Posts filed under ‘Advice’
Tough new mortgage rules should not have an impact on the availability of competitive fixed rate loans, a mortgage trade body said today.
The tighter regulations, which come into force on April 26, require lenders to carry out a detailed assessment of borrowers’ ability to keep up with their loan before advancing them money.
The strong emphasis on affordability has sparked speculation that banks and building societies may scrap short-term fixed rate deals at low rates, as they focus on responsible, sustainable lending.
Under the new rules, known as the Mortgage Market Review, lenders will also be able to ask applicants for evidence on how much they spend on everything from food to childcare to debt repayments if they are concerned about affordability.
They will also carry out an interest rate ‘stress test’, to ensure borrowers can continue to meet their mortgage repayments even if the cost of borrowing rises.
But the Council of Mortgage Lenders (CML) today said there was nothing in the new rules that would lead to lenders pulling their fixed rate products or hiking the price of them.
Bernard Clarke CML communications manager, said: “There is a very strong attachment among consumers to two year fixes.
“They have proved extremely popular overtime and the mortgage market has a strong bias to consumer preference.
“There is nothing in the Mortgage Market Review that would bring them to an end.”
Just under nine out of 10 mortgages taken out during February were fixed rate deals, according to the CML.
The group attributed the strong preference for these loans to the fact that interest rates were likely to start rising sooner than previously expected on the back of the UK’s strengthening economy.
Only 6 per cent of borrowers opted for a tracker deal, which moves up and down in line with changes to the Bank of England Bank Rate, while just 2 per cent of homeowners took out a discounted rate.
Meanwhile, the Bank of England’s Trends in Lending report showed further improvements in the mortgage market during the early part of the year.
The Bank said mortgage approvals for house purchase by all UK lenders had continued to rise during the three months to the end of February.
It added that although approvals fell slightly in February, they remained “considerably higher” than for the same period in 2013.
At the same time, interest rates on two year fixed rate mortgages have remained broadly unchanged since the start of the year, despite an increase in two year swap rates, upon which the deals are based.
But the cost of five year deals has started to edge up, as lenders pass on some of their higher funding costs to consumers.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The volume of mortgage lending continues to rise as more buyers take advantage of the cheap rates available to get on the housing ladder or move up it.
“Two year fixes were largely unchanged in the first quarter but five year fixes have started to edge up, partly as a result of higher swap rates which have doubled in the past year.
“However, there are still five year deals pegged at around 3 per cent for those with sizeable deposits, which is excellent value.”
He added that the new mortgage rules were likely to lead to a slowdown in mortgage processing while they “bedded in”, but once any glitches were ironed out, the mortgage market should continue to perform strongly for the rest of the year.
We all know that moving house is rated as one of the most stressful experiences, but hopefully it is a lot more fun than other worrisome events such as the loss of a job or divorce. Like so many tasks, the art lies in good preparation. Use these beautiful spring months to maximize your selling potential during spring or to prepare for the post summer holiday high, writes Caroline Knight and Karin Hawkes.
The air is full of promise and your front garden can direct viewers to your door like a welcome smile.
Of course, you’ll find that time is short as there is so much to do. So spare a moment from your busy schedule to visit your local nursery or garden centre to buy some colourful, instant bedding in order to entice your prospective purchaser. But do make sure that all risk of frost has passed before planting outside.
Here are 10 seasonal tips which will brighten up the picture that your property presents to visitors:
- Remove spent bulbs from tubs and planters. They can be stored ready to take to your new property, or planted in a space within the garden.
- Replace them with colour and, if possible, scent. Place containers by entrances and exits to give a welcoming lift.
- Plant Alchemilla (Lady’s Mantle) for its fresh green foliage and tiny yellow-green flowers, between anemones, pansies, tulips and later flowering Daffodils.
- Plant Petunias and Lobelia in part shade or sun – they will bloom all summer long.
