Tuesday, 30 November 2021

Warrington House Prices - The Effect of Rising Inflation


House prices tend to rise with inflation, so with the UK annual inflation hitting 4.2% last week, that’s good news, isn’t it? Yes and no – let me explain what it means for Warrington homeowners.

The year-on-year cost of living rose by 4.2% in October, its highest rate in almost a decade. The jump in prices (inflation), pushed mainly by increasing fuel and energy costs, places further pressure on Warrington household budgets.

So, what will this rise in inflation mean to Warrington house prices?

Let me look at the downsides first. The first is the effect inflation has on the true spending power or value of your hard-earned money.

The mid-1970s to mid-1980s was a time of high inflation in the UK, so I think that is an excellent place to start.

The average house in Warrington in 1974 was worth £10,823,
and by 1984 it had risen to £31,634

So, Warrington property prices had risen by 192.3% in the decade 1974 to 1984.

Good news for everyone, then? Well, as always, the devil is in the detail.

Inflation over the same decade rose by 224.2%, meaning your Warrington house was worthless in real terms (i.e. spending power terms).

If that same Warrington home had gone up by the inflation rate seen 
between 1974 and 1984, the house would have been worth
£35,091 in 1984

That doesn't sound a lot (the difference between £31,634 and £35,091), until you apply that difference to today’s prices; that's a loss of £26,411 in today’s money.

The second is the effect of interest rates.

When inflation rises, the usual weapon of choice to reduce inflation is to increase interest rates. Homebuyers tend not to borrow as much on their mortgage when borrowing money becomes more expensive due to higher interest rates.

When interest rates get high (they were over 15% in 1992) Warrington homebuyers may not even want to borrow any money at all (staying put in their existing home). This would mean fewer Warrington home buyers wanting to buy (decreased demand). However, at the same time, more Warrington houses would be coming onto the market (because existing Warrington homeowners would want to sell and downsize because they have high mortgage payments), meaning higher supply … low demand and high supply does drive house prices in a downward direction.

So, does that mean you should hold off buying a Warrington home?

Although Warrington house prices did not keep up fully with inflation in the late 1970s and early 1980s, they did a pretty good job (and much better than keeping money in a savings account). You must remember your house is not a pure investment, it's a place you and your family live in. It's a place you call home. So don't worry if it doesn't keep up with inflation in the medium term as your four walls offer a lot more than just a simple investment.

Ok, so let’s look at what does happen when inflation effects property.

When your Warrington house price rises because of inflation, it increases the value of your house, not by the cost/value of your deposit. So, if inflation increases the value of your Warrington home by, say half (50%), it may triple, quadruple, or even quintuple the value of your deposit/equity.

For example, if you buy a Warrington property for £500,000 with a £50,000 deposit and inflation increases the price/value by 50% to £750,000, that means your equity in the property quintuples from £50,000 to £300,000. It also means you go from (in this scenario) owning 10% equity (£50k of £500k) in your home to 40% after inflation (£300k of £750k).

Even better if you take out a fixed-rate mortgage because you would be making a fixed monthly mortgage payment that dropped in real spending power ‘inflation adjusted’ pounds over the time of the fixed rate. You might ask why? Well, you are paying less for the mortgage than you did when you took it out (i.e. inflation erodes the actual value of money, meaning your mortgage debt diminishes in real value terms in line with inflation).

So, holding off moving home could cost you a lot of money.

What does this all mean for existing Warrington homeowners?

It’s challenging to forecast with any certainty what will happen with UK inflation and interest rates. I believe we will see inflation hover between 3% and 5% in 2022, with it returning to more normal levels of around 2% in 2023 (although I am no economist!).

We know the Bank of England base rate is just 0.1%, meaning it’s unlikely to get any lower. I have spoken about this in previous articles on the Warrington property market and said the money markets have already priced in an interest rate rise to 0.75% to 1% by the summer of 2022.

So, if you haven’t already, you need to seriously consider taking advantage of these low mortgage rates (can you believe 21% of Warrington homeowners aren’t on a fixed-rate mortgage). The bottom line is, irrespective of what is happening to inflation and Warrington house prices, being able to afford the monthly payments on your Warrington home is what counts for everyone.

Next, if you are worried about the spending power of the equity tied up in your Warrington home, you will have built up a decent buffer if you have been in your house, for example…

The average value of a Warrington house has risen by 19.7% in the last 
five years, yet inflation has only been 11.3%

This means the equity in ‘real spending power terms’ has increased by 8.4% in the last five years.

One final thought for any Warrington homeowners thinking of selling and not buying another home, inflation could eat into the real spending power terms of your equity in your Warrington home – so now might be the best time to sell your home to get maximum bang for your bucks. Then invest the money in other pure investments that consistently tend to beat inflation, such as gold, commodities, or Real Estate Investment Trusts? Again, I am giving you my opinion here, not financial advice. You must take independent advice from someone qualified in these matters and make your own decisions.

