Remortgaging soars as homeowners cash in on competition among lenders
The number of people remortgaging has soared to a two-year high as homeowners take advantage of lenders’ end-of-year price war to lock into a good deal.
A total of 37,769 mortgages were approved for people switching to a new deal in October, 12.7% more than in the same month of last year, according to industry body UK Finance.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As we head towards the end of the year, and lenders jostle for what business there is out there, there are some incredible deals on the market to attract borrowers.”
There was also an increase in the number of mortgages approved for house purchase, with these rising 3% year-on-year to 46,631, despite the uncertainty caused by the General Election.
Why is this happening?
The final quarter is traditionally a busy time for remortgaging as banks and building societies try to entice homeowners with competitive deals in a bid to meet their annual lending targets by the end of the year.
This situation not only encourages people who are sitting on their lenders’ standard variable rate to remortgage, but it also means a higher volume of mortgages tend to expire during this period, due to people previously taking out fixed term deals in the run up to the end of the year.
The surge in remortgaging typically helps to offset a more subdued market for lending to people buying a new home, with house-hunters typically putting moving plans on hold until after Christmas
Who does it affect?
End of year competition among lenders is great news for anyone looking to remortgage.
Halifax is currently offering a two-year fixed rate mortgage of 1.08% for people with a 40% deposit, while NatWest is offering a two-year deal of 1.25% for those with a 25% deposit.
Rates ate only slightly higher for homeowners who want to fix for five years, with Virgin Money offering a deal of 1.46% for people borrowing 65% of their home’s value.
Nationwide, Halifax, NatWest and Royal Bank of Scotland all have five-year fixed rate loans with rates below 1.6%.
What’s the background?
The housing market has shown signs of enjoying a slight autumn bounce, although the lift has been more muted than in previous years.
Subdued transaction levels are partly due to the current uncertainty caused by both Brexit and the General Election.
But high house prices and stretched affordability in many areas are also acting as a drag on the market, particularly in southern regions.
Even once Brexit is finalised, activity levels are not expected to pick up significantly, with house price growth also expected to remain low.
Top 3 takeaways
-
The number of people remortgaging has soared to a two-year high as homeowners take advantage of lenders’ end of year price war
-
A total of 37,769 mortgages were approved for people switching to a new deal in October, 12.7% more than in the same month of last year
-
There was also an increase in the number of mortgages approved for house purchase, with these rising 3% year-on-year to 46,631
Gardens and kitchens on a par for home-hunters
Half of Britons think a well-designed garden is as – or more – important than a designer kitchen or bathroom when it comes to their quest for a perfect home.
House-hunters are prepared to pay a premium of nearly £15,000 for a garden when purchasing a property, and put the importance of outside space up there with a top-end kitchen or bathroom.
A further 40% would consider hiring a professional garden designer in order to transform their outside space, according to research by Zoopla and the Society of Garden Designers.
Gardens are considered to be so important that 74% of homeowners have either already spent money on their outside space or would consider doing so in a bid to increase the value of their property.
At the same time, house-hunters are prepared to pay a premium of £14,448 to purchase a home with a garden.
Sarah Morgan, chair of the Society of Garden Designers, said: “We know from our members that having a garden designed by a professional designer can add significant value to a property. But, quite apart from the overall ‘wow’ factor, a good garden design can also add something really special to a home.”
Why is this happening?
Both buyers and renters put a high emphasis on having outdoor space, with 86% of both groups saying having a garden was very or extremely important.
People are also prepared to spend significant sums to create their dream garden, with homeowners willing to splash out an average of £7,339.
But the outlay does not end there, with the typical person spending £678 a year maintaining their garden.
Which regions value a garden most?
People living in the south east are prepared to pay the biggest premium for a property with a garden at an average of £21,925, followed by house-hunters in the north west at £18,425.
Those in the south east are also most likely to rate having a garden as being important at 91%.
At the other end of the scale, buyers in Yorkshire and Humber will pay the smallest premium for outside space at an average of £9,068, despite 84% of people rating having a garden as being important.
Homeowners in the East of England are prepared to spend the most in order to transform their outdoor space into their dream garden at £10,882, nearly double the amount people in Wales are prepared to spend at £5,832.
