Insider tips from builders
We hear so much about building projects from the homeowner’s perspective, so wouldn’t it be interesting to get the builder’s viewpoint for a change? They're not always an easy bunch to pin down, but fortunately for us, Direct Line Insurance has recently carried out a survey in the area.
According to the 100 builders they quizzed, it's home extensions that are the most popular trend in home improvements, with the average one costing around £35,000. Given that the difference between the average two and three bed properties in London is around £160,000, it’s not much of a surprise. What was more of a surprise was that the builders claim that over 70% of projects are completed within the agreed timeframe and budget, although they did admit that 26% of projects ended up being more expensive than the original quote and 35% ran over time. Maybe I've been watching too many episodes of Grand Designs, but every project Kevin McCloud comes across seems to run hugely over budget and are never even vaguely close to completing on time.
One thing we all agree on is that what homeowners want most is extra space and light. So, on top of all those new extensions, our builder friends are also busy removing walls and adding sliding glass doors and skylights.
Now for the bad bits. If you are thinking about doing a loft conversion – beware! Despite being one of the cheaper types of extensions, 36% of the builders claim they are the most likely home improvement to go wrong. Bathrooms (26%) and kitchens (19%) are next in line. Being on the upper floors and with all that water, bathrooms are not where you want any problems, but before you panic, it doesn’t necessarily mean they leak.
Probably the most useful feedback from the survey is the builders’ top tips on how to get the best out of them, which include:
- Agree a quote beforehand - set aside a strict budget, but don’t forget to allow a contingency in case of any overspend
- Agree on a realistic time frame upfront, but bear in mind that it may be affected by external factors, such as the weather
- Make sure you understand exactly what is involved in the project and be completely honest about any previous work that’s been done in the past that may affect the current job.
- Maintain regular contact with the builders throughout the project period
- Make sure you have a contract in place that covers the responsibilities for all parties and never hand over payments upfront
- Always use the same workforce from start to finish to ensure consistency
- Ensure the builders are working exclusively on your project and that they commit to working on it every day and don’t just turn up when it suits them
- Check your builder has the right insurance in place before any work begins
Most of all, they recommend you plan everything in as much detail as possible and you must get three competitive quotes.
How have house prices in Notting Hill, London performed over the decades?
At Homesite, we know that people often buy investment properties with an eye on long-term gains rather than just a quick profit. We thought therefore, we’d take a look at how the housing market performs over decades rather than years, and the results make for some very interesting reading.
According to a report from Nationwide, the last full decade (2010s), was a fairly mixed period. At 33%, they had the weakest growth since the 90s (21%), yet it was also a period of low inflation and interest rates. In contrast, average prices rose by an eye watering 180% in the 80s. However, inflation was far higher - interest rates hovered between 10%-15%, then peaked at 18.63% before the market eventually crashed spectacularly in 1989.
Despite tailing off over the last couple of years, London was the top performing region in the 2010s, with house prices rising at twice the UK average (+66%). London’s immediate surroundings, Slough, Guildford, Crawley, Chelmsford etc, were the next best performers – rising by 54%. On the whole, the further north you went, the worse the performance. Scotland’s house prices rose by just 8%, the North by 11%. Yorkshire, the Northwest, and Wales came next at 17%, although Northern Ireland did the worst at 2%.
Affordability is key to a fully functioning housing market and there was a very mixed picture during the 2010s. Although prices were up 33%, wages rose by just 20% during the same period. Some of this was offset by historically low interest rates (and mortgages).
Even so, the effect rising prices are having on first-time buyers (FTBs) has been well documented, especially when it comes to deposits. Nationwide’s chart shows the typical time it would take an FTB to raise a deposit if they set aside 15% of an average area income.
London, unsurprisingly, represents the biggest challenge - at the end of the last decade, it would have taken just over 10 years to save a 20% deposit. Now it takes 15 years. In the North, the time taken has actually come down, slightly, from 5.5 years to a smidgen over 5 years. The West Midlands is, appropriately, somewhere in the middle at just under 8 years, up from just under 7. It should be noted that most people now buy with their partners, resulting in a higher combined income and far shorter savings periods.
In contrast, mortgage affordability has improved, with mortgage payments representing a lower percentage of FTBs’ take-home pay, with average mortgage interest rates around 2.4% during the 2010s compared to 5% in the previous decade. Only in London and the Outer Metropolitan areas have mortgage payments grown as a percentage of income.
