Average UK Property Prices Reach £300k, How to Downsize Your Property & More

Welcome to the February edition of the Town & Country Newsletter!

In this edition we take a look at why the average value of a UK property is now worth £300,000 and why the number of first time buyers have jumped to a nine year high. We also reveal the best way to downsize and what steps to take before painting a room.

Average UK Property Prices Reach £300,000

2017 is already off to a strong start with UK property prices breaking the &300,000 mark for the first time.

Research by property site Rightmove has shown that in the month of January UK home values rose by 0.4% on average, which is the third highest monthly rise for property values since 2015. This new year jump has taken the national average to &300,245, breaking the &300k mark for the first time.

Asking prices were also up, with an average 3.2% rise year on year across the nation, but still quite varied from region to region. As expected, the South of the UK saw the largest jump with the South East rising by 5.5% year on year to &404,804 and Greater London rising by 2.3% year on year to &624,953.

Director at Rightmove, Miles Shipside said: “The 0.4% monthly and 3.2% year-on-year price increases are indicators of the continued market momentum from the autumn.

“Demand for a suitable home is such that visits to the Rightmove website are still up by 5% year-on-year, despite being compared to a period that was boosted by high demand from buy-to-let investors rushing to beat the stamp duty deadline."

Miles Shipside also pointed out that “Year-on-year comparisons for transactions in the first quarter of 2017 should also allow for the distortion of last April’s additional stamp duty tax deadline, as transactions were up 40% in the first quarter last year.”

There has also been a rise in supply of smaller properties hitting the market as it has seemingly cooled down from the property investor perspective, as many acted quickly almost a year ago to beat the stamp duty hike.

This could be a huge benefit to first time buyers, a sentiment backed by Shipside as he stated. “Those planning to buy their first home in 2017 have more choice of properties and less competition from other buyers than their counterparts a year ago. It’s a possible learning point for aspiring first-time buyers that a year ago buy-to-let purchasers acted more quickly and closed deals at a faster rate, appearing not to take a Christmas break.

“Admittedly they had the financial incentive of a deadline to motivate them, but first-time buyers still have time to act and currently have the incentive of stronger negotiating power to try and mitigate the upwards trajectory of property prices.”

First Time Buyer Numbers Reach Nine Year High

The number of first-time buyers soared to a nine-year high in 2016. This was despite the value of starter homes breaking through the &200,000 barrier for the first time.

According to Halifax, 2016 saw the highest number of first time buyers since the financial crisis in 2007.

The high street bank estimates that there were 335,750 first-time buyers in 2016, which is the highest figure they have seen since 2007, which saw 359,900 people take their first steps onto the property ladder.

Halifax has also reported that the amount of money first-time buyers require to put down on a deposit has more than doubled since 2007 and now stands at &32,000.

So why now after nine years?

A major factor in the sudden rise in first-time buyers is the record low mortgage rates.

Despite rising house prices, the typical first-time buyer spent 32% of their pay cheque on mortgage payments, which remains in line with the long run average of the last nine years and well below the peak of 50% reached in the summer of 2007.

The increase can also be attributed to government schemes such as Help to Buy, which have helped to not only assist prospective buyers in saving for a deposit, but have also reinvigorated the mortgage market for buyers with a small deposit.

Who does it affect?

Of course it is great news for those looking to buy their first homes, but it’s also good for the housing market as a whole.
First-time buyers stimulate the housing market, as they buy the properties from those looking to trade up the ladder.

The role of the new buyer is becoming increasingly more important in the housing market. In 2016 first-time buyers accounted for 49% of all purchases made with a mortgage, the highest level since 1996.

2016 was the third consecutive year in which first-time buyer numbers have totalled more than 300,000. They have been steadily increasing since the record low of 192,300 in 2008.

The average property price paid by a first-time buyer in 2016 broke through the &200,000 barrier for the first time in 2016 to stand at a record &205,170, a significantly higher number than the &135,254 paid in 2009.

Unsurprisingly, first time buyers in London faced the highest prices at &402,692 for their first home. They also faced saving for a far higher deposit at &100,445.

In order to afford the higher costs, many first-time buyers have been opting for longer mortgage terms. The national average in 2006 saw most first time buyers choosing terms of 25 years or under. Now, however, most first time buyers face a mortgage term of 30-35 years.

How to Downsize Your Home

For a lot of older homeowners today, downsizing can be a great way to have a good clear out after your kids have left home, but also a fantastic way to free up some equity from your home. This financial boost also will most likely come with the added bonus of a reduction in running costs as you move to a smaller home. While there are plenty of benefits of downsizing, moving home can still be a complex and stressful experience, so we’ve put together a quick guide on what to consider to help make your move a much smoother transition.