If you would like a chat about anything in this article, do drop me a line.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page

Friday, 26 November 2021

Property Market Update: What’s Been Happening In The UK Property Market – November 2021


The UK property market has seen a drop in sales, but prices continue to rise. Meanwhile, the happiest place to live in Britain has been named in a survey, and one mortgage lender has launched an extraordinary new fixed-term product.

These are just some of the headlines this month in November’s UK property market update. Read on to find out more.

House Sales Fall 52% In One Month, But Prices Continue To Rise


Figures released by HMRC have shown a significant 52% drop in property transactions across the UK for October, following the end of the government’s stamp duty holiday.

There were just under 77,000 transactions completed as buyers rushed to get their purchases completed before the 30th September. This made it the slowest October since 2012 and signalled a 28% drop in transactions from the same month last year.

Despite the slowdown in sales, prices continued to rise across the UK, with Halifax reporting a 0.9% increase in average property prices, which was the fourth consecutive month they’ve risen. Their data also confirms that the average property price in the UK has crept above £270,000 for the first time, while fellow lender Nationwide also reported an increase of 0.7% on the average price.

40-Year Fixed Rate Mortgage Launched

In a very rare move, one lender has recently launched a fixed-rate mortgage for up to 40 years.

Specialist lender Kensington Mortgages has taken the highly unusual step as they seek to capitalise on growing uncertainty among buyers and homeowners who are anticipating an increase in interest rates.

Although some lenders already offer a 10-year fixed term mortgage, Kensington’s new deal will allow borrowers to sign up for anything from 11 to 40 years.

The interest rate will vary depending on the size of your deposit and the length of the mortgage term, but for those fixing between 36 and 40 years, the rate currently starts at 3.34%.

The Bank of England’s interest rate is currently at a record low of 0.1%, but an increase is expected in the coming months, which will make the prospect of a 40-year fixed term deal attractive to many homeowners.

Rent Increases Hit 13-Year High In Major Cities

Increased demand for rental properties in major cities across the UK has led to the cost of rent reaching its highest point for 13 years.

Some cities have seen demand double in their central zones, squeezing would-be renters out of town and forcing prices up.

According to leading property portal, Zoopla, average rents across the UK have risen by 6% in the past 12 months, with the South West seeing a 9% increase as demand for properties has continued to outstrip supply.

It’s a similar picture across the UK, with only London failing to see the same kind of increases, although prices have still risen 1.6% in the year to September, but they’re 5% lower than they were pre-pandemic.

Britain’s Home-Selling Hotspots Revealed


Research from leading property website Rightmove has revealed the country’s 6 top hotspots for sellers.

Grays in Essex and Mangotsfield, Bristol share the number one spot, with 84% of the homes listed for sale on the website already sold subject to contract.

Following closely behind, Eastleigh in Hampshire and Redditch in Worcestershire both have 83% of properties sold subject to contract, while Yeovil in Somerset and Hythe in Kent complete the top 6, with 82% of properties sold STC.

Perhaps rather tellingly, none of the top 6 are city-centre locations as an increase in remote working since the pandemic has led to employees having more options when it comes to where they live, and buyers are increasingly looking for more bang for their buck.

Britain’s Happiest Place To Live Revealed

Leading property portal Rightmove has released the results of their annual ‘Happy at Home Index’, which reveals that Hexham is the happiest place to live in Britain.

The market town in Northumberland scored highest overall based on factors like the friendliness of neighbours, its sense of belonging, the quality of local amenities, and the availability of open space.

It’s a return to the top spot for the North East town, which was also number 1 in 2019’s survey.

Richmond upon Thames was the happiest place to live in London for the 7th year in a row. The affluent borough in the southwest of the capital, where average house prices are just under £1.2m, came second overall in the standings.

Harrogate in Yorkshire rounded off the top 3, while 2020’s winner, St Ives in Cornwall came 8th.

Hamlet Homes Warrington are your local property experts for the Warrington area. Call us on 01925 235 338 or email manoj@hamletwarrington.co.uk to find out how we can help you buy a new home or sell your property.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.


Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE



Hamlet Homes Warrington, your local Estate Agent


Follow my Warrington Property Market Blog

Hamlet Homes Warrington LinkedIn Page

Hamlet Homes Estate Agents Warrington Facebook Page

Hamlet Homes Estate Agents Warrington Twitter Page









 

Monday, 22 November 2021

With Warrington Tenants Deposits Totalling £6,960,650, How Will ‘Lifetime Deposits’ Change the Warrington Rental Market?


The Government’s scheduled publication of their White Paper for the Renter's Reform Bill, which incorporates proposals to forbid Section 21 evictions and introduce ‘Lifetime Deposits’, has been suspended until 2022.

The additional time is required to give a chance to create a level playing field to reforms for both landlords and tenants in the private rented sector in England.

