by admin | Apr 18, 2021 | Mortgage News
If you don’t like the term “haggling”, think of it as “negotiation”. That’s essentially what it is. In simple terms, the seller (or their agent), is trying to achieve the highest possible price for their home. You are trying to achieve the lowest possible price for the property. This is not about “win/lose”. It’s about reaching an agreement. Here are some tips to help.
Prepare thoroughly
Guide prices are a guide to what a seller (or their agent) wants for the property. You should therefore regard them as sources of information rather than as instructions. What you really need to know is the state of the local market and the seller’s situation. You can find out a lot about the first point with some thorough digging around the internet.
The key point to understand is that you need recent, local data. Recent data tells you what the market is doing now, not what it did in the past. Local data tells you how the market is performing in the locations which interest you. To take an extreme example, there’s no real point in looking up data from London if you want to buy property in Aberdeen.
In fact, if you’re looking at buying in a city, then you want data at local-authority level if not postcode level. Be aware that there can be significant differences in property prices in different areas of a city. You need to be sure that you’re comparing like with like.
Get preapproved for a mortgage
If you need a mortgage, then get preapproved for one. This marks you out as a serious buyer and reassures sellers. Think about whether or not there are any other steps you could take to make a seller’s life easier. For example, can you be flexible with your move date?
Understand the seller
It’s always safer to deal with a seller who has a clear reason to move. This reduces the chances of them pulling out of the sale, leaving you high and dry (and possibly out of pocket). The more motivated a seller is to move, the more chance there is that they will be willing to accept a lower price in return for a quick and convenient sale.
There are, however, a couple of caveats here. Firstly, a seller may have a baseline price below which they cannot, or just will not, go. For example, they may need (or just want) enough to clear their mortgage. Secondly, the more competition there is for a property, the more likely it is that someone else will offer both a higher price and a quick and convenient sale.
Keep a clear head
Until the sale is complete, in fact, arguably until you’ve moved in, you’re buying a property. It may be someone else’s home, but it is not yours. Keep that in mind at all times.
Obviously, you should only be looking at properties where you would be happy to live. You must, however, avoid getting emotionally attached to them. Your attitude needs to be that you want a good deal for your money and will go on looking until you get one.
If any given property is out of your budget (or just overpriced) and the seller is not prepared to reduce the price, then just move on. If you really liked the property, then keep an eye on the listing. If the seller does not get a sale, they might become more flexible on price further down the line.
By the same token, however, be careful about focussing so much on getting a bargain that you lose out on a great property you could have afforded.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage
Please contact us for any more information.
by admin | Apr 16, 2021 | Mortgage News
Vaccines are being rolled out and spring is rolling in. That’s two reasons for there to be good cheer throughout the UK. Will this mean good cheer for the property market? Here are some factors to consider.
The economy should be reopening
All four parts of the UK have mapped out plans to exit lockdown. Admittedly those plans will depend on circumstances. In principle, there could be halts and even backwards steps before the UK emerges from the pandemic. Overall, however, the general direction of travel should be very clearly towards a post-lockdown “new normal”.
Reopening the economy should have the very practical benefit of improving housing affordability. Of course, it would be unrealistic to expect too much too soon. It’s reasonable to assume that some sectors and job areas will recover more quickly than others. In blunt terms, the less a sector has been hurt, the quicker it will recover.
That said, as sectors recover, the benefits of recovery should begin to spread. For example, as people get their jobs back they will have more disposable income. This can then be spent at other businesses.
People will have clarity on remote working
Companies are going to have to decide whether or not they’re going to support remote working over the long term. This doesn’t necessarily have to mean full-time remote working. Even companies deciding to offer flexible/hybrid working could have a meaningful impact on the housing market.
In simple terms, if remote working goes mainstream, cities and traditional commuter-belt areas could lose their appeal. They could be overtaken by areas where people can afford more space (inside and outside). These areas could have longer commutes, but if people are making them less often this could be an acceptable trade-off.
The Stamp Duty holiday is still on
New buyers might have to more very quickly indeed if they want to get the full benefit of the Stamp Duty holiday. That said, it’s not entirely impossible. If sellers are prepared and conveyancers are available and everything goes smoothly it could be done.
Even if they miss out on the full discount, however, there is still the “consolation prize” of a lower discount available for three months after the main holiday ends. What’s more, if the Chancellor then puts Stamp Duty back as it was, then first-time buyers will still benefit from reduced Stamp Duty after the end of the temporary tax break.
Help to Buy has been extended
This isn’t exactly news, but it’s still relevant. The initial Help to Buy scheme has been extended to counterbalance delays caused by COVID19. The new Help to Buy scheme will be implemented as planned. The government has also outlined an initiative to provide guarantees for 95% mortgages. This is, however, still in the pipeline.