One thing is very clear - over the last four decades, despite plenty of bumps in the road, including some quite serious ones, prices have always risen, making houses an exceptional investment over the longer term. Affordability, though, can bounce between negative and positive territory and, moving forwards any significant rise in the base rate could impact on affordability and have a knock-on effect on house prices.
If you’re looking for an investment opportunity, please do register with our team
What are the implications of the base rate rise?
With inflationary pressure continuing to build, the Bank of England (B of E) raised the base rate yet again this month by 0.25% to 0.5%. Unused to rises, especially back-to-back ones, it may come as a shock to many borrowers but what effect will it have on the housing market?
Firstly, it should be remembered that the rises have come during a period of historic lows. The base rate has only now risen to the same level it was at when the B of E slashed it to 0.5% in response to the 2008 financial crash. Nor will it affect the majority of borrowers, at least in the short term – roughly a third of homeowners don’t have a mortgage, a third are on fixed rates and only the remaining third are on lenders’ variable rates. And, for those on variable rates, the difference in the average mortgage payment will be just £300/year or £25/month, which is not a significant amount of money.
Secondly, mortgage rates tend to follow swap rates (the rates at which banks borrow money) rather than the base rate. They are also affected by varying levels of competition within the different lending sectors. So, although most lenders have added the rise to their variable rates, they have not yet added the full 0.25% to the cost of their fixed rate products. Rates had already been creeping up since October last year, but only very slightly and there are still plenty of mortgages available sub 1.5% for those who have a decent deposit.
Moving forwards, the base rate is likely to rise several more times during the course of 2022, reaching between 1.25% and 1.5%. It means the average mortgage rate is therefore expected to go up from its low point of 1.5% in November 2021 to 2% by December 2022. To put that into some sort of historical perspective, the average 5-year fixed rate mortgage was as high as 6.19% before the 2008 crash and only dipped below 2.5% towards the end of 2016, after which it hovered around 2% until the start of 2021. Within that context, 2% is therefore still an exceptionally low rate. And, for anyone coming off a 5-year deal, a 2% mortgage would represent a reduction rather than an increase, as the average rate five years ago was 2.34%. For those on a 3-year deal, there will be a rise, but only a very modest one, with the average rate around 1.81% when they fixed theirs.
If you want to see how the housing market has reacted, you only need to look at how house prices are continuing to rise, up 0.8% last month and by 11.2% annually (source: Nationwide), to see our confidence remains as high as ever.
Below is a selection of this month’s best buys from Moneyfacts.co.uk, which will give you an idea of the kinds of mortgage rates currently on offer:
HOME PURCHASE
Two-year fixed rates: 1.39% from First Direct. Product fee £490. 60% LTV.
1.40% from Barclays. Product fee £995. 60% LTV.
Three-year fixed rates: 1.45% from Barclays. Product fee £999. 60% LTV.
1.54% from Barclays. Product fee £999. 75% LTV.
Five-year fixed rates: 1.54% from first direct. Product fee £490. 60% LTV.
1.61% from HSBC. Product fee £1,499. 60% LTV.
Discounted variable: 0.89% For 2 years. From Progressive BS. Product fee £0. 60% LTV.
1.00% For 2 years. From Stafford Railway BS. Product fee £1,000. 75% LTV.
BUY-TO-LET (BTL)
Best two-year fixed rate: 0.99% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV.
Five-year fixed rate: 1.49% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV
Best Discounted variable: 1.34% for 2 years. from Accord Mortgages. Completion £995. 60% LTV.
Your guide to design trends in 2022
At Homesite, we like to keep you up to date with all the latest trends. This year, many of the key ones have been influenced by the amount of time we have been spending in our homes. It seems we now want a little luxury in our lives, especially in our bathrooms. We are also aspiring to more mindful spaces, filled with plants, natural materials, and restful colours.
Colours
This year, colours are a bit of a mixed bag. Neutrals and bright colours are both going to be popular. Pantone’s colour for 2022 is 17-3938 – Very Peri – a kind of violet-purple that Pantone claims is both spritely and joyous. Dulux’s colour of the year is Bright Skies – a more subtle, pale summer blue. And, according to Houzz magazine, other in-demand colours will include sage green, duck-egg blue, mustard yellow and any shade of green. Colour drenching is another key colour trend – painting the ceiling the same colour as the walls, which produces far more impact than the usual white.
