The very latest from Burnett's

Happy New Year! The whole team at Burnett's would like to wish you a happy, healthy and prosperous New Year and we look forward to working with you in 2020.

Each and every month we bring to you the most pertinent property news from around the United Kingdom so that you remain well-informed and up-to-date on all things housing.

Supply and demand outstrips Brexit concern

With the Brexit date being pushed back once more, it would appear that supply and demand for property is now the driving factor in the market, with Brexit taking the back seat in terms of market-driving factors.

In a recent survey from property investment company SevenCapital, nearly 69.5% of investors continued to invest in the United Kingdom despite the spectre of Brexit. Indeed, this confidence in the United Kingdom property market is echoed by international investors, with nearly 95% of the Hong Kong respondents believing that Brexit isn’t a critical factor in their investment decision.

SevenCapital points out that the Sterling has risen in value – a better indicator of fiscal stability – and this outweighs any potential impact that Brexit may have levied upon the market. With the average price of properties increasing last month by over 1% or £3,347, according to Rightmove, then house prices are also reflecting this upturn in the market.

In terms of the rental market, rental yields have also grown in recent months with the best performing areas in Birmingham and Manchester seeing yields driven up as much as 10%. With new changes in the rental sector such as the Tenant Fee Ban and Section 21 changes, tenants and potential tenants should be feeling more empowered in terms of their rights which should encourage more renters into the market.

Despite the headlines that Brexit has provided of late, it is evident that other factors are driving the property market, both sales and lettings. A key point to note is the lack of housing supply and increased demand of late with this duality keeping the market buoyant, despite any political uncertainties. With first-time buyers now at record levels and keen to buy, there is a whole new swathe of potential buyers entering the market which is creating an extremely competitive sales environment.

One in six parents remortgaging for their children

With interest rates remaining incredibly low and competition amongst lenders producing some of the most favourable finance options ever seen, many are remortgaging in order to benefit from cost savings. Rather than simply easing the financial burden, however, recent research has shown that many parents are remortgaging in order to gift the extra money to their children.

Price comparison website MoneySuperMarket has found that one in six parents who remortgage their home then gift some of that extra cash to their children, with the average financial contribution standing at £9,050 per child and nearly 10% of parents giving over £20,000.

More than a third of the children who receive the financial gift utilise it as a deposit for a property, whilst others use it to go travelling (11%), buy a new car (11%) or pay for ‘everyday essentials’ (9%).
Rachel Wait, consumer affairs spokesperson at MoneySuperMarket, commented: “Our research found that 15% of parents released equity when they remortgaged to help their children. However, you’ll only be able to do this if your property has gone up in value and you’ll need to be sure you can afford to keep up with your new repayments.

“It’s also important to factor in the costs associated with remortgaging, such as arrangement fees which can be as much as £2,000, as well as legal, admin and valuation fees. Try to be realistic – only release equity to help your children with life events if you can really afford to do so.

“Also keep in mind that because a mortgage takes so long to pay back, remortgaging may not be the right option for everyone – there may be cheaper ways of getting a cash sum. It’s important to look at all options and shop around before making a decision.”

How to add value to a property

When we decorate our properties, it is often driven by personal preferences in order to make a space fit into our own idea of what is stylish. However, if you are not just looking to decorate a space but to maximise the potential value of your property, then read our guide which explores the best ways to add worth to a home.

Solve existing issues
If you’re thinking of adding value to your property then don’t jump straight to improving the aesthetic of particular rooms in order to gain the much-lauded “wow factor”; instead make sure that your property is structurally sound. It may have less cosmetic impact, but a house with a leaking roof, subsidence or damp will be severely hindered in achieving a strong asking price due to the perceived costs and effort in fixing the issues. Take the time to assess your property and ensure there are no major defects, and this will give a solid foundation for your property to achieve the best price on the market as buyers will not be scared away by problems, nor will they be able to barter the price down.

Central issue
Take a look at the central heating system in your house - does it look modern and fit-for-purpose or is it on its last legs? If your central heating isn’t quite up to scratch, then replacing this is a sure-fire way to add value to your property as it is another issue which has the potential to put-off potential buyers. Although the initial outlay for the central heating refit may seem high, you should more than recover these costs when selling the property as it is another key point which will assure buyers that your property is well-cared for.

