Adam Swalwell of Carver Financial Services comments on how the Mortgage Market Review’s stress tests are helping to prepare buyers for their future.
With mortgage rates now increasing, both current and prospective homebuyers need to be aware of the increase in their mortgage repayments for when interest rates eventually rise.
The Mortgage Market Review (MMR) was officially introduced by the Financial Conduct Authority (FCA) in April, and was brought in to allow lenders to determine a borrower’s affordability if such a time was to arise.
Under the MMR rules, lenders must now check that you can afford your repayments – both now and in the future, and they do this through processes such as mortgage stress tests.
What is a mortgage stress test?
With a base rate rise inevitable, the FCA has stated that borrowers must not receive a loan if a bigger mortgage repayment could “break” their finances. You will be extensively checked, with your day-to-day finances and spending coming under intense investigation.
With the new rules, lenders will need to know everything about your finances, from how much you earn to how much you spend on food and utility bills every month.
Research carried about by Experian this month revealed that homebuyers are underestimating what their mortgage repayments could be by as much as £650 if interest rates were to rise.
Whilst this may sound like a panicking statistic, this is one of the main factors why the MMR has been introduced to the market.
As well as ensuring that a return to irresponsible lending that took place in the run-up to the credit crisis is avoided, the MMR aims to protect borrowers from falling behind in their repayments, which is why doing a check now, will prepare you in good time for when the rates rise.
When the Bank of England’s Monetary Policy Committee votes to increase the base rate, expectations are that it will be increased in a controlled manner until it reaches between 3-6 per cent to minimise the risk exposure level.
If a homebuyer was to purchase a £235,000 property, and had a combined average household income of £50,674, research by Experian shows that they are claiming they can afford an average mortgage repayment of £780 per month.
However, if rates were to indeed increase to 5.5 per cent at the end of a typical two-year fixed deal, the homebuyer could find themselves paying around £1,440 per month.
As the economy continues to improve, interest rates are inevitably going to rise. This is why it is better that the MMR is letting borrowers know now how much they can afford, rather than a year from now, when it is too late.
Whilst the MMR continues to look to the future, so should you. Regardless of what measures are taken by the Bank of England and Government, there is always going to be a risk factor when taking out a mortgage, which is why considering taking out income protection insurance and seeking professional advice should be a serious consideration.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will 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.
A SUCCESSFUL meat company plans to spend up to £1m on transforming a former pub into a food hall and bistro.
Premier Meats, based in Gateshead, has bought the former Colburn Lodge in Catterick Garrison to create its third “Centre of Meat Excellence”.
Mark and Celina Whittaker are already known in the area, having had an outlet at the regular Sunday market at Catterick Racecourse since it started 20 years ago.
The couple, who began with a fresh meat stall at Chester-le- Street market 24 years ago, already have Centres of Meat Excellence at Team Valley, Gateshead, and Kingston Park, Newcastle.
They plan to spend between £750,000 and £1m on the Colburn Lodge project which they hope to open in time for Christmas 2014.
An innovative bistro will offer speciality teas and coffees together with food produced from products stocked in store.
Mr Whittaker said: “We will be creating 12 new posts at the food hall. We will be recruiting management, sales staff, butchers and warehouse staff from the local area and plan to offer a seven-day service.”
Carver Commercial, the Darlington- based chartered surveyors and property consultants alerted Premier meats to the property and then handled and completed the sale.
Mr Whittaker said: “When Carvers flagged up that Colburn Lodge was for sale we immediately registered our interest.
“We really want the centre to become an important part of the local community and to establish a community of its own among staff, customers and our neighbours.”
Julie Wallin, director of Carver Commercial, said: “We knew Premier Meats well as market traders across the region who were keen to establish their new brand of Centres of Meat Excellence in strategic locations.
What does the future hold for our high streets? Commercial property professionals have come together to suggest the way forward for one North-East town. Julie Wallin reports
EVEN before the worst recession in a generation hit retailers four years or so ago, the challenges facing town centres across the country had been mounting.
How can traditional high streets hope to compete with the growth in out-of-town retail parks and the explosion in internet shopping?
The Government’s answer was to enlist Mary Portas – Mary Queen of Shops – to come up with a solution. The result was the Portas Review back in 2011, in which the retail expert presented the view that it was not a question of needing to revive the High Street, but to create a new one.
As a chartered surveyor, active in the Darlington market for more than ten years, I share that view. Darlington is a good example of a town centre which is struggling with the challenges of competing in the modern retail world.
In my time in business, I don’t remember so many empty shops coming onto the market in primary and secondary town centre locations.
We are in the middle of a retail crisis and, frankly, something fundamental has to change.
The world has moved on and we either move with it or die.
A meeting of landlord clients and local planning consultants was recently arranged in Darlington to air concerns and exchange ideas on what could be done. It quickly became clear that there are common concerns and beliefs about the changes which are necessary.
