Posts with tag: homebuyers

Higher Standards of Accommodation are Making Renting more Enticing than Ever

Published On: November 1, 2018 at 9:01 am


Categories: Tenant News

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Higher standards of accommodation are making renting a property more enticing than ever, according to housing expert Kate Faulkner.

In a report on the growth of the private rental sector, commissioned by the TDS Charitable Foundation, Faulkner claims that higher standards of properties are driving demand from tenants.

This comes despite a new study, which found that buying a home is cheaper than renting one in every area of the UK.

Research from Santander Mortgages shows that owning a home in the UK costs an average of £2,268 per year less than renting one. Nevertheless, Faulkner believes that an increase in high quality rental accommodation is, to an extent, deterring many would-be homebuyers from purchasing property.

Higher Standards of Accommodation are Making Renting more Enticing than Ever

Higher Standards of Accommodation are Making Renting more Enticing than Ever

The private rental sector in England and Wales, which has more than doubled in size in the past 20 years, accounted for 20% of all housing stock in the latest English Housing Survey. While Faulkner accepts that this is partly due to higher demand, she insists that it is hard to ignore the improvements in the quality of rental accommodation.

She says: “To understand how the private rental sector has grown, we need to be able to see beyond headlines about house prices to know what’s really going on.

“The main contributing factors are – as is commonly understood – a lack of social housing provision, and house price growth outstripping wage increases for many, but that’s not the whole story.”

She continues: “If we look at a more local level, there are places where affordability has increased, but the number of first time buyers continues to decrease, suggesting house prices and demand aren’t the only forces at play.

“Over the same period that the private rental sector has gone through dramatic expansion, it’s also improved considerably. Standards of rented properties are now arguably higher than ever before. The increased quality of accommodation has reduced the need to buy.”

Faulkner points out that “good quality” rental housing is often much cheaper and more easily accessible than buying a property, especially in the short to medium-term.

She explains: “When high standards of accommodation are available, with the added bonus of flexibility, it can make an enticing proposition.

“There is also caution in some parts of the market, with potential buyers lacking confidence that house values will continue to rise.”

Faulkner goes on: “That fear, coupled with tougher restrictions on buy-to-let mortgages putting off landlords from entering or continuing in the market, could lead to situation in the private rental sector where demand is increasing and supply is decreasing.

“More research is required into the nuances of the UK’s housing market and stock to understand affordability, renting landscapes and, ultimately, to make more effective legislative decisions.”

We’re used to hearing terrible stories about the conditions of some rental properties across the UK, but do you agree with Faulkner’s claims that higher standards of accommodation are making renting more enticing than ever before?

With news that tenants will soon be given greater powers to sue their landlords over poor property conditions, renting could become even more appealing.

Are Tenants and Buyers Saving Enough for Moving Home?

Published On: October 30, 2018 at 9:57 am


Categories: Tenant News

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Private tenants and buyers have to dip into their savings to cover the cost of moving home, according to the latest Cost of Moving study from Post Office Money, which was compiled by the Centre for Economics and Business Research (Cebr).

Tenants need to have an average of £1,469 saved for moving home, including the cost of a security deposit (£944) and moving costs (£525). A typical renter has £1,522 saved in cashable assets. However, 53% of 22-29-year-olds saved no money in a savings account, meaning that many young tenants will have no savings set aside to cover these costs at all.

Buyers, meanwhile, will need to budget an additional £10,132 to move home, with estate agent fees making up a third of this cost (£4,815). However, 80% of prospective homebuyers underestimate the cost of moving, budgeting for just over half of the actual amount on average (£6,782), which could force them to dip into their savings.

Post Office Money found that the cost of moving home has increased by an average of 25% for buyers and 13% for tenants over the past decade. However, upcoming changes, such as those announced in previous Budgets by the Chancellor, may see costs ease for both parties.

Cost of moving home as a tenant

Moving home can place significant financial pressures on tenants, with deposits accounting for the bulk of the cost (64%), ranging from £1,629 in London to £526 in the North East.

While renters will expect to see these costs recuperated at the end of their tenancies, they will likely need to wait until they have moved out to receive the funds. As such, tenants who do not want to deplete their savings will need to set money aside for their next deposit in order to move home.

However, there is some hope for tenants, as the Government is planning to ban lettings fees under the Tenant Fees Bill, which is likely to come into force in spring 2019. Agent fees make up a significant amount of the cost of moving as a tenant (16%), at an average of £235.