In this article, I want to look at these lifetime deposits. How could the Lifetime Deposit Scheme work, and how could they benefit both Warrington landlords and tenants?

When a tenant moves between rented homes, they need the deposit for their new home before being released from their old home.

The average deposit for a Warrington rented
home stands at £850.

This means finding that amount of money at the time of moving home can be difficult for many tenants; thus, they become stuck in their existing rental.

Therefore, Westminster wants to propose in this White Paper a new deposit choice for tenants. A deposit is transferred from the old landlord (letting agent) to the new landlord (letting agent), thus making life simpler as the tenant doesn't need to save for an additional new deposit every time they move home.

Now, of course, it's vital that any new ‘deposit scheme’ does not dissuade Warrington landlords from making valid claims for damage to properties. Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to claim it. 
 
So how would Lifetime Deposits work?

There would need to be some form of system safeguarding that the new Warrington landlord is protected by a whole deposit, even if the deposit on the old Warrington home comes into dispute.

This will be critical and central to Warrington landlords having conviction in the Lifetime Deposit Scheme. That could be something like an interest-free loan for the tenant on the crossover between the properties.

Another advantage to the scheme is that ‘lifetime deposits’ could be used for tenants to build a deposit for a house for the future.

What about the existing system of deposits?

The rules regarding the amount of deposit held by a Warrington landlord were changed a couple of years ago, where only five weeks’ worth of rent can be held as a deposit.

The deposits Warrington tenants have had to save for certainly raises the cost of renting a home.

Some say this extra burden puts another nail in the coffin of the dream of homeownership for many Warrington renters. To give you an idea of the level of deposits held for Warrington rental properties …

The total of all the tenants’
deposits in Warrington is £6,960,650.

Yet the other side of the argument contends that if the Warrington tenant misses more than one month’s worth of rent, the landlord is immediately out of pocket, even before they’ve got the costs of solicitors and any improvement works from the tenant trashing the place.

Does a deposit of just over one month provide Warrington landlords with a decent level of protection against unpaid rent or damage to the property? When you consider …

The total value of all the privately rented properties
in Warrington is £1,884,493,625.

Before I conclude my thoughts to the initial question of ‘lifetime deposits’, the need for decent landlord insurance to ensure you are adequately covered as a Warrington landlord is vital.

So, what are my thoughts on ‘Lifetime Deposits’?

It is my opinion the common need for Warrington tenants to stump up a ‘two-fold deposit’ is not helping many Warrington renters when moving home. It’s clear the standard cash down deposit is not fit for purpose for the 21st Century.

One might suggest the Government’s quest for the ‘lifetime deposit’ could open the door to other deposit alternatives that have come onto the market for tenants in the last few years.

Some landlords don’t require a deposit yet are compensated by asking the tenant to pay a higher rent to cover the risk. Also, there are companies that offer insurance backed deposits where the tenant pays one week's rent to an insurance firm, and the insurance firm pays out if a loss is incurred by the landlord.

Interestingly, other countries are already offering deposit loans and guarantee schemes. Could this be something for the British Government to contemplate?

We must wait until at least the spring of 2022 for the Renter’s Reform White Paper to be published. Then every stakeholder involved (tenants, landlords and agents, et cetera) can look at it in the cold light of day and decide how this will affect the way they view the landlord/tenant/agent relationship.

Many will say the bigger issue isn’t ‘Lifetime Deposits’ in the White Paper, but the removal of no-fault Section 21 evictions. The removal of Section 21 is something the current Government have pledged to bring in during this parliamentary cycle (i.e. before Q4 2024).

I am not concerned about removing no-fault Section 21 evictions, but what will replace it to ensure there is suitable redress for landlords if the tenant doesn't pay the rent?

Of course, a handful of Warrington landlords will decide to sell their rental portfolio because of the White Paper. The same happened in 2016 when the increase in landlord taxes were announced.

However, this will reduce the supply and availability of Warrington 
rental properties, meaning rents will rise (classic textbook supply and 
demand), thus, landlords return and yields will rise.

Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across Warrington will continue to grow in the next twenty to thirty years. The reason being we are still not building enough homes to accommodate our growing and ageing population. This means we will turn to more European ways where the norm is to rent rather than buy in their 20s and 30s.

This means new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Warrington and enjoy those higher yields and returns. Isn't it interesting that things mostly always go full circle?

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page

Friday, 19 November 2021

Renovation Ideas That Can Add Value to Your Warrington Home


It’s no secret that home renovations can give your home a boost in value. But knowing which DIY projects will reap the most benefits is a tricky one.

If you’re flipping a property or selling up in the next few years, being selective about what you renovate is always a wise choice. Some renovations are worth more in resale value than others.

If you’re looking for ideas on what renovations will add the most value to your Warrington home, here are Hamlet Homes Warrington’s top four choices based on UK demand.

