Category: Blog

With the average cost of a UK home now £282,000, there’s no denying that both first time buyers and home movers are considering their options prior to parting with their hard earned deposits. Whilst some opt for a smaller home to keep repayments down, others ultimately look to Europe where a wealth of far more affordable homes can be found.
As one of the UK’s leading mortgage brokers, we wanted to take a look at the differences between the UK and mainland Europe, specifically in a way that consumers will understand. As such, below we’ve ‘mapped the price of property across Europe,’ looking specifically at what the average UK sale price could get you overseas:

In the media we are constantly bombarded with news about the dire situation our housing market is in here in the UK, but how bad is it really? Here at Search Mortgage Solutions we have been casting our expert eye across the globe to see how bad housing markets are in different countries to get a better idea of the state of our market.

Renting

If you currently rent then this might not be an easy read as figures show that the UK renting costs are currently the highest in Europe. According to figures from the National Housing Federation (NHF), UK tenants on average spend 39.1% of their income on rent compared to the European average of 28%. The biggest contrast came in figures from Holland and Germany which showed that private rents were 50% cheaper on average than here in the UK.

The figures also suggested that renting in the UK is generally less secure than in other countries across Europe. They put this down to renting contracts being shorter in the UK on average in comparison the average European contract which is longer.

Mortgages

In comparison the mortgage market makes for fantastic reading. The British Bankers Association put this down to “fierce competition” between lenders in this country, which just isn’t replicated in any other European country.

Competition is at an unprecedented level in the UK at the moment to the point where even those already on a very low mortgage rate are being offered better deals. While this is obviously good news for those with a foot on the property, it is argued that the rental market is now making it even harder for first time buyers to get on the ladder.

Having a competitive mortgage market is great, but our rental market means that it is increasingly difficult for those looking to buy for the first time to save for their first deposit. The NHF chief executive David Orr has put this down to poor investment in the housing market in previous years meaning there just isn’t enough houses, forcing existing rental prices up due to competition for contracts.

The US housing market also makes for interesting reading when considering house prices. Recent figures show the average US house will set you back £124,723, whilst the average house price here is £186,553. These figures clearly reinforce what David Orr said about the market being too saturated because of a lack of houses available, therefore prices and rent costs are being pushed up.

As expected though the mortgage market is a very complex beast, and becomes even more so when comparing from abroad. While the average house price is considerably cheaper in the US, the average interest rate is much higher. The average UK rate stat at around 2% while in the US it stands at a whopping 4%.

Clearly this shows that nothing is black or white in the world of mortgages and different countries have different financial and economical problems effecting their housing market just as much as we have just in a variety of different ways.

If you are 65 or over and looking to take out a mortgage, it is important to make it clear that it is still possible.  So, whether you are looking to purchase property for the first time, free up some money to better enjoy those later years or just desire to take some strain off your monthly outgoings, don’t give up hope. Instead, keep reading.

Banks and Older Borrowers

Because banks are often one of the first mortgage providers and so make up some of the most popular mortgage providers in the UK, they can afford to be very selective about whom they lend to. Hence, most major banks, whilst able to afford to lend to those considered to present more of a risk, are usually reluctant to take risks on older borrowers.
Financial risks aside, banks are also acutely aware of the damage ‘bad press’ can cause a business. After all, banks have had their fair share of bad press in recent years. So, the prospect (however small) of having to repossess the home of a pensioner is often enough to mean that many banks won’t even entertain offering a mortgage to an older borrower. If you are over 65 (or even 55) you may already experienced this reality. But then, what can you do?

Don’t Rule Out the Banks

In 2015 people are living, working and earning longer than ever. As such even the banks have had to alter and adjust their attitudes and thinking. That means, even those who were ‘put off’ at 55 by being told the likelihood of securing a mortgage was slim may even discover at 65 that they can still do exactly that. The fact is, times are ever changing.
What matters as an older borrower in 2015 and how an older borrower can secure a mortgage is a matter of being able to establish and prove the following.

Establish the Size of the Mortgage or Re-mortgage You Require

It is likely, even today, a bank might be hesitant or unsure about lending to you, or even entertaining the thought. Consequently, it is imperative that you are not hesitant or unsure, but instead know exactly what you need. Presenting a chosen mortgage supplier with concrete and accurate figures inspires confidence. Further, it enables a mortgage supplier to calculate the risks or potential risks of approving your mortgage application. So, do not give a supplier any excuse to say no on the basis of your age before considering you on the basis of being an individual.
To help establish the size mortgage you may need, the BBC website features a useful mortgage calculator tool, you may find useful when making preliminary assessments, including estimating interest rates and monthly repayments.

Prove the Banks Wrong

Banks are likely to be sceptical as to how likely it is an older borrower will pay them back in the long term. So, if it is a younger person’s task to prove themselves as a viable and good investment to a bank, it is an older borrower’s task to prove the banks wrong for thinking that they may not be a sensible investment.
Most simply, an older borrower must be doubly organised and clear about their income, amounts and financial situation. That is, if you are still earning, show it and show it clearly. As well, make sure to include in your proof of income all of your monthly incomings, including any finances that comes from pensions, insurance policies and / or any investments you might have.

Consider a Guarantor Mortgage

To further assure a lender, seek to find a guarantor. For many older borrowers, this may prove an uncomfortable option, but for a lender who is sure that they are able to manage a mortgage in later life, it shouldn’t be. Seeking a guarantor at any age is a means of instantly increasing one’s potential of successfully attaining a mortgage.
For more information, the Mortgages-Remortgages website explains how guarantor mortgages work.

Tailor Your Search

Older borrowers can enhance their chance of having their mortgage application accepted by tailoring their search towards lenders who favour more matured borrowers. That said, finding such providers, whilst not impossible, can prove time consuming and difficult. Hence, the best advice is to seek expert advice when searching for a mortgage as an older borrower by contacting the likes of ourselves.
Reputable mortgage brokers, offer unbiased and professional advice on a case-to-case basis and without charging an initial broker fee, guarantying that the service you receive from them is the best advice at the best price – whatever your age or circumstances. So, if you are an older borrower and unsure where to turn, a mortgage advisory service may prove your best next step and are well worth speaking to before taking any action which could potentially and otherwise affect your credit rating or impact upon your chances to have a mortgage application accepted.

Further Information and Advice

Back in 2013, This is Money published an article titled ‘How to Beat Lenders’ Age Discrimination’. The article featured a ‘six key challenge’ which even in 2015 remains full of relevant information and advice on approaching mortgage lenders as an older borrower. Hence, for further information and ideas as to getting a mortgage application approved in later life, you might want to the This is Money website.

According to City AM, London’s first free daily business newspaper, the average age of the ‘first time home buyer’ in the UK currently stands at 31 – in contrast to statistics in 1995 which placed first time buyers at just 28. Further, whilst in 1995 the average first home cost £65,000, in 2015 the average cost of a first time home is now stands at a staggering 196,000 with prices expected to rise a further 25% over the next five years. Consequently, City AM, claims few buyers, even in their early 30s, are able to secure that first time home without most often substantial financial support from family and friends.
Fortunately, young people, couples and families do have options, it is just a matter of discovering them. Hence, here’s three viable means of getting on the property ladder with little or no deposit:

1. Buy at Auction

Daytime TV shows such as the BBC’s Homes Under the Hammer have helped to popularise the idea of and incentivise many to consider purchasing a home at auction. The money an individual or couple can save by purchasing at auction can be in the tens to hundreds of thousands in some instances.
On the flipside, often homes sold at auction require (sometimes extensive) renovation. What is more, inexperienced property auction attendees can find that that bargain purchases can turn out to be a financial nightmare when rising damp, structural problems and the dreaded Japanese knotweed are later discovered. Hence, and as Homes Under the Hammer presenters always stress, it is imperative to always pre-read the legal packs provided ahead of property auctions, to visit any property that interests you and to budget extremely carefully.
For more information, the BBC website has published a very insightful and informative ‘Beginner’s Guide to Buying at Auction’.

2. Guarantor Mortgages

An alternative option to having to rely upon parents (as many do) to contribute financially towards that often costly deposit amount in order to purchase a first time home is to instead consider the option of a guarantor mortgage.
A guarantor mortgage can increase the chances of having a mortgage application accepted because it provides lenders more assurance and so decreases the risk associated with lending. Further, a guarantor mortgage provides those unwilling to ask parents, relatives or friends for financial assistance but equally struggling to secure a mortgage without support, a viable means of purchasing that first time home.
To learn more about guarantor mortgages or seek advice on whether a guarantor mortgage might work for you and your situation before approaching a potential guarantor, you might benefit from first seeking the advice of a professional mortgage broker, such as ourselves at Search Mortgage Solutions.

3. Government Schemes

If renovating an auction property or asking parents to be guarantors is simply out of the question, that first time home still might not be. An alternative is to look into any Government schemes available to first time buyers. Specifically, ‘Help to Buy’ schemes have been especially formulated to enable anyone with only a small deposit amount saved who is hoping to buy a property up to the value of £600,000.
‘Help to Buy’ schemes work most commonly through the government agreeing to supplement a mortgage borrower’s deposit so that the borrower can expect to stump up as little as 5% of a property’s value as a deposit. The remainder of the deposit, paid initially by the Government, is provided by means of a loan which most often remains interest free for the first five years, affording would-be home owners to both afford to get onto the property ladder and as well the time to repay the loan before interest is incurred.
Whilst this is the most common way in which a ‘Help to Buy’ scheme operates, it is not the only way. To learn more and what other support the Government can provide to first time buyers, visit the Own Your Home UK Government website.

Keeping your possessions and family home safe is obviously a priority for all of use, but making sure your home has the best security available is out of many peoples budgets. Fear not though, because there are a number of ways you can improve the safety of your home without investing hundreds of  pounds, here are 5 of the best tips.   

Signs as the first line of defence

The first thing a burglar generally does when assessing whether they will attempt to break into a house is wha the exterior looks like. Because of this you should make your home appear as difficult to break into as possible, which you can even do on a budget.

Why not try putting up a few “beware of the dog signs” whether you have a dog or not. You can also try putting up recognisable home security signs whether you have it installed or not, as this will make them think twice about approaching your front door.

Budget Security Cameras

Splashing out on a full CCTV setup would obviously be damaging to your wallet, so what are the ways around this? Appearance is everything in budget home security, and it is as much about putting off potential burglars than catching them.

While the most basic home CCTV equipment can set you back £170, you can pick up fake cameras for a tenth of the price. Some of these are solar powered which means they can rotate and also have a flashing light on the side to appear as if it is recording, very convincing to the unsuspecting eye.

For a truly bargain basement approach, why not try placing an old webcam on the outside of your home.

The Right Locksmith

One of the most basic home security precautions is ensuring you have functional locks on your doors and even windows. While installing locks of differing standards can be pricy, there are still ways you can get the best for your budget.

Locksmiths are not regulated by the UK government, which means that the price and skills of many locksmiths vary with no real rhyme or reasoning. Locksmith trainers MPL Locksmith Training suggest you do your homework, make sure that the locksmith you go for has had all the proper training and their course was recognised by the NCFE.

With these types of qualifications you can guarantee a certain standard which at least won’t leave you having to call out another locksmith a week later because the first one did such a bad job.

Security Lights

According to research done by Aviva insurance, burglaries increase by as much as 20% in the winter months, meaning the dark nights play a big part in the confidence of thieves. One of the simplest ways to combat this is to keep your home as well lit as possible.

When money is no issue, the obvious answer is to kit your entrances and garden with movement sensitive security lights, however if you are on a budget this just isn’t possible.

There are plenty of little tricks to combat this so why not try leaving your television, front room or doorway lights on if you need to leave the house for any reason on an evening.

Prepare a Red Herring

Assuming the worst has happened and someone has broken in, there are still precautions you can take to make the burglary as less painful as possible. Many people generally keep their important personal belongings in the same places such as the bedside draw or under their mattress.

Its thought that a burglar will generally spend between 8-12 minutes in your house, so they don’t exactly have time to browse. What this means is that they will generally go straight for the usual hiding places.     

Changing up your hiding places will immediately waste plenty of their time. With little time left, they will get desperate and grab anything in plain sight, so why not place a red herring object that you can take a loss on such as an old laptop or phone.

Alternatively you can adopt some more obscure hiding places that are so obvious they would never guess. Try putting your important belongings into a plastic bag and hiding them in the bottom of a box of cereal, or in the sleeve of a hardback book. 

Hopefully these 5 tips will help those of you who cant afford a state of the art security system or 15 camera CCTV set up to keep your home safer than it currently is. If you have any other useful tips why not leave a comment blow.

There are endless home improvement programmes on our televisions showing us how best to improve our homes in order to boost its price tag on the property market. What is perhaps lacking is what difference your garden can have on your property’s value.

Research by over 50’s insurance provider RIAS earlier this year showed that the Gardens of Great Britain are collectively worth a staggering £9.3bn. This translates as each garden containing items worth £5,000 on average, a considerable chunk piece of money. To help you know what garden improvements will boost the price of your home, here is a handy list.

Sheds

Storage is a big attraction to any potential buyer, so having a garage, shed or other outdoor storage facility can be a great investment. Families often have more than just garden tools to store, with children’s bikes garden toys and other things needing shelter from the miserable winter wether. Investing in a good, spacious and most importantly durable shed or storage unit could well be a big draw for a potential viewer.

Outdoor spaces also have other uses, which could add huge sums onto your property price, with increasing number of home owners getting creative with spaces such as sheds. For a little inspiration, check out these fantastic sheds.

Paving and patios

t is great to have variety in your garden (dependent on size) because its great to create multiple uses for your outdoor space. This is exactly what a patio can do, because a well laid patio can be used all year around, unlike a lawn.   

Patio experts RF Paving say “patios can be seen as an extra living space, especially in the summer months. They give home owners a very flexible space, either used for storage, for relaxing or for hosting guests. The use of short stone walls and steps (if needed) also improve the look of a garden and thus boost your price.”

Lawns

What people love in a garden more than most is a beautiful lawn space. In the summer months a well maintained lawn can be a brilliant and flexible space for friends and families to enjoy. Think of a lawn as the important foundations for an appealing garden. It can be a space for children to play, a BBQ space, or simply a centre piece in which to build flower beds and patios around.

Unlike other things mentioned in this list, it is also relatively cheap if you already have some sort of lawn. Mowing and trimming your lawn is relatively cheap compared to irrupting a shed or laying paving, and can look fantastic.

Flowers and plants

Arguably even cheaper than lawns (depending on size and investment) plant can add a vibrancy to a garden space which can dramatically change the perception of any garden, therefore potentially improving its worth. This is less a guaranteed improvement like a shed or patio because it doesn’t involve a large wad of cash, but what it does do is make all the difference on first appearance.

Similarly to when you buy extra furnishings and trinkets to spruce up the appearance of the inside of your house, flowers are your gardens cherry on top, which might just twist an estate agents price review.

These are just some of the improvements that could make to your garden in order to make a difference when it comes to improving the price of your home. If you have had any experience and have found improving any of the above helped you, then please leave a comment below. 

When it comes to making home improvements, the bathroom can be one of the trickiest rooms to really get right. Bathrooms are a minefield of potential mistakes, with so many variables of flooring, pluming, decorations and colour schemes to consider. If this is a headache you are going through, check out these 3 ways to make sure your bathroom ends up looking perfect

Stick to your plans

We have al visited a friend who has either moved into a house and attempted to modify the existing bathroom, or given up half way through a renovation, and thematically it can look rubbish. The first thing you need to do is decide on your colour scheme and stick to it. By doing this you can them plan all of your purchases around the theme, making sure everything fits and nothing is sticking out.

Try making sure your bath, shower, toilet and sink all match, as these will be the main features of your room and you want any of them to appear like an afterthought. Its also important to be realistic with what you can achieve. Not everyone can fit a bath and a shower in, so don’t compromise your plan because you think you “might be able to squeeze a shower in the corner” chances are you can’t.

This point of poor judgement couldn’t be summed up better than this post by buzzfeed.

Materials are vital

The longevity and look of your bathroom very much relies on the decisions you make when it comes to buying materials. One off the riskiest decisions you can make is going with carpet. Carpet can look good, but it creates lots of problems because it absorbs water, and bathrooms need to be able to cope with plenty of spillages.

As an alternative try stone tiles, and in particular natural stone tiles. There is a huge variety of natural stone options from slate, to marble to limestone, they all have different strengths and come in a range for different colours which might suit your theme better than others.

Natural stone experts RF interiors told us that “opting for natural stone is ideal fro bathrooms and kitchens because of its durability and resistance to water. It’s also very flexible depending on colour schemes because it comes in a range of tones from shiny blacks to creams and whites.”

Stone tiles also vary in hardness, for example granite is about the hardest stone you can get your hands on, whilst travertine or limestone has a bit more give in it, and is more regularly used in flooring. Natural stone texture is also important, with some having smoother surfaces than others, so best to shop around for one you aren’t going to slip over on.

Wallpaper is a stumbling block for some people, because it all can struggle to cope with moisture, but you can still use if you are smart. It can be more homely combining wall tiles with a painted wall or wallpapered wall, because you don’t want the room looking like the changing room of a Sunday league football club.

Be intelligent selecting fixtures

One of the biggest mistakes people make is rushing into buying their bathroom fixtures. This is more often than not because there are so many variables. To comply with point one, do what you can to make each fixture match, or at least make them follow your colour scheme.

As well as appearance, comfort can be a big problem. Take for instance the thought of buying a toilet you hadn’t tested out sitting on, only to find out it’s dreadfully uncomfortable? The same goes for a bath, as silly as you might look, why not hop in whilst in the show room to see if its feasible (but please keep your clothes on).

Hopefully the above three tips can put you on the right path to creating your perfect bathroom. If any of these tips have helped you out then please leave a comment below and let us know.

Landlords who rent to students report low arrears, higher than average yields and reduced ‘voids’ due to sustainable demand for rental properties. A study by utility company Glide found that 69% of landlords and letting agents prefer to let to students, and 84% agree that students make good tenants.

What Are My Options?

The three main buy to let options for students are HMOs (house in multiple occupation), MUFBs (Multi Unit Freehold Blocks) and student pods (individual rooms or flats in a larger unit).

HMO

A HMO is typically a  4-5 bedroom house. Multiple tenants have separate contracts but share kitchen and bathroom facilities. Houses of 5+ tenants do require a costly HMO license from the Local Authority, but higher than average yields tend to exceed this outlay.

MUFB

Yield wise, MUFBs (which consist of several apartment units on one freehold title), slightly outperform HMOs at the moment, but require a greater initial outlay. Lenders tend to prefer these two types of accommodation – it can be easier to calculate a more favourable mortgage.

Student Pods

Student pods are a seemingly cheap option, but mortgage lenders dislike them because they can’t repossess the property in the case of a default.  As a result, you need to be able to buy outright. There has been controversy as promised yields failed to materialise, and experts recommend steering clear.

What Are The Benefits Of Renting To Students?

The main benefits are that it’s profitable, and reliable. No investment is 100%, but student accommodation has a number of things going for it. Multiple occupants in a HMO or MUFB means higher income, with an average 9% yield – compared to 6.5% for traditional tenancies. Students are also oddly reliable – the NLA found that only 38% of student landlords had experienced arrears (compared to 59% of landlords renting to blue collar families). Student loans mean that tenants will often pay a term’s rent upfront, and parents make excellent guarantors.
Demand for student housing often outstrips supply, and there is a new, ever expanding annual market for rental properties. While this means increased turnover, landlords can often charge a higher rent in University cities due to simple supply and demand.

What Sort Of Property Should I Buy?

First you need to decide who you want to rent to. Most regular students don’t have high expectations, making cheaper, large old houses a good option; especially given their reputation for causing property wear and tear. Ensure necessary repairs are made and that there is basic furniture, but décor is less of a priority than location.
Mature and post-grad students will likely want better quality accommodation, but will take better care of your property, helping it to appreciate in value. A modest outlay for refurbishment and higher quality fixtures and fittings is a good investment.
If you want to cater to a more upscale market, consider international students. Wealthy foreign students attending universities like Lancaster and Herriot Watt are used to a higher standard of living; they will pay well, but demand real quality. This kind of accommodation is more of a risk, but offers higher returns.

