Default-on-a-loan

What Happens if You Default on a Bridging Loan?

Failure to repay a bridging loan could lead to repossession of the property/valuable asset that was used as security, however this is only ever used as a last resort. In addition to this, borrowers can also face adverse costs as a consequence for not repaying.

Lenders can work with struggling borrowers and rearrange their loan repayments to something more manageable.

As a secured loan, bridging loans will need a valuable asset as security. This means that those with bad credit histories can be considered for this type of finance, however, it also means borrowers run the risk of losing their asset when failing to repay – which can often be their home.

With a bridging loan, as with any type of loan, it’s vital to ensure you are able to pay back the loan to avoid more costs and the potential repossession of your home.

 

I Can’t Pay Back My Bridging Loan – What Should I Do?

If you can’t pay back your bridging loan on the required repayment date, you should contact your lender as soon as possible.

 

Contact-your-lender

 

Unfortunately, issues can arise that make it difficult to keep up with repayments – whether this is from cash flow issues, delays to your building project or something else. If these issues come up, it’s important to be honest with your lender, and let them know right away that you won’t be able to pay the loan on the set repayment date.

Your lender might be able to help you refinance or “re-bridge” under different terms, either with them or with a different lender. The solution worked out between you and your lender when struggling to repay your bridging loan will depend upon the details of the loan agreement and the situation you’re in that’s caused the repayment difficulties.

 

Will My Property Be Repossessed?

With Octagon Capital, your property will only be repossessed as a last resort. This means that if all other options have been exhausted, your property could be repossessed.

In addition to this, your property could also be repossessed if we can’t get in contact with you for a number of months. When struggling to repay, it’s best not to avoid your lender, as this can often leave them no choice to work with you on an alternative repayment plan, putting your property at greater risk of repossession.

 

How Do Bridging Loan Repayments Work?

Bridging loans are intended for short-term use, priced monthly rather than annually. Interest on the loan is charged for each month that the loan is open and can be paid monthly or all together at the end of the loan term.

 

Bridging-loan-repayments

 

The fees involved for a bridging loan can vary depending on the situation. Below is a list with some of the fees typical for this type of loan:

  • Interest rate
  • Arrangement fee
  • Legal fees
  • Broker fees
  • Exit fees
  • Valuation fees

It’s vital to understand the full cost of any potential loan before taking it out, ensuring that you’re able to keep up with the repayments and thereby avoiding the risk of costly consequences.

 

Can I Get Out of a Bridging Loan?

You can refinance if struggling to or being unable to pay your bridging loan. However, this does not mean you can avoid repayments of the money the lender is owed. Once you’ve made an agreement with your lender and have borrowed the money, you will have to pay for this loan.

When unable to pay your bridging loan, your lender can work with you to try and come up with a viable solution, making repayments on the loan more manageable.

 

Are Bridging Loans a Good Idea?

Bridging loans can be a great way of accessing the funds you need when you need them. They can be applied to various different situations, such as buying a new property while waiting for the sale of a current one, property development projects and more.

 

Consider-bridging-loans

 

While bridging loans can be an effective aid for temporary cash flow issues, it’s important to only use them short-term, and be confident in your abilities to repay the loan back as and when required.


Secure-bridging-loan-on-property

Can I Get a Bridging Loan on My House?

Yes, you can get a bridging loan on your current house. Most bridging loan providers will require property as security on the loan. They accept a range of different properties for this purpose, including residential, commercial, semi-commercial and land.

Bridging Loans are a great option to consider when in between a property sale and a property purchase, used to “bridge” the financial gap and help you move into a new property before selling your existing one.

These types of loans should only ever be used as a means of short-term finance, as if it takes a while to sell your current property, or the sale falls through completely, you could then be stuck with a substantial amount of secured debt.

Here, we’ll take your through the key features of bridging loans, including who they’re really for, eligibility criteria, the cost of the loan and more.

 

Who Are Bridging Loans For?

 

development-finance

 

Bridging loans are a dynamic means of finance, and can be used effectively in a range of different situations, including the following:

  • Moving house
  • Property development projects
  • Raising Finance

When applying for a bridging loan, you’ll also have to meet the lender’s eligibility criteria. Some lenders will require applicants to have a good credit history, however others may be willing to consider those with adverse credit histories.

