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

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.

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 explored in our article Why is Property Insulation so Important?

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.

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 plumbers, decorators, bricklayers and the like are not as stringent and there is flexibility for you as the purchaser, but 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/


bridging-rates-fall-50%

Dan Kettle Comments on Bridging Volumes

According to the latest report by Bridging Trends, bridging volumes halved during Q2 as a result of the covid-19 lockdown. £79.4m worth of bridging deals were completed from May to July 2020, down from £184m in the same period of 2019 and from £123m in Q1 2020.

As a result, in the six months to the end of June 2020, bridging volumes declined by £168m to £202m, compared to £370m in the first half of 2019 - something that brokers and lenders considered as 'inevitable' given the circumstances.

How bridging fell by 50% in Q2

Bridging interest rates rose during the period, perhaps reflecting the increased risk and more limited product availability during the period.

The average weighted monthly interest rate in Q2 2020 increased to 0.85 per cent – up from 0.8 per cent in Q1 and 0.75 per cent in Q4 2019. This is the highest average monthly interest rate recorded in Bridging Trends data since Q3 2016. Investment purchase and re-bridging saw notable increases as the reason for borrowers accessing bridging finance.

A quarter of deals were completed for investment, up from 20 per cent in Q1, while 13 per cent were as re-bridges, up from 8% between January and March.

In contrast, chain breaks made up just one in 10 bridging deals, down from 20 per cent in Q1, while heavy refurbishment dropped from 13 per cent of transactions to 10 per cent.

Dan Kettle of Octagon Capital commented: “The drop in bridging volumes is unsurprising. During the covid-19 lockdown, very little action could really take place, since there was no property valuations, certainly no auctions and most lenders had temporarily turned off their lending.”

“But that does not mean that things won’t improve. There has been real enthusiasm to get deals done and get out there at the moment, especially whilst covid-19 threats are relatively low and if a second wave comes back to bite us.”