Extra space
Adding additional living space will always attract potential buyers as this offers them versatility in the way in which they will use the property; however, before you convert that loft or garage then we would recommend doing a little research. A converted loft can add thousands to the asking price of your property, so it is certainly something to consider – before you undertake this do take a look at similar properties in your area and do some investigation as to what the top selling price has been lately. There will be a ceiling price to the properties in your area, and therefore before you add a room, make sure that there is the potential to recoup the cost in the asking price of the property.

Decoration
If you’re looking to add value to your property without any major outlay, then picking up the paintbrush could be the answer. Freshen up any paint that has seen better days around the house and do the same in the bathroom, checking on any sealants to ensure they are crisp and clean. Clean up a few simple defects and potential buyers will see your property in an entirely different light, willing to pay more for a home that they perceive to be in excellent condition. This should extend to the frontage of your home, so ensure lawns are mowed and outside areas look cared for.

Kitchens and bathrooms
That old saying that homes are sold due to their kitchens and bathrooms is true, to an extent. Having a modern kitchen and bathroom will add considerable value to your property, as well as generating much more interest from potential buyers. If you don’t want to invest in a brand-new kitchen and bathroom, then update your current spaces in order to make them more sellable. Kitchen cabinets can be painted to modernise them, and changing the door handles to something more sleek will also help to create the feeling of a newer space in the kitchen. In the bathroom, refresh the paint on the walls, keeping it as neutral as possible, and ensure that the space is bright and airy – add mirrors to make the space feel bigger, and use accessories to add colour into the space.

The best home design ideas for 2019

Whether you want to add value to your home in preparation for sale or you just want to make your property a more appealing place to live, redecorating and incorporating the latest trends is a worthwhile endeavour. Take a look through some of our picks of the best home design ideas emerging through 2019…

Embrace the industrial

One of the key trends throughout the year so far has been the embracing of industrial materials in the home environment. Typically, steel beams in the ceiling space would be covered, with their utility overshadowing their relative beauty. In line with new trends, these beams would be left exposed; their harsh texture a welcome juxtaposition to the surrounding soft surfaces in the home. Similarly, materials such as concrete are being embraced this year; simply polished to a high shine and then left exposed for a striking floor covering. Rather than exposing interior workings as a sign of minimalism or modernism, this newest trend is about adding new textures and colours into your home.

Bring the outdoors, indoors

In these modern days, we are constantly bombarded with new studies and surveys showing us the benefits of spending more time outdoors, and whilst these are of course to be heralded, it can be difficult to get the right amount of time alfresco. This desire for more outdoor space is being met head-on by designers who are incorporating more of the outdoors, indoors. The inclusion of bi-folding doors which concertina into themselves are being incorporated into modern homes in order to bridge this gap, and the additions of conservatories or orangeries are also ways to flood your home with light from the outdoors. A non-budget-busting method for incorporating more of the outdoors into your home’s design aesthetic would be to include more plants around your home and at different levels – on the floor, on tables or in very on-trend macramé hanging pots.

Let there be lights

Nobody starts out their interior design plans looking to create dark interiors with limited light; we all like natural light-sources to balance a room’s feel. Natural light and the inclusion thereof is a recurring theme no matter what year it is, but balancing the natural light with artificial light is high on the trend list for 2019. Hidden lighting and light-sources are a key inclination this year; with recessed lights, under stair lights and uplighters all proving very popular.

Au naturale

In years gone by, interior trends have revolved around overly designed rooms with “feature walls” and striking pieces, yet this year the natural finish is having something of a revival. The use of materials such as clay plaster offer a more interesting and textured finish, with no need to be covered once applied which creates an organic and natural feel to an interior.

Storage woes

A major concern for interior design this year is that of storage and how to incorporate the most innovative storage space into the home. Kitchens are key in this trend – with the inclusion of central islands adding storage, high cupboards drawing the eye further up the walls to create the feel of taller ceilings and the resurgence of pantries to hide away ingredients. Around the home, under stair storage is a massive trend as this space is often wasted, and similarly storage underneath baths is increasingly being utilised.

Minimum qualifications and code of practice a step closer

Estate agents have found out how they will be policed as the final report from the Regulation of Property Agents (ROPA) working group is made public.

Click here to read Minimum qualifications and code of practice a step closer.

Property market predictions for 2020

Now that 2019 is over, it is time to look to the year ahead and what is expected to be a strong year for property. Now that there is a majority government and uncertainty around Brexit seems to be assuaged, the outlook for 2020 is strong – read on to see what’s in store.

2019 proved to be a year of resilience for the property market, with prices maintaining steady growth, and a resurgence in the first-time buyer market evident for all to see.

