managing-properties

Benefits of Property Management Software

It is no secret that managing a property comes with a range of benefits and headaches, all at the same time. With this in mind, there are many tools and tips which can improve standards of property management for both dedicated managers and landlords to save money, run the portfolio better and make the lives of both themselves and their tenants that bit better.

Whilst owning or managing a property portfolio may sound like it doesn’t come with any hassle, there are many responsibilities that landlords have to their tenants, their property and otherwise including:

  • Buildings insurance
  • Maintaining fixtures and fittings
  • Repairs and maintenance (excluding wear and tear)
  • Service charges
  • Letting fees (paid to the agent)

The larger a portfolio gets, the more difficult it can become to manage, whether you are the owner or a manager, running things on the owner’s behalf.

 

Using Property Management Software

Property management entails many jobs and various responsibilities. If you are a manager, you will need to look after the tenants in the property as well as the landlord who will be paying for the management of their portfolio. With a large portfolio, it can get difficult and this is where dedicated property management software comes in with many providers offering a range of features:

Vacancies – If there are any vacancies across the landlord’s portfolio, rather than having to manually view details, the manager is able to navigate to and then manage the property directly through the software. This may include arranging for redecoration, advertising it online or taking it off the market.

Technology and Integrations – Most property management software providers are able to integrate with many different platforms making things easier for all involved. This includes integrations with property platforms like Zoopla and Rightmove as well as other software packages like Xero and Sage accounting. This lets landlords and managers tie everything together in a tidy and manageable way in relation to their properties.

Security and Encryption – Rather than storing data and important information on unprotected devices or even as a hardcopy, property management platforms will tend to be very securely encrypted, protecting users, managers and tenants from data breaches.

 

Staying Ahead of Issues

Traditionally, if a tenant or block owner has an issue with a property which falls into the remit of the landlord, it will need to be reported to the landlord or manager and passed up a chain. For example, if a tenant’s boiler breaks down, they will need to inform the landlord who will then have to get an engineer out to repair the issue. Then, the engineer will need to let the landlord know what the problem is.

One the work has been signed off by all parties, only then will the work commence and thereafter, the service provider, in this case the engineer will need to invoice the landlord who will then need to pay.

This process can take more time than many would like. With property management software, it is possible for all of this to be managed effectively via an app or cloud-based programme. Everyone can then login and from the point of reporting an issue through to approval and payment, it can all be taken care of much faster.

Onboarding Tenants and Clients

Onboarding tenants can be difficult with a lot of documentation needed, followed by signing and submissions. However, with a management platform in place, onboarding is much easier and quicker. Vacancies can be posted on property sites and from the moment interest is shown in a property, the software can track everything and manage all aspects, right through to getting the tenant signed on the property.

Payments and issues are then also all managed through the platform which then lets property and block managers get on with their work more efficiently and free of the worries of individual tenants as may have previously been the case.

Accounts and Reports

As you would expect, with all aspects of a property portfolio and all the necessary payments and potential issues logged and recorded, property management platforms provide extensive reporting. This provides increased transparency and detail to all parties throughout all stages of the journey to onboard and then manage tenants and properties.


Why your ground rent 'doubling' is causing hell for so many homeowners

Mortgage lenders including Barclays and Nationwide have become even stricter with their mortgage lending criteria and recently the implication of your lease agreement saying that your 'ground rent will double' in the next 25 years, is causing all kinds of problems for homeowners.

The clause only applies to new build properties and has affected large developers including Taylor Wimpey.

What is behind this?

In the Brexit apocalypse, mainstream lenders are being more stringent than ever and the idea of ground rent doubling or anything doubling by the matter is something that they do not want to lend against.

This is part of the 'freeholder scandal' where clauses have been put into place that state ground rents must double, leaving huge bills for households and something that the Government has expressed a strong interest in banning.

Banks do not want homeowners to be tied down and the idea is that once ground rent doubles, it may only be a few hundred pounds, but it continues to grow and grow and no potential buyer wants to be left with this kind of clause.

What are your options to get out of it?

