Category: Uncategorized

Huge Increase In Homemovers – Will It Last?

According to a recent report by TwentyCI, there has been a massive increase of 20% in homemovers over the past year . Despite what has been an undeniably difficult year for many sectors, the volume of people moving home has actually risen, possibly due to low interest rates, a Stamp Duty holiday, and for many, a necessary change in location and/or property.

Will House Prices Keep Rising?

Industry Experts predict that sales will grow another 7% and prices will rise another 5.7% on top of 2020’s already high levels. However, are these rates of increase in price and volume sustainable and if not, why?

At present, we have identified several reasons why this upturn in homebuyers might not maintain its momentum:

1.Stamp duty

Chancellor Rishi Sunak has this week extended the stamp duty holiday in the Budget. Anyone buying a home costing up to £500,000 before the end of June will now not pay the tax, and could save up to £15,000, with a reduced discount available until the end of September. 

There were previously ongoing fears that many buyers who had begun the purchase process could fail to meet the March 31st deadline to take advantage of the relief which raised the minimum threshold for paying the tax from £125,000 to £500,000. 

Use our Stamp Duty Calculator To work out UK rates of Stamp Duty

2. Mortgages

Lenders have struggled to keep up with such high demand for mortgages over the past year and this, along with the Stamp Duty Holiday backlog, means thousands of deals are stuck in a massive queue.

According to Rightmove, it can take more than four months for a sale to go through, although Conveyancing Expert aim to help you move in a more timely manner.  Interest rates are remaining low and steady with the average interest on a two-year fixed mortgage at 2.52 per cent.

On the other hand, one possibility is that when the stamp duty holiday ends in September, first-time buyers will regain their advantage because their pre-existing tax breaks will still be in effect. Banks could also launch more First Time Buyer incentives anticipating them to make up a greater proportion of the market come spring. 

Ask our Expert Conveyancing team for advice on mortgages and remortgaging.

3. Brexit

Several years of post-referendum uncertainty had a massive impact on the confidence of buyers and sellers alike and the property market has, in part, reflected this. However, now the deal has been done, the negative impact on the property market might see an end. People have been worried that the financial services will suffer, leading to a fallout in the property sector.  However, these fears were unfounded.

House prices did stagnate briefly following the referendum in June 2016. However, that was fairly standard for the time of year: In late 2018 and early 2019, prices began to fall fairly quickly as uncertainty around Brexit continued but rose steadily over the months leading up to the general election in December. 

The COVID-19 outbreak brought a house prices rise, buoyed by the government’s cut to stamp duty.

4. Furlough

The end of furlough in April 20201 could trigger a short-term increase in property for sale, as some of those out of work will have to sell or rent out their homes, increasing supply and lowering prices. On the other hand, furlough will continue until lockdown restrictions are over allowing businesses to bring their employees back to work with relatively minimal financial upheaval.

However, almost 5 million are self-employed in the UK and are facing bigger challenges when it comes to buying a home: During the past few weeks, several lenders have introduced tougher lending rules for those who run their own business: Santander is limiting its mortgages to 60% LTV for the self-employed. This new restriction took effect on 9 January and was described as temporary, although it is likely to be in place for at least a few more weeks.

5. A third wave?

The evolution of the pandemic and its future course is unknown. However, the Property market has weathered the storm fairly well so far but what would future waves of the virus bring?

Most of us are hoping that the vaccination programme will return the world to a comparatively normal state by the summer. But nobody truly knows how things will pan out and even in the best-case scenarios, the social and economic effects of Covid-19 will be felt for years to come.

Conveyancing Expert are renowned for delivering excellent and efficient legal and conveyancing services. Our goal is to ensure your purchase, sale, re-mortgage or transfer of equity, is completed to the highest standards with the support of our expert conveyancing advice.

The current pandemic has had a massive and continued effect on all elements of the UK economy including the housing market. As restrictions will at some point start to lift and with the property market in full swing, we take a look at what this means for you and the mortgage options available to you.

Mortgage Options At Highest Level Since First National Lockdown

With lenders having regained confidence during lockdown#3, homebuyers and property investors seeking mortgages now have the highest level of mortgage options available since March 2020 when the UK experienced lockdown for the first time.

How is The Pandemic Affecting Mortgages?

At the beginning of the lockdown, Experian stated that mortgages were affected in the following ways:  

• Mortgage approvals fell – due to lenders being unable to carry out physical valuations of properties. 
• Lenders tightened their lending criteria – many increased the deposits they require for their mortgages.
• Some lenders pulled mortgage deals from the market because of the uncertainty. This limited options for customers.
• Mortgage holidays boomed – over 1.6m homeowners took a break from repaying their mortgage.
• Interest rates fell – the Bank of England cut the base rate to 0.1%  and mortgage interest rates fell.

However, more recently, the number of mortgage deals on the market has risen and we now have the highest level of options available since the start of the pandemic. Conveyancing Expert explains what is happening to the market and considers whether it really is becoming easier to get a mortgage and if so, why.

New Ranges Of Mortgage Available

Many lenders have launched a range of new mortgage options for property buyers. There are now 3,215 mortgage deals available according to Moneyfacts, the highest number available in 11 months. There had previously been 5,222 deals available on the market.

In the first half of 2020, mortgage options fell sharply. Many lenders even withdrew mortgages altogether while they assessed the level of risk they could take due to the effects of the COVID-19 pandemic. In particular, those with smaller deposits had much fewer mortgage deals available.

During the latter half of 2020, the market started recovering. Since October, the number of mortgage options has risen by 42%, the biggest four-monthly increase since 2007 .

Furthermore, the end of 2020 saw mortgage approvals at their highest level since 2007. The housing market remained busy as homebuyers and property investors have been rushing to beat the stamp duty holiday deadline.

