Is moving home harder than being a first time buyer?

The process of buying a home is stressful no matter how you look at it. But which is worse, being a first time buyer or selling your home and buying another? In this blog post, we’ll break down some of the obstacles you might come up against as a first time buyer and how you can overcome them. We’ll also look at how you can make selling up and moving home easier.

Whatever stage in the process you are currently at, it always helps to get expert advice. If you’re struggling to understand your mortgage options, get in touch with Niche Mortgage Info today and we’ll be more than happy to help clear up any confusion.

Help for first time buyers

In many ways, being a first time buyer is easier as you won’t have the stress of selling your existing home while trying to buy your new home. When moving home, there’s a lot more that can go wrong in the chain. Imagine you are buying a home from someone who has to buy their new home before they can sell to you. And then imagine the person buying your home also has their own home to sell. That’s a lot of steps that could go wrong. As a first time buyer, you only need to think about yourself.

However, first time buyers are often overwhelmed by the options available to them. Navigating the mortgage process for the first time can be very complicated. There’s also the issue of saving up enough money for the deposit and all of the additional fees. The good news is that there is plenty of support for first time buyers. According to one property developer, around half of all properties sold in the first half of 2019 went to first time buyers. This shows that the schemes are helping people onto the property ladder, so the support is out there.

Do estate agents have your back?

As a first time buyer, you might lean on the expertise of the estate agent to help you navigate the depths. However, it’s important to be cautious. The estate agent doesn’t work for you, they work for their seller. They only earn commission when the property sells, and many won’t mind saying what you want to hear if it helps you make a decision. Instead, you should turn to the people you are paying for support and advice. This might include your mortgage broker, solicitor or even your bank.

Moving home puts you in the driving seat

While selling one property and buying another might be stressful, this is when you will feel most in control. Suddenly, you’ll have estate agents on your side as they will want to do everything they can to secure your sale. Not only will you be able to take the wheel, you’ll also be more familiar with the processes. Conveyancing will just be another bit of paperwork, not something that keeps you awake at night.

Now that you know what to look for, you can pick your providers with ease. Look for a proactive estate agent with in-depth knowledge of your local area. If they offer suggestions on things that might sell your home sooner, then it’s worth following their advice.

So, which is harder?

First time buyers and those selling up and moving will both face struggles along the way. Getting on the property ladder is difficult, and once you’re there, the process of moving to a different home can be daunting. The important thing to remember is that you will have support every step of the way. If you aren’t sure what your next steps should be, get in touch with the Niche Mortgage Info team for advice.

UK Buy to Let Hotspots

Owning a buy to let property can be a great investment for your future. If you purchase a home with a promising yield, you will not only make money from the monthly rental payments but you will also stand to profit if you decide to sell the home further down the line.

Buy to let mortgages are different to a normal residential mortgage. It’s important that you understand these differences before you head down this route. In fact, most residential mortgages will have rules against you renting out the property for a period after purchase. See this guide.

If you decide a buy to let property is right for you, you’ll also have to think about which area is best. While some areas are booming, you might struggle to find suitable tenants for your property. That’s why we’ve come up with this handy guide to the UK buy to let hotspots for 2019.

Where are the best places for buy to let?

According to data published by the website Totally Money, the following areas are the best places to consider. These were the best performing areas in the whole of the UK.

  • Nottingham
  • Liverpool
  • Manchester
  • Leeds
  • The North East

It’s no surprise that the North dominates this list. With investment flooding to the North of the country, people are finding that they can get a lot more for their money in the north. If you’re a buy to let landlord looking to expand your portfolio, these are some of the rental yields you can expect to see in the North.

Buy to let in Nottingham

According to the study, Nottingham topped the list with an impressive yield of 11.99% in the most sought after areas. If you’re looking to buy in Nottingham, consider the NG1 postcode which is incredibly popular with students. With such close proximity to Nottingham Trent University, you’ll have a steady flow of new tenants.

You should also consider the NG7 postcode, which offers an average rental yield of 8.89%.

