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CORONA VIRUS – WHAT ARE THE RULES AROUND EVICTIONS?

When the coronavirus first started it was made illegal for landlord to evict their tenants throughout England and Wales. Last week the ban on evictions was extended till 20th September.

An eviction is a process a landlord must follow if they would like to seek possession back of their property and would like the tenant to leave. They may want to do this for a number of reasons

  • The landlord may want to sell the property
  • The landlord may want to move into the property
  • The tenant maybe in breach of their tenancy agreement

 

Whatever the reason the landlord must go through the proper eviction process.  In order to start the process, the Landlord must either issue a ‘Section 21 notice’ or a Section 8 notice’. A section 21 is also known as a non-fault eviction whereas section 8 notice should be issues when the tenant is in breach of their tenancy agreement. In the case of a section 8 notice the landlord must specify why the tenant is in breach.

However, although the tenant may have received notice to vacate the property there is still no guarantee they will leave on the specific date. If the tenant fails to leave, then the landlord will have to apply to the courts for possession of their property and this is when it can get expensive. Therefor it is a lot more beneficial for the landlord if the tenant vacates before it gets this far.

 

As explained above at the start of the pandemic evicting a tenant from a property was banned. This was enforced by the government because they wanted to protect all those tenants who suffered from loss in income from being made homeless. Initially the ban was up until 25th June, however this has recently been extended to 20th September. Furthermore, after the 20th September a landlord must give a tenant at least a six-month notice period whereas previously it could have been as little as 2 weeks for some breaches of the tenancy agreement.

Due to the governments new rules regarding eviction there is the chance of landlords been exposed to tenants not paying their rent for a considerable amount of time. If this is the case, then there is the option for the landlord to apply for a payment holiday from their respective lender to ease some of the pressure.

Support is also available if for example the tenant has lost their job or had their hours reduced. In these instances, the tenant has the option to apply for housing benefit or universal credit, whichever applies.

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WILL HOUSE PRICES DROP IN 2021?

As we all know the property market was basically closed for three months due to the outbreak of the Coronavirus. This has obviously led to a lot of uncertainty about the property market with many people expecting a drop in prices over the forthcoming months.

So, what do expect to happen in the market in 2021? It was announced last week the UK have entered a recession with statistics identifying the economy crashed by 20.4% from April to June the worst figures since 2008.

The reasons for the recession are simple Gross Domestic Product (GDP) plunged as for obvious reasons less money was spent in all industries. Furthermore, output from our factories etc fell overnight when the Country was put in lockdown. Generally value’s in anything fall when unemployment rises and because of this demand drops. Its down to these reasons that we saw property prices drop significantly in 2008.

When the pandemic hit the initial fears were the market was going to suffer the same impact however has this has not been the case since the market re-opened.

Here at FastMove and a number of other companies involved in the industry have announced strong figures in sales agreed over the last few weeks.

Our Managing Director Christian Armitage recently stated ‘In the last month we have agreed the highest amount of agreed sales over the last 6 years month to month, which is incredible given what has happened in the Country in the last 3 months.’ He went onto say ‘It’s because of this high demand the industry has actually seen an increase in house prices whereas everyone was convinced we were going to see the opposite. The levels of interest in people moving home may not just be down to the market been closed for three months, it may also be down to people realising they want something different from their property.

However, the famous saying goes all that glitter is not gold, and this maybe the case for the industry at the moment. Although we are seeing SOLD boards going up by the minute the question has to be how many of these sales will actually complete? I suspect a large percentage of the agreed sales will actually fall through, the main reason down to buyers not being able to obtain funding.

We speak to mortgage brokers all over the Country on a daily basis and the majority of them are finding things really tough. Since Covid-19 there is no doubt lenders have tightened their criteria significantly, for example larger deposits are now required and self-employed applicants are being scrutinised to levels brokers have never experienced before. However, it’s a case of taking each day one at a time and we all have to keep going and stay positive’

Whilst things appear to be a lot better than predicted do people think prices will drop in 2021? Although no one has a crystal ball many economists expert prices to fall over the next couple of years with many expecting the main drop to occur once the government furlough scheme ends and people are left to paddle their canoe independently.

 

 

 

 

 

 

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IS IT A GOOD TIME TO BUY A NEW HOUSE?

Although moving to a new home is a very exciting time of your life, there is a stigma it can be one of the most stressful things you will ever experience.

The property market has been hit hard since Covid-19, but with the market is now back open and going strong. Coupled this with the stamp duty holiday so many people are now asking the question is now the right time to sell and buy a new home?

We have all spent more time in our own homes over the last few months than we ever have and because of this lots of people have identified they would like to move home. For example, their existing property doesn’t have that extra Bedroom which could be used as an office, which for obvious reasons has been helpful since lockdown and maybe for the foreseeable future. Another key factor for people searching for a new home is a property with a garden.

