Many existing and potential homeowners are wondering whether to move now or delay their plans until they have a clearer picture of how long the pandemic will last. 

Since the market reopened here in Scotland in June, people have flocked to estate agents to purchase a new home. Properties are going to closing date, achieving record offers overs and competition is fierce as pent up demand combined with government incentives and a re-evaluation of our priorities has resulted in a mini property boom. 

The recent tax break announcement created a flurry of interest from buyers and gave an immediate boost to the housing market – according to The Telegraph, the lockdown resulted in £27bn of lost sales and buyers and sellers have been making up for this ever since.

The prime rural market has benefitted the most as people search for more space and better value. Buyers appear to be prioritising larger properties with more outside space, and they have re-evaluated the importance of proximity to transport links, local amenities and the ability the work from home. 

According to Zoopla, agreed sales fell by 92% during lockdown. Buyer demand, which is measured by the number of property enquiries, has jumped to 46% above pre-lockdown levels with a significant rate of recovery.

The prime rural market has benefitted the most as people search for more space and better value. In July, asking prices reached a new high of £320,265 – a rise of £7,640 (Rightmove) and Zoopla has forecast price growth of between 2% and 3% by the end of the year. Here in Glasgow house prices were 2.3% higher in August compared to 2% in August 2019.

 What is the outlook?

 With few distressed sellers just now – which is usually what drives house prices down in a crisis – it appears that the property market is holding strong. This is due to job and payment retention schemes and the availability of mortgage holidays. In addition, the eviction ban is protecting tenants who can’t pay their rent. 

At its peak, there were 1.9 million homeowners that took a mortgage repayment break – a sixth of all mortgaged homeowners. However, lenders have reported that only a small number of these requested an extension. If these people were to become forced sellers at the end of their mortgage break, but this would still not top pre pandemic property transactions. In addition, Hansen Lu, of Capital Economics, said that when the mortgage break scheme ends, regulatory changes mean that lenders’ own internal forbearance procedures will be more generous than they were ten years ago, and the impact will be reduced.

What’s more, according to the Bank of England, mortgage approvals reached a 13-year high in August as the rush to buy homes continued. The number of mortgages approved hit their highest level since October 2007 with a total of 84,700 mortgages  approved in August, a 28% increase on the previous month’s total.

It’s a seller’s market, so the advice is to sell now and for buyers, there are still some exceptional mortgage deals available. Even with the strict guidelines surrounding house sales, people are still encouraged to go on house viewings especially as initially it can be done virtually as agents increasingly embrace technology. Although many buyers tried to negotiate discounts when the market reopened, agents instead are seeing competitive bidding. Estate Agency is still subjected to social distancing measures and a change in the way they conduct themselves with restrictions on viewings to one member of a household, a ban on open houses and vendors vacating the property during the measuring, photography and viewings. However, this doesn’t appear to have dampened appetite.

Talk to us at The Mortgage Hub on 01698 200050 if you would like to discuss your mortgage options and for general advice about the property market here in Scotland.

This week it was announced that the UK is officially in recession. So, what does this mean for you if you’re planning to move?

During a recession when finances are tight job security is in question, many are cautious about buying a new home. However, this is a very unusual time for everyone in the UK – the likes of which we have never seen before.

The property market came to a standstill in March and went off with a bang when it reopened on June 29^th . It was feared that house prices would crash but to date, the opposite has happened. The recession is a result of a public health crisis and not a financial one, so the financial system isn’t at a standstill as it has previously been. The government has taken unprecedented steps to protect jobs and prop up the housing market. Estate Agents have reported a huge upsurge in interest in properties and new seller enquiries and property portals have reported incredible visitor stats since the start of July.

What’s more, in July it was announced that LBTT would be waived for all properties up to £250,000 until March 2021 to further incentivise those considering moving and the Help to Buy scheme has been extended. There has been restored confidence in the market and transaction figures have rebounded – with a particular rise in the purchase of first homes and newly built properties.

The concern surrounding buying a home during a recession is that house prices may fall after a property purchase leaving buyers in negative equity. There’s also a fear that the Furlough scheme has delayed the number of job losses and that when the scheme ends there will be a raft of redundancies.

One thing is for sure – house prices are steadily rising and mortgage companies are bringing back products. House prices fell in 2018 due to a very specific lack of funding in the mortgage market. This isn’t the case this time so we believe that property will still be one of the strongest investments you can make. At present, there is an imbalance between demand and supply which is putting upward pressure on prices at the moment, and as a result we have seen the price growth for UK homes rise to 2.7% in June, up from 2.4% in May. We see this trend continuing for the foreseeable future.

If you’re buying a new home, you may prefer to delay your  purchase and wait to see how the recession plays out but the danger is that if your job is secure and you have the funds and meet the lending criteria, now is a great time to secure an attractive mortgage rate.

If you are thinking buying, make sure you have the right advice and don’t miss out on the LBTT break and low mortgage rates. Talk to us to discuss your circumstances before making a decision as we may able to help you decide what’s best for you.

The average interest rate for two-year and five-year fixed rate mortgages has dropped to the lowest levels since records began in 2007 according to the latest figures from Moneyfacts. That makes it a great time to remortgage.

We are currently averaging lower rates than last month’s record low rate following two emergency cuts made to the basic rate in response to COVID-19 – this is the interest rate that the bank sets for lending to other banks. The fall in the official cost of borrowing impacts swap rates upon which fixed-rates mortgages are based – and lenders have passed on the reduction in borrowing costs to their customers.

