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Five Tips To Help You Sell Your Home

According to data from RightMove1, Spring is officially the best time to get your property on the market, representing a lull between the busy Christmas celebrations and Summer holidays. Getting your home onto the market before the summertime rush could help beat the competition and potentially even secure you a better price.

Here’s a few speedy tips on how you can get your place ready for a quick sale.

Declutter – but don’t depersonalise

Get rid of items that have accumulated – put them into storage, sell or give away to charity. Remove any bulky furniture to make the room feel larger and let people see all the fantastic living space you’re offering them. It’s important to not to make it look like a generic hotel, leave some personality to the room – it can help give suggestions to buyers as to what they might do with the space.

Fix and clean

Now’s the time to make any minor repairs, fill that hole in the wall or replace the broken door knob – many buyers want to move in without making changes, so allow for this by making your place as easy as possible to do so. Clean everything until it sparkles – from getting rid of limescale, repairing tile grout, through to waxing wooden floors – it all counts in making your place attractive for others to buy. Don’t forget the garden too – clean the patio, cut the grass and let your buyers visualise themselves enjoying the garden space.

A quick makeover

Sometimes a place can really benefit from a few small changes to really help sell the space – consider adding a fresh lick of neutral paint over the walls to make your home seem lighter and bigger.  Clean your windows, check that all your light bulbs work, and try adding a wall mirror to a small room or hallway to give the appearance of more room.

Refresh the kitchen

The kitchen can be one of the biggest areas to add value to your home2 – so it makes sense to check that yours is in tip top condition. Where necessary, think about refacing the cabinets or upgrading damaged or worn counter tops to give a quick-fix makeover to tired units that could make all the difference during property viewings.

Dress the room for sale

Finishings are important – dress your windows with blinds or curtains, consider adding plants and flowers to add colour, and of course, fill your kitchen fruit bowl with fresh fruit! Smells are important too, if you are a smoker, place bowls of vinegar around the house for three days to neutralise the smell. Invest in air fresheners and quality diffusers for that finishing touch.

Sources

1 – Rightmove (2022) Want to know the best time of year to sell your home?. Available at https://www.rightmove.co.uk/news/articles/property-news/best-month-to-sell/ (Accessed 24th May 2022)

2 – Home Owners Alliance (2022) Kitchen renovation: Where do I start?. Available at https://hoa.org.uk/advice/guides-for-homeowners/for-owners/kitchen-renovation-start/ (Accessed 24th May 2022)

Understand Your Credit Score

Do you know how to access your credit score or the ways it can affect your access to finance of all kinds?

Whenever applying for a mortgage, credit card or loan, the provider will check your credit record. Along with basic information to confirm your name, date of birth and address, it provides detail on how you have conducted any financial dealings, any overdrafts, existing credit arrangements and whether they are up to date. County Court Judgements (CCJ’s), home repossessions, bankruptcies, debt relief orders and individual voluntary arrangements are also recorded1.

In essence, it is a snapshot of your financial past and present, but also acts to identify that you exist and where you live and is a crucial part of the assessment of your ability to qualify for personal finance of any kind.

Why might you need to be concerned?

When it comes to borrowing money, a poor credit score can mean an out-and-out rejection or having to pay a higher price than others because you may be considered a poor risk to the lender or product provider offering finance, according to Experian. In the past 10 years, the credit landscape has almost completely shifted towards ‘rate for risk’. This means almost every credit provider on the market uses your credit file to not only dictate whether they’ll provide you with credit but also what interest rate you’ll get2.

According to MoneySavingExpert, when it comes to loans, only a minimum of 51% of accepted customers get the rate advertised. A lender might be advertising a 6% rate (known as the representative APR), however, you could be accepted and offered a 40% interest rate instead, because of a poor credit score3.

So, if you are applying for a loan, mortgage, credit card or other types of credit, it makes sense to check your credit report first, particularly if you haven’t looked at it for some time.

Below are the main credit agencies’ websites from where you can get an up to date report on your credit status.

https://www.equifax.co.uk/Products/credit/statutory-report.html

https://www.experian.co.uk/consumer/statutory-report.html

https://www.transunionstatreport.co.uk/

Most importantly, it makes sense to check your credit report from time to time to make sure there are no mistakes or to make sure you haven’t missed any payments without realising it.