Mortgages With Smaller Deposits

Choice in mortgages is on the rise especially for borrowers with smaller deposits. In recent months, the most significant rise in products was for 90% loan-to-value (LTV) mortgages, where borrowers only need to put down a 10% deposit is typically used by first-time buyers.

90% LTV mortgages are usually considered a higher risk for providers. Willingness to extend lending in this risk bracket could signify that lenders have confidence in the sector, despite ongoing, wider economic uncertainty. 

This is reinforced by the average two and five year fixed rates at 90% LTV seeing the largest fall of all the lending brackets, reducing by 0.09% and 0.07%.”

Mortgage Rates Stabilising

Mortgage rates have not become cheaper despite the wider availability cheaper. They are still rising slightly, with two-year deals continuously on the increase. The speed of the increase is slowing down though; lower rates could be on the horizon.

Average interest rates have in fact increased across all LTV but only fractionally, which shows stabilisation. This is possibly due to increased competition and lenders are gaining more confidence, becoming less risk averse than before.

Choosing The Best Deals

Conveyancing Expert advises homebuyers to consider a number of factors when choosing a mortgage deal. Although the interest rate is important, It’s also crucial to take product fees and incentives into consideration.

Two-year fixed products have been particularly popular of late. These typically have lower interest rates than five-year fixed deals but for some, a five-year option could be a better choice in the long run. 

As the economy and mortgage market remains uncertain, five-year fixed deals could provide longer-term stability though this depends on the borrower’s specific needs. 

Is It Getting Easier To Get A Mortgage?

Whilst greater availability and longer lasting deals are good news for borrowers, it remains a complicated time to get a mortgage. Whilst lenders are starting to ease the strict rules they introduced during 2020, there are still some hurdles. 

Always seek independent financial guidance to find the best mortgage deal for your circumstances. Your dedicated expert conveyancing solicitor will assist you with advice in this matter. 

Conveyancing Expert are renowned for delivering excellent and efficient legal and conveyancing services. Our goal is to ensure your purchase, sale, re-mortgage or transfer of equity, is completed to the highest standards with the support of our expert conveyancing advice.

During the early stages of the pandemic, the number of mortgage products available fell sharply to around 50 percent of their previous level. While lenders have started reintroducing products, numbers have not quite returned to ‘normal’ levels yet, so your choice may be limited. Conveyancing Expert bring you all the latest news on remortgaging in 2021.

Remortgaging In 2021- All You Need To Know

Mortgages are generally people’s biggest financial commitment, taking up a large portion of their monthly outgoings. Lenders are more cautious while economic uncertainty continues. Mortgage companies, like other employers, face challenges in maintaining their normal services. As a result, timescales for processing and finalising applications have lengthened and this can mean a delay in receiving funds.

Should I Remortgage?

Making sure you have the best deal is important as it can save you hundreds each month. If you already have a mortgage and are looking to change lender, we can help you through the remortgage conveyancing process.

There are signs of a strong recovery for the remortgaging sector in 2021, as rising house prices boost homeowners’ equity allowing them to benefit from better loan-to-value products.

Why Might I Remortgage?

There are several reasons to think about remortgaging but the main reason is going to be saving money…Maybe your current deal is about to end. Many introductory mortgage offers only last a short time, often two to five years. This is the typical length of time offered on a fixed rate, tracker or discount mortgage. The most common time to remortgage is when this fixed or introductory tracker or discounted rate on your mortgage ends.

• Mortgage Term Ended: Once your introductory mortgage offer has ended, you will be on the lender’s Standard Variable Rate (SVR). It is unlikely this will be the cheapest option, so remortgaging is going to be something you will have to think about. Your lender may be happy to retain your custom so this should always be your first port of call.
• Better Rates: If you are tied into an initial deal you might have to pay an early repayment charge of up to  2-5% of your outstanding loan. Regardless of exit fees, the savings can be huge
• Change Of Personal Circumstances: If your current mortgage is no longer the most appropriate, a different type with different terms might suit you better.
• Flexibility: The predictability of a fixed-rate remortgage might be more important than low repayments. Or maybe you’re earning more than when you took your mortgage out . Flexible features usually come with a slightly higher interest rate. 
• Raising Extra Money: Affordability will be reassessed by your lender to make sure you’re not over-stretching your finances.

Early Repayment Charges

Most mortgages have an early repayment charge during the initial special discount period. Early repayment charges are often a percentage of the amount you owe. Some lenders charge a flat rate like 4% whilst others charge a higher percentage the longer you have left on your mortgage.

Check the costs on your mortgage statement, in your terms and conditions or by asking your lender for a redemption statement. This will confirm how much you owe and what fees you need to pay to clear the balance. Conveyancing Expert will help you understand all charges that come with remortgaging your property.

Do I Need A Solicitor When Remortgaging?

It is especially important to employ a conveyancing expert when:

• Adding Someone To A Mortgage: you will need a solicitor as ownership of the property is changing. This is known as a ‘transfer of equity’. Deeds will have to be amended and paperwork drawn up specifying how you will own the property.
• Removing Someone From The Mortgage – as above, this means that the ownership of the property is changing so a solicitor will be needed to amend the deeds.

Our expert conveyancing team can answer all your remortgaging queries. Contact us today for a quote.

Mortgage Rates And Availability In 2021

Mortgage Availability has been improving for several months now, providing a boost to both home buyers and remortgagers alike. There are currently more deals on the market than there has been since last March. In fact, the number of mortgages on offer has risen by 42%, with offers of low-deposit 90% deals being a driving factor. 

As for mortgage rates, the increased availability hasn’t made them cheaper. Rates are still rising slightly, with two-year deals continuously on the increase. Saying that however, the speed of the increase is slowing down. Lower rates could be on the horizon.

How Much Can I Borrow?

Lenders used to multiply your income to work out how much you could borrow. It’s all about affordability. Lenders look at a detailed assessment of your income compared to your outgoing and work out how much spare cash you have each month. They take everything into account.