 

What’s the Criteria for a Bridging Loan?

Octagon Capital’s eligibility criteria includes:

  • Must be over 18
  • Available for residential, commercial, mixed properties and HMOs.
  • Must have an exit strategy
  • Available in U.K., Scotland and Wales
  • Minimum borrowing amount of £50,000

We can also offer non status bridging loans, meaning we can consider those with no proof of income and adverse credit histories. With these types of loans, we’ll be interested in the value your property could potentially have, and your plans for it. For these types of loans, you can help to build up your application with a plan of action, an exit strategy and an indication of costs.

 

What Can I Use a Bridging Loan For?

A bridging loan can be used for various different purposes…

When moving house, homeowners might want to purchase a new property before selling their existing one, worried that they’ll lose their new property by waiting too long on the sale of their current home. Bridging loans can be useful for these types of situations, giving homeowners access to the money they need so that they can purchase their new property before selling the old one. The loan is then repaid when the old property is sold.

Bridging loans can also be great for property development projects. If a property developer wants to refurbish a property to sell at a higher price, they can take out hundreds of thousands, or even millions of pounds via a bridging loan for this, with money able to be sent through quickly and efficiently.

 

development-finance

 

Those wanting to raise finance for investment opportunities can also do this with the help of a bridging loan. For those already with one of these loans, or a mortgage, this is known as a first charge. You can then take out another one of these loans (known as a second charge) using any leftover equity you have.

 

How Much Do They Cost?

As bridging loans are only meant to be used for a short period of time, they’re priced monthly instead of annually. With this type of loan, you may find yourself facing monthly fees between 0.5% and 1.5%.

The precise fees will be dependent upon the property and the opportunity it offers, however, the typical fees you’ll see with a bridging loan include:

  • Arrangement fee
  • Interest rate
  • Legal fees
  • Valuation fees
  • Broker fees
  • Exit fees

Interest will be charged for each month the loan is open for. Borrowers can either decide to pay this back month-on-month, or also have the option to “roll up” these repayments, leaving this until the loan term end.

 

How Do I Get a Bridging Loan?

You can apply for a bridging loan with Octagon Capital. First, you’ll have to make an initial enquiry, either via the form on this page, sending an email to sales@octagoncapital.co.uk, or by calling us on 0333 414 1491.

 

octagon-capital-logo

 

Through this enquiry, you can tell us how much you need to borrow and for how long, as well as some details on the property in question, including your plans for it. During this discussion, we’ll be able to advise you on the next steps, and you could receive an Offer in Principle in a matter of hours.


self-employed-man-working

Can I Get a Bridging Loan if I Am Self-Employed?

Yes, if you’re self-employed it’s possible for you to get a bridging loan. With more than 5 million people self-employed in the U.K., many of which have borrowing needs, for lenders it makes sense to accommodate to this group.

The affordability rules for bridging loans aren’t as strict as they are for mortgages, however, self-employed people applying for a bridging loan will have to prove their financial status with business accounts, as well as meeting other eligibility criteria in order to be approved for this type of loan.

 

Should I Get a Bridging Loan if I’m Self-Employed?

Bridging loans can be a great method of borrowing for those who are self-employed, useful for a variety of different funding requirements.

For example, if you’re self-employed and investing in redeveloping a property that was bought at auction and need to borrow a loan to help purchase the property within the allotted 28-day period.

 

auction-finance

 

Mortgages may take too long to be approved in time for this, whereas a bridging loan can come through in time to meet the purchase deadline. The bridging loan is then repaid once it’s “bridged” the financial gap.

Bridging loans are a short-term type of finance, and therefore not intended for long-term use, but rather for temporary issues with cash flow.

 

Will I Need Proof of Income for a Bridging Loan?

For self-employed applicants, lenders will typically need to see proof of financial status. This can be shown through business accounts, typically over the course of two years, however certain lenders may only need to review one year of such accounts if one year is all that’s available.

In addition to this, the lender might request to see copies of the applicant’s bank statements.

With bridging loans, lenders will be focused more so on the applicant’s exit strategy rather than their financial status. This exit strategy can therefore be more important for a self-employed person’s application than their income.

So long as the applicant meets all the necessary eligibility criteria, even when self-employed, they could be eligible for a bridging loan.

