Unlock the door to a home of your own with a Help to Buy ISA

The Help to Buy scheme continues to grab the headlines, with its success rate for getting first-time buyers onto the property ladder. A recent study from the Ministry of Housing, shows that almost half a million completions have taken place since 2013, with 430,000 of these completions made by the first-time buyer market.

There was a total of 494,108 completions, which have taken place using one or more of the governments Help to Buy schemes, over 93% of which took place outside of London. The average house price purchased through the schemes, was around the £200,000 mark. First-time buyers have now opened 1.4 million Help to Buy: ISAs offering government bonuses of up to £3,000 on top of their savings.

These figures highlight how invaluable the Help to Buy scheme has become, and how it will continue to support home buyers into the next decade. It has also helped prop up the new build sector and provided housebuilders with a solid target plan for the delivery of new homes. Demand will continue to grow for new build homes even though some questions arise around the price, value and borrowing requirements and affordability. Build quality and energy efficiency standards attached to new build properties continue to be a primary focus for the property developer sector. Help to Buy has certainly created a positive pathway for the growing numbers for first time buyers, housebuilders, lenders.

So how does it actually work?

Launched on April 1st, 2013 and available until 2023, help to buy is an equity loan scheme. Under the scheme, the buyer is only required to find 5% of the property value for a deposit. The government then lends you up to 20% of the value of the property in the form of an ‘equity loan’. The remaining balance can then be topped up through a mortgage. There’s no interest to pay on the equity loan for the first 5 years, after that the interest kicks in at 1.75%.

It’s open to both first-time buyers and home movers, but it is restricted to new build homes. From April 2021 onwards only first-time buyers will be able to apply. When you come to sell your home, the government will take back its 20% share. If you don’t sell, the money is due back after 25 years. The idea with the help to Buy equity loan is that, because you’re theoretically only borrowing 75% from the mortgage lender, payments will be lower than if you had used a 95% mortgage. Help to Buy is a great route to get onto the housing ladder, or to even upsize your house if you are wanting to start now. But you must be quick, as its not going to go on forever!

The Power of Prop Tech 2019: What is it and why does it matter?

Property technology will continue to transform the industry

The UK’s property industry has remained stubbornly resistant to change, even as innovation reshapes entire verticals across the wider economy. Compared with finance or retail, where e-commerce now accounts for around 20% of total UK retail sales, technology-led disruption in the property sector has been marginal. Whilst most of us bank and shop very differently today to how we did just a few a years ago, the fundamentals around buying a house, acquiring a mortgage or renting office space has remained more or less the same. But all of those things are about to change.

Technology has been continuously remapping the way we work in the industry, and we can expect to see this trend continue in 2019. Over recent weeks, we have seen the Property technology innovations make national headlines, with the worlds first AI auctioneer overseeing an online property auction using blockchain to create an electronic audit trail and google making it’s first property tech move outside of the US by investing into UK property management service AskPorter. And its not just google who think that PropTech is a good idea.

Historically the property industry has been slow to embrace technological change. However, attitudes appear to be changing now we are heading into the year of 2019. A survey carried out by Property Week underlines the steady increase in the number of businesses looking to adopt new technology, with 68% of respondents saying they reembrace tech and are ‘willing to innovate and trail new products’. With 67% of property companies saying they believe the investments they have already made in tech have given their business a USP.

Innovative property technologies in the UK Market

1. Move bubble – a collaborative site for property owners, agents and renters

The site’s aim is to champion the renter’s needs and in doing so it’s a collaborative site where owners, agents and renters can work together as individuals to streamline the rental process. There’s a huge shift going on with the younger generation coming onto the market. They’re demanding more simplistic, value adding, mobile, cloud based solutions that enable collaboration between end-users, offering far greater levels of transparency.

2. Virtual View App – the UK’s first mass-market augmented reality property platform

Founded in 2016 out of the startup accelerator Rainmaking Loft, Virtual View App combines digital and printed marketing materials to allow users to access 3D property models and floor-plans, photo galleries and videos by scanning an image. There’s the ability to look at other elements of the property process, such as unique videos to market properties or cloud services that manage rental-related documentation.

3. Splitwise – an app to make shared living simple

In the ‘hassle-free’ space, Splittable claims to “make it easy to split bills and track expenses with your housemates”. This innovative application focuses on making shared living easier by tackling the often tricky subject of bills. Claiming to stop arguments before they start, Splittable makes it simple to split bills flexibly while helping users keep track of house share expenses.

So what does the future hold for property technology?