They will require you to have a ‘cushion’ in case mortgage rates rise, and leave you unable to pay. 

Remortgaging If You’re Self-Employed

It’s becoming harder to get a remortgage if you’re self-employed. For example:

• Self-employed applicants will only be able to borrow up to 60% of a property’s value from Santander.
• Halifax: self-employed borrowing is limited to 4.49 times annual income. 
• HSBC: not currently lending to self-employed applicants whose income has been impacted by the recent tightening of COVID-19 rules. Applications will reopen after the lockdown ends. 
• Nationwide: self-employed applicants can borrow up to 85% LTV. 
• Natwest: if a self-employed applicant has had a Self-employed Income Support Scheme grant, the proceeds will not be considered as income. 
• TSB: self-employed applicants can borrow up to 75% LTV. Borrowing is limited to 4.25 times annual income.

You will need at least two years of accounts to prove your income.

This can be done in one of two ways.

• Business Accounts. Preferably three years worth of accounts — though two can sometimes do. They usually need to be signed off by an accountant.
• Tax Returns. If you can’t show business accounts, two or three years’ tax returns are the next best option. You’ll be assessed on profits, not turnover. 

Those who have recently become self-employed will simply not be able to remortgage.

Whatever your circumstances, it is always a good idea to keep up with all the latest mortgage information, with Conveyancing Expert, especially if you plan to apply for a mortgage in the near future.

Let-to-buy is the procedure of renting out your current home and buying a new one to live in. This might involve having two mortgages at the same time: you would have to convert your existing mortgage into a buy-to-let mortgage in order to let out your current home, then take out a standard residential mortgage for the home you plan on buying. 

There is a lot to think about when doing this as there are many potential complications, including the costs and responsibilities of becoming a landlord and taking on two mortgages.

Conveyancing Expert are an experienced and professional Conveyancing Solicitors based in Manchester. Our Quality conveyancing services cover as all aspects of residential and commercial conveyancing.

Is Let To Buy A Good Idea?

Let-to-buy could be suitable for homeowners in the following situations: 

• You want to use the equity built up in your home to move to a new one, while keeping the existing home as a long-term investment.
• Those in a hurry to move to a new home and can’t wait to sell your current property.
• Homeowners struggling to sell their property.
• People wanting to buy a property with a partner but to still own their current home.
• Those moving elsewhere short term but plan on moving back.

Let to buy and buy to let are two different things. When you buy to let, you’re purchasing a property to rent out, whereas with let-to-buy you’re buying a new property to live in yourself and renting out your current home. 

Let To Buy And Mortgages

You cannot simply rent out your home and buy another one without first switching your mortgage. Owning a rental property with a residential mortgage will most likely breach the terms of your home loan. You will need to convert your residential mortgage into a buy-to-let deal (or obtain consent to let from your current lender). 

This isn’t always straightforward as buy-to-let mortgages are often interest-only and rates are usually higher than on residential loans.  If you wish to release equity from your current property to use as a deposit on your new one, this can add further complications: your existing lender may allow you to switch to a buy-to-let deal but this will rely on your finances being reassessed all over again, this time based on buy-to-let criteria. 

If this is not possible with your current provider, you could try to re-mortgage with another lender. Look out for early repayment charges though. 

Some lenders offer specialist let-to-buy mortgages, which take some of the complications away.  The criteria for Let-to-buy mortgages will include how much rental income you can bring in from the property you’re letting out, rather than how much you earn. 

Specialist let-to-buy mortgages are available from just a few providers and these will have different requirements including: 

• A borrowing limit of 75%-80% of the value of your current home – if you want to release equity when re-mortgaging you’ll need to factor this into your calculations. 
• Proof that you’ll bring in higher rent than your mortgage repayments: lenders usually require rent to cover around 145% of monthly repayments. 
• Proof that you’re buying a new home at the same time as switching your mortgage: such as a mortgage offer for your new home. 
• That you use the same solicitor for both transactions: this isn’t always required but is by some lenders. Maximum age: 70 or 75, usually. 

Conveyancing Expert are an experienced and professional Conveyancing Solicitors based in Manchester. Our Quality conveyancing services include conveyancing on re-mortgages as well as all other aspects of residential conveyancing.

Let To Buy Advice

Let-to-buy has lots of variables and therefore, a lot can go wrong. It is highly recommended that you speak to one of our conveyancing experts to seek advice on your options from one of our conveyancing solicitors who are based in Manchester. We will help you from start to finish, helping to ensure you can complete in a timely manner with all legal aspects of the transaction completely watertight. Finally, many buy-to-let mortgages are only available through brokers rather than directly from lenders, so a broker may be able to access deals you won’t be able to get on the high street. 

Conveyancing Expert are an experienced and professional Conveyancing Solicitors based in Manchester and can offer advice on let to buy transactions. Get in touch today to discuss our Quality conveyancing services and all aspects of your residential or commercial conveyancing needs.

Let To Buy And Stamp Duty

When buying your new property, you will have to pay a 3% buy-to-let stamp duty surcharge which  can add thousands to bill so it’s hugely important to budget for this.  The surcharge is applied because you will be buying a second home (even though it’s one you’ll be living in yourself).  If you sell your original property (the one you’re renting out) within three years, you can claim the difference between what you paid and the normal home mover rates back.  

Other Costs

Buy-to-let isn’t always as viable as it sounds, so it’s important to ensure letting to buy is a sensible and cost-effective decision. As well as bringing in more than enough rent to cover the mortgage payments, you’ll need to contend with the costs of managing the tenancy. This could include employing a letting agent if you don’t plan on taking on the responsibility yourself. 

Finding tenants can be particularly costly for landlords, especially since the introduction of the tenant fees ban in June 2019. You’ll also have to file tax returns each year for your rental income through self-assessment. There are further considerations in this area for landlords, as the government is currently reducing how much mortgage interest can be claimed against your tax bill.  