Interest rates remain an open question
The Bank of England advised banks to prepare for the possibility of negative interest rates. Of course, that’s not at all the same as saying that they will actually happen. It is, however, making the point that they cannot be ruled out. Although negative interest rates are not at all a new concept, they would be new to the UK. Hence it’s anyone’s guess what their impact would be.
At the same time, interest-rate increases cannot be ruled out either. Obviously, if interest rates go up, then this could reduce affordability. That said, if interest rates were going up as a result of strong economic growth, the end result could still be positive.
The housing supply is unclear
Buyers need there to be sellers. Currently, it’s unclear how much new-build and existing property will be on the market this spring. Lack of supply could put a damper on the housing market. It could, however, alternatively lead to fewer transactions of higher value.
Your property may be repossessed if you do not keep up repayments on your mortgage.
For more mortgage information please contact us
by admin | Mar 31, 2021 | Uncategorized
Fraud is a fact of life and the potential payoff for property-related fraud can be very high. This means that everyone involved in the property market needs to stay vigilant about it. Here’s a quick guide to what you need to know.
There are different types of property fraud
Some of the most common types of (attempted) property fraud include:
- Money laundering
- Investment scams
- Fund interceptions
- Identity theft
These can all be implemented in various ways. Ultimately, however, all frauds require you to trust someone who shouldn’t be trusted.
Money laundering
Money laundering tends to be an issue for property professionals to handle. As a regular buyer or seller, your only experience of this is likely to be having to provide ID. For completeness, it’s increasingly likely that this will be verified electronically. This is to protect against forgery, which is now highly sophisticated.
That said, it is not out of the question that you will find yourself approached by someone wanting you to act as a “money mule”. The simple way to protect yourself is just to say no. No matter what they offer you, it’s not worth the risk.
Investment scams
You can be targeted by an investment scam even when you’re not actively looking to buy or sell property. The way to protect yourself against investment property scams is the same as the way to protect yourself against investment scams in general. Make sure you do thorough due diligence before you decide whether or not to part with any cash.
In particular, be clear about whether or not the scheme is covered by any industry bodies or regulators. These do not guarantee that an investment is legitimate, let alone that it will be successful. They can, however, be a lot better than nothing.
Fund interceptions
Fund interception works by persuading the victim to transfer funds to a scammer rather than a legitimate recipient. The scammer often achieves this by pretending to be someone the victim knows and trusts. It may even be someone from whom they were expecting a legitimate bill.
As with investment scams, the key to protecting yourself against funds interception is to be sure you know who you’re dealing with. Find out both the contact details and the bank details of your legitimate key contacts (e.g. your solicitor) and only use those contact details.
Be aware that both phone numbers and emails can be “spoofed” (impersonated) as well as hacked. Always verify any contact by calling or emailing the known contact details. Never let yourself be pressured into taking hasty actions. Remember the old saying – act in haste, repent at leisure.
Identity theft
Your identity has a value, especially if you’re a homeowner (or about to become one). You, therefore, need to be careful to protect it. Here are some ideas.
Keep your mail secure
You may not get much postal mail these days, but you still need to ensure that what you do get is kept safe from prying eyes (and fingers). Once you’ve read it, shred it. If you don’t get enough mail to justify a shredder, then a pair of scissors will do. Just remember to cut finely and cut in both directions.
Protect all your devices
Any device with a mainstream operating system (e.g. Windows, macOS, Android and iOS) should have plenty of security software available for it. Make sure you at least download one of the free antimalware programs. Consider investing in one of the paid-for offerings. In particular, look for one with advanced message-filtering capability. This can help to protect you from scam emails.
For devices that don’t have proper security software, make sure you use a strong and unique password.
Use two-factor authentication whenever you can
Two-factor authentication combines something you know (your password) with something you have (usually a one-time code). It can do a lot to improve the safety of your accounts.
Please contact us for more information.
by admin | Mar 12, 2021 | Mortgage News
The latest budget was, unsurprisingly, a lot more focussed on COVID19 than on the housing market. It is, however, also important for property professionals. Here’s a round-up of the key points.
An extension to the Stamp Duty holiday
Arguably it was almost inevitable that the chancellor would need to grant some sort of extension to the Stamp Duty holiday. After all, the logic behind this is, fundamentally, exactly the same as the logic behind the recent extension of the current Help to Buy scheme. The construction industry has been badly hit by COVID19 and now also has to deal with the full impact of Brexit.
This has resulted in delays both to the construction of new-build properties and to the legal completion process. Rather ironically, the Stamp Duty holiday may have exacerbated the latter problem by stimulating activity in the housing market.
With buyers facing the prospect of losing out on the Stamp Duty holiday through no fault of their own, arguably, the government had to act. If it hadn’t then, at best, it could have had a lot of upset buyers on its hands come election time. At worst, it could have led to buyers pulling out of sales due to being unable, or unwilling to pay the increased Stamp Duty.
