redstones houses

Should you rent or buy a property?

It’s a common issue for many clients we work with at Redstones – should we buy or rent our home?

We firmly believe that there is no right or wrong answer. There is a strong case to be made for both options and ultimately, it all depends on your personal circumstances and desired choice of lifestyle.

Generally, buying a property is seen as more cost effective but as house prices rise, the gap between the cost of renting or buying a home is narrowing. At the moment, low interest rates are keeping the cost of mortgage borrowing low, which is attractive for those looking to buy but lending criteria can be strict.

Making the right decision means working out what you would be most comfortable with and can afford. Here are some further questions to ask yourself, in order to reach the right decision:

Is investing in property a priority for you?
Owning your own home through a repayment mortgage means that you are investing in a valuable asset – your home, as well as investing for the future. This is in contrast to paying a landlord and not owning the property in any way. Whilst the value of your property can go up and down, eventually, at the end of the mortgage term, you will own the property. That said, some people have other priorities and rather that invest in property, they may choose to spend on other investments or spend their hard-earned money in other ways. Consider how important it is for you to ultimately own a property and which sacrifices you’re willing, or not willing, to make.

Are you ready to bear the maintenance costs?
It is great to be able to make any adjustments you want when you move into a new home. But owning a home also comes with financial responsibility in regards to maintenance. In contrast, if you are renting a property, the landlord will pay for all decoration and maintenance. Another advantage is that you cannot fall into negative equity if you are renting and are not subject to the conditions of the housing market.

Have you considered your household budget?
Renting and buying are very similar in the sense that once you have a property, you will need to create and manage a household budget to manage all the costs of running a home, including building a contingency for unexpected costs. You must therefore ensure that mortgage payments or rental amounts are affordable to allow you to pay for everything else. Therefore, ensure you compare and contrast mortgage payments with rent levels, to help make the right decision when you consider your personal finances and circumstances.

How much flexibility do you need over location?
You may know exactly which area you wish to settle in but if you’re new to an area, how do you know whether it will suit you? A great aspect of renting is that it enables you to try out living in different areas to see which ones you prefer. If you’re happy to move on and try new locations, renting can be a great way of testing an area before you commit to buying or you may feel that it suits you for the long-term – the choice truly is yours!

Redstones Buyers

Buying a home is no longer out of reach with Help to Buy

Recognising the difficulties many people experience in regards to buying their own home, the Government created their Help to Buy scheme to help hard-working people buy their first home or move up the housing ladder.

Help to Buy makes it possible to buy a new build or existing home valued at up to £600,000 for only a 5% deposit, making home ownership more of a reality than a dream.

With Help to Buy, the Government offers an equity loan of up to 20% of the cost of a property, so that a 5% cash deposit and a 75% mortgage is required to comprise the rest. Additionally, fees are not charged on the 20% loan for the first five years of owning the home. Please note that these rules apply to newly built homes with a price tag of up to £600,000. Within the scheme, sub-letting or part-exchange deals for old homes are not permitted. In addition, an applicant must not own any other property at the time they buy a new home with a Help to Buy equity loan.

Part of Help to Buy is their mortgage guarantee scheme, which works as any other mortgage would, except that the Government offers lenders the option to purchase a guarantee on mortgage loans. This means that participating lenders are able to offer home buyers higher Loan to Value mortgages (80-95%). Therefore, if an applicant has a 5% deposit, they will need to take out and repay a 95% mortgage.

Other options under the scheme to help people become home owners are shared ownership (part buying or part renting) and Help to Buy ISAs, where the Government helps first time buyers to save for their first home through boosting their savings by 25%. These ISAs are due to launch on 1st December 2015.

Right to Buy is also under the scheme, which enables a council tenant with a least five years’ tenancy to buy their home at a discount.

At Redstones, we regularly advise our clients on how Help to Buy can benefit them as we can see its immense value in helping enhance lifestyles, whilst providing a fantastic new home and valuable asset for the future.

Stressed Landlords

Top tips for first time buyers

Redstones recognises that moving into your first home will be a major milestone in your life. If you’re currently working towards this goal, how can you achieve it successfully? Here are our tops tips:

Be financially savvy
This means having a clear picture of how much money you actually need to buy your first home. Typically, you will need a deposit of at least 5% of the property’s value. In addition, don’t forget that you will require further funds for mortgage and solicitor fees, survey costs and stamp duty if the property is above £125,000. This can amount to several thousands of pounds, which needs to be added to the initial cost of buying a home. Furniture, carpets, decor and household supplies also need consideration.

Think about your household budget once you’ve moved in too. The budget will need to cover the mortgage, bills and other outgoings on a monthly basis, as well as a contingency for maintenance and any emergencies that could occur. Understanding your costs and being able to stick to a budget ensures you’re making the right decision and will be happy once you move in.

Get Help to Buy
If you’re struggling to save a deposit, consider taking advantage of the Help to Buy government scheme.

Their equity loan scheme offers an interest-free loan of up to 20% of the value of a new build property, whilst the mortgage guarantee scheme has increased the number of mortgages only requiring a deposit of 5%, which makes mortgage interest rates more affordable.

Research different mortgages

There are so many mortgages on the market that it is worth speaking to a mortgage broker, bank or building society early on. You can start researching the many mortgages available through a price comparison site too, which often include Mortgage Calculators that help you work out monthly payments based on the interest rates available and repayment terms.

