Be wary when buying a home Off-Plan

Be wary when buying a home Off-Plan

Buying a new home before a brick has even been laid is becoming increasingly popular here in the south. This is due to new development popping up in sought after location and then rise in need for housing. To many buying a new build home is very appealing but remember to be wary as you are buying a property you haven’t even seen yet.

There are many advantages to buying off-plan, you are able to choose your plot and extra options such as garages and fixtures and fittings. This rise in popularity may have come hand in hand with the first stage of the Help to Buy scheme where you are able to put down as little as a 5% deposit and obtain a 75% mortgage with the government lending the other 20%, enabling many people to get on the property ladder or move home.

Another benefit to buying off-plan is you agree a price at the start, in the current housing market with property prices increasing you may have already made thousands on your house before you even move in. There are also all the usual benefits of buying a new build home, the good economy and new systems throughout the house, no need for any work or maintenance and ready to move straight into. 

 

However it is possible it could be a very different story, for example if property prices were falling the buyer could lose out before the house is even built. This could lead to issues obtaining a mortgage or having to pay a larger sum to make up the difference as the lender will look at the current value and the developer will want the price agreed at the outset. There is also the aspect of the property not being built in time, and therefore the mortgage offer expiring and having to go through the process again.

Also the property may be different from what you imagined when looking at the initial plans. You don’t know who your neighbours will be and views and noises may not be what you expected. There is also the chance that the developer could go bust before completing the development.

Have any of you bought off-plan? What are your experiences?

 

 

Unsure whether to use Help to Buy or save for a larger deposit?

Unsure whether to use Help to Buy or save for a larger deposit?

Are you a first time buyer eager to get that first step onto the property ladder? Or even an existing homeowner needing to move to a larger home? If you are I am sure you have heard all about the Help to Buy Scheme.

There are 2 parts to the Help to Buy Scheme, the first part is available to existing homeowners and first time buyers but only applies to new build property. The buyer is required to raise a 5% deposit then government will supply up to a 20% interest free (for the first 5 years) loan enabling the buyer to obtain a 75% loan to value mortgage, which will allow them to achieve a lower interest rate and more affordable monthly mortgage payments.

The second phase of the Help to Buy scheme was launched in early October. This is available again to both first time buyers and existing homeowners but applied to both existing properties and new build properties. The buyer is required to raise a 5% deposit and then obtain a 95% mortgage but the government will guarantee up to 20% of the mortgage. This means that should the buyer become bankrupt or the house is repossessed the government would cover 20% of the mortgage. This was aimed to make 95% loan to value mortgages more available and lenders more willing to offer them.

 

The Help to Buy scheme is a great idea and opportunity for those who are unable to save large sums of money for a big deposit. However sometimes it can be a risk putting down such a small deposit because should the property drop in value then the buyer would be in negative equity. If you are able to save even a 10% deposit the window opens for better interest rates and you are putting more equity into your home which gives you more security.

Property prices have been rising and should you wait to save for a larger deposit there is a risk that prices may increase even more. It is also difficult to predict what will happen regarding interest rates because they are currently the lowest they have been. For example if you aim to save for a 10% deposit for another year, interest rates and property prices may rise. So Help to Buy with a 5% deposit may be perfect for you now.

Since the scheme has been launched we have provided conveyancing services for many Help to Buy transactions and are familiar with the process. Don’t hesitate to get in touch for more information or a quote regarding Help to Buy conveyancing or visit our dedicate website.  Help To Buy

Increase in First Time Buyers Stepping onto the Property Ladder.

Increase in First Time Buyers Stepping onto the Property Ladder.

Conditions are carrying on improving with regards to the property market. This has seen an increase in first time buyers due to more available mortgages and government property schemes such as Help to Buy.

Saving for a substantial deposit still remains a hurdle to getting on the property ladder and with house prices continuing to rise it is becoming even more of a challenge for the majority of buyers.

 

Higher loan to value mortgages are increasing also so there are plenty of options for buyers with smaller deposits. Some of the present 90% loan to value mortgages are very competitive with interest rates as low as 3.54% (Chelsea building society). Currently the two-year fixed rate is a popular choice with many borrowers thinking they will be able to remortgage onto another fixed deal at the end before interest rates rise.  Howeverthis can be a gamble as no one can predict when rates will rise. Although there are currently some other good five-year fixed rates available for example Nottingham building society offers a five-year fixed rate at 4.39% for 90% LTV with a £299 fee.