The experts state that throughout the month of July demand was huge another factor behind the increase in people wanting to move home is the recent stamp duty holiday introduced by the government saving people £000’s.

This holiday lasts until the end of March and relates to property’s up to £500,000.

SHOULD YOU MOVE HOME?

Although a recent survey identified a significant percentage of the population would like to move they still have concerns about the future of the market, especially in the short-term.

FastMove’s Managing Director Christian Armitage recently commented ‘Since the market re-opened the level of people enquiring to sell their property’s is higher than the same time last year. This is both people wanting a cash offer and others who want a market appraisal.’ He went on to say ‘It;s not just enquiries which are strong sales and purchasers are also at a good level which illustrates people are serious about moving and the market is strong. However, whilst we expect the buying part of our company to remain buoyant, we do feel there is a chance our estate agency will slow down slightly. We expect this to occur once the furloughing stops and there is no safety net. Once this happens confidence in people may drop and the amount of people wanting to buy house will reduce. Unfortunately, we don’t have a crystal ball so we need to take one day at a time.’

It was announced last week the Country fell into recession, the first time in 11 years. Therefore, if you are looking to move you may want to think long and hard before committing. The obvious thing to consider is how secure is your job? Other things to take into consideration is how long do you plan to be at your next home for? This is important because if you see it as your forever home a slight fall in prices becomes more irrelevant.

As long as you are confident about you job security and its something you and your family are committed to and you are not just taking advantage of the stamp duty holiday and jumping on the band wagon of an active market then what’s stopping you?

 

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Asking Prices At Their Highest In Six Years

Although many experts are predicting a huge decline in the housing market in the forthcoming months due to Covid-19. The latest monthly statistics indicate there was an increase of 1.5% in the average asking price in the last month. This means the overall increase in the last 12 months is 2.0%.

The increase of asking prices in the last month is the highest month to month surge since 2014. If you consider these figures were taken before the change in stamp duty regulations one could expect this figure to increase next month, given the substantial savings now available to any buyers.

It is reported that new sales instructions are getting to back to where they were pre Covid-19, however this is not the case in Wales and Scotland where there are still heavy restrictions in place.

Reports state that the strongest area in England is Yorkshire where there is an apparent increase of 2.7%, a significant improvement. It is also reported that in London new instructions are back to the where they were before the Pandemic, which is great news for the Country as London is generally the leader in which the other regions follow.

Whilst Yorkshire is the strongest performer in the UK the East of England is the worst however the area has still improved, which illustrates the improvement in the industry is consistent across the whole of England.

Although the average prices have increased the amount of new instructions in June compared to June 2019 was down by 9%, however given the circumstances I am sure forecasts would have predicted a higher fall.

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HOW LONG WILL THE BUOYANT MARKET LAST?

I am sure you have thought the same over the last week or so, ‘houses seem to be flying off the shelf’.

You are right in your thoughts there are a lot of sold boards currently going up, which illustrates the housing market is strong. However, as the famous saying goes ‘looks can be deceiving’. Before coming with up the assumption all is well with the property market we have to consider the following

  • The market has been basically closed for three months so what percentage of these sales are backlog?
  • As we all know finding a buyer for a property is one thing, getting the transaction completed is another. This has always been the case in the industry, however early indications are the amount of sales that fall through may be higher than normal. The main reason for this is the buyer been unable to obtain a mortgage. There are a considerable amount of buyers who were granted a mortgage in principal pre-lockdown and are now looking to make an offer on a property they desire. Unfortunately, and you can understand why, due to covid-19 lenders have tightened their lending criteria significantly. Because of these unforeseen circumstances a high level of the agreement in principals will no longer qualify. For example, buyers who have a 5% deposit. Pre-Covid 19 if you had a 5% deposit there was a strong chance you would be able to obtain a mortgage subject to a strong credit score. However, now this is basically impossible. This is why if the estate agent selling the property is not on the ball at point of offer the house will be marked as ‘SOLD’ only to be re-listed later down the line.

Although some properties listed as sold will be eventually be relisted due to the reasons detailed above there will still be a level which will complete. With the recent changes in stamp duty experts predict a decent level of sales will continue to be agreed.

However, although the property market maybe buoyant the question is ‘how long is this going to last?’ The government are currently helping a significant number of people with the loss of their incomes due to Covid-19, for example the furlough scheme. But what is going to happen once the government remove the cushion?

Analysts predict there are going to be a significant number of people who are made redundant once the furloughing stops. Therefore, with unemployment rising it goes without saying the amount of people looking to move will decrease which in turn may affect the property market in a negative way.

Due to the point illustrated above If you are looking to sell your property the window of opportunity maybe now.  If you would like a Free Valuation contact us today on 03333 232 199. All our terms are on a no sale no fee basis and we only charge £800 on completion irrespective of value.