 

What’s the Eligibility Criteria?

Eligibility criteria for a bridging loan can include:

  • Minimum borrowing amount of £50,000
  • Available in U.K., Scotland and Wales
  • Must be over 18
  • Available for residential, commercial, mixed properties and HMOs
  • Must have an exit strategy

When borrowing money in any form, a general requirement that can be expected is for the applicant to have a good credit score. However, with bridging finance this isn’t always the case.

 

octagon-capital-logo

 

At Octagon Capital, we’re willing to take a view on applicants with adverse credit histories, and also those with no proof of income. These types of bridging loans are often referred to as “non status bridging loans” and offer flexibility for those who have struggled to access finance before for these very reasons.

 

How Much Does a Bridging Loan Cost?

With bridging loans, you can expect to see typical monthly fees of anything from 0.5% to 1.5%.

Bridging loans are priced monthly rather than annually, due to the fact that they’re only intended for temporary, short-term use.

The typical fees you could see when borrowing a bridging loan include the following:

  • Interest rate
  • Legal fees
  • Valuation fees
  • Arrangement fee
  • Broker fees
  • Exit fees

The exact fees will depend on your unique case – e.g., the property and the opportunity offered with it.

You can choose to pay the interest each month (the interest being charged per month), or “roll up” the repayments and pay the full amount due at the end of the loan term.

The precise details regarding the cost of your loan and the fees charged will vary depending on the lender you go with, your circumstances and therefore the application you submit.

 

Where Can I Get a Bridging Loan When Self-Employed

Start your bridging loan application today with Octagon Capital. Simply make an initial enquiry via the form on this page, send an email to sales@octagoncapital.co.uk, or call us on 0333 414 1491.

We offer non status bridging loans and are willing to consider those with no proof of income as well as those with adverse credit histories.


Security-padlock

Can I Get a Bridging Loan Without Security?

No, you cannot get an unsecured bridging loan. This type of finance is always provided on a secured basis, meaning you will need to have the appropriate asset to secure the loan.

The asset required can vary depending on the lender, your project, and the details of your application, which we’ll go into more detail about later on in this guide.

 

What Unsecured Bridging Loan Alternatives Are Available?

You can take out an unsecured loan, which does not require a valuable asset to be secured. If you’re unable to take out a secured loan due to a lack of property/asset, this type of finance may be a better option to consider.

 

Loans-without-security-application

 

You may be able to take out an unsecured loan over a short period of time. These types of loans can be arranged quickly, however, can have high interest rates.

With an unsecured loan, lenders may also rely on other details of your application to feel secure in who they’re lending to, such as the applicant’s credit score.

There’s a wide range of different loans available on the market that won’t require a valuable asset as security, catering to a range of different circumstances, borrowing amounts and periods. It’s important to understand exactly what you’re looking for in a loan, and what details you’d need accommodating for (e.g., an adverse credit history), to help you filter your search for the best loan without security.

 

Secured vs Unsecured Lending

Both types of loans have their own pros and cons, and the best fit for borrowers will be dependent upon their unique circumstances and requirements.

With a secured loan, borrowers may be able to borrow significantly larger amounts in comparison to personal, unsecured loans. Borrowing amounts for unsecured loans typically go up to around £25,000, whereas with Octagon Capital, the minimum amount you can apply for with a bridging loan is £50,000.

An unsecured loan will also often require applicants to hold a good credit score, helping to provide reassurance that they can keep up with repayments. It’s for this reason that secured loans can be seen as more accessible to those with adverse credit histories (provided you have a valuable asset to secure the loan with), available for those that don’t hold a perfect credit history with the property, reassuring the lender that the loan will be paid off.

However, by securing valuable assets like your home onto a loan, you could end up losing it if you can’t pay back the loan. This can be a big risk to take, so it’s important to only take out such a loan when you’re confident that you’ll be able to keep up with repayments.

 

Should I Consider a Secured Bridging Loan?

If you’ve got a valuable asset to secure on the loan and are confident that you’ll be able to pay it back in time, a secured bridging loan is worth considering.