Are There Any Alternatives?

If you are struggling to sell your home but are not in a mad rush to do so, one option is to stay put for now and see what happens with the property market after Brexit. 

With rates very low at the moment, it can be a financial benefit for homeowners to fund renovations or home improvements by re-mortgaging, rather than by taking out a personal loan. Not all improvements will succeed in adding value to your property, however, so it’s important to weigh up the pros and cons and develop an understanding of your local property market before spending extra money on your home.

Always Seek Legal Advice

We always recommend using a conveyancing expert to carry out the let to buy legal process on your behalf. Our quality conveyancing services will see you from start to finish: we deliver an excellent and efficient service to ensure your property transaction is completed with expert legal advice and service.

The pandemic had a massive and continued effect on all elements of the UK economy including the housing market. As restrictions start to lift and the property market in full swing, we take a look at what this means for you and the mortgage options available to you.

Mortgage Options At Highest Level Since First National Lockdown

With lenders having regained confidence during lockdown#3, homebuyers and property investors seeking mortgages now have the highest level of mortgage options available since March 2020 when the UK experienced lockdown for the first time.

How is The Pandemic Affecting Mortgages?

At the beginning of the lockdown, Experian stated that mortgages were affected in the following ways:  

• Mortgage approvals fell – due to lenders being unable to carry out physical valuations of properties. 
• Lenders tightened their lending criteria – many increased the deposits they require for their mortgages.
• Some lenders pulled mortgage deals from the market because of the uncertainty. This limited options for customers.
• Mortgage holidays boomed – over 1.6m homeowners took a break from repaying their mortgage.
• Interest rates fell – the Bank of England cut the base rate to 0.1% and mortgage interest rates fell.

However, more recently, the number of mortgage deals on the market has risen and we now have the highest level of options available since the start of the pandemic. Conveyancing Expert explains what is happening to the market and considers whether it really is becoming easier to get a mortgage and if so, why.

New Ranges Of Mortgage Available

Many lenders have launched a range of new mortgage options for property buyers. There are now 3,215 mortgage deals available according to Moneyfacts, the highest number available in 11 months. There had previously been 5,222 deals available on the market.

In the first half of 2020, mortgage options fell sharply. Many lenders even withdrew mortgages altogether while they assessed the level of risk they could take due to the effects of the COVID-19 pandemic. In particular, those with smaller deposits had much fewer mortgage deals available.

During the latter half of 2020, the market started recovering. Since October, the number of mortgage options has risen by 42%, the biggest four-monthly increase since 2007.

Furthermore, the end of 2020 saw mortgage approvals at their highest level since 2007. The housing market remained busy as homebuyers and property investors have been rushing to beat the stamp duty holiday deadline.

Mortgages With Smaller Deposits 

Choice in mortgages is on the rise especially for borrowers with smaller deposits. In recent months, the most significant rise in products was for 90% loan-to-value (LTV) mortgages, where borrowers only need to put down a 10% deposit is typically used by first-time buyers.

90% LTV mortgages are usually considered a higher risk for providers. Willingness to extend lending in this risk bracket could signify that lenders have confidence in the sector, despite ongoing, wider economic uncertainty. 

This is reinforced by the average two and five year fixed rates at 90% LTV seeing the largest fall of all the lending brackets, reducing by 0.09% and 0.07%.”

Mortgage Rates Stabilising

Mortgage rates have not become cheaper despite the wider availability cheaper. They are still rising slightly, with two-year deals continuously on the increase. The speed of the increase is slowing down though; lower rates could be on the horizon.

Average interest rates have in fact increased across all LTV but only fractionally, which shows stabilisation. This is possibly due to increased competition and lenders are gaining more confidence, becoming less risk averse than before.

Choosing The Best Deals

Conveyancing Expert advises homebuyers to consider a number of factors when choosing a mortgage deal. Although the interest rate is important, It’s also crucial to take product fees and incentives into consideration.

Two-year fixed products have been particularly popular of late. These typically have lower interest rates than five-year fixed deals but for some, a five-year option could be a better choice in the long run. 

As the economy and mortgage market remains uncertain, five-year fixed deals could provide longer-term stability though this depends on the borrower’s specific needs. 

Is It Getting Easier To Get A Mortgage?

Whilst greater availability and longer lasting deals are good news for borrowers, it remains a complicated time to get a mortgage. Whilst lenders are starting to ease the strict rules they introduced during 2020, there are still some hurdles. 

Always seek independent financial guidance to find the best mortgage deal for your circumstances. Your dedicated expert conveyancing solicitor will assist you with advice in this matter. 

Conveyancing Expert are renowned for delivering excellent and efficient legal and conveyancing services. Our goal is to ensure your purchase, sale, re-mortgage or transfer of equity, is completed to the highest standards with the support of our expert conveyancing advice.

During the early stages of the pandemic, the number of mortgage products available fell sharply to around 50 percent of their previous level. While lenders have started reintroducing products, numbers have not quite returned to ‘normal’ levels yet, so your choice may be limited. Conveyancing Expert bring you all the latest news on re-mortgaging in 2021.

Re-mortgaging – All You Need To Know 

Mortgages are generally people’s biggest financial commitment, taking up a large portion of their monthly outgoings. Lenders are more cautious while economic uncertainty continues. Mortgage companies, like other employers, face challenges in maintaining their normal services. As a result, timescales for processing and finalising applications have lengthened and this can mean a delay in receiving funds.

Should I Re-mortgage?

Making sure you have the best deal is important as it can save you hundreds each month. If you already have a mortgage and are looking to change lender, we can help you through the re-mortgage conveyancing process.

There are signs of a strong recovery for the re-mortgaging sector in 2021, as rising house prices boost homeowners’ equity allowing them to benefit from better loan-to-value products.

Why Might I Re-mortgage?

