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Kirkby Stephen,
Cumbria, CA17

Kirkby Stephen is an active market town just beyond the northern periphery of the Yorkshire Dales National Park.

£965,000

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Cumbria, CA17.

Patrick Brompton,
North Yorkshire, DL8

Wheelgates is a large family detached house with a detached single story annex, which is situated in a quiet location...

£825,000

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North Yorkshire, DL8.

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How to help your children buy a home

Buying a first home is no easy feat, which is why many first-time buyers turn to the Bank of Mum and Dad for that extra bit of help. If you’re eager to help get your adult children on the property ladder, let’s take a look at ways you can help them take their first step.

How can I help my child buy a home?

The term ‘Bank of Mum and Dad’ refers to parents who offer financial support for their children’s major life expenses, such as buying a house. This is usually through a gifted deposit or a loan, but if you can’t afford to gift a large sum of money, there are mortgage options available to help them buy their first home:

Retirement interest-only mortgages
Guarantor mortgages
Family offset mortgages
Joint mortgages
Joint Borrower, Sole Proprietor mortgages

Gifted deposits

If you have the means to gift your child enough money for a deposit, this is the easiest way to help them onto the property ladder. Many mortgage lenders will allow gifted deposits from family members, but you will need to provide a Gifted Deposit Letter and supporting documents confirming the following:

Your photo ID and proof of address
How much you’re gifting
Your relation to the mortgage applicant
Where the funds are currently
Confirmation that it is a gift and that you won’t have any financial or commercial stake in the property (usually a written statement)
Proof that you are in a financial position to gift a deposit.

It’s important to note that this lump sum is officially a gifted deposit, therefore you will not have any stake in the home, and it is not a loan.

Tax implications

There won’t be any immediate tax to be paid by you or your child if you opt for a gifted deposit. However, a bill could be due further down the line. In the UK, every individual is allowed to give away up to £3,000 a year with no inheritance tax charge. Your unused allowance can be carried over from the previous year, meaning that two parents could potentially gift their child up to £12,000 without having to pay inheritance tax. Any more than this, and you will likely be liable for inheritance tax.

Guarantor mortgages

This type of mortgage allows you to act as a guarantor for your child by putting up savings or your property as security. If you decide to use savings, you can earn interest on them but they will technically be off-limits for a fixed period or until the amount owed falls below a certain threshold.

Acting as a guarantor can help your child secure a mortgage, but the risks are significant and shouldn’t be overlooked. If the borrower cannot keep up with their mortgage payments and the home is to be repossessed, you could lose some or all of your savings. If you used your home as security, then you too could lose your home in the worst-case scenario.

Family offset mortgages

Family offset mortgages link the borrower's mortgage deal to a family member’s savings account, resulting in reduced interest rates for the borrower. While this is a great option if you are in a good financial position, you will not earn interest on your savings once linked to a family offset mortgage. Plus, if you wish to withdraw some of the cash in your savings, the borrower’s mortgage payments will increase as a result.

Joint Borrower, Sole Proprietor mortgages

In a JBSP mortgage, you can join as a borrower along with your child. This means that your income and credit history are considered when determining mortgage eligibility and affordability. This can be particularly helpful if your child's income alone is not sufficient for the desired mortgage amount.

While your child will be the sole owner of the property, all parties are equally responsible for repaying the mortgage. Defaulting on payments can have serious consequences for both the child's and the parent's credit scores and financial stability.

Joint mortgages

As a joint mortgage holder, you'll be equally responsible for repaying the loan along with your child. This means you need to be confident in your collective ability to meet the mortgage payments.

Decide how the mortgage repayments will be handled. Will you and your child split the payments evenly, or will one party be responsible for a larger share? Having clear communication and a written agreement can prevent misunderstandings later.

For more advice, contact the dedicated team at J R Hopper & Co

20% more homes for sale than last year

As we head into the summer months, the property market is continuing to bolster as an increase in market activity continues to benefit home movers. Let’s take a look at recent property market data and how the current market conditions benefit sellers and buyers alike.