 

Consider-bridging-loans

 

A bridging loan can be used for a variety of different purposes, including the following:

  • To help you buy a new house
  • To help fund a property development project
  • To help raise finance

When in between the sale of your current house and the purchase of a new one, bridging finance can help “bridge” the gap between the two, lending you the funds to purchase the new property before the existing one has been sold. This can be great for those who are at risk of losing their dream home waiting around for their current property sale to go through.

Bridging loans can also be used to help fund property development projects. If a property developer wants to refurbish a property or block of flats to sell them for a higher price, they can help fund this via a bridging loan.

You can also use a bridging loan to raise finance for investment opportunities, for example, putting money into another property or a business. For those with an existing bridging loan or a mortgage (a first charge) with any equity left over, you can use this to take out another loan (a second charge), for such opportunities.

 

Am I Eligible for a Secured Bridging Loan on an Unmortgageable Property?

Yes, you can still be eligible for a bridging loan even if you’ve been refused by a mortgage lender.

The term “unmortgageable” is used for properties that mortgage lenders refuse to touch. This can be due to the lack of a kitchen, bathroom or for various other reasons.

Even if a property is unmortgageable, you may still be eligible for a bridging loan, and even use the funds from this loan to make the property habitable, and therefore able to later sell at a profit.

If you’re unsure about whether a bridging loan is right for you, get in touch with Octagon Capital to discuss your options.


bridge-finance

What Are The Jobs Available at a Bridging Loans Provider?

The bridging loans industry is very fast growing, after all, the sector was worth £1 billion in 2011 and ten years later, it is estimated to be worth over £8 billion. With this comes many job opportunities and today, people may find more scope for working with a bridging loans provider or specialist lender, rather than working with a traditional bank or mortgage company. Below, Octagon Capital highlights some of the jobs and responsibilities you might find working with a bridging company.

 

  • Customer services advisor
  • Business development manager (BDM)
  • Underwriter
  • Marketing team
  • Legals
  • Mortgage administrator
  • Finance analysts and controllers
  • Compliance
  • HR
  • Directors

 

Customer services advisor

A bridging company will always have a team of people who oversee the customer service operations. This may include just answering standard queries from customers, answering the phones, offering initial quotes, following up enquiries and helping put key documents together.

Prior experience in the financial sector may be useful here, but a lot of the skills can be learned on the job. You will need people with good communication skills and confidence answering phone calls and dealing with queries or complaints. If you work in a regulated bridging environment, you will need to be more strict with following procedures and scripts, in line with regulation.

Whilst some bridging companies may have just one or a few customer service agents, you may find that it overlaps with other skills in administration or marketing. In some cases, you could always outsource this to specialist customer service centres such as Tieta or similar partners.

 

customer services

 

Business development manager (BDM)

A business development manager or BDM as it is commonly known is a sales role, with the responsibility to find new opportunities and bring in new business. A BDM would be good at speaking to new and existing partners, maintaining strong relationships with brokers that send regular deals and speaking to people at exhibitions and trade shows across the country.

Depending on the size of the firm, you may find that there are BDMs for specific regions, so that they can capture more of that specific market or become more well-known in that area. If they are on the road a lot and going from place to place, it might help if it is in the region of the South-West, or Midlands or a specific area.

BDMs will usually have a starting salary but may also work on commission and the successful completions of some deals.

 

Underwriter

The underwriters have a very important role within the organisation to assess the risk and rates of any customers and ultimately decide who is approved and who is not.

The underwriters will typically have a background in business, finance, law or economics and they will have very good analytical skills to assess risk and determine what rates are charged and what deals are approved - in order to make a profit.

Underwriters make key decisions and get the final say on who is accepted (along with the Directors).

The salaries for underwriters will typically be a lot higher, and this is something that you can learn by working in the organisation or you can study for this too. However, a lot of underwriters previously work in finance or law and have transferrable skills to take on this position.

 

Marketing team

The marketing team can be key for a bridging lender in order to convey a positive message and brand image. In a busy industry, a good marketing team can help the company stand out and generate good quality business.

A marketing department can be just one or multiple people and roles can include:

  • Branding
  • Brochures
  • Exhibitions and displays
  • Email and direct mail marketing
  • Website design and optimisation
  • Lead generation from online brokers
  • Affiliates, digital and online search
  • PR and press from local sources
  • Awards applications and submissions

 

Legals

The legal department will play a crucial role to ensure the completion of any deals, making sure all regulatory and legal contracts are viable, taking into consideration the complexities of purchasing properties or land. The legal team will be responsible to liaising with the solicitors of the clients, passing over funds and checking all aspects of the property and deal so they can run smoothly.