There are several reasons to think about re-mortgaging but the main reason is going to be saving money…Maybe your current deal is about to end. Many introductory mortgage offers only last a short time, often two to five years. This is the typical length of time offered on a fixed rate, tracker or discount mortgage. The most common time to re-mortgage is when this fixed or introductory tracker or discounted rate on your mortgage ends. 

• Mortgage Term Ended: Once your introductory mortgage offer has ended, you will be on the lender’s Standard Variable Rate (SVR). It is unlikely this will be the cheapest option, so re-mortgaging is going to be something you will have to think about. Your lender may be happy to retain your custom so this should always be your first port of call.
• Better Rates: If you are tied into an initial deal you might have to pay an early repayment charge of up to  2-5% of your outstanding loan. Regardless of exit fees, the savings can be huge
• Change Of Personal Circumstances: If your current mortgage is no longer the most appropriate, a different type with different terms might suit you better.
• Flexibility: The predictability of a fixed-rate re-mortgage might be more important than low repayments. Or maybe you’re earning more than when you took your mortgage out . Flexible features usually come with a slightly higher interest rate. 
• Raising Extra Money: Affordability will be reassessed by your lender to make sure you’re not over-stretching your finances.

Early Repayment Charges

Most mortgages have an early repayment charge during the initial special discount period. Early repayment charges are often a percentage of the amount you owe. Some lenders charge a flat rate like 4% whilst others charge a higher percentage the longer you have left on your mortgage.

Check the costs on your mortgage statement, in your terms and conditions or by asking your lender for a redemption statement. This will confirm how much you owe and what fees you need to pay to clear the balance. Conveyancing Expert will help you understand all charges that come with re-mortgaging your property.

Do I Need A Solicitor When Re-mortgaging?

It is especially important to employ a conveyancing expert when: 

• Adding Someone To A Mortgage: you will need a solicitor as ownership of the property is changing. This is known as a ‘transfer of equity’. Deeds will have to be amended and paperwork drawn up specifying how you will own the property.
• Removing Someone From The Mortgage – as above, this means that the ownership of the property is changing so a solicitor will be needed to amend the deeds.

Our expert conveyancing team can answer all your re-mortgaging queries. Contact us today for a quote.

Mortgage Rates And Availability In 2021

Mortgage Availability has been improving for several months now, providing a boost to both home buyers and re-mortgagers alike. There are currently more deals on the market than there has been since last March. In fact, the number of mortgages on offer has risen by 42%, with offers of low-deposit 90% deals being a driving factor. 

As for mortgage rates, the increased availability hasn’t made them cheaper. Rates are still rising slightly, with two-year deals continuously on the increase. Saying that however, the speed of the increase is slowing down. Lower rates could be on the horizon.

How Much Can I Borrow?

Lenders used to multiply your income to work out how much you could borrow. It’s all about affordability. Lenders look at a detailed assessment of your income compared to your outgoing and work out how much spare cash you have each month. They take everything into account.

They will require you to have a ‘cushion’ in case mortgage rates rise, and leave you unable to pay. 

Re-mortgaging If You’re Self-Employed

It’s becoming harder to get a re-mortgage if you’re self-employed. For example:

• Self-employed applicants will only be able to borrow up to 60% of a property’s value from Santander.
• Halifax: self-employed borrowing is limited to 4.49 times annual income. 
• HSBC: not currently lending to self-employed applicants whose income has been impacted by the recent tightening of COVID-19 rules. Applications will reopen after the lockdown ends. 
• Nationwide: self-employed applicants can borrow up to 85% LTV. 
• Natwest: if a self-employed applicant has had a Self-employed Income Support Scheme grant, the proceeds will not be considered as income. 
• TSB: self-employed applicants can borrow up to 75% LTV. Borrowing is limited to 4.25 times annual income.

You will need at least two years of accounts to prove your income.

This can be done in one of two ways.

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• Business Accounts. Preferably three year’s worth of accounts — though two can sometimes do. They usually need to be signed off by an accountant.
• Tax Returns. If you can’t show business accounts, two or three years tax returns are the next best option. You’ll be assessed on profits, not turnover. 

Those who have recently become self-employed will simply not be able to re-mortgage.

Whatever your circumstances, it is always a good idea to keep up with all the latest mortgage information, with Conveyancing Expert, especially if you plan to apply for a mortgage in the near future.

Homebuyers should be able to secure a mortgage with as little as a 5% deposit, with the government underwriting new 95% loans, thanks to new measures in the 2021 Budget. 

The 95% mortgage scheme was previously suggested back in October 2020 when Boris Johnson stated he wanted to ‘turn Generation Rent into Generation Buy’ though at the time, the Prime Minister provided few details. It is now confirmed that the scheme will be available from this month (April) and is set to run until 31st December 2022, enabling homebuyers to purchase properties worth up to £600,000 with just a 5% mortgage. Both first-time buyers and existing homeowners can take advantage of it.

For all your residential conveyancing needs, contact Conveyancing Expert. We are a firm of expert residential conveyancing solicitors based in Manchester.

What Is A 95% Mortgage?  

A 95% mortgage enables you to borrow up to 95% of the purchase price of a property. The remaining 5% is made up of your deposit. This arrangement is sometimes referred to as a 95% LTV mortgage (LTV stands for ‘loan-to-value’ ratio). 

Bear in mind that the lowest mortgage interest rates will still be reserved for borrowers with larger deposits of around 40% or more, but there will be competitive deals for buyers with just 5% to put down. Just be aware that a smaller deposit does mean that your choice of mortgages will be more limited. Get a re-mortgage quote here.

Can I Get A 95% Mortgage? 

The coronavirus pandemic affected many areas of the financial markets, including mortgages, and most lenders withdrew their high loan to value products in 2020. However, the picture is beginning to look a lot more positive and many 90% and 95% loan to value deals are becoming available again.