- Bring the garden into the house and echo the same colours, using cut flowers on windowsills that can be seen from the road.
- Keep on top of the weeds and consider applying a mulch to save you some much-needed time.
- Mow your lawn regularly, gradually moving the blades downwards towards a lower setting.
- Even more importantly, trim the edges to give a crisp appearance and to emphasise the shape.
- Check your seats and benches. Your prospective buyer would like to envisage sitting comfortably in your garden. If that pigeon has left a mess you might need to get out the scrubbing brush or even give your furniture a lick of paint.
- Remember, you wouldn’t attend a job interview without looking in the mirror. So make sure your house is appealing from the street. Drive past your house and check what buyers will see from their car.
This five bedroom Cornish property has a well-presented front garden that contains a pleasing blend of shape, colour and form. It also conveys a sense of individuality and the palm gives it an exotic atmosphere. The strategically placed pots at the rear create an interesting foreground to a stunning seaside backdrop. We also love the fresh flowers indoors. Because the gardens are well maintained it gives the impression that the property is easy to look after.
Caroline Knight and Karin Hawkes are passionate about the beneficial impact that outdoor space can have on a property. An effective garden, courtyard or even parking space can not only provide considerable charm but also offer enormous benefits for occupants of homes of all sizes – from the tiniest, diminutive dwelling to the most expansive country estate. This is why it is essential to make the most of your outside space before putting your property on the market. Their design and maintenance service, Kerb Appeal South East, seeks to enable sellers to enhance their properties with the minimum of fuss and upheaval, thereby maximising the selling potential of any home.
If you are looking to get your house in top shape for a top sale, then you will need to please both buyers and surveyors, writes home staging expert Anna Hart.
Obvious maintenance issues are a total turn-off for most buyers - you know, the jobs that you’ve been putting off for months and have learned to live with.
Things you have happily ignored for ages will stick out like a sore thumb to buyers seeing the house for the first time, so if you want to sell relatively quickly and for a decent price, I recommend you address any broken or substandard items before you put the house on the market.
Here’s my list of the top five maintenance jobs to keep buyers happy:
- Get rid of any signs of previous water damage, damp or mould – use ‘stain stop’ paint before re-painting the entire wall or ceiling so the stain doesn’t just show through the new paint
- Remove and replace any mouldy silicone or grout in kitchens and bathrooms – new silicone seals freshen up bathrooms immediately
- Fill and re-paint any cracks, gaps, dents and chips in walls, ceilings and woodwork – use decorator’s caulk to fill gaps between skirting or sockets and walls
- Pay attention to the exterior – fix and re-stain fences, re-paint wooden doors and window frames, and check your render is up to scratch
- Sort out any noises – dripping taps, squeaky doors or floors
These things will help you get a decent offer from a buyer, but it’s another thing altogether to secure a completed sale at that same price.
Buyers range in their level of home construction and maintenance experience from super-savvy builders or investors to naïve first-timers, but one thing many buyers have in common is that they’re likely to commission a survey once their offer has been accepted.
This means that not only do you have to present your house in such a way as to attract and please your buyer, you also have to meet the approval of their surveyor if you want to get to completion without a hefty renegotiation.
This means thinking ahead; working out what a surveyor is likely to put on their “probably needs expensive attention” list and assessing what you can do to mitigate this. Remember that every potential problem brought up by a survey is essentially a reason for the buyer to lower their offer, and you don’t want that.
It will almost always be cheaper for you to get the work done yourself than it will be to accept a price reduction.
The best way to make sure you’re aware of every item that might need action is to commission a survey yourself, but if you don’t want to spend that kind of money – around £400 for a homebuyer’s survey – here is my list of the typical items that surveys often bring up.
- Damp & timber problems - many companies will prepare a damp and timber condition report for a small fee, along with a quote for rectifying any issues. Check for the most obvious cause of damp – such as leaky or broken guttering – and get it fixed. Remember what seems like damp could actually be condensation, so air your house well.
