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Buy-To-Let Mortgages: All You Need To Know

Buy-To-Let Mortgages: All You Need To Know

Buy-To-Let mortgages became increasingly popular five months into the Coronavirus pandemic, as there were more people looking to take advantage of the current situation and buy investment properties. The added bonus of the stamp duty holiday relief made it even more enticing, and the market saw a huge demand in houses for sale.

Whether you are an investor in the buy-to-let market or one of the great many “accidental” landlords who rent out their main property whilst living elsewhere, you’ll need to get a specialist buy-to-let mortgage. While it is similar to the standard residential mortgages, there are some important differences you need to be aware of.

  • Most buy-to-let mortgages are interest only. This means you won’t be repaying any of the capital during the lifetime of the mortgage, so it’s vital you know how you are going to pay off the loan or refinance at the end of the term.
  • You will need a larger deposit than with residential mortgage. Typically, you will need a minimum deposit of 25% of the property’s value. The best interest rates will be available to those with larger deposits of 40% or more.
  • Upfront fees are higher than with standard mortgages, usually between 1.5% and 2% of the value of the loan. Be sure to factor this in when comparing deals.
  • The mortgage affordability test is based on the profit a landlord is likely to make from the property. Lenders use projected rental income and a representative interest rate to calculate ICRs (Interest Cover Ratios). Generally, the monthly income must cover at least 125% of the loan repayment.
  • As with residential mortgages, you can choose between a variety of different products including fixed rate, tracker, and discounted variable rate. Interest rates are historically low at the moment and there are very cheap deals around, particularly if you have a large deposit.
  • Bear in mind that there is a 3% stamp duty surcharge applied on buy-to-let purchases. This is still applicable during the stamp duty holiday period.

If you are thinking of buying a rental property, give us a call on 0800 862 0871. We are happy to advise on all aspects of the buy-to-let market. In the meantime, click here to view our current properties on the market.

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How The Stamp Duty Is Changing

How The Stamp Duty Is Changing

The stamp duty holiday was first introduced in July 2020 to help boost the lockdown hit property market. It’s due to end in its current form at the end of this month.

Until the holiday was introduced, it was only first-time buyers who could benefit from paying no stamp duty tax on the first £300,00 of the value of a property. The temporary tax break saw this nil rate extended for all buyers on the first £500,000 of the value of a property. The market responded enthusiastically to the news, but there were fears that the market would “fall off a cliff” when the tax holiday ended on March 31st.

When Rishi Sunak announced in the March budget the extension to the stamp duty holiday beyond its original March 31st deadline, the news was widely welcomed and celebrated. Buyers had an extra three months to take advantage of the relief, which could result in savings of up to £15,000.

Since March, sales and prices have been continuing to grow at record rates.  Demand is outstripping supply in almost all areas of the UK and the government’s own figures are showing an annual 10% rise in house prices.

To try to minimise the effects of a sudden dramatic end to the stamp duty relief , the duty is going to be tapered after June 30th. From 30th June until 30th September 2021, no stamp duty will be charged on a residential property bought for up to £250,000.

It is hoped that this gradual move back to higher stamp duty levels will avoid a sudden crash in the housing market, but many in the industry believe that the numbers of sales will fall off significantly and price growth will slow down.

If you’re thinking about making the move and taking advantage of the stamp duty holiday, click here to view our array of properties or call 0800 862 0870 to speak to a member of our team.

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Five Tips For Renting Out A Property

Five Tips For Renting Out A Property

Are you exploring the idea of renting out a property for the first time, and not sure where to start? At Love Your Postcode, we are here to help and have put together five important tips to consider before letting out your property.

Research the local market

Find out what the going rate is for properties similar to yours in the local area and set a realistic rental price point. Research the type of person your house is most likely to appeal to, and then let this guide you in terms of furnishings and décor. For example, a family with children won’t thank you for cream carpeting!

Get the property ready

Whether you are letting your property furnished or unfurnished, a deep clean is a good starting point, setting the standard for how you expect the property to be kept. Obviously, you will remove personal belongings and anything that is broken or simply looking worse for wear. Be sure to leave copies of instruction manuals and ensure you get enough keys cut.

Get the right insurance

As a landlord, you will need to amend your buildings and contents insurance to reflect the property’s new status. You may also decide to take out special landlord insurance to cover yourself against such risks as void periods, rent defaults or legal expenses. Thanks to Covid-19, taking out insurance is more important than ever!