Buy the freehold

This is likely to cost anywhere from £10,000 upwards per household and to include numerous people within the development. If people within the road or development do not want to pay it, they will pay their ground rent to the new owners of the freehold (their neighbours).

Get a lease extension

Likely to take up to a year and also cost up to £10,000. With a lease extension for another 99 years, these clauses become void.

Sell to a cash buyer

Cash buyers looking to downsize do not require mortgages so they will not be held back when buying this property. But it does leave this issue for the future if they want to sell it or if it goes to their children as inheritance.

Ask the freeholder to change the terms

You can ask your freeholder to change the terminology from 'doubles' to 'reviews' every 25 years. This will likely come at a cost, since the freeholder has got a good deal tying you in at the moment.

Use a specialist finance company

You can use a specialist lender to get a mortgage for this type of thing. The rates are likely to be higher than a mainstream bank like Barclays or Nationwide. You can apply for Residential bridging loans for this type of thing and the loan will be regulated because it is secure upon an individual's primary residence - so things like credit rating will be very important in this scenario.

If you would like more information about this or would like assistance getting a mortgage under these circumstances, please contact us at sales@octagoncapital.co.uk


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How to Rent Out Your Property for Holidays/Weekends Away

If you own a property that’s empty for a lot of the year, one great way to get some use from the house and earn some money whilst doing this, would be to rent it out as a holiday home.

This can not only provide holiday-goers with great accommodation, adding to the overall experience of their trip, but also increases the security of your property, working as an excellent (and free!) deterrent from thieves and burglars.

With numerous benefits for renting your property out as a holiday home, there is however a rather important to-do list when setting this up. We at Octagon Capital understand how confusing and tedious it can be trying to hunt down everything on this list, and have therefore created this informative guide to help you get to grips with the key things to consider when turning your property into a holiday house.

The Makeover

As with many wanting to turn their property into a holiday home, odds are it isn’t used a lot, and therefore can often do with a new lick of paint. Refurbishing your property is a great investment for any new holiday home, increasing the appeal of the property, the number of guests who use it and subsequently the amount of money earnt from this. Refurbishing doesn’t have to break the bank either, its best to look around online and get a few quotes to find great deals for home renovations at the best prices.

It’s also important with the revamping of your holiday house to find its target market and to cater its new look around this. Assessing the location of your house, (is it near a city or in the countryside, is it near clubs/bars or historical landmarks etc.) in addition to its size are important steps to help figure out what type of clientele you’ll be mostly attracting, and therefore how to cater for this through the property’s appearance.

Remember The Taxman

When turning your property into a holiday home, one vital job to tick off the list as early as possible is to inform HMRC of these plans. This is required as you may have to pay tax on your earnings from the property, dependent on the amount of these earnings. To find out more information on this, please click here.

Pricing it Up

Another key thing to consider when turning your property into a holiday home and weekend getaway is to ensure that the price for renting it out is appropriate and in keeping with the rest of the competition in your area. As your customer base will typically be trying to find the best deals for their holiday, if your property is not at a competitive price, there is less chance it will be picked above those that are cheaper. However, it is also important that you do not undersell your house, and if there are qualities making it stand out from the rest (e.g. a swimming pool, beautiful gardens etc.) these typically can add value to your property, and mean people will be willing to spend more money to stay there.

Putting it Out There

Once you’ve revamped your property, taken care of all the legalities that comes with making it a holiday house, (such as informing HMRC), and made sure your prices are at a decent, competitive rate, the next step is advertisement. When putting your property out there, it can often be a challenge to get the consumer’s attention amidst a sea of other potentials. Therefore, getting your house added to such sites as Landed Houses can significantly increase its visibility and attraction, with owner of the company Edmund Cohen offering first-timers “consultancy over and above the ad-hoc support that comes with adding your house to Landed Houses; including web development and marketing advice.”


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Britain’s Hottest Market: Edinburgh and Beyond

It has been revealed that Britain’s hottest property market is in Edinburgh, with the housing market booming. Properties are in such demand in Edinburgh that homes are typically being snapped up in just 22 days on average, new research has revealed. This makes it the fastest place to sell a home in the entirety of Britain.