There is a lot of excitement around property technology both locally and globally. The key for success in property technology both locally and globally. The key for success in the property industry is to continually improve visibility and transparency, and to work hard to empower investors and other stakeholders as part of the value chain. That’s why its extremely important to get comfortable with new technology to make your business flourish, times are changing, and you know what they say, “innovate or die”.

Important things to know about Help to Buy ISAs in 2019

The Help to Buy ISA was launched on the 1st December 2015 and runs until the end of November 2019, with all bonuses having to be claimed by the 1st of December 2030. With just under a year left to open and start saving, now could be a good time to consider one. They offer an alternative to taking out a loan to help fund an initial deposit for your first home along with other benefits, with the way they work and how you can take advantage of them.

How do they work?

Help to Buy ISAs work in a similar way to regular ISAs, the only difference is, the government will top up any contributions made by 25% (up to a limit of £12,000). A minimum amount of £1,6000 is required to qualify for a government bonus and you can start with a deposit of anything up to £1,000. After the initial deposit has been made you can only save up to £200 a month, so you can’t simply transfer £12,000 across, for example. Then when it comes to buying your first home with the ISA, 25% will be added to it as long as its between the minimum and maximum contributions.

Qualifying Criteria

In order to open and use a Help to Buy ISA you simply need to be a first-time buyer over the age of 16. The good news is that they are available to each first-time buyer and not each home, so if you have a partner or want to buy a property for a friend, you can combine savings and get up to £6,000 from the government towards your home. Any home worth under £250,000 (or 450,000 in London) is eligible and it can be used with any mortgage, not just a Help to Buy one.

Limitations to Help to Buy ISAs

Within all the criteria mentioned, there are a few further restrictions. Help to Buy doesn’t work if you are wanting to buy a property overseas or open more than one. Technically you can’t buy a property and rent it out with one, but if your circumstances change and you have to work away, for example, you will be able to rent it out.

Should I open one in 2019

Any first time buyers will be looking into getting a good financial position before purchasing a property by ensuring they fulfil their financial obligations. If you are considering buying a house in the years should seriously consider open one. As long as you meet the qualifying criteria and open one before the 2019 deadline then theres little reason to not open a Help to Buy ISA.

Richard Carr talks about 3 things you need to know about the UK housing market in 2018

Since the Brexit referendum has happened, the UK housing market has been experiencing some instability in certain areas. It has been facing major difficulties in the recent months in properties at the higher end of the spectrum and in certain geological areas. This, in turn, has resulted in uncertainty from buyers. Since 2016 the average price in the UK has gone up to over £220,000 per dwelling. Although this pricing has gone up between 2012 and 2017, the earnings growth hasn’t corresponded to this, making it extremely difficult for people to buy houses. Richard talks to us about 3 important aspects of the housing market that you could take advantage off.

A fixed rate mortgage might be the best option for you

• You remain stable for consecutive years.
• Can be used with buy-to-let properties too.
• More properties are being built and are expected to come to the market this year.
• First-time buyers can take advantage of schemes like Help to Buy to further augment choices.

Buy-to-let is still a viable option for investors

• Tax reforms left uncertainty for buy-to-let investors.
• Liverpool has increased in rents at 6.2% PA.
• Nottingham increased in rents at 6.2% PA.
• Cardiff increased in rents at 6% PA.
• Southampton increased in rents at 5.9% PA.
• Greater Manchester increased in rents at 5.9% PA.
• University towns remain a good place to invest in buy-to-let.

Affordable homes are available
• Local councils are working with private developers to make housing assessible for all.
• Shared ownership allows you to part-own or rent part of a home.
• Government schemes including Help to Buy.
• Areas such as the west of the UK are cheaper to live.
• Stamp duty has been abolished for first-time buyers if the property they are buying is less than £300,00.

 

 

 

Developers blamed for UK’s housing crisis

Poole-based property developer Richard Carr is annoyed and disappointed to read that developers are being blamed for the country’s housing supply crisis.

Supply

Richard Carr skyline image

Property Developers aren’t to blame for the housing crisis

Richard Carr has been in the industry for three decades and believes the problems start and end with the government and the restrictions that they place on developers, which slow down and prevent properties being built.

However, after analysing recent research independent think-tank Civitas has claimed that councils have granted enough planning consents to meet the government’s target of building one million new homes by 2020.

Civitas’ editorial director, Daniel Bentley, told planningportal.co.uk: “Local authority planning departments have been under enormous pressure in recent years and are frequently blamed by developers for holding up housebuilding.

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