Sustainability
There has been a growing emphasis on environmental issues and that extends to our homes’ interiors. We are taking an ever-closer look at the type of materials being used and where they come from. As a result, natural materials, such as rattan, cane and raffia are likely to be much sought after in 2022. House plants have been popular for some time, but have now reached a new level. In a movement known as biophilia, some people are designing their entire homes around them.
Themes
These days, there’s no overriding design style, there’s a multitude of different ones. This year, though, there are a couple of hot, yet contrasting style trends.
CottageCore: our flight to the country has shone a spotlight on a less urban way of living and CottageCore is all about materials and finishes that are homely and imperfect. Think distressed finishes and gracefully ageing furniture.
Japandi: Although Scandinavian design remains popular, it has been around for a very long time. To freshen it up, many are now mixing it up with Japanese elements, such as darker woods, bamboo, and slatted wood.
One trend that is likely to be on the wane is mid-century design.
Rooms
Bathrooms: If you are looking for clues for this years’ bathroom trends, you only need to take a look at Houzz magazine’s latest search data. According to them, during lockdown, we have been developing a taste for hotel-level bathrooms. Searches for them have increased by 435%. Searches for saunas have gone up by 1065% and freestanding baths by over 150%.
Bedrooms: Bedrooms are another area where we are looking for a little luxury. Colours will be more neutral than they are for other rooms, and fabrics natural – cotton and linen, in particular. Hotel-style panelling will also be in in 2022, as well as textured wall coverings. As always, clever storage will be a top priority.
Kitchens: Top of the kitchen list for 2022 is a statement worktop. Houzz reports searches for ‘chunky quartz’ were up by 417%. Islands with wrap-over worktops are another hot item and curves and copper will be everywhere.
Living rooms: Things will get more colourful here than in the rest of the house. Green velvet is going to be one of the bigger trends - on furniture, fabrics, and curtains. Statement lighting is also likely to be highly popular. The natural world is coming to your living rooms, too, in the form of plants and animal prints. With home offices springing up all over the place, zoning will be key. This can be done with a rug, freestanding screens or even with colour or texture changes.
Gardens
The lines between inside and outside living are likely to blur even further during 2022, with kitchens, dining tables and rugs all moving outside.
Hopefully, this year will also see the end of the worst of the pandemic. As a result, we are likely to be spending far less time in our homes and it will be interesting to see how that affects the design trends next year.
If you are looking for a stylish new home in any of the areas listed below – all you need to do is give us a call at Homesite.
#NottingHill
#Bayswater
#Hollandpark
#Kensington
Selling in Winter?
Selling in Winter?
Although the first few months of the year are not always considered to be the best time to put your property on the market in Notting Hill, there are a number of advantages to selling in winter, especially this year.
Whatever the season, people still need to move, as the many drivers of change don’t suddenly come to a halt just because of a change of season - there are still divorces, marriages and deaths. Babies keep on being born, children grow and some of us still have to move for a new job. There are, though, some specific advantages to selling in winter. Unlike spring, there is far less competition from other sellers at this time of year and buyers tend to be more serious. And, with the supply of new housing stock coming to the market already tight in many areas, there is even less competition between sellers than normal. So, for example, if yours is the only two-bedroom flat for sale in the area, buyers will not be able to make endless comparisons before choosing a near-identical one next door just because it has a slightly newer bathroom.
In addition, mortgage rates are incredibly low at the moment but are likely to rise during the course of this year, so buyers will want to lock in those low rates while they can. And when those rate rises happen, the market may go soft for a month or two as we adjust to the new reality, so you are better off selling beforehand.
There are, however, some things you need to do to prepare your house for sale in winter. At this time of year, exteriors can look tired and grubby, gardens tend to be covered in dead leaves and plant matter and the inclement weather will have given paintwork and windows a hard time.
The old mantra that first impressions count was never truer, so the first thing you need to do is to sweep up those leaves, cut back any dead plants and give your windows and paintwork a really good wash with soap and warm water. You should mow the lawn, too. As long as you set the mower a little higher than normal (grass should be about 2 inches long), it won’t do any harm whatsoever and it’s amazing what a difference it makes.
