Top tips for securing a mortgage

With the UK property market now entering its busiest period of the year, leading property finance specialists, we have put together some top tips for homebuyers when it comes to securing the best deal on a mortgage. While the affordability of mortgage products remains at almost record lows, there are still plenty of ways to make your mortgage even more cost-effective, although your broker might not always disclose these methods. While some tips will save you money, it really is a case of spending money to make money with some of the others. When combined they should place you in the best position when buying in the current market.

Deposit thresholds

More often than not, increasing your deposit by just a small amount can boost you into the next Loan to Value band, meaning a better rate and even potentially less onerous credit scores with lenders. Always work on 5% increments as these are where the best deals are for your price band.

Seek a no-fee mortgage broker

Pretty simple but many of us fail to do it. All brokers are paid commission on the product they sell you, but around 80% will also charge an additional fee – typically £500. May seem minute in the grand scheme of buying a house, but it all adds up.

Life cover

With the cost required to get on the ladder, many of us can be forgiven for skipping the add ons a broker may suggest. If there’s one cost you don’t want to skip on, it’s life cover. Understandably, many of us today can only get on the ladder with the help of our partners as a joint income is required. However, if the worst were to happen and illness or even death strikes, the lack of any form of protection cover can result in the whole deck of cards coming crashing down immediately. This is the last thing you need in this situation, so make sure your life cover is in place and up to date.

Don’t restrict your options

It’s common knowledge that your bank isn’t the best place to start as they only offer their rates and products. But you would be surprised as to how many brokers and advisers can only offer products from a restricted panel of lenders. As a customer, this means you are missing out on potentially the best deal for you so make sure your broker has access to the entire marketplace.

Get your personal details in order

Such a simple one, but if you’ve failed to update documents to your married name, or you aren’t registered to your current home address, the lender’s computer will literally say no as it won’t be able to find you. This is a shortcut route to having your application declined.

Electoral roll

Once your details are correctly registered, register for the electoral roll. You might not know it, but this has a huge bearing on the scoring system of lenders credit. If you aren’t registered it’s another minor little detail that can see you fall at the first hurdle of a mortgage application.

Forward your post

The £60 it costs to have your mail forwarded for a year will be the best money you’ve ever spent without even realising it. This doesn’t necessarily apply to your mortgage but it will save you money. All too often a client moves house and ended up with a default notice on their phone bill or credit card as they’ve not received the reminder and forgot to pay it.

Overpayments

Again, sounds obvious right? But many of us plod along without even considering it. If your mortgage product allows overpayments – make them! You would be surprised at how much even a small overpayment can make on a monthly basis when it comes to the total interest over the lifetime term of your mortgage.

Lock it in

We’re currently in the middle of an artificially low, interest rate cycle and mortgage product affordability is close to record lows. Great news but make sure you lock in on a fixed rate mortgage to make the best of the current climate. A longer term of a fixed five-year rate is probably the best option however a three year fixed might be a happy middle ground for many between a two and five-year product. However, be aware of any 10 year plus fixed rate products. The fee might be great but over the years we’ve seen best-laid plans fall by the wayside and clients are then hit with huge early exit fees if they need to move or pay their mortgage early.

Working overtime

Any overtime worked can be beneficial towards mortgage eligibility but try and ensure that this overtime is consistent as possible. If there are drastic swings in the hours worked, lenders will often work from the lowest figure when deciding your position in the market.

Credit score

If you’re looking to buy right now and your credit score is no good, then you’ve probably already had a few lenders say no. Your credit score is everything to a lender in this day and age and poor payment history or a low score will put you at a severe disadvantage from the offset. Do all you can to cultivate a healthy score starting now and as most lenders base their judgement on Experian, it’s worth the small investment.

Richard Carr discusses changes to National Planning Policy Framework

Last week the Prime Minister announced a major overhaul to the planning framework in the UK, in a bid to deliver the number of homes we need.

The reforms focus on maximising land use, strengthening protection for Green Belt land and putting more emphasis on turning planning permissions into actual homes. Continue reading

Is the government’s £1m new homes by 2020 target achievable?

The government pledged in the recent Housing and Planning Bill that it would build a million new homes by 2020, a target that property developer Richard Carr felt was slightly ambitious.

Achievable

Richard Carr 200,000 homes image

Is the government’s target achievable?

However, land agent Aston Mead has hit back at doubters claiming that the target is based on current figures and is a reality.

In contrast, a recent survey of owner and directors of 389 house builders across England found that a small majority (51%) thought that the target would not be met.

Current output of homes is increasing rapidly, with build rates on large sites doubling since 2010. There were more than 180,000 new homes delivered in 2014/2015, with this year’s figure expected to be higher still.

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Richard Carr supports councils’ calls for the government to provide more affordable homes

96% of local councils in the United Kingdom have claimed that their need for affordable housing is severe or moderate and have called upon the government to do more to tackle affordable housing prices, writes property developer Richard Carr.

Action

Richard Carr's affordable housing

Affordable Homes

The Association for Public Service Excellent (APSE) and the Town and Country Planning Association (TCPA) have published a report calling for urgent government action to deliver the homes needed in the UK.