Recent market data

According to Zoopla's house price index, there were 20% more properties for sale in March 2024 than the previous year.* There was also a 9% rise in sales agreed during this time period.*

This rise in market activity is partly due to an increase in the average working wage and an overall robust job market, both of which boost consumer confidence. In fact, confidence in personal finances has reached the highest level in more than two years, according to GFK's Consumer Confidence Barometer.** This made homeowners considerably more interested in buying a new home, therefore increasing market activity.

Benefits for buyers

More choice

An increase in market activity leads to a wider range of choices available for buyers to consider. This improved choice empowers buyers to explore various properties, compare features and prices, and ultimately make more informed decisions that align with their preferences and needs.

Price stability

The market remains well balanced as the demand for properties and the supply of homes for sale have equally increased. Because of this, prices are less likely to fluctuate, potentially making for a more stable investment. Increased market activity also helps to create a clearer picture of the true value of properties, further contributing to stable pricing.

More negotiating power

Due to increased confidence, buyers have the opportunity to be more assertive when negotiating a price for a property. Since the supply of properties is so high, buyers are less desperate to secure a particular property and can carefully consider their options.

More opportunity for investment

For those looking to invest in property, the increased supply increases their options massively. In a busy market, investors can buy a property, make renovations, and sell for a profit in a shorter timeframe.

Benefits for sellers

Increased demand

With more people in the market for a new home, sellers can command higher sale prices for their properties as buyers engage in bidding wars. By achieving a higher sale price, sellers can then look for a higher-value property than they previously considered possible.

Faster sales

The increased level of demand makes it easier for sellers to find potential buyers, which can lead to faster sales and less problematic property chains. Additionally, if a buyer is particularly interested in a property, they may be willing to pay a slightly higher price to secure a quick sale.

Flexible terms

Strong demand can give sellers the upper hand in negotiating certain terms. For example, if the seller needs to close the sale quickly, they can choose the buyer who is in the best position to complete the transaction as soon as possible.

Less pressure

In a balanced and active market, sellers may experience less pressure to accept lower offers or make compromises that they're uncomfortable with. They can feel confident that a more suitable buyer will soon show interest and make a better offer.

How an estate agent can help

Estate agents use their in-depth knowledge of the property market to assist buyers and sellers alike in taking advantage of summer 2024’s active market. They have access to a wide range of property listings and can help movers identify suitable properties that match their needs and preferences. They are also skilled negotiators who can secure favourable terms and prices while guiding movers through every step of the process.

Zoopla*

GFK**

Rental prices have increased - how this benefits landlords

The rental market is continuing to look strong for landlords as we head into summer, with Zoopla reporting a 7.8% increase in rental prices between March 2023 and March 2024.* Let’s explore how this increase benefits landlords and how a letting agent can help you increase rental prices correctly.

Benefits for landlords

Increased rental income

As inflation drives up expenses such as property taxes, maintenance, and insurance, landlords often adjust rental prices to maintain profitability and cover their investment costs. By making sure you don’t exceed inflation rates, you can remain competitive while still covering your expenses and improving your return on investment.

Financing property renovations

The additional rent income you earn from rental prices increasing can be allocated towards funding renovation projects aimed at enhancing the property’s overall value. These improvements could include upgrading appliances, improving energy efficiency, and modernising interior spaces, all of which can help you command higher rent prices and increase the property’s value to boost long-term profitability.

Mitigating financial risks

Increased rental prices also help you protect your finances and reduce the impact of unforeseen expenses, such as vacancy periods. Additionally, as you can allocate more funds to maintenance and repairs, you are less likely to encounter issues with your property in the future, further stabilising your income.

Why it’s important to set a realistic rental price

Tenant affordability

Although it may be tempting to significantly increase rent, it is important to keep any increases to a sensible level. Setting rental prices too high can outprice tenants and reduce the amount of interest in your property, potentially leading to costly vacancy periods.

Tenant retention

Rental prices directly impact tenant satisfaction, so your current occupants are much more likely to stay in the rental property if they feel that they are receiving fair value for the rent they pay. If the rental price is too high, tenants could seek alternative housing options.