Understand your legal obligations

There are over hundreds of laws that landlords need to comply with, covering areas as diverse as gas and electrical safety, the protection of tenant deposits or the energy efficiency of the property. There’s no need to be alarmed however, as your letting agent will be able to advise you to ensure you are within the law at all times.

Choose a good lettings agent

An experienced letting agent will be able to guide you through every step in the process of letting out your property. We can help you find the right tenants, deal with all the paperwork and then manage the property on an ongoing basis if you wish.

If you’re looking to let your property, we are here to help! Call us on 0800 862 0871 to speak to a member of our letting team or click here to find out more about our services.

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West Midlands sees a rise of prospective tenants

West Midlands sees a rise of prospective tenants

Rental prices are currently on the rise which is great news for anyone thinking of investing in a buy to let property.

The combination of a growing number of people looking for rented accommodation, plus a shortage of rental properties, is resulting in an increase in rental income for the first time since the pandemic began. The latest Homelet rental Index shows that, excluding London, the average rent in the UK now stands at £850, up 6.2% in a year.

The letting agents’ trade body Propertymark reports that the West Midlands is seeing the largest number of prospective new tenants, with agencies typically taking over 150 new registrations a month. Outside of London, rental demand has risen by over 10% since the start of the year. More and more of these people are looking for homes with extra space, both inside and out, to accommodate so-called “hybrid” working, which looks set to become the new post-pandemic norm for many. At the same time, city centre property is predicted to return to favour, particularly with younger renters as lockdown restrictions are lifted.

During the period of the pandemic, a third fewer rental properties came onto the UK market than usual, which has led to a lack of rental stock to meet the increase in demand. As night follows day, low supply and high demand means a rise in prices. Existing tenants are finding it more difficult to avoid rent rises and new tenants, faced with competition for tenancies, are discovering there is no wiggle room on price.

However, there are signs that more first-time landlords are now being tempted into the buy-to-let market, attracted by the historically low interest rates and the stamp duty holiday on the first £500,000 of a purchase. This is due to end on June 30th 2021, so anyone looking to take advantage would have to act extremely quickly.

If you would like to discuss the local buy-to-let market, contact us on 0800 862 0870 to speak to a member of our team.

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Lettings Market Records Its Strongest Month

Lettings Market Records Its Strongest Month

The lettings market recorded its strongest month in July, with voids continuing to decrease and rents rising across England.

In some parts, void periods have dropped by as much as 50% month-on-month, taking England’s average from 22 to 16 days according to Property Reporter.

Tenant demand is continuing to increase and banks have widened their range of buy-to-let options available, making it a great time to become a landlord. The amount of time rental properties are spending in void periods has dramatically reduced. The average void period in England is now 16 days, down from 22 days, a decrease of 30%. The lettings market has continued to grow from strength to strength, despite the last 16 months, performing better than June 2019, pre-pandemic.

We have put together some tips together on how to become a new landlord.

1) Understand your business

When starting a new business venture, it is important you have all the information you need before you get started. Do this right and you have the potential to secure a comfortable financial future for yourself.

Research the local market and choose the best spot in town in terms of location, demand and opportunity.

2) Learn more about the legal requirements

There are a lot of important regulations that landlords must comply with in order to protect their tenants, themselves and their properties.

Familiarising yourself with the sector will help you create an established reputation in the area, which will help you retain your tenants for longer.

3) Pick the right buy-to-let mortgage

Don’t rush into any buy-to-let mortgage. Take the time to scope out the right one for you before you make a decision.

Speak to a trusted mortgage adviser who can help you make the ultimate decision when selecting your mortgage.

4) Think about decorating for tenants

You have to remember, your property may have multiple tenants in its lifetime so you want to be able to create a blank canvas for them.

Keep neutral tones throughout, the right furnishings and a low maintenance garden if you invest in a property with one.

5) Who will be managing the day-to-day responsibilities?

This last step is the most important! You need to choose the right letting agents who will protect your investment for you, and act as the first point of contact for your tenants while overseeing all checks, changes and inspection.

To learn more about our property management services, contact us on 0800 862 0871.