What is interesting is that Rishi Sunak chose to extend the holiday until the end of June. Then there will be a further three months where the threshold is set at £250K. This means that even new entrants to the market could potentially benefit from it. It also means that there could be another “cliff-hanger” in three and then six months time.
Help for “Generation Buy”.
Back in October 2020, at the (virtual) Conservative party conference, Boris Johnson announced his intention to turn “generation rent” into “generation buy”. He indicated that the government would achieve this by introducing a scheme to guarantee mortgages of up to 95% of the property price.
Fast forward to March 2021 and the chancellor has now indicated what this means in practice. Essentially, the government is bringing back David Cameron’s Mortgage Guarantee scheme. Like the old scheme, it will be available to onward movers as well as first-time buyers. It will also be available on purchases of existing property. The current limit is set at £600K.
ISAs stay untouched
Given that the adult ISA limits have been the same since 2017, it was always highly unlikely that the chancellor was going to feel under any obligation to increase them. The one change was that the penalty for making irregular withdrawals from the Lifetime ISA will be going back up to 25% in April. It was temporarily reduced to 20% to help those affected by the pandemic.
The chancellor did announce the introduction of new NS&I “green bonds”. These are intended to help the UK meet its target of becoming carbon neutral by 2050. At present, it’s unclear whether or not these will have any direct impact on the housing market.
It is, however, worth noting that the government’s commitment to its “net-zero” target requires a switch to electric vehicles. This in turn requires the development of mass-scale charging infrastructure. Areas that get ahead of the curve here could see local house prices rise accordingly.
Widespread tax adjustments
The chancellor’s largesse on Stamp Duty has not extended to other personal taxes. Capital Gains Tax exemptions, Inheritance Tax and the Pensions Lifetime allowance all stay at 2020/2021 levels. The tax-free personal allowance and the higher-rate income tax threshold both stay at 2021/2022 levels.
At present, these freezes are scheduled to stay in place until 2025. This effectively means that people could find their take-home earnings eroded over time. In itself, this does not augur well for affordability. On the other hand, much will depend on how well the economy performs overall.
by admin | Feb 27, 2021 | Mortgage News
As anybody who has tried it will know, being your own boss isn’t always easy. In the early days, you may have to do just about everything yourself. This can really limit your personal life. Even once your business matures, you still have to deal with unique challenges. In particular, you have to face up to the fact that lenders may be very wary of dealing with you.
Business owners versus mortgage lenders
According to a survey from specialist mortgage broker Haysto, approximately one in six people reported having their mortgage application rejected because they were their own boss. More specifically 14% of company directors and 15% of sole traders reported being turned down for a mortgage due to their employment status.
Looking at this from a “glass-half-full” perspective, however, five in six people are having mortgage applications accepted even though they are their own boss. This clearly shows that it is possible.
Understanding mortgage lenders
The key point to remember is that mortgage lenders now have to act in accordance with the terms of the Mortgage Market Review. In simple terms, this means that they cannot just look at multiples of income. They must look at the applicant’s personal circumstances and assess their ability to afford the loan over the long term.
Keep in mind that lenders can be sanctioned if they are found to have made an improper loan. The safest approach for them, therefore, is to err on the side of caution. Then add in the fact that lenders have to think about their own finances. Nobody will be happy if a bank winds up in the sort of trouble the world saw in 2008.
In short, therefore, if anyone wants to get a mortgage, they’re going to need to make sure that they satisfy a lender on all counts. This can be a particular challenge for the self-employed. That said, the challenge is not unique to them. Zero-hours contract workers and those on variable incomes are both in much the same situation. Here are some tips on how to address it.
Look after your credit records
Make periodic checks with the credit bureaux to ensure that your credit record is up-to-date and accurate. Keep it healthy by always making the minimum payments in full and on time. Pay extra if you can.
Reducing the balance on loans lowers your debt-to-income ratio. Reducing your balance on lines of credit (e.g. credit cards) doesn’t have quite the same effect. This is because you still have access to the credit. That said, staying comfortably below your credit limit is an indicator that you can manage your money.
Build up your deposit
Deposits protect your lender from house-price falls and from borrower defaults. Given that COVID19 and Brexit are both still running their course, it’s understandable that lenders will probably be particularly wary of these possibilities.
It can be hard to build up a deposit, especially when you’re renting. It may, however, be possible for you to get some help with it. For example, the Lifetime ISA is designed to help either with the purchase of your first property or in your retirement. It benefits from government bonuses.
Choose your lender with care
Lenders may all work to the same basic set of rules, but they still have some scope for individual decision-making. They may also have varying degrees of understanding about the realities of being self-employed.
Going to a mortgage broker may be a convenient way of getting guidance on which lenders are most likely to give you a yes. If you don’t want to go down this route, then at least do your research carefully. Check which lenders have the best track record of dealing with people in your situation.
Your property may be repossessed if you do not keep up repayments on your mortgage.
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