The first key factor in property and the wider general economy for 2020 is, of course, Brexit. With the Prime Minister’s Brexit deal now passed by MPs, the UK is due to leave the EU at the end of the month with a withdrawal agreement – effectively meaning there will be a transition period as the UK truly cuts its European ties until 31st December this year. For property, this means additional certainty – with a majority government and a conclusion to the Brexit saga, buyers and sellers who have been hesitant to enter the market are predicted to jump in, creating something of a surge.

Kate Faulkner, housing expert and founder of propertychecklists.co.uk, says: ‘One of the things that has held the market back over the last 12 months is the uncertainty of Brexit and latterly the election.

‘Now both of these questions are settled and as people have ‘hung on’ for some time, it is likely there will be a bit of a Brexit bounce in activity at the start of 2020. As a result, I would expect more people to put properties up for sale and more buyers coming into the market. In some areas this may result in a short term rise in prices as people compete for quality properties in good locations which are likely to still remain in short supply.’

Widely predicted to be announced next month, the government’s Budget statement will have a steer on the property market for both sales and lettings. We have already had an idea of what is in store thanks to the Queen’s speech in which there were allusions to a stamp duty surcharge to overseas buyers, first-time buyer incentives and further lettings legislation reforms. With the Budget predicted to be announced in February, this could be a catalyst to further spring activity in the property market.

In terms of the lettings market, 2019 proved to be a key year with new legislation introduced, most notably the Tenant Fee Act. Throughout last year we saw the demand for rental properties growing, however the supply being somewhat limited which presented landlords with the ideal opportunity, as long as they are adhere to the new legislation.

David Cox, chief executive of ARLA Propertymark, said “Looking ahead to 2020, we hope the Government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for landlords. This will encourage more landlords back into the market as well as ensure that tenants, including those who are most vulnerable, are not at a disadvantage in being able to find a suitable and affordable home to rent.”

Another key player in the health of the property market this year will be mortgage rates – in 2019 we saw record levels of first-time buyer mortgages thanks to a greater selection of available mortgages and rife competition amongst lenders. If we see these favourable rates continue this year, then the first-time buyer sector can be expected to endure and potentially even grow thanks to the forecast influx of available properties, providing more choice.

Overall, 2020 is set to be a more fruitful year for property thanks to the greater levels of political stability and the continuing favourable mortgage rates and saving schemes.

Local first-time buyers set for 30% discount

In the Queen’s speech it has been announced that the Government has pledged to provide more support to first time buyers to get onto the property ladder. They have announced that a scheme, named First Homes, will be created to provide local people who are yet to buy a home, a whopping 30% discount off purchasing their first property. This significant reduction could result in new local buyers saving tens of thousands of pounds.

In her speech, the Queen said, “my Government will take steps to support home ownership, including making homes available at a discount for local first-time buyers”. The motivation behind the scheme is to enable local people a fairer chance at owning property in the increasingly competitive market; with current competition from overseas buyers and investors steadily invading the market. This will drastically improve the affordability of homes for the average working person which provides a glimmer of hope for their home ownership pursuit.

According to the Monevator, “over the past 30 years house prices have risen nationally by 428%; with London house prices rising by an average by 559%”. Whilst this does not take inflation into consideration, it is easy to interpret that wages have not risen at the same accelerated rate during this time making it difficult for the average working person to save a large enough deposit to buy a home. Considering this, it is fair to say that the introduction of a 30% discount scheme would be welcomed by all and will enable a stronger sense of community. This is because the scheme names ‘key workers’ as part of those that it will target; recognising and offering support to those who contribute to their community.

This scheme seems to be a replacement for the recently closed to new applicants Help to Buy ISA, with further focus on helping first time buyers. To enable the First Homes scheme to function, councils will be able to use contributions from housing developers to facilitate the discounts.

The First Homes scheme should not be viewed as taking away from these other areas, as the Government has also pledged to rejuvenate the Affordable Homes Programme and Shared Ownership Programme so that they can also deliver on their promises. An overhaul of the rental system to make it fit for contemporary society and will strengthen the rights of tenants has also been discussed.

The Queens speech has delivered some promising news to start 2020, but the success of the First Homes scheme will be truly measured by its detailed workings in practice. At present, the specifics of who counts as ‘local’ to qualify for the scheme is unclear (such as does someone have to live, where do they have to work, and how long for?). Despite the lack of detail, it is safe to say is that the Government clearly want to give back to the community to continue its growth and prevent homes being left empty in this time of growing demand.

