Mortgages Set To Rise – Is Now The Last Chance To Lock Into Low-Cost Fixed Deals?

David Grundy, CEO of My Online Estate Agent, comments on why mortgage rates will increase regardless of an interest rate rise and how households can prepare for the hike:

“The Bank of England governor Mark Carney has been clear that record low interest rates will soon start to increase, and despite the exact timing still being unclear, lenders are already starting to axe their cheapest fixed rates in preparation for a rate rise.

 

“Barclays, Santander and Yorkshire Building Society have become the first to withdraw their cheapest deals from the market, and we can expect a domino effect to follow with many of the other best deals starting to disappear.

 

“Although much of the talk predicts interest rate rises towards the end of this year, I would be surprised to see any real movement until at least 2016. But, the fact lenders are starting to withdraw their cheapest deals now shows interest rates are not the only driving force pushing rates up. The fact is mortgages have hit rock bottom, interest rates have seen no movement in six years and there is nowhere for them to go but up.

 

“On the bright side however, there are still some amazing fixed rates on the market, such as Chelsea Building Society and Tesco Bank who are currently topping the best buys chart. If you are on a variable rate and think you would struggle to meet higher repayments now is the time to grab them before they’re gone.

 

“This is particular relevance to first-timer buyers who’ve purchased their property during the past six years and as such have never experienced a mortgage increase. First timers need to carefully calculate their repayments to make sure they can handle an interest rate hike, bearing in mind that once rates start to rise there is only one way for them to go, meaning over the longer term we can expect to see more increases. Fixing may mean slightly higher payments now, but will provide more security in the long-term.

 

“But, before you jump into the first cheap fixed-rate you find, make sure you check it’s the right deal for you. Five-year fixes are very popular, but don’t commit to this term if there is a chance you might move in two or three years, as it could potentially leave you with a hefty penalty to pay. Also, check carefully that there aren’t any hidden charges, people often focus on the headline interest rate and not the overall deal – it is critical to ensure you compare the all-in cost of mortgage deals.

 

“Mortgage rates are undoubtable on the up, so don’t just assume you’re on the best deal, now is the time to check. Some of the current standard variable rates can be expensive and with potential rate hikes on the horizon, fixed rates may work out cheaper for you in the long-term. If you’re already on a fixed rate that is coming to an end next year, talk to your current mortgage provider as they may be able to help secure you an on-going deal. Plan your finances now and you’ll be well prepared for the long-anticipated mortgage hikes which are just around the corner”

The Election Results and Property Market – comment by David Grundy

On the election outcome, CEO of My Online Estate Agent, David Grundy, said: “Since the election last week, there has been a definite surge in confidence in the air. Here at My Online Estate Agent, we have seen an influx of instructions post-election as people have been waiting to see the outcome before putting their house on the market.

“In fact the week prior to the election, our instructions were noticeably down, but in the four days since we have seen a noticeable surge, 25% up on a typical weekend period. People who were holding off to see if we would end up with a hung parliament, are now taking the plunge to put their properties on the market and for good reason.

“Any uncertainty has gone and with that has come more confidence to sell. There are lots of buyers out there and I would say if you are thinking about it, now is the time to get your property up for sale in the run up to the busy Summer period. Prices are strong, there are a lot of buyers, and there is time to generate real interest before the traditional Summer slowdown.”

Grundy believes that to see real momentum return, the new government needs to introduce tailored schemes aimed at specific groups of buyers. He said: “Trying to rely on a ‘one size fits all’ generic approach has had very little impact on the overall housing market. To achieve real results we need to start targeting the people who have the potential to really drive things forward.”

MOEA is one of the UK’s leading and most established independent, online estate agencies – offering both Sales and Lettings services to property owners and landlords across the country.

ENDS

NOTES TO EDITORS:

MOEA is one of the UK’s leading and most established independent, online estate agencies – offering both Sales and Lettings services to property owners and landlords across the country.

It offers the same services offered by a typical high street estate agent, at a fraction of the cost and without compromising on reach – MOEA properties are advertised on all the major portals such as Rightmove and Zoopla.

The significantly lower prices are deliverable as the business does not have expensive property and ancillary costs. In addition, a focus on the use of technology allows operations to be delivered in a more efficient manner. Despite operating on a national basis, a country-wide network of property assessors ensures Sales instructions receive a local service.

One In Four Brits Resent Estate Agent Fees And Plan To Move Online

Three-quarters of homeowners say they would ditch high street estate agents for cheaper online alternatives, according to a new survey.

One in four (27%) admitted their decision was driven by their resentment of being forced to pay the high commission fees associated with traditional agents, while 1 in 10 confessed they now lacked any trust in high street branches.

Online estate agents typically charge a one-off fee as little as £349 (+VAT), in comparison to the typical 1.5%+ charged by high street agents.

The national poll of 2,000 homeowners by My Online Estate Agent also found that over half of those surveyed (55%) sited saving money as the main reason for opting to go online, with one in four (27%) aware that selling online saved an average of £3,000 per home.

And it is not just the financial savings which are enticing sellers online, one in three (35%) believed their home would sell quicker using an online agent.

David Grundy, CEO of My Online Estate Agent confirmed this viewpoint:

“Online agents offer a slicker, more technology-led service, and by charging a fixed fee there is a strong commitment to providing a quick and professional service rather than waiting for a commission-led transaction.”

Nearly one in five (17%) said they plan to use online agents as they guarantee their properties will feature on both Rightmove and Zoopla. The recent launch of OnTheMarket means high street agents using the site can only advertise on one or the other, but not both.

David said: “Sellers are getting increasingly more aggravated by rising estate agents costs, which have collectively rose by more than £500m in the past two years, and so it’s no wonder they’re looking to sell online to save thousands, yet still receive a full and professional service. Using an online agent is the modern way to sell your house.

“And with OnTheMarket confusing homeowners even further about where their property will feature and what restrictions may apply, this spring seems the perfect time for the much anticipated and inevitable online estate agent boom to begin”.

To date, My Online Estate Agent has sold more than 1000 properties and has saved its customers more than £4m in total fees.

Online estate agents typically charge a one-off fee as little as £349 (+VAT). In comparison to the typical 1.5% (+VAT) charged by high street agents, the average individual seller could save approximately £2,900 by selling online. For more information visit www.myonlineestateagent.com.

Four Ways to Kick Start The Housing Market

Estate agents warn targeted approach needed to bring momentum back to housing market.

A leading online estate agent has warned that the UK housing market will remain ‘subdued’ unless the new government introduces more targeted help for homeowners and those looking to get on the property ladder.

CEO of My Online Estate Agent, David Grundy, believes programmes aimed at getting university students onto the property ladder, helping homeowners in negative equity and incentivising the bank of mum and dad are the key to breathing life back into the market. In addition, incentivising refurbishment of empty properties will also contribute to the need for more housing stock.

David Grundy said: “The housing market is nervous in the run up to the general election and the biggest fear is that May’s result will leave us with a hung parliament. This uncertainty will reduce whatever little confidence there is amongst buyers to zero and could bring the market to a complete standstill.

“Improving economic confidence is critical to building the market, and a minority government or looming second election will worry anxious buyers even further.

“Nervousness amongst sellers means instructions are already considerably down on last year, and although it’s clear the government has been trying for some time to stimulate activity with Cash for Lending schemes, it is struggling to find any real ways to inject confidence back into the market with such a generalised approach. The recent Help to Buy ISA announcement is to be encouraged, but the impact of this is years in the future – it may encourage savings, but won’t benefit the housing market until the end of the next parliament when savings have been accumulated. “

Grundy believes that to see real momentum return, any new government needs to introduce tailored schemes aimed at specific groups of buyers. He said: “Trying to rely on a ‘one size fits all’ generic approach has had very little impact on the overall housing market. To achieve real results we need to start targeting the people who have the potential to really drive things forward.”

According to Grundy, these include:

Bank of Mum and Dad

Encouraging parents to assist their children by gifting them the money needed to buy their own property will not only help their children but is also good inheritance tax planning for parents

Grundy said: “If parents genuinely have the money to offer their children, especially without having to borrow or lend any of the sum, then giving the money to children should be sensible inheritance tax planning, and would stimulate the first-time buyer market. The financial cost of a first home deposit is often an affordable sum for parents, but of great benefit to children.

“Under present rules, this gift forms part of the parent’s inheritance tax for seven years. By removing this potential tax liability the government would incentivise parents to support their children. In reality, the lost inheritance tax is a very low amount, and far outweighed by the benefits of clear and focused government encouragement.”

Empty property refurbishment

Previous governments have provided financial support to demolish and rebuild derelict properties. However, there still remain a significant number of empty properties that are suitable for refurbishment, and can be targeted for social housing and areas in need of economic regeneration.

Various incentives to registered housebuilders and renovators could include:

  • Reduced purchase prices, if under local authority ownership.
  • VAT exemption on energy efficiency. There is a 5% VAT rate applied to certain “green” products, but this needs widening significantly, to include double-glazing, external wall insulation and energy management systems.
  • Stamp duty exemption for those buying such renovated properties.
  • National Insurance exemption on recruitment of local apprentices employed on refurbishment projects.

Although there is a need for government financial support, there are wider benefits to the local economy and will also stimulate the construction industry as well as the housing market, ensuring the financial cost has multiple benefits.

Students

Incentivise university and higher education students to get their foot on the property ladder by offering a two or three year moratorium on student loans when they take out a mortgage.

Grundy said: “Students are essential contributors to the UK economy and getting them on the property market early would be a significant step in the right direction. Thousands of graduates leave university each year with substantial debts to pay off, and this impacts their ability to take out a mortgage. It is clear that the student debt regime is not working, with a significant number never completely repaying the debt, and this needs to change.

“Offering assistance to ease this burden if they buy their own property could offer them a win-win solution and provide just the push they need to buy their first home. In essence, student loan repayments would be waived during the early years of a mortgage. This is the time when graduates are building their careers and are still at relatively low earning levels. By not having to fund student debt repayments they have more potential to fund a mortgage.

”Whilst there is a direct cost to the government of this scheme, it is essentially the same as if the student debt is written off later in an individual’s working life. Given this is increasingly common, the net impact to the taxpayer is minimal.”

Homeowners in negative equity

Thousands of UK homeowners are still in negative equity and don’t have the capital to put down a deposit to move. Whilst the financial burden of the mortgage may be manageable, given low interest rates, the ability to secure a new mortgage is a different story. It is now challenging, if not impossible, for buyers to get a 95% mortgage, meaning they are stuck in their current home unless they can save substantial sums or house prices rise.

Grundy believes introducing a new scheme could help homeowners raise a recommended 25% deposit to buy a new home. 5% would be put up by the homeowner and the other 20% provided by a second loan, but secured by a government sponsored insurance policy. The insurance policy would provide protection to the loan provider, with the one-off premium added to the value of the mortgage. In this way, mortgage providers can lend with sensible security levels, and the top-up provider has security from the insurance policy; from the individuals perspective the additional cost is spread over the life of the mortgage, so much more affordable.

All of this allows lenders to lend with confidence, and allows individuals to consider moving house, at no cost to the taxpayer.

Notes to Editors

MOEA is one of the UK’s leading and most established independent, online estate agencies – offering both Sales and Lettings services to property owners and landlords across the country.

It offers the same services offered by a typical high street estate agent, at a fraction of the cost and without compromising on reach – MOEA properties are advertised on all the major portals such as Rightmove and Zoopla.
The significantly lower prices are deliverable as the business does not have expensive property and ancillary costs. In addition, a focus on the use of technology allows operations to be delivered in a more efficient manner. Despite operating on a national basis, a country-wide network of property assessors ensures Sales instructions receive a local service.

If You Come Into The House Today, You’re In For A Big Surprise

A coffin in the cupboard, live chickens in the kitchen and a blacked out bathroom were among the rare sights spotted by Brits when house hunting, a new survey reveals.

Carpeted walls, a toilet behind a glass panel and a tree growing through the living room were also discovered by the 2,000 home buyers surveyed, according to property site My Online Estate Agent.

1 in 5 people said they had seen something unusual when viewing prospective new homes, with strange collectables of dolls and teddies topping the chart (22 per cent).

Of those encountering unusual items, 11 per cent reported coming face to face with naked pictures of the property owners, while 15 per cent spotted real-life stuffed animals and 10 per cent encountering lifelike mannequins.

It wasn’t just the surprising findings which seemed to be cause for concern, 14 per cent of people surveyed said they encountered bizarre behaviour from the seller.

Messy homes were the biggest faux par committed by home owners, identified by 1 in 3 of those who encountered peculiar behaviour, confirming this was due to the owners not making any effort to tidy the property (30 per cent).

Home-owners moaning about their current relationship breakdown or divorce was also a common concern, with nearly a quarter of unusual behaviour (21 per cent) from people keen to unburden to potential buyers about their recent break-up.

Nearly 1 in 5 of those who witnessed unusual behaviour encountered owners with no inhibitions, walking around the property wearing only a towel, while 18 per cent were a little too private about the property, refusing to grant them access to certain rooms in the house.

Arguing or shouting at their partner (19 per cent), openly criticising the property (18 per cent), playing extremely loud music (15 per cent) and cooking unpleasant smelling food (13 per cent) were also seen as major turn offs for buyers who reported strange behaviour.

David Grundy, CEO of My Online Estate Agent which commissioned the study, said: “First impressions are absolutely key to securing a buyer and simple things like not tidying up or cluttered rooms can instantly turn people off.

“It’s not always the extremes, like coffins hiding in the kitchen cupboard that can lose you a buyer. Simple things like unpleasant smells, dirty dishes or making buyers feel uncomfortable can stop you from securing a sale. Prospective buyers want to see a property that they can imagine themselves living in, a blank canvas to they can make their own. When selling a property it is crucial to put your own preferences and style to one side, and let viewers see what the house can be for them, not what it is for you.

“We’re committed to helping our customers save money, sell their property quickly and for the right price. To help them do this we’ve pulled together some helpful hints and tips on the website on how to prepare their property for viewers, so there’s no excuse to suffer from some of the serious blunders exposed above”.

To date, My Online Estate Agent has sold more than 1000 properties and has saved its customers more than £4m in total fees.

Online estate agents typically charge a one-off fee as little as £349. In comparison to the typical 1.5% charged by high street agents, the average individual seller could save approximately £2,900* by selling online.

For more information on how to make your house appealing to perspective buyers visit the advice pages on www.myonlineestateagent.com.

ENDS

NOTES TO EDITORS:
MOEA is one of the UK’s leading and most established independent, online estate agencies – offering both Sales and Lettings services to property owners and landlords across the country.
It offers the same services offered by a typical high street estate agent, at a fraction of the cost and without compromising on reach – MOEA properties are advertised on all the major portals such as Rightmove and Zoopla.
The significantly lower prices are deliverable as the business does not have expensive property and ancillary costs. In addition, a focus on the use of technology allows operations to be delivered in a more efficient manner. Despite operating on a national basis, a country-wide network of property assessors ensures Sales instructions receive a local service.