 

In fact, it is 25 days quicker than the average time across Britain and is less than half the amount of time it would take to sell in London. In London, the average length of time it takes to sell a property is 54 days.

Just under Edinburgh in the fasted selling areas are Glasgow (27 days) and Cardiff (32 days). The fastest place in England is Northampton which on average takes 33 days to sell. Therefore, buyers searching for homes in these areas will have to act fast with the homes selling in this time.

Why is this market desirable?

It would seem that Edinburgh and Glasgow are hot markets due to the lack of property which is available.

Edinburgh has less property for sale and therefore market demand is actually more than supply. As a result, prices are increased. However, the prices are still relatively low for a very major British city and many are opting to make a life in Scotland’s capital over the English capital, London. London is officially one of the slowest UK markets, selling a home will take you on average 54 days and the average values are the highest of any region at £651,033.

London’s fastest selling areas

Considering it is the slowest market, for those who need to be in England’s capital for work, it makes sense to provide insight into the areas in which houses do sell the quickest despite the overall London market being slow.

London

Bexley has been ranked the fasting selling London borough, with the average listing taking 36 days to go under offer. Furthermore, the average price in this area is £370,818 making it a lot cheaper than other London boroughs.

 

Followed closely in second is Barking and Dagenham at an average of 37 days. The average price for this area is £298,954.

An up and coming market: Newport

A surprising booming property market is in Newport, with the number of properties which are available for sale decreasing by a third over the past year or so.

 

So why has this year boomed as of recent? Well, the upcoming removal of the tolls on the bridges across the River Severn between England and Wales at the end of 2018 has ultimately led to an increase in buyers jumping at the opportunity to snap up a property in this Welsh city, Newport.

According to statistics provided by Rightmove, Newport estate agents are reporting lengthy buyer waiting lists and have demands led to a 37pc annual drop in available properties for sale. In addition, they are seeing a £12,000 uplift in the asking prices placed on the properties.

The time it takes to secure a buyer in Newport has fallen from a pretty devastating 76 days, to a promising 52 days – still no Edinburgh, but it is certainly on the rise nevertheless.

Local estate agents are claiming to be selling homes in Newport every single say, in some cases, within hours of the property going live on their sites.

Interestingly, the most popular people moving to Newport are Bristolians who can trade in their over-priced homes for a larger and nicer home for a better price. These people from Bristol are able to sell their small terraced house and snap up a four bed detached house in Newport for the same price, if not less.

Bridging loans

If you find a home that you love and want to move into quickly due to the rising prices in the area, then this is great news. However, you may find that you simply do not have the time to wait for a mortgage to clear; perhaps you are starting a new job down in the city and need to clear the sale, bridge finance may be the best option for you. A bridging loan acts to ‘bridge the gap’ between you and the mortgage until it can be paid out. You can get in touch with us for a quote by calling us up on 0333 414 1491.


factors-bridging-loan

What factors do bridging loan lenders consider when approving a loan?

If you are considering making a bridging loan application, (typically because you are looking for funds to help bridge the gap between selling and the completion of an existing property that you have, and having the money in order to facilitate the brand new home) then it is worth making sure you are completely clued up as to the lending criteria bridging loan lenders will be assessing you on when deciding to approve or decline your application.

As one of the leading bridge finance brokers in the country, we have decided to put together a clear, concise guide to this criteria, in order for you to make the best application possible and therefore improve your chances of being accepted for this type of line.

Do you have an exit strategy?

When you make an application for a bridging loan, you will have to provide the loan provider with an exit strategy, which will be assessed. What we mean by exit strategy is when and how you will be able to make prompt repayments on the loan that may potentially be granted to you, this will also be dependent on the type of bridging loan that you have applied for too. For example, if you are looking to get access to an open bridging loan, then it will not be a requirement for you to provide an exact repayment date to the lender, however, do keep in mind that you will need to repay this loan back usually within a three year time period, and you must assure the lender that it is financially viable for you to do so. On the other hand, if you apply for a closed bridging loan, you will need to provide an exact repayment date for the lender, this will typically be when you have managed to sell your property and it has reached completion.