Section 21 evictions

2019 was filled with talks of abolishing Section 21 “no fault” evictions. The Government initially announced the abolition in April 2019, which was followed by a consultation process from July to October 2019. With the political uncertainty throughout the year that has recently settled, the Queens speech has confirmed that the abolition proposal is still intended as we move forward into the new year.

What exactly is a Section 21 eviction?
Included in the Housing Act 1988, Section 21 is the recovery of possession on expiry or termination of assured short hold tenancy. This essentially allows landlords to evict tenants from their properties with two months’ notice, without any reason given.

Why is this being abolished?
The ability that landlords have to evict any tenants without reason has been argued to have negative effects on tenants’ well-being and cause huge disruption to their lives. This can disrupt the lives of good tenants who may have done nothing wrong in relation to their tenancy agreement. It can also be extremely unsettling families who may have children settled in local schools and communities.

What impact will the abolition have for tenants?
The abolition of section 21 of the Housing Act 1988 will provide some protection for tenants by assuring them that their tenancy agreements will be upheld for the duration of their contracts. This is providing that they do not breach this. The abolition is a positive step for tenants; especially families who are renting on a long-term basis as it reassures them that their housing requirements are met allowing families to settle.

What impact will the abolition have for landlords?
It could leave landlords vulnerable to tenants who may abuse their home, leaving them with less power to regain possession of their property and making this process longer. Without an updated alternative provision to support landlords to protect their property, it could deter them from offering their property on the rental market. This could contribute to further demand for rental property, but with a reducing supply; driving rental asking prices to increase. To address this, the Government has proposed to strengthen Section 8 of the Act, which allows eviction due to the tenancy agreement being broken. This would ensure that the landlords needs are also protected with effective channels for them to use in the event of undesirable circumstances.

The Policy Director for the Residential Landlords Associations explained that it is crucial to also reform the way repossessions take place to avoid a rental crisis. A new system is required for landlords as well as tenants so that it is fair market for all. There must continue to be a lawful procedure to protect landlords in legitimate circumstances such as anti -social behavior, and tenant rent arrears.

Tips for buyers and sellers looking to move

It’s the start of a brand new year in the market, with buyers and sellers alike preparing to fulfil their New Year’s Resolutions and make their move. Market conditions appear to have stabilised after December’s general election brought with it a majority Conservative Government, but what can you do to give yourself the best chance of a successful transaction? Read our top tips for Buyers and Sellers below.

BUYERS TIPS

Research, Research, Research
As clichéd as it sounds, buyers who prepare sufficiently are more likely to end up with a better deal for the home they’re looking for. Once you’ve made the decision to begin house hunting, look into sale and listing prices for properties in the local areas that you’re interested in; this will give you a rough guide as to how much you can expect to spend.

Prepare your mortgage
If you’re house hunting in a competitive area where properties are quickly snapped up, then getting a mortgage agreement in principle will give you an advantage when you find the property that you want. Having your finances in order and prepared can save time and prove invaluable if the home you want is likely to generate significant local interest.

Survey the house
Once you’ve had your offer accepted, carry out a survey of the house to flag up any major issues or elements of the property that require attention, such as urgent defects or structural concerns. Depending on the age of the building, you could find yourself a wildly fluctuating amount of work to carry out, especially if previous owners have neglected its upkeep. Either way, a survey will provide valuable piece of mind in any outcome.

SELLERS TIPS

Research, Research, Research
Preparation is key for sellers, too! Make sure you know your property’s true value before it’s listed; carry out a full appraisal of your home with a trusted agent and not just an instant valuation to get a clear idea of what your property is worth. Inviting valuers into your home can also provide you a fresh set of eyes which can be useful in flagging up any existing issues or reminding you of a few flaws that could require attention before going to market, too.

Find ways to add more value
If you’re looking for ways to add more worth to your property, then carrying out home improvement projects will certainly aid you. These can be relatively simple tasks, such as installing double glazing or adding extra insulation to your loft, or bigger jobs such as renovating your kitchen. Whilst the cost associated with these projects may be off-putting, it will pay off when it comes to increasing your home’s value.

Declutter and organise
Take a look at each room in your house and you’ll likely find a few easy ways of decluttering and making extra space. This is vital for the viewing process as potential buyers need to be able to picture themselves living in this space, and in some rooms it’s as easy as clearing a few worktops or mantelpieces.

In today’s market, preparation really is key whether you’re buying or selling. Carry out your market research, get your finances and paperwork and make sure you utilise a knowledgeable and local agent to help you through the process.