The average costs associated with moving home as a tenant are as follows:

Security deposit Agent fees Self-drive van hire Child minder fees Moving materials Total
£944 £235 £123 £87 £80 £1,469

Chrysanthy Pispinis, of Post Office Money, says: “Moving can be a time of financial pressure and people will often need to draw upon any savings they have. However, they are unlikely to have earmarked this money specifically for moving, leaving them with no financial safety net. Having a regular savings habit – putting money aside on a little-and-often basis – can help with these unforeseen costs.

“To ensure they can meet the demands of moving without damaging their nest egg, movers should consider these costs in advance as much as possible. The Government has made some accommodations recently, such as the Tenant Fees Bill and recent Stamp Duty changes; we hope these revisions will ease the cost of moving for both renters and buyers.”

Cost of moving as a buyer

Even after years of experience moving as tenants, people can still be underprepared for the additional costs of moving as a homebuyer. Significant costs include Stamp Duty (£2,019) and estate agent costs (£4,815). Over the past ten years, these costs have risen by 30%, but buyers are not currently budgeting more to cover the higher costs.

This is how much it costs, on average, to move as a buyer:

Stamp Duty Estate agent costs Surveyor fees Conveyancing costs Removals Total
£2,019 £4,815 £600 £1,619 £1,079 £10,132

Pispinis continues: “Most people know that planning and budgeting are essential to any move, but most renters or buyers will only think about their deposit payment, and may not necessarily plan for the additional costs. When people do move – be it renting, buying a first home or moving up the ladder – it really helps to have a very clear understanding of all of the associated costs.”

Tips for moving

Post Office Money has put together some tips for tenants and buyers when moving home:

Budget in advance – Many people will wait until the point that they move to consider the costs of moving home. In fact, one in five buyers will not consider common moving costs at all. Making an itemised checklist of potential moving costs and making sure that you budget for these well in advance is essential to ensuring that you have enough set aside.

Consider letting/estate agent fees – The fees charged by letting and estate agents differ significantly, so consumers can massively benefit from shopping around. There are alternatives to high-street agents, which can often greatly reduce the cost for cash-strapped movers.

Get a number of quotes – When enlisting a removal service or self-drive van hire for moving day, be sure to get a number of quotes from different companies; you may be able to get a cheaper deal or even use them to negotiate a better price.

Cut down on removal costs – Movers can save money by sourcing moving materials secondhand, such as asking their local supermarkets for discarded cardboard boxes, rather than buying expensive moving packs. Another way to reduce these costs is to cut down on the amount of items that you’re moving, by having a clear out.

Property Purchasing Process is Outdated, Estate Agents Agree

Published On: October 30, 2017 at 10:00 am


Categories: Property News

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The property purchasing process is outdated, estate agents seem to have agreed in the latest Housing Report from NAEA Propertymark (the National Association of Estate Agents).

Property purchasing process

Property Purchasing Process is Outdated, Estate Agents Agree

Property Purchasing Process is Outdated, Estate Agents Agree

As the Government announces that it will consult on the home buying and selling process, the September Housing Report from NAEA Propertymark reveals that eight in ten (79%) of estate agents confirmed that the property purchasing process is outdated last month.

The Government recently revealed plans to shake up the property purchasing process, such as banning gazumping. Read more here.

Housing demand

The study also found that, in September, the number of house hunters registered on estate agents’ books rose to the highest level seen since March this year, at an average of 394 per member branch.

This was up from 343 in August and 347 in July.

Property supply

The amount of properties available to buy on estate agents’ books increased from an average of 37 in August to 41 in September – the highest number recorded since March 2017.

Sales agreed 

Despite the fact that both supply and demand for housing rose in September, the amount of sales agreed remained flat, with an average of eight per branch – the same level as in July and August.

The proportion of sales made to first time buyers was 23% in September, which is also the same as the previous two months.

The Chief Executive of NAEA Propertymark, Mark Hayward, comments on the report: “The Government’s announcement last weekend that it will consult to reform the home buying process couldn’t come soon enough, and we welcome it. Our findings show that estate agents agree, and would welcome changes to ensure the process for buying and selling is brought into the 21st century.

