Easing the lockdown- what is happening in the housing market?

Easing the lockdown- what is happening in the housing market?

Sadly this newsletter is a tad too late to wish all you beautiful ladies out there a Happy Women's day.  But we are reaching you in time for Easter.  With the days getting longer and with a few hours more sunshine a day things are getting brighter. Add to that the lifting of restrictions and we are finally seeing some people with a spring in their step.  We have things to look forward to...  Onwards and upwards.
There are many things happening in the housing market this month.

<span style="font-family: Arial, Helvetica;">Landlords urged to comply with electrical safety regulation or risk fines</span>

What are the new electrical safety standards?

The new electrical safety standards require landlords to ensure the safety of all electrical wiring and fixed electrical installations are tested and signed off for each of their properties.
If the test highlights any investigative or corrective work, the landlord has 28 days to rectify the issue.

What exactly needs to be tested?

The fixed electrical parts of the property.

• Wiring
• Socket outlets
• Light fittings
• Fuse box
• Showers
• Extractor fans

What does not need to be tested?

The new regulations state that the tenant is responsible for portable electrical appliances and therefore tests on these items are not required.
However, it is recommended that the landlord carries out tests on the portable appliance items they provide for good practice.*

When will the new standards be enforced?

For existing tenancies, an electrical safety test will need to be carried out by 1st April 2021.

For new tenancies, all electrical installations must be tested before the tenancy begins.

Who can carry out the electrical safety test?

Only a qualified electrician can carry out the test. Guidance for choosing a competent tester:

- Electrical Safety Roundtable
- Registered Competent Person Electrical single mark and register

What do you need to do as a landlord once the test has been completed?

- Provide a copy of the electrical safety report to each tenant in their existing properties within 28 days of the inspection.

- If requested, provide the local authority with a copy within seven days.

- Supply a copy of the safety report carried out to the electrician conducting the next safety report.

- Provide a copy of the most recent report to any new tenants.

- If requested, provide a copy of the most recent report to any new prospective tenants within 28 days.

- Electrical installations must then be tested every five years.

What happens if landlords do not carry out corrective work highlighted by the report?

The local authority has the right to enter the property (with the tenant's permission) to rectify the problem and will notify the landlord of this action.
The local authority can then bill landlords for the cost of any work completed by them.
If any issues highlighted within the report are not rectified within 28 days, landlords will potentially be faced with a fine of up to £30,000.

Landlords have the right to appeal to the First-tier Tribunal against any decision of the local authority.
Due to current restrictions with the pandemic, many within the sector are concerned about ensuring their compliance in time with qualified help.
If you'd like to talk about this in more detail, visit our website or learn more about our services for landlords.


<span style="font-family: Arial, Helvetica;">How to maximise what you can see without physically viewing</span>

It goes without saying that COVID-19 had a massive ripple effect on the world, and of course, the property market wasn’t left untouched by this.
We have seen radical changes within the sector, as agents like ourselves look at ways to adapt and evolve in order to meet new needs from our clients and colleagues.
One of the ways we've done that as an industry is to introduce new elements to our offering, substituting face-to-face meetings for online consultations that can be conducted safely.
Now, months after we've settled into this new way of doing things, a common question we get asked is ‘how can I maximise non-physical viewings?’

The benefits of non-physical viewings

A perk of non-physical viewings is being able to see the property without having to make unnecessary trips in-person to view a property, which is key in light of the current situation and restrictions.
Spending more time looking at online property listings, virtual tours or videos allows you to browse a larger number of homes than it may have been possible to physically view; particularly if you find it difficult to find time outside of work to arrange appointments.
So, this already means that you have the opportunity to see more properties in less time and refine the criteria you have by being exposed to more choice.
Another key benefit is that by starting your search online, you can quickly gain a feel for the homes that you want to see again, whilst identifying those that aren't suited to your needs.
In terms of maximising your time when talking to an agent screen-to-screen, we'd advise asking them about the natural flow of the rooms to help you envision the space more clearly, as well as the standard questions you'd otherwise ask on the seller's reasons for moving, whether there's a chain and the current conditions for the property's boiler and water pressure.
As we can appreciate that you'll want to see a select few properties in-person when you've narrowed down your search, there are tips for making in-person viewings right now, such as:
- Arranging the viewing by appointment, with only one household in the property to minimise contact
- Wearing a mask and using sanitising gel at the start and end of the viewing
- Asking any questions outside of the property so that you don't feel rushed to exit and miss anything important

How can we help?

Speak to a member of our dedicated team for any support you may need.

<span style="font-family: Arial, Helvetica;">The government’s multi-billion pound intervention to end unsafe cladding</span>

After the tragic incident of Grenfell tower in 2017, a massive investigation was launched to determine what caused the fire to spread so rapidly, resulting in an outcome that blamed the poor quality of the additional external cladding used to hold the building together.