With less natural light available, pay careful attention to your lighting. And that starts on the outside - a warm and welcoming porch light will set the right tone, right from the start. You want all the lights on inside, as well. Although, be careful, a single source of light can make a room look like a prison cell and will do more harm than good. If you want to mimic natural daylight, which should be your aim, you need multiple, low-level light sources. If necessary, go and buy some extra free-standing or table lights.
The house’s temperature is another important consideration - it should be warm and snug, but not hot. The recommended temperature is between 19-21 degrees, so make sure it stays around those levels whenever there are viewings and that you allow plenty of time beforehand for it to warm up. If you’ve got a gas fire, it is well worth lighting it, as it will help create the right kind of ambience. Lighting a real fire, on the other hand, is not recommended, as it can be dangerous if left unattended.
Some other useful tips include - providing somewhere for coats to be hung (so people relax and don't overheat), making sure there is somewhere for visitors to wipe their shoes before coming in, that you have some pictures of the garden available of what it looks like in summer. And don’t put away all your garden furniture just yet because, otherwise, the garden would look empty, but do give it a good clean. Lastly, place some fresh flowers around the house, as it will really cheer the place up.
If you’ve got a property in Notting Hill and are considering selling (or renting it out), your first step is to give us a call at Homesite, and we can set you on the right path.
New EPC rules coming
At Homesite, we like to keep our customers up to date with all the latest legislation and there are some changes coming to EPC regulations (Energy Performance Certificates) that we think you should be aware of.
EPCs were first introduced back in 2007 and, at the time, were the subject of much derision. Our ever-increasing focus on the environment means their importance has been steadily growing and they will soon be hitting centre stage. That’s because, there is currently legislation passing through Parliament, the Minimum Energy Performance of Buildings Bill, which will make it compulsory for all newly rented tenancies to achieve an EPC rating of at least ‘C’ from 2025. From 2028 it will be extended to all tenancies, new and existing, and from 2035 it will apply to all homes for sale.
There is likely to be a transition period but, afterwards, to ensure maximum compliance, there will be a maximum fine of £30,000 for any breaches of the rules. At the same time, the government is pushing lenders to increase the borrowing costs for the most energy inefficient properties.
As the bill has yet to be passed, it is still subject to amendments. However, with our homes responsible for nearly 20% of the UK’s CO2 emissions and the government attempting to burnish its green credentials, there are unlikely to be any significant changes. Most of us would applaud its intentions, but it involves some serious issues (and costs) for the property market. The fear is many older and period properties will be either very expensive or impossible to bring up to a ‘C’ rating.
An EPC measures the energy performance of a property and has 7 bands – ‘A’ to ‘G’– with ‘A’ the most energy efficient. The assessment is carried out by a qualified domestic energy assessor who will look at everything from how well insulated the property is to the heating system it uses and the type of windows it has. The property is then issued with a grading and a number of suggestions as to how to improve its performance.
Only 2% of homes currently achieve an ‘A’ or ‘B’ rating, 85% are ‘C’ or ‘D’ and 13% are between ‘E’ and ‘G’ (source: English Housing Survey). The older the property, the more likely it is to have a poor rating. 47% of Victorian buildings (pre-1900), for example, have an EPC rating of ‘E’ or worse. Rental properties also tend to perform poorly, with around 67% of them below the required 'C' rating. And, according to Rightmove, there are as many as 1.7 million homes in England and Wales that may never be able to achieve a ‘C’ rating.
Before you panic, there are lots of ways you can improve a poor EPC rating, some quick and cheap but others can be expensive. Below is a list of the points required for each grading and the number of points you can add by making changes. Clearly, the more inefficient the original items, the bigger the points boost you’ll get for replacing/improving them:
EPC Ratings
A - 92 points
B - 81-91 points
C - 69-80 points
D - 55-68 points
E - 39-54 points
F - 21-38 points
G - 1-20 points
A rough guide to points boosters
Loft insulation 270mm + 10-15 points
Cavity wall + 5-10 points
New boiler + 5-20 points
Insulate water cylinder + 2 points
Seal chimney + 1-2 points
Solid wall insulation + 10-20 points
Renewables (ground source heat pump, etc.) + 10 points
Single to double glazing + 5 points
LED lights and draught-proofing + 1 point
If your property is a typical ‘D’ rated one, you will probably only need around 10 extra points to boost your rating up to a ‘C’. The problems come if yours is an older property with a lower rating and you need to start insulating non-cavity walls and floors, replacing all your windows and installing some kind of renewable heat system. Solid wall insulation will cost around £7,000 for a terraced house and £20,000 for a larger detached one. This can sometimes then cause damp problems for period homes, as they are designed to breathe. A ground source heat pump will cost £20,000 + to install and double-glazing costs about £600/window. It is estimated that the average spend will be approximately £10,000, but a late Victorian house could cost as much as £20,000 to get it up to standard.
