If you are thinking of a move to one of the most scenic and popular countries then you should be aware of the costs before you go. Moving away from the UK is currently extremely popular for many reasons including the costs rising and the disappointment many feel for the UK government in helping the public.
Canada is known for beautiful lakes, fun cities and a fairly transparent government which people appreciate. Despite Canada being a popular move for brits, Canada is also very expensive to live and the prices are only rising too.
For a family of 4 living in Canada excluding the cost of rent, their monthly costs average at around £3,065 ($5208.07).
This is 7% higher on average than the cost of living in the UK.
Rent in Canada is around 10.5% higher than the average rent in the UK as well.
The high inflation and interest rates which are at the highest level in 22 years, are causing prices to become unbearable for many residents.
The most expensive place to live would be Vancouver and small towns in Quebec are the cheapest areas to live.
The rising prices of houses and rented property is due to the limited supply and high demand in cities like Vancouver and Toronto. This increases the prices of living here as there is a massive increase in the population here.
Due to the rising population, 315,000 new residences will need to be built every year between now and 2023 to keep up with the demand.
The government is trying to solve their housing crisis by building more homes including affordable housing. They aim to bring down the cost of building and helping cities to create homes quickly and efficiently on a lower cost.
Your mortgage should be your top priority debt over any other forms as missing or falling behind on payments could result in serious consequences.
Most lenders will allow for 3 missed payments before they start taking action.
If you have taken out a mortgage and are now struggling to pay back the full amount then you could be in danger of being taken to court to have your property repossessed.
The mortgage lender will take possession of your property so they can sell it and cover the costs of your repayments with the value of the house. You will no longer own your house and could only buy the house back by making a lump payment
The UK property market has seen sky rocketing prices including rising mortgage rates making it more difficult for people to get on the property ladder. House prices have been falling slowly even in places like Manchester.
East of England, South East and South West have seen the largest price falls in the last year with the average home costing £344,000.
This is still +30% above the UK average.
Zoopla has recorded that there is currently an increase in sales and demand for house meaning on either side of the transaction this could be getting easier
There is 15% more property sales agree than in 2023.
An 11% uplift in buyer demand as buyers return to the market.
There are also 21% more homes for sale which is increasing the choice for buyers.
London will always win the top spot and currently the average price here id £523,400 which is almost two times more than the UK Average.
In the dynamic world of property development, the concept of Build to Rent (BTR) has emerged as a transformative force, reshaping the approach to residential projects. At its core, BTR is a strategy that caters exclusively to the rental market, diverging from the traditional focus on sales. This innovative financing model is not just about constructing buildings; it’s about fostering communities and redefining urban living.
Build to Rent Development Finance is a specialised loan designed for professional property developers and landlords with an eye on the burgeoning rental market. Unlike traditional property development loans, BTR finance is tailored to support the construction of properties intended solely for renting. This financial solution effectively bridges the gap between the upfront costs of development and the subsequent rental income.
BTR Development Finance operates similarly to a traditional mortgage, where a sum is borrowed and repaid over time. However, it distinguishes itself in several ways:
This type of finance is ideal for developers aiming to create multiple rental properties and landlords seeking a bridging solution to manage development costs before the rental income stream begins.
The BTR model offers numerous benefits:
When considering BTR Development Finance, developers should weigh several factors:
Build to Rent Development Finance is more than just a funding mechanism; it’s a catalyst for innovation in the property development sector. By aligning financial strategies with the needs of modern renters, developers can not only profit but also contribute to the evolution of urban housing.
Consult with an Expert Broker: At Evolve Finance we understand how build to rent development finance works and can guide you through the intricacies of the process, helping you explore all available options.
The government has announced that they will be increasing the cost of council tax due to the rate of inflation in the UK.
The cost of Council tax is determined from the valuation of the property from 1991 in England and Scotland and 2003 in Wales. If your property did not exist then it would have a valuation completed by the Valuation Office Agency (VOA). New builds will be compared to similar properties in the area.
The VOA value the property based on…
The property will be placed in a band where Band A is the cheapest through to Band H which is the most expensive.
Council tax varies depending on each county and the needs for the area. Your local council will set the price for each band’s council tax bill.
Council needs include, street cleaning, community infrastructure, the police and fire services in your area, street lighting, rubbish collection and more.
If you are moving into a house soon and are unsure how council tax works, there is no need to panic. Once you move into the property you will be sent a letter from the government with your council bill included along with the process to pay it. You will be sent this letter once a year in April when you expected to pay, you should then set up direct debits to ensure this is paid on time.
