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.


uk-house

Why is Property Insulation so Important?

Home insulation is not a new concept in the UK, although it has had somewhat of a resurgence in the last few years This has culminated in the UK Government’s recent rolling out of their Green Homes Grant (more information), which provides homeowners and landlords with funding to make their properties greener and more energy efficient. The responsibility for insulating and properly caring for properties in this way falls on whoever owns the property and therefore tenants and residents who have a landlord or management company will need to discuss improvements to insulation with the relevant, managing party.

How Does It All Work?

The process of insulating a property and making it more energy efficient is fairly simple and there are a number of ways in which it can be achieved, with the most popular methods being:

Installing a New Boiler – Older boilers are not as efficient as newer models, which utilise gas more efficiently. As boilers age, they also tend to run in to various problems (particularly when they are not properly serviced over the years) such as fan and motor problems and components of the boiler becoming aged and overused. Although it is entirely possible to keep boilers running for many decades, as time goes on, the boiler is more likely to use more gas less efficiently, being worse for the environment and your bills.

Installing Double Glazing – A tried and tested method for improving energy efficiency and improving the integrity of the building in question’s envelope (the barrier that separates the inside and outside environments.) The better the protection between the interior and exterior environments, the better heat will be retained in the cooler months and cooler air maintained in the hotter months. Also, double glazing will help keep the property at a more stable temperature, putting less strain on the heating and therefore boiler.

Loft Insulation – The loft or attic of a property is usually where much of the heat is lost from the property in question. Heat rises and therefore it is logical that the highest point of the property [the loft] ill be where a large amount of heat is lost. Insulating the loft and attic means that less heat will be lost and will be contained within your property, allowing for less work being required by the central heating and boiler.

Cavity Wall Insulation – In the case of many early 20th Century properties, there is a gap [cavity] between the interior wall of the property and the exterior wall. This was designed so that the elements outside such as the rain and moisture cannot penetrate into the property. However, a major drawback of these designs of property is that the cavity allows cold air to infiltrate by filling the cavity, the building envelope is better secured and the property will be more energy efficient, greener and better for the environment.

Under-Floor Insulation – Surprising to many people is that the underfloor region of their property is poorly insulated. Underneath the flooring you will have in your property, be it carpet or otherwise, there will be the floorboards and underneath will be the joists, supporting the floor and then usually, a gaping space. this space allows for cold air to penetrate, making the property less energy efficient. Fixing this by insulating this is a great way to improve the energy efficiency and retention of your property.


first-time-buyers

Will First-Time Buyers Set To Receive Low-Deposit Mortgage Deals?

Prime Minister Boris Johson has pledged 95% mortgages for two million first-time buyers. The Government unveiled plans for 'generation buy' at a virtual Conservative Party conference. The Prime Minister said: "We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95 percent of the value of the home — vastly reducing the size of the deposit."

 

How Will It Work?

The Government has revealed intentions to make 95% mortgages more extensively available for first-time buyers, but it is still uncertain how the proposals would work. The Prime Minister discussed the issue facing two million prospective first-time buyers who could afford to pay mortgage repayments but are having difficulty getting approved for a home loan. He believes the Government has a role to play in unlocking low-deposit loans to generate 'the biggest expansion of homeownership since the 1980s'.

The proposal is also reminiscent of government-backed low-deposit mortgage schemes introduced after the 2008 crash. A similar program was launched as part of the Help to Buy plan during the 2008 recession because of banks withdrawing their high loan-to-value mortgage products. Previously, there were 100 percent loans on offer for buyers.

The Government has not released any details on how the scheme might work. According to a report by The Telegraph, one prospective design is for banks to get rid of the rigorous stress tests that were introduced after the financial crash. Rather than the stress tests, the Government could impose a guarantee for these higher loans. This would remove the risk placed on lenders, allowing them to offer low-deposit loans without worry. The tests are designed to assess whether a buyer will keep up mortgage repayments should interest rates rise from their current rate of 0.1%.

 

How Could The Scheme Help First-Time Buyers?

Boris Johnson said that the scheme will help up to two million people who can afford mortgage repayments but can't currently find home loans. While high loan-to-value mortgages were widely offered at the begging of this year, the COVID lockdown caused many lenders to withdraw their products. Banks and building societies were inundated with a backlog of inquiries when the housing market reopened, and some became overwhelmed with the demand. The decision to remove the low-deposit mortgages may have been due to economic uncertainty - as the economy walks a tightrope many lenders wish to distance themselves from providing riskier loans. 

In theory, first-time buyers will be able to buy with a five percent deposit once again under the new proposals. The result hopes to "turn Generation Rent into Generation Buy." However, buyers should still be aware of the possible risks that remain. When you buy a property with a low deposit, there is often a greater risk of negative equity if the property market doesn't rise but instead declines. 