1. A Conservatory


Conservatories have always been popular with UK buyers. They add more living space and can sometimes even boost the amount of natural light that spans across the downstairs of your home. By choosing to install a double-glazed or solar-controlled glass conservatory, you could easily add value to your home.

Plus, the good thing about conservatories is that they can extend the square meterage of your home, without you having to pay for a costly extension. It’s a cheaper solution that can easily pay for itself if the market is there for it.

2. A Loft Conversion With a Bedroom En-Suite


It’s no secret that the more bedrooms you have, the more value you can add to your home. If you add an extra bedroom with an en-suite bathroom to your loft, you can boost your home’s value up into the next pricing tier. Some loft conversions can even add as much as 15% to the valuation estimate!

3. A Garden Office

Since the number of people working from home is on the rise, installing a home office in your garden could be one of the best renovation ideas for your property. Summer houses that are properly installed as productive home offices can cost anywhere between £5,000 and £20,000. But the value this extra space could add to your home could be well worth the investment!

4. An Open Plan Kitchen-Living Space


Open plan kitchen and living rooms can be a simpler DIY project than it sounds. If all you need to do is knock down the wall that separates your two main spaces, you can add value to your home without needing to extend it.

Just make sure you always seek advice from a professional before taking down walls. The last thing you want to do when you’re thinking of selling is to make your house structurally unstable!

Thinking About Resale Value?


If you’re thinking about the resale potential when renovating your home, we’d love to talk to you! Hamlet Homes Warrington are your local property experts in the Warrington area and are here to help. Whether you’re selling up right now or next year, our friendly team of agents can help get your home ready for buyers in Warrington.

Give us a call today on 01925 235 338 or email us at manoj@hamletwarrington.co.uk for a chat about which renovations can add the most value in your area.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

Monday, 15 November 2021

Is the Warrington Property Market Running Out of Steam?


In recent articles on the Warrington property market, I have been talking a lot about house prices over the last 12 months and 5 years in Warrington.

When it comes to newspapers talking about the property market, the headline most people look at is what is happening to house prices.

However, as 2 in 3 (65.1%) of Warrington home sellers are also home buyers, the price is almost irrelevant. Let me explain.

If your property has gone down in value – the one you want to buy has also gone down in value – so you are no better or worse off (and if you are moving up market – which most people do when they move home – in a suppressed property market the gap between what yours is worth and what you will buy gets lower … meaning you will be better off).

Many property commentators (including myself) consider a better measure of the health of the property market is the transaction numbers (i.e. the number of people selling and buying).

Let’s take a look at the numbers for Warrington as a whole.

The average number of properties sold in Q1 (Jan/Feb/March) between 2008 and 2020 was 205 properties per month, whilst Q1 in 2021 saw 312 properties sell on average per month (boosted by the March stats where an eye watering 396 homes sold). This meant…

52.2% more houses sold in the Warrington area in Q1 2021 than the 
14-year average

The average number properties in Q2 (April/May/June) between 2008 and 2020 was 232 properties per month, whilst Q2 in 2021 saw only 200 properties sell on average per month, meaning…

13.6% less houses sold in the Warrington area in Q2 2021 than the 
14-year average

Finally, whilst the Land Registry won’t be publishing the exact stats for Q3 2021 for our local authority for a couple of months, I can make certain calculated assumptions from the national data published by HMRC. The number of property sales for our local authority area in Q3 (July/August/September) between 2008 and 2020 was on average 246 properties per month. However, using the HMRC data, I calculate there will only be 182 properties sold on average per month in Q3 2021. This means…

25.9% less houses sold in the Warrington area in Q3 2021 than the 
14-year average

One of the two main drivers of activity in the housing market in the latter half of 2020 (meaning Q1 figures were better than the long-term average) was the battle for space, with many Warrington buyers seeking larger properties to work from home. The second was the short-lived tax relief measures such as the cut to Stamp Duty meaning property prices were at an all-time high.

But what also might surprise you is the number of people buying for the first time.

1 in 4 mortgages since lockdown have been for first-time buyers 
(25.12%)

Warrington first-time buyers, buoyed by parental help with their deposits, the Government’s 5% deposit mortgage and ultra-low borrowing costs, have also helped to push house price growth since the start of 2021. In fact, if you split down house price growth between second-time (third-time, etc.,) buyers and first-time buyers, the national annual house price inflation for first-time buyers is 9.2% compared to 8.1% for the second or third buyers.

Yet, the Q2 and Q3 2021 Warrington property market was worse 
than the long-term Warrington average (in terms of property 
transactions)

The question is – should we be worried?

The UK economy continues to deliver a benevolent framework to the British housing market.

The labour market has outstripped expectations with the millions expected to join the dole queue at the end of furlough failing to materialise and with the number of job vacancies on the rise.