If in doubt, talk to an accredited financial adviser who can advise you and help you obtain what you need.

Sources

1 – Experian (2022) What is a credit score?. Available at https://www.experian.co.uk/consumer/experian-credit-score.html (Accessed 24th May 2022)

2 – Experian (2020) Why do people with higher credit scores get lower interest rates?. Available at: https://www.experian.com/blogs/ask-experian/why-do-people-with-higher-credit-scores-get-lower-interest-rates/ (Accessed 24th May 2022)

3 – Lewis, M. (2021) MoneySavingExpert: How to Borrow at 0%. Available at: https://www.moneysavingexpert.com/news/2021/11/how-to-borrow-at-0–i-e-no-cost–or-as-close-to-it-as-possible-/  (Accessed 24th May 2022)

Considering a remortgage to fund home improvements?

Considering a remortgage to fund home improvements?

As we move deeper into Spring, the weather is becoming more pleasant and many of us will be thinking about making improvements to our homes. Yes, the DIY and home improvement season is upon us. But do you know how you can raise the finance?

Many homeowners remortgage to fund home improvements because interest rates tend to be lower than on personal loans or credit cards.But remortgaging will depend on your property, your existing mortgage loan, and your current financial situation. Whether it’s a new bathroom, kitchen, loft conversion or extension, you’ll need to think about the best way of funding your home improvement project.

Important things to consider when remortgaging to finance home improvements

Affordability: if you increase the amount you are borrowing on your mortgage, your monthly payments will rise. Before agreeing to a remortgage in these circumstances, the lender will check your income is high enough to afford the new payments after all your other outgoings have been deducted.

Cost of the home improvements: It’s very important to consider the cost of your proposed home improvements, and whether you can finance the amount required from a remortgage. A lender will consider the cost of the home improvements in their assessment to give you an idea of the amount that you will need to get from remortgaging.

Credit history: Your credit score is a primary factor in the lender’s decision whether to approve your remortgage. It pays to do some homework beforehand to understand how lenders see you and your credit status to avoid any nasty shocks later in the application process.

Equity: A lender would be unlikely to approve a remortgage deal if you are in negative equity, i.e. if your property value has fallen since purchase. Although generally UK property prices have continued to rise in recent years, it is an important detail to consider before proceeding.2

Financial circumstances: When obtaining a remortgage, whether it’s a new deal with your existing lender, or a brand new lender, your financial situation will be reassessed and details such as late or missed mortgage payments may result in lenders turning down your application. Those lenders that accept borrowers with mortgage payment issues may charge higher rates than mainstream lenders.

Type of property: Consider whether your home improvements will add value to your home. A local estate agent can help you assess whether you will see a return on your investment if that’s important to you.

5 reasons to stay in your home and carry out home improvements

  1. You could add value to your property
  2. Create more living space
  3. Stay in your current location
  4. Stay near to schools
  5. You could save money on the cost of moving home

If you are considering a remortgage or the alternative of a second charge loan, as a means of financing your dream home improvements, please get in touch and we can look at your situation and advise the most suitable course of action to take.

Sources

  1. Sproson, K. (2022) Should you remortgage?. Available at: https://www.moneysavingexpert.com/mortgages/why-remortgage/ (Accessed 25th April 2022)
  2. Bown, J. (2020) Understanding Negative Equity – and how to get out of it. Available at: https://www.moneysupermarket.com/mortgages/negative-equity/ (Accessed 25th April 2022)

Scams you need to guard against

1. Free voucher scams

With so many people looking for ways to save money, the ‘free voucher’ scam is one to watch out for. Social media websites are home to some of the most plausible including:

  • Mitchells & Butlers’ Toby Carvery restaurant chain warned that fraudsters are using fake Facebook pages to encourage victims to enter their personal details to sign up for vouchers.1
  • JD Wetherspoons, the pub chain closed down its social media accounts four years ago but it hasn’t stopped fraudsters from setting up false accounts offering free food vouchers in exchange for comments on posts and personal information.1
  • Similarly, supermarket chain Morrisons does NOT offer free food and vouchers in exchange for likes or shares on Facebook posts despite frequent scam posts circulating on social media.1

2. Health related scams

It is estimated that £34.5m has been taken from people concerned about their health, especially during COVID.2

While some of these will be losing their potency as the COVID rules are being relaxed, the way that they have played and continue to play on the natural fears of victims show how they could be quickly adapted by fraudsters in the event of a COVID return or another pandemic.