Mortgages with a 95% Loan to value still remain minimal and rates on these can be a lot higher than mortgage with a lower LTV. Although this may not be a bad thing as borrowing a high LTV when interest rates are so low may not be a wise idea.

Lack of housing still remains an issue and there is a shortage of new homes being built in contrast with our ever expanding population.

 

The Second Part of the Help to Buy Scheme… The Mortgage Guarantee.

The Second Part of the Help to Buy Scheme… The Mortgage Guarantee.

The terms of the second part of the Help to Buy Scheme have been reviled at the end of July. George Osborne launched the second part of the scheme in a meeting with lenders and house builders. The scheme will guarantee a percentage of the mortgage on a property new or existing up to the value of £600,000. There have been warnings that it may push up house prices and encourage buyers to take out larger mortgages than they would usually afford.

George Osborne has responded to these negativities saying that there will be strict checks required to qualify for the scheme. Buyers will not be allowed to purchase property as a second home on the scheme and will be required to sign a declaration to agree to this, strict income checks will also be applicable to ensure the buyer can afford the mortgage. Individuals who have any issues on their credit records will not qualify.

The aim of the scheme is to help people buy a property with a much smaller deposit. The government scheme will offer to guarantee a percentage of the mortgage with the lender which will add security and cover a portion of costs if the buyer became bankrupt or the home was repossessed.

The first part of the Help to Buy Scheme has already proved to be a hit with buyers. It allows buyers to purchase a new build property with an equity loan of up to 25% regarding they have at least a 5% deposit, permitting the buyer to secure a lower mortgage with a lower Loan to Value and therefore in most cases a lower interest rate.

In comparison the mortgage guarantee part of the scheme will provide a guarantee to the lender on a portion of the mortgage meaning if the property was repossessed the government would cover a portion of the lenders losses.  The scheme will run for 3 years and lenders will be required to pay a fee for the guarantee scheme, the amount is yet to be revealed but it has been stated that it will depending on the loan to value. The aim is to encourage as many lenders as possible to use the scheme.  

Planning Appeals... What are they?

Planning appeals are generally submitted by people who do not agree with a decision made by the Local Authority. This is most often when a local council planning application has been submitted and has then been refused, an example would be if a house holder applies to build an extension to their house and the local council planning authority turns their application down.

Planning appeals can also be submitted when an Enforcement Notice has been served. An example could be if a property has been extended without planning consent and the local council planning authorities have ordered that the extension be demolished or its appearance changed.

Planning appeals can also be made against a local council planning authority’s failure to make a decision about a planning application within a given time.

Planning appeals are dealt with by the Planning Inspectorate which is a Government Agency.  Appointed by the Secretary of State – the Planning Inspectorate considers planning appeals against the decisions of local council planning authorities all over the Country – usually against their refusal to grant planning consent.

Planning appeals can take the form of a written submission where the planning appeal is dealt with in writing only – these are usually for small appeals and where there are very few points in dispute. For larger more complex issues a Formal Hearing may be required with the Planning Inspector acting as a judge. Finally, for the most serious matters, the planning appeal may take the form of a Public Enquiry.

Uncertanties about the Help to Buy Scheme

An end is put to uncertainties about the Help to Buy scheme fuelling second homes and foreign buyers

David Cameron has spoken up to clarify that the Help to Buy scheme is not available to people wanting to purchase a second home or to foreign buyers. He stated the Help to Buy Scheme is aimed at helping people onto the property ladder. The scheme is only to be used for people who are purchasing their own home to live in.

According to Cameron there will be a mechanism in place to ensure that foreign buyers and second home owners do not qualify for the scheme. Another point he made was that to qualify for the scheme you have to have a credit record in this country.

There are to be clear rules published relating to the scheme. It has been criticised that the scheme is artificially inflating house prices into a housing bubble. But time will tell…

What’s your opinion on the scheme?