You will ideally need to have qualified solicitor and lawyers to work in the legal department of a bridging loans company - with other roles such as property surveyors likely to be outsourced to a partner.

 

legals

 

Mortgage administrator

The administration team will be responsible for gathering and collecting documentation from clients and partners, staying on top of all regulatory requirements and helping to process bridging deals as smoothly as possible.

Since every company will be different, no prior experience may be required and much of this could be learnt on the job, whilst any background working in admin or financial services would be welcomed.

 

Finance analysts and controllers

The financial analysts and controllers will be responsible for holding and distributing funds between lenders, investors, solicitors and customers. A background in banking and finance would be useful for this, although some roles can be acquired on the job. Other roles may overlap with underwriting or even paying invoices for partners and staff members.

 

Compliance

The compliance team may overlap with the legal department and will ensure that any activity is compliant and according to the regulation. To be compliant means that you will require written procedures for everything you do, including offering quotations, customer services, contracts, collections and more. A compliance team will be required to do regular training and also pass this on and teach this to other staff members in the organisation.

 

HR

For larger bridging firms, there may be someone or multiple people involved in HR (human resources). Their roles will include hiring and firing staff, finding new candidates, deploying employee benefit schemes, arranging team socials, dealing with any internal conflict or mediation and also salary reviews.

 

Directors

Whether it is the main director or commercial director, these are the bosses who have an overview of the entire organisation and ultimately decide what direction it takes and how it grows.

The role of directors is important for securing larger bridging clients and also networking at the highest level. The responsibility of investment and where they generate their funding from will be a key role of a director.

Ultimately, directors will make the final decision on loan approvals, hiring of staff and the overall vision of the company.


David Beard

David Beard Comment - From Lending Expert - "Second Charge Lenders Still Have a Good Appetite"

Second charge lenders still have a good appetite, explains David Beard, the founder of Lending Expert, one of the UK's leading price comparison websites.

Beard explains that whilst the UK is in its third lockdown, the housing market remains open and property valuations can still take place, allowing applications to be processed and deals to be completed across second charge loans, mortgages, bridging loans and more.

 

David Beard, founder of Lending Expert, explained:

“While business levels were quite significantly effected during the first national lockdown in March 2020, it’s now “business as usual” during this third lockdown for the secured loans industry.” 

“January 2021 is showing that many second charge lenders still have a good appetite to lend and borrowing rates and products have mostly remained unchanged. The key differences to note are during this third national lockdown is that the housing market has remained open and lenders are able to instruct surveyors for home valuations which is critical to successfully carry out secured lending and mortgage applications.”

“This time round there is no restriction on physical valuations and for over a decade the industry has offered a huge range of products available using Hometrack or similar desktop valuation models.”

 

david beard lending expert
David Beard believes that second charge lending will thrive, despite the third lockdown

 

Stamp duty deadline also likely to play a role

With the upcoming stamp duty deadline of 31st March 2021, this will certainly play a role in boosting mortgage applications and deals in Q1. With those properties under £500,000 in the UK incurring zero stamp duty, there is certainly an incentive for first-time buyers, homeowners and developers to make an application or complete on a purchase, giving them a saving of £15,000.

With the deadline around 8 weeks away, this will certainly be a busy time for borrowers, brokers and lenders and this will continue to drive the second charge and general mortgage market, certainly in Q1.

What remains after in Q2 is yet to be determined and it could result in a major house pricing crash or a surge in house prices too.

 

About second charges

Second charge loans are used by developers and homeowners as a way to raise additional funds on an existing mortgage. The amount you can borrow is a little less than your first mortgage and it is known as a second charge because it is the second priority after your first mortgage has been paid. For developers, second charges are used to pay off existing debts, renovations, building work or finance a new property. For homeowners, second mortgages are often used to raise funds for debt consolidation, school fees, weddings and more. There is always a risk of repossession if you cannot repay your loan on time, or you may have to give up equity in your first original property to the outstanding lender.