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Top Gardening Tips For Landlords

Top Gardening Tips For Landlords

Rental properties with a garden, no matter how small, are highly attractive to most prospective tenants. Even if you aren’t a gardener, everyone appreciates relaxing in an outdoor space for fresh air and to hang out the washing! Although it is estimated that a garden can add over 15% in rental value, it’s important to keep it well maintained to prevent that asset becoming a liability.

Unless otherwise stated in the lease, the tenant is responsible for the day-to-day maintenance of a garden, so you need to keep it easy to maintain for them.

Here is our top three tips on what you can do:

1. Create a low maintenance seating area

All gardens should have a dedicated seating area which can be used all year round. While gravel can look attractive it is more prone to weeds.  Put a layer of polypropylene sheeting, or similar, to inhibit their growth. Paving is easier to maintain but make sure it is grouted to stop weeds growing in the cracks. Decking is a popular choice, but to ensure it lasts you should invest in good quality pressure treated timber.

2. Don’t be afraid to ditch the lawn

If you are letting out a family home, then a lawned area for kids to play on is probably a must. But a lawn needs regular mowing in the summer and can quickly look unloved if not property maintained. If your property isn’t designed for a family, then why get rid of the lawn altogether? Gravelled areas with lots of pots and small trees can look stunning and are very low maintenance.

3. Choose plants carefully

Take care with your choice of plants. Perennials that come back year after year are generally low maintenance or just need an autumn tidy up. Hardy annuals that will self-seed, such as poppies, aquilegia or cornflowers are delightful and look after themselves. Remember to add some shrubs to add year-round structure, but choose ones that are slow growing so they don’t take over and need labour intensive pruning.

If you’re thinking about renting out your property, we are here to help! Call us on 0800 862 0871 to speak to our lettings team.

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Common Mistakes When Selling Your Home

Common Mistakes When Selling Your Home

Selling your home is known to be one of the stressful processes you can go through in your adult life. There are lots of steps to go through and plenty of chances to make wrong choices, but we are here to help! Read on for advice on how to avoid the most common mistakes when selling your property.

Overpricing your home

Everyone naturally wants to get as much as they can for their home, but the figure you would like and what a buyer will actually pay might be two different things! Agents will give you a fair market value based on comparable homes in the local area and it’s wise to follow their advice. An over-priced home will deter buyers and make it hard to sell. If you’re looking to sell in the near future, click here for a property valuation.

Ignoring repairs

Unless you are marketing your homes as a “project”, most people will be turned off by obvious repair issues that need sorting out. Buyers will probably also get a survey done and finding hidden problems you haven’t disclosed may lead them to reduce their initial offer. Again, take advice from your agent about what needs fixing.

Not presenting your home well

It’s really important to present your home in its best possible light to maximise its appeal. De-cluttering is the first step, followed by thorough cleaning and simple redecorating if necessary. You can even go a step further and “stage” your home so that everything is arranged to look as inviting as possible. A good agent will also help showcase your home in the best possible way by taking clear and sharp imagery to attract buyers.

Limiting viewings

You need to get as many people to view your home as possible. Be ready to flex your personal arrangements to accommodate viewings, even at short notice.

Working with the wrong agent

A good estate agent will work hard on your behalf. They will be great communicators and open and honest about how to get the best price for your home. Be sure to ask around for recommendations and don’t just choose the first estate agent that Google selects for you! As well as word of mouth, online reviews and social media pages are highly important to see how they have worked with clients in the past and how they will market your property.

We are here to help you avoid all the above mistakes, and make sure your home selling experience is as smooth as possible. Contact us on 0800 862 0870 to speak to a member of our sales team for more information.

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Tips On Increasing The Rental Value Of Your Property

Tips On Increasing The Rental Value Of Your Property

As a landlord, you want your property to be a profitable investment for years to come. The rent price your property achieves will be dictated by the market, but there are many simple things you can do to make sure your property stands out. You’ll need to be prepared to spend a little money, but it can be worth it in the long run.

Read on for our top five tips on how to make your property stand out from the rest and get the best possible rental income.

Get the basics right

You want your tenants to stay for as long as possible, so make sure the property feels like a real home rather than a temporary stop-gap. Ensure that the paintwork is fresh and the flooring clean. Don’t opt for the cheapest possible furniture but choose decent items that you wouldn’t mind living with yourself. Make sure everything is in working order and no routine repair or maintenance jobs are overlooked.

Focus on kitchens and bathrooms

These are the rooms that can make or break a decision to rent, but they can easily become tired and shabby and lose their appeal.

