Like a great many other people, we’re delighted to say goodbye to 2020 (the year that shall no longer be mentioned). Welcome in 2021, a new year packed with potential!
Here are some things to consider in 2021 if property is your priority.
Buying your first home
Making the decision to buy your first home is an exciting feeling, especially if you’ve already found the place that makes your heart race.
Is now a sensible time to be getting on the property ladder?
What happens if there are further lockdowns?
Are your finances in order?
What don’t you know that you need to know?
All of these are valid questions – and they might feel a little overwhelming – that’s what we’re here for, so please don’t be put off from investigating your options whatever your situation.
The government has been making encouraging noises about ‘making housing more affordable for the young’ and ending ‘generation rent’ in 2021. The Help to Buy scheme is changing, continuing until March 2023, and a ‘First Homes’ scheme is being discussed which may also offer more options to first time buyers.
Moving home
2020 turned out to be a busy year with a surge in home movers taking advantage of the Stamp Duty Holiday to make large savings on a new home purchase. There is still time to take advantage of the Stamp Duty Holiday which runs until 31 March 2021.
Renovation and home improvements
Renovating or upgrading your property can increase its value as well as making it a more fabulous place to live in. In our experience loft conversions and kitchen and bathroom refits will always improve the saleability and attractiveness of your property.
If you’re considering a remortgage to fund home improvements, having a chat with one of our mortgage advisers will help you understand how much capital could be available and what the repayment schedule could be.
Buy To Let
Historically, a buy to let property has been seen as a safe investment, but recently things have changed. The COVID-19 pandemic has had an effect on demand, the reduction in mortgage tax relief, and the impending end of the SDLT holiday in March 2021 are all having a negative impact on this area of the market.
This isn’t to say that Buy To Let is an unwise thing to do if you’re thinking of investing your money in property – if it’s your first time, in fact, even if it’s not, you should definitely speak to a mortgage adviser before making any decisions.
Overpaying your mortgage
Most lenders will allow an overpayment of up to 10% of the remaining balance in a year. It’s important to avoid incurring Early Repayment Charges as these will negate your overpayments and may leave you worse off.
Overpaying your mortgage within the terms and conditions of your mortgage agreement can have a number of positives attached – you’ll pay off your mortgage more quickly and you’ll reduce the amount of interest you’ll pay overall. You can pay with a lump sum payment or you can make regular monthly payments.
Don’t pay more than you need to
If you have a fixed rate mortgage, tracker mortgage, or if you’ve been on a standard variable rate mortgage for a number of years it is always worth checking if you can save money.
According to research carried out by Experian, 1 in 4 people said they had stayed with their current lender on a Standard Variable Rate (SVR) because they thought remortgaging would be too complicated. And 1 in 6 people believed remortgaging would prove to be more expensive. This really is not the case.
With a mortgage broker like us, you’ll always know when your mortgage product is coming to an end. We’ll get in touch with you in good time to talk through your mortgage options and arrange the most cost-effective product available for you.
There are reasons to be optimistic about the year ahead
Homebuyers with smaller deposits were arguably hit the hardest by changes in the mortgage market during 2020. 90% and 95% mortgages were rapidly withdrawn at the start of the first lockdown as lenders became more cautious about the economic effects of COVID-19, and to reduce the workload on reduced numbers of underwriters – many working from home.
House price rises, the COVID-19 vaccine and now the Brexit agreement are all positive factors which will encourage lenders to return to a more familiar mortgage market, reduce rates and ease lending criteria which has often restricted overtime and bonuses.
How can we help?
Contact us to speak to our friendly team and book your free, no obligation, mortgage consultation with a mortgage broker from our Portsmouth Technopole office. You can rely on our expert support every step of the way to make the whole process as simple, hassle-free, and straight forward as possible.
You may have to pay an early repayment charge to your existing lender if you remortgage.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
Your property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.