The type of property

Another factor that loan providers will be assessing when deciding to approve or decline you for a bridging loan is the kind of property you are intending to use the loan for. Whilst most property types (whether it be flats, houses, shops, office, parking spaces, hotels, guesthouses, bars) can all be taken into consideration for a bridging loan, you may find that it is the case that the interest rate and charges are better for those which are secured against residential property. The type of information that the lender will also require on a building you are intending to buy, or if you are using the loan for refinancing purposes include:

  • The tenure of the property - whether it is freehold or leasehold
  • The purchase price of the property
  • The value of the property
  • The cost of works (if you are intending to buy and then refurbish the property in or to sell on as an investment)
  • The estimated value of the house once these refurbishment works have been carried out
  • The proposed works that are to be carried out

Age of the applicant

As is the case with almost every type of loan on the market, the age of the applicant will be taken into account, and this will be a minimum applicant age of 18 years old and could be higher than this dependent on the lender. In some cases, there can also be a maximum age limit for one to be able to apply for a bridging loan.

Employment status

Another factor that will be considered by a bridging loan lender will be your employment status. Generally speaking, bridging loan applicants tend to be property developers, so a lender may be assessing their previous projects in order to determine how likely it is that they would be able to make prompt repayments at the end of the term for the bridging loan. If you aren't a property developer and are applying for a bridging loan for the very first time, then the loan provider will be wanting to make sure that you have sufficient funds and a stable enough income in order to pay the loan back when the time comes. For example, if you are constantly applying for payday loans to maintain your finances, you are far less likely to receive an approval for your bridging loan application.

Sufficient collateral

One of the main advantages of bridging loans is the fact that lenders do not necessarily always take into consideration your credit history (however, this is not necessarily the case with all bridging loan lenders, so you should definitely check with the lender in question prior to making an application if you feel that your credit score may be an issue).

This can be a huge plus when so many other types of loans available on the market tend to focus very heavily on whether or not your credit history is good or bad, and can often be the deciding factor as to if your loan application is approved or declined.

On the other hand, what most bridging loan lenders do require you to have is to have sufficient collateral in order to make sure that you will be able to make repayments at the end of the term. The collateral that you will have will be usually the property assets that you have, and these can be secured against different property types including commercial, residential and in certain cases land and building plots.


tips-for-getting-new-home-christmas

Tips for getting in your new home by Christmas

As a bridging loan lender, we understand how long the process can be of trying to sell your existing home and being able to quickly move into your new home.

Many people struggle with being able to get a mortgage in place quickly enough in order to purchase the home of the dreams they have just discovered, which is why it is becoming increasingly popular to opt for a bridging loan, which can provide you with the funds you need to secure the property.

There are a number of other ways in which you can take steps to get more organised when it comes to the moving process, and it could very well be possible that you can sell your existing property now and still get moved in by Christmas, providing that there aren't any huge complications along the way. But how exactly do you go about achieving this? Look no further, we are here to help. Take a look at our guide that will get you on your way.

Make sure your home is sale ready

One of the key aspects of making sure that your home can be sold as quickly as it possibly can be is ensuring that is is definitely 100% ready for being sold. This is particularly important as there are certain things when it comes to the buying and selling process that takes time and which you have no control over, therefore it is key to take charge of the things you can sort out yourself quickly and efficiently.

There are different steps you can take to ensure that your property is ready to be sold. This includes perhaps giving tired and slightly mucky walls or ceilings a lick of paint in a neutral colour, having a huge clear out through the entirety of the property to ensure that you have freed up some space (space is regularly highlighted as a selling point by both estate agents and buyers themselves) and sort out any problems regarding mould or broken taps and other small issues.

Is the price right?