The payments are usually split into 10 monthly payments form April- January starting from the month you possess the property.
You can pay your bill online, or alternatively there would be pay points in your area, such as, the post office.
Extra costs of buying a house such as council tax is why it is important to understand how much of your salary should be spent on your mortgage so you can afford all the costs included in moving into a house.
You could be eligible for a reduction or exemption from council tax if you meet the criteria below.
According to Zoopla, the average UK rental price is currently £1,223 which is a +7.8% increase over the last year.
The Guardian have reported that there is an expected further 13% increase in rental prices by 2027. The Office for Budget Responsibility have found there is only a predicted 7.5% increase in wages for the average worker over that same time period.
The affordability of rental homes will become more difficult as wages don’t match the cost of homes.
The minimum wage in the UK has recently been increased, however, this is still not enough to combat the cost of living.
There are almost a 5th (18.8%) of UK homes which are privately rented as of 2023. This mean with so many people renting the demand for property is increasing, due to the accessibility to buying a home has become more difficult for the population. Despite House prices falling, they are still too much for many to start their journey on the property ladder which leaves many still renting.
The increase in rental prices is slowing and despite the +7.8% increase, this is the slowest rate of growth seen in the last 2 years showing a gradual decline.
The demand for rented homes has dropped by a 5th over the last year as well which is causing landlords to reduce their asking prices.
Data from Rightmove shows that the average time a property is listed before either being let or placed under offer has gone from 33 days to 39. Landlords are being forced to decrease the prices and renters are saving.
Chesterton’s letting agency in London revealed there has been 41% more rental property available than in January 2023. With more property available renters can take longer to decide and also be more specific with what they want.
Rental prices are slowly falling with London experiencing the biggest inflation slowdown, currently rising at +5.1% compared to last year’s rates of +15.3%.
Despite this inflation slowdown rent is still 29% higher on average than pre-pandemic levels and this is not expected to last into the coming years.
London residents are paying at least 50% more for rent that anywhere else in the UK according to USwitch.
London remains the most expensive place to live and rent in the UK with the average rental prices at £2119 per month.
Your mortgage is going to be a significant financial investment and a long-term commitment that will require careful consideration of your budget and financial capacity. Deciding how much you can afford to borrow is a crucial step in this process, and both you and the lender will need to thoroughly evaluate your current financial situation, including any existing debts, to determine what monthly repayments you can comfortably manage.
Before you begin the mortgage application process, it’s essential to understand how much you can realistically expect to borrow and what you’ll need to contribute toward a deposit. You also need to be mindful of other potential costs associated with buying a home, such as legal fees, stamp duty, and home insurance.
One of the most important factors to consider when taking out a mortgage is your mortgage-to-income ratio, which measures how much of your income will go towards repaying your mortgage. It is wise to keep this ratio as low as possible to ensure you can comfortably make repayments over time. Missing payments can lead to increased interest charges, a negative impact on your credit score, and, in the most severe cases, repossession of your home.
A common rule of thumb is to spend no more than 30-40% of your post-tax (net) income on mortgage repayments.
This guideline is often used by homeowners and recommended by financial advisors. Sticking to this range helps ensure you have enough money left over each month to cover other essential expenses, such as utilities, groceries, and emergency savings, without feeling financially stretched. For example, if your monthly take-home pay is £3,000, a responsible monthly mortgage payment would be between £900 and £1,200. Spending more than 40% of your income on housing costs could increase your risk of falling behind on payments, especially if unexpected expenses arise or your income changes.
In the UK, lenders typically apply a borrowing limit that is 4 to 4.5 times your annual salary. This is known as the loan-to-income (LTI) ratio. However, lenders will also assess your affordability based on your outgoings, debts, and financial commitments. For example, if you have significant student loans, credit card debt, or childcare expenses, your mortgage offer may be lower than the maximum loan-to-income ratio would suggest.
Halifax and Lloyds have updated their policy to lend 5.5 times your income giving many first time buyers a better chance at buying a home.
The Bank of England has set guidelines to prevent excessive borrowing and reduce financial risks. For most borrowers, a mortgage cannot exceed 4.5 times their income, and only 15% of new mortgages can be at this upper limit. This restriction helps protect both homeowners and the economy from excessive debt and prevents a repeat of the housing market crash seen in the late 2000s.
If you earn £30,000 annually, your maximum mortgage is likely to be in the range of £135,000 to £150,000. At the same interest rate and mortgage term, a £135,000 mortgage could result in monthly payments of around £690. If your post-tax income is £2,000 per month, this equates to approximately 34% of your income.