Regional breakdown of garden spending
| Region |
Average premium willing to pay for a garden |
Average current spend per year |
Average spend transforming current garden |
|
South East |
£21,925 |
£812 |
£7,822 |
|
North West |
£18,425 |
£518 |
£5,860 |
|
East of England |
£13,974 |
£753 |
£10,822 |
|
London |
£13,388 |
£554 |
£7,434 |
|
East Midlands |
£12,803 |
£734 |
£8,440 |
|
South West |
£11,935 |
£674 |
£6,899 |
|
Wales |
£11,268 |
£733 |
£5,832 |
|
North East |
£10,569 |
£732 |
£7,257 |
|
West Midlands |
£10,552 |
£731 |
£7,812 |
|
Scotland |
£10,207 |
£700 |
£6,646 |
|
Yorkshire and Humber |
£9,068 |
£619 |
£6,435 |
|
Britain |
£14,448 |
£678 |
£7,339 |
What’s the background?
When it comes to creating a dream garden, having somewhere to sit and relax was ranked as the most important feature, cited by 36% of people.
It was followed by having south-facing outdoor space or a design that allowed the maximum amount of sunlight throughout the day, which was key for 15% of people.
Both of these features were considered to be more important than having somewhere for children to play or space for pets, cited by 12% and 7% respectively.
Around 8% of people wanted flowers or shrubs to be part of the design, while 6% wanted somewhere to entertain and 4% of people wanted to be able to grow their own fruit and vegetables.
But water features appear to have fallen out of fashion, with only 0.4% of people considering this an important feature of a garden design.
The 9 most important design features of a garden according to Brits:
- Somewhere to sit and relax (36%)
- Maximum sunlight throughout the day / south facing (15%)
- Somewhere for the children to play (12%)
- Flowers / shrubs (8%)
- A space for pets (7%)
- Somewhere to entertain (6%)
- Growing my own fruit/vegetables (4%)
- Extra storage space/shed (2%)
- A water feature (0.4%)
Top 3 takeaways
- Half of Britons think a well-designed garden is as important or more important than a designer kitchen or bathroom
- A further 40% would consider hiring a professional garden designer in order to transform their outside space
- House-hunters are prepared to pay a premium of £14,448 to purchase a home with a garden
15 Best Day Trips From London When You Need A Break From The City
The best day trips from London
Looking to get out of the city for a few hours? Here’s the definitive list of best day trips from London, featuring spa cities, seaside towns and adventures in the great British countryside
Sometimes the best way to truly appreciate a place is to leave it for a short while. We suspect that's the case with London – much as we adore life in the Big Smoke, we also relish the occasional change of scene.
Helpfully, England is really quite small, which means getting from the city to the coast is a doddle – grab a coffee, hop on the train and you'll be breathing in fresh, salty sea air before you know it.
Whether you're in the mood for pony-filled forests, picture-postcard towns or pebble beaches, here are fifteen sweet spots, complete with cute pubs and ace restaurants – and all close enough to the capital to get there and back in a day.
1. Whitstable
It’s hard to think of a lovelier seaside spot than Whitstable. Kick off a day there at Blueprint Coffee and Books with a pot of something strong and ethically sourced (and maybe a mini orange-and-rosemary bundt cake). Next, rent a bike from Whitstable Cycle Hire and pedal your way along the five-mile seafront Oyster Bay Trail. And for lunch? Oysters, natch – watch them being shucked in front of you at The Forge. Stay on the beach for a drink as the sun sets: Whitstable is one of the few in the UK with a pub, the Old Neptune, right on the shingle.
How far? 61 miles
Get there one hour 20 minutes by train from London Victoria or one hour 10 minutes from St Pancras International to Whitstable; around one hour 40 minutes by car.
2. Deal
It doesn’t get as much attention as Margate and Whitstable, but with its tidy rows of Georgian townhouses, quirky independents and thriving Saturday market, Deal ticks all the day-trip boxes. Start at Deal Castle (built by Henry VIII as part of an ambitious chain of coastal forts), then treat yourself to lunch at 81 Beach Street or Victuals & Co. Parisian-style bottle shop Le Pinardier is great for stocking up on gluggable goodies, and make sure you stop by gallery-cum-homewares boutique Taylor-Jones and Son, where Delilah the sheepdog will welcome you with open paws.
How far? Just over 80 miles
Get there one hour 20 minutes by train from London St Pancras International; around two hours by car.
3. Margate
The Turner Contemporary opening in 2011 was the long-neglected Margate’s invitation to the ball. Today, the Kent coast’s most famous Cinderella story is awash with cold-brew coffee and craft beer, with just enough salty charm to still give it an edge. Start at the Turner, then mosey over to retro theme park and roller-disco Dreamland. Once the effects of the Waltzer have worn off, head to Hantverk & Found for a lunch of the freshest seafood and natural wines. Spend the rest of the afternoon shopping: browse immaculate vintage piece in Breuer & Dawson, and stock up on seaweed-based skincare at Haeckels.
How far? 76 miles
Get there one hour 25 minutes by train from London St Pancras International; around two hours by car.
4. Bath
Water wonderful day awaits you here! Start as you mean to go on with a tour of the baths the Romans built (no paddling allowed), before making a splash in the Thermae Bath Spa – the rooftop pool has stunning views of the city. Once you’ve dried off, make like Jane Austen and stroll along the Royal Crescent, then try on some reproduction Georgian garms at the Fashion Museum. Peckish? Sally Lunn’s teahouse is home to the Sally Lunn Bun, a kind of sweet brioche bap – for a Bath take on the cream tea, order one toasted and spread with strawberry jam and clotted cream.
How far? 115 miles
Get there one hour 30 minutes by train from London Paddington; two hours 30 minutes by car.
5. Box Hill
Biking to green and pleasant Surrey is a wheely nice way to spend a Sunday (sorry) – plus, Box Hill was part of the 2012 Olympic road-cycling route. Start in Richmond Park and pedal down past Hampton Court – it should take you about two hours. After a 1.6 mile climb and some hairpin bends (easier than it sounds!), you’ll be rewarded with stunning views of the North Downs from the top of Box Hill itself. Grab a slice of cake from the National Trust café, but save space for lunch at The Tree, which serves homemade pies and crumbles. Your last stop is Box Hill and Westhumble station, where you can load your bikes on to a train back to Waterloo. Whewf!
How far? 30 miles
Get there by bike (obviously). Plan the route carefully before you set out, and take a map and a puncture repair kit, plus water and snacks.
05. The New Forest
A trip to the New Forest is about as close as you can get to going on safari without buying a plane ticket. As you make your way down dappled lanes and across the heather-covered heath you’ll be watched the famous ponies, which have grazed there for thousands of years, plus free-ranging Highland cattle and pigs hoovering up fallen acorns. Don’t fancy being stuck in the car all day? Hire a two-seater electric Twizzy buggy to explore in, or book a beginners’ hack at one of the stables. Don’t forget to make time for a proper ploughman’s lunch at the Royal Oak in Fritham.
How far? 90 miles
Get there one hour 30 minutes by train from London Waterloo to Brockenhurst; around two hours by car. Just remember that animals, not drivers, have right of way.
08. Brighton
If Brighton were a stick of rock, it would have GOOD TIMES! running right the way through it. With its perfect pebble beach, wall-to-wall live music venues and buzzing LGBT+ scene, there’s nowhere like it for topping up your Vitamin Sea levels. Start by dodging seagulls on the Palace Pier, then shop up a storm in the Laines, which are packed with independent boutiques, record stores and vegan eateries. Sit down to a zero-waste late lunch at Silo, and finish up with a couple of pints in the Brighton Beer Dispensary, which champions small Sussex breweries like the Hand Brew Co.
How far? A little over 50 miles
Get there one hour by train from London Victoria, Blackfriars or London Bridge; around two hours by car.
09. Canterbury
In Chaucer’s day this was where people came for a big old knees-up. Today its default is a little more sedate, but a large student population means there’s still a pleasingly rowdy edge. Kick things off with a leisurely stroll down the King’s Mile, home to boutiques a-plenty. Lunch-wise you’re spoilt for choice, from gourmet Scotch eggs with slaw and fries at Pork & Co, bento boxes at Tamago or pizza straight from the oven at indoor farmers’ market The Goods Shed. Round off your very own Canterbury tale with a visit to the Beaney House of Art and Knowledge, which features one of the world’s most important collections of cow paintings and an Egyptian mummified cat.
How far? 61 miles
Get there one hour by train from London St Pancras International; around one hour 30 minutes by car.
10. Guildford
Heads up, horror fans: Guildford’s cathedral starred in cult bone-chiller ‘The Omen’. That being said, everything else about Surrey’s county town is bucolic in the extreme: if it’s sunny you can lounge by the water at pretty Dapdune Wharf, or actually get in it at the Guildford Lido. Lunch on locally-sourced nacho boxes at Burrito Loco, before checking out the 400-year-old Star Inn. Still thirsty? Hop on a train to tour the nearby Hogs Back Brewery.
How far? 31 miles
Get there 30 minutes by train from London Waterloo; around one hour by car.
11. Rye
With its antique shops and higgledy-piggledy cobbled lanes, Rye feels like a little piece of the Cotswolds on the coast. After a browse in The Tiny Book Store (does what it says on the tin), treat yourself to a seafood lunch surrounded by lobster pots at Globe Inn Marsh, followed by Sussex real ale or a glass of local wine at The George Tap – the Chapel Down vineyard is just up the road and well worth a visit. Ten minutes away are the pillowy dunes of Camber Sands: roll your trousers up and splash through the shallows, take a kite for a spin or just park your towel and stretch out.
How far? 79 miles Get there by car.
Get there one hour 10 minutes by train from London St Pancras International, with a change at Ashford; around two hours by car.
11. Dungeness
Dungeness’s shingly, shipwreck-dotted beach is so spookily empty that it’s often described as Britain’s only desert (though the Met Office refuses to recognise it as such, the party-poopers). But look a little closer and there’s plenty going on. It’s a nature reserve, for one thing – follow the two-mile trail around RSPB Dungeness for the chance to glimpse glossy ibises and marsh harriers. Come lunchtime, queue up at the famous Dungeness Snack Shack: they’ll serve you their catch of the day in a warm bun, lobster and crab rolls or smoked cod chowder. Finally, go in search of the huge concrete ‘sound ears’, which date from the First World War and were designed to listen out for planes.
How far? 86 miles
Get there one hour by train from London St Pancras International to Folkstone, with a one hour 30 minute bus ride to Dungeness; around two hours by car.
12. Cambridge
Smaller, quieter and (whisper it) prettier than Oxford, Cambridge has its own language: bumps, backs, quads. Start your day with a visit to the Fitzwilliam Museum, then refuel at Fitzbillies and buy a box of the sticky Chelsea buns to take home. Spend a couple of hours wandering around the colleges and King’s Chapel before taking to the river for a spot of punting: behatted guides will do the hard work, or you can hire a boat of your own (beware: it’s trickier than it looks). Come tea time, head for Grantchester and feast on scones in The Orchard Tea Gardens, just like poet Rupert Brooke.
How far? 64 miles
Get there 45 minutes by train from London King’s Cross, or one hour 10 minutes from London Liverpool Street; around two hours by car.
13. Mersea Island
Attached to the mainland by a causeway that floods (and pub quizzers, take note: this is the UK’s most easterly inhabited island), Mersea feels properly, peacefully remote at high tide. The big draw is The Company Shed, which serves seafood platters that pull in crowds from all over the country every weekend. It’s BYOB – bring your own bread – and they don’t take bookings, so get there before noon to make sure you can feast on prawns, smoked fish, oysters and dressed crab. Speaking of which, catch-and-release crabbing is encouraged – there are specially marked areas near the water, and shops selling the kit. Or you can book a boat trip around the bay.
How far? 69 miles
Get there one hour by train from London Liverpool Street to Colchester, then a 45 minute bus to Mersea Island; around two hours by car. Don’t forget to check the tide timetable before you set off...
14. Chichester
Dinky, pastel-coloured Chichester looks like it’s been built of macarons – but it’s more than just a pretty face. Start at the Norman-meets-Gothic cathedral before moving onto the Pallant House Gallery, home to brilliantly curated exhibitions, a first-class bookshop and a courtyard cafe that gives Rochelle Canteen a run for its money. Some of the best bits of Sussex are an easy drive (or, if you’re feeling full of beans, a slightly less easy bike ride) away, from the Goodwood Estate to West Dean Gardens and the gorgeous sandy beach at West Wittering.
How far? 80 miles
Get there one hour 30 minutes from London Vicotoria; around two hours by car. Car is best, so you can really explore.
15. Stratford-upon-Avon
The Bard, of course, is the big draw here, and Shakespeare’s house, his wife Anne Hathaway’s cottage and the RSC’s home theatre are all must-sees. But Stratford’s more than just a Tudor Disneyland, you know. Take a boat tour of the canal basin to find out more about the West Midlands’ waterways, refresh yourselves in the Grade II-listed Old Thatch Tavern, stop for a scoop of Eton Mess ice cream at Hooray’s British Gelato Kitchen and pick up some local Berkswell to take home from posh cheesemonger Paxton & Whitfield (sorry, fellow travellers).
How far? 104 miles
Get there two hours 15 minutes by train from London Marylebone; around two hours by car.
Plan your August Bank holiday
Top ten things to do this August bank holiday
Staying at home is just not an option this August bank holiday weekend…
Make the most out of the last – and longest – weekend in August (Saturday August 24 – Monday August 26 2019). Yes, you can always jump in a London lido or snooze in a big old London park, but this August bank holiday is positively packed with things to do. You’ve gained a day off work, so make it count.
Check out top ten ways to let loose from Friday to Monday and before Tuesday kicks in again.
