Abingdon Living Jan - Feb 2020

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THE HOMEBUYER'S Thinking about moving or buying your first home? Read on... If you are beginning the process of buying your first home, selling to buy a bigger property or even downsizing once the kids have flown the nest, you may find that the property market is an unknown entity, full of potential pitfalls, doubts and unexpected costs. Couple that with the looming uncertainty of BREXIT, and you have a complicated set of hoops to jump through. In this guide, we aim to demystify homebuying and give useful advice for each stage of the process. BREXIT BLUES? UK house price growth remains subdued as uncertainty about the direction and shape of Brexit continues to weigh on the market. The latest figures from Nationwide show UK house prices rose by 0.4% on the year, the 11th month in a row that annual price growth remained below 1%. City A.M. says the latest modest rises “underline concerns over a slowdown in activity in the UK’s housing market, particularly in London and the South, despite a recent improvement in earnings and employment”. “It’s hard to see the market emerging from this sub-one per cent annual growth rut until there is clarity on Brexit,” said David Westgate, chief executive of Andrews Property group, adding “the sheer level of political uncertainty has left the property market in a protracted limbo”. Which? magazine says: “Whether you’re a staunch remainer or avid Brexiteer, there’s no denying that the uncertainty around when the UK will leave the EU, and the terms under which it may happen, is causing property market jitters.” What has the impact of Brexit been so far? “The economic uncertainty caused by Brexit has undoubtedly affected the market, with house price growth slowing year-on-year and the number of sales taking a dramatic dip in recent months,” says Which?. Nationwide’s chief economist Robert Gardner said this week that average prices rose by £800 over the last 12 months, a sharp slowing compared with the year to October 2016, just after the Brexit referendum, when prices jumped by £9,100. Data released by Rightmove earlier this month found that the price of property coming to market has endured its weakest month-on-month rise at this time of year in over a decade. Prospective home buyers have been undeterred by the approaching Brexit deadline, while sellers have been put off by ongoing uncertainty over UK house prices, according to the real estate platform. While the latest Brexit extension has pushed back the imminent threat of a nodeal Brexit, investors and market experts have expressed concern about the potential consequences given it remains the default position if an agreement cannot be ratified by Parliament by 31 <strong>Jan</strong>uary <strong>2020</strong>. Information from theweek.co.uk FIRST-TIME BUYERS So, you’re about to make the biggest investment of your life so far. Scary, right? There’s a lot to think about, and a lot of costs you will not have even considered until the process has started. Your mortgage is the first thing you should think about, because until you have your Decision in Principle, you will not know what you can afford to buy. By going to an independent mortgage advisor, you will have the choice of many different banks and building societies, so you can assess options like the term of your mortgage, fixing interest rates and any cash back offered. Viewing Houses This is probably the most fun bit of the process, because you get to know your tastes and can have a look around some lovely properties in the process. Rightmove is a great resource, as is Zoopla for comparing prices in an area. As well as relying on these sites, it is vital that you make yourself known to lots of different local agents. Let them know in as much detail as possible what requirements you have (location, number of bedrooms, garden, garage etc) and your upper price limit. A good agent will let you know about properties about to come to the market, helping you get a head start on other buyers. Viewing Tip - When viewing houses, try to take some pictures (with the estate agent’s permission) on your phone as an aide memoir and if you have furniture from renting to fit in, take a tape measure and see if it would fit in the space. CONVEYANCING So, once you’ve found the property you want, you will need to instruct a solicitor to do the conveyancing for you. Before deciding on one, we recommend emailing or calling around for some quotes to make sure you get a competitive rate. 30
GUIDE CHARTERED SURVEY Unless the property you are buying is less than 10 years old, it really does make good sense to have a survey. Most surveyors offer a choice between a RICS Homebuyer Report or a Building Survey. Send over the property details you have and they will help you decide on the best survey for peace of mind. Once again, it does pay to enquire with a few different firms to keep prices competitive and to find the right surveyor for the type of property you buy. Surveying Tip - If you are buying a flat, it can be difficult to know whether you need to have a full building survey (formerly called a structural survey). If you are buying a flat in a listed or older building, talk to your surveyor about whether they can offer a special package for you. SELLING Over the past few years, the property landscape really has become a seller’s market. With a high demand for property, estate agents are having to be creative in the way they compete for instructions. This is great news if you are selling, as you can ask them to be competitive in the rates they offer. Surveying Tips - It is likely that you will need to provide certificates or documentation of any major work you have had done on your home in the last 10 years, primarily electrics. De-clutter before the estate agent comes to take photos. Your home needs to be a blank canvas, so the potential buyer can imagine their possessions there, without yours dominating their vision. MOVING So, you’ve accumulated a lot of stuff eh? Here are our top tips to make moving easier: • Start packing the areas of your home that you use the least. Pack essentials last. • At least 8 weeks before the date, notify change of address for any subscriptions. • Pack early if you are using the services of a moving company. Also be sure to label clearly and keep heavy boxes double taped. • Recycle anything you don’t love anymore. Start this process early, using a skip for unsellable items and send other bits to the charity shop. Removals companies sometimes charge by volume, so reducing the amount you take with you cuts costs. Help to Buy? The Help to Buy scheme offers an equity loan where the government lends firsttime buyers and existing homeowners money to buy a newly-built home. The purchase price must be no more than £600,000. Under this scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price. The Government has confirmed it will extend its Help to Buy equity loan scheme from 2021 to 2023. However, this extension will be restricted to first-time buyers purchasing newly built homes. From 2021, there will also be new regional price caps which could reduce the maximum value of homes that can be bought through the Equity Loan Scheme. Help to Buy: Equity loans How they work • You need at least 5% of the sale price of your new-build flat or house as a deposit. • The government lends you up to 20%, or 40% if you live in London, of the sale price. • You borrow the rest (up to 75%, or 55% if you live in London) from a mortgage lender, on a repayment basis. • The equity loan must be repaid after 25 years, or earlier if you sell your home. • You must repay the same percentage of the proceeds of the sale as the initial equity loan (i.e. if you received an equity loan for 20% of the purchase price of your home, you must repay 20% of the proceeds of the future sale). • You don’t pay any interest or fees on the government’s equity loan for the first five years. In the sixth year, you’ll be charged 1.75%. • After then, the fee rises by inflation based on the Retail Prices Index (RPI) plus 1% each year. • RPI figures are put together by the Office for National Statistics. Help to Buy: Shared Ownership If you can’t quite afford the mortgage on 100% of a home, Help to Buy: Shared Ownership offers you the chance to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share. Later on, you could buy bigger shares when you can afford to. You could buy a home through Help to Buy: Shared Ownership in England if: • Your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London • You are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move. With Help to Buy: Shared Ownership you can buy a newly built home or an existing one through resale programmes from housing associations. You’ll need to take out a mortgage to pay for your share of the home’s purchase price, or fund this through your savings. Shared Ownership properties are always leasehold. You can get help from another home ownership scheme called Older People’s Shared Ownership if you’re aged 55 or over. It works in the same way as the general Shared Ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining share. 31
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