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1st April 2019
With the effects of Brexit still unclear, homeowners continue to hold off putting their homes on the market. A gradual dip in house prices means some are still waiting for property prices to rise before listing their home. But remember, it’s likely that if your own home is being valued at a lower price, so is the one you’re looking to buy.
While the supply may be low, the demand for properties is still high. Many people do still want and need to move, whether to be closer to a new job, school catchment zone or to accommodate a growing family. This February, we saw our best sales month since November 2016, suggesting more people are letting Brexit simmer in the background while they focus on taking the next step. Our advice? Prioritise the needs of your lifestyle over uncertainty around Brexit.
In contrast to the housing market, lettings is a hotbed of activity.
From the 1st of June, new legislation will come into action across England and Wales that stops tenants paying lettings fees. It’s thought that, as a result of the new Tenant Fees Bill, monthly rents may rise, as landlords attempt to offset some of the costs that are associated with referencing, inventories and admin. However, it will make the initial financial outlay when renting a property more affordable for tenants.
But what about those who still struggle to save up ahead of a move?
In an attempt to support tenants in the private rental sector further, the government also announced that security deposits will be reduced from 6 weeks rent to 5 weeks from 1st June.
Nil deposits are also starting to enter the market. This alternative to a traditional deposit scheme asks new tenants for around one week’s non-refundable rent upfront, as opposed to holding a full deposit. Essentially, it is a form of insurance, which allows landlords to claim for the cost of any damage or unpaid rent at the end of a tenancy, whilst giving tenants the flexibility to move easily and stop cash being tied up.
For those on the property ladder, mortgages remain competitive. There are a choice of lenders in the market competing for business, giving homeowners a variety of great deals.
Historical UK Mortgage approvals:
Graph credit: https://tradingeconomics.com/united-kingdom/mortgage-approvals
For first time buyers (and their parents), there’s even more good news. Some mortgage companies are now offering first time buyers the option to put a gifted deposit, which has been donated by parents, into a savings account. It remains in the account until the first three years of the mortgage has been paid. Thereafter, it can be released, along with any interest that’s been accumulated over the period. This allows parents to retain their savings, whilst new homeowners build trust with their lender.
First time buyers also remain exempt from paying stamp duty if the property price is below £300,000, helping to make buying a first home more affordable.
CTA: Talk to our in-house mortgage advisors to find independent financial advice.