Vaccine passports are available for free through the NHS app. Criminals are still targeting victims by selling fake vaccination passports.1

Coronavirus vaccine appointment scam texts and emails are still going out encouraging people to provide their bank details in order to book an appointment for their vaccine.1

Fake hand sanitiser – People have been targeted with fake adverts for cheaper Covid-related products such as hand sanitiser. Some items contained 37% of the highly toxic banned substance methanol. Others also did not even contain enough ethanol to be effective against COVID.1

3. Travel scams

As the world has started to get back to some form of reality, fraudsters are taking advantage of people booking flights and holidays. Airlines like Jet2 are warning customers to only contact them on their official email accounts because fraudsters are putting up false contact details which link customers to call centres where they are asked for personal information.1

Top tips to save you from the scammers

  1. If an offer sounds too good to be true, it probably is.
  2. Always log onto a website directly rather than by clicking on links in an email, and make sure the website is secure.
  3. Keep your wallet shut. Don’t hand over cash or sign anything until you are happy about the business with which you are dealing.
  4. Never send money to anyone you don’t know or trust.
  5. Protect your personal information. Never give banking or personal details to anyone you don’t know.
  6. Be password smart. Don’t pick your birthday or phone number and don’t use the same password for different sites and change them regularly.

Sources

  1. Frost, G. (2021) Ten financial scams to avoid. Available at https://www.thetimes.co.uk/money-mentor/article/ten-financial-scams/ (Accessed 25th April 2022)
  2. Simmons, D. & Quinton, M. (2021) Covid Fraud: £34.5m stolen in pandemic scams. Available at: https://www.bbc.co.uk/news/technology-56499886 (Accessed 25th April 2022)

Should you be worried about Inheritance Tax?

“Inheritance Tax is something only ‘rich’ people have to pay”, may be the response most people would make and yet it might be closer to being a part of your life than you think.

Inheritance Tax (IHT) is a tax on the estate of someone who has died, including all property, possessions, and money. The standard IHT rate is 40%1.  It is charged on the part of your estate that is above the tax-free threshold which is currently £325,000. If you leave your main home to children or grandchildren, you could benefit from an additional £175,000 allowance.2

However, it was announced in the 2021 budget that the IHT thresholds would be frozen until 2026. That five-year freeze is significant, and it is advisable to review your situation in light of this announcement because currently, although only 3.7% of UK deaths in 2018/192 resulted in an IHT charge, if property prices continue to rise as they have in recent years, then this may mean more estates are pushed over the allowance threshold.3

If we factor in the increasing value of property and the potential of inheriting during your lifetime, the risk merits a review with an adviser. However, there are actions you can take to reduce or even eliminate the threat.

  • Potentially exempt transfer (PET)

You can make a gift or make a transfer of ownership, which, provided you survive for a further seven years has the potential to be exempt if you survive seven years from the date of the gift. If you die within seven years, the PET becomes potentially chargeable and is added to the value of your estate to calculate an IHT liability. However, it may benefit from a reduction in tax depending on the number of years the individual survived since the gift was made.

  • Leave a legacy to charity
  • Put your assets into a trust for your heirs
  • Leave your estate to your spouse or civil partner
  • Pay money into a pension instead of a savings account
  • You can give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate. This is known as your ‘annual exemption’. You can give gifts or money up to £3,000 to one person or split the £3,000 between several people.1

As every situation is different, it is important to seek independent tax advice from your financial adviser or from an accountant to ensure that your individual situation is assessed correctly.