It isn’t rocket science, but it does require bold leadership from the town’s authorities and the need for greater flexibility on planning consent was a consistent theme.
A survey of vacant, available ground floor retail space in the Darlington core town centre area recently revealed more than 76,000sq ft. That is a lot of space to fill in a shrinking retail market. However, there are potential occupiers to fill these gaps.
From my own company’s experience of inquiries for retail space, charity shops, restaurants, coffee shops and betting shops, plus small independent retailers, have the largest appetite.
However, there are planning constraints which are stopping properties in designated retail areas being let. A lack of flexibility over change of use applications are making it increasingly difficult for landlords to find suitable tenants.
As a result, we have an increasing stalemate and there was a clear feeling at the meeting in Darlington that a forum was required – involving councillors, planners, landlords and agents – to debate what is clearly a vital issue for the future prosperity of the town. It is in all our interests to find some answers.
Planning inflexibility was not, however, the only concern aired at our meeting. Bringing vibrancy back to Darlington town centre depends on a collection of ideas and activities, and parking is seen as a major issue.
MARKET stall holders are not allowed to park their vehicles near their stands, and parking enforcement is seen as over-zealous, with shoppers in fear of being penalised if they are a few minutes late returning to their cars.
To encourage motorists – the modern shoppers – we believe there is a need to seriously consider disc parking, as well as designated 30- minute parking bays to enable shoppers to collect their purchases. We simply have to make it more convenient to shop – not make it more difficult or intimidating.
In summary, it is time for serious debate and for meaningful change. A Government initiative in May has introduced some relaxation of planning restrictions, albeit for only two years and subject to size and location.
It represents a crumb of encouragement, but is it realistic to expect it to make a real difference and be workable with no guarantee that planning permission will be given after the two-year window?
Grasping the nettle now before it is too late in terms of local policy is needed to reflect the times that are rapidly changing. The fact is that national occupiers are retreating from our high streets and a recent report by Price Waterhouse Cooper, commissioned from the Local Data Company, claims that town centres are transforming from pure shopping destinations to “centres of leisure and services”. The suggestion is that the high street will gradually become a place to eat and consume services.
If that trend continues, there will have to be greater incentives for smaller independents to take up vacant units and create a different kind of shopping experience off the back of the growing demand for leisure uses.
Landlords are doing their bit by offering many more incentives to keep existing tenants and find new ones. These include extended rent-free periods, stepped rents, rent reductions, and sharing or carrying out improvement works for tenants. But, on their own, those measures are not enough.
Darlington has much to commend it. It is a nice town with first-class communication links, serving a prosperous and largely loyal catchment area. If national and local policies are flexible and supportive, then the town can adapt and prosper in a new and challenging environment.
But without change, there is the very real prospect that we will be faced with more empty units, shuttered facades and quieter shopping streets. We are prepared to take up the challenge in taking our town centre forward. It is hoped that those in control will share that aspiration before it is too late.
- Julie Wallin is a director at Carver Commercial Chartered Surveyors in Darlington. This article has been written with the support of Steve Barker, MD Prism Planning; Beckside Properties Ltd; John Joyce, MG Estates; Peter Robinson, Thomas Watson Auctioneers; Torben Simpson, landlord and property consultant MRICS BSc Hons; Peter Smyth; Marcus Stone, Fairacre – Asset Manager, Queen Street Shopping Centre; Grahame Yarrow, Capital Holdings.
Many people are enduring financial difficulties because of unexpected costs related to moving and maintaining a home.
Many families in Britain are being caught out by the costs involved when moving into a new home, as well as those required to maintain a property.
This is according to new research from Family Action and Lloyds Banking Group’s Money for Life Programme, which revealed people are risking debt because they fail to take these costs into account when moving house.
Entitled Home Economics, the report noted some individuals are willing to go into credit card debt or cut back on heating and food in order to buy items for their home.
It was shown that 25 per cent of Brits found removal costs to have been something of a shock and David Holmes, chief executive of Family Action, said: “Moving to a new home may be a life-changing experience for some, but it is also one which brings with it a range of unforeseen and unexpectedly high costs.”
He added it is very important that people looking to move into a new property have access to information and budgeting support before doing so.
Here at Carver Group we can advise you on the future cost of maintaining your home and a few pointers towards budget planning. Michael Harvey in our survey department can offer a range of condition surveys and more detailed building pathology advice together with guidance as to the true market value of the house you are buying and the cost of putting it into good repair. We can also offer you a cost of moving appointment ensuring you know all of the cost involved in moving so you can budget for it.
Carvers “My Dream Home” Art Competition makes dreams come true as young artists see their work displayed at prestigious Gallery
There were smiles all around as the twelve prize winners of the “My Dream Home” Art competition, organised and sponsored by Nick and Gordon Carver Residential, admired their art work hanging on the walls of the prestigious Mackenzie Thorpe Arthaus Gallery, Richmond.