It can often be the case that a property remains on the market for a considerable amount of time purely because it has been priced wrongly. Therefore, if you are keen to get your house sold speedily, don't make the mistake of overestimating the value of your property. Ways in which you can avoid doing this include making sure that you consult the advice of a number of different agents - we recommend at least three or four- to provide you with a valuation of your home. Remember to not get wooed simply by the agent who provides you with the highest value of your property, as if you want it to sell quickly, it must be in line with prices on the market at the time.

From the comfort of your own home, you can also get an estimate of the valuation of your home by checking out Zoopla's house prices tool.

Research surveyors

So perhaps you have found your dream home, but you are aware that you need a survey carried out before you can go ahead with the property buying process (the only exception is if it is a new build which is under an NHBC guarantee). Usually, this can be quite a time-consuming process, but there are ways you can cut corners without compromising on the quality of the survey. We recommending contacting several reputable surveyors beforehand and check their availability in order to ensure they can survey the house quickly so you can move onto the next step.

Is your paperwork in order?

When it comes to both the buying and selling process relating to property, you can guarantee that it will involve a considerable amount of paperwork. Get ahead of things and make sure that if you need to reapply for an existing mortgage deal as you are considering taking the loan with you to the new property, you have the paperwork all ready. That will mean that you need to ensure that you have all the details ready for this application, including:

  • Bank statements
  • Employment contracts
  • Tax returns
  • Payslips

Quick turnaround for completion

You should try to agree on a quick turnaround for completion if you want to get the keys to your new home before Christmas. That means ensuring that you outline when you would ideally like your completion date from the very beginning of the process so that it means that both you and the buyer completely understand the date you are working too.

Generally speaking, completion will occur around two weeks after the exchange has taken place, but it is definitely possible for this to take place far sooner. Depending on the circumstances, it may even possible for keys to be exchanged on the very same day!

Sign up for a good selling agent

To get your home snapped up as quickly as possible, make it one of your top priorities to research selling agents in your local area and make sure they are signed up to the major property portals. This is a very important point, as it is estimated that over 90% of all prospective buyers start their property search online. As a result, if you want to get your house sold and move into a new property during the festive season, then check the selling agents is signed up on sites such as Rightmove and Zoopla.


tips-moving-town-to-country

Tips for relocating from city to country

You may well have decided that now is the time to up sticks and move out of the city and reside in a more tranquil environment in the countryside. Perhaps this is why you have applied for a bridging loan, or are considering applying for one in the not-too-distant future in order to bridge the gap between receiving the funds for the city property you are currently living in up for sale, and so you can still be able to put down a deposit and buy that much-longed-for home in the country. If you are still in the process of looking for a brand new home in a quieter place elsewhere, we've put together a guide things you should take into consideration when looking for a place in the country, as the last thing you want to do is to make a very costly mistake.

 

Know what you can afford

Don't get too caught up in the excitement of leaving the chaos of the city- the ram-packed commute, high pollution levels and extremely busy streets- and forget what it is you can actually afford elsewhere. After all, the point of leaving the city life is surely to improve your quality of life. Consequently, be clear before starting the house hunt on what it is exactly you can afford to buy. It is recommended that you consult the services of estate agents of the home you currently have in order to get accurate valuations of your home.

You should also look at speaking with other mortgage brokers (from different companies) about what you can buy in the country realistically speaking, by taking into account not only your household earnings but also what you would also make from the sale of your existing home. If you find yourself in a situation where you think you may not be able to receive your mortgage in time (for example, you have found a dream home at auction, and your current house has as of yet not been sold) then this is also the time to look at respectable bridging loan companies who may be able to help you in the short-term.

Be practical

It goes without saying that whatever town or village you decide to pick, it is one that is practical for you. This means taking into consideration things as whether or not the place has good transport connections so that you can easily get to work, whether it has good shopping facilities, as well as how well it does for social activities (think gym, restaurants or pubs). Another thing to remember is to check how good broadband connection is. As so many of us are increasingly reliant on all things technology, it could end up becoming a nightmare staying connected in a small desolate village.