Sources

  1. Gov.uk (2022) How Inheritance Tax Works. Available at: https://www.gov.uk/inheritance-tax (Accessed 26th April 2022)

Garden improvements to add value to your home

The Covid-19 lockdowns reminded us of why open space is so important to our sense of well-being and it is noteworthy that as lockdowns were eased, the main requirement for people looking to move home was the need for open space.1

This is why the value of well kept outdoor space has begun to be measured in respect of the individual components that buyers are looking for. The garden has become a valuable asset and additional means of increasing the value of your home when it comes time to sell and move on.

Nationwide Building Society recently commissioned a survey by Censuswide into the garden improvements that add the most amount of value to a home in 2022.2 At the top of the list was a conservatory, which on average, could increase the value of your home by almost £8,500. An office in the garden and gym room followed close behind, making up the rest of the top three garden features that could add the most value to your property. With so many of us working from home more than ever before, a lot of people are now willing to pay more for a property which allows them to work and exercise in comfort. 

The survey also found that by having a home office in the garden, it could increase the value of your property by around £7,261, while a gym or studio room could increase your home’s worth by £7,124, on average.2

Several entertainment features, including an outdoor kitchen, outdoor entertaining or dining area, and a hot tub also made the top 10 most prized garden improvements. Having these features in your garden could increase the value of your property by up to £6,500 on average, according to the Nationwide survey.2

In total, the Nationwide research identified 19 garden improvements, with a vegetable patch, newly painted fences and a well-kept lawn also making the list.

Of course, neglecting your garden space could also significantly decrease the value of your home. A mouldy or dirty conservatory roof could decrease the value of your house by £6,140, with damaged garden walls next, with an average decrease in value of just under £6,000.2 Broken guttering, cracked or damaged patios and damaged decking could cost you dearly.

Of course, in the end, with property values at an all-time high3, demand for property is outstripping supply and the value of your property could be determined by the desire to buy as much as by the additional features that you may offer.

Sources

  1. Office for National Statistics (2021) How has lockdown changes our relationship with nature? Available at: https://www.ons.gov.uk/economy/environmentalaccounts/articles/howhaslockdownchangedourrelationshipwithnature/2021-04-26 (Accessed 26th April 2022)
  2. Nationwide Building Society survey with Censuswide (2022) The Garden Trends That Add The Most Value to Your Home in 2022. Extract available at https://www.roofingmegastore.co.uk/garden-trends-2022 (Accessed 25th April 2022).

Are you a tenant in a House in Multiple Occupation?

If you are a landlord of an HMO (House in Multiple Occupation) or a tenant of part of a property designated as such, you might need to be prepared for a shock. An HMO is described as one rented out by at least three people who are not from one household (for example, a family), but share facilities, such as kitchens and bathrooms.

Local councils are seeking to have HMOs reclassified, so that council tax becomes liable on each of the tenancies, rather than on the single property itself. In one example, a five bedroom home had its council tax quadrupled from £1,300 per year to £4,890. It was reclassified as five one-bed homes, even though three of the bedrooms did not have ensuite bathrooms and none had kitchen facilities.1

Normally, landlords receive a council tax bill for the one property, which is split between the tenants as part of the rental payment charged. Now that councils are asking the Valuation Office to revalue HMOs on the basis of separating out individual tenancies, landlords can only increase rents to take account of the extra charges.

This could cause financial hardship for many, coming as it does on the heels of cost of living rises, especially energy costs. Landlords will also be reluctant to pass on the extra costs because of the danger of having tenants in arrears or quitting tenancies altogether.

For councils who are cash strapped, this is seen as a good way to raise money in what they see as a painless way. Government figures show there are 500,000 HMOs in England2 that could be affected. However, the likely effect will be to price more would be tenants out of the rental market and put more pressure on their own housing departments.

The viability of remaining a landlord of an HMO is now going to be called into question, with reports that at least one landlord has already filed for bankruptcy as a result of the recent changes3. If this money raising tactic by councils increases, it is very likely we will be seeing less rental property on the market at a time when there is already a shortage.

