Smart-home technology: could it help you?

This month, we look at what's driving purchasing habits in smart-home technology; are these new gadgets only for those with money to burn, or will these products soon become commonplace around our homes?

Elsewhere, we look at the recent extension of the Help to Buy scheme, we investigate if the 100% mortgage should be reintroduced and we offer a guide to help tenants move out of their rented property.

Want to use Help to Buy? You've got a little more time

The Government’s Help to Buy scheme has been extremely successful, with a duality in its accomplishments; firstly, in encouraging people to take a step on to the property ladder and secondly, in encouraging housebuilders to develop new homes in the knowledge that they have a government-backed safety net of potential buyers, just waiting to purchase their newly-built homes. With the news from the recent Budget that the scheme which is due to end in April 2021 will be extended, albeit in a new format, by two years prospective buyers should be buoyed by the government decision.

Help to Buy will have been in existence for a decade by the time the extended period finishes and is available to first-time buyers as well as current homeowners looking to trade up on the property ladder. Essentially, the scheme provides a government-backed loan to people who want to buy a new home but cannot afford the deposit. For developments participating in the scheme, you only need a 5% deposit (ie. &10,000 for a home worth &200,000) and the government then lends 20% of the cost (topping up the deposit), with the remaining 75% consisting of a mortgage. The 20% loan from the government is also exempt from fees for the first five years of the scheme.

The extra two years of Help to Buy will be available to first-time buyers throughout the UK for houses worth up to a new regional price cap, rather than the current scheme’s cap of &600,000. As well as new regionalised limits for the equity loan, the scheme will solely be available to first-time buyers whereas currently, you do not have to be new to the property market in order to buy through the scheme – a fact which very few are aware of.

The scheme in its current guise has helped more than 300,000 people purchase a property, all of which have been new-build homes. It is this interaction between buyers and new-build homes which has helped to answer the ever-increasing demand for properties across the UK, and with the scheme forecast to end in 2023, there will surely be an impact upon the ready availability of new homes from this point onwards.

Housebuilders have had the luxury of a steady supply of buyers ready to purchase through Help to Buy who otherwise would not have been able to purchase their properties, and after 2023 there is the real possibility of a slowdown in new building projects due to the cessation of Help to Buy. Companies such as Barratt, Taylor Wimpey and Persimmon have reaped the rewards of the scheme since its introduction in 2013 with around 40% to 50% of their sales from Help to Buy homes.

For five years, potential homebuyers have been able to purchase properties which would otherwise have been outside their price range – and for first-time buyers, in particular, this has allowed a first foray into property ownership. The announcement of an extension to the length of this scheme should therefore encourage potential buyers to take the plunge, and allow building firms to continue to reap the rewards of a particularly lucrative sector of the property market.

What's driving purchasing habits in smart-home technology?

Smart homes have typically been seen as a luxury for those with money to burn, or, if you’re feeling particularly unkind, those of a lazy disposition. The ability to control your central heating with your smartphone or turn your house lights on and off using voice commands certainly has an element of usefulness, but popular opinion around the idea appeared to be that such technology wasn’t high on people’s lists of priorities when it came to managing their home.

Recent research by the Property Expert suggests that this isn’t the case, however; according to their findings, almost three-in-four homes have at least one connected smart automation device of some description already. Further research has advised that by 2023, this sort of technology should be commonplace across the country, with close to 1.5 million homes planning to fully automate their home in the next five years.

What’s the thinking behind this surge to make your home work for you? The data seems to suggest that it comes from a practical place, with 40% of those people with smart home technology confirming that their purchasing habits were based around a desire to make their lives easier. When you consider the practicalities of turning your heating on prior to your arrival at home during the cold winter months, or controlling your TV watching or music listening activities without having to get up from the sofa, perhaps it’s no wonder!

Beyond that, 31% profess their purchases to be down to a desire to keep up with the latest technology, with a further 18% citing a need to cut their energy bills with the installation of smart meters. At the other end of the scale, 3% simply wanted to keep up with their neighbours.

Currently, the most popular forms of in-home gadgetry are smart TVs, smart meters, home hubs such as Amazon Echo, heating and smart speakers. The landscape could change drastically by the time we hit 2023, of course; technology like smart fridges with the capacity to order food or sensors that monitor your movement and adjust the lighting in your home accordingly could become more prevalent as smart speakers and TVs become the norm.

There’s certainly an element of attraction to automation too; it can add value to any kind of home, be that purchased or rental property. With that in mind, should you be wondering of ways to increase the price of your house, flat or abode, you could do far worse than investigate ways to kit your domicile out with the last technology.

