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Planning

New web apps to simplify planning applications to build extensions

For some time, the rules on planning have been difficult to interpret, particularly for homeowners planning one off building extensions for extra accommodation or new kitchens. It has led to confusion and, in some cases, added cost for homeowners as many home improvements, such as kitchen extensions and loft conversions, do not need full planning permission. Lack of clear information has seen invalid applications submitted for what are called ‘permitted developments’ rejected with the subsequent wasting of time and money.

In response, the Ministry of Housing, Communities & Local Government has developed two new apps, which are currently being tested in three areas. The first one is designed to help guide homeowners, while the second will also help developers and architects by speeding up and simplifying the application process. In addition, it will help council planning officials manage permitted development applications – tracking progress and putting the information they need to make decisions in a user-friendly format. It puts the focus on data rather than documents, helping planners make decisions much more quickly and efficiently.

The new app for homeowners uses simple language and diagrams to help navigate the system. It asks a series of questions and determines whether the plans meet local and national requirements. Users can then apply within the app for the certificate they need to show their plans are permitted development, allowing building to go ahead.

According to the Ministry, it is a first step towards replacing the current, outdated, paper based system with a fully digital process, which does away with 100 page PDFs and having to find information manually.

Assuming the trials are successful, apps will (presumably) then be made available for all smartphone operating systems.

For the many people who have been put off by the complexities of form filling as well of those who have lost money in fruitless attempts to apply, these new apps could hold the key to a simpler, stress free method of planning application.

Mortgage

Mortgage guarantee scheme – 5% deposits for home buyers

During the Spring Budget, Chancellor Rishi Sunak stated that the Government is introducing a mortgage guarantee scheme to help first time buyers and existing homeowners

For many, it may not be easy to save for a 15% or 20% deposit for a home and this is where the new scheme will be beneficial to those looking to buy their first or next property.

 

How does the scheme work?

The new scheme will begin in April and both first time buyers and existing homeowners will be able to purchase homes worth up to £600,000 with a deposit of just 5% – enabling the majority of homebuyers to be eligible for the scheme.

Data from property portal, Rightmove, has revealed that 86% of properties currently listed for sale on their site have an asking price of £600,000 or less.

Mortgage

For the scheme to work, the Government will compensate lenders for some of their losses should a buyer default on their mortgage repayments for any reason. In return for this guarantee, lenders provide mortgages worth up to 95% of a home’s valuation or purchase price, so that borrowers can proceed with a deposit of 5%.

As many 95% of mortgages have been unavailable over the past year, the new scheme could be a real game changer, particularly for first time buyers.

Is the scheme only for first time buyers?

The Government has confirmed that the mortgage scheme will be open to all buyers, providing the home you’re buying is worth less than £600,000. Whether you are a first time buyer or looking for your next property, you can benefit from this new scheme.

How to apply for a 95% mortgage under the scheme.

Some of the nation’s biggest banks have committed to the scheme, including Santander, Lloyds, Barclays and HSBC. The usual mortgage affordability checks will still apply.

First time buyers and existing homeowners will need to prove to their lender that they can comfortably afford the monthly repayments after other essential spending has been covered.

If you or someone you know might be able to benefit from this scheme, fill in the form at the bottom of this article and get in touch. We are here to answer any questions you may have.

How does this scheme differ from Help to Buy? 

Under the current Help to Buy Equity Loan scheme, the Government will lend up to 20% of the cost of a newly built home from an approved developer and then shares in any increase (or decrease) of the property’s value.

To be eligible for the scheme the property must be your only property and your permanent residence. The maximum purchase price under the scheme is £600,000.

You will need a cash deposit of at least 5% and then a mortgage of up to 75% to make up the rest. You will not be charged loan fees on the 20% loan within the first five years of owning your home.

Stamp Duty

Benefits of the recently extended Stamp Duty holiday

On Wednesday 3rd March the Chancellor announced an extension of the Stamp Duty holiday to the 30th of June.

How will this extension benefit you?

Benefit from substantial savings – In England and Northern Ireland, if you are considering moving home and complete by June 30th, you can benefit from the biggest cuts in property purchase tax on properties up to the price of £500,000. In Scotland, the holiday comes to an end at the end of this month but those in Wales will benefit from the tax cut on properties up to the price of £250,000.

Zoopla data indicates that at least 740,000 buyers will have benefited from the Stamp Duty holiday by the time it ends across the UK.