 

 

 

 

 

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HOW WILL THE STAMP DUTY HOLIDAY WORK?

HOW WILL THE STAMP DUTY HOLIDAY WORK?

Today the Chancellor Rishi Sunak announced a holiday on stamp duty for property purchases up to £500,000 with immediate effect. The initial suggestions are this is going to last until March in a bid to stimulate the housing market and help all people looking to purchase a property since the impact of the Coronavirus.

The holiday applies to people who complete a transaction on their main residence up to £500,000 in England and Northern Ireland, which could save people up to £15,000, a significant amount of money. People who complete on properties for higher than £500,000 will only be charged stamp duty on the difference between the £500,000 and the respective purchase price.

The governments objectives for this move are

  • To help buyers who have been hit financially by the coronavirus
  • To boost the property market as a whole hit by the market basically been closed during lockdown.

I AM LOOKING TO PURCHASE A PROPERTY HOW MUCH STAMP DUTY WILL I PAY?

As previously explained if you are looking to purchase a property and the agreed purchase price is anything up to £500,000 then you will not be liable to pay any stamp duty. The next tier is a purchase price from £500,001 – £925,000 where a stamp duty level of 5% will be due. The next tier been £925,001-£1.5 Million at 10% and anything over £1.5 Million a liability of 12% will be payable.

Landlords and second home buyers also qualify for the cut but they are still liable for the extra 3% charge once stamp duty applies to the transaction.

SO WHAT HAS CHANGED?

Prior to the announcement stamp duty was due on any agreed purchases at £125,000 or higher. However, any first-time buyers didn’t pay the liability on any agreed purchase up to £300,000.

WHAT ABOUT IF I HAVE JUST COMPLETED A TRANSACTION?

The stamp duty holiday came into effect today (08th July 2020). Therefore, if for example you completed on a purchase last week you will not be liable for any refunds and stamp duty will be paid at the rate before the holiday came into force.  However, one thing to consider is stamp duty is payable on completion not exchange. Therefore, if for example you exchanged contracts on your agreed purchase last week and the completion date is 10th July 2020 you will be entitled to the stamp duty holiday.

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ARE PAYMENT HOLIDAYS GOING TO BE EXTENDED FURTHER?

There are reports that the chancellor Rishi Sunak is currently working with the FCA and industry to help put further processes in place to extend mortgage payment holidays. These will apply to all those people who are still in financial difficulty because of the Coronavirus. Although a decision has not been made yet reports suggest the are looking at ways to continue support when it runs out at the end of June.

However, the importance of explaining the consequences of taking a payment holiday must by marked out in black and white according to a number of experts.

Martin Lewis ‘The Money Saving Expert’ explained last week ‘The FCA has confirmed, sadly, that while credit files shouldn’t be impacted by mortgage or other payment holidays, lenders are still allowed to take them into account when making their acceptance decisions.’

“It’s impossible to say yet how widespread this will be or how substantial the impact will be we’ll start to learn that over the next year. 

“Each lender’s assessment process is different, it’s a dark art that’s hidden from the public and never published, so this is likely to be yet another factor applicant’s will need to navigate.”

However, for a large percentage of people they have no option, due to the financial impact covid-19 has had on their personal circumstances and Mr Lewis did state that you should take the holiday if it is imperative due to cash flow reasons.

In regards to extending payment holidays the general consensus is that given the huge impact and downturn on the economy a further extension seems very sensible.

But there is no doubt this cannot go on forever and the government will need to devise a clear and dynamic strategy on how to bring this to a close.

If you were unaware of the option to take a payment holiday on your mortgage account, loans or any credit cards contact the respective lenders website. There you will find the relevant information on how to apply for the payment break.

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THEY ARE CALLING IT THE CORONA-COASTER

The new name given to the property industry is the ‘Corona Coaster’. The first set of figures have been released relating to property transactions in the UK since lockdown. There were just 55,381 residential sales completed in March with a huge number of solicitors confirming they did not complete one sale. In contrast to January where there were over 100,000 sales completed, a 4 year high. Just looking at these two figures you can see where the name ‘corona coaster’ has come from.  

Further statistics confirm that each conveyancer completed on average 15 transactions each in March, the lowest since 2013.

However, when you look at the whole first quarter of 2020 a 5% increase is evident with over 235,000 sales completed. However, it will be interesting to see how quarter two pans out given the industry has returned to some form of normality.

Since the market re-opened last Wednesday Rightmove have reported some positive numbers as far as interest is concerned with a high percentage of these been first-time-buyers. However, many experts predict that these first time-buyers might be slightly disappointed as the reductions and discounts they are hoping may not be there.