- Roof - without getting to the top of a very long ladder, it’s difficult for us to see whether we’ve got any roof problems other than the obvious missing bits, so ask a roofer to check over the roof and fix any immediate issues. Many roofers will carry out a set of basic tile and flashing repairs for under £200. Flat roofs always cause issues due to their limited life span, so get yours checked and consider re-roofing if it is past its best.
- Boiler – it is common for buyers to ask for the boiler to be serviced before they exchange contracts, so do this in advance to avoid delays later. Servicing starts at about £70 depending on the type, make and model and will clearly cost more if there’s something that needs fixing.
- Electrics – it is very important for your electrics to be properly certified. Solicitors will ask if you have made any electrical changes since the introduction of new regulations in 2005. If you have, they must be certified by a qualified electrician. Cost will vary depending on whether any remedial work is required to bring things up to standard, but don’t leave this as a potentially large surprise bill.
- Windows & doors – replace any blown panes (those with condensation or ‘mist’ between the two panes in a double-glazed unit) because buyers and surveyors alike will pick up on these. Make sure the frames are in good condition and check all hinges, handles and locks work properly.
If your investigative work brings up a vast number of problems you may not want to invest in fixing them all yourself, but at least you’ll be aware of the issues and if you do end up renegotiating or being asked to address some items, it won’t be a big surprise.
Anna Hart is an expert in staging homes for sale, working with house sellers to maximise their chances of selling as quickly and as profitably as possible. Anna’s new e-book “How to Sell Your House For Top Price, Fast” brings her practical and proven house sale preparation strategy to sellers across Britain.
The mortgage market is recovering to its pre-credit crisis state as both lending levels and product choice rebound.
Total mortgage lending soared by 43 per cent year-on-year during February to stand at its highest level for the month since 2008, the Council of Mortgage Lenders recently said.
But it is not just the volume of lending that is showing signs of improving, with the range of products available also increasing significantly during the past 12 months.
The number of different mortgages available to people with just a 5 per cent deposit has more than doubled since April 2013, according to data from Moneyfacts.co.uk.
There are now 179 different home loans available to people borrowing 95 per cent of their home’s value, up from just 73 a year earlier.
The current number is also above the 134 mortgages that were on the market for people with a 5 per cent deposit in early 2008, shortly before the credit crisis began to exert its strangle hold on the market.
There has also been a big increase in the number of deals for borrowers with a 10 per cent deposit and a 15 per cent one, with availability for both categories rising by 20 per cent in the past year.
Overall, there are now more different mortgages available than in 2008 in all but two loan to value categories.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “The 5 per cent deposit market is booming with a variety of choice for borrowers, this is largely due to government initiatives which have been the driving force, such as the Help to Buy scheme.”
As well as the government schemes, there are growing signs that lenders are becoming more willing to advance mortgages to people with only small deposits.
In its recent Trends in Lending report, the Bank of England found mortgage availability had increased for the seventh consecutive quarter during the first three months of 2014, particularly for people looking to borrow a high proportion of their property’s value.
The Bank said there was a significant increase in the willingness of lenders to advance money to people with a deposit of 10 per cent or less.
It added that although this improvement was in part driven by the Government’s Help to Buy scheme, it expected this trend to continue going forward, as lenders looked to increase their market share.
Adrian Anderson, director of mortgage broker Anderson Harris, said: “I think that confidence in the economy and housing market has made it easier for banks to produce higher LTV mortgages. “
But he added: “Banks are very selective and will be assessing high LTV mortgages with a fine tooth comb and will require a squeaky clean credit history hence only the strong applicants will qualify for a high LTV mortgage.”
But there is still one area of the mortgage market that has not recovered, and that is the level of choice for people looking to take out 100 per cent mortgages.
There are currently just six deals available for people with no deposit, up slightly from four in April 2013, but still well down on the 14 that were on the market in 2008.