“The current prolonged process means sales are stagnating, despite the fact that the supply of housing is up and there is growing demand. Hopefully, we will see activity pick up marginally in the short-term, when properties which are being marketed now are taken off the market and pushed through, so buyers can be in before Christmas.”

Government Could Ban Gazumping in Property Market Shake-Up

Published On: October 23, 2017 at 9:04 am


Categories: Property News

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The Government could move to ban gazumping in order to save time and stress during the property purchasing process.

The Communities Secretary, Sajid Javid, has called on the property industry to provide evidence on how buyers and sellers can save time during the home buying process, with any streamlining through technology also being considered.

One area of focus is to make selling and buying property cheaper, faster and less stressful by tackling the practice of gazumping.

The Founder and CEO of online estate agent, Russell Quirk, has contributed to the study, providing his thoughts on gazumping and how it can be tackled head-on to improve the property sector.

Government Could Ban Gazumping in Property Market Shake-Up

Government Could Ban Gazumping in Property Market Shake-Up

He says: “Gazumping really is the scourge of the property market and a practice that is facilitated through a draconian, archaic conveyancing system, the likes of which is shared only with Papa New Guinea, which leaves large numbers of buyers extremely disappointed and out of pocket. During the most stressful part of the property purchase, it further exacerbates the emotional turmoil a buyer can find themselves in, and can crush their hopes and dreams of securing that perfect property.

“The law needs to change to ensure there is a contractual obligation and to protect homebuyers much earlier on in the process. One common misconception is that gazumping is the work of the agent in order to secure more commission on a property. However, this practice is often orchestrated by the seller and without the support or encouragement of the agent, although they take the blame.”

He adds: “These property market fall-throughs cost £1 billion per annum in wasted legal and survey costs – money that could be better spent elsewhere in tackling the housing crisis.”

Quirk has compiled a list of what he believes needs to be done to improve the property market:

  • Encourage e-conveyancing to ensure that all documentation is in one place and digitally accessible quickly, and at the same time across multiple parties.
  • Ensure that surveyors, local authorities and mortgage lenders are legally compelled to work faster and for the buyer, not against them.
  • Allow electronic signatures to be used within the process.
  • Introduce title insurance as they do in the USA.
  • Force the conveyancing process to deal with the multiple work streams in parallel, rather than consecutively.
  • Introduce earlier contractual obligation on the part of the seller and buyer, similarly to Scotland and the USA.

Alongside its call for evidence, the Government has published the findings of a survey of 2,000 people, which showed that 69% of sellers and 62% of buyers report stress and worry as a result of delays.

Almost half (46%) of sellers had concerns about buyers changing their minds after making an offer, while almost a quarter (24%) would use a different estate agent if they had to go through the process again.

Nearly a third (32%) of sellers and 28% of buyers were dissatisfied with the other party’s solicitor, the study also found.

The call for evidence will run for eight weeks from yesterday (Sunday 22nd October 2017).

Javid comments: “We want to help everyone have a good quality home they can afford, and improving the process of buying and selling is part of delivering that. Buying a home is one of life’s largest investments, so if it goes wrong, it can be costly.

“That’s why we’re determined to take action to make the process cheaper, faster and less stressful. This can help save people money and time so they can focus on what matters – finding their dream home. I want to hear from the industry on what more we can do to tackle this issue.”

The Chief Executive of NAEA Propertymark (the National Association of Estate Agents), Mark Hayward, responds to the consultation: “NAEA Propertymark has long been calling for more regulation of the estate agents sector, to ensure that consumers are protected when dealing with the biggest asset most people own, their home. We are delighted that Government has chosen to include further estate agents regulation in the scope of their call for evidence into the house buying and selling process. This is a welcome review of the process, which is currently archaic and does not reflect the 21st century.”

Second-Stepper Sellers Most Likely to Find Buyers Before Christmas, Reports Rightmove

Published On: October 17, 2017 at 8:07 am


Categories: Property News

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Second-stepper home sellers are the most likely to find a buyer before Christmas, according to the latest House Price Index from Rightmove.

The property portal reports that the average price of property coming onto the market was up by 1.1% (£3,432) on a monthly basis in October to stand at £313,435.

The Rightmove index has recorded an increase in October every year since it started back in 2001, but this month’s is the largest since the 1.4% rise recorded in 2014. However, with more sellers chasing fewer buyers, this month’s 104,000 new-to-market sellers will have to work harder to find a buyer before Christmas.