The report reveals:

  • 72% of councils think the National Planning Police Framework (NPPF) hinders building of affordable housing
  • 96% of councils say that their need for affordable housing is severe or moderate
  • 7% think starter homes will help address affordable housing

“With 96% of councils describing their need for affordable homes as severe or moderate, and 89% worried that the extension of Right to Buy will lead to less affordable homes, it is clear that there is a real crisis,” Kate Henderson, chief executive of the TCPA, told propertywire.com.

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UK property market continues to heat up

Despite the EU referendum and a number of other factors, the UK’s residential property market continues to flourish and has outperformed the predictions that were set for the start of 2016, writes property developer Richard Carr.

Activity

Richard Carr image of Leeds

The UK’s residential market has started 2016 at breakneck speed

According to analysis from Connells Group, the property market in the UK started 2016 at breakneck speed with more buoyant activity than the positive sentiment experienced during the final quarter of 2015.

Low interest rates and a number of economic factors has seen the number of active buyers entering the property market reach new heights. David Livesey of Connells explained to propertywire.com that the low interest rates has encouraged those on the fence to make their first move onto the property ladder.

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Is the EU referendum already starting to affect property markets?

According to the Royal Institution of Chartered Surveyors (RICS), the forthcoming EU referendum is already affecting property markets with uncertainty creeping into decision making.

Slowdown

Richard Carr

Is Brexit good for property?

Although there has been plenty of positives coming out of the industry over the past months in relation to increase planning applications and new funds to help social housing, the country’s housing shortage remains one of its major problems.

As a result of the increasing uncertainty around the decision that will be made following the referendum, residential investment transactions in the residential sector have slowed and limited house buying transactions across the house price spectrum.

However, there’s no need to panic, yet.

“This is not unexpected as there’s usually a slowing of residential transactions before any national poll. After an election vote we typically see the residential sector recover and bounce back as stability and confidence returns,” the report says.

“Should the UK opt for a Brexit, we could assume that uncertainty could linger while the UK Government negotiates new trade deals and relationships with the EU and third countries,” it adds.

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Independent panel criticises Community Infrastructure Levy (CIL)

Property Developer Richard Carr recently spoke out in the Bournemouth Echo about the need to rethink the way that property taxes such as s106 payments and CIL are being implemented, an opinion which is now being shared by an independent panel.

Review

Richard Carr image of Liz Peace

Liz Peace

Last week the government set up an independent panel to review CIL and look at ways in which it could be improved. Former British Property Federation CEO Liz Peace chaired the panel and told a National Planning Summit that the levy “is not providing a huge amount of funding for infrastructure” and has failed to provide a “faster, simpler, more transparent system’ than section 106.

Furthermore, she said that the review team were “not convinced that CIL has met the primary purpose of when it was set up”.

“We don’t actually think it’s providing a huge amount of funding for infrastructure, and it most certainly hasn’t provided a faster, simpler, more transparent system,” Peace said.

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Green Belt development soaring

Local authorities grip on Green Belt land is getting weaker and weaker by the minute as new research suggests that the number of homes being built on Green Belt land is set to soar over the coming years, writes property consultant Richard Carr.

Pressure

Richard Carr's Green Belt image

Can anyone stop green belt development?

Green Belt development policy is slowly abating as the government responds to the growing housing crisis. An increasing number of loopholes in planning guidance are being found, whilst local councils find themselves under increasing pressure from the government to release Green Belt land for new development through an ‘exceptional circumstances’ clause.

The claims come from new research produced by the Campaign to Protect Rural England, who are concerned about the amount of development that will occur on protected land in the coming years.

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Government pulls 50% of funding for Planning Advisory Service

The Department for Communities and Local Government (DCLG) have added extra pain on the planning system by reducing its annual government grant to the Planning Advisory Service (PAS) by half, writes property developer Richard Carr.

Cuts

Richard Carr planning policy image

The PAS is set to be hit by 50% cuts

The Planning Resource revealed earlier this week that the Local Government Association, which runs PAS, received a letter from Planning Minister Brandon Lewis explaining the changes to the funding. As a result, the DCLG has reduced its funding by 50%, which means that PAS will along receive £1m in government grants.

According to Planning Resource, the reduction is a knock-on effect of the substantial reduction the DCLG’s resource budget from 2016/17 onwards.

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MPs support increase in planning fees

A poll conducted by the British Property Federation (BPF) has found that they majority of UK parliamentarians support a rise in planning fees to help under resourced local planning authorities.

Increases

Richard Carr Planning Permission

Planning fees set to rise

61% of MPs agreed that fees should increase, whilst 47% say they should increase but with stronger guarantees on planning performance. The feeling was supported by the country’s two main political parties. Labour MPs voted in favour by 65% and the Conservative’s by 61%.

In a survey conducted by the BPF and GL Hearn in 2015, 55% of local planning authorities cited under resourcing as a major challenge, whilst 65% of applicants said they would be happy to pay extra to reduced waiting times.

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