We have a dedicated Help to Buy website for more information…

 

Click here to visit our dedicated Help to Buy website

Mortgage Strategy Awards 2013

Mortgage Strategy Awards 2013

Best Conveyancing Service – 3^rd Place

Bpl is proud to announce that we have been awarded 3^rd place at this year’s prestigious Mortgage Strategy Awards. We are very grateful to all the broker, estate agents and financial advisors who nominated us for the award. The awards are judged by a panel of top industry professionals.

In a continuing competitive industry we are very pleased to be recognised for our high level of conveyancing service to our customers and other industry personnel. Here at bpl we have a very hardworking team and are happy to say that all our effort it acknowledged.

Our Head of Business Development, Clive Dickman said “Winning the award is the culmination of a lot of hard work by all our staff and is the result of us continuing to strive to always improve our conveyancing standards.”

This award reflects our passion and dedication as a company to our clients. It wouldn’t have been possible without the assistance of our fellow industry professionals to achieve the best possible outcome. We are very pleased to be recognised as a market leader for proving a high level of efficient and reliable conveyancing both locally and nationally.  

Visit our website for more details

Stamp Duty preventing people from moving up the property ladder!

Stamp Duty preventing people from moving up the property ladder!

Since the mid 1990’s stamp duty has risen more than 7 times the rate of inflation. From an average of £532 to £5957 according to a report carried out by the Homeowners Alliance. Previously first time buyers have been exempt from stamp duty, but this is now not the case, preventing even more people from moving onto the property ladder.

On average when purchasing a new home the buyer pays 3.7% of the property price. In London when property prices have continued to rise the average stamp duty paid is £17,529. According to the report in 1995-1996 the average stamp duty bill was equivalent to eight days’ worth of earnings compared with 2001-2012 where it is worth 11 weeks wages.

 

Is Stamp Duty putting people off moving home?

Stamp Duty has now become a deterrent to people needing to move up the property ladder; instead families look for alternatives such as extensions, loft conversions and basement conversions to create extra space.

The Homeowners Alliance wants to see thresholds increase in line with house prices. And that buy-to-let investors and second home buyers should pay more than people who are buying a home to live in. They also suggest that the first threshold should be above the average house price and that first time buyers should be exempt.

Stamp Duty Thresholds

Currently 1% Stamp Duty tax is payable on homes over £125,000 then the next threshold is £250,000 - £500,000 at 3%. This means for example a house is bought for £240,000 and £2400 stamp duty is payable it then sells later for £270,000, the stamp duty has incurred an increase of 238% to £8,100.

What are your thoughts and opinions? Has Stamp Duty put you of moving?

 

bpl solicitors ltd - conveyancing services

UK housing market finally on the up!

UK housing market finally on the up!

Rate them or slate them, the new government schemes aimed at getting the property market moving again are proving to be working. The demand for housing is the highest since 2009, and the new government Help to Buy scheme is proving to be one of the reasons for this. After the Stamp Duty Holiday there was a lull in the property market for first time buyers, however now that mortgages with a higher loan to value and new government initiatives are more readily available the number of first time buyers is increasing.

Help to Buy Scheme

It is encouraging to see government schemes are having a positive effect on the property market. Help to Buy is aimed to enable people to purchase property with a small deposit (5%) and the government lending the further deposit (20%)  interest free for the first 5 years enabling the buyer to get a lower LTV mortgage (75%) with a lower interest rate and smaller monthly payments compared to if they took out a 95% LTV mortgage. Help to Buy is open to everyone, not just first time buyers; this may be why it is a factor in the rise of property demand. However developers need to be true to their word in delivering more housing so that house prices do not rise too drastically. According to a monthly report carried out by the RICS (Royal Institution of Charter Surveyors) property prices are starting to rise and inquiries from new buyers were at their highest since November 2009.

Funding for Lending Scheme

Another factor which may be responsible for the increase in the housing market is the Funding for Lending Scheme, introduced last August. It was aimed at making borrowing easier for prospective buyers, with mortgage lenders loosening strict mortgage requirements this has helped to reduce mortgage rates. The Funding for Lending scheme was designed to enable was designed to enable greater availability of funds to lenders at a lower cost and proves to be paying off. With lenders more confident in their credit supplies they are more openly providing borrowers with mortgages and supporting first time buyers. In conjunction with each other these schemes have had a positive effect on housing market activity and it is showing signs of further growth.