Notting Hill Carnival
Notting Hill Carnival 2019 is a vivid spectacle representing London’s multicultural past and present. This August bank holiday, which includes invaluable Notting Hill Carnival information, route details and tips on having fun and staying safe. Feel the energy of the mas bands, watch the Notting Hill Carnival Children’s Day parade and don’t be afraid to get a little lost in the streets of the Grove.
Time to let a home falls to record low of 20 days
Growing demand for rented property, combined with a falling supply has meant tenants must move quicker than ever to seal the deal.
The average time it takes to let a home dropped to a record low of 20 days during the first seven months of the year.
A combination of increased demand from tenants and falling supply as landlords exit the sector led to rental properties being snapped up quickly, according to Hamptons International.
While one-bedroom properties took the least time to let between 2014 and 2018, three-bedroom homes were moving quickest during the seven months to the end of July, suggesting a shift in tenant mix.
Unsurprisingly, the mismatch between supply and demand is pushing rents higher, with the cost of being a tenant rising by 1.9% in the year to July to average £982.
Why is this happening?
The rental market is currently experiencing strong demand as stretched affordability prices many people out of buying a home, while uncertainty over Brexit is causing others to put moving plans on hold.
Hamptons said it had seen a 5.6% increase in applications from potential tenants during the seven months to July.
At the same time, a combination of tax and regulatory changes have caused landlords to exit the sector and sell their properties, with Hamptons seeing a 5% fall in stock levels so far this year.
The fact that more tenants are chasing fewer properties has led to homes being let quicker.
Who does it affect?
The amount of time taken to find a tenant fell in every region of Great Britain during the first seven months of the year.
Finding tenants was quickest in the south west and East Midlands, at an average of just 18 days.
Landlords had to wait for the longest to find a tenant in the north east, but even here the process only took 24 days, and was still four days faster than it had been a year earlier.
London saw the biggest decline, with it taking just 19 days to let a property in the capital, six days quicker than during the same period of 2018, with properties in Hillingdon let within 9.5 days on average.
What’s the background?
Strong demand from tenants led to rents rising in nearly all regions of Great Britain.
Scotland saw the strongest year-on-year rise with rents increasing by 5.2%, followed by the south west at 4.7% and the south east at 4%. The Midlands was the only region to buck this trend, with rents decreasing by 2.7% in the past 12 months.
In terms of property types, the cost of renting a one-bedroom home rose by 2.8% year-on-year, compared with a 1.3% rise for three-bedroom homes.
Hamptons said this trend had contributed to more tenants looking to rent a larger property as a group, rather than a one-bedroom flat on their own.
Is the new-build premium worth it?
New-build homes are selling for a premium of £65,000, according to the Land Registry. We take a look at what is driving the price difference and ask whether it's worth paying.
New-build homes are selling for a premium of more than £65,000 compared with existing housing stock.
The average UK new home sold for £290,176, compared with a typical sales price of £224,729 for older properties, according to the latest figures from the Land Registry.
The premium buyers pay for a new build home has increased by £5,000 during the past year.
Historically, the price of new build and existing properties has been much closer, with buyers more likely to pay a premium for a home that is being resold.
Why is this happening?
A number of different factors are likely to be behind the strong price growth for new-build homes in recent years.
On the one hand, the higher price of new builds is likely to reflect the fact that housebuilding activity is currently concentrated in southern regions, particularly London, where property values are higher.
In fact, figures from the NHBC show that in the three months to the end of June 6,000 properties were built in London and 6,584 in the south east, compared with just 1,226 in the north east and 1,954 in Yorkshire and Humberside.
Some of the premium can also be accounted for by developers targeting the high-end of the market and building luxury homes in some locations.
But there are suggestions that the Government’s Help to Buy equity loan scheme is responsible for driving prices up in the new build sector, as the initiative only applies to new build properties.
Some studies claim the popularity of Help to Buy has created a mismatch between supply and demand, driving up the cost of new builds.
What advantages do new-build homes offer?
Potential buyers will have to think carefully about whether or not paying the new-build premium is worth it for them.
For first-time buyers who want to take advantage of the Help to Buy equity loan scheme the lure of a five-year interest-free loan worth up to 20% of their home’s value may well make it worthwhile.
This is particularly true if it enables them to purchase a bigger property, meaning they will need to make fewer moves up the housing ladder.
New-build homes come with other advantages too, as they are typically more energy efficient than older properties, while they require less maintenance and have a 10-year building warranty from the NHBC.
As a result of these factors, they tent to have lower running costs compared with existing housing stock.
Some new builds, particularly apartments, also come with significant amenities, such as gyms, swimming pools and even cinemas.
Finally, new developments may offer property types that are not currently plentiful among the existing housing stock, such as starter homes or detached family properties.
What are the downsides?
Unfortunately, new build properties do have some downsides as well.
While in theory no decorating should be required, in practice many homeowners have to go through the process of snagging with the developer, to sort out issues that may have been overlooked.
New build properties are also more likely to be leasehold than existing ones, which, particularly in the case of houses, tend to be freehold.
It is worth noting, however, that the Government is currently consulting on whether the majority of new-build houses should be sold as freehold.
Finally, new build properties are often smaller than their older counterparts as developers try to fit more units on to a site.
Homeowners appear to be shunning moving in favour of improving their property
High levels of equity being withdrawn by people remortgaging suggests homeowners are investing in significant improvement works.
Growing numbers of homeowners appear to be opting to extend or improve their current property instead of trading up the housing ladder.
Around 16,880 people increased the outstanding size of their loan in June when they remortgaged, borrowing an additional £56,100 each on average, according to figures from UK Finance.
While the group does not track what homeowners are using the money for, commentators speculated that it was being used for substantial home improvements.
Adrian Anderson, director of mortgage broker Anderson Harris, says: “Many borrowers are taking on extra borrowing when they come to remortgage.
“This is a clear sign that homeowners are staying put and improving or extending, rather than paying the hefty cost of moving home.”
The number of people who took on additional borrowing outstripped the 15,320 homeowners who switched loans without increasing the size of their mortgage.
The total was also 8% higher than it had been in June 2018, suggesting it represents a growing trend.
Why is this happening?
A number of factors are likely to be driving the decision among homeowners to extend rather than move.
As house prices have risen, the associated costs of moving – many of which are charged as a percentage of a property’s value, have also increased.
In its most recent survey, Lloyds Bank estimate the average person now spends more than £12,000 on taxes, surveyors’ and estate agents’ fees and moving costs when they buy a new home.
At the same time, growth in property values has increased the gap between the cost of a starter home and a family property, leading to many people finding their second step up the property ladder harder than their first.
Meanwhile, the current shortage of homes for sale, means those looking to buy a new property have only a limited choice.
As a result, it appears that many people have decided they are better off staying put and finding a way to extend their current home.
Who does it affect?
While improving their property may make sense for homeowners instead of moving, it is bad news for the housing market as a whole.
In order to function efficiently, the property market needs a steady stream of people to be trading up the ladder to free up properties for those lower down.
The current subdued level of transactions has led to a shortage of homes for sale, which has in turn deterred existing homeowners from moving, creating a vicious circle.
What’s the background?
For homeowners considering extending or improving their property, it is worth weighing up the costs of the work involved against the likely value it will add to their property.
A study carried out by Anglia Home Improvements earlier this year found that while a loft conversion typically adds an average of £24,255 to a home’s likely sale price, building an extension had far less impact at £6,456.
Those considering adding a conservatory in order to get more space, may only see the value of their property rise by £3,155.
What are Boris Johnson’s pledges on stamp duty?
New Government, new era for stamp duty? We take a look at the Prime Minister’s pledges to overhaul the property tax.
Increase the stamp duty threshold to £500,000
While campaigning to be leader of the Conservative Party, Johnson announced he was considering increasing the threshold at which stamp duty kicks in to £500,000 from its current level of £125,000.
The move, when combined with the properties that are already not liable for stamp duty, would mean an estimated 770,000 homebuyers would not pay the tax each year, according to think tank Onward.
Winners: Anyone buying a home for between £125,000 and £499,999, with those purchasing at the top end of this range saving nearly £15,000 compared with the current system.
Losers: HM Revenue & Customs. The change could reduce the stamp duty take by around £3.3bn a year, according to Onward.
Reduce the top stamp duty rate to 7% from 12%
The Prime Minister also suggested he could reduce the top rate of stamp duty from 12% to 7%. The 12% rate, which kicks in on homes sold for more than £1.5m, was increased by the then-chancellor George Osborne in 2014. But it has been widely blamed for leading to a sharp fall in transactions at the top end of the market.
Winners: People buying a home costing more than £1.5m who will save considerable sums if the change goes ahead.
Losers: HMRC would see a further fall in revenues, although some of this drop could be offset if the change leads to more high-end homes changing hands.
Sellers pay stamp duty instead of buyers
Perhaps the most radical change Johnson is understood to be considering is changing who is liable for stamp duty so that the seller rather than the buyer pays the tax.
Such a move, which was not announced when he was on the campaign trail, would ease the burden on people trading up the property ladder, while those selling would be able to tap into their equity to pay the stamp duty they owed.
But the change could prove unpopular, as it would mean existing homeowners effectively having to pay the tax twice, having already paid it when they purchased their home.
Winners: First-time buyers purchasing a home for more than £300,000, people trading up the property ladder.
Losers: Those downsizing as they would face higher stamp duty bills on the home they are selling, rather than the one they are buying.
Anything else?
One aspect of stamp duty that Johnson has not been reported to be considering reforming is the 3% surcharge for buy-to-let investors and those purchasing a second home.
This additional tax has contributed, along with other tax and regulatory changes, to a fall in landlords entering the sector and those expanding their portfolios. It has, however, helped first-time buyers through reducing competition for homes at the bottom-end of the housing ladder.
It is also worth noting that there has not been an official announcement or timeline for the reforms published since Johnson became leader.
This uncertainty could lead to temporary distortions in the market if people delay purchases in the hope of paying less stamp duty if they wait.
Top 3 takeaways
-
The Prime Minister has promised to increase the threshold at which stamp duty kicks in to £500,000 from its current level of £125,000
-
Johnson is also expected to reduce the top rate of stamp duty from 12% to 7%.
-
Under the reforms, the tax could be paid by the seller rather than the buyer.
House prices rise by the price of a good bottle of wine a day
The typical home saw £2,046 added to its value during the first six months of the year.
The value of the average home increased by £11 a day during the first half of 2019, adding £60 billion to the total value of the UK’s housing stock.
House prices rose by £2,046 in the six months to the end of June, but the headline figure masked significant regional variation, according to analysis by Zoopla.
The West Midlands was the best performing region, with property values jumping by an average of £36.58 a day, giving a total gain of £6,695.
But at the other end of the spectrum, house prices in London fell by £71.23 a day, wiping around £13,035 off their value during the first half of the year.
Laura Howard, spokesperson for Zoopla, said: “An increase in the total value of housing was recorded across nine of the 11 regions analysed, with average property values in the West Midlands making the most for homeowners.
Which regions have seen the strongest growth?
While the West Midlands posted the strongest house price gains during the first half, south east England was not far behind, with the typical home adding £35.32 a day to its value or a total of £6,463.
North west England saw the third strongest gains at £20.39 a day, with Yorkshire and the Humber completing the top five with homes in the region rising by an average of £12.37 a day during the first half of the year.
Regional value changes since January 2019
|
Rank |
Region |
January value (£) |
July value (£) |
£ total change |
£ change per day |
|
1 |
West Midlands |
230,676 |
237,371 |
£6,695 |
£36.58 |
|
2 |
South East England |
406,821 |
413,284 |
£6,463 |
£35.32 |
|
3 |
North West England |
198,446 |
202,177 |
£3,731 |
£20.39 |
|
4 |
Wales |
190,610 |
193,910 |
£3,300 |
£18.03 |
|
5 |
Yorkshire and The Humber |
181,918 |
184,181 |
£2,263 |
£12.37 |
|
6 |
East of England |
360,707 |
362,823 |
£2,116 |
£11.56 |
|
7 |
East Midlands |
224,352 |
226,177 |
£1,825 |
£9.97 |
|
8 |
North East England |
192,388 |
193,663 |
£1,275 |
£6.97 |
|
9 |
South West England |
309,333 |
310,165 |
£832 |
£4.55 |
|
10 |
Scotland |
194,942 |
191,174 |
-£3,768 |
-£20.59 |
|
11 |
London |
670,535 |
657,500 |
-£13,035 |
-£71.23 |
Where is the housing market slower?
Alongside London, Scotland was the only other region to see house price falls in the first half of 2019, with properties north of the border losing an average of £20.59 of their value each day.
Meanwhile, growth was subdued in the South West, with house prices rising by just £4.55 a day or a total of £832 during the first six months, and the North East, where property values rose by £6.97 a day.
Despite the price falls, London continues to have the most expensive homes by some margin, with the average property costing £657,500, followed by the south east of England at £413,284.
What about individual towns?
In terms of individual towns, properties in Berkhamsted enjoyed the largest gains at an average of £185.11 a day, adding a massive £33,875 to their value during the first half of the year.
Reigate was not far behind with house prices in the town rising by £184.28 a day, followed by Epping at £178.45 a day.
In London, Notting Hill and Holland Park saw the fastest house price rises at £141.46 a day.
By contrast, the biggest losses were recorded in Hampstead, Belsize Park and Swiss Cottage, where house prices slipped by an average of £179.28 a day, and Leatherhead at £141.46 per day.
Top 10 post towns for value increases since January 2019
|
Rank |
Town |
January value (£) |
July value (£) |
£ total change |
£ change per day |
|
|
1 |
Berkhamsted |
683,356 |
717,231 |
£33,875 |
£185.11 |
|
|
2 |
Reigate |
583,392 |
617,115 |
£33,723 |
£184.28 |
|
|
3 |
Epping |
593,587 |
626,244 |
£32,657 |
£178.45 |
|
|
4 |
Billericay |
523,326 |
554,625 |
£31,299 |
£171.03 |
|
|
5 |
Winchester |
537,660 |
568,681 |
£31,021 |
£169.51 |
|
|
6 |
Bushey |
565,030 |
593,849 |
£28,819 |
£157.48 |
|
|
7 |
Ware |
462,779 |
489,563 |
£26,784 |
£146.36 |
|
|
8 |
Godalming |
593,181 |
619,963 |
£26,782 |
£146.35 |
|
|
9 |
Uckfield |
440,467 |
464,636 |
£24,169 |
£132.07 |
|
|
10 |
Waltham Cross |
399,642 |
423,025 |
£23,383 |
£127.78 |
|
Top 3 takeaways
-
The value of the average home increased by £11 a day during the first half of 2019 adding £60 billion to the total value of the UK’s housing stock
-
The West Midlands was the best performing region, with property values jumping by an average of £36.58 a day
-
House prices in London fell by £71.23 a day, wiping around £13,035 off their value during the first half of the year
Number of company landlords reaches highest level for eight years
More than one in 10 rental properties are now owned by a company as tax changes make private landlords feel the pinch.
Tenants are now more likely to be renting their home from a company landlord, as opposed to a private landlord, than at any time in the past eight years.
Firms now let more than one in ten properties, the highest level since 2011 and up 9% from 2015 when tax changes for private landlords were announced, according to research from Hamptons International.
This means company landlords own 641,480 buy-to-let homes in Great Britain, 42% more than four years ago, with London landlords the most likely to own a buy-to-let using a company structure.
The average cost of a new let in Great Britain also rose to £986 pcm in June, a 3.1% year-on-year increase driven by rising rents in the South.
Table 1 – Percentage and estimated number of homes let by company landlords in GB
| Year | % of homes let by company landlords | Estimated number of homes let by company landlords |
| 2008 | 14% | 456,260 |
| 2009 | 13% | 449,900 |
| 2010 | 14% | 524,540 |
| 2011 | 12% | 481,780 |
| 2012 | 10% | 443,740 |
| 2013 | 10% | 448,080 |
| 2014 | 9% | 449,260 |
| 2015 | 9% | 452,600 |
| 2016 | 9% | 458,280 |
| 2017 | 10% | 535,330 |
| 2018 | 10% | 537,060 |
| 2019 H1 | 12% | 641,480 |
Source: Hamptons International & EHS
Why is this happening?
Tapering of mortgage interest tax relief for non-company landlords was introduced in April 2017.
Previously, private landlords could deduct both mortgage interest and other costs associated with a let property from their rental income before calculating how much tax was due.
But new regulations stated the amount of mortgage interest individual landlords could write off for tax purposes would drop by 25% each year.
By next year all rent must be declared as income. They are then taxed on total income and need to claim back 20% as a credit.
Buy-to-lets owned by a limited company are taxed differently and the changes to the tapering of mortgage interest tax relief do not apply.
Company landlords are viewed as businesses, with expenses written off for tax purposes, including mortgage interest payments.
But there are other costs associated with owning a property through a limited company. For example, mortgage costs tend to be higher and landlords have to take their income in the form of a dividend. Company landlords also pay corporation tax rather than income tax.
The sector has also been hit by the introduction of a 3% Stamp Duty Land Tax on second property purchases.
This has led to a surcharge of thousands of pounds on property and forced many private landlords to rethink extending their portfolios.
Who does it affect?
The mix of landlords continues to sway towards companies from private individuals, but how this affects the tenants differs from case to case.
What the research does show is that demand in certain locations is increasing for rental properties and this is pushing up the cost of renting. The South West recorded the strongest rental growth, with rents rising 4.5% annually.
Aneisha Beveridge, Head of Research at Hamptons International, said: “Increasing taxation for private landlords combined with the growth of the build-to-rent sector has meant that more companies are letting homes than at any time since our records began.
“London, where landlords tend to have higher levels of debt and often the most to gain from corporate ownership, has the largest proportion of homes let by a company.
“However, it’s not always more profitable to put a buy-to-let into a company as other associated costs come into play.
“Strong rents in the South drove rental growth in Great Britain in June. Low stock levels, particularly in the South, continue to put pressure on rents.”