Research the schools

Perhaps one of the main reasons that you are considering moving is because you have children, and some of the local schools you have looked at in the countryside have wowed you with their amazing Ofsted inspection reviews. This is all well and good, but you should verify with the individual schools in question or contact the local council in order to make sure it is actually possible for your kids to be enrolled there. Don't assume automatically that it will be the case that they will be able to go there purely because of where you will be situated, this is because not all counties across the UK will have exactly the same catchment-area requirements.

Be realistic

This relates reasonably strongly to the practicality category. If you are addicted to the urban life and are obsessed with all the things associated with it, then don't fool yourself that you are going to be super happy deciding to move to the middle of nowhere, as you are going to sorely miss all the things you have become accustomed to. Nevertheless, if you are still dead set on moving outside the city take into consideration the following:

  • Where exactly do your friends and family live, do you want to live near them and see them regularly? If you do, would this be feasible in the area that you have chosen, or would it be easy for others to reach you?
  • Where do you work, and how long are you willing to commute for? take into account not just the long summer days and nights, but also the freezing cold winter months too
  • What are your hobbies? Will you still be able to do those things in the area that you have chosen?

Think about others

If it is not just you who will be making the move from the city to the country, then you should take into consideration your partner or children into these plans for the future.

Try before you buy

Perhaps despite considering all of the above points, a part of you (or potentially others who would be settling for life in the country with you too) is a little hesitant still about upping sticks, but yet you still can't let the idea go. In this scenario, it may well be worth trying before you buy. What we mean by that is, is deciding to rent a house in the area you are looking at purchasing a property in for a few weeks, maybe months, and then making your final decision afterwards. Or you could decide to get an Airbnb for just a week. Whichever choice you make, it may help to quell fears and make you far surer about the ultimate decision you make.


how-brexit-has-affected-house-prices

How has Brexit has affected house prices?

As the day when Britain officially leaves the European Union growing ever closer (this will take place on 29th March 2019), and with uncertainty as to what the outcome of this will be (talks of a no-deal Brexit continue to permeate) what exactly will become of house prices in the UK as a result of Brexit? As a bridging loan lender, we understand just how important it is to you as a property developer or potential homeowner the impact of house prices can be, so we have taken a look at what the effect has been on property prices across the country since the EU referendum result and what is predicted to happen too.

 

UK house growth in July

The Guardian reported earlier this summer that UK house prices had grown at the slowest rate recorded in the last five years. London was the most affected, as a result of not only economic uncertainty provoked by the Brexit referendum, but also many households feeling the financial strain.

According to Nationwide's monthly report, annual price growth had slowed to just 2% in June, from 2.4% in May. This has been the lowest recorded rate of growth since the same month in 2013 when house prices rose by just 1.9%.

In London, the average price of a home in the capital had fallen by 1.9%, to £468,845. Nevertheless, it still remains by far the most expensive area in the UK to purchase property. It isn't only the uncertainty of Brexit that has caused problems for the London housing market, for it has been hit harder than other regions due to a number of different factors, including much stricter mortgage criteria that is in force, weak wage growth as well as the higher rate of stamp duty that has been implemented since 2016, which has impacted a far higher number of sales in the capital than in other regions of the UK.

Overall, it is anticipated that house prices will rise in 2018 by about 1%, which is a decrease from 2017's total over 2.6%.

In terms of longer-term predictions, PWC has estimated that house prices will rise by about 3% until 2025, with this being partly provoked by Brexit uncertainty.

 

Will there be a London house price crash?

Housing market specialists have warned that in the next coming months it could very well be possible that the capital will end up having a house price crash, driven by the fear that Britain could end up leaving the European Union next march without a deal.

In a poll conducted by Reuters in August, surveying over 30 analysts it was estimated that prices will fall in London by 1.6% this year, and 0.1% in 2019. This has been largely attributed by the prediction that international buyers typically attracted to buying property in the capital are going to be put off purchasing houses, due to the lack of decision making as it stands when it comes to Brexit negotiations.