The Concerns

All this being said there are also some issues which may arise. House prices are gradually being pushed up, however this makes property which has been unaffordable even more unaffordable to buyers. Within our economy earnings are still showing very low signs of growth. With a demand for property and developers under pressure to deliver it is inevitable that property prices will rise.

The property market is still a favourable place to those looking to buy their first home. According to the Council for Mortgage Lenders more borrowers are taking out higher loan-to-value mortgages than any other time over the last four years. At first people were dubious about the success of these government schemes but from all the evidence they are only proving to be of help.

 

BPL Solicitors awarded Conveyancing Quality Scheme accreditation

All of us at bpl solicitors limited are very pleased and  proud of our recent accreditation under the prestigious Law Society’s Conveyancing Quality Scheme.

David Bridge, Managing Director at bpl commented:

“As a specialist firm of Property Solicitors, we are at the forefront of conveyancing in England and Wales. This accreditation reflects the hard work of all our staff and their commitment to providing an excellent service for all our clients. By achieving this accreditation, all our clients can rest assured that we will do our best to provide the service that they expect and the reassurance of knowing that we have been independently assessed and approved by the Law Society.”

We are one of the top conveyancing firms in the country and consistently in the top twenty firms by volume according to the land registry statistics.

By gaining the CQS accreditation, we can also ensure that we are qualified and trusted to act for the increasing number of lenders that require this accreditation before they are prepared to entrust the mortgage work to a conveyancing firm.

We underwent rigorous assessment by the Law Society in order to secure CQS status, which marks our firm out as meeting the highest standards in the residential conveyancing process.

More information about our conveyancing services can be found on our website at www.bplaw.co.uk

Great news from surveyors - UK housing demand now highest since late 2009

Demand for housing across Britain in April has risen to it's highest level for more than 3 years, helped by the recently launched government Help To Buy scheme, the Royal Institution for Chartered Surveyors (RICS) announced in a recent survey.

Alongside this, RICS's seasonally adjusted house price balance notched its first gain since mid-2010, their monthly survey showed last week.

This is really good news for us all and Peter Bolton King, RICS global residential director, is encouraged by these figures and expects sales to pick up over the coming months.

Help to Buy Scheme

The government backed Help to Buy Scheme was launched in April 2013 and is aimed at getting people moving on the property ladder.

To help you understand this fully and see if this could help you, BPL Solicitors have launched a dedicated website at www.helptobuy.me

The Help to Buy Scheme comes in 2 parts. 

20% deposit towards a new-build property
The first part, launched last month, is aimed at anyone who wishes to buy a New Build Property.  If you have a 5% deposit, then you will be able to get a further 20% as a Government loan.  This loan is interest free for the first 5 years!

Unlike similar schemes in the past, this one is open to anyone buying a new house that is valued up to £600,000, whether you are an existing homeowner or a first time buyer, and also with no limits imposed upon your household income.

Guarantees for small deposit mortgages
The second part will be launched in January 2014 and is the Mortgage Guarantee part of the scheme.  This will apply to all properties, not just new build homes, with, again, a property value limit of £600,000. 

If you only have a small deposit and are having difficulties due to a high loan to value ration, then the Government will give a guarantee to the mortgage lenders for a percentage of the loan.  You would still be required to get the full mortgage amount from the mortgage lender, but they would have the security of knowing that at least part of the mortgage was guaranteed by the Government.

Hi, and a very big welcome to our brand new blog.  Here is where you will find the latest & greatest news on everything about conveyancing, everything from the latest industry news, what's happening in the housing market, fantastic conveyancing offers & promotions to interviews with conveyancing professionals, yes, there really are interesting people in the world of conveyancing, starting with me of course :)

BPL Solicitors is a dedicated conveyancing solicitors firm, focussed solely on all aspects of property law, including residential sale and purchase conveyancing, remortgages, commercial property and equity release.

Myself and my colleague, (Jenna Massey), will be writing a selection of, (hopefully), useful and informative blogs to help keep you up-to-date with what is happening in the world of conveyancing.

So, please bookmark this blog, email to a friend/colleague or add our RSS feed, and let's get moving on conveyancing.  And of course, we'd love getting your feedback on conveyancing and this blog - and what you would like to see discussed (and showcased) in the future.

Until next time friends....