The new 95% mortgage products are going to be available to both first-time buyers and home movers. However, just like with any other mortgage, you will still need to prove that you earn enough to meet the monthly mortgage repayments as well as all your other ongoing expenses. All lenders will still perform a stringent affordability check before considering lending you money. 

Affordability testing Your salary is the starting point in any mortgage application, but it’s not the only factor lenders take into account. They will assess the full range of your income, outgoings and any debt, among other things, when working out whether you can afford monthly repayments. They will also ‘stress test’ your finances, making sure you could still afford the mortgage payments if interest rates were to fluctuate. 

To be in with a chance of qualifying for a 95% mortgage, you must still have a good credit score. You must have a proven history of paying bills, loans and credit cards, rent on time. Registering on the electoral roll is a must and boosts your credit score.  

Speak to one of our residential conveyancing solicitors today who can advise you on all areas of your house purchase.

What Can I Borrow? 

In theory, you could borrow up to five times your salary (or combined salaries) with a 95% mortgage. 

For example, if you had saved a 5% deposit of £10,000 for a £200,000 home, you would usually need a salary of at least £38,000 (or a combined salary of the same amount) to be able to borrow the remaining £190,000, though the actual amount you will be able to borrow will vary depending on the lender and your personal circumstances. Some lenders place caps at 4.5 or 4.75 times your annual income. 

95% Mortgage Rates And Availability 

The pandemic has had a massive impact on the economy over the past year which has, up until now, made it much harder to get a 95% mortgage. In February 2021 there were only three 95% mortgage offers available, down from 273 in March 2020. However, the government’s recent announcement that they will guarantee these mortgages has prompted several major banks to launch new deals starting this month.  

Buy-to-let mortgage rates vary, and like any other type of mortgage; are dependent on a number of factors. The bank will assess how risky the loan is, how much the deposit is and your credit score. 

What About Mortgage Rates?

Rates on 95% mortgages are usually around 0.7%-1% which is more expensive than 90% deals so If you are able to save a bigger deposit, then you could benefit from far lower monthly repayments. 

There is also a degree of uncertainty over the direction of house prices in the next few months after such a huge surge over recent months; A drop in house prices would make low deposit deals more risky, since borrowers could potentially be left in negative equity. 

Which Lenders Will Offer The 95% Mortgages?

In his budget speech, Rishi Sunak said “several of the country’s largest lenders including Lloyds, Natwest, Santander, Barclays and HSBC will be offering these 95% mortgages from next month.” He also said that “more, including Virgin Money will follow shortly after.”

So some of the big names have already committed themselves but some in the industry remain sceptical about how widespread the uptake will be among lenders:

“Banks have demonstrated a reluctance to lend in this market during the past twelve months, partly due to the sheer volume of business at lower LTVs and partly due to concerns over the outlook for jobs,” said Oliver Knight, head of residential development research at Knight Frank.

“Though that outlook is improving, the success of the scheme will depend on how many lenders take it up, on top of those announced so far, and what pricing they adopt. The government will be hoping the guarantee will significantly stimulate appetite to lend in that space.”

Risks For Buyers

With the UK housing market uncertain for the coming years, there is some concern that low-deposit mortgage buyers could be at risk of falling into negative equity.

If house prices were to fall, buyers who took out a 95% LTV mortgage would be more likely to owe more than their house is worth. Negative equity makes it difficult (or impossible) to sell or re-mortgage a home, proving a risk to new buyers hoping to climb the property ladder.

Conveyancing Expert are Conveyancing Solicitors based in Manchester. We offer an expert Residential Conveyancing service to ensure your purchase, sale, re-mortgage or transfer of equity, is completed to the highest standards.

More homebuyers are actually paying over the asking price for properties than at any time in over seven years. The UK’s property market is at its strongest for a long time, with buyers desperate to secure purchases before the stamp duty holiday ends. But is now the time to take the leap? Conveyancing Expert takes a look at what is happening to house prices to help you decide whether to make a move or wait until things calm down.

Conveyancing Expert are conveyancing solicitors based in Manchester. We offer the highest quality conveyancing services. For your free, no obligation conveyancing quote just CLICK HERE.

The Stamp Duty Holiday

The temporary cut to stamp duty had a significant impact on the property market. The cut was due to end on 31 March 2021 which resulted in a huge rush of buyers aiming to get purchases in time. HMRC figures show that 190,000 transactions took place in March, double that of a year earlier.  The tax break was actually extended in March, meaning we’re likely to see high numbers of sales continue at least for a little longer. 

What Is Happening To UK House Prices? 

Lockdown caused many people to reassess their living arrangements with particular emphasis on extra rooms and gardens. This increased demand in the housing market and since there are not enough houses to match the demand, prices have shot up.

According to the most recent data from Nationwide, annual UK house prices rose by 7.1% in April, up from 5.7% in March. Month-on-month prices rose 2.1% in April alone, which is the biggest monthly rise since February 2004.

In the last year England, has seen a house price growth of 8.7%, to an average price of £268,000 (8.7%), in Wales to £180,000 (8.4%), in Scotland to £162,000 (8.0%) and in Northern Ireland to £148,000 (5.3%). The North West of England was region to see the highest annual growth in average house prices (11.9%), while London saw the lowest (4.6%). (Figures from the ONS)

Naturally, greater demand results in higher prices, especially for those moving to larger and/or more expensive homes; the Land Registry shows how detached houses in the UK have increased in price by the biggest percentage over the last 12 months and flats and maisonettes have seen the smallest growth. 

Mortgages Rates In 2021 

The pandemic saw the number of mortgage deals available halving. People with smaller deposits were the worst affected. However, there are now 3,659 fixed-rate mortgages available; this is still 25% less than before the pandemic but the highest seen since last spring. Rates are fairly good for those with a big deposit. 

Conveyancing Expert are a team of solicitors based in Manchester who offer the highest quality conveyancing services. For your free, no obligation conveyancing quote just CLICK HERE.