What's more, analysts have stated that they believe there was a one in three chance of there being a 'significant correction' or even worse, a full-blown crash if there was a no-deal Brexit in 2019, which could cause serious trouble for UK homeowners. The problem is, the odds of the UK leaving the UK without a deal are on the rise, due to growing opposition to Theresa May's Chequers plan. Adding to this high inflation rates, rising interest rates and ever increasingly stretched household finances, this may be a recipe for disaster.

The chief executive of specialist home loans company Octane Capital, Jonathan Samuels, stated in an interview with Homes and Property earlier this year that: “A no-deal Brexit could make international business and overseas buyers extremely nervous, at least in the short term”.

“Given that the London property market is heavily exposed to big business and international buyers, if both begin to retreat in the event of a no-deal Brexit, prices in the capital could suffer disproportionately.

He also added that “the London market is already reeling after a period of overexuberant growth, and a chaotic exit from the EU has the potential to accentuate this.”

Could Brexit help first-time buyers?

On the other hand, if there was a London house price crash, it could work to the advantage of first-time buyers. With house prices having continuously risen way above household incomes, making it impossible for many first-time buyers to be able to purchase a house in the capital, a crash could make it far easier for this to happen.

 


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Why are so many Londoners quitting the capital?

Where you aware that in the last decade, the number of people deciding to pack their bags and leave the capital to head north has increased dramatically? in fact, it is estimated that it has more than tripled in the last ten years. According to Hamptons International, over 30,000 people in London decided to purchase a house outside of the city in the first six months of 2018. That equates to a rise of more than 16% compared to the year previously, and overall house price growth has led to a 61% increase in the number of people based in London deciding to leave and go elsewhere since 2008. So what has led to this growth? We take a look at the different factors contributing to the rise.

 

Where are Londoners moving to?

It was reported in The Guardian in December last year that nearly every single part of England and Wales last year saw an ex-Londoner move there to start a brand new life, up 14% from the decade previous and at its highest overall level since 2006. The research by agents Hamptons International has revealed that city dwellers are increasingly using the profits they have made in London to spend on much larger properties up north as well as in the Midlands, as they are able to get much more for their money compared to what they would receive in London. It is thought that compared to just one in 17 in 2008 deciding to leave the city for the north or the Midlands, this has now risen to almost one in five.

For example, it is estimated that the average property buyer from London leaving the capital will spend around £424,610 for a new property elsewhere, often through using bridging finance. According to The Guardian, this is the equivalent of paying for a large detached house in a pleasant area of Birmingham, compared to just being able to purchase a two-bed flat above a supermarket in east London.

However, whilst there has been an influx in terms of the number of buyers in the north and Midlands in the last decades, it is still the case that the majority of Londoners decide to move somewhere close to the city. Over 38% of leavers decided to move to the south East, and 30% to the East.

Why are Londoners moving?

There are a number of different factors that all seem to be leading buyers to decide to up sticks and move from the capital. Here are some of the main reasons why:

The cost of property

As most of us are aware, the price of property in the capital is extremely high compared to elsewhere in the country, and this has been widely stated as the main reason so many people are leaving London to buy property elsewhere, especially when salaries have not been rising in accordance to inflated property prices. According to Zoopla, the average homebuyer can expect to pay a staggering £477,000 for a property in London, far higher than in other parts of the UK such as the north and in the Midlands. With affordability being such a huge problem, it comes as no surprise that other areas of the UK have become more appealing to home buyers.

Stamp duty charges

Another reason that has been led a number of people to leave the capital has been the heavy costs of stamp duty for second-movers. Hamptons revealed that they have seen more people decide to upscale and buy a larger home much quicker than they would usually do in order to avoid having to pay more stamp duty on further moves as they trade up. This has then led more homeowners to look at heading up north due to the lower prices of stamp duty. For example, if buying a detached home in the south of England, a prospective buyer could end up paying around £14,780 in stamp duty costs, whereas if they were purchasing property in the north, this would be around £5,358, a considerable drop in price.

Difficulties for first-time buyers

It has also been revealed that the number of first-time buyers who live in London deciding to then purchase a property outside the capital has doubled in the last five years, rising from 16% in 2013, to now over 31%. This is largely due to the issues first-time buyers have faced being able to afford to purchase a home in the capital, with over one in three young adults in the city finding it impossible to be able to buy their own property in London.