Buy to let in Liverpool

Heading to the coast, Liverpool was another top performing city. A total of 6 Liverpool postcodes made the list, including L7 which covers the city centre, Edge Hill, Fairfield and Kensington areas. The average rental yield for these areas is an impressive 9.79%.

Other areas to consider include L1 and L2 which are both in the city centre and L6, which covers Anfield, City Centre, Everton, Fairfield, Kensington and Tuebrook.

Buy to let in Manchester

Best of luck finding property in the centre of town or in the trendy Ancoats area. Instead, look to the student-dense suburbs of M14. Here, you’ll find an average rental yield of 7.07%. You can also look to areas like M13 which is close to the University of Manchester and two hospitals.

Buy to let in Leeds

To grab yourself a great rental property in Leeds, head outside of the city centre to the leafy suburb of Headingley. The LS6 postcode is popular with families and students alike. Here, you’ll find an average yield of 7.43%.

Buy to let in the North East

The best postcodes to consider in the North East are all in the Newcastle region. Look to the NE1 postcode for the best rental yield in the North East. Being close to Newcastle’s two universities means that you could look to enjoy a yield of around 8.16% along with low property prices. You should also look at the NE6 postcode.

Is it worth looking at London?

The majority of the best rental yields can be found in the North, so does this mean that it’s time to ignore London and the South East? Absolutely not. While property prices might be higher, rental prices are also higher in the capital. Competition for rental property is also steep, so you shouldn’t expect to sit on an empty property for too long.

According to Totally Money, the best performing rental yield in London can be found in East Ham. This has an average yield of just 4.81%. While this might be lower than some of the locations in the North, you have to keep in mind the value of the property.

Capital appreciation is a big factor to consider when looking at buy to let property in London. Investors in London typically see increases in their property’s market value.

What are the best areas in London?

At the moment, the best areas for buy to let are in the areas around Dagenham, Barking and Romford. The closer you get to the centre of London and areas like Kensington, Westminster, Chelsea and Fulham, the less yield you can expect to command.

With fluctuating property prices and the looming threat of Brexit causing uncertainty, it has become increasingly difficult to predict. This is why many investors are moving their focus to areas outside of London where property is cheaper but rents remain steady.

How do I find out the average rental yield in an area?

Before purchasing a buy to let property, you should do your research to discover how much money you could stand to make. By working out the rental yield, this can help you to decide which area is more profitable.

The first place to start is to find out the average property prices and the average rental prices for your chosen area. You can search on sites like RightMove, Prime Location and Zoopla to get an idea of how much rent you can expect in each area. Gumtree will also have listings direct from private landlords.

Once you have the rental figure, divide it by the market value of the property and then multiply by 100. This will be your rental yield percentage. The higher the number, the better the value.

What is a good rental yield?

The higher the better, but in general, you should look for a rental yield of around 7-8%. Any less, and you could struggle to meet your month commitments. You not only have to make mortgage payments, but you will also be responsible for upkeep of the property, so it makes sense to make sure this is always covered.

A common mistake that people make is assuming that everywhere in a post code offers the same rental yield. Things like schools, transport links and nearby amenities can make a huge difference to your rental potential. People might be willing to pay more rent for a place that is near a tram stop than one that is near a bus stop, even if it's in the same post code. You can’t assume that all transport links are equal. The same goes for schools and amenities.

And rental yield isn’t the only factor you should consider. Look at the wider area and consider if the area is prospering or declining. If new businesses are moving to the area, there is a chance the value of the property will increase. If, however, businesses are closing down and residents are moving away, you could end up with a property that is worth less and that you cannot rent.

Can I always get a buy to let mortgage?

You won’t be the only one doing these calculations. Your mortgage provider will also want to see that your buy to let property is a good investment. There are also different rules for buy to let mortgages depending on where you are in the country. Some lenders will see some areas as higher risk than others, so it’s worth speaking to a specialist before you start your property search.