Is Now A Good Time To Buy A Home?

The stamp duty cut and low mortgage rates might encourage many to take the plunge but there are some downsides of buying in a lively market, especially one influenced so heavily by external factors such as a pandemic and short term tax cuts. With regards to the Stamp Duty Holiday, the £500,000 tax-free limit will be lowered to £250,000 in England and Northern Ireland, and £180,000 in Wales on 1 July, meaning that even if you’re looking to buy very soon, you will struggle to get your purchase complete before the end of the tax holiday. 

Also, the incredibly high house prices around at the moment could mean that if you buy now, you could find your property is worth much less than you paid after the current surge dies down. 

Bearing these factors in mind, it may be sensible to take a step back rather than rushing into a purchase. Always think of the bigger picture and the long term goals. 

What About Selling My Home?

It is very much a seller’s market right now but only you and your individual circumstances can dictate whether you should sell now. If your property has increased significantly in value, you might decide to cash in now and progress to another home. If you’re selling at the top of the market, you’ll probably be buying at the same level, so the hike in value of your current home may not have a significant effect. 

With working from home likely to remain more commonplace than it ever was, home buyers are looking for different things from a property than they were a few years ago. If you are thinking of selling in the near future, think about how your property fits with what buyers in your area are searching for, and consider what improvements you could make to make your home rise in value and attract greater interest. 

Conveyancing In 2021

The past 12 months have seen massive changes in ways of working for all of us, not least in the conveyancing market. Also, the rapidly approaching end to the SDLT holiday (England) and the LTT holiday (Wales) and the end of the Help to Buy scheme in its current format, coincided with the busy Easter period. However, we are as dedicated as always to progress your sale and purchase efficiently and thoroughly and in a timely manner.

If you are looking for quality conveyancing services, Conveyancing Expert are here to deliver an excellent and efficient service, ensuring your property transaction is completed with expert legal advice.

Despite being hit by a series of tax hurdles and record high house prices over the past few years, the buy-to-let industry remains popular with those who are familiar with the trade. A 3 per cent stamp duty surcharge is also suffered by those buying investment properties, and landlords can also no longer fully offset mortgage interest payments against income tax on rent and then face higher capital gains tax bills than other investors when they sell.

But the housing market is still thriving and people will always need places to rent, so is buy-to-let still a good investment? 

Conveyancing Expert are a team of conveyancing solicitors in Manchester.

 We can assist you in all aspects of buy to let house purchase.

Is Buy To Let Still A Good Investment?

Over the last 12 months, over 234,000 buy-to-let mortgages were taken out in the UK. Of those, 169,000 were re-mortgages and 65,000 house purchases. In total there was over £36 billion worth of buy-to-let mortgage lending in the last 12 months, which consisted of £8.7 billion in house purchases and £27.3 billion in remortgages (finder.com)

This would suggest there is still a demand for investing in buy-to-let, although mortgaged purchases are less prevalent than before the stamp duty 3% surcharge which came into force in 2016. 

What Do The Figures Say?

Last year 131,900 properties were sold by landlords in the UK, the smallest sell-off since 2013. 

The average landlord who sold their properties last year in England & Wales, sold for £82,450 or 42% more than they paid for it, having owned the property for an average of 9.1 years. The average gross gain increased by £3,390 or 4% to £82k compared to 2019 (£79,060), marking the first annual rise in more than five years. London landlords made the biggest gains, selling their buy-to-let for £302,200 or 71% more than they originally paid for it, having owned the property for 9.8 years on average. (Hamptons)

In March this year, the rent on a newly let home stood at 4.4% higher across Great Britain than at the same time last year. Regions outside London continued to see the highest rates of rental growth, increasing by 6.8% annually, the third consecutive month that annual rental growth outside the capital exceeded 5.0%. Every other English region recorded rental growth of at least 4.0%. (Hamptons)

Tax On Buy-To-Let Properties

Landlords used to be able to offset mortgage interest payments against rental income but in 2015 the government announced they were phasing this out. In 2017-18 the tax relief reduced to 75 per cent and in 2019-20 it was only 25 %. Now it has gone completely.

Instead, the government introduced a 20% tax credit which isn’t as beneficial for higher-rate and additional-rate taxpayers. To help mitigate the new rules, more and more landlords are setting up a limited company when buying a new rental property as they will instead be subject to Corporation Tax rates of 19 per cent, rather than the higher individual income tax rates. A record 41,700 new buy-to-let limited companies were formed in 2020, an increase of 23 per cent from 2019.

The government also increased the Capital Gains Tax allowance for 2020-21, from £12,000 to £12,300. So when selling a second property you do get to earn more pounds tax-free. But the Capital Gains Tax rate is now 18% higher for landlords and 28 per cent for higher and additional-rate taxpayers.

These are just a few of the tax implications that landlords must take into consideration.

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Investing For Property Price Gains

It’s easy to see why property investment is seen as an attractive way to make money, especially after the incredible surge in property prices we have seen over the past year. The average house price raised by nearly £16,000 over the past year and April to hit a new record high. In April, the average UK property price hit a peak of £238,831 (Nationwide). It is predicted that house price inflation will hit double digits by June.

But, as with any potential investment, there are still risks involved. The market uncertainty in 2020 saw many UK lenders withdrawing their mortgage products from the market and imposed stringent lending criteria. Consequently, many saw elongated mortgage deployment times, and even increased rates of application rejections.

Get your buy-to-let residential conveyancing quote Now.

Earning Income From Rent

A lot of the long-term appeal for buy-to-let investing comes from the rental income. The average gross yield in the UK, which excludes all expenses such as taxation, is 5.9 per cent (Hamptons). However, it is net yields, which consider the expenses associated with owning a rental home and the taxes landlords must pay that provide a more accurate picture. For a higher rate taxpayer, purchasing a buy-to-let property means the profitability can seem negligible; Assuming landlords incur additional costs representing 10 percent of their rental income, the average higher-rate taxpayer would see their net yield fall from 2.3 per cent to 2 per cent over the same period.