10-million-plus-properties

Increase In Money Spent On London's £10m-Plus Properties

This year, the amount of money has been spent on London's "super-prime" housing market has increased. Analysis sees a rise in sales of £10 million-plus homes in 2020, in comparison with the same period in 2019. This is in spite of the coronavirus lockdown which paused the market. A study found that £1.13 billion was spent on the capital's super-prime property between January and August 2020. In comparison, only £977.5 million was recorded in the same span of time last year. 30 transactions above £10 million were made in the first three months of 2020 compared with 18 in 2019. 

 

How Has COVID19 Affected The Sale Of Super-Prime Properties?

Although coronavirus brought about tight restrictions on the housing market in the second quarter of the year, there were still 56 super prime sales throughout the first eight months of the year. This was only one less deal, with 57 recorded deals during the same period in 2019. Another effect of the coronavirus has been the surge of British buyers involved in super-prime property exchanges. The restrictions on overseas travel have caused the highest proportion of exchanges to involve British buyers seen over the past decade, according to numbers from the first eight months of the year. This sits at around 40%.  

 

Where Are 10m+ Properties Being Sold?

The largest proportion of London's super-prime deals were found in Kensington, based on figures of this year up until August.  The fashionable residential district in central London accounted for 14.3 percent of all deals over £10 million during the period. In 2019, Mayfair had the highest number of super-prime transactions during this time. Marylebone has shot to second place as the most expensive area of London (based on pound-per-square-foot). These properties are situated at the very top of the market, with at least 17 homes valued at more than £30 million. Other than Kensington, luxury homes are being exchanged in wealthy districts in SW1 and SW3 including Mayfair, Belgravia, Sloane Square. Demand for super-prime properties has also increased in Notting Hill, St Johns Wood, Hampstead, and Belgravia.

 

This home located on Lichester Place in Kensington is on the market for more than £30 million

Why Has Money Spent On Super-Prime Properties Increased?

Some of the key motivators for top tier property purchase has not changed. These include capital preservation, the UK education system, and cheap debt. Additionally, the current situation arising from the coronavirus pandemic sees cheap debt readily available with banks being lenient on calling in loans. While there has been a surge in buyers moving away from the UK's big cities, there is a definite desire more the uber-wealthy to keep old of a residence in the capital to retain London investment long-term. Despite the short-term pause on the housing market, prices do not feel as though they will fall at any time soon. The pandemic has not provided any large discounts with vendors remaining resilient. 


planning-permission

Brits Waste £64 Million On Denied Planning Permission

Planning permission is a requirement in the UK if you are looking to renovate your home. Since the onset of the coronavirus, Britons have been planning more home updates as we all spend more time at home. Many are looking at the possibility of adding extensions or loft conversions to their home to create offices or more comfortable living spaces. To do this, you have to obtain planning permission - an approval on your renovations. 

Why Are People Losing Money?

The cost of planning permission can vary depending on how big the project is and different types of permissions have different fees.  There can also be unexpected additional costs such as extra surveys.  If you end up being denied, the money is wasted. In just the last three years, Brits have wasted £64 million on unsuccessful planning permission applications.

Moreover, a frequent mistake of those applying for planning permission is that they underestimate how long it will take. If your plans are not approved as quickly as you imagined home improvement projects can be delayed by weeks or even months. This can affect costs as you may lose deposits you already held with contractors.  If you are denied permission you will also incur extra costs when having to change plans, particularly if the work has already started.

 

Will Your Planning Permission Be Denied?

Whether you are likely to be successful when applying for planning permission depends on where you are based. Research by Roofing Megastore has revealed where applicants are more likely to be denied.

Using planning application data from the Ministry of Housing, the research uncovers the most and least successful areas to be granted planning permission in England. The success standard for a local area fluctuates from as low as 65 per cent, up to 99 per cent. However, for the country as a whole, the rate of success is 91 per cent.

 

Where Is It Hardest To Get Planning Permission in England?

Londoner's seem to have the most challenging time acquiring planning permission, with property owners in London spending a massive £21 million over the past three years on unsuccessful applications. The number one most challenging area in England is Enfield, London, with a success rate of 65.13 per cent. In fact, eight of the top ten most challenging locations are in London: Hillingdon at 66.01 per cent, Harrow at 69.56 per cent, Hounslow at 71.24 per cent, Greenwich at 71.47 per cent, Lambeth at 73.55 per cent, Newham at 76.02 per cent and Bromley at 76.82 per cent. Rochdale in Greater Manchester at 74.03 per cent and Southend-on-Sea in Essex at 74.46 per cent also rank in the top ten.