Should the 100% mortgage be reintroduced?

A recent poll from YouGov suggests that almost half of the United Kingdom think that the re-introduction of the 100% mortgage is a good idea. A total of 9,713 people were included in the government survey and participants were asked whether borrowing the entire cost of a home is either a ‘good idea’, ‘bad idea’ or ‘unsure’. Almost half of those surveyed, 48%, stated that the reintroduction would be a ‘good idea’ and almost a third regarded the borrowing as a ‘bad idea’ – showing that there is some consternation around the subject.
Currently, a total of nine lenders offer a 100% (or ‘loan-to-value’) mortgage. However, there are conditions around the borrowing option in its current format. In order to apply for a 100% mortgage, and depending on the mortgage provider, you must either have a guarantor who has a property to act as collateral against the mortgage or you will have a ringfenced amount of savings which can act as security (essentially making it an offset mortgage).

The suggestion to reintroduce the 100% mortgage would circumvent the necessity for guarantors or separate security accounts and could therefore help those who are struggling to take that first step on to the property ladder. Legal & General Mortgage Club head of lender relationships Danny Belton disputes whether the reintroduction of this type of lending would be beneficial, however, stating “the thinking and rationale behind the return of 100% LTV mortgage is interesting, but this is not the solution to the current issues facing first time buyers.”

Belton continues to critique the 100% mortgage, offering: “At the very least it would mean lenders would have to significantly increase the amount of capital they would be required to hold, which is just not sustainable. What would be more beneficial is for more buyers to utilise schemes such as shared ownership and Help to Buy, or even make use of a guarantor mortgage.”

In terms of age groups, the poll returned some interesting results, with 46% of those aged 18 to 24 responding positively to the proposition, compared to 49% of those aged 65 and over considering it a poor idea. The disparity in the age groups could be linked to the differences in the stages of property ownership; there’s the younger survey participants that are keen to get on the property market and are therefore more responsive, whilst the older participants have a higher likelihood of already owning a property and are thus more circumspect when faced with new propositions, such as the 100% mortgage.

Although the initial prospect of a mortgage for the full value of a property may appeal to potential buyers struggling to get on to the property market, the realities of living with such debt and the inflexibilities around it could dissuade the majority. The YouGov survey clearly demonstrates that younger people are keen to buy property and hence any new prospects which may help them in this endeavour will be well-received.

However, as Danny Belton has stated, there are several alternatives available to help people onto the property market. Those considering the 100% mortgage to be a good prospect should look into shared ownership schemes and Help to Buy before plunging into the loan-to-value option, no matter how attractive the prospect may appear on first glance.

Read our tenant's guide to moving out of your property

Your tenancy has come to an end, and now you must juggle a series of different tasks before you can successfully leave the property. But don’t fret! Take a look at our guide to moving out for some handy tips to make the process a little less stressful:

Round off all your bills
Unpaid rent is the most common reason for tenants losing their deposit, so it’s a good idea to check with your landlord or property manager before you move to make sure you’ve paid the correct amount.

You should also give your energy suppliers plenty of notice before you move so that they can organise a final bill. Make a note of your meter reading on the final day for reference – this will prove useful, should you be billed an incorrect amount.

You could also consider having your mail re-directed to your new address and you should also inform any of your service providers such as TV, internet etc. that you will be moving to a new house.

Give the place a good thorough cleanLandlords will need the property to be ready for the next tenant, so there will likely be a clause in your contract that stipulates that you will need to clean every nook and cranny of the property before you move out. If the property isn’t spotless, you could lose some of your deposit to a cleaning bill.

Spruce up the garden
The garden will also need to be in the same condition as when you moved in. Pull up any weeds, mow the grass and dispose of any garden waste properly. If the gardening tools belong to the landlord, ensure you leave them behind for the next tenant.

Thoroughly check the property for a final time…
Moving out of your rental property is a different proposition to moving out of your parent’s house or a property you may have owned. For the duration of your tenancy, you have essentially played the part of guest and caretaker of someone else’s property, so a good deal of the process will be focused on the condition of the property when you moved in vs when you left it.

To help avoid any issues, it’s a good idea to do a walkthrough of the property and compare it to the condition report and/or any pictures you or the lettings agent might have taken before the move. It’s also a good idea to take new images before you leave.

… and review the inventory
The inventory you received at the beginning of your tenancy will detail any items that the landlord had in the property, for example, gardening tools, small items of furniture, kitchen appliances etc. You will need to check that all these items are still in the property and that they’re all in working order, or you might face losing a portion of your deposit.