Market competition

An accurately priced rental property is a key component of remaining competitive in the market, as overpricing your property can deter potential tenants and lead to prolonged vacancy periods. Overall, setting a realistic rental price is essential to effectively navigate market competition, attract tenants, and optimise your property’s profitability.

How a letting agent can help you increase rent fairly

A letting agent can play a crucial role in helping you increase rent fairly by providing valuable market insights, professional guidance, and effective negotiation strategies. Using their expertise in the local rental market, letting agents can conduct in-depth analysis to guarantee that any proposed rent increase aligns with the current market conditions.

Additionally, letting agents can advise you on the best timing and rate of rent adjustments to maximise rental income while remaining competitive and fair to tenants. By setting a realistic rental price that aligns with rental inflation, comparable rates in the area, and the property’s value, you can ensure that your property remains accessible and affordable for a broader range of tenants.

Looking to increase your rental income? Contact us today

Zoopla*

How to prepare your property for the rental market

As a landlord, preparing your home for the rental market is crucial to attracting tenants and maximising your rental income. From inspections and maintenance to legal compliance and insurance, let’s take a look at how you can make sure your property is ready for a new tenancy.

Inspect the property

Firstly, you should inspect your property and take note of any areas that require attention or repairs. By taking care of these issues in good time, you can present a well-maintained property to potential tenants, increasing the likelihood of securing tenants. This will also reduce the chances of maintenance issues further down the line, which will reduce your expenses throughout the tenancy period.

Present the property

Presenting your property well significantly increases its attractiveness to potential tenants, as it showcases your commitment to providing a comfortable and well-maintained living space. You should begin by cleaning and decluttering the space to create a welcoming environment, before staging the property with attractive décor to highlight its full potential. Make sure to capture high-quality photographs to showcase its best angles and features in rental listings.

Decide between furnished and unfurnished

Deciding between offering a furnished or unfurnished rental property is a crucial consideration when preparing it for the market. Furnished rentals appeal to tenants seeking convenience and immediate occupancy, as they come equipped with essential furniture and amenities. This option can command higher rental rates and attract short-term tenants, such as students and young professionals.

On the other hand, unfurnished rentals provide tenants with the flexibility to personalise the space according to their needs and preferences. These properties tend to appeal to long-term tenants looking for a more permanent living situation and often cost landlords less time and money. Ultimately, the decision depends on factors such as your target market, the property’s location, and local market conditions.

Prepare an inventory

Preparing an inventory is crucial as it reduces the likelihood of disputes arising over damages or missing items during a tenancy. You should document every item included in the property, from fixtures and fittings to appliances and decorations. It’s important to take detailed notes and photographs that accurately show the condition of the property. This will not only protect your investment but also provide peace of mind and establish clear expectations and understanding between you and your tenant.

Make sure you’re fully covered

You should ensure you have adequate landlord insurance coverage to protect your investment against potential risks. Landlord insurance typically provides coverage for property damage, liability protection, loss of rental income, and legal expenses. Without the appropriate insurance coverage, you could face significant financial loss in the event of accidents, property damage, or tenant-related issues.

Adhere to safety regulations

Adhering to safety regulations is paramount when preparing a property for the rental market, as it not only ensures the well-being of tenants but also protects you from potential liabilities. By meticulously following safety guidelines and regulations, such as installing smoke detectors, carbon monoxide detectors, and fire extinguishers, you can demonstrate your commitment to providing a secure living environment.

Use a letting agent

Using a letting agent to prepare your property for the rental market can significantly streamline the process and enhance your return on investment. Letting agents possess extensive knowledge of the local rental market, allowing them to advise you on setting an optimal rental price and attracting suitable tenants.

They handle tasks such as marketing, tenant screening, property viewings, and tenancy agreement drafting, saving you valuable time and effort. Letting agents also have access to professional networks and resources, enabling them to efficiently address any maintenance or repair needs and ensure that your property complies with legal requirements.

By entrusting the preparation of your property to a letting agent, you can benefit from their expertise and industry insights, ultimately maximising your rental income while minimising potential issues and risks.

Looking to expand your property portfolio? Contact us today