Stamp Duty

Getting the purchase completed

For those in Scotland there is little time left to take advantage of the scheme, but for the rest of those moving home, the extension to the tax holiday will allow more time for property purchases to reach completion. Without the extension, thousands of deals may have fallen through because buyers may have been forced to find extra savings to meet an increased tax bill.

Buyers have benefited by making substantial tax savings. The biggest cuts are on offer to those in England and Northern Ireland. Spending £500,000 or more on a new home or buy to let investment, you could save up to the maximum in tax of £15,000.

Whilst the Stamp Duty holiday has resulted in greater demand it has also led to higher house prices. Figures from the Land Registry show an 8.5% year-on-year rise in December, defying predictions earlier, in the year that the pandemic would create a reduction in the cost of a home.

2021 – 2023 Help to Buy Equity Loan Scheme

As a first-time buyer, searching for a newly built home, you may need a financial boost. With the government’s Help to Buy: Equity Loan scheme, buying your own home could become a dream come true.

The new scheme will enable first-time buyers to borrow a minimum of 5% and up to 20% (or up to 40% in London) of the market value of a newly built home. The amount you can spend on the home depends on where in England you buy it.

Who is eligible?

  • To take advantage of the scheme, you must be a first-time buyer.
  • You must not own a home or residential land now or in the past – in either the UK or abroad.
  • You should not have had any form of sharia mortgage.

 

How does it work?

When purchasing a home with the Equity Loan scheme you will not pay interest on the equity loan for the first 5 years. You will pay interest in year 6, this will be on the equity loan amount you borrowed.

At the exchange of contracts, you will be required to pay a deposit, this is 5% of the purchase price.

You can repay all or part of your equity loan at any time. A part-payment must be at least 10% of what your home is worth at the time of repayment.

Is the scheme right for me?

If you already have a large deposit and can get a mortgage without the use of the Help to Buy scheme, you may not need to benefit from the financial boost.

If you are unsure, contact us using the form below. We are here to help and answer any questions you may have.

If you would like to know more about the scheme click here

How to apply:

First-time buyers who are eligible for Help to Buy: Equity Loan (2021-2023) can apply now with a homebuilder registered for the scheme.

Apply with a Help to Buy agent, in England, within the area where you would like to live.

Find your local Help to Buy agent here.

Three things to consider before buying or selling properties in 2021

If you're considering selling your home in 2021, here are a few things to consider.

Expect delays

According to Rightmove, there are currently 613,000 properties trying to reach completion. Their latest data revealed that it’s taking 126 days from the time an offer is accepted until legal completion – just over four months to complete the selling process. If you are keen to sell your home this year, be aware that you may experience delays.

While it may take a while, the process will depend on a few things. For example, if you’re a cash buyer you may be able to move more quickly, however, if you are in a chain, the local searches may take longer than usual.

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Stamp Duty Savings

Rightmove estimates that around a million sales currently going through, will miss out on the stamp duty savings. If you are in the process of selling your home and feel you or your buyer may be purchasing a property in the hope to save on stamp duty, speak to your estate agent as soon as possible and seek advice – you may be able to avoid the purchase falling through by renegotiating the price. 

The temporary stamp duty holiday that started on 8th July 2020 is due to end on 31st March 2021. With this in mind, Rightmove recommend that you should not factor in stamp duty savings from the temporary holiday – this will be more beneficial to first-time buyers who are buying a property for no more than £300,000.

The Current Market

Buyer activity has increased since the first lockdown back in 2020, many have reconsidered their housing priorities as the market has remained open during the current lockdown. Rightmove believes there are signs we are surpassing 2020’s new year surge activity.

Research from the online property portal reveals that the number of prospective buyers contacting agents between 2nd and 12th January 2021 was up by 12% and sales agreed numbers were up by 9% on the comparable period last year.

Visits to the Rightmove website have also continued to increase since the start of January and are up by 33% from the same period in 2020.

Resident property data expert, Tim Bannister, explained that the housing market is experiencing a processing logjam, with some homemovers likely to miss out on their stamp duty savings.

He said, “As we enter the new year and a new lockdown, the housing market remains open but is focused on the imminent end of the stamp duty holiday and on the challenges of the pandemic.”

Matthew Smith, Sales and Lettings Director at Thornley Groves in Manchester, said, “Many people have outgrown their homes and, with more people now working from home and undertaking home schooling, it has really focused their attention on getting their properties ready to sell.”

If you are considering moving home or you are close to remortgaging your home, get in touch with us using the form below and we can discuss your options. 

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