The Director and Housing Market Analyst at Rightmove, Miles Shipside, says: “With Christmas some 69 days away and the average time to find a buyer being 63 days, many of the 104,000 new sellers this month will be hoping to agree a sale before Christmas. It will be harder for this autumn’s sellers to secure a sale, because buyers have more choice, with a 3.1% increase in new seller numbers compared to this time a year ago.

“In addition, the number of sales agreed was running ahead of 2016 over the summer, but has now fallen back, with a 5.9% decrease compared to last September. New sellers’ pricing optimism may therefore be unfounded in some parts of the country. While this month sees higher asking prices in eight out of ten regions, sales agreed are below this time a year ago in nine out of ten. With buyers becoming more Scrooge-like with their cash, sellers who have undercut the average 1.1% rise in asking prices may stand a better chance of finding a buyer before Christmas, especially if they are in one of the more active parts of the market.”

The average time from first advertising on Rightmove to being marked as sale agreed by an estate agent was 63 days this month. However, national averages mask many regional and sector variations. The properties that are moving the quickest are in the second-stepper sector – those with three or four bedrooms – except four bedroom detached homes, where the average time taken to find a buyer is 60 days.

Second-Stepper Sellers Most Likely to Find Buyers Before Christmas, Reports Rightmove

Second-Stepper Sellers Most Likely to Find Buyers Before Christmas, Reports Rightmove

Typical first time buyer properties – those with two bedrooms or fewer – also just undercut the average, at 62 days.

Shipside observes: “Whilst affordability is stretched, it is still countered by the motivation to own a home rather than rent, or the need for extra space to house a growing family. Sellers looking to find a buyer before Christmas have a head start if they are selling a property in these two mass-market sectors, as that is where there is the greatest demand.

“However, with buyers’ average wage rises often falling behind retail price inflation, and with a rise in interest rates being more heavily trailed by the Bank of England, sellers in these most popular sectors should still be wary of over-pricing. Buyers will be looking for the best buy on the market in their desired area, either in terms of price or quality of finish.”

The toughest market at present is the sector made up of properties with five bedrooms or more, with this top-of-the-ladder category taking a current average marketing time of 76 days.

The challenge to sell these larger properties is particularly noticeable in London, where the average time to sell is now 86 days. This longer period is having an effect on overall market activity in the capital, with the number of sales agreed down by 9% on the same period last year – more than any other region.

It’s regions in the southern half of the country that are dipping most, with an average of 7.9% fewer sales being agreed than this time last year, while the northern half performs somewhat better, with a fall of just 3%.

For the year as a whole, however, 2017 still remains ahead of 2016 on sales agreed numbers, with the year to date being 1.1% ahead of the previous year.

Shipside concludes: “Sales agreed numbers are holding up better in the north, whilst a common factor throughout the country is the lower and middle market sectors being the most active. However, where property prices have far outstripped buyers’ wages, and consequently their affordability, sellers will either have to be more tempting with their asking prices or outscore other properties with extra desirable features.

“With the number of sales agreed for the year still up on a pretty busy 2016, it shows there is plenty of potential life in the market and need for housing, but at the right price and quality. Get that right and it will hopefully mean the present of a successful sale for Christmas and the gift of a new home in the New Year. Those homeowners who need to do some work to their home to make it more attractive to potential buyers should get ready now in time for marketing in January.”

The Chairman of estate agent Jackson-Stops, Nick Leeming, offers his thoughts on the index: “The driving force behind the slowdown in sales in September is the combination of a lack of supply of homes to the market and potential buyers being warier than usual, due to the prospect of increasing interest rates. Christmas is generally a crucial deadline for everyone involved in the house buying and selling process, with buyers wanting to unwrap gifts with their family in their new property. Accurate pricing is vital to secure a sale as quickly as possible, particularly as buyers are savvier than ever before on their local property market, given the host of research tools at their disposal. Buyers will generally have a clear check-list of what they want in a home and they will not pay over the odds in the current climate for something that does not tick all the boxes.”

Kevin Shaw, the National Sales Director at Leaders estate agent, also responds: “The market varies significantly from region to region, but certainly in the south it is now more price sensitive, whereas in some areas of the Midlands, we are still seeing demand outweigh supply and high asking prices being achieved. Whatever the market conditions, it is always important to set the right price as soon as a property comes onto the market. This is even more crucial if you want to achieve a sale within a specific timeframe. Although the market is now slightly quieter as we continue into October, it certainly is possible to secure a buyer by Christmas.”