Of course (and I mentioned a lot in my recent posts), the Bank of England is projected to increase interest rates to dampen inflation in the coming months, with further small rises predicted over 2022, so I do expect the demand for property to cool off as mortgage borrowing costs increase.

Normally such rises in mortgage costs would mean less property would sell, yet nothing over the last couple of years has been normal.

Many Warrington property homeowners have held back putting their property on the market in the last 6 months because they were afraid they would sell their own home but not find another to buy – thus making them homeless (nothing could be further from the truth – yet that is what a lot of people incorrectly believe).

If the Warrington property market slows and interest rates rise, 
mortgage costs will still be very low by historical standards.

Also, if the obstacle of raising the 5% deposit can be overcome by first-time buyers plus a confidence that existing homeowners won’t be made homeless because of a cooling property market, many more people could be tempted to enter the property market by placing their property for sale first…

… thus, opening up the market to more buyers - which in turn will drive up transaction numbers back to their normal 14-year average. However, raising a deposit is likely to remain the primary obstacle for many.

If you are a Warrington homeowner or Warrington first-time buyer and want my thoughts on the future, then please do drop me a line.

2022 is going to be an interesting year ahead for the Warrington property market - only time will tell if this will be a brief respite or is it running out of steam?

Please tell me your thoughts on what you think will happen.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page

Friday, 12 November 2021

What Happens After Your Offer Has Been Accepted? 5 Immediate Things You Need to Do


So, you’ve found the home of your dreams and your offer has just been accepted. Congratulations! Your journey to owning your new home has officially begun.

If you’re wondering what happens next, here are five immediate things you need to do after your offer has been accepted to get things moving.

1. Provide Confirmation


Once your offer has been accepted, your estate agent will likely give you a congratulatory call. But this won’t just be a courtesy. They’ll also request confirmation of a few things so they can finalise the offer.

You’ll usually need to provide confirmation of things like:
  • You have the funds available to make the purchase
  • Your mortgage in principle
  • You have a solicitor – or you’re working to get one now
2. Remove Competition

Normally, estate agents will cancel viewings and take the property off the market as soon as your offer has been accepted. However, you’ll want to make sure this is definitely the case.

Remove the competition immediately and ask your estate agent to cancel any scheduled viewings and to take the property off the market. If the listing isn’t taken down, you could be at risk of getting outbid or even gazumped.

3. Instruct Your Solicitor

There’s no better time to get the ball rolling than after your offer has been accepted. For a quicker sale, you’ll want to instruct your solicitor as soon as possible. If you haven’t already found a solicitor, ask your estate agent for a recommendation.

At this stage, your solicitor will start completing the checks and searches on the property. Depending on the solicitor, they may also ask you to pay up-front for some of their services.

4. Complete Your Mortgage Application

Since the mortgage in principle was a principle agreement, you’ll need to complete a full application for the money now that your offer has been accepted. You’ll need to apply for the exact amount you need to borrow for the property in question.

If you have a mortgage advisor, they’ll guide you through this process and let you know what information you need to supply.

5. Arrange a Survey

While surveys aren’t compulsory when you buy a new home, they’re a good idea. During a survey, a professional surveyor will inspect the property and cast an eagle eye over the place. Surveys can help you understand any current or future issues you may have with the property.

To arrange the survey, you’ll need to speak with your estate agent about booking time with the sellers.
Still Looking For a Warrington Home?

If you’re still looking for your new home in Warrington, Hamlet Homes Warrington could have what you’re looking for! Check out our listings or let us know what type of property you’re interested in so we can help keep an eye out for you.

Give us a call today on 01925 235 338 or email us at manoj@hamletwarrington.co.uk to speak to a member of our friendly team.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

Monday, 8 November 2021

Would You Re-Mortgage Your Warrington Home to Help Your Child onto the Property Ladder?


How far would you go to help your child get on in the world?

Many Warrington parents move area to ensure their child gets into the best primary school or fund their university costs. Many of you reading this have even helped your children with the deposit for their first home from savings.

However, I have come across many Warrington people in their 50’s and 60’s, who have good jobs and incomes, yet don’t have the savings to give to their children to help them buy their first home. It doesn’t help when you consider …

The average value of a Warrington home has risen by 22.6%
in the last 5 years, from £186,473 to £228,675.

I am therefore seeing increasing numbers of parents who are willing to re-mortgage their own Warrington home or start a new mortgage (when they own their home outright) — to get their children onto the Warrington property ladder.

So, whilst the Government is trying to turn Britain’s 20 and 30 somethings from ‘Generation Rent’ into ‘Generation Buy’, the Bank of Mum and Dad are mortgaging their retirement to pay for it all. Yet it need not be cost prohibitive borrowing the deposit as you still have access to interest only mortgages.

With an interest only mortgage, your monthly mortgage payment covers only the interest on your mortgage, not any of the original capital borrowed. This means your mortgage payments will be lower than on a repayment mortgage, remembering though at the end of the term you will still owe the original amount you borrowed from the mortgage provider.