Lenders are also continuing to favour those borrowing a low proportion of the property’s value, with 466 mortgages available to people with a 40 per cent deposit, compared with just 25 before the credit crisis started to impact the market.
But despite the improvement in the number of mortgages available for people with only small deposits, the introduction of the Mortgage Market Review on April 26 means lenders are unlikely to ever return to the looser lending criteria seen in the past.
The new regime will require banks and building societies to carry out a detailed assessment of borrowers’ ability to keep up with their loan, while interest-only mortgages will only be advanced to people who have a credible repayment plan.
Finding the perfect house is hard enough – but imperfect neighbours can spoil all your efforts.
According to a new study, the best place to head if you are looking for charming neighbours who never throw raucous parties or have family slanging matches, whose dogs never bark, and who keep their gardens suitably pristine is the undoubtedly lovely, but slightly impractical Isles of Scilly, where the local council received not a single nuisance complaint over the last year.
However, relocating to a group of islands 28 miles off the coast of Cornwall (where the main local career opportunity is growing scented narcissi and – according to the Land Registry – only 60 homes have changed hands in the last five years) might be a little drastic.
Other options include investigating the delights of Gwynedd with an average price of £169,058, Worcestershire with an average price of £220,693, Nottinghamshire with an average price of £146,579, or Glasgow with an average price of £147,135, which received the next lowest levels of complaints in the country, according to the research by Churchill Home Insurance.
It might also mean avoiding the most complained-about areas of Fife, Newcastle, Westminster, Stockton-on-Tees, Belfast and Tower Hamlets.
There are, however, other ways to safeguard yourself against the undeniable horror of acquiring a set of nightmare neighbours along with your dream home.
James Wyatt, of estate agents Barton Wyatt, said buyers do have some legal protection: “With consumer protection regulations in force, estate agents should have asked the seller about any neighbour issues,” he explained. “If there is a serious problem with noise or mess then it should be made clear to the potential buyer before they embark on trying to buy the property.”
However, Matthew Dabell, of aspire estate agents, said that while vendors should disclose information about neighbourly problems there is a grey area about how much they are legally required to fess up.
“While the guidelines are not black and white as to what you need to make any buyer aware of legally, there have been situations where the new owners have decided to sue previous owners for not informing them about particularly dreadful neighbours,” he said. “From a buyer perspective you have a right to know about any major issues with the neighbours and certainly if there are any ongoing disputes the outgoing vendor will need to inform you of these.”
And, of course, you can always simply ask the vendors directly about what the neighbours are like and listen to what they don’t say as well as what they do. They are unlikely to wax lyrical about how marvellous the neighbours are, what fantastic friends they are, if they have a long-running vendetta.
The other thing you can do is to use your eyes.
If neighbouring properties and gardens look basically well cared for then it is a good sign, and it is also not a bad idea to knock on doors and introduce yourself – you can pretend to have a question about local schools or whatever but in reality this will give you a chance to suss out whether the home is occupied by a dear old lady or a Hells Angel. You can also fish for gossip about other residents of the street.
Mandy Stevenette, of estate agents Stevenette & Co, suggests that buyers get to know the area before making a decision. “Visiting the property at differing times of the day, having a drive around, again at different times of the day, should help,” she said.
And if you smell a rat you should seek help from your conveyancer.
“If there’s something specific that concerns you – such as shared parking, or swimming pool related noise – ask your solicitor to insert a specific question among the standard questions that the vendor is required to answer,” said Greenwood. “For instance, you can ask: “Has the shared parking ever led to disagreement?”
Ultimately, of course. you cannot protect yourself 100 per cent. And it is worth remembering that, like family members, not only can you not choose them, but you need to learn to live with them.
Properties for sale in some of the most neighbourly corners of Britain:
Four bedroom apartment in a great Glaswegian location:
Five bedroom detached Georgian house in Nottinghamshire:
Historic three bedroom stone cottage with the proverbial roses around the door in the heart of Gwynedd: