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Finally, after the pent-up frustrations of lockdown, we have some very good news to report:
Firstly, the Chancellor of the Exchequer, Rishi Sunak, has announced a substantial boost for the housing market with the raising of the SDLT (Stamp Duty) threshold from £125,000 to £500,000. This really is quite incredible and will save buyers up to £15,000 (£10,000 for first time buyers who already enjoy a discounted SDLT rate). If the idea is to kick start house sales then this is certain to do the trick. There are plenty of buyers around, enjoying low interest rates too, but stock is woefully low, with 15% fewer properties available than this time last year. This boost will encourage people thinking about moving to do so immediately, as the concession expires in March 2021.
This additional activity will in turn generate knock-on sales and inspire even more confidence in a market that has come out of lockdown with only slight bruising. Indeed, before the SDLT concession was announced, over 85% of movers said they still planned to move, despite the effects of the pandemic. The survey of over 2,000 movers was conducted by Zoopla, who also predict that annual house price growth will hold at around 2% over the coming months as a result of renewed demand and overall activity.
What will happen as soon as the SDLT holiday comes to an end is yet to be seen, but hopefully it will coincide with people coming to terms with lifestyle adjustments and being able to make longer-term housing decisions. Rightmove has already reported that over 12% of movers are actually doing so as a result of virus-related living/working changes. But for the time being, if you are considering moving up, moving down, moving on or moving out, there will be no better time than right now to do so. And that’s not just bullish agents’ speak - this is exciting! Do let us help you quickly and safely bring your property to this fantastic market and help you secure the very highest price. Put us to the test and call us on 0115 8240235 today. You might be pleasantly surprised!
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Sometimes we have to point out a few home truths if we are to enhance our client’s chances of selling quickly, and for an excellent price! Some homeowners spend thousands of pounds improving their property before going to market yet can be oblivious to issues that prospective purchasers could regard as glaringly off-putting.
This is especially the case when it comes to pets. Just over half of British households own a pet. Six million of us have a cat, 5.1 million have a dog, 4.1 million have fish, 2.5 million have a rodent and 1.4 million keep birds. Just under 1 million of us keep reptiles! *
Yet house buyers seem not to belong to the family of animal lovers, despite the fact that 70% of us lived in a pet-owning household as a child, and buyers can be very distracted when viewing a property that houses a pet.
It may be fear of a large or aggressive dog (66% of dogs are classed as medium to large), concerns about allergies or hair on clothing (there are 9.2 million cats in the UK) or the “stand on a chair” squeamishness about rats and mice. Don’t even mention snakes! Yakking, squawking, or barking can also be an annoyance when a buyer is trying to concentrate on looking at the property – and hopefully like it. Even an unfamiliar whiff of something in a cage can taint an otherwise good viewing.
Not all estate agents have the courage to talk plainly! But if you are selling, please don’t ignore the effect your pet might potentially have on your sale. Take the dog for a walk when your agent brings buyers to view; clean out the hamster cage twice a week and make sure there are no cat hairs on chairs. Freshly cleaned carpets not only smell better than “arôme du chien”, but they look good as well.
Fido might have shredded your slippers – but don’t let him wreck your sale! As for us, we love dogs, and you’ll probably find a dog biscuit or two in our pocket when we assess a home for sale.
* Source of figures: Pet Food Manufacturers Association
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Smart investors are keen to snap up bargains, and the buy to let market remains surprisingly active. However, whilst it is tempting to go out and buy, buy, buy – a word of caution, because it might not be so easy to let, let, let.
Finding a tenant is only one aspect of the venture which some landlords feel can be done independently of a lettings agency. However, we often hear sob stories from new landlords who tried to go it alone - with disastrous consequences.
For example, according to the National Landlords Association, some 50% of landlords have had a property abandoned by a tenant. This usually follows at least one month of rent arrears and can also include substantial repairs bills and cleaning costs, and arrears of electricity, gas and water, which may have accrued without the landlord’s knowledge. So the issue of credit referencing and deposit protection becomes an issue.
Then there is the problem of possession. You can’t just reclaim the property, as the tenants are unlikely to have formally relinquished their occupation. So despite having an empty property, you could still have to gain formal possession through the courts. This can take months and be expensive, especially when compounded with rent arrears and a period of vacancy. And if you re-let the property illegally you can be fined up to 25% of the property’s open market value!
As you might expect from the above, most experienced landlords choose to employ lettings specialists such as ourselves to manage their investment - as well as simply finding a tenant. Our landlords typically agree that this could well represent one of the most rewarding aspects of their investment in the right letting agency.
Why not call Angela for a chat on 0115 8240235. It could pay dividends!
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Is This a Good Time to Buy Your First Home in Nottingham?
Should you wait to buy your first home in Nottingham or buy now? What sort of mortgages are available? What sort of deposit is required? These are questions all Nottingham buyers are asking at the moment, yet this week I would like to focus on Nottingham first time buyers and what it means directly and indirectly to Nottingham homeowners looking to move up the Nottingham property ladder and Nottingham buy to let landlords.
Well quite frankly, to answer that question it’s contingent on what Nottingham property you are looking to move into and even more significantly, how long you are hoping to live in that property.
We have many armchair economists and even professional economists predicting Armageddon when it comes to the property market, yet the Nottingham (and UK) property market is essentially very sound. Don’t forget the Chancellor himself, George Osborne warned that if we voted to leave the EU two things would happen. Firstly, the UK property market would crash and property values would drop by 18% in the two years after the vote. Secondly, there would be an ‘economic shock’ to the country’s economy that would increase the cost of mortgages (through increased interest rates as there would be a run on the Pound). UK GDP rose by £132bn in the two years after the referendum and interest rates actually dropped locally, with regard to property values …
Nottingham house prices rose by 11.1% in the 2 years following the Brexit vote
Lloyds have predicted an enormous 30% fall in property prices over the next 36 months whilst Savills have suggested a short dip of 5% during the summer, based on very low transactions numbers, with property prices bouncing back to be just over 15% higher in 5 years’ time. This assumes that the UK plc economic downturn is short & sharp, and that no substantial gap opens up between supply and demand in the property market (i.e. everyone doesn’t dump their property market all at the same time).
Nottingham Property Values after the 2008 Credit Crunch crisis plummeted 10.6% between 2008 and the end of 2009
Yet, the circumstances of the 2008/9 property crash were fundamentally different to today. Many ‘armchair economists’ assume there will be a re-run of the 2008/9 and 1988 property crashes in the coming 12 months in terms of house value falls. Yet, dissimilar to the last recession, this dip has not been led by previous years of strong property price growth like the other two crashes. House prices in many parts of the UK have been down in the last 12 months.
You would think Nottingham first-time buyers who have already saved their deposit could grab a bargain in the coming months, you would believe they would have less competition in the market because of landlords holding back buying additional rental properties. This is because of the press speculation that rent arrears are sky high from tenants who are unable to pay their rent. Yet evidence from many professional bodies in the private rental sector state rent arrears across the whole of the Country are appearing to be very low indeed, despite Covid-19.
Interestingly, the firm Yomdel who handles ‘web live chat’ and ‘phone support’ for thousands of estate and letting agents have reported national activity is higher than the two months of the Boris Bounce (in January and February 2020). The number of new buyer enquiries for the last two weeks is double (108.9% higher to be precise) than the 2019 yearly rolling average. New landlord enquiries are 32.1% higher than the 2019 average and tenants are 150.1% higher than the 2019 average ... these are all great signs and go against the doom monger economists.
My best advice to all Nottingham property buyers is, be they second time buyers, first time buyers, landlords … whatever number buyers, they should buy with a medium-term view of future Nottingham property values, instead of an expectation of always looking to making a quick few pounds flipping a property (i.e. selling it quickly).
Let’s not forget that mortgage interest rates are another important factor: they are at a 325-year low, so borrowing money has never been so inexpensive. If you know you are going to be living in your first (or second) Nottingham home for five years and you want the peace of mind of knowing precisely what your mortgage payments will be, then it’s very attractive. At the time of writing, Barclays are offering any first-time buyer a 95% mortgage on a 5-year fixed rate of 2.95%. The average value of an average terraced house in Nottingham is £144,700 and so with the 5% deposit of £7,000 on a 35-year term the …
Mortgage payments on a typical Nottingham terraced house would only be £526 per month (i.e. much cheaper than renting)
Many lenders are lending money even if you are on furlough, yet you may find you won’t be able to borrow as much pre Covid-19. Interestingly, some mortgage companies will even take into account total income, where your employer is topping up the Government’s furloughed amount, whilst other lenders will consider mortgage applications on a case-by-case basis. The best advice I can give is, don’t assume what you can or can’t borrow. Speak to a whole of market mortgage broker, to see what is possible – not what your friend on Facebook tells you, what you can or can’t borrow.
You only need to put down a 5% deposit for the property you would like to buy
If you think about it, it’s inconsequential if Nottingham property values drop or not, or if they do drop whether they bounce back quickly (or not as the case maybe) because it’s impossible to know the bottom of the property market. I would say if you find the right Nottingham property for you, at the price that feels right, that will be your home together and you are going live in that Nottingham property for the next five to ten years, it’s not a bad time to be buying. It is like waiting for the next piece of tech – there will always be a better model or an assumed better time. We are talking about your home here – a home for you and your partner and family, be that your kids, dog, cat, pet or favourite pot plant because …
Spending money on rent is all wasted money – at least when you buy your own home, you start to pay your mortgage off from day 1
So many first-time buyers use the Bank of Mum and Dad to help with their deposit, yet I have spoken to many parents who wouldn’t want to interfere in their mature children’s life and subsidise day to day expenditure, yet are embarrassed to offer their help with the deposit. If you don’t ask …you don’t get!
Hope you enjoyed this article and if you need any assistance from us, give us a call on 0115 8240235.
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June 2020 Market Update
It might be tempting to believe that the pandemic has been destructive and all-consuming on all fronts, especially in relation to the property market, which virtually ground to a halt a few weeks ago.
But we British are a resilient lot! Our compliant “keep calm and carry on” mentality has meant that we have/continue to do our bit to protect our community, without losing our focus on those other things in life that are important to us. Our home comes close to the top of the list, along with family, relationships, job, pets, well-being and general prosperity.
While some businesses, for example a coffee shop or an airline, will eventually start to trade again from where they left off, the property market is one type of business where the latent demand has accumulated during lockdown like a catapult being stretched. It is now at the point of being released and we are expecting intense activity over the summer.
In fact, recent research revealed that some 15% of home movers have been prompted to do so as a result of a change of plan due to the pandemic. During lockdown some people found that working from home suits them quite well, but they would prefer not to use their broom cupboard as an office. And if they are no longer expecting to commute to work, why are they paying a premium to live in a property near the station, especially if the broadband quality could be better elsehwere? Perhaps time spent during May’s warm and sunny weather has sparked an interest in gardening too?
Certainly, we are already seeing a surge of interest from Londoners rethinking their lives and deciding that Nottingham is no longer regarded as just a commuter City, but a fabulous place to settle for both home and work. Unlike other scenarios that might adversely affect the property market, we have a good balance of supply and demand, interest rates are incredibly low, and banks are keen to lend. So although sales might be down perhaps 25% this year, the consensus is that the rebound is likely to be strong.
The dynamics of the market may be changing, but we as estate agents a ready for the challenge. Whilst we are of course highly respectful of the guidelines for safe property viewings, our focus remains on offering sincere, straight-talking and sound property-related advice to our customers. The pandemic might have changed society, but, as we emerge from our confinement, our vision remains the same - we help people move, whatever the circumstances.
If you feel moved to move, why not call us on 0115 8240235 for an initial chat? You might be pleasantly surprised.