Before placing your home on the market, it makes sense to perform a little profit-oriented housekeeping. Ask any real estate expert, and they will tell you how it is often the smaller details that add up to the biggest differences price-wise.

But of all the home improvements you can conduct before selling your home, which have the most positive effects on market values?

According to those who specialise in maximising properties’ market values, the following could make a significant contribution to your home’s value and curb appeal:

1. Painting and decorating

Superficial it may be, but a fresh coat of paint really can hide a world of sins. Always remember that those who view your home with the intention of making an offer want to see it as something like a blank canvas. Hence, a pristine coat of fresh paint (in a neutral colour) can be just the thing to help them do just that.

1. Basic repairs

The same can also be said for the equally superficial repairs that are technically not a big deal. Examples of this include stiff doors, squeaky floors, window rattles, cracked wood, chipped paintwork, broken lights, stained fabrics, and anything else that could technically take the shine off the room in question.

1. Front door, porch, and hallway enhancements

First impressions are everything, and most prospective homebuyers make up their minds almost immediately after entering a property for sale. Anything you can do to make that all-important first impression the right first impression is something you should be doing. Ensure your entrance ways send the right message about the rest of your home.

1. Declutter and clear out

Back with the blank canvas theme, getting as much excess clutter out of your home as possible is essential. If necessary, consider hiring a storage locker for the duration of your relocation, offloading everything that does not need to be there.

1. Kitchen and bathroom remodelling

Installing a new kitchen or bathroom (or simply updating your existing setup) could add anything from £5,000 to £25,000 to the total market value of your home. In both instances, the average return on a kitchen or bathroom upgrade when selling a home is around 65%.

1. Smart lighting and heating

With the living-cost crisis only set to get worse before it gets better, more prospective buyers than ever before are prioritising smart and efficient utilities. Smart lighting and heating, in particular, can be highly attractive to prospective homebuyers, constituting an affordable upgrade and adding as much as £10,000 to a home’s market value.

1. Outdoor living spaces

More people are spending more time at home than ever before, as hybrid working continues as the new norm. Private outdoor living spaces are particularly attractive to prospective homebuyers, which in many cases can be a deal-breaker. Research suggests that by presenting your home’s exteriors in the right way, it can increase the value of your home by more than £8,000.

1. Private parking

Building a garage or driveway may seem like a major undertaking, but doing so can nonetheless lead to a healthy return. On average, adding a single-car garage to a home can increase its total market value by as much as £25,000 in some parts of the country.

1. Loft conversions

The value added by a loft conversion will be determined by multiple factors, including the functionality of the new space and its size. In the case of a fully functional living space large enough to use as a bedroom or home office, a loft conversion can easily add £40,000 or more to a home’s market value.

1. Conservatories

Last up, a modest conservatory can be installed for as little as £5,000, yet it can make a significant contribution to a home’s asking price. Anything from £8,000 to more than £15,000, depending on the location of the property and the type of conservatory installed.

Invoice finance provides businesses with the opportunity to access money they are owed by their own customers in advance. In doing so, delays between issuing invoices and collecting payments can be shortened or eliminated entirely.

Where the business issues an invoice, the recipient may have anything from seven to 90 days to pay, sometimes even longer. During this time, the business must continue to make ends meet with its own on-hand capital reserves.

Effectively a financial ‘gap-filler’ for such scenarios, invoice finance allows the business to access its owed capital immediately.

How does invoice financing work?

Invoice finance can be beneficial for any business (or sole trader) for which significant gaps between raising invoices and receiving payments are the norm.

The facility is arranged by a specialist lender, who takes into account the company’s financial status and the professional background of the applicant. Pending invoices are then used to determine how much the business is owed, and the lender issues a loan to cover this outstanding amount.

Over the subsequent weeks or months, the business repays the loan as it collects payments from its customers.

“As the culture of late payment continues to rise here in the UK, the threat that this poses to businesses also grows. Our recent survey results highlight just how vital invoice finance is to businesses,” explained Phil Chesham, head of invoice finance at Time Finance.

“Of the business owners surveyed, 67% reported that an invoice finance facility helps them to pay suppliers, HMRC, employees, and other financial commitments on time. 50% told Time Finance that it helps to manage late payments from customers, and over one-third said it helps them to better combat the current economic challenges such as rising costs and inflation.”

“With late payment debt as high as £200,000 for one in five UK SMEs, invoice finance solutions are as vital as ever, and with the addition of our credit control service here at Time Finance, we can really take the strain away from chasing payments and protect our clients’ customer relationships.”

What Are the Advantages of Invoice Finance?