Where Do I Start?

Determine an area and choose your property. Acquire any necessary licenses and visit your local mortgage broker to arrange financing. Then begin advertising – on social media and through student accommodation providers – you might even be able to get a mention from the local university!

As the cost of buying a house continues to spiral, so does the number of young people struggling to get their foot on the property ladder. Financially, young people are struggling more than ever to even raise the funds for a deposit, based on the average cost of living in the UK. So what does this mean for first-time buyers? Are young people now giving up on their dreams of owning their own property?

Check out our latest infographic which highlights exactly why young people are now waiting so long to get onto the property ladder.

Care to share? We created a handy embed code just for that…

<a href="https://www.searchmortgagesolutions.co.uk/snakes-and-property-ladders/" target="_blank" rel="noopener noreferrer"></a><br />

Whilst there has been some improvement in the mortgage approval rate for first time buyers, getting the first step onto the property ladder is undoubtedly the hardest.
Even if you can demonstrate a history of good personal financial management and have a deposit that can be anywhere up to 20% of the purchase price, you may still find it difficult to get a mortgage approval.
For this reason, more first time buyers are opting to apply for forty year mortgages in order to get a mortgage approval from a bank or building society. In this blog we’re going to take a look at 40 year mortgages and their pros and cons.
How could a 40 year mortgage help me get approved
Most mortgage products are focussed on a repayment period of 15, 25 or 30 years. Although you may change your mortgage provider during this time period to take advantage of the best interest rates, a mortgage based on these timescales is designed to be amortised, that is, fully paid off in the final payment in the 15th, 25th or 30th year.
To get a mortgage paid off in a shorter period of time, it’s fairly obvious that the repayments required are going to be higher. This can be the bar to people getting on the mortgage ladder. The banks will assess your income and decide if you will be able to comfortably meet the repayments. They’ll also take into account the effects of an interest rate rise and see if you would still be able to meet the repayments.
40 year mortgages are designed for the people that the banks turn away because whilst they meet other criteria for lending like financial responsibility, their monthly income is deemed to be too low to comfortably meet the repayments. Adding a further 10 years of payments to the mortgage means lower payments during the course of the mortgage.
What are the advantages of a 40 year mortgage?
If you have previously been turned down for a mortgage of a shorter time period because it has been judged you’ll have difficulty in making the repayments, a 40 year mortgage may be for you. The extended repayment period will result in lower monthly payments. These lower monthly payments may be acceptable to the mortgage lender and may allow them to approve your housing loan.
And the disadvantages? 
Extending the repayment period means that you’ll end up paying more interest on your loan. You should take serious consideration of this because the amounts of money involved can be considerable.
Paying off the loan over a longer period of time also means that you’ll build equity in your property at a slower rate. Equity is the difference between the value of your property and the amount of the mortgage that is still outstanding on it. If you’re paying a smaller amount off your mortgage each month it will take longer to build up equity in your property. However, house prices are still rising so you may find that your property continues to gain value after your purchase helping you to build some equity.
Do you want to be paying a mortgage a long way into your 60’s? For most people the answer is no. This is another serious consideration you need to make. Add 40 years to your current age and that’s how old you’ll be when you have finished paying off your mortgage. This places a lot of restrictions on your future options – early retirement being one of them.
Pay more each month than you need to
If a 40 year mortgage is the only way you can get onto the property ladder, you can help to reduce the amount of time to repay the loan and the interest that you’ll pay on it.
Just because the banks think you might not be able to sustain higher payments doesn’t actually mean that you can’t do it. If you are able to pay back more than you are required to on a monthly basis you can dramatically reduce the interest and the length of the term of your home loan.
 
So what now?
If you think that a 40 year mortgage could be the way that finally gets you onto the property ladder we recommend you get some advice from a bank, building society or a mortgage broker.
 
Banks and building societies will offer advice on mortgage products that they have to offer, whereas a mortgage broker can give you advice on mortgages from the whole of the market. In many cases the in depth knowledge of a broker can find mortgages that suit your needs that you may otherwise not have found. You can also visit our first time buyer pages to find out more about getting your first mortgage.