 


property-surveyor

A Guide on How to Become a Property Surveyor - The Qualifications, Salary and Skill Requirements

To give you an insight into the profession of a property surveyor, Octagon Capital looks at everything you need to know about becoming a property surveyor.

 

Key Points

  • A property surveyor is a qualified professional who is brought into to assess the structural integrity of a building - maybe for purchase, sale or valuation purposes
  • A graduate surveyor can earn between £22,000 to £26,000

 

 

What does a property surveyor do?

A property surveyor is a qualified professional that assesses the structural integrity and quality of a building - including homes, offices, retail stores, garages and more.

A surveyor is typically brought in to assess the quality and value of a property, which the owner may wish to put on the market or better understand the value of their asset. The role of the surveyor is key to highlight any risks for potential owners or buyers and their involvement is usually a requirement to complete on any kind of property purchase, mortgage deal or even a bridging loan.

Property surveyors work in housing (residential) or for offices and retailers (commercial).

There are several titles under the role of a property surveyor including building surveyor, land surveyor or chartered surveyor.

 

What are the key responsibilities of a property surveyor?

Property surveyors essentially contribute towards the smooth running of the property market. Their main responsibilities typically involve:

  • Analysing progress reports
  • Dealing with planning applications
  • Following health and safety regulations
  • Reviewing project tenders
  • Conducting risk assessment and cost control
  • Advising subcontractors and clients
  • Preparing scheme designs with costings and specifications
  • Carrying out feasibility studies

 

property-surveyor-qualifications

A property surveyor checks the quality and integrity of a property or building and their role is key to proceed with a mortgage or property purchase.

 

What is the salary of a property surveyor?

Graduate surveyors can expect to earn between £22,000 to £26,000 and with a few years of experience, this can rise to the bracket of £28,000 to £50,000.

Senior level surveyors can expect to earn upwards of £70,000 and there is even potential to reach a six-figure salary at partner or director level.

Property surveyor salaries not only depend on experience, but also location. Surveyors based in central London can expect higher salaries than those operating outside of the capital.

According to the RICS Macdonald & Company Rewards & Attitudes Survey conducted in 2019, the average salary of a property surveyor was £48,000. Chartered surveyors were found to earn around 38% than those non-chartered.

 

What qualifications do you need to become a property surveyor?

To become a property surveyor, there are typical requirements of a degree or professional qualification approved by the Royal Institute of Chartered Surveyors (RICS) in one of the following subjects:

  • Civil engineering
  • Building engineering
  • Property
  • Construction
  • Surveying

Studying a RICS-accredited degree or qualification will give you the relevant training to become a chartered surveyor.

This can be completed at undergraduate level in 3 years - see RICS Courses for more information.

Courses can also be completed online here at https://academy.rics.org/

Another option is getting a postgraduate qualification with a RICS-accredited Masters degree which will lead towards chartered training. Some employers may even support students taking this course with funding.

Additionally, there are apprenticeship opportunities for those who do not wish to go down the formal further or higher education route - https://www.rics.org/uk/surveying-profession/what-is-surveying/surveying-apprenticeships/

 

What skills do you need to become a property surveyor?

If the idea of working as a property surveyor interests you, it is important to check whether you have the right skills required for the job role before going further. Property surveyors need to have:

  • A driving license (to visit different sites)
  • A local and practical mind
  • Strong oral and written communication skills
  • The ability to build strong relationships with clients and peers
  • Knowledge and interest in buildings and construction
  • Negotiation, presentation and report writing skills
  • Commercial awareness

 

how-to-become-a-property-surveyor

A property surveyor should have good communication skills and have a good knowledge of buildings and property.

 

Can you work as a freelancer or with a firm?

Yes, It is possible to freelance as a property surveyor, but the decision to do so usually comes after several years of experience and building up a reputable client base. Going freelance suits those who may wish to specialise in one particular area, such as building defects or sustainability.

Typical career prospects for a property surveyor who is not freelance include working within the public sector or organisations. In large organisations, there are often formal channels of promotion and greater responsibility.

Either way, the environment you work in will certainly vary from day-to-day. For instance, you could be working on a construction site one day, and then from home or in an office the next.