Sources

1 – Lawford, M. (2022) Council Tax on my Buy-to-let has quadrupled to £7,000. Available at: https://www.telegraph.co.uk/property/buy-to-let/council-tax-buy-to-let-has-quadrupled-7000/ (Accessed 29th March 2022)

2 – Wilson, W., Cromarty, H (2019) House of Commons Library: Houses in Multiple Occupation in England and Wales. Available at: https://researchbriefings.files.parliament.uk/documents/SN00708/SN00708.pdf (Accessed 29th March 2022)

3 – Central Housing Group (2022) Wave of ‘unfair’ HMO council tax revaluations revealed that can quadruple bills. Available at https://centralhousinggroup.com/wave-of-unfair-hmo-council-tax-revaluations-revealed-that-can-quadruple-bills/ (29th March 2022)

Do current events strengthen the case for electric cars?

Data from the Society of Motor Manufacturers and Traders showed that 305,000 plug-in vehicles (electric vehicles and plug-in hybrids) were sold last year, accounting for 18.6% of overall market share, up from a market share of 17% in 2020.1

Yet against that, according to online car marketplace, AutoTrader, only one in six buyers were considering an electric alternative in February, which was down from one in four in September.2 Although it seems like every car manufacturer is advertising its latest electric car offering, consumer concerns including the hike in home energy prices, ‘real life’ battery range and the lack of  adequate national recharging infrastructure have  all acted as a brake on progress. Yet fast forward to today and, leaving aside the human tragedy around the current Ukraine conflict, the impact is being felt keenly as our interconnected world economy pays the price with accelerating cost of living increases,  including the jump in energy prices as well and the makings of an inflationary spiral.

Forecourt petrol prices have been rising since before the war in Ukraine. During the first lockdown, lack of demand saw petrol prices in May 2020 down to £1.07 per litre. But  world demand increased again as the COVID crisis eased and petrol prices  began to rise, reaching £1.46 per litre as the worries about Ukraine became headline news in January. Since the start of the invasion with prices at over £1.63 per litre for petrol and £1.77 for diesel, does the purchase of an electric car now make even more sense?3

The simple fact is that even as household energy costs increase, the growing cost per mile will hit us all, regardless of what we drive. However, assuming that we accept the higher prices for electric cars and the challenge of equipping our properties with charge points, the reality is that it costs half the price of a full petrol tank to fully charge an electric battery, and with both electricity and petrol prices rising, this is likely to remain the case for the foreseeable future.

Sources

1 – SMMT (2022) SMMT Vehicle Data. Available at: https://www.smmt.co.uk/vehicle-data/ (Accessed 29th March 2022)

2 – de Prez, M. (2022) Consumer interest in EVs declines as prices remain high, says Auto Trader. Available at: https://www.am-online.com/news/market-insight/2022/03/08/consumer-interest-in-evs-declines-as-prices-remain-high-says-auto-trader (Accessed 29th March 2022)

3 – Department for Business, Energy & Industrial Strategy (2022) Weekly road fuel prices. Available at: https://www.gov.uk/government/statistics/weekly-road-fuel-prices (Accessed 29th March 2022)

House prices and interest rates – what could the future hold?

The cost of living increases, especially energy, prompted by the economic costs of two years of Covid-19 are also being accompanied by interest rate increases, while would-be home buyers watch asking prices for property continue to increase.

To all intents this is a perfect storm for consumers, but likely first-time home buyers and those wishing to trade up are going to find it harder to make the transition. According to the Nationwide, a typical property now costs a record £29,162 more than it did a year ago, which represents the largest cash increase since the Society started collating property data in 1991.1

The rise, which equates to a 12.6% increase across the housing market, is continuing to surprise industry experts. It would be expected that with pressure on household budgets along with rising inflation, the housing market would have quietened down, but in reality, property values are being driven by an imbalance between the meagre size of property supply being outstripped by the demand from prospective buyers, which is still as positive as it was last year.2

How long it can continue is still a matter of conjecture.  As household cost increases begin to bite, demand is likely to subside. The other factor is the rise of interest rates. After the rise in inflation, the Bank of England has had to raise the bank base rate, which of course has had a knock-on effect on the availability of continuing low mortgage rates2.