1 in 14 new mortgages are interest only and 1 in 5.5 existing 
mortgages are interest only mortgages, they are very popular.

Anyway, many Warrington homeowners might be worried about having that level of debt in their golden years. However, many plan to pay off the mortgage when they downsize as they get into their 60’s and 70’s.

I talk to many Warrington homeowners, who are asset rich but cash poor and desire to help their children onto the Warrington property ladder. Their attitude is their children will inherit their property when they pass away, so it seems practical to give them that money to work harder for them earlier in their life when they need it to buy their first home.

Can you get a mortgage, even if you are retired?

A lot is dependent upon your age and financial position. The mortgage companies will see if you have adequate funds for your retirement and emergencies plus leaving enough equity in the property to enable you to downsize in the future. Like all things, you need to take advice from a qualified mortgage arranger.

So, that then begs the question, is there enough equity in Warrington homes to borrow against?

In the late 1980s and again in the early 2000s, many Brits saw their homes as a cash machine. Numerous homeowners re-mortgaging at the end of their mortgage’s preliminary term (usually after the initial 2, 3 or 5 years), but when doing so increased their mortgage to enable them to buy a nice car or fancy holiday. Yet, by increasing the borrowing, it created negative equity in the early 1990s and stopped many homeowners moving home between 2009 and 2013 because of their lack of equity.

Therefore, I have to ask, have we borrowed too much this time round?

Looking at Warrington and the specific postcodes WA1-WA5 combined ...

In 2016, the average Warrington homeowner had a mortgage
of £82,161 and today it is £91,678, a rise of £9,517.

Looking at these numbers, one might think we are again over-extending ourselves, yet as regular readers of my blog about the Warrington property market will know – I like to drill down and look at all the figures.

Initially, I was worried about these stats, until I considered the equity Warrington people have amassed over the same 5 years.

In 2016, the average equity held in a Warrington homeowners’ 
property (whilst still having a mortgage) was £104,312, yet today 
that stands at £136,997, a rise of £32,685.

Even though mortgages have increased, Warrington homeowner’s equity has risen even more, meaning as we stand today, mortgaged and owned-outright properties, there is …

£17,459,797,100 of equity held in all Warrington homes.

Whilst the total value of mortgages has increased slightly since 2016, as a percentage, this has gone down meaning Warrington homeowners and Warrington landlords have increased their equity in the last five years.

It can quite clearly be seen that the financial insecurity sparked by the Credit Crunch crisis of 2008/9 has created a generation of Warrington homeowners and landlords who are savers and improvers rather than movers and excessive borrowers, using excess cash to invest in their property and pay down debt or to excessively borrow on their equity growth.

Only 18.88% of the total value of Warrington property
is borrowed money with a mortgage.

This is great news for every Warrington homeowner and landlord because irrespective of whether the ‘Post Lockdown Bounce’ is short or long-lived, it shows the Warrington property market is in a better state to ride out any storm that it might encounter than ever before because less people will be in negative equity or have prohibitively high mortgages.

Before I finish, I fully appreciate money and inheritance is a sensitive subject for many families.

My message to all the Warrington parents is, just because your children aren’t talking about the subject, it doesn’t mean it’s not on their mind.

The lead has to come from you, as a Warrington parent, to ensure the wealth held in your bricks and mortar can be used to your family’s advantage, when they need it most.

If you do, your children will thank you for it and they may even do exactly the same for their children, then, they will do the same for their children’s children ... creating a legacy that will go on for generations.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page

Friday, 5 November 2021

First Time Buyers: First Things To Do When Moving Into Your New Home in Warrington


Moving into your first home is one of the biggest and most exciting life events that you’ll go through, but with so much to take in it can be difficult knowing where to start.

This handy guide will take you through some of the key things you’ll need to do when you’re moving into your new home in Warrington.

Before Moving Day
  • Start Packing Early
You’ll be surprised at how quickly your moving date arrives, and you don’t want to be rushing around the night before only to find you don’t have enough boxes or bubble wrap. If you start boxing up your belongings early it will help completion day go that little bit smoother.
  • Pack a Box of Essentials
It’s unlikely you’ll be unpacking everything on the day you move in, and even if you do, you’ll find that things are buried in certain places and you won’t remember where you’ve put everything. For that reason, it’s a good idea to have a box just for the essentials you’ll need on day one, such as a kettle, tea bags and coffee, cups, a phone charger, some cleaning products, and bin bags. Having a box of essentials to hand will save you rummaging around, while everything else can wait.
  • Change Your Address and Redirect Your Post
Think of all the companies that you have regular contact with and let them know your new address in advance. Some of them aren’t particularly urgent, especially if most of your communication with them is online. However, things like your bank, mobile phone provider, and credit card companies should be top of the priority list. Make sure you get your post redirected by Royal Mail too. There are always one or two companies that slip the net so having this in place will make sure you cover all bases.
  • Take Final Meter Readings
If you’re currently renting, it’s important you let your utility providers know you’re leaving your rental property and on which day. After all, you don’t want to be paying for someone else’s electricity. Make sure to take meter readings just before you leave so you can get an accurate final bill.
  • Have Your Insurance In Place
It’s likely that you’ll already have buildings insurance in place before you move as it’s usually a condition of lenders before granting you a mortgage.