The property portal Rightmove released date illustrating that 60% of first-time buyers postponed their plans to buy a new property. However, now lockdown on the market has slightly relaxed these first-time buyers have decided now is the time to book a viewing. Because of this influx there isn’t any early indication that property prices are going down as there is plenty of demand. These thoughts were backed up by Rightmove as their data indicates that asking prices are up 2%.  The question is how long will this last for? Is it just a honeymoon period or a backlog given in reality the market has been closed for nearly 8 weeks?

Therefore, the clever tactic for some who aren’t in a rush might be to wait whilst things pan out as that deal maybe there it might just be a waiting game until the honeymoon period is over. On the other hand there will be obviously those sellers who need to sell fast for whatever reason so if you are looking for a bargain it maybe worthwhile calling a few agents to see if they have a vendor who are in a personal situation where they need a quick sale.

But it’s pretty obvious and the property market as many other markets comes down to the basic economics of supply and demand. Whilst there is plenty of demand which at the moment there seems to be you if you are wanting to make an offer on a property you may need to pay the asking price or if not very close to it.

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CAN I NOW VIEW A PROPERTY AND MOVE HOUSE?

It goes without saying there is a high level of uncertainty at the moment with more grey areas than ever and this includes the property industry.

We are receiving a high level of calls for clarity on what house sellers and buyers can and can’t do.

On Wednesday it was clarified by the government that estate agents were formally allowed to return to work with the respect of social distancing and strict hygiene measures. Along with estate agent’s construction workers were also advised they could start their engines with the intentions of kick starting the property market.

So, I suppose the first question is

CAN I VIEW A PROPERTY?

During lockdown physical viewings on properties were not permitted, however many estate agents were offering virtual viewings by using apps such as WhatsApp and Facetime in the form of a video call. Since the slight relaxation by the government it is now possible to attend a physical viewing of a property, which has to be good news for everyone. However, it goes without saying that social distancing measures have to be respected by all parties. Furthermore, the government have advised sellers to ensure all external, internal and cupboard doors are open prior to the viewing, which will avoid contact between viewer and fixtures within your property. One thing the government has said is that only one viewing at a time, so open houses are a no no, there should also be a good sized gap in between each viewing.

CAN I NOW MOVE HOUSE?

You may have agreed to sell your property and completed the legal process prior to the lockdown or even during lockdown but due to the restrictions have been unable to move out of your house and into your new home. Good news, if all parties in your chain feel comfortable about completing the transaction and moving you can. However, again it goes without saying that this has to be done with the respect of social distancing and a thorough deep clean of the property you move into is advised. Another recommendation would be to try and move yourself without using a removal company but if this is not possible ensure you use a company who has the right measures in place.

UPDATE ON EXISTING TRANSACTIONS

Prior to lockdown there were 1000’s of people who had agreed to sell their property but due to a number of reasons their house sale stalled. This week we have seen valuers/surveyors return to their job of work. The Land Registry have started to complete applications and a number of solicitor practices have asked their employees to return to work. All of this should help those transactions which had hit a brick wall so if you were one of these people I would expect you to see progress on your sale/purchase shortly.

HOW HAS THE INDUSTRY REACTED SINCE THE OPENING OF THE PROPERTY INDUSTRY

Figures don’t lie and the property portal Rightmove stated its website experienced a 45% jump in traffic to the site following the formal re-opening of estate agencies across the Country.  Another interested statistic was enquiries about viewings had increased by 70% and there were 2,115 new properties listed in the first 5 hours of trading. This is really positive for everyone who is thinking about selling their property.

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LENDERS START TO RE-ENTER THE MARKET

In the last week a number of main-stream lenders have launched more products to the market which offer more generous terms, making it easier to get a home loan.

This is excellent news for the whole economy and should give the industry a huge boost. At the start of the month all lenders had pulled a large percentage of their products only offering mortgages to people with large deposits.

One example of a change made recently to the market is Halifax have resumed loans at 85% Loan to value where is was previously 80%.

In fairness to all the lenders it is quite impressive they have loosened things so quickly given how busy they were at the start of lockdown supporting all their customers with payment holidays.

During lockdown lenders have still been issuing mortgage offers even though their valuers have not been able to attend the respective property. To overcome this they have had to rely on their systems and information available on the internet by carrying out what they call a ‘desktop valuation’. Granted it took a few days for lenders to put these processes in place furthermore the underwriting has been a lot stricter and generally only been available with applicants with a significant deposit.

A huge amount of people will have held off from applying for a mortgage, whether a re-mortgage or purchase mortgage is required. If you are one of these people, now might be the perfect time to at least speak to someone, so why not give us a call on 03333 232 199? One of our in house mortgage brokers will offer you free mortgage advice and source you the best product to suit your circumstances.

Although certain economists predict we are facing recession fixed rate mortgages continue to be at an all-time low, with the base rate been nearly 0%. However, many experts predict its only a matter of time before interest rates start to rise, mainly because of the crisis the economy may face due to covid-19.