Category Archives: Finance

5 Reasons you should sell in early 2015

The festive season is upon us and the last thing you may be thinking of is selling your home. There have been many changes within the property industry this year including the mortgage approval system and more recently the stamp duty reform. With a General Election fast approaching, why should you consider selling in early 2015?

  1. Stamp Duty

As you may have read, George Osborne’s reform on the Stamp Duty Land Tax (SDLT) at the beginning of the month saw changes to the system overnight. This meant that the previous “slab” system has been replaced by the preferred sliding system.

Residential properties

Purchase price of property Rate of SDLT (percentage of portion of purchase price)
£0 – £125,000 0%
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1.5 million 10%
Over £1.5 million 12%

How does this work in practice?

If you were purchasing an apartment for £300,000:

  • You would pay no tax on the first £125,000
  • 2% on the next £125,000 (£2500)
  • 5% on the last £50,000 (£2500)

That’s a total of £5000 compared with £9000 under the previous system.

Many are stating that this change to the upper brackets is a political move, and if the there was to be a change in government that the revered Mansion Tax may now not be imposed. But as history dictates, you cannot predict what each political party may change or introduce once they are in power. Homes up to £937,500 will now certainly benefit from the change in Stamp Duty payable.

  1. Interest Rates

We have been blessed for some years now with low interest rates. It has been hinted for some time that these are expected to rise during 2015. Although we believe that for many homeowners it will not have a huge impact. We do predict however, that many will want to move in the early part of 2015 to tap into a lower interest rate mortgage before the rise.

  1. Mortgages

Although the nicknamed mortgage “stress test” has slowed the market in some sectors, the number of mortgage products available is on the rise. With preferred rates and deals being pushed by major lenders it has certainly been an attractive time for buyers over the later few weeks of this year. We envisage the growth of potential buyers to continue to rise in the early part of 2015. What a better time to sell your home than when buyers are a plenty and mortgages more attractive.

  1. House Prices

 The Centre for Economics and Business Research predict that house prices will dip by 0.8% by the end of 2015. They have confirmed that this is only due to a ‘levelling off’ from the rises during 2014. We predict that the early part of the year will remain strong with prices starting to slow after April and continuing for the rest of the year.

  1. Time of the Year

Although Easter to summer tends to see the most movement in the property market we believe that there will be a strong start to 2015. Homeowners have already started to approach us with the intent of listing their property at the beginning of next year. Their reasons? They too anticipate a rush of buyers seeking to move before the election. Moving before Easter will allow you to enjoy the summer months in the comfort of your new home.

Whatever 2015 may bring we look forward to helping you move.

To find out why you should use Ellis and Co Golders Green, read next: 5 Reasons why you shouldn’t list your home with Ellis and Co Golders Green

 

 

Why this autumn is predicted to be one of the busiest yet!

September always feels like a new beginning in itself. Thousands of children return to school and even though we have worked during the summer months, there is a sense of returning to normality. It is also the time that many people re-start their quest for a new home, there are already signs this is going to be a busy autumn.

One of the signs that autumn is going to be a busy period is the recent news that a few major lenders released fixed rate mortgages deals that are back below 3 per cent. This is amazing news for buyers, with some being put off by the imminent increase in interest rates together with the new ‘stress test’. The worry of not only getting a mortgage but also being able to meet their repayments has seen some light.

Mr Hollingworth of broker London and Country in the Telegraph on 5 September stated that those ‘considering a five year fixed mortgage should not hold out for a better deal.’ In affect now is the best time to buy. He continues, “The recent falling five year fixed rates that we’ve seen shows just how rapidly prices can change. Rates might get slightly better but the market leaders are looking very competitive.”

We always see an upturn in properties coming on to the market this time of year.   This year is no exception; the first week in September we have seen a particular increase in the number of buyers looking for their next home and wanting to be in before Christmas.

But we must urge all those looking to sell that is not a done deal. Staging your home for sale will not only increase your chance of selling quickly but also can have an impact on the price offered, with many well-staged homes receiving above their asking price. Home staging is so important as it creates the lifestyle of your home, and is the first impression they may see of your home on property portals such as Rightmove and Zoopla.

Always go with the principle that they can’t see through your cluttered rooms or unique décor. The actual fact is that the majority of potential buyers want to be able to walk into a home without having to do any work to it. Yes they may down the line wish to decorate, but they want to move into somewhere where they can feel at home straight away.

With an increase in buyers and below 3 per cent fixed rate mortgage deals, why wouldn’t you want to move before Christmas. Contact us today to arrange your free valuation and register your buying needs.

At Ellis and Co we will not only sell your home quickly we will work hard to make it as stress free as possible. Let us to do the hard work, and you can enjoy planning your new home.

 

How getting a mortgage just got a little tougher

Did you know that on the 26 April 2014 the rules to getting a mortgage changed? Why? “In the past too many people got a mortgage by simply telling their lender they would have no problem repaying their debt, and that was that,” said Martin Wheatley, chief executive of the Financial Conduct Authority (FCA). “Our new rules will hardwire common sense into mortgage lending.”

The changes do not only affect first time buyers but also those looking to re-mortgage. The main area of concern for homebuyers and owners is the “stress” test. This is a more intrusive process than we are used to which means that taking out a mortgage could take longer than before.

2009_06stresstest

The stress test has been introduced so lenders can check your ability to repay your mortgage should the interest rates rise. With mortgage rates being low for some time a dramatic rise could seriously affect some peoples ability to repay. Surely the changes are sensible and a good thing?

Stress testing will determine if you can afford the repayments with the money spare in your family budget. This means that even utilities, your cost for commuting, membership/subscriptions, cost of living, clothes, personal goods and childcare costs will all be taken into account.

How to prepare for the stress test.

It has been advised that before you apply for a mortgage that you try and pay off any outstanding debts, cancel unused and unnecessary memberships/subscriptions and cut back on spending for at least 3 months prior to applying.

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Gavin Littlejohn, founder of the Money Dashboard website, says borrowers can prepare for the new regime “by properly budgeting and showing consistent behaviour of being able to live within their means”.

The Council of Mortgage Lenders suggest that prior to your meeting with the lender that you anticipate the questions that may be asked and have the relevant documentation available such as pay slips and bank statements.

The changes make seem drastic but I am sure you will agree it’s better to go through a stress test than risk loosing your home.

Contact James Ryan today about where to get the best advise on the new mortgage rules on 020 8455 1014.