There are some suggestions that the legislation might include a price cap for alterations (£20,000) and that listed buildings may get some exemptions. Currently, with the scrapping of the Green Homes Grant, the only government help available is a £5,000 contribution towards replacing your heating system with a greener alternative. They are expected to introduce more grants, but the details have yet to be announced.
The good news is that improving your property’s energy efficiency should increase its value. Nationwide have found there is a 1.7% premium to be paid for a ‘C’, ‘B’ or ‘A’ rated home when compared to a ‘D’ rated one and that premium jumps to 3.5% for ‘E’, ‘F’ and ‘G’ rated homes. The bad news is that the government does not appear to have thought through all the consequences of the legislation. Landlords could easily decide the costs of upgrading their properties are too much and sell up. The supply shortfall would make rents spiral upwards and, at the same time, the oversupply to the sales market could substantially depress house prices. Hopefully, the government will find a way to mitigate these issues before the new rules start kicking in in 2025.
Putting the style into Christmas
The main problem with Christmas decorations is that they are a collection of - whatever didn’t break last year, a couple of new bits you picked up whilst out shopping and an old box full of random, unrelated, brightly-coloured objects and a spot of tinsel. The result looks like the aftermath of a catastrophic explosion in a Christmas gifts shop. That is why there is one rule and one rule only - decide on a theme and stick to it. And it should then be applied to absolutely everything - ideally, including wrapping paper. And remember, however tempting it may be, never sneak the odd bauble into a display just because you can’t think of anything else to do with it.
Themes
You can choose any theme you like, but here are some themes you could follow:
Choose one or two colours only, such as white and silver, but use a variety of textures. Mix shiny with matt, as well as plain and heavily patterned decorations. White and silver is a classic, but subtle Christmas combination that has the advantage of a wide selection of decorations to choose from.
If you want something a little bit different, why not go for the tartan look. Get a large piece of tartan cloth and cut off long strips of different to make into generous bows and attach them to the Christmas trees and wreaths. You can also wrap them around white linen napkins for the Christmas dinner table.
Decoration tips
Now you have decided on your theme, here are a few tips on how to make the most of your decorations:
- Use brown paper and string with white labels, to wrap presents and tie the smallest ones to the tree.
- Bring in ivy from the garden as a garland for the stairs.
- Group a selection of old silver or glass vases, candle holders together on the table, rather than dotting around the home- this makes the setting look generous.
- If you have a balcony or garden view, use old candles or night lights in glass holders outside. Place in groups to liven up the dark afternoons.
- You can put candles in the middle of a wide vase if you pour uncooked rice or sand in first, so the candle can stand on its own.
A selection of designer Christmas products.
Finding designer Christmas decorations is surprisingly difficult, but there are some out there. They don't have to be all plastic and shiny. Below are some links to some of the more unusual and elegant products currently available on the market. There are the beautiful wreaths from The Real Flower Company, some gorgeous table decorations from The White Company, luxury crackers from Selfridges and a paper tree from Conran Shop. And, if you need some inspiration for wrapping up all those pressies that sit under the tree, just take a look at Jane Mean's fantastic gift-wrapping sets. Lastly, if you want something a little more bespoke, there’s always Not On the High Street’s personalised Christmas decorations.
- Selfridges luxury Christmas crackers
- Whitestuff’s gorgeous table settings
- Conran shop paper Christmas trees
- Real Flowers stunning wreaths
- Jane Means designer gift wrapping
- Not On the High Street’s personalised Christmas decorations
Hopefully, that should get you sufficiently inspired to create your own designer Christmas.
Here’s to a wonderfully stylish Christmas and New Year
From all at Homesite.
Housing and the Autumn Budget
We thought, at Homesite, it might be useful to give you a rundown of the latest budget and how it affects the housing industry, in both the areas we cover (Notting Hill, Bayswater, Kensington & Holland Park) and the wider market.
