The very latest from Burnett's

Welcome to the February edition of our newsletter.

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.

Buyer Demand Soars

Recent data released by Zoopla has shown that 2020 has started in supreme fashion for the property market; with buyer demand up 26% when compared to the same period in 2018 and 2019. With such an influx of buyers, those thinking of selling their property have timed it well.

Hometrack, the data research arm of Zoopla, have demonstrated just how much of an effect the general election and the promise of political stability have had on the property market; with demand increasing by over a quarter and house price growth across the major UK cities also hitting nearly 4%, the highest in two years.

Richard Donnell, Hometrack’s research and insight director, says: “This is partially due to fading political uncertainty; households who were holding off moving are now starting to return to the market and this momentum has been supported by low mortgage rates.

“The cities with more affordable house prices, such as Sheffield and Leeds, have seen the greatest increase in buyer demand as house hunters continue to focus on value for money this year.”

Statistics from HM Revenue show that the increase in buyer demand also had a positive impact on December’s property market, with an 11% increase in property transactions when compared to December 2018.

The research goes on to look at the strongest prospects for price growth throughout 2020, with Nottingham ranked as the number one location for prospective price increases. Edinburgh and Glasgow are ranked second and third respectively, and the traditional North South divide is set to narrow.

Does Anything Really Change now that Brexit has Started?

After nearly fifty years of membership, Britain has officially left the European Union and we are now in what is known as the ‘transition period’, which is scheduled to last until the end of the year when we fully depart from the EU. Now that we have left, does anything really change?

Essentially, not much changes for the next 11 months whilst a fully fleshed-out trade deal is brokered. The United Kingdom will be less involved in EU affairs, which means no more MEPs (Members of European Parliament) and no more EU summits, but for the majority of us no change will be seen.

Something that will change, and that has been well-publicised, is the return to blue passports rather than the current burgundy version. These blue-and-gold passports were first introduced nearly a century ago, and will be phased into production throughout the year, although burgundy passports will continue to be valid.

Alongside the new passport designs will be a series of commemorative coins, the first of which is a 50p coin now in circulation bearing the inscription “Peace, prosperity and friendship with all nations”. There are also further plans for other commemorative coins to be released in circulation, so check your change to see if you have one of the three million newly released coins.

Aside from these fairly trivial items, nothing palpable will really change this year in terms of travel, healthcare or working abroad.

British nationals may still queue in the “EU Arrivals” sections in airports, and no visas or extra documentation will be required for travel to Europe. Whilst in Europe, the European Health Insurance Card (EHIC) will still be valid up until the end of the year, however from 2021 this will no longer be valid.

The exit at the end of last month from Europe was more politically significant than having any day-to-day ramifications.

Eco Friendly Homes Playing an Important Role

Climate change has received immense attention recently with urgent calls to reduce the contributing factors to carbon emissions, rising sea levels, and rising temperatures. The UK has committed to reduce its CO2 emissions to net zero by 2050; and this commitment cascades to all markets, including property. This commitment is a great achievement for the UK, with it being the first first-world country to pass law to such a commitment.

Sadly, the amount of greenhouse gasses produced from heating properties has increased since 2014. Heating our homes accounts to a staggering one seventh of overall UK emissions. Our increased use of fuel can be resultant from heat escaping from properties through walls, windows and ceilings during winter. Luckily, the Government have called an end to the rise in fuel consumption and are devising a plan to battle the emissions producing more energy efficient homes. They are behind an initiative called Future Homes Standard, which is planned to be in full operation by 2025.

Having more energy efficient homes is a great ambition for all. It will lead to lower carbon emissions, reduced energy bills, and upgraded housing. In 2025, all new build homes will have to abide by the initiative to have clean technology to heat homes instead of the current fossil fuel burned for gas boilers. The construction sector and developers are at the heart of this revolution with their designs crucial to meeting this goal.

The Housing Minister, Esther McVey, said that “industry has told us some homes built using modern methods can have 80% fewer defects and heating bills up to 70% lower. Homes built using modern methods can be of higher quality, greener and built to last. I want to see a housing green revolution.” 2020 is set for an environmental transformation, with the property market a strong contributor to this.

Saving for a House Deposit

For most of us, the most expensive thing that we ever purchase will be a property, and the prospect of saving for that all-important deposit can be rather daunting. However, the key to saving for that lump sum is simply good financial preparation and making a few changes to your outgoings which should reap big rewards. Take a look through our handy hints and tips and you’ll be in that new home in no time.

Speak to an expert
If you have made the decision that you are ready to buy a property, then an excellent first point-of-call would be to speak to an expert, be that a financial planner, mortgage advisor or a savings expert in your bank. It is important to get a detailed overview of your personal finances and speaking to an industry expert will provide you with tailored advice which suits your lifestyle, as well as being given some proven strategies to help you to save. Whether you’re a saver or a spender, it is important to get in to the right mindset to save and starting the process by speaking to an expert is a sensible first step.

Make a move
With the cost of renting often leaving many with little money to save for a deposit, making a temporary move can be a key factor in achieving a sufficient deposit. More and more people are moving back in with their parents for a period of 6 to 12 months; often paying no rent and economising through saving on laundry and food costs. If living with your parents is a truly unbearable prospect, then finding a lodger to live with you will also aid you in that all-important quest for a deposit.

Know your options
Did you know that you could buy a property with just a 5% deposit? Knowing what schemes and grants are out there will most certainly help you to achieve a house deposit. The Help-to-Buy shared equity scheme allows you to purchase a home with as little as 5% deposit and the government or developer (this is available for new homes only) lends you the rest of the deposit. Shared ownership schemes involve purchasing part of a property and then renting the rest, and although you would still need a deposit to get a mortgage for the part of the property you are buying, the deposit would be considerably lower; for example, to get a 90% mortgage on a 50% share of a £150,00 property, you would need only £7,500 for the deposit.

Make your savings work harder
Naturally, any changes you make will have one similar goal – to help you in saving more money more quickly and making these savings work for you should be a top priority. Open an ISA and use your yearly cash allowance so you don’t pay unnecessary tax. If you don’t already have one, open a savings account and save what you can, even if you think the amounts you are saving are inconsequential, they will soon amount to a worthwhile value. Shop around and see which bank offers the best interest rate on your savings, don’t just take one out with your current banking provider as finding a good interest rate could go a big way to helping you reach your goal faster.

Saving for a deposit can seem like a tall order, so making some sound financial decisions will be the key in to being approved for a mortgage and taking a step on to the property market. Get yourself into the right mindset where you are aware of why you are making some financial changes, remember that they are all short-term, and you’ll see those savings growing faster than you could have ever hoped.