 

The governing bodies for surveyors in the UK

RICS - https://www.rics.org/uk/

The Ecclesiastical Architects & Surveyors Association (EASA) - https://www.easanet.co.uk/


new-home-regulations

The Regulations You Need to Be Aware of When Buying a New Home

Buying a home is both exciting and terrifying at the same time. It is a process that can throw surprises at you along the way, that can become increasingly expensive the more you dig and yet can leave you residing in your dream property when it concludes.

There are few regulations placed upon you as a buyer, but there are aspects of owning a home you should be aware of before you decide to purchase, especially if you are buying an older home. If you are purchasing a new build, then there is less likelihood of complications from a survey, although you should still have certain criteria satisfied.

 

Energy Performance Certificate (EPC)

The main regulation you should find useful is the Energy Performance Certificate, known as the EPC, which is mandatory for homes when they are built, sold or let. It covers aspects of thermal efficiency and gives your home a rating from A to G – A being the most efficient and thus likely to cost you less in energy bills. Now more than ever before, insulating your home is an important business, a topic we explore in our article Why is Property Insulation so Important?

 

Survey-Dependent Regulations

As Property Industry Eye discusses, there is a drive to reintroduce a compulsory pack for home sellers, like the defunct Home Information Pack. It was a short-lived method by which a seller put together a pack of information about their home prior to it going on the market, much like a survey but conducted before a buyer had been found. They were compulsory until May 2010, but a similar project has yet to become mandatory in the UK. That means in terms of regulations, the only other ones you need to be aware of are directly affected by your survey, usually conducted by your mortgage company ahead of any purchase.

These cannot be avoided, and they are intended to give your lender a clear picture of the property they are lending money against. These could throw up all manner of problems which need resolving before you are loaned money, or that you must pay attention to in the first six months of moving in.

Typically, older homes tend to fall foul of surveys, with electrics and damp being two of the key areas which you may have to look to carry out remedial work on. Electricity can be dangerous and in older homes, particularly those that have been advertised as ‘in need of modernisation’, you may have to have a full rewire carried out. Even if you only need certain parts of the system looked at, the NICEIC regulations are far-reaching and demand a qualified contractor to work on the property. Failed wiring, fuse box breakdowns, or even broken power sockets are all serious problems facing homeowners at any time, but in a new property you may not be aware of previous problems or potential ones.

However, HomeServe outlines how with electrical insurance cover you can protect yourself from any unforeseen dangers, and against the cost of expensive repairs in the event of breakdown or malfunction. It is especially important to pay attention to this aspect of your home not only when you move in, but in the months after the purchase. It is somewhat ironic that if you bought a faulty TV and the problem became apparent a week after you purchased it, you could return it, but you are afforded no such protection with your home.

 

Regulations-when-buying-new-home

 

If you are asked to carry out work that involves your gas supply, you will also need to consult a qualified engineered, one who is CORGI registered. This is less likely on a survey but is still something you should consider. Regulations around the following are not as stringent, and there is flexibility for you as the purchaser:

  • Plumbers
  • Decorators
  • Bricklayers

However, being cautious is still advisable even if the project does not demand a specific qualification, as electrics and gas do.

In terms of regulations that cover what you need to be aware of, the randomness of the survey is something to keep an eye out for. Some properties may have asbestos that needs removing, others may have bats in the loft – both of which are covered by certain regulations. If you are in any doubt, make sure you opt for a more expensive and thorough survey, as it is usually an option, and carefully pour over the recommendations and suggestions contained within.

This way, you can enjoy your new home not only when you move in, but for many years to come.


stamp-duty-renoavtion-jobs

How to Keep Building Sites Safe During Covid-19

The construction industry continues to boom during the pandemic. Following a quiet lockdown period from March to May, there has been a real eagerness to complete on properties and carry out renovations, making the most of the stamp duty cuts and trying to capitalise before another pandemic or lockdown emerges.

The property market continues to very busy, with a record number of mortgage approvals and applications for construction finance.

But with construction booming across the UK capital and other regions, it is important that any construction workers are still minimising any risk of the covid-19 pandemic spreading, especially for their colleagues and any clients living or working in their homes. Octagon provides some advice for keeping build sites safe during covid-19.