Where Is It Easiest to Get Planning Permission?

Based on the percentage of applications granted, Carlisle, Cumbria is the most convenient place to granted planning permission at 98.90 per cent success. Copeland, Cumbria follows closely with 98.72 per cent acceptance. The top ten most accessible locations are all boasting a percentage of 97 upwards, giving applicants peace of mind that they won't be wasting their time and money. These include Richmondshire, North Yorkshire (98.17%), Vale of White Horse, Oxfordshire (97.89%), County Durham, North East (97.82%), Fareham, Hampshire (97.79%), Cornwall, South West (97.39%), Eden, Cumbria (97.38%), North West Leicestershire, Midlands (97.36%), Rushmoor, Hampshire (97.36) and Darlington, County Durham (97.29%).


two-bed-london-flat-to-be-sold-for-just-£1

Two-bed London Flat To Be Sold For Just £1

While a property is usually a considerable investment, this luxury 2-bed apartment in London could be purchased for as little as £1. With the market back on track since its pause over lockdown, you can now enter to win a property as a raffle prize. Demand for property has spurred, and in order to draw attention to their listings, agents create a lottery in which the property is the grand prize - to be won for a tiny fraction of its value.

 

The property is available to win in a raffle from Win My Dream Home (Image: Win My Dream Home)

Why Is It Being Sold So Cheap?

Properties that are sold as part of a raffle offer the chance for one lucky individual to grab a bargain price. The method has become popular recently as a way of drawing attention to the property and creating interest. It is also well-liked among sellers because the process can be more straightforward, with everything taking place online. This reduces a lot of time spent contacting potential buyers, giving house viewing, and other various admin and back and forth. The raffle creates a large sum over time through the sale of entry tickets. So long as it gains enough attention, it is unlikely to cause a loss for the seller.

 

How Does It Work?

Win My Dream Home is one such company allowing buyers to try their luck. They have listed a stunning luxury apartment, located in Kentish Town in North West London. The property is 525 square foot flat, on the ground floor and has two bedrooms, a 17-foot reception, and a private terrace. It has been valued at £500,000, but one lucky entrant of the prize draw will win it for as little as £1.

The apartment is based in Kentish Town, North London (Image: Win My Dream Home)

 

Tickets are sold for £5 from the Win My Dream Home website until 31st December 2020. Potential buyers who purchase a ticket are not guaranteed the apartment but can enter as many times as they wish. Bulk buying is also possible, making the entry price cheaper - 100 entries cost £100, just £1 per ticket.

 

Raffle tickets are sold for as little as £1 (Image: Win My Dream Home)

 

There will also be two runners up in the raffle. The first runner-up will receive ten thousand pounds, and the second will get five thousand pounds. Win My Dream Home will donate ten percent of all the money raised through ticket sales to the Great Ormond Street Hospital.

 

 


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/


interest rates

Are Negative Interest Rates Imminent?

What does a negative interest rate mean?

Negative interest is an interest rate that falls below zero per cent. A negative interest rate is a reversal of how a bank typically works. Currently, most high street banks pay interest at a rate of 0.01 per cent. When negative interest rates occur, borrowers gain interest as opposed to paying interest to lenders.

 

Is the Bank of England setting negative rates?

Bailey set out to put minds at ease on a British Chambers of Commerce webinar. In an attempt to play down speculation, he disclosed that policymakers were only discussing negative interest rates to make sure that the option was there if necessary, not because they will be put in place imminently. He explained: 'It would be a cardinal sin in my view if we said we had a tool in the box which we didn't think could be operationally used...Yes, it's in the tool bag, but that doesn't mean we're going to use negative rates.'

As part of the research into its use, Bailey launched a study on whether the UK should set negative interest rates. The study reviews other countries who have implemented this, such as Japan and parts of the EU. The governor discussed other countries' experiences of negative rates, describing them as a 'mixed bag'. The effectiveness depended largely on the framework of each individual banking system as well as the time at which it was implemented.

On Tuesday, Bailey gave an online speech in which he hoped to clarify further that the bank had not decided whether rates will be set at below zero for the first time or settled any date for when this could happen. Whether the Bank of England is planning to push rates into the red remains unknown, but for now, it seems certain that Bailey wants to leave negative rates on the table.

How could this affect me?

If the Bank of England puts negative rates in place, commercial banks will be charged to hold cash deposits with them. As a result, banks will pass on these costs to the savers. With negative rates in place, your bank will most likely charge you to save with them, rather than paying you interest. It may also mean that borrowing, including mortgages, will become cheaper. Your credit card interest rates will probably depreciate as well. However, there is no guarantee that banks will pass on the benefit to the individual.