According to Moneyfacts, standard variable rate mortgages have seen the largest single monthly rise since they began recording statistics. Opting for a fixed rate mortgage is becoming a real alternative to keep costs under control, but even fixed rates are also showing rate increases too, with 2-year fixed rate deals showing their largest increase since 2015.3

At the same time, product choice is shrinking with lenders revising and condensing their product ranges. While there are still over 4,800 products on the market, a monthly fall of 518, if continued, would represent a significant reduction in choice.4

For those readers who are still on their lenders’ standard variable rate or are coming to the end of their fixed rate period, now is a good time to seek professional mortgage advice and let us talk you through the options available to suit your circumstances.

Sources

1 – BBC (2022) House prices see record cash rise, says Nationwide. Available at: https://www.bbc.co.uk/news/business-60585947 (Accessed 29th March 2022)

2 – Bayliss, J (2022) RICS Residential Market Survey. Available at: https://www.rics.org/uk/news-insight/research/market-surveys/uk-residential-market-survey/new-listings-slump-fails-to-meet-demand-driving-up-house-prices/ (Accessed 29th March 2022)

3 – Williams, E (2022) Moneyfacts: SVR Mortgage Rates Post Biggest Ever Monthly Rise. Available at: https://moneyfacts.co.uk/news/mortgages/svr-mortgage-rates-post-biggest-ever-monthly-rise/ (Accessed 29th March 2022)

4 – Financial Conduct Authority (2022) Mortgage Lending Statistics 2022. Available at: https://www.fca.org.uk/data/mortgage-lending-statistics (Accessed 29th March 2022)

Practical tips to help reduce your monthly outgoings

With rising prices from food and petrol to domestic electricity and gas bills, what can we do to help ourselves and budget in a way that ensures we can live within our means without racking up overdrafts and other debts?

The golden rule is to make sure that if you are finding difficulty paying for a service, don’t hide away. Call the people to whom you owe money to see if you can come to a temporary agreement.

Whilst we can’t control the events surrounding the economic bumps in the road, we can take positive action to cut our household costs by looking at the services and goods we can afford to do without.

The question to ask yourself when you look at your bills is ‘Do I really need this?’ and ‘Is this value for money, for me?’

Subscriptions – Netflix, Amazon, Now TV and Sky are a few of the TV subscription channels that require regular monthly payments, with Sky packages starting at anything between £26 and £46 depending on what services are required. Have a think, do you really value this?

Credit card/store card balances – If you are just making minimum monthly payments on outstanding balances, consider reducing your balance, if possible, to reduce monthly outgoings. Consider talking to your financial adviser about any debt consolidation options that could be suitable for your circumstances.

Home phone, broadband and mobile phone –

  • Call your suppliers and ask for a better price – you’ve got nothing to lose
  • Look at price comparison websites to see if you can find cheaper deals – though be careful to check you aren’t eligible for any financial penalties if you do make a change.

Water bills –

  • Monitor your consumption with a water meter
  • Take steps to reduce usage, such as switching to showers instead of baths
  • Check your shower is fitted with an efficient shower head to help save water

Gas & Electricity –

  • Low income families can benefit from a £140 discount in the Warm Home Discount https://www.gov.uk/the-warm-home-discount-scheme.
  • In February 2022 the government announced extra help towards rising bills, including a £150 Council Tax rebate for eligible households and £200 towards energy bills in England, Scotland and Wales.1
  • Thinking of changing suppliers? Unfortunately there are no savings to be had here at the moment – each energy supplier charging to the limit of the energy price cap, and if you are on a fixed tariff coming to an end then you will be placed on your supplier’s standard variable tariff.

Council Tax – are you paying too much? Up to 400,000 homes are in the wrong Council Tax band according to MoneySavingExpert2, so it is worth checking.

Go to the Money Helper guide at https://www.moneyhelper.org.uk/en/homes/buying-a-home/how-to-save-money-on-your-council-tax-bill

MoneyHelper is provided by the Money & Pensions Service – set up by HM Government.

Sources

1 – Gov.uk (2022) Households urged to get ready for £150 council tax rebate. Available at: https://www.gov.uk/government/news/households-urged-to-get-ready-for-150-council-tax-rebate (Accessed 29th March 2022)

2 – Lewis, M (2022) Council Tax Bands. Lower your band and save £1,000s. Available at:  https://www.moneysavingexpert.com/reclaim/council-tax-bands-change/ (Accessed 29th March 2022

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