However, contents insurance isn’t usually insisted on, but it’s just as important. Many movers wait until they’ve been in their new home for a few weeks before getting it, but with all the shifting of boxes and furniture on moving day, it’s not worth taking the risk of having all your valuables uninsured.

On Moving Day
  • Locate Your Home’s Essentials
Some of the most important things you’ll need to find in your new home are the stopcock, thermostat, and gas and electricity meters. You may have a water meter too that you’ll need to locate. It’s important that you find these as soon as you can, as you’ll need to give meter readings to your utility suppliers, and you don’t want to wait until you have a leak before finding out where your stopcock is!
  • Take Meter Readings
As soon as you’ve found your meters, make sure you make a note of the readings, ideally by taking a picture on your phone as you’re less likely to lose that than a piece of paper, and it’s timestamped.

You’ll need to submit these to your new energy suppliers to ensure you’re only paying for the energy you’ve used.

The previous homeowners will have submitted their final meter readings, in which case you should have letters waiting for you from the current energy suppliers. If this isn’t the case then you’ll need to do some digging online or by phone to find out who supplies the energy to your home, but whatever you do, make sure you’ve got those meter readings as soon as you can on moving day.
  • Introduce Yourself to The Neighbours
Ok, this tip is not as vital as the others but it’s a good idea to knock next door and say hello sooner rather than later!

Meeting the neighbours will help you to settle in more quickly and it’s easier to meet them on moving day than a few weeks later when you need to collect a parcel from them.

They’ll also be able to give you some useful tips about the area, such as which restaurants, gyms or pubs to try out – and avoid – and what day the bins are collected if you don’t already know.

First time buyers in Warrington often ask the question “what should I do first when moving into my new home?” and the team at Hamlet Homes Warrington know exactly how to answer! Call us on 01925 235 338 or email manoj@hamletwarrington.co.uk to find out more.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

Monday, 1 November 2021

Warrington Homeowners to Face Post-Lockdown Mortgage Rate Rise of £541 a Year


With grocery, energy and other household prices/costs rising and hitting everyone’s back pocket, inflation (rising prices) may feel like an unimportant issue when it comes to the cost of keeping a roof over your head.

Yet nothing could be further from the truth for many Warrington homeowners and Warrington landlords.

Because inflation over the long-term is bad for the economy, the normal weapon of choice to reduce inflation is to increase interest rates. The Bank of England (BoE) is in charge of interest rates.

Should inflation continue to rise, there will come a point later in the year when the BoE will need to raise it’s Base Rate from its 300-year record low of 0.1%, and probably continue to do so with a series of further increases in 2022.

When interest rates go up, the cost of mortgages go up. When the cost of mortgages go up, that hits the affordability of what people can borrow to buy their homes (and landlords to finance their buy-to -let properties). In essence ...

could it be the end of the Warrington house price boom?

The danger of a base rate rise by the BoE on the back of a rise in inflation over the last few months has alarmed banks and building societies into increasing the mortgage rates for both home buyers and landlords.

In the last week alone, lenders have increased the rates (i.e. prices) of their mortgages, some mortgages by more than one whole percentage point. That doesn’t sound a lot, until you punch the numbers into a calculator (more of that later).

Warrington property buyers (be they landlords or homebuyers) have 
relished months of cut-price cheap mortgages rates.

Mortgage lenders have played the big game in the last 12/16 months to capture the mortgage business of 1 million+ Brits that have moved home since the end of Lockdown-1 plus the many millions of re-mortgages, with the cheapest mortgage rates falling below 1%.

Yet, the money markets have already priced into their calculations that the BoE will increase the base to 0.25% by December, up from the existing 0.1%. They also anticipate a further two quarter point (i.e. 0.25%) rise in the spring of 2022, meaning they believe the base rate will be 0.75% by the end of summer 2022.

So why is this an issue for the homeowners of Warrington? Looking at the combined totals of the WA1-WA5 postcode districts …

39,598 Warrington property owners have mortgages
totaling £3.30bn (up from £2.99bn in 2013).

Yet, 7,551 of those Warrington homeowners with mortgages are on variable rate mortgages, with their mortgage payments rising and falling based on how the BoE interest rate shifts. That will cause instant pain if mortgage providers pass on increased mortgage repayment costs. So how much will that be?

The average size of mortgage for a
Warrington homeowner is £83,251.06.

If the base rate were to rise to 0.75%, the average Warrington homeowner (with a variable rate mortgage) would be £45 per month worse off (£541 per year).