The Managing Director of Andrews estate agent, Chris Chapman, comments on market conditions: “We’re seeing similar lead times as Rightmove to secure a buyer, and we are working with our vendors already who are looking to move in the New Year to get their properties listed now to get a buyer settled in time for Christmas. The key with the current market is correctly priced property, which is all about using an experienced agent. We are seeing more and more regional differences in the property market, so selecting an agent with detailed knowledge of your area is key to success.”

Finally, the Founder and CEO of online estate agent, Russell Quirk, says: “The north-south divide is no new division where UK house prices are concerned, but a slower market climate in recent times has seen the divide almost reversed, with the more affordable areas in the north performing much better where actual price growth is concerned. Of course, it goes without saying that those with a top-of-the-ladder property will find it harder to sell, as these properties take a bit more time whatever the market conditions.

“With the UK market showing positive signs of a recovery over the last few months, it is unlikely the average UK seller will struggle as we approach one of the busiest periods in the UK property market calendar. I certainly don’t think there are more sellers chasing fewer buyers, as the level of housing stock, or lack thereof, continues to be the driving factor behind UK price growth. There are many pockets of the UK outside of the top-end market in London and the South East that are still seeing an imbalance between the level of buyer demand to houses available.”

New Stamp Duty Tax Rates Announced for Wales

Published On: October 4, 2017 at 10:06 am


Categories: Finance News

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The Welsh Government has announced new Stamp Duty tax rates for homebuyers in the country.

Although the changes mean that nine out of ten homebuyers will pay the same or less than they do at present, some will end up paying thousands more than they would in England.

New Stamp Duty Tax Rates Announced for Wales

New Stamp Duty Tax Rates Announced for Wales

The biggest change is that those buying homes worth over £400,000 in Wales will pay more than their counterparts in England.

For example, someone purchasing a £500,000 property in Wales will pay £17,500 under the new tax rates, compared with £15,000 in England.

On a £600,000 home, the bill in Wales will be £25,000, compared to £20,000 in England. And, on a £750,000 home, the tax rate in Wales will be £36,250, compared with £27,500 in England.

It’s for homes worth over £750,000 that the new tax rates will really start to hit, as the Stamp Duty owed will climb to 10%. Properties worth above £1.5m will be subject to a new rate of 12%.

However, buyers of homes worth less than £250,000 will pay up to £500 less in Stamp Duty under the new rates, while those buying properties up to £150,000 will escape the tax altogether.

In Wales, Land Transaction Tax will replace Stamp Duty from 1st April 2018. It is the first Welsh-only tax in almost 800 years.

The Chief Executive of NAEA Propertymark (the National Association of Estate Agents), Mark Hayward, says: “This is a welcome move for the Welsh housing market, and we’re pleased the Welsh Government has listened to our proposals to raise the band for this lower rate. The rate up to which buyers won’t have to pay any Stamp Duty will be £150,000 from 2018 – the same value as the average house price in Wales.

“This means a huge number of house buyers will no longer have to pay any Stamp Duty at all. However, the move creates further bands for properties in excess of £250,000, and those properties will now attract a higher rate of Stamp Duty Land Tax than they would have previously.”

Changes to Stamp Duty in England and Wales, introduced by the former Chancellor George Osborne, who abolished the slab structure, have had mixed results, and led to criticism that prior hikes in the purchases of expensive properties have severely slowed and damaged the London market.

While purchasers of cheaper properties were intended to pay less, escalating house prices have, in practice, meant larger bills for some homebuyers.

Below, we will compare the current Stamp Duty tax rates to those that will be introduced in Wales from next year:


  • Up to £125,000: No tax
  • Between £125,000-£250,000: 2%
  • Between £250,000-£925,000: 5%
  • Between £925,000-£1.5m: 10%
  • Above £1.5m: 12%

New rates:

  • Up to £150,000: No tax
  • Between £150,000-£250,000: 2.5%
  • Between £250,000-£400,000: 5%
  • Between £400,000-£750,000: 7.5%
  • Between £750,000-£1.5m: 10%
  • Above £1.5m: 12%

Landlords must remember the Stamp Duty surcharge that was introduced in April 2016, which means that those buying additional properties are subject to an additional 3% Stamp Duty rate.