For once, it was a relatively low-key affair for housing. Too often, in recent years, the chancellor has used the opportunity to announce one tax rise after another for the sector. No doubt, to the relief of all our landlords and second-home owners, there were few mentions of stamp duty and capital gains tax. There were, though, some important issues hidden within the detail of Rishi Sunak’s speech. Here’s a summary of the key points:
New homes
The centrepiece of Sunak’s housing budget was a promise to invest nearly £24bn to help stimulate the building of new homes. Sunak claimed it was the “largest cash investment in a decade” into housebuilding which will “turn Generation Rent into Generation Buy”. The money will be divided up into a number of different initiatives, including:
1) £1.8bn to be spent on the development of 1,500 hectares of brownfield land - part of the government’s £10bn commitment to help facilitate the building of more than a million new homes.
2) A £11.5bn investment in the Affordable Homes Programme. This is a fund from which housing associations, developers and local authorities can borrow to build affordable homes. Unlike social housing, these can then be rented or sold but only at affordable prices. The fund is expected to deliver 180,000 new homes, two thirds of which will be outside London.
Cladding
The chancellor announced a £5bn fund for removing dangerous cladding from high rise blocks. The figure includes contributions from a new Property Developers’ Tax - a 4% tax which will be levied on developers’ profits over £25m. The fund is considered woefully insufficient by many experts and, controversially, is only available for buildings of over 18 metres. Those between 11m and 18m have, instead, been offered loans to pay for the work. Since the budget, new House Secretary Michael Gove has waded into the argument, putting on hold any plans to make leaseholders pay for making cladding safe and questioning why they should pay "at all".
Help to Buy coming to an end
It has not been a good budget for developers. On top of the new Property Developers’ Tax, Rishi Sunak also confirmed the Help to Buy scheme would come to an end in 18 months’ time. It is a significant blow to developers - in 2020-21 alone, 55,600 people used the scheme to get them onto the property ladder. In response, Bellway, one of the UK’s largest housebuilders, has said it will be scaling back some of their activity.
Green funding
With Cop26 in Glasgow, many were expecting some big announcements for green housing. In addition, many landlords were hoping for some financial help to get their properties up to an EPC ‘C’ rating, which will be a legal requirement in 2025. Rishi, sadly, disappointed them all, announcing a £3.9 billion fund for de-carbonising homes - an almost insignificant figure compared to the estimated £500bn it will cost to do so to the UK’s ageing housing stock.
Stamp Duty
There was some considerable pressure from within the housing sector to continue the stamp duty holiday, but with the government’s coffers emptied by the pandemic, the chancellor showed no signs of doing so, nor of reducing it in any way.
CGT
There were fears Rishi might increase Capital Gains Tax for second and BTL homes. Instead, he extended the grace period for paying any CGT on property sales from 30 to 60 days after the completion date.
Rates
In good news for our local high streets, shops will be given a 50% discount on their rates for 2022-23.
Council tax
The government claims council tax will need to rise by 3% to fund their pledges. Many independent commentators believe the figure will be closer to 6%.
What’s going to happen to interest rates?
In recent months, there has been a lot of talk in the press about interest rates. Prices and wages have been rising rapidly since the end of lockdown, which has been driving up inflation. It was initially thought to be only a temporary spike but has proved stubbornly persistent. As a result, most commentators were expecting the Bank of England to raise the base rate by 0.15% to 0.25% in November. To everyone’s surprise, it didn’t happen. It is only likely to be a temporary reprieve, a month or two at most, and it is then forecast to continue rising to around 1% to 1.25% by the end of 2022.
Swap rates, the rate at which the banks themselves borrow money, have already gone up. At the start of this summer (May), the swap rate on a 2-year fixed-rate loan was 0.31% and 0.71% for a 5-year loan. Now they are 1.24% and 1.26% respectively. Lenders such as TSB, Barclays, Halifax, Nationwide and Santander have responded by raising the rates on many of their cheapest mortgage deals. Some are predicting that the best rates could double to around 2% over the next 12 months.
Coming from historical lows for both mortgages and the base rate, there is plenty of room for manoeuvre, especially since most borrowers have already been stress-tested by lenders for far larger increases in their monthly payments. Nor will the base rate rise affect everyone immediately - 74% of mortgage holders are currently on fixed-rate deals. And, for anyone coming off a 5-year deal, 2% may represent a reduction rather than an increase, as the average rate five years ago was 2.34%. For those on a 3-year deal, there will be a rise, but only a very modest one, with the average deal in 2018 around 1.81%.