The mortgage price war the banks and building societies have been fighting recently has resulted in falls in the month-on-month average mortgage rates available to borrowers. The economy is awash with cash looking for a home (mainly down to the Government’s and BoE’s intervention to keep the UK economy going during lockdown). For those with large deposits, this has meant mortgages have been available at less than 1%.

However, with reports of a potential BoE interest rate rise happening soon, those Warrington homeowners who are on a variable rate mortgage are probably going to be the first who would feel the influence of any Base Rate increase.

If the BoE Base Rate rose to 3%, the average annual mortgage 
payment of those Warrington homeowners on variable rate 
mortgages would rise by £2,498 per year.

This could mean homeowners with variable rate mortgages would be spending half their salary on their mortgage should interest rates get up to these levels.

Now the BoE won’t increase rates by that amount over night, as that would spook the market. They will probably increase every few months by a quarter of one percent each time.

Thankfully, over the last 4 or 5 years, over 90% of new mortgages have been fixed rate, yet they are only fixed for a certain length of time. If you have less than one/two years left on your mortgage, you seriously need to take advice now from a qualified mortgage broker, as any penalty to change might now be considerably smaller compared to the mortgage rates you might be paying when your deal finishes in the next 12/24 months. Again, I am not giving you advice in this article – just making a suggestion.

A further message to the 1 in 5 (ish) of Warrington homeowners on a variable rate – please take some advice from a qualified mortgage advisor as well. Mortgage rates can’t get any lower and all the signs are showing they will be going up. The mortgage market is still extremely competitive, there is opportunity for borrowers to lock in ultra-low mortgage rates before any likely Base Rate increases filter through.

Will an interest rate hike crash the Warrington
housing market like the early 1990s?

The early 1990s saw repossessions go through the roof as homeowners defaulted on their mortgage payments because of the increased mortgage rates. Also, in the run up to the Credit Crunch in 2008, Northern Rock were lending 125% of the value of the property (we all know what happened to them!). Other banks were recklessly lending 8 or 9 times a person’s income, without the person having to prove that income. Both scenarios were significant contributory factors in the housing market crash.

Thankfully in 2014, the BoE implemented the recommendations of its own Mortgage Market Review (MMR). The MMR forced banks and building societies to stress test mortgage borrowers against potential increases of the base rate of up to 3%. Thankfully, even the most hardened monetary doom-mongers aren’t contemplating base rates of those levels (although I won’t apologise for highlighting what it could cost earlier in the article).

Fundamentally, as we go into 2022, the housing market is built on decent foundations, unlike 2007 with the poor lending practices by the lenders. Yet the increase in base rates will have another influence.

The psychological factor of a perceived increase in mortgage costs, might be enough to cool the enthusiasm and excitement of many buyers to pay top dollar for their next Warrington home, and that might not be a bad thing. If I am being frank, we could do with something that takes a bit of fizz out of the Warrington housing market.

Many Warrington homeowners have been wary of putting their house on the market because they are scared they won’t be able to find another home. A slight increase in Base Rates will take the frothiness out of the Warrington property market and return it to some form of normality. I would even go as far as to say house prices might ease back ever so slightly in the coming 12 to 18 months.

So don’t be alarmed if house prices in Warrington do drift slightly over 
the coming years like they did in the mid 1990s.

It’s just the property market settling down and coming back into some form of equilibrium, which is good for everyone.

My final thoughts ...

The mortgage lenders have already priced in the potential BoE rate rises, so even if rates do rise, let’s not panic. And even if they did rise to 3%, that would still leave them at levels that look exceedingly cheap at any other time in history. Many homeowners in their 50’s and 60’s can remember mortgage rates of 15% in 1992, so take advice from your family. (Interestingly, the 50-year BoE Base Rate average is 7.2%).

Buying your Warrington home is a long-term venture. It is a huge financial decision that can give you peace of mind and a superb place to live.

But it is not an investment. I am not saying you should avoid homeownership, however, if you are considering buying because you think you are making a clever investment choice, think again.

The idea that your Warrington family home can be an investment too comes from the fact that, historically Warrington property prices have risen. We all have stories of someone in the family, somewhere in the UK, who bought a house for £500 many years ago, for it to be worth 300%/500%/1000% more today!

If you read some of my past articles on the Warrington property market, I have proven many times over that there are much better ways to invest your money e.g. buying buy-to-let properties or stocks and shares.

But if you want to bring your family up in a home that is yours, the bottom line is this. Even if interest rates rise to 3% (if not a little more), you will still be able to get on the property ladder with a small deposit (using the Governments 5% deposit mortgages) and you will still find it’s cheaper to buy than rent.

If you would like to chat to me about anything in this article, do drop me a line. In the meantime, please do give me your thoughts on the matters raised in the article. I would love to know.

Thanks in advance.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page