The competition which asked primary school children to draw their “dream home” saw a fantastic response “we were blown away by the response to the competition, the support from the schools, teachers and parents who all really got behind the competition has made it a pleasure to organise” said James Carver who had idea to run the competition when he received a drawing of a house as a thank you card from a client’s 5 year old.
“We received over 500 entries to the competition and every single entry was judged by Mackenzie Thopre himself. We had winners from schools in Darlingotn, Crakehall, Staindrop, High Conniscliffe, South Otterington, Richmond, Harrogate Hill and Croft”.
With over £2000 worth of prizes on offer the winners and their families as well as representatives from their schools were invited to Mackenzies Arthaus Gallery in Richmond to see their art work on show hanging in the gallery “to see the children walk in and see their art work on display in the gallery was a brilliant moment” added James.
Over 50 guests were welcomed to the presentation and all of the prize winners received a signed certificate, vouchers for WH Smiths, a Mackenzie Thorpe goody bag and they were handed their framed art work to take home to hang on their own wall.
Mrs Katy Whitehead of St Augustines RC Primary School, Darlington, who attended the presentation to support 4 pupils who received prizes said “the children all loved thinking of what their dream home would look like and had great fun putting their ideas onto paper. We were delighted to do so well this year and look forward to the competition again next year”.
“After the huge success and the positive feedback from pupils, parents and teachers we are already drumming up some ideas for next years competition” said James. If you would like to register your school to enter the 2014 competition please email your interest to firstname.lastname@example.org
A Billingham developer of biochemical materials used in medical research is undertaking a £1million expansion into new premises at Belasis Business Park. Cambridge Research Biochemicals (CRB), is doubling the size of its workspace following the purchase of a 10,000 sq ft premises across the road from its existing rented accommodation at Belasis Court. The move has been overseen by North East Chartered Surveyors and Property Consultants Carver Commercial, of Darlington, who have described it as “a perfect fit”. Carver Commercial Chartered Surveyors were jointly instructed by Expense Reduction Analysts (ERA) property team, along with Naylors Chartered Surveyors, of Newcastle, to dispose of the building on behalf of Smithers Rapra following relocation of their testing facility. CRB, was acquired in the year 2000 by scientist owners Emily Humphrys and Alison White as a result of a buyout from parent company Avecia (formerly Zeneca and ICI). It mainly produces peptides, short protein fragments which are useful tools used in medical research at the molecular level. The move into new premises will allow CRB to grow from its existing footprint of 4,000 sq ft to 7,000 sq ft, with additional space for future expansion. Julie Wallin Director of Carver Commercial Chartered Surveyors said “It is always tremendously rewarding to provide suitable properties for businesses, particularly to facilitate a company’s expansion plans. “CRB expressed interest in this building in April last year, when their existing lease was coming to an end on the Technology Park. The building was adjacent to their existing premises and of a size to accommodate their expansion, with a little extra space contingency for further possible expansion in the future. “During the marketing period the business park was granted Enterprise Zone status as part of a Government incentive scheme in selected areas which meant there was up to £250,000 rate relief over five years available for businesses relocating or expanding into the area. This was another incentive for CRB to take the opportunity to move at this time. “We were able to liaise with Stockton Council over rate relief and to help with energy reports and referrals to surveyors and engineers. It was a perfect fit.” Andrew Pegg Consultant for ERA said: “Our agents worked extremely hard to bring this sale to a successful conclusion and we would be delighted to work with them again in the future.” Emily Humphrys, Commercial Director of CRB, said: “We started to think about expanding three years ago and decided that we wanted to buy our next premises. When the Carver Commercial sale board went up just across the road it was too good an opportunity to miss. “It was quite a protracted purchase process and we are very grateful to Julie Wallin for all the help she was able to provide. About half the investment of close to £1million has gone on buying the building; the remainder will be used on fitting it out with the laboratories and offices we require.” Carver Commercial can be contacted on 01325 466945 or visit www.carvercommercial.com.
People eager to sell their home may want to consider whether carrying out major improvements are required before they are able to attract potential buyers.
New research from Halifax Home Insurance has shown that more than one in ten homes in Britain (11 per cent) are at risk of falling into disrepair, while minor works are needed on around half of the nation’s properties.
The report found that 28 per cent of homeowners view themselves as home maintenance enthusiasts, but only 31 per cent believe they have the ability to make sure basic improvements are done well.
These simpler tasks include painting and grouting – and carrying them out properly can prevent damp and other problems further down the line.
