Posts with tag: property owners

Mortgage Switch Guarantee Proposed to Help Property Owners

Published On: July 20, 2017 at 9:41 am


Categories: Finance News

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Online mortgage broker Trussle has proposed a new set of industry standards to be introduced into the market, to offer property owners much-needed support with switching deals. In a white paper, Trussle outlines five initial recommendations for a Mortgage Switch Guarantee.

The Mortgage Switch Guarantee is designed to address wide-scale switching inertia and the issue of mortgage prisoners, both of which are costing UK property owners billions of pounds every year.

Mortgage Switch Guarantee Proposed to Help Property Owners

Mortgage Switch Guarantee Proposed to Help Property Owners

The white paper identifies several shortcomings in the mortgage market, which are exacerbating this inertia – some of which are expected to be addressed in the upcoming Financial Conduct Authority (FCA) Mortgage Market Study. These range from a lack of uniformity and education surrounding the pricing of mortgages, to inadequate communication from lenders when it comes to prompting customers to switch.

It also recognises that a large number of borrowers are not switching to more suitable deals because they are mortgage prisoners, trapped on Standard Variable Rates (SVRs), and are unable to remortgage because they fail the stricter borrowing affordability rules introduced by the Bank of England in 2014.

Trussle is proposing the creation of a Mortgage Switch Guarantee to address these issues and ultimately move towards a state of mortgage optimisation, where all UK borrowers are switching to the best available deals at the right time.

To initiate the proposal, the broker has made the following five recommendations:

  1. Standardising and simplifying the way mortgages are priced and presented to customers.
  2. Improving lenders’ communication with customers when prompting borrowers to switch.
  3. An obligation for lenders to offer new deals to customers who are mortgage prisoners.
  4. A mandate for all mortgage brokers to have access to all deals on the market.
  5. Modernising a range of slow and outdated processes when it comes to switching.

The CEO and Founder of Trussle, Ishaan Malhi, says: “Millions of homeowners are collectively losing billions of pounds because switching mortgage isn’t clear or simple. The Mortgage Switch Guarantee will help put an end to this unfairness.

“We’ve spent the best part of a year speaking with thousands of borrowers and meeting with industry leaders from across the market to identify this ambitious but necessary set of standards. Thankfully, there’s already consensus among senior industry figures that many aspects of the remortgage market are in need of improvement.”

However, he adds: “But for the Mortgage Switch Guarantee to be a success, it will need to be widely adopted by lenders and brokers, and supported by regulators and Government. We’ll therefore be speaking with and listening to feedback from these key groups in the coming months.

“The Energy Switch Guarantee, introduced last year after more than a decade of lobbying and hard work, has already helped five million energy customers save an estimated £1 billion. The impact of the Mortgage Switch Guarantee has the potential to be 15 times greater, which is why we won’t be slowing down our efforts to deliver a fairer mortgage market for homeowners across the UK.”

Paul Higgins, the Chief Executive of the HomeOwners Alliance, also comments on the proposal: “Unquestionably, changes must be made in the mortgage market. The fact that two million borrowers are on their lender’s SVR cannot simply be attributed to borrower apathy and ignored.

“Consumers have seen huge upheaval in the mortgage market over the last ten years and, with the hoops they have to jump through to meet affordability criteria now, it’s not surprising many would be confused by or fearful of getting a new deal. The mortgage industry must address this by making switching to a better deal as straightforward and safe as possible.”

Homeowners more content than renters

Published On: June 8, 2017 at 8:50 am


Categories: Property News

Tags: ,,,,

The majority of property owners in the UK are pleased with their property – with those aged over 55 most content.

However, tenants are not as pleased generally with where they live, according to new research from TheHouseShop.


In all, 83% of home owners said that they were content with their property, in comparison to 54% of tenants renting a property from a private landlord.

What’s more, tenants were more likely to be more unhappy with their property. 21% of tenants asked said that they were either fairly or very unhappy with their current dwelling, as opposed to 8% of owners.

Nick Marr, co-founder of TheHouseShop, believes that the findings are not overly surprising, given groups such as Shelter and Generation Rent have long called for better standards and protection for tenants.

Homeowners more content than renters

Homeowners more content than renters

Marr observed: ‘For home owners, the commitment to a property is much more permanent than it is for renters, and buyers will spend a lot of time and effort choosing their ideal property and carrying out improvement works over the years to perfect it.’[1]

‘Tenants, on the other hand, are rarely allowed to make even superficial changes or improvements to their homes, so it is highly unlikely that they will ever achieve the same level of happiness as home owners,’ he added.[1]


The research uncovered a clear divide between the young and old age groups. The over 55’s were by far the happiest, with 85% happy with their property.