However, some banks and building societies have reviewed the level of risk they take in lending – this is due to the impact that COVID-19 is having on the UK economy.

With these record-breaking fixed rate deals, now is a great time to remortgage, especially if your deal is coming to the end. In addition, if you’re still sitting on your lenders’ SVR, you could save thousands per year by switching to an average two-year fixed rate deal. The gap between the cost of a two-year and a five-year fixed-rate deal has also narrowed so you could pay a lower premium for the peace of mind knowing what your mortgage repayment will be for the next five years.

However, the number of mortgage products to choose from has more than halved – from over 5,200 products to 2,500.

There are currently less products available to borrowers with a low amount of equity or small deposit – those with 5% can choose from 22 products compared to 279 previously available and the choice for those with a 10% has dropped from 563 to 50. That’s why it’s essential to talk to a mortgage broker to find the right deal.

Although lenders have increased rates on loans for people borrowing 95% of their home’s value, this is only a small rise of 0.04% for a five-year fixed rate and 0.1% for a two-year fixed rate and they are still open for business for this sector of the market.

Because lenders have cut rates for people borrowing 90% of their property’s value this shows that competition is still strong in this area even though there are fewer products available.

At The Mortgage Hub we can scour the whole market on your behalf and help you find the best deal and find out if your application will be accepted. Talk to us for advice – we are currently closed but still working remotely until it is safe to open.

The latest House Price Index from Zoopla shows that UK city house price growth has hit a two year high of 3.9%. In addition, figures show that housing demand was up 26% over the first few weeks of this year compared to the same period in 2018 and 2019.

This means that city house price growth is at a 2 year high. HMRC data shows that in December last year sales were 11% higher than the same period in 2018

Northern regions registered stronger price growth throughout 2019 than many of the southern cities, although there are signs that the spread of price growth across the country has been narrowing in the last few months.

A summary of factors including house affordability, position in the current housing cycle, time to sell and price achieved indicate cities where the momentum in growth over the last quarter of last year will carry into next year.

According to Zoopla, Nottingham, Edinburgh and Glasgow rank as the top three cities with the strongest prospects for 2020 indicating that they will be towards the top of a relatively narrow range of price growth this year.

An examination of market fundamentals by city – including housing affordability, position in the current housing cycle, discounts to asking price and time to sell all indicate cities where the momentum in growth over the final quarter of 2019 will likely carry over into 2020. The ranking for all cities is shown in Table 2 along with the current annual growth rate.

Nottingham, Edinburgh and Glasgow rank as the top three cities with the strongest prospects for 2020, indicating they will be towards the top end of a relatively narrow range of price growth this year. During the four weeks to January 20^th this year, the demand for housing has ‘bounced’ with a 26% more people looking for a home than the same period in 2018 and 2019. In fact, all cities apart from for Belfast have recorded an increase in demand compared to the last 2 years.

Demand for housing in Edinburgh remains strong overall with 6% annual growth in prices over 2019. However, demand has levelled out in the first 4 weeks of the year compared to the last 2 years.

If you would like to take advantage of the predicted growth this year by investing in property in Edinburgh or Glasgow, talk to us at The Mortgage Hub about securing the best mortgage for your circumstances.

As we reported recently, if you purchase a second home that is uninhabitable you can avoid the LBTT surcharge. Not only can you avoid this additional tax payment, you could also maximise your return on investment.

According to recent research from Rightmove, over 90% of people would consider buying a property in a state of disrepair. If you’re among them and decide to purchase a property in need of renovation, what should you consider?

Get the right advice

The first step is to get the right advice from the off. Talk to architects, builders and your local council to find out what you need to be aware of and what the common pitfalls are. Also talk to your local estate agent and find out how much value certain projects will add to your property as this is very much dependent on the area in which you’re buying. For example, spending money on a driveway in a rural area may not add any value whereas a driveway in an urban area where there are parking charges could make a huge difference. Talk to us at The Mortgage Hub about how you can get the best mortgage deal as soon as you see a property you are interested in buying – getting the right mortgage deal can make a huge difference to your budget and return on investment. There are many factors to consider so talk to the experts.

Work out your budget

Work out your purchase price, cost of all associated fees and get a clear picture of how much you have to spend on the renovation. Don’t work your way up – work your way down starting with the must-haves and finishing with the would-likes. Don’t forget to include a buffer as renovation projects often go over budget. Don’t try to stretch your budget by cutting corners and if you do need to cut costs apply this to your decorating and décor rather than building work. You won’t get your value for money by skimping on quality building.

Consider the type of property

It’s important to consider whether the property is located on a World Heritage Site or is a listed building. This will greatly impact the renovations that you can undertake. There could be stipulations that some original features need to remain intact, you may not be able to change the layout and any works may need to be in keeping with the design of the home. Don’t forget the outside – are there any protected trees in your garden that are at odds with your plans for landscaping? If you do opt for an older property it may be worth paying extra for a structural survey – we can advise you on this.

Don’t forget the garden

There’s no point in spending all your time and money on the inside of your property if you have no kerb appeal! Make sure you consider the outside of the property and factor in any costs to get this area up to scratch. Research has shown that outside space can add up to £22,000 to your home (Zoopla 2018) so it could be well worth the extra investment.

Work out what buyers want

Buyers want to see lots of space, plenty of natural light and a well-considered internal layout with plenty of storage to put clutter out of sight. A renovation that delivers sparkling clean kitchens and bathrooms with a hint of luxury will be a winner.

Talk to us at The Mortgage Hub about purchasing a second home or a property that needs renovating.