Although rising costs will have an effect on the wider housing market. Because we are not used to rising rates, in the short-term, it may dampen demand, but only very slightly as borrowers adjust to the new reality. Things should then pick again, shortly afterwards, peaking in the spring. It is also possible that inflationary pressure will reduce rather than rise during the course of 2022, as global demand returns to more normal levels. The economy has proved very difficult to predict during the pandemic and things can change very quickly. Last month’s inflation forecasts, for example, are already being revised.
If you want to get an idea of where mortgage rates currently are, below is a selection of this month’s best buys from Moneyfacts.co.uk:
Two-year fixed rates: 1.14% from HSBC. Product fee £995. 60% LTV.
1.24% from HSBC. Product fee £999. 75% LTV.
Three-year fixed rates: 1.44% from HSBC. Product fee £999. 60% LTV.
1.49% from HSBC. Product fee £999. 70% LTV.
Five-year fixed rates: 1.46% from HSBC. Product fee £1,499. 60% LTV.
1.50% from NatWest. Product fee £995. 60% LTV.
Discounted variable: 0.51% For 2 years. From Progressive BS. Product fee £0. 60% LTV.
0.79% For 2 years. From Progressive BS. Product fee £0. 75% LTV.
BUY-TO-LET (BTL)
Best two-year fixed rate: 0.99% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV.
Five-year fixed rate: 1.49% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV
Best Discounted variable: 1.19% for 2 years. from Accord Mortgages. Completion £995. 60% LTV.
Please note, the information we provide is our personal opinion and should not be relied upon for financial advice. Should you need financial advice or guidance please contact an appropriate professional.
First impressions count
When you are doing viewings and you step through the front door of a home for the first time, you are filled with anticipation about what lies beyond. Will you be impressed, or will you be disappointed?
People don't often spend much time in their hallways - even though it gets a hard life, it’s always the last room to be decorated and is often little more than a dumping ground for coats, bags and bikes. But, remember, first impressions count, and that’s especially true when you are buying or selling a property. Buying decisions are often made within seconds of entering your home, so get the hall right and the battle is already half won. Here are some top tips for making the most of it:
Space:
To make your hall feel as spacious as possible, the most important advice of all is to keep it clean and simple. A cramped and cluttered hallway is an instant turn-off. Try not to use more than a single item of furniture. Narrower pieces work best, such as console tables. Mirrors, on the other hand, should be encouraged. If it’s well-placed, it will not only give the illusion of space, it can also help brighten a typically dingy hall. Keep coats, shoes and bags locked away in cupboards, but where that’s not possible, some stylish shelves and hooks can work – the trick is to make it look ordered in some way. Be sure to hide away all those voluminous puffa jackets and muddy trainers. And, if you normally keep prams or bikes in the hall, give them a temporary home somewhere else, such as in a shed or in the back garden (if you have one).
Light:
If your hallway feels like you are walking into a cave, and many do, do something about it. This may be as simple as cleaning windows and replacing heavy curtains. If it's not blessed with any natural light, your light fittings become even more important. So, for example, replace that old light fitting you inherited from the previous owners with a striking feature light, such as a chandelier. Or, if that's not possible you could introduce some extra light by placing a lamp on the hall table. A more radical option would be to replace a solid wall with a glazed one, allowing you to “borrow” light from a neighbouring room.
Colour and finishes:
Don’t be afraid of using bold colours, as they can add some unexpected glamour to a dingy entrance. Even those forgotten pieces of furniture can be reinvigorated with the application of a striking colour or pattern. A well thought out colour scheme will smarten things up considerably and ensure people are eager to see the rest of the house. Stay away, though, from colour or pattern clashes, as they will shrink the space.
The floor:
When meeting a person for the first time, it's often said that the first thing you notice about them is their shoes. In a home, you notice the flooring first and, like scuffed unpolished leather, threadbare carpets don't impress. A hard-wearing surface is your best option, whether it's tiles, stone or timber, although some carpet is often the quickest and cheapest solution. Remember, though, if your hall is dark, lighter flooring is best but light carpet stains easily, whereas light wood or tiles tend to wear far better.