The cladding used was below standard and the company providing the cladding ‘knew of fire risk’ – according to the BBC.*

Grenfell tower spurred on a movement within the UK, leading the government to pay closer attention to the materials used within similar property blocks.
After this data was released, figures showed that an estimated 1,700 buildings over 18 metres in height were identified to have unsafe cladding, affecting upwards of 321,000 current residents.**
What the government is doing

After significant pressure from the British public, the government recently announced a pledge of £1.7 billion towards the removal and replacement of unsafe cladding on high-rise residential buildings, otherwise known as the Building Safety Fund.

However, the Building Safety Fund has been criticised by some as not being adequate, as the government itself estimates the total cost of cladding restoration on all 1,700 affected buildings will be between £3 billion and £3.5 billion.
Another criticism of the Building Safety Fund is the available money will be distributed via a first come first served basis rather than on a risk factor, a choice that has been widely criticised.

In December 2018, the government also put a ban in place on all ACM cladding (the cladding used on Grenfell) on residential buildings to stop future high rise buildings from meeting the same fate as Grenfell tower.
For more information, please refer to: www.local.gov.uk/supporting-residents-who-have-been-affected-cladding-issues

*BBC News
**Local GOV.UK

<span style="font-family: Arial, Helvetica;">Good news for first-time buyers as lenders allow smaller deposits</span>

Over the last 12 months, first-time buyers have found it more difficult to move forwards with their purchase plans, as low-deposit mortgages became increasingly scarce.
Now that lenders have begun to re-introduce their 10% deposits, the current situation is looking up for new homeowners, as the number of available products at 90% loan-to-value ratio rose by 29% in the first two weeks of February.*
It is estimated that around £5 billion is currently being held up in the first-time buyer’s market due to the COVID-19 pandemic, as many future homeowners have decided to delay their move until they have greater financial stability and job security.
Are you looking to try again with your first property purchase?

Nine in ten 90% mortgages were withdrawn from the market in the wake of the COVID-19 outbreak last spring. 
Nearly a year on, first-time buyers have been handed a serious boost, with the majority of lenders now offering low-deposit mortgage deals and reducing the restrictions they put in place on how much of the deposit could be 'gifted' by friends or family members.

Are 95% mortgages likely to come back?

It is likely to be some time before we begin to see the full range of 95% mortgages re-appear back on to the market.
To learn more about your prospects as a first-time buyer, please visit our website.

<span style="font-family: Arial, Helvetica;">10% price surge for detached homes due to house hunters demanding more space</span>

Since the property market reopened last summer, we've seen a market boom that's led to record activity for new listings and sales agreed in the UK, as homeowners rush to find somewhere more suited to their lockdown needs and lifestyle.
The average price of a detached home was £486,595 in December 2020, which when compared to the previous year is a massive increase of £43,364.
This increase in value seems to be directly related to the fact that house hunters are seeking properties with more space since the emergence of the pandemic, as well as the start of the working from home new norm.

The second highest increase year-on-year were for semi-detached properties, which increased 6.26% to £287,313.

Russell Galley, Managing Director at Halifax, said: “as many continue to work from home, this has led to a significant increase in demand for bigger properties, which has likely driven the boost in price we’ve seen in detached homes versus other property types.

“Over the past six months, the average UK house price has risen by 6.3%, making it the market’s best half-year performance since early 2007.”

In the last two decades, the price of a detached home in the UK has trebledIn 2000, a typical detached property could be bought for an average of £164,820.
However, it’s the last five years which have seen the sharpest price increase.
In 2015, the jump from a semi-detached to detached home would be just under £150k, with the gap widening to just under £200k in 2020.

How much could your property have increased in value by? If you've not yet obtained an updated market appraisal for your home, you could be unaware of its value in light of current market conditions.
To get started with your next sale or purchase, visit our website today or talk to us directly to book your valuation.

<span style="font-family: Arial, Helvetica;">Eviction ban “more balanced” than past examples</span>

Just after we started 2021, Housing Secretary – Robert Jenrick – announced an extension on the ban preventing tenants from being evicted.

This meant that – apart from the most serious of cases – no evictions would be carried out until at least 21st February.

With the recent news that the ban will once again be extended, pushing bailiff-enforced evictions in the private rental sector back to March 31st, what does this mean for landlords and tenants?

The point of the extension is to ensure tenants are protected during these hard times, whilst what we have seen for landlords over the last few weeks is that the most recent extension has looked to be "more balanced".

Comparing how the ban has evolved

In the previous bans, the substantial rent arrears exemption only applied when there were nine months of arrears before 23rd March 2020.

Many landlords have been suffering severe hardship by rent arrear levels significantly below that figure, which prompted a change to the arrears threshold to six months, making it more balanced for landlords and tenants.

Jenrick has since added that the aim is to strike a fair balance between "protecting tenants and enabling landlords to exercise their rights to justice".

How are evictions able to take place in the most serious cases?