Decide what you REALLY need
The most important step to a successful downsize - and a step you’ll want to take as early as possible - is taking a good look at all of your possessions and cutting away as much as possible. This is the part where you have to consider your day to day life and think about how much you use all of these items. You should ask yourself, do you still need all of that seating in the living room, or do you need such a large dining table? If the answer is ‘no’ to these sorts of questions, then it’s time to start dividing item into the ‘keep’ and ‘get rid’ piles.

While it may be hard at first to get tough of some sentimental possessions you’ll benefit on moving day when you have less stuff to move and won’t have to worry so much about how you fit all of it in.

Don’t Throw Anything Away
Once you’ve decided which items don’t belong in the ‘keep’ pile, it’s time to see if you can get some extra cash from your unwanted possessions. Obviously there will be some items that may not be fit for use anymore and would be better off taken to be recycled, but the items that are in good condition can be used to help fund new items more suitable for your smaller home.
As we said earlier, separating your items early is the best strategy as you will now have plenty of time to use websites such as Gumtree and Ebay, you might even be surprised by the how much interest some of your items generate and how much money they bring in.

Assess Your New Space
At this point you should have divided your items and possibly sold a few of them generating some extra cash. Even though you’ve probably gotten rid of a lot of possessions, it may still be a challenge fitting everything that remains into your smaller space.

If you’re already part way through the moving process and have agreed on which house you’re going to buy, start looking at measurements of each room and compare them against the measurements of your furniture. Your King size bed may fit into your new bedroom, but will it leave room for much else? Start planning how everything is going to fit in and figure out how to get the absolute most out of each space. You may need to invest in smaller and more suitable items for your home such as a dining table that seats 4 instead of 8.

Prepare For The Big Day
Last time you moved home it was most likely into a house of roughly the same size or bigger, however, this time you have to consider that you’ll have less space to work with, meaning it won’t be just as simple as getting everything in and unpacking it later.

Whether you want to label all your boxes with ‘Living room’, ‘bedroom’ etc. or use a colour coded system, it’s best to know what goes where before you begin shifting everything. As with any move, it’s wise to move the bigger items such as beds and chairs first, as this will give you a better idea of where to place all the small things.

Normally when a family moves into a bigger space they initially use the extra room to store things they’re too tired to unpack right away. If you’re downsizing then you probably won’t have room for a bunch of items to be out of sight and out of mind, so you should begin unpacking and organising all of your items as soon as you can. Moving into a smaller place and being surrounded by boxes for the first couple weeks will only ruin the experience for you by making it feel even smaller. Get organised early and get the full use out of your new home.

The Essentials to Consider When Painting a Room

Are you thinking about sprucing up your walls? Painting is often that task all homeowners dread but it’s one of the most inexpensive ways to improve the look of your home without too much effort.

But before you rush down your local DIY store and start buying pots of ‘Jasmine Shimmer’ and ‘Ocean Ripple’ (yep, they’re real names!) don’t forget the essentials first…

Lighting
The quality and level of light in a room is a key factor to consider when choosing a paint colour. Rooms that benefit from lots of natural light will benefit from pale shades to enhance the bright and airy look but you may need a stronger shade than you first thought to avoid it from appearing washed out. If the room's walls are currently white or another light colour, you should consider how painting the room a darker hue will affect your current lighting scheme. Will you need to add additional lighting? If so, save energy and choose a colour on the lighter side.

Traffic
Does the space experience heavy traffic? If so, think darker. White hallways and entryways will show wear and tear relatively quick. Avoid unnecessary cleaning by choosing a low-maintenance colour. Make your paint perform for you!

The Finish
Surprisingly, not only does the colour matter, but the finish, or sheen, does as well. High gloss paint finishes are very durable and easier to clean, but the downside is they often highlight imperfections in your walls. On the other hand, a flat paint finish will hide these imperfections. A more matte-like finish, such as flat, will not clean as well or endure touches as well, but you won't see imperfections as much.

Try Samples First
No need to guess how good (or bad) a colour will look on your wall. For a fraction of the cost of a gallon of paint, you can purchase sample pints, take them home, and test them out. We recommend painting onto a large (say, A3) sheet of card so that you can lay it out with other samples of tiles, flooring and fabrics to see how they work together. Also, if you’re shopping for other items, you can take it with you!

Do the math
Of course, you'll need to know the total area you're going to paint (add up all the square footage of your walls, including alcoves and dormers, plus a little extra), but you'll also need to account for multiple coats, primer and the porosity of the walls. It's best to have some paint left over for repair work later on, so get more than you need.

Don’t forget the prep
Prep work will be the vast majority of your time spent painting the interior of your home. This means empty out the room, or as much as possible, wipe the walls down (to remove dust and dirt), tape off adjacent walls, trims and light switch’s. At least three-quarters of your time will be spent doing these tasks.