If you are applying for a mortgage with a partner or co-buyer, lenders will consider both incomes, which can increase your borrowing potential. For instance, if you and your partner have a combined annual income of £80,000, the maximum mortgage available could be around £360,000. However, joint applications also mean both parties are responsible for the repayments, so it's important to ensure both incomes are stable and that the overall debt is manageable.
While income and debt are the primary factors in determining how much you can borrow, lenders will also look at the size of your deposit. The more you can put down as a deposit, the better your chances of securing a mortgage with favourable terms, such as lower interest rates. In the UK, most lenders require a minimum deposit of 5-10% of the property’s value. However, putting down 15-20% or more can give you access to better mortgage deals.
You should also factor in the costs of homeownership beyond the mortgage itself. Home maintenance, insurance, council tax, and utilities can add hundreds of pounds per month to your overall expenses. Planning for these costs is vital to avoid overstretching your finances.
A big move is expensive and everything you need will add up very quickly so it is vital you have started saving before you begin.
You should try to save up to 3-6 months’ worth of living expenses so you can afford the move and to settle in. You will need enough to cover all the initial costs such as insurance, a car, finding your new living space and more.
For example the estimated living costs for Melbourne, is $2500 a month.
If you have your visa ready and are getting prepared for the move there are some ways you can keep the costs down.
In the months leading up to your move you should gradually begin selling your belongings, furniture, kitchen ware and anything else you don’t need. You will be able to buy these things when you move and this will save you time and money in the long run as the shipping costs will be large.
You are able to start the process to open a bank account in Australia before you get there, meaning once there you only have to go in the bank branch with proof of your documents and then you easily have a new bank account. This will save you on transaction fees and you will be able to easily spend money in your new home. Without an Australian bank account you will be charged fees when you withdraw or spend any money.
Often the prices of moving as well as rent prices will fluctuate throughout the year, this could be because in September, students are moving and this raises the prices. You should research what your new city is like as this could impact the time of year that is best to move.
Not only are the shipping costs to get your car to Australia expensive there are also hefty import taxes you are required to pay. For any move abroad you will be better off selling your car or vehicle in the UK before you move and finding a new one once you are settled.
Travel insurance is a vital part on your check list and will protect you from a large cost in case of emergencies. Don’t skip on travel insurance as there are many reasons you should invest.
When moving to Australia you should definitely be searching for your new home as early as you can as there are so many others who are looking for property too. If you find a place to stay quickly you will be able to cut down on the costs of staying in a hotel during the search. This will also help you find somewhere to live for a decent price.
Rent prices in Australia have been rising and currently the average price of renting in Sydney is $750 per week and in Melbourne it is around $550 per week.
So you have found your dream property and have had your offer accepted, now you are ready to handle the nitty gritty mortgage details.
You will have to find the best mortgage deal that works for you and then you can apply online or over the phone. You may choose to go with a broker to help you get the best deals.
A broker is a qualified and regulated mortgage advisor. They should remain unbiased and be there to help you wade through all the offers and find you the best deal for your situation.
Having a broker will save you time and effort trying to find the best deal, they will also be able to handle the negotiations with the lender for you. A broker will help you understand the mortgage rates and know what you will need.
Make sure to be upfront with the broker about your finances and credit so they can do their job properly.
You either pay them a broker fee which is usually around £500-1000 or they will receive a procuration fee from the lender, which won’t affect your total.
If you are confident you can find the best deals yourself then you can skip this step and move on.
You will need original copies of all the forms listed below, make sure you have these ready before starting the process, this will help you speed things up.
This is a conditional offer from a lender with no guarantees this will go through to completion. This helps buyers to have a sense of confidence during the process whilst the lender continues with their checks
The lender will complete credit checks, these could damage your score so make sure not to have too many in short space of time.
‘Soft’ credit checks leave a less visible sign to the next lender so check which type they are using.
Don’t rely on your existing bank or building society as this vastly limits your options and cuts the market short.
On top of all the big payments you’re making to buy a house it is important to factor in all the other fees you have to think about too.
Arrangement fee
You will pay this to the lender and it can go up to around £2000 which you can pay upfront or add on to the price of your mortgage. If you pay upfront be aware that this is a non-refundable sum even if your offer falls through.
Booking/reservation fee
Some lenders will charge this fee to secure a fixed-rate, tracker or discount deal. This will be around £100-200 and is again non-refundable which you can pay upfront. Sometimes this will be rolled into the arrangement fee and won’t be a separate charge.