On the other hand, 25 to 34 year olds were least likely to be very happy with their properties, with only 16% stating that this was the case. Only one in twenty over 55’s said that they were unhappy with their home.


Housing Market Confidence Remains Uncertain

Published On: November 21, 2016 at 1:02 pm


Categories: Property News

Tags: ,,,

The most recent housing market confidence index from agency Knight Frank has shown that property owners across Britain feel the value of their home will increase in the next twelve months.

Interestingly, market confidence is more prominent in the South East of England than any other region.

Confidence Rising

Of the 1,500 households surveyed, 16.9% said that the value of their home rose during the last month. Only 6.3% said that they had seen falls.

Knight Frank said that while the headline index rose month-on-month, there were still significant regional variations. Households in the South of England are much more confident than those in Scotland and Wales.

However, the Index is well below the confidence recorded in May 2014, which is a reflection of the uncertainty surrounding the market.

Housing Market Confidence Remains Uncertain

Housing Market Confidence Remains Uncertain

Lack of supply

Grainne Gilmore, head of UK residential research at Knight Frank, observed: ‘This chimes with the increased economic uncertainty as the UK starts to negotiate its way out of the EU. However, opinions on the housing market are also formed at a local level and in many cases markets are characterised by a lack of supply of homes to purchase, which is underpinning pricing.’[1]

Tim Moore, senior economist at HIS Markit, which conducted the investigation, said: ‘Households are also relatively cautious about the outlook for house price growth in 2017, suggesting that heightened economic and political uncertainty remain headwinds to confidence.’[1]



Annual house price growth in 6 month high

Published On: November 12, 2015 at 11:43 am


Categories: Property News

Tags: ,,

Annual house price growth in England and Wales rose at its quickest rate for 6 months during October, according to a new property index.

Data from the Your Move Reeds Rains Index indicates that property prices rose by 5.2% in comparison to the same period last year. In addition, average property prices increased by 0.9% month on month, bringing the typical property value to £288,421.


This record high rise was the tenth consecutive one recorded this year. The overall price growth is being driven by property in the capital, with values increasing by £24,636 here in the previous year. If London and the South East of England were taken out of consideration, annual house price growth would slow to 3.9%.

For sales, last October was the strongest since 2007, with the north seeing the largest sales boost, due to better levels of supply. However, sales of homes valued at £1.5m or more dropped by 35% year on year, with changes in Stamp Duty still hitting hard.

East Anglia recorded the strongest year on year growth of any region, with rises of 6.2% taking the average price of property in the region to £241,284.


The report shows that London house prices are recovering from more slowed growth seen in the second half of 2014. In the capital, there has been an annual rise in prices of 4.4%. Most of these recent price rises have been driven by growth in areas such as Harrow Newham and Barking and Dagenham.

‘These rapid rises are currently outweighing the decline at the top of the market, carrying average values higher,’ noted Richard Sexton, director of e.surv chartered surveyors. ‘While many commentators are forecasting significant house price growth in London and the UK in the coming years, these need to be viewed in historical context and we’re unlikely to see a return to the unsustainable rise of the past decade.’[1]

‘Most current predictions are still a slowdown from the past five years of growth and overall since September 2005 average prices across the country have soared 43.5%, while average property values in London have more than doubled,’ he added.[1]

Annual house price growth in 6 month high

Annual house price growth in 6 month high


High-value drop

Mr Sexton also explained that properties worth in excess of £1.5m have been hit with the 12% of property value Stamp Duty increase, from its previously low 5%. As a result, ‘sales of homes worth more than £1.5m have fallen by 35% in the third quarter compared to a year ago,’ says Sexton. He went on to say that, ‘this tax has really put the shackles on the prime market in the capital, as three quarters of these sales since January 2014 took place in London.’[1]

‘The implications can be seen in the 12.6% annual drop in prices in Kensington and Chelsea, while prices in the City of Westminster have also fallen, 5.5% year on year. Stamp duty has had strong implications for the South East too, with prices dropping in other typically more expensive areas, such as Windsor and Maidenhead,’ he also noted.[1]

Regional results

Regionally, the pattern of property sales is in reverse to what has been happening with house prices. Activity increased most in the North, Yorkshire and Humber and the North West, but fell in the South.

Sexton notes that, ‘supply of properties on the market seems to be the sticking point for sales growth and activity in the northern most regions of England is also being facilitated by more affordable prices.’[1]

‘With low interest rates now likely to be prolonged into 2017, there should be plenty of momentum to encourage further activity. But so far in 2015, total sales are still 4% down on last year, due to a slower first six months. We will need the current revival to storm through the remaining two months of the year, if we are going to match 2014 sales,’ he concluded.[1]



Lack of knowledge over property leases

Published On: November 10, 2015 at 10:58 am


Categories: Property News

Tags: ,,,

A shocking new survey has indicated that many property owners in Britain who are leaseholders do not know enough about how the system works.