The potential benefits and cost-effectiveness of invoice finance will always vary significantly from one business to the next.

For those who stand to benefit from an invoice finance agreement, the main advantages of the facility are as follows:

• Access to Quick Cash: Businesses with plenty of liquid capital always enjoy a competitive advantage over those with limited cash reserves. With invoice finance, the business gains access to the money it is owed right after its invoices are issued.
• No Assets at Risk: Invoice finance is issued in the form of a specialist unsecured loan, for which the invoices themselves serve as a form of collateral for the facility. This means no physical assets need to be put on the line and subsequently put at risk.
• Missed or Late Payments: It can also be a useful facility for avoiding (or minimising) the consequences associated with missed or late invoice payments. Where customers pay late, the business can still access the money it is owed in a timely manner.
• Reputation Protection: Most businesses rely on their customers’ payments to meet their own payment obligations. Invoice financing can make it much easier for businesses to keep their own commitments, protecting both their reputation and their credit status.

What are the disadvantages of invoice finance?

Invoice finance is not suitable for all businesses, and there are downsides to such agreements that must be considered. The most important examples are as follows:

• Restricted to Business Customers: The only invoices that can be paid early as part of an invoice finance deal are those issued to other businesses. Invoices issued to the public cannot be claimed early on invoice finance.

• Potential Relationship Strains: With some types of invoice financing (invoice factoring), the lender subsequently takes charge of chasing up the borrower’s customers for payment. Depending on how this is handled, it could result in frayed relationships between the business and its customers.

• Long-Term Costs: Invoice finance can prove a highly cost-effective and beneficial solution, but it is never offered free of charge. Irrespective of the terms, conditions, and duration of the agreement, it will always result in additional costs for the business.

All the above pros and cons will be discussed in full during your initial consultation, during which your broker will help you determine your suitability and eligibility for invoice finance.

Invoice Finance in Practice

To illustrate how invoice finance works in practice, consider the following example scenario:

• A small business issues an invoice for £5,000 to a customer with a 30-day payment deadline.
• The business would like to get this money back as quickly as possible in order to invest it in a new project.
• An invoice finance agreement is reached for 85% of the value of the invoice, with total borrowing costs of 3%.
• The business receives a payment of £4,250 from the lender, i.e., 85% of the value of the invoice raised.
• When the £5,000 invoice is paid, the full £5,000 is transferred directly into the account of the lender.
• The borrowing costs (£150) are subtracted from the remaining value of the invoice (£750), and the remaining £600 is transferred back to the business.

All invoice finance contracts are bespoke agreements tailored to meet the exact requirements of the business in question. In most instances, the logistics of invoice finance are fairly similar and surprisingly straightforward.

For more information on any of the above or to discuss the potential benefits of invoice finance in more detail, call anytime for an obligation-free consultation.

When borrowing funds, it is common for prospective lenders to assess one’s financial assets and liabilities before dispatching money. Lenders evaluate your financial situation to determine your creditworthiness and reliability when paying off your loan on time. Responsible lending is the process that helps lenders assess your ability to undertake a loan and make repayments without hindering your finances.

A debt consolidation loan is used to pay off multiple debts with a favourable interest rate and combine those payments into one. The borrower will pay one monthly fee instead of numerous charges each month.

While it sounds like an ideal solution, consider its advantages and disadvantages before going ahead with debt consolidation loans.

Responsible lending

There are numerous short-term financing options that can help you obtain funds at short notice, such as bridging loans and development finance. Both bridging finance and development finance loans offer investors a way out when facing a cash shortage. Irrespective of your choice of finance, responsible lending is a process that lenders rely on to predict your repayment ability.

Responsible lending enables the lender to decide whether you are in a position to repay the debt promptly. The process entails a detailed analysis of the applicant’s ability to make repayments without disturbing their financial situation and takes into consideration how potential future changes to market conditions may impact the applicant’s ability to repay.

Lenders use credit score examinations to understand how well you have been managing your finances. Your credit score report acts as a catalyst for a potential lender. To ensure that you can repay the money borrowed, the lender often inquires about your income, monthly financial liabilities, and regular expenses.

As per the FCA rules, credit card companies must monitor customers who get stuck in a ‘persistent debt’ cycle, including those who repeatedly make only the minimum monthly repayments over three years.

Responsible lending practices reassure providers and assist customers struggling with repayments by either asking them to switch to lower-rate products or suspending their credit cards to keep their debts in check.

Financiers generally carry out all the necessary inspections before approving customers’ loan applications. However, the terms and conditions of the loan are subject to change anytime during the loan tenure, which may impact the customer’s