A fixed rate mortgage is often useful for first time buyers, as it means that your monthly payments will remain the same for a number of years. However, variable rate mortgages reflect the Bank of England base rate, which is historically low at the moment.

It may feel daunting to make a big commitment such as buying your first home, but by following these tips you can be assured that you’re making the right decisions.

Ready to buy your first home? Let Redstones help you take that important step.

Redstones Lettings

Landlord update: new Government proposals underway

There are a number of developments at the Government level that are likely to impact private sector landlords. These include:

Tax Relief
The level of tax relief available for landlords is changing, as announced in the recent budget. It’s proposed that buy-to-let mortgage tax relief should be capped at the basic tax rate of 20%.

This is causing much debate, as some people feel it would drive rents up and price landlords out of the market. Opinion is split as to the fairness of this proposal. Some people feel that landlords should consider renting their property as a business, in which case they should be taxed. Others state that homeowners cannot claim tax relief on their mortgage payments – so should landlords be able to?

Wear and Tear Consultation
Tax relief changes have been proposed for the wear and tear of furniture and fittings. Restricted to fully furnished properties, landlords can currently claim a wear and tear allowance of 10% of rent received, regardless of the costs.

This had meant that some landlords were gaining relief despite making no expenditure, whilst landlords who spent above the 10% level are limited in terms of the relief they can claim.

New proposals will allow all landlords to claim a deduction for the cost of replacing furniture and furnishings, as well as appliances and kitchenware.

Please note that the tax relief available will be for replacing existing furniture and not for furnishing property in the first instance.

Right to Rent
Right to Rent, where it is the responsibility of landlords and lettings agents to perform checks that ensure a tenant has the right to be in the country was recently trialled in the West Midlands. Although the results of the trial haven’t been released, the Government plans to expand the scheme throughout the UK.

What do you think about these recent proposals? Get in touch via social media and let us know.

Redstones Walsall Estate Agents

Planning to work for yourself in 2016?

The New Year often symbolises a new start and for many people, this means re-thinking their career. You may be unsatisfied with your current career, looking for a fresh start or want more flexibility and rewards.

If so, working for yourself by becoming a franchisee could be a serious option to consider for 2016 and beyond. Here’s why you should give it some thought:

Being your own boss

Fed up of that bad boss? A franchise allows you the freedom of being your own boss but you also have the protection of working within the framework of a tried and tested business. You don’t need to think of your own successful business idea, which is harder to identify than you may realise but you will need the passion, skills and drive to promote your own business.

Reduced risk

The success rate for new franchisees is now 91.8% – that’s significantly higher than most other start-up businesses. That’s because the franchisors will have developed a business model that works. This means that you don’t need to start from scratch and should just focus on making your own impact.

Your franchise is also far more likely to be successful if it’s part of a business sector you’re interested in, as you will easily be able to demonstrate passion. To reduce risk, due diligence and thorough research before you choose the right franchise is essential.

 Great income potential

Once your new franchise business is established, the income potential can be significant. If you’re looking for a career that is more financially rewarding, consider whether you’re satisfied with the income a franchise business could offer you.

 Flexibility

For working families and those who value work/life balance, as a franchise owner, there is flexibility in the hours you work. This is extremely valuable for some people, as it allows them to work around their childcare and family commitments.

 Support

Don’t forget that a franchisor will give you all the support you need to succeed – it’s in their best interests after all! This may mean offering advice on business planning or marketing, for example. This support is invaluable as you set off on your road to success.

If you like the idea of being a franchisee, how about owning your own prosperous property business?

Find out why many potential business owners are discovering that a Redstones Property Franchise is an attractive option.

Redstones Residential Sales

Our stress free survival guide for moving house

You may have heard that moving house is one of the most stressful experiences you can encounter. At Redstones, we feel that doesn’t necessarily need to be the case – if you’re prepared that is!

On the day you move, you will be very busy and may perhaps feel emotional too. On top of that, there is often a deadline by when you need to move to allow the new occupiers to move in on time.

You can reduce stress during a house move if you follow our advice:

  1. Anticipate stress

Anticipate stress and pack essentials in advance to help you on the day. These could include headache pills, drinks, snacks, paper, pens, scissors, spare light bulbs and any other materials you think you may need during the move.

2. Start early in the morning

Removal men will arrive early and work quickly, so ensure you have everything you need set aside such as a vacuum cleaner and cleaning equipment for a quick clean up afterwards and dust sheets to protect the floor and sofas. Dismantle furniture and disconnect electrical appliances beforehand, ensuring all boxes are clearly labelled.

3. Keep pets and children at bay

With so much activity occurring on the day of the move, if possible, see if a relative or friend can look after your children or pets. This will definitely help eliminate some of your stress, it will be more enjoyable for them and the chance of any accidents will be minimised.

4. Ensure communication is constant

In case of emergencies, keep contact numbers for your estate agent, solicitor, bank, as well as family and friends to hand.

Stay in touch with the removals team or whoever is helping you move, ensuring everyone understands where heavy items and boxes need to be placed in the new property.

5. Be realistic about what you can achieve

Don’t try to unpack too much when you first arrive. The bare essentials such as bedding and cutlery to eat a meal are enough. Once a proper night’s sleep has been achieved, you will have much more energy to tackle the rest of the unpacking.

Staying organised and calm is the key to a successful house move. Remember that although moving house may be tiring, it’s also the start of an exciting new chapter in your life, so congratulations!