The Bank of England’s Monetary Policy Committee has just announced a rise in the Bank of England base rate of 0.25% – only the second increase increase in over a decade. Whilst the 0.75% base rate is now the highest it has been since 2009, it is still historically low when many still remember the levels of the late 1980’s when a mortgage rate of 15% was the norm!
The latest increase is probably designed to be nothing more than a shot across the bows in response to surprisingly high consumer spending, higher employment levels and wage rise expectations in order to ensure inflation remains firmly under control.
Certainly, housing inflation is already under control, with predictions that house prices are unlikely to rise by more than 3% per annum until 2025. Stability during these uncertain times is exactly what is required for a healthy housing market, where people who wish to move for “real” reasons, can do so without fear of making a mistake.
Of course, those homeowners on a fixed rate mortgage will not immediately notice any difference in their monthly payments, while those on variable rate or tracker mortgage will notice a small increase in monthly payments, typically of around £37.50 extra per month on a £180,000 mortgage.
This latest increase is unlikely to have any direct effect on the property market, although if you are contemplating a move it might be worth bringing this forward in order to secure a low-rate mortgage now in anticipation of any further incremental rate rises in the future.
As ever, as your local property experts, we’d be happy to advise, without obligation, on how this, and any other market influences, might impact on your moving plans or property value. Please feel free to call us on 01736 332076.
The heat is on! Or rather, it has been for the past few months of the glorious summer we have been enjoying. But is the heat on, or off the property market? Here at Kerb Appealz we have seen consistently strong sales over the summer, although the national picture seems confused. It all depends who you speak to!
For example, according to the government’s official house price index, UK house prices have increased by 3% over the past year – the lowest level of growth since 2013. This was, however, skewed by a 0.4% decrease in London values. However, we know that the government’s figures usually trail behind current reality by up to six months, and the Halifax reports annual growth at just 1.8%.
Interestingly, new analysis from Price Waterhouse suggests that house prices are unlikely to exceed 3% until 2025. Although we are passionate about securing high prices for our sellers here in Penzance, at a national level, such price stability would be a good thing. Indeed, there has even been a suggestion from think-tank IPPR that the government should freeze house price inflation for five years, and then peg it to inflation at 2% thereafter (although history has shown that it is usually best for the government not to meddle with the market).
Overall, property has fared reasonably well since the Brexit referendum and anyone thinking of moving need not be deterred by the negative news headlines. It is encouraging to note that bricks and mortar tends to outshine the stock market during times of uncertainty (even long-term, the FTSE100 capital price index has only risen 9% in the past 18 years!) PWC predicts that the UK will be the strongest performing G7 economy until 2050, and MFS revealed that 77% investors think that Brexit is unlikely to affect their long-term investment strategy. More than half of these said they prefer traditional asset classes such as property as a safe and secure investment – as proven by the 6.6% rise in property values since the referendum.
For most people, a property move is more about adapting to a change in lifestyle than poring over investment figures. Life’s too short! If a move helps you with your commuting, your family, your finances or your relationships, then surely these motivators should always take priority. Why not call us today on 01736 332076 to see how we can make a move work for you? We’re here to help.
One of the property terms that can be confusing is the word “deposit”, especially among first-time buyers who have previously been renting.
For example, consider this statement: “When Jake got his deposit back he had enough for his deposit, although this was not enough to cover his deposit.”
There are three uses of the word “deposit” that, unless understood in their respective context can be perplexing:
1. The “rental” deposit. This is the amount of money held by a landlord or letting agent as security against damages and is returned to a tenant at the end of the tenancy, subject to the property being returned in good condition.
2. The “mortgage” deposit. This is the difference between the purchase price of a property and the amount of mortgage available on that property. So, if a buyer qualifies for a 95% mortgage (ie 95% of the agreed purchase price) they would need to have raised a “deposit” (or “cash” even though this may not be physical pound notes) for the remaining 5%.
3. The “Contract” deposit. When contracts for the sale of a property are exchanged (ie the deal becomes binding) is it usual for a sum of money to be put down prior to the whole amount becoming due on completion a few weeks later. This contract deposit is usually 10% of the purchase price. However, it is not uncommon, for practical reasons, for the amount actually required on exchange to be for a smaller amount, or even nothing, as a concession, even though should the buyer fail to complete, the full 10% would still become payable contractually.
So the strange statement above might now be better understood as meaning: “When Jake got his rental deposit back he had enough for his mortgage deposit, although this was not enough for his contract deposit.”
Please feel free to contact us on 01736 332076 should you ever have any questions about the terminology or processes involved in buying or selling a property. We’re here to help!
“Waiting in Hope?”
If your property is currently on the market, it may be tempting to assume that your agent is in full control of the situation, and that sooner or later a buyer will materialise. But don’t be so sure! Sometimes an agent will take the same view and simply sit in hope, having apparently exhausted their own marketing options.
However, we believe in a much more proactive approach and would invite anyone who is currently “waiting in hope” to contact us for a free and confidential marketing review meeting. Our aim during these meetings is not to criticise your chosen agent, but simply to help you consider some key facts about the progress of your sale from day one and offer constructive advice where appropriate.
For example, we would review the following in context:
1. The response to date and feedback from viewings and advertising.
2. The number of viewings in relation to local averages
3. The “drawing” ability of your sales particulars, online listing and photographs.
4. The presentation of your home.
5. The availability of other homes on the market that compete with yours.
6. Your own moving plans.
7. How your property is positioned in the market.
Sometimes it pays to have another pair of eyes to take a constructive and enthusiastic look at your situation. Any marketing advice we offer would be sincere, free, without obligation, and offered with a smile.
We’d love to help you move, so why not call us now on 01736 332076 to arrange confidential and constructive meeting over a coffee?
On 4thJuly each year Americans go to town on celebrating their national pride on Independence Day.
And well they might, as independence is wonderful thing – whatever your views on Brexit/Trump etc! As independent estate agents we experience daily what it is to be free of the constraints of corporate governance, number crunching, management reports and toeing the party line. The only people we have to report back to are the most important of all – our customers!
Being independent means that we can adapt and respond to changes in the market without having to run it past a committee. Speed of response is essential in these changing times. If a property needs a marketing boost, we give it one! Independence also means that the directors are personally involved in the business – after all – it’s our future, Kerb Appealz above the door, and we make a point of ensuring that those values we cherish personally are instilled across the business as a whole. We tend to work very much in partnership with our clients and are sometimes quite selective as to which properties we accept onto our books. None of this would be as easy if we were a PLC.
Most important of all is our people. They all feel part of a strong and committed team where their individual strengths are immediately appreciated and rewarded. Their great team spirit and professionalism combine with a sense of fun, enabling them to focus on helping people move (rather than selling ancillary services), allowing us to provide an enjoyable and efficient service to our clients, of which I am very proud.
So for truly accountable service why not call us for a chat about your property needs today on 01736 332076? Happy Independence Day!
From Penny and the team.
I always love articles and videos that help people work with small spaces, especially as these days we are getting far less for our money.
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Take note of these helpful tips to present your home to the best it can be to get the best price for you when you go to market.