Lenders will look at wider factors including rising unemployment, slow wage growth, falling house prices and population decline. This can include buy to let properties in rural areas where there is less demand for property. In some cases, lenders will be reluctant to lend to you if you live far away from the property you are purchasing. This can be frustrating for landlords based in the South who want to make the most of the lucrative opportunities in the North. In this instance, speaking to a specialist mortgage broker will help you to navigate your options.

Where can I find advice?

If you aren’t sure if you will be accepted for a buy to let mortgage because of any of the reasons listed above, it’s always best to seek advice. We have access to a wide range or mortgage brokers, so we can point you in the right direction to help you find the answers you need.

When researching buy to let mortgages, make sure you have a good idea of the area you are looking in, the average rental price and changes to property values in the last five years. This will help to refine your search and ensure that your broker puts you in touch with the right lender for your needs.

Can I purchase a buy to let property abroad?

If you want to purchase a property overseas with the intention of letting it out, you are likely to need a specialist mortgage. However, it can get complicated to purchase a buy to let property overseas. Every country will have their own rules, and you may also have a language barrier to contend with.

If you are thinking about purchasing an overseas buy to let property, you have two main options. The first is an international mortgage, and the second is simply applying for the mortgage overseas.

The first is likely to be simpler as you will be dealing with a UK-based lender and they will be able to help you navigate the home-buying process. The second is likely to be more complicated, particularly if you don’t speak the language. However, it’s worth looking at both options. By giving yourself more choice, you might be able to secure a better deal on your buy to let mortgage overseas.

Next steps

Whether you are looking at one of the UK buy to let property hotspots, or setting your sights overseas, the first step is to seek the advice of a specialist mortgage advisor. Get in touch with Niche Mortgage Info today to find out how we can help you navigate the process with ease.

A guide to understanding landlord responsibilities

Before you let tenants into your property, there are a few steps you will need to take. It doesn’t matter if you made an investment decision to purchase a buy to let property, or if your decision was more accidental and you need to let out a recently purchased property, the rules are the same. Whatever your reasons for letting out a property, if you want to make sure everything is above board, there are a few rules and regulations you will need to follow.

The laws to protect landlords and tenants are very strict, and just as you wouldn’t want your tenant to be confused about what you expect of them, they wouldn’t want you to be confused about your responsibilities. If you establish a good relationship with your tenants from the start, you will be far less likely to run into trouble further down the line.

If you’re new to the world of landlords, or just want to make sure you’re on the right track, read on to discover the main responsibilities you hold as a landlord.

Draw up an inventory

While this isn’t a legal requirement, it makes sense to make sure you have one in place. Most estate agents will have their own processes for drawing up and inventory, but don’t assume that they will handle it. Always check that they have a process for creating an inventory, checking it with the new tenants and then keeping it safe until the end of the tenancy.

Your inventory should include the following, as a minimum:

  • Walls and ceilings
  • Paintwork or wallpaper
  • Carpets
  • Curtains or blinds
  • Appliances
  • Furniture
  • Fittings and fixtures (cupboards, lights etc)
  • Windows
  • Doors
  • Smoke alarms
  • Carbon monoxide detectors
  • Meter readings

When the tenant moves in, they will check the inventory against the condition of the property. If there are any disagreements, they can be noted on the inventory at the start of the tenancy and then the tenant won’t be blamed for the damage at the end.

Having an accurate inventory in place isn’t just to protect your tenants, it also ensures that you get your property back in a reasonable manner. It can also help to avoid disputes over the deposit.

Tenancy agreement

It doesn’t matter if the person staying in your home is a friend or even a friend of a friend, you should always have a tenancy agreement in place. Unless you are letting the person stay in your property for free and don’t expect them to pay any bills, then you should have a tenancy agreement.

The tenancy agreement is a contract between you and your tenant. Most tenancies in the UK are an Assured Shorthold Tenancy. Your tenancy agreement should include the following information:

  • The names of all people involved
  • The rental price for the property and how/when it should be paid
  • Information about how/when rent will be reviewed
  • The deposit amount and where it will be protected
  • What the deposit covers
  • The property address
  • Access information
  • The start and end dates of the tenancy
  • Expected obligations for landlord and tenant
  • Energy supplier information, who pays them and if the supplier can be changed
  • How to end the tenancy early (if possible)
  • Who is responsible for small repairs
  • If the property can be sublet or have lodgers

All clauses have to be fair and compliant with UK law. You can access sample contracts which can be modified to your needs on the Gov.uk website.

Protect the deposit

The deposit isn’t yours to keep. It must be held in a government-backed scheme for the duration of the tenancy. Failing to protect your tenant’s deposit, or failing to provide information about where the deposit is held can lead to legal action. Tenants can take landlords to court if a dispute arises.

Scotland and Northern Ireland have their own rules for deposits, so you should check with your local authority. If you are based in England or Wales, you will have 30 days from the date your receive the deposit to place it in a government scheme. At the end of the tenancy, you will have 10 days to return it, provided there are no disputes.

Make rent changes fair

You cannot just increase the rent amount without first checking with the tenant and ensuring that you are on the right side of the law. Any rent increases must be fair and in line with local averages. You also cannot increase rental amounts in the middle of a fixed term tenancy. It can only change at the end of a fixed term agreement.

You need to give at least one month’s notice of a rent increase.

Keep the property safe

You have a responsibility to ensure the property you are renting out is safe. As a minimum, you will need to ensure the following:

  1. Ensure you have electrical safety certificates for all appliances provided to the tenant. This includes things like fridges, power showers and electric ovens.
  2. All gas appliances must be checked every 12 months by a registered Gas Safe engineer. You are required to give the tenant a copy of the gas safety certificate within 28 days of moving into the property.
  3. If you provide furniture, all furniture must comply with fire safety regulations.
  4. Every floor in the property must have a working smoke alarm. You should also provide a carbon monoxide detector in every room with a gas appliance.
  5. Check that escape routes are accessible.

Keep the property maintained

When you draw up your tenancy agreement, it’s important that you set out who is responsible for maintenance. For example, while you might be responsible for the pipes and drains in the property, you might want to let the tenant know that their responsibility is to ensure they do not flush anything which could cause a blockage.

In general, the landlord will be responsible for the following:

  • Structure and exterior
  • Sinks, baths, toilets and sanitary fittings
  • Pipes and drains
  • Heating
  • Hot water
  • Gas appliances, flues, ventilation
  • Electrical wiring

You should set out in the tenancy agreement if you want your tenant to be responsible for the following:

  • Keeping the property clean and tidy
  • Small maintenance tasks (changing light bulbs)
  • Fixing broken items
  • Garden maintenance

Ensure your property visits are legal and fair

Every now and then, you may need to visit your property to carry out checks or to make repairs. However, you have to remember that your tenant has a legal right to quiet enjoyment of their property. This means you can’t just show up unannounced.

By law, you have to give 24 hours notice before you visit. If you don’t do this, your tenant is well within their rights to refuse you entry and this can quickly sour a relationship and break the trust.

Instead, make sure that you always let your tenants know well in advance and make sure they confirm. You should also ensure that you visit at appropriate times. While it might be easier for you to fit in a visit first thing in the morning or late at night, this might be very difficult for a tenant to accommodate.

Get landlord insurance

This is another one that isn’t a legal requirement, but it could save you a headache if something goes wrong with your property. You can protect yourself against anything from missed rental payments to legal fees associated with settling disputes. 

There are three main types of landlord insurance:

  1. Landlord building insurance will cover the structure from things like fire or flood.
  2. Landlords contents insurance will protect your furniture and fittings if you rent out a furnished property.
  3. Landlord liability insurance will cover you if a tenant of their visitor is injured in the property.

Get your energy performance certificate

An energy performance certificate offers a grade value to show how energy efficient a property is. You are required by law to provide one for your rental property. This can help tenants to make a decision about whether a property is right for them, as it can give an indication of running costs. For this reason, it can be helpful to secure an energy performance certificate when you start looking for tenants. Once you have your EPC, it will last for 10 years. It will also offer recommendations for how you can make your property more efficient. Following these recommendations will be very attractive to some tenants and may allow you to increase your rental price as the tenant will save money on their bills.