Thinking about moving? With the surge the housing market has seen in the last 12 months you will likely have seen the steep and steady rise in house prices in your local area. Whilst this is causing difficulties for first-time buyers and those of you who are thinking about moving, let’s look at the side effects of this for anyone who is looking to stay put, and maybe even offer an alternative to those of you who can’t find the perfect next house to move into.
Land registry records the listed sale price for all houses sold in the UK. They have been completely overwhelmed by the volume and there is a long wait for these figures to hit the books. However, in the coming months, this data should start to catch up and the House Pricing Index (HPI) will likely see a big jump as well. We are already starting to see this with some lenders. If you have a home already, it is likely your lender will be applying some form of HPI calculation behind the scenes to keep themselves comfortable with the valuation of the homes they currently have outstanding mortgages against. This means there may well be more equity in your home than you previously thought.
Thinking about Moving?
If you are considering moving, your house might be worth more than you think! Speak to your local estate agent if this is on your mind. Do bear in mind that if your house price has increased, then the chances that the one you have your eye on also has increased in price, so do your research before making the choice to proceed or not.
You could consider joining the masses that, throughout lockdown have become, generation renovation.
All the free time we have had during the coronavirus lock-downs has sparked a nationwide boom in home renovations. New research from Mortgage Advice Bureau (MAB) sees that renovations are high on the priority list as two fifths (41%) of homeowners have plans to renovate or extend their homes.
If you have already started looking but have found the market void of options, consider why you are moving. Is your current house in the right location, just too small? Do you want extra space indoors for the home office that would give you the peace and quiet during the day? Could the garden be a better use of free space by getting a professional contractor in to make it over? Or would a full extension give you that extra bedroom with the en-suite of your dreams?
Have you considered Remortgaging?
If the value of the house has gone up, there is more equity there to borrow against and all these options may be more attainable than you think. A lack of homes for sale will also likely see lenders focusing more on remortgage deals and more focus means more competition, more competition means better deals! A good broker will be able to help work out whether it is worth sticking with your existing lender and helping to raise the extra funds or moving to a new one will save you more money overall.
We have also seen a rise in clients looking to raise capital on their existing home to start earning additional income by buying Buy To Let property. Borrowing more on their existing home to use as a deposit on an additional property. This in turn generates some additional income, whether that is to spend now for the holiday you have been waiting for or to save for income at retirement the options are there.
Things to consider…
Don’t overlook the home you bought 12 months to 2 years ago. With the increase in value of the homes around you, your new home may have given you a little boost to your finances. If you had a small deposit before, you may have found that you can remortgage and drop one or even two Loan To Value brackets offering a more competitive rate without borrowing more and just enjoy the savings in your pocket, or even keep your payments the same and clear the mortgage quickly
If you have any questions or want to enquire further around anything mentioned above or indeed anything we haven’t, please give us a call on 01392 660219 or drop us an email below.
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