Bailiffs that are enforcing the few evictions permitted to be carried out are being told to take caution and proceed in accordance with the regulations – if they can do so safely.

There is also a question mark over how a bailiff should deal with a situation where a tenant is self-isolating.

The presumption from many bailiffs is that the eviction could not be carried out for their own safety.

What can you do as a landlord?

Landlords are going to have to find ways to manage these sensitive situations in the best way possible.

The most important thing is communication.

If your tenant is saying they can't pay their rent, it is ok to ask them for evidence to show there has been a change in circumstance, e.g. a letter to say the tenant has been furloughed or has been made unemployed due to the pandemic.

If you have any concerns about your living situation or property investments, we urge you to speak with our team today for more information.

<span style="font-family: Arial, Helvetica;"><span style="font-size: 18px;">Buyers have a second chance at stamp duty savings</span></span>

Initially announced in 2020, the stamp duty holiday was intended to aid homeowners through the buying process during the pandemic.
As expected, many took this opportunity to upgrade to their dream home or purchase their next investment, as savings of up to £15,000 were up for grabs.
Although it was thought that activity would begin to peter out at the end of last year, given that the original completion deadline was March 31st, that wasn't the case for the first part of 2021.
Now, with the recent extension announcement, the nation's home movers have a second chance at seeing incredible savings, with around 613,000 properties at 'sale agreed' by mid-January and likely to be the first to benefit from this protracted period.*
Even with an end in sight, buyers and sellers appeared mostly unfazed and continued to buy and sell regardless of the March deadline, which may have been as a result of the increasing availability of mortgage products with 10% deposits.
Another possible explanation for this is that property priorities have changed in the past 12 months due to sellers needing more space and falling out of love with their current home, making their need to move more urgent.
By giving homeowners and investors until the end of June, it is thought that the housing market will see further spikes in buyer activity as conditions prove advantageous, with the sector already demonstrating above average trends compared to previous years.
During a 10-day period in January, there was a reported 12% increase in estate agency enquiries and a 9% increase on sales agreed from 2020.
Combined with the fact that Rightmove are seeing ever-increasing website visit numbers, which in January were 33% higher than last year, these statistics give homeowners and buyers a promising opportunity in 2021.
If you are looking to upgrade your home this spring, our team of professional agents are here to help.

As your trusted agent, we specialise in local knowledge and attention to detail when valuing your property. For more information on what we can do for you, contact us.

*Property Reporter

<span style="font-family: Arial, Helvetica;">How much could you save by re-mortgaging?</span>

Homeowners whose fixed rate mortgage deal has ended could save hundreds by just re-mortgaging!

When a fixed mortgage deal ends, you are usually automatically put onto the lender's Standard Variable Rate (SVR), which can cost borrowers more each month in repayments than if they actually re-mortgaged onto a new fixed rate deal.

Here are some examples to show you the savings when switched:-

How much could you save re-mortgaging with 40% equity in your home?

If a homeowner owned 40% equity in their home, they would look for a mortgage deal at 60% Loan to Value (LTV).

• The average SVR currently stands at 4.41%*
• The average two year fixed rate at 60% LTV is 1.67%*
• The average five year fixed rate at 60% LTV is 1.90%*

With a property valued at £250,000, mortgage borrowers looking to re-mortgage at a 60% LTV would be looking to borrow £150,000.

Using a mortgage repayment calculator, you can calculate that if this borrower was on the average SVR on a mortgage term of 20 years, they would be paying £941.70 per month.
If they re-mortgaged onto a two year fixed rate deal at the average rate of 1.67%, this borrower would pay £735.61 per month in repayment, a reduction of £206.09 per month.
If this borrower were to re-mortgage on a five year fixed deal at the average rate of 1.90%, they would pay £751.74 each month in repayment, a reduction of £189.96 per month.

How much you could save re-mortgaging with 25% equity in your home?

Those homeowners who own 25% equity in their home would look for a mortgage deal at 75% LTV.

• With a two year fixed rate average at 75% LTV, which is currently at 2.29%
• With a five year fixed rate average at 75% LTV, which is currently at 2.49%

If your property is valued at £250,000, a homeowner would look to re-mortgage at a 75% LTV, borrowing £187,500.
On the average SVR of 4.41% and a mortgage term of 20 years, repayments on the average SVR would be £1,177.13 per month.
Re-mortgaging onto a two year fixed deal at 75% LTV at the average rate detailed above, repayments would be £974.50 per month.
If the homeowner re-mortgaged onto a five year fixed deal at 75% LTV at the average rate detailed above, it would make their monthly repayments of £992.65, a reduction of £184.48 each month.

How much could you save?

There are many deals available offering rates below the average, which means for some borrowers, bigger savings could be made.
If you speak to a mortgage broker, they’ll be able to give you the best options for your circumstances.

Contact us today for more information or help finding the right mortgage deal for you.