Considering capital growth and rental income over an average nine-year ownership period, the average landlord in the UK made a total net profit of £76,820 in 2020, representing a 39% return on their initial investment after other costs and taxes over a nine-year period (Hamptons).

Buy To Let Mortgages 

Landlords now have more mortgages to choose from than at any time in the last 12 months – but some borrowers still struggle to get a cheap deal. Buy-to-let investors looking to remortgage or expand their portfolios have been handed a boost, with lenders launching more than 200 new mortgage deals last month.

The Covid-19 pandemic had a massive effect on the number of mortgage deals available to landlords but a year on, things have started to improve. Data from Moneyfacts shows the number of buy-to-let deals available increased by over 200 in March, to a total of 2,333. This means that overall deal numbers are now only 20% less last March. 

It’s not all great news though; average rates have dropped slightly but still they remain much higher than before the pandemic.

Conveyancing Expert are conveyancing solicitors in Manchester who can help you in all aspects of buy to let house purchase.

Get your residential conveyancing quote Now.

What Is A Property Chain?

If something goes wrong along the chain, it can collapse in a domino-style effect, affecting everyone within it. The longer the housing chain, the more risk there is in one of the links falling out, an obstacle for all buyers and sellers involved making their sales and purchases.

Even first-time buyers feel the impact of a chain, despite having no links below them because the party they are buying from may be affected by the sellers of the house they are buying and so on. This the ‘onward chain.’ 

We are expert conveyancers in Manchester and work very hard to minimise problems associated with chains. We have worked continuously to develop a team of qualified professionals who strive to deliver excellent customer service, optimal systems and have 60 years of legal experience within the team. 

Why Might A Property Chain Collapse? 

There are several reasons a property chain might collapse. Here are some of the most common:

• A buyer might be refused a mortgage.
• One of the buyers or sellers might simply change their mind.
• A property survey could reveal problems that the buyer finds unacceptable.

• A buyer or seller may try to renegotiate the terms of the transaction.
• Unforeseen events such as loss of job, illness or accident, might alter a party’s needs.
• Gazumping – where a seller accepts an offer from one buyer but then takes a higher offer from someone else at the last minute. 
• Gazundering – where a buyer reduces their offer at the last minute, sometimes just before exchange, which may result in the seller being unable to accept it and the chain breaking. 

Sometimes it is impossible to avoid breaking a housing chain but maintaining good communications can often keep problems to a minimum. It is also possible to buy a specific type of home buyer’s protection insurance which will pay out if your purchase falls through. Make sure you read the terms, conditions and exclusions thoroughly.

How Can I Prevent My Property Chain Breaking?

1. Maintain Communication

Communication is everything. Maintain regular contact with your solicitor, estate agent and mortgage broker and request regular progress checks and respond promptly when you’re required to provide information. This will help to build good relationships all round, which increases the chance of holding a chain together. It becomes harder to let somebody down once you’ve established a rapport.

1. Be Organised

Get your finances in place and instruct your conveyancing expert to advise you and keep a record of all correspondence.

Being organised enables the process to move along more speedily, meaning there’s less chance of things going wrong.

1. Be Open Minded

If someone in the chain pulls out because of money issues, you could try getting everyone in the chain to agree to a lower sale price.

If the seller of the home you want to buy loses the home they want to buy, it’s worth asking if they might consider renting in the short term. If you’re really keen on their property and don’t want to let it go, you could even offer to give them a few months’ rent as a sweetener.

In general, it is the job of the professionals to keep communicating, making sure everyone is doing what they are supposed to. Some estate agents have dedicated sales-progression teams whose main objective is to keep things moving forward. Keep asking your estate agent and conveyancing expert to chase people. Here is a breakdown on how to maintain an effective property chain:

• Do your research when choosing a residential conveyance solicitor. 
• Don’t choose a residential conveyancing solicitor simply based on the cheapest quote. Make a comparison of all the services offered and read reviews.
• Look specifically to buy a chain free property.
• Make sure your finances are in place well before you make an offer on a property.
• Maintain good communication with everyone involved in the housing chain, especially the estate agent and conveyancing solicitors.
• Air any concerns early on. If you discover something that you think might affect the chain, flag it up as soon as possible.
• If you are selling a property as well as buying one, you will have to supply information about the property. Get this together this to hand in advance to avoid delays.
• Discuss potential time frames early on so that everyone involved is clear on your expectations
• If the property chain is fairly long, agree for one person (perhaps your conveyancing expert) to be the central contact.
• File everything, including all correspondence. 
• Have copies of documents that are likely to be requested to hand. 
• Sign and return all paperwork promptly. 
• Deliver documents by hand or special delivery.

How Can I Avoid Getting In A Property Chain? 

Finding yourself stuck in a housing chain can be stressful and expensive. If just one person drops out, the whole chain can collapse, and you and everyone else can suffer emotionally and financially as a result.

Circumstances often mean chains are unavoidable. The main way to avoid would be:

• Sell Before You Buy

This way you are not reliant on the sale of one house to buy the next. It also puts you in a really strong negotiating position meaning you could get a better price when you negotiate on a new property, especially if you find a seller who is keen to move quickly. Selling first also means you know exactly how much you have to spend and buying your new home won’t be dependent on you achieving the expected price on your existing one.

However:

If you sell first, hoping to buy soon after, you may have to rent for a while if there is nothing suitable on the market. This can prove very costly and inconvenient meaning 2 moves. Also, if prices are rising, then by the time you’ve sold, a new house could be unaffordable. 

Conveyancing Expert are your dedicated conveyancers in Manchester. We ensure that every client benefit from our expertise, and is more than happy with the services provided to them. We always provide informative updates during the process and excel in customer service.