Valuation fee
The lender will carry out checks on your chosen property to determine the value in case you miss payments and the property is repossessed. The cost of this will depend on the property value. You can also ask for a survey at an extra cost which will check for any hidden damages and structural problems which is especially important if you are buying an old house.
Legal fees
This is paid to your solicitor and covers all the legal work needed when buying a house including, conveyancing which searches local authorities data for hidden damage on the property. This will cost roughly £500-1500.
Stamp duty
This is a tax paid to the government which some developers will offer to pay if you are buying a brand new home.
The price depends on the property value.
If the property price is between £300,001 to £925,000 then you will pay 5% in stamp duty.
The application process in total can take months to reach completion which is why before you start, it can be helpful to make sure you have all the information, are sure you can cover all costs and have all the correct documents.
Happy Mortgage hunting!
As of March 2024 below are the best 2 year and 5 year fixed term mortgage rates.
With a fixed term mortgage you will not be affected by changing interest rates and you will often pay lower rates than if you were on a variable rate mortgage.
If your fixed term is coming to an end this year and you are worried about the rise in mortgage rates then make sure you are comparing the best deals.
Barclays
Natwest
Halifax
Natwest
HSBC
As seen above, currently 5 year fixed term mortgages offer lower interest rates meaning you will have to pay back less over time.
A 5 year fixed term is a long term commitment so you have to make sure you will be able to make your repayment for the whole duration.
Pros of a 2 year fixed term
Cons of a 2 year fixed term
Pros of a 5 year fixed term
Cons of a 5 year fixed term
London, a city where history and modernity converge in a stunning tapestry of architectural marvels, stands as a beacon of heritage and innovation. The city's diverse skyline, shaped by centuries of cultural and historical influences, not only defines its aesthetic charm but also sets the stage for one of the world's most coveted real estate markets. This article delves into the essence of London's architectural allure, explores the prestigious real estate market it nurtures, and offers a guide to navigating the complexities of buying property in this iconic city.
From the cobbled streets of the Roman Londinium to the soaring glass facades of The Shard, London's architectural journey is a testament to its enduring legacy and constant evolution. The city's landscape is a living museum, showcasing an array of styles from the timber-framed houses of the Tudor period to the grandeur of Georgian symmetry and the ornate designs of the Victorian era. In more recent times, the skyline has been punctuated with modernist and postmodernist influences, creating a dynamic juxtaposition that captivates both residents and visitors alike.
The architectural diversity extends into London's various districts, each with its own unique character. Mayfair and Belgravia exude elegance with their Georgian townhouses and leafy squares, while the Gothic spires of the Houses of Parliament and the intricate facades of the Victorian era tell a story of London's imperial past. The contemporary skyline, featuring structures like 30 St Mary Axe (the Gherkin) and the London Eye, speaks to the city's forward-looking ethos, blending seamlessly with the historical backdrop.
London's real estate market is as varied as its architecture, with properties ranging from historic homes in conservation areas to luxurious modern apartments overlooking the Thames. This diversity, coupled with the city's global financial and cultural significance, creates a high-demand market, particularly for luxury and heritage properties. The scarcity of such properties in desirable areas like Kensington, Chelsea, and Westminster further adds to their exclusivity and value.
The city's architectural heritage and cosmopolitan lifestyle continue to attract a global audience, making London a hotspot for international investors and affluent buyers seeking a home and a piece of history and prestige. This international demand plays a significant role in driving the market dynamics, keeping London at the pinnacle of real estate desirability.
Buying property in London is a journey through a market renowned for its complexity and competitiveness. Prospective buyers face a myriad of considerations, from understanding the nuances of leasehold vs. freehold to navigating the intricacies of the city's planning and conservation regulations.
Setting a realistic budget is the first step, encompassing not just the purchase price but also additional costs like stamp duty, solicitor fees, and potential renovations. For many, especially those looking at the higher end of the market, securing a mortgage is a key part of the financial equation. Here, bespoke mortgage solutions providers like Henry Dannell come into play, offering tailored services to navigate the unique challenges of high-value property transactions with unparalleled expertise and personalised attention.
The process of buying a property in London involves several key steps, starting with an in-depth market research to find the right property. Once a suitable property is found, the process moves to making an offer, conducting legal checks, and finally, completing the sale. Each step requires careful consideration and, often, the guidance of experienced professionals, from real estate agents to solicitors and financial advisors.
Looking ahead, London's real estate market continues to evolve, with sustainability and innovation at the forefront of new developments. The city's commitment to green spaces and energy-efficient buildings is setting new standards, ensuring that London remains a desirable and livable city for generations to come.