Who will this end up affecting?

Of course, lower house prices and better value for money in other parts of the country makes the move from London to elsewhere advantageous for city dwellers. But what effect does this have on those, not from the city? Experts are concerned that this rise in demand elsewhere in the UK is going to then lead to a spike in property values in these areas, with people having less disposable income than those coming from London.

Take for example the fact that the typical Londoner buying a property outside of London spends on average 1.6 more than homebuyers from other regions in the country. Furthermore, in more than seven local authorities that are on the border of Greater London, it was now the case that more homes were bought by leavers than local residents, and around one in six homes in the East is now estimated to be bought an ex-Londoner.

In terms of the exact effect this will have on the property market value in these areas, only time will tell.


what-is-mortgage-refinancing

How does mortgage refinancing work?

When deciding to take out a bridging loan or not, it can be common for property developers to decide as a strategy to refinance their bridging loans once they have reached the end of the loan term. But what exactly does this mean when it comes to mortgage refinancing? We explain in further detail everything you need to know about this strategy.

Mortgage refinancing explained

In the simplest of terms, refinancing your mortgage is when a borrower who has taken out an old loan (this may be a mortgage or a bridging loan) to then exchange this for a brand new mortgage term, interest rate as well as also potentially a new mortgage term too. Some may decide to get a new mortgage with their existing lender or decide to refinance their mortgage with a new lender entirely.

You can also refinance bridging loans to help with your mortgage. A property developer may decide to opt for a second charge bridging loan in order to secure it against a property already has a mortgage outstanding. This is an option for those who are perhaps interested in raising funds in order to help carry out a renovation project (for example, to build an extension, create a loft conversion or other property improvement projects). This is because your main mortgage isn't being repaid, and you do not need to worry about early repayment charges that could be incurred due to the second charge bridging loan take out which is enabling you to raise the required funds.

 

How do I find the best mortgage refinancing deals?

If you are interested in the possibility of mortgage refinancing, then it is worth making sure that you are fully aware of:

  • The percentage value of the home that you want to borrow against (the LTV ratio)
  • What the current estimated value of your property is
  • The annual income that you or anyone else who will be named on the new mortgage will be

You should also figure out what type of mortgage you would like to compare when it comes to mortgage refinancing. For example, consider the following:

  • Tracker mortgages: this type of mortgage means that the mortgage rate that you pay is set a percentage above the base rate that has been created by the Bank of England (or your lender's standard variable rate). What this means for you is that if interest rates increase or decrease, the same will go for your mortgage repayments too
  • Offset mortgages: that means your savings account and mortgage are combined together. In this scenario, that means the money which is in your savings account is counted as an overpayment (on a temporary basis) for your mortgage. This has the potential to save you a considerable amount of money over time when it comes to interest paid.
  • Fixed rate mortgages: with this kind of mortgage, the interest rate is fixed for a period of time. In the majority of cases, this will be for a period of between two and five years in total. This can be a great option for you if you want to have the comfort of knowing exactly what your repayments will be costing you each month, without changing as a result of interest rates going up or down.

 

Is refinancing the right option for you?

It is worth noting that making the decision of mortgage refinancing is not the best decision for all homeowners. Some may consider mortgage refinancing to:

  • To cut down on costs: some homeowners may choose to refinance their mortgage in order to benefit from lower interest rates overall or lower monthly repayments. It is estimated that almost half of all borrowers in the UK are in fact paying more than they need to on their mortgage
  • Raising money: it can help to release equity in your home which can be particularly usefully if you are looking to consolidate existing debts or alternative release money for home improvements.

Who can consider mortgage refinancing?

Providing that you already have an existing mortgage, and meet the criteria set by the mortgage lender, you can be eligible for remortgaging. It may be particularly pertinent to you to consider mortgage refinancing if you are coming to the end of a discounted deal you were receiving, or are coming to the end of a fixed rate period on a mortgage.