Buyer's Guide

BUYER’S GUIDE

You get knocked down, but you get up again.

WORDS Josh Woodfin Property Journalist

Retired celebrity boxer, Rocky Balboa, can teach us all a few things about tenacity. He famously said of his fighting philosophy, ‘going one more round when you don’t think you can… that’s what makes a difference in your life.’

Wise words indeed, and it’s an attitude you may need to adopt if you’re in the market for a new home in this extremely active market. Things may have calmed down a bit since the white-hot heat of the rush to complete before the stamp duty exemption ended, but the market is still very busy with limited supply and big demand.

In the second quarter of 2021, London prices rose at an annual rate of 7.3 per cent, up from 4.8 per cent in the first quarter. The average value rose £27,359 over the three month period from £482,576 to £509,935.

Nationwide’s chief economist Robert Gardner told the Evening Standard, “underlying demand is likely to remain solid in the near term as the economy unlocks. Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee. Activity will almost inevitably soften for a period after the stamp duty holiday expires at the end of September, given the strong incentive for people to bring forward their purchases to avoid the additional tax.”

But ‘soft’ is open to interpretation. The more specific you are in the property you want, the more competitive you might find the landscape, and fair Fulham is a good example. It has some of the most sought after property not just in London, but the whole of the UK, along with green spaces, proximity to the city and great schools. But you probably know all this. So how do you buy one? Well, as with most things, it’s all in the prep. But here are some good habits to adopt that will hopefully make the process a bit easier.

Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices.

Blow-by-blow

Get the right people in your corner Having a solicitor primed and ready to go once a vendor has accepted your offer will make sure the process begins in a timely fashion. And the right solicitor or conveyancer can make this process a dream or a nightmare. If you already have one you trust, great. If you’re in the market for a solicitor and don’t know where to start, go to friends and family first, as there’s no better recommendation than someone who’s had a successful transaction. If not, organisations like the Homeowners Alliance can recommend conveyancers or solicitors.

Roll with the punches You know where you want to live, you know what sort of property you want, now you have to master the art of patience. Of course, there are times when moving falls under serious time constraints, but if that’s not you, great. The vendor of your dream home might not have found their next spot, so if you can assure them they have the time to manage their own onwards buying process, it should theoretically put you in good stead after you;ve made an offer.

Check your purse It might sound facetious, but knowing exactly how much money you have to spend on your new home is surprisingly easy to overlook. You shouldn’t really make an offer until you have a mortgage in principle at least. But you should also have a frank look at your finances, this will help you if or when you find yourself in an offer/counter-offer situation. Do you have a savings account, shares, an ISA? Knowing where all your money is, and how much you have, before you start the process can give you a real edge over your fellow buyers. It’s surprising how unprepared some buyers are for the twists and turns of the process.

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WORDS ROSS MURPHY Capricorn Financial

In recent weeks & months, borrowers looking to secure finance at higher LTV’s have benefited from forces beyond gravity as Banks & Building Societies have looked to ‘sharpen the pencils’. The ‘Mortgage Guarantee Scheme’ introduced via UK Government from April 2021 has buoyed the marketplace with a raft of lenders falling over themselves to participate: Barclays, HSBC, NatWest, Virgin Money, Halifax etc. Perhaps an unintended consequence of ‘Mortgage Guarantee Scheme’ is the downwards pressure this initiative has placed on rates/products at 85% LTV & 90% LTV. As it stands, it is possible to secure two year fixedrates at 2.29% (90% LTV) - approx. 1% lower than rates seen during the height of the Global Pandemic!

In addition to lower rates at the higher LTV’s, there has been more good news for first-time-buyers as we’ve seen Nationwide BS expand their allowable ‘income multiples’ to approx. 5.5x current levels of basic salary (minimum £35k) - the only caveat is the requirement to opt for a longer-term fixed-rate product/ structure. Nationwide BS are one of the latest lenders to join the ranks of providers willing to offer ‘5.5x income multiples’ to borrowers: Metro Bank, CYBG, Barclays, Santander, Newcastle BS, Platform Intermediaries - certain providers only look to offer enhanced income multiples to borrowers classified as ‘Professionals’ i.e. Doctors, Lawyers, Accountants etc.

And who can forget the headlinegrabbing products/options currently on offer for borrowers able to maintain at least 40% equity in their property? Rates at the lower LTV’s are now at levels never before seen in the UK! Halifax Mortgages & Nationwide BS are clearly eager to snap-up their share of the market as they’re offering five year fixed-rate products less than 1% (with ERC’s/ Penalties of up to 5% of the loan amount it is worthwhile reading the fine-print when it comes to products with extended fixed-rate periods!). Money has definitely never been cheaper and undoubtedly this will help to keep the property market humming despite the recent changes to Stamp Duty Land Tax (30th June 2021). Fortunately, we’ve also seen a greater willingness from lenders/ providers to accept a higher proportion of ‘non-guaranteed’ income into consideration for affordability purposes i.e. annual bonus income, commission etc. Providing borrowers can evidence ‘non-guaranteed’ income on recent payslips & P60’s –payslips or P60’s received during the COVID period – there are a number of providers that are happy to provide finance/ borrowing against this income.

The ‘trifactor’ of more options/ products at higher LTV’s, lower interest rates & improved lending/ underwriting criteria will be music to the ears for anyone looking to secure mortgage borrowing in the foreseeable future.

FINANCE

Finance

What goes up, must come down…..

Providing borrowers can evidence ‘nonguaranteed’ income on recent payslips & P60’s –payslips or P60’s received during the COVID period – there are a number of providers that are happy to provide finance/borrowing against this income.