 

Why are negative interest rates being considered?

In theory, implementing negative rates would boost the economy. The aim is to encourage consumers and banks to use, borrow and lend money more freely and take more risks. If negative interest rates crush yields on savings accounts, people are far less likely to keep money tucked away in the bank and far more likely to spend or invest. As the second wave of COVID takes a thorough hit to the economy, the Bank of England is considering this option in hopes of reigniting the economy.


HOUSE-PRICES-GOOD-OR-BAD-TIME-TO-SELL

UK House Prices Jump By Five Per Cent 

 

They report the average asking cost for houses to be at £319,996 with monthly growth at 0.2 per cent in September. Scotland saw the most substantial increase in asking prices raised by 8.8 per cent to £168,272. Yorkshire and the Humber, as well as the North West of England, also saw significant growth with prices rising by 7.2 per cent (£210,128)  and  7.1 per cent (£212,977) respectively.

 

house prices
Average UK house price statistics published by Nationwide.

 

Both the East of England and the South East have already surpassed the number of sale agreements made in the same period last year. This is due to the fact that these areas have higher average prices. With more expensive properties, the stamp duty holiday introduced by the chancellor in July has more of an impact on buyers with possible savings of up to tens of thousands of pounds. This acts as an incentive for sellers to raise their asking price, knowing that the buyer is saving on stamp duty. 

 

Increased demand for three and four bedroom houses has also helped to drive UK housing prices. Director of property data at Rightmove Tim Bannister states: “Increased competition for second-stepper homes has pushed prices to a record this month for those looking to take the next step up the ladder". While most often the reason for moving house is needing more space, the increase in people working from home has created a higher demand for the same types of properties. As a result, different types of buyers are now finding themselves in competition for the same type of property. 

 

Another affect the pandemic is a surge of people looking to move out of major cities. More and more people are choosing to leave the capital altogether, but the outer areas of London are still active. Zone 1 has become less desirable as, with more people working remotely, the importance of living close to inner-city offices dwindles. York is one of the many areas seeing buyers coming from London, as it’s far cheaper in comparison. Many are choosing to sell up and move despite working in the capital because they will only be commuting once or twice a week. As a result, commuter belts are widening around London and all major cities. 

 

Before the pandemic, many would've assumed it impossible to leave the major cities in which they find their employment. Moving to the countryside to a larger or more desirable home is likely something many would never have considered an option. However, with the majority of people spending more time at home in recent months, more buyers are happy to compromise on city life and opt instead for extra indoor space or a garden. The option to work from home has created a wave of people looking to move to more affordable areas and own larger homes than they ever thought they could. Accordingly, demand for smaller houses with three and four bedrooms has grown, demonstrating that houses have become preferable over flats. 

 


property sales

Will Property Sales Continue To Recover?

When the market closed entirely during the lockdown in April, experts predicted the worst. However, pent-up demand has helped the market reopen on a strong foot. The stamp duty holiday introduced for nine months has also helped to spur interest. Buyers and sellers alike are keen to take advantage of the financial incentives which come with the higher tax threshold. It is evident now that buyers have started to make up for the lost time. 

 

In August, prices accelerated the most in one month for more than 16 years, according to Nationwide. They describe the sudden recovery as 'unexpectedly rapid'. Experts predict fewer than 1.1 million sales will complete this year, compared to each year from 2014 to 2019, where the number was around 1.2 million. Given the bleak outlook most held back during the lockdown, when house prices fell for four months consecutively, the figures are promising.

 

 

Nevertheless, the recent trend of high activity levels has begun to appear superficial and impermanent. Fears have begun to muster that the upwards trend will soon plummet. This is partially due to the tax break encouraging those who were intending to buy next year to advance their plans. This could create a vast drop in demand when the tax break ends in March 2021. Moreover, critics fear that the continually increasing likelihood of an imminent second lockdown may have an impending effect. Ongoing financial uncertainty and instability as a result of the pandemic have near but crushed consumer confidence. The reintroduction of national lockdown measures would be sure to topple the already fragile economy.

 

The question also remains whether first-time buyers are able or willing to enter such an uncertain atmosphere. These potential buyers have been some of the hardest hit financially by the coronavirus. As a result, this demographic is, for the most part, shut out of the market. The sudden kick-back into action also means that buyers experience delayed processes. High-demand causes mortgage processes to extend and become prolonged as banks and brokers deal with an excess of both back-dated and current requests. The property website Rightmove recently published estimates indicating that there are currently 40 percent more sales in progress than is typical for this time of year, resulting in delays. These setbacks, as well as the endless uncertainty, could cause consumers to lose confidence in the market and activity to plummet rapidly.