At Carver Building Surveyors we regularly provide advice and guidance to sellers. We believe that a serious seller will take all reasonable measures to make their home presentable for sale in order to get the best possible price. If the seller can anticipate and deal with issues that may be raised by a buyer’s valuer or surveyor a great deal of delay and time wasting can be saved between acceptance of an offer and legal completion. We provide a range of services to sellers ranging from a full condition survey to comments on a specific area of concern. It is often the case that the seller’s perception of the issue may be misguided and that the defect can be addressed and rectified at reasonable cost.
Carver Commercial Chartered Surveyors,Darlingtonhave been appointed by Blackwell Grange Golf Club as their selling agents with respect to the disposal of their former Club House site at Blackwell.
Doug Christie, the Secretary for Blackwell Grange Golf Club said “The Club’s relocation on 1 July from Briar Close toSnipe Lanehas gone extremely well and our membership has doubled. Both our members and visitors to the Club are enjoying playing the course and the hospitality provided in the Club House. We commissioned Carver Commercial for their expertise and local knowledge to market the sale of our former Club House and car park. The sale proceeds will be reinvested to improve our golf course and Club House atSnipe Lane.”
The site provides a residential redevelopment opportunity to build up to five detached houses on the site which is approximately 0.7 of an acre. Julie Wallin, Director of Carver Commercial said “We are delighted to be acting on behalf of Blackwell Grange Gold Club and we have already received to date a good level of interest in the few weeks that we have been marketing it for sale. Blackwell is a popular residential location and the site is within an attractive setting predominantly overlooking part of the former Fairway.”
Further enquiries can be made by contacting Carver Commercial on 01325 466945 or visiting their website www.carvercommercial.co.uk
Adam Swalwell from Carver Financial Services comments on recent developments in the mortgage market:
What a week it’s been with a series of firsts for the mortgage market.
New Governor of the Bank of England Mark Carney signalled interest rates, which often dictate mortgage rates, will only move up when a series of conditions are met. Those include unemployment hitting 7% and a fall in inflation, neither of which are likely to happen for three years. This offers more certainty than ever before to mortgage borrowers and the market, although savers have less to celebrate.
On Monday, a new mortgage lender Magellan, named after the pioneering Portuguese explorer, launched in England and Wales with high hopes of ‘rehabilitating’ borrowers with a credit record blip. This is good news for those who have been stuck on poor mortgage deals after a mortgage application refusal from a high street lender, for example. But importantly the mortgage is only for people who after a one-off life event like redundancy, for example, can offer a full written explanation of how they got into payment difficulties in the first place.
The lender also wants applicants to satisfy strict criteria and will turn down any borrowers with serial credit problems. Applicants must also be 25 or over, earn at least £25,000 and have maintained a clean record for the last 12 months.
Unusually, the lender won’t be credit scoring mortgage applicants either and instead plans to look at each application individually. Borrowers will pay a fee on a sliding scale reflecting the property value and a 1.5% completion fee or a minimum of £995, but there’ s no early repayment charge on the loan giving borrowers the option to pay the loan off early.
Mortgage Advice Bureau is one of the few mortgage brokers able to offer the mortgage to those with a minimum deposit of 25% who want to borrow up to £400,000. The lender is also willing to consider self-employed applicants and first time buyers which is another welcome move.
Magellan’s CEO Matt Gilmour, said: “In our opinion, a short-term financial wobble should not preclude borrowers from mortgage finance on a long-term basis. We’re delighted to be piloting a new proposition which gives credit impaired borrowers a real chance to obtain mortgage funding once again.”
Elsewhere in the housing market, property prices reportedly reached new highs in July. Driven on by prices in the Capital and schemes like the government’s Help to Buy, the average house price hit £232,969, actually beating the all-time peak in 2008.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will 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.
A fantastic evening of Jazz Music took place in Northallerton Town Hall on Saturday night, with over 100 people enjoying sets by The Swale Valley Stompers and Jazz in the Afternoon to raise money for MacMillan Cancer Support.
James Carver, branch manager of Carvers Northallerton Office said ‘ It was a thoroughly enjoyable evening and we are delighted to support such a worthy cause. I especially enjoyed watching Michael “Smooth Operator” Harvey on the keys and vocals’.
Michael Harvey, Director of Carver Commercial and member of The Swale Valley Stompers added ‘We were delighted to be part of this Jazz evening, there was a great atmosphere and everyone seemed to have an enjoyable time. Keep an eye out for us playing in Barkers arcade and at the Queen Cathrine Hotel in Osmotherley fortnightly, starting next Sunday 4th August’.
Annie Rothenberger, Secretary of Northallerton fundraising committee for Macmillan Cancer Support announced ‘When all the pennies were added up last night our final profit total came to £1,778.16 for Macmillan, so THANK YOU again for all the hard work and your continuing support’
The Swale Valley Stompers will be starring on ‘The Dales’ Televison programmeat 8pm on Monday 29th July…Tune in for some more Jazz.