London's architectural splendour offers more than just aesthetic pleasure; it forms the foundation of one of the world's most prestigious real estate markets. For those aspiring to own a piece of this historic city, understanding the market's complexities and seeking expert financial guidance, such as that provided by specialists like Henry Dannell, is key to turning aspirations into reality. In the end, buying property in London is not just an investment in real estate but an investment in a lifestyle enriched by history, culture, and architectural beauty.
It is used by property developers, investors, and landlords who want to undertake large-scale building or renovation works. In this article, we will explain how property development finance works, what are the pros and cons of using it, and how to apply for it.
Property development finance is a form of advanced loan that allows developers and builders to raise funds towards the purchase price of property (or land), as well as providing the necessary development costs for converting or refurbishing it. Unlike traditional loans, property development finance works by taking the value of the property on completion into consideration – with the expectation being that the value of the building will have increased by the end of the financing period. This enables builders and investors the opportunity to undertake high-profit schemes that would usually be out of reach and budget, whilst receiving a greater return on their investment.
Property development finance is a fairly broad category that covers term loans, mortgages, bridging loans and even personal loans. It refers to the large-scale funding of significant building or renovation works. You might use it to fund a new residential housing project, workspace development or regeneration initiative. Development finance is likely the most appropriate form of property finance for ground-up developments, such as building a property from scratch.
If the borrowing requirement is between £750,000 to £30,000,000 and typically for a period between 12 and 30 months for a ground-up residential development of 6 or more units or a large-scale commercial to residential conversion then traditional property development finance will be required. This type of loan is specifically designed for larger and more complex projects, with longer repayment terms and more stringent eligibility criteria.
Or, on the other hand, if the borrowing requirement is between £50,000 to around £2,000,000 for a single unit buy-to-flip refurbishment property, a bridge to-let project, an auction property purchase, a commercial to residential conversion or a small new build development of up to 6 units then a development bridging loan can be tailored to meet the specific needs of each project.
In certain situations, developers can borrow up to 100% of the property or land purchase price with the development costs drawn down in tranches.
Bridging and Development finance lenders will assess the viability of the project and the borrower's experience in executing the project.
This includes evaluating the property's potential for development and the borrower's proposed exit route and will assess the borrowing capacity for a development project based on the GDV (Gross Development Value) of a project and apply the LTGDV (Loan to Gross Development Value) calculation to establish the maximum loan amount that would be available.
Both types of lenders will advance a percentage of the land or property purchase price or value on Day 1 then provide a drawdown facility that can be drawn every month for the build costs or refurbishment costs.
With the right documentation and a solid development appraisal, developers can secure the necessary funds to bring their projects to life.
Property development finance works by being issued in set stages in line with the development project(s). Development finance loans work by having funds paid out to you in drawdown stages as your property development project progresses, known as ‘tranche drawdowns’. In most cases, lenders will carry out periodic re-inspections of the site before each payment is made, similar to a self-build mortgage.
The amount of money you can borrow depends on the type of project, the expected gross development value (GDV), and the loan-to-value (LTV) or loan-to-cost (LTC) ratio. The GDV is the estimated value of the property once the development is completed, while the LTV is the percentage of the GDV that the lender is willing to lend. The LTC is the percentage of the total cost of the project that the lender is willing to lend. Typically, lenders will offer up to 70% of the GDV or up to 90% of the LTC, whichever is lower.
The interest rate and fees for property development finance vary depending on the lender, the project, and the borrower. Generally, the interest rate is higher than a standard mortgage, ranging from 6% to 18% per annum. The interest can be paid monthly, rolled up and paid at the end of the loan, or deducted from the loan amount at the outset. The fees may include arrangement fees, exit fees, valuation fees, legal fees, and broker fees.
The duration of property development finance is usually between 6 and 24 months, depending on the scale and complexity of the project. The loan is repaid either by selling the property or by refinancing it with a long-term mortgage.
Property development finance has many advantages over other forms of finance, such as:
If you are interested in applying for property development finance, you will need to prepare a detailed business plan and feasibility study for your project. This should include:
Obtaining property development finance can be complex, once you have gathered all the necessary information and documents, you can approach an experienced commercial finance broker who specialises in property development finance to assess your project and guide you through the process.
Property development finance is a useful tool for property developers, investors, and landlords who want to undertake large-scale building or renovation works. It works by providing funds in stages, based on the value of the property on completion. It has many benefits, such as allowing you to take on bigger and more profitable projects, but also some drawbacks, such as being more complex, risky, and expensive than other forms of finance.