Allow for Open Spaces

Construction sites are typically in the open air - and this is something that reduces the risk of covid-19 spreading. However, as a site comes closer to completion, the spaces become enclosed, especially if you have the client living in the home at the same time. In this case, you have to take measures to make sure that windows are always open and that the spaces are not confined. You can also consider making areas just for workers or builders and not accessible for household members.

Hand Washing Stations

Using hand sanitisers or hand washing stations are important to avoid the germs and virus spreading. If you are bringing materials from different locations, you want to ensure that your hands are clean (or you are wearing gloves) and they are washed every time you leave and enter.

Some construction sites will already have hand washing stations, assuming there is a kitchen installed.

You can also access portal hand washing stations from the likes of Trovex, which are perfect for construction sites upon entry or exit - and they have also been used by schools and other places of interest.

hand-washing-stations

 

Regular Testing

It is not unreasonable to ask for and carry out regular covid-19 testing on builders and workers, especially if they are mixing households or working on multiple jobs. The result of one person or the entire team catching covid-19 could be detrimental to the workflow, deadline and become very costly.

Home testing kits for Covid-19 are available to order online and cost just a few pounds. But ideally you should try find the ones available in bulk so that you can carry out tests daily and for multiple staff members.

covid-testing-kits
Covid testing kits are available online for just a few pounds.

Wearing Masks When in Close Proximity to Others

Wearing the correct PPE is always important if you are not in the same bubbles. So if you have different specialists and builders coming in from different locations, the correct PPE such as masks and gloves will be important.

For the very least, you may need to wear masks and gloves or show that you are regularly washing your hands just to instil confidence in the client - and demonstrate that you are taking measures towards their safety and yours.


reduction-in-planning-permission

Home Truth: Lockdown Caused 21% Reduction in Planning Permission Applications

Lockdown Caused 21% Reduction in Planning Permission Applications

 

  • Same time period in 2019 saw only a 5% decrease from the year before
  • North East and Yorkshire & Humber saw the largest drop in planning permission applications during lockdown (27%)
  • 87% of planning permission applications were approved in 2020

 

New research from bridging loans broker Octagon Capital reveals that lockdown had a significant impact on the number of Brits applying for planning permission, with numbers from April, May and June 2020 down 21% on the same time period the year previously.

The research, which analysed gov.uk data, found that the decrease in planning permission applications during lockdown is far more significant than in 2019, where there was only a 5% decrease in applications during the second quarter of the year. In 2018, there was only a 3% decrease.

The good news for those who have applied for planning permission during lockdown is that the likelihood of having an application approved doesn’t seem to have been affected. 87% of planning permission applications in 2020 have been approved, marginally lower than the two years beforehand (88%).

Regionally, the North East and Yorkshire & Humber both saw a 27% drop in the percentage of planning permission applications between the second quarter of 2020 and the same period of 2019, the largest in the country. On the other hand, the South West has seen a 17% decrease, which is the lowest.

 

See also:

Rise in mortgage approvals 'highest in 13 years'

Dan Kettle: 'Bridging volumes halve in Q2'

Sunak approves stamp duty change

 

Percentage difference in the number of planning permission applications between Q2 2019 and Q2 2020

 

Region

Percentage Difference in Planning Permission Applications, Q2 2019 – Q2 2020

North East

-27%

Yorkshire & Humber

-27%

North West

-23%

East of England

-22%

South East

-22%

West Midlands

-20%

East Midlands

-19%

London

-19%

South West

-17%

 

Planning permission applications in the North East were the most likely to be approved during lockdown, with a 94% approval rating. Meanwhile, only 79% of applications from London were approved, the lowest rate nationwide.

Dan Kettle, Commercial Director at Octagon Capital, commented: “COVID-19 has impacted every aspect of our lives, but the 21% drop in the number of planning permission applications during lockdown is particularly telling when it comes to looking at how Brits are prioritising their finances during a difficult time.

“There are positives from this research for those who still want to expand, for example to build a home office to help them work from home. The approval rate for planning permission applications has remained high and at the similar level to 2019. The best way to ensure your application is approved is to do your research beforehand and bringing in an architect to ensure your plans are up to scratch.”

To find out more about Octagon Capital and how planning permission has been impacted by lockdown, visit: https://octagoncapital.co.uk/guides/lockdown-caused-21-reduction-in-planning-permission-applications/