Between tenancies it’s vital to give them a deep clean and to assess if they need any refurbishment. Replacing a worktop, updating tiling or adding a heated towel-rail needn’t be expensive but can give a fresh, up-to-date look.

Add an en-suite

This won’t be a cheap option, but especially in larger properties, having an extra bathroom can greatly add to the property’s appeal and allow you to charge a higher rent.

Tidy up green space

If your property is lucky enough to have a garden, then make the most of it. Attractive outdoor space can be a major selling point, so make sure it is well-maintained and has a few desirable features such as a seating area, a BBQ or a decent-sized shed.

Install the fastest possible broadband

With WFH very much the new normal for many people, having a super-fast internet connection is a real plus point. Paying for premium broadband installation will be money you can easily recoup in additional rental.

With these simple steps, you’ll have a property that will be profitable and a solid investment. If you’re looking to let your property, contact us our lettings team on 0800 862 0871 or click here for more information.

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What Does The Government’s 95% Mortgage Scheme Mean For Buyers?

What Does The Government 95% Mortgage Scheme Means For Buyers?

During the Spring 2021 Budget on 3rd March 2021, Chancellor Rishi Sunak announced the new 95% mortgage scheme will be introduced to allow more first-time buyers to get on the property ladder with a deposit as little as 5%.

In his speech, Sunak said: “It is a policy that gives people who can’t afford a big deposit the chance to buy their own home.” This will make a substantial difference particularly to those living in more expensive areas, such as London. For those in the capital, it is notoriously difficult to get on the property ladder as price houses are so high.”

The aim is to support home ownership and make mortgages more accessible for buyers struggling to meet strict criteria from lenders, especially those who are first time buyers. Prime Minister, Boris Johnson, declared he wants to ‘turn Generation Rent into Generation Buy’.

The new scheme will enable mortgage lenders to offer loans of up to 95% to properties up to the value of £600,000, excluding second homes and buy-to-lets. Big lenders such as Natwest, Santander, HSBC and Barclays have agreed to provide the mortgages. The mortgages are available from April 2021, until December 31st 2022. 

The new mortgage announcement coincides with the extension of the stamp duty extension until 30th June 2021. Buyers across the UK will be grateful for this extra help to get onto the property ladder, and we’re sure it will continue to strengthen the UK property market. 

If you’re looking to make the move and want to make the most of the 95% mortgage scheme, view our selection of properties under £600k or contact us on 0800 862 0870 to speak to one of our expert agents

 

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The Benefits of Estate Agents in 2021

The Benefits of Estate Agents in 2021

Are Estate Agents necessary when completing a property purchase or a sale? Here are the benefits of having using an estate agents in 2021.

More and more services are being conducted online these days, strengthened by COVID-19 and the rise of digital property agencies. Agencies are using various methods to appeal to a new generate of buyers and sellers who are used to living a life online.

At Love Your Postcode, we recognised this straight away and started offering more virtual services such as virtual valuations.  This allowed us to bridge the gap with those looking online and retaining them for once we were allowed to open our offices again.

EXPERTISE AND LOCAL KNOWLEDGE

One of the biggest benefits of estate agents is that they are experts on the local area where you wish to buy or sell.

Having a real human experience to help you during what is known to be quite a complicated and stressful situation is invaluable.

At Love Your Postcode, we have hundreds of five star reviews with many commenting on our high levels of customer service. We are able to achieve this by having regular communication with our clients and making sure their needs are met by our agents.

RESOURCES

Established estate agents have plenty of useful resources! We are able to spread the word about your property via marketing, from local brochures and window displays to big billboard campaigns across the UK to digital advertising and e-marketing, to find good buyers as soon as possible.

Each office will also have a substantial database of active clients with the details of their property needs. Rather than spending months on searching for a buyer, the right person could already be on their system or a phone call away.

NEGOTATIONS

Estate agents are the bridge that holds an entire property chain together, ensuring everything runs smoothly from the first valuation to the final exchange. Moving house is said to be one of the most stressful life experiences, so a trustworthy and reliable estate agent can take a lot of pressure off.

If you’re looking to buy, sell, rent or let a property, enlisting the help of an experienced, qualified and well established estate agency is key to success. Call us on 0800 862 0870 to talk to a member of our team, who will be delighted to help.

 

 

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