This is due to poor advice being passed on by conveyancing solicitors, according to the investigation conducted by law firm Bolt Burden Kemp.


The firm believes that some owners have a very poor understanding on how leases work, what to do to get them extended and the consequences of not extending a short lease.

Results from the survey show that over half of leaseholders are unaware of an 80 year old rule that states once the time left on a lease falls below 80 years, an extension will immediately cost thousands, if not hundreds of thousands, to renew.

Nearly all flats and apartments in England and Wales are leasehold property, yet only a fifth of leaseholders know that they have leases with less than 80 years let. They therefore are facing lofty bills to extend their agreement. Worryingly, 36% do not know the length of their lease.

Leaseholders are said to not know that they can extend their lease following two full years of ownership. Bolt Burden Kemp points out that a lease with less than 80 years left to run becomes less valuable, leaving the owner with a diminishing asset.

Lack of information

In addition, the survey shows many respondents were not given basic information about the importance of the length of a lease. It points out that buying a leasehold can be full of underlying issues and a lack of knowledge can lead to expensive problems.

‘It is clear from these results that leaseholders are simply not being given enough information by their professional advisors before buying flats and apartments,’ noted Stephen Hill, partner at Bolt Burdon Kemp. ‘This is creating a ticking time bomb for many leaseholders.’[1]

Lack of knowledge over property leases

Lack of knowledge over property leases

‘Not knowing the length of your lease of the impact if it balls 80 years is very serious, it could mean you struggle to sell the property or renew your mortgage. Solicitors and conveyancers advising leaseholders must do more to ensure property owners are fully aware of what they are getting themselves into when they buy a lease,’ he added.[2]

Results from the survey indicate that 39% of respondents were not advised of the significance of the 80 year rule when purchasing a property. 42% were told not to take legal advise in time before their lease dropped below the 80 year mark.


The law currently states that when an unexpired term of lease falls below 80 years, the calculations to work out the cost of an extension changes. When a lease is extended, the freehold becomes less valuable. Should the lease have less than 80 years left, when a leaseholders comes to extend, the law states that compensation for any lost value should be paid to the freehold owner.

Despite half of those surveyed knowing that their lease had more than 80 years left to run when they purchased their home, 20% said that bought a home which had less than 80 years left on the lease. 29% could not remember.

Hill believes that, ‘the general lack of knowledge around the 80 year rule is shocking. This is one of the first things property buyers should be enquiring about when they are looking to buy a home which has a leasehold title rather than a freehold.’[3]




Mansion Tax Could Cost Millions

Published On: April 20, 2015 at 3:09 pm


Categories: Landlord News

Tags: ,

A Labour victory in the closest General Election for decades could be costly for over 120,00 households, according to new reports.

Estate agents Savill’s estimate that this number of homes could each be facing a bill of 4,800 to have their property revalued, to fall in line with Ed Milliband’s proposed, ‘mansion tax’ regulations. Savill’s predict that the total cost could be as high as a huge £110m.[1]


However, writing in an article for The Telegraph, Savill’s also suggested that the taxpayer could be hit to the tune of £175m. This, the estate agent believes, will be due to HMRC having to fit the bill for homeowners that are in dispute over the valuation of their property. Savill’s believe that a substantial percentage of property owners would choose to challenge the valuation of their property to make sure that they are not subject to the tax.

Mansion Tax

Mr Milliband’s proposed mansion tax will affect all properties valued at £2m or above. Taxes for properties valued between £2-3m will be £3,000, but properties of a higher value could face even higher bills. Labour’s motive for the mansion tax, which they believe could raise in excess of £1bn, is to raise significant funds for the NHS.

Mansion Tax Could Cost Millions

Mansion Tax Could Cost Millions


Election uncertainty, coupled with an increase in stamp duty for high value property purchases, has resulted in a 4.7% decrease in £2m valued property in London during the six months to March 2015.[2]

Director of residential research at Savill’s, Lucian Cook, said that, ‘the valuation requirements and associated potential for dispute mean that a mansion tax would be particularly costly and complicated to administer.’ This, Cook believes, will reduce the efficiency of the tax to become, ‘a revenue raiser for the Treasury.’ Furthermore, Cook said that, ‘the potential costs borne by the tax payer will be a further concern to long term owners who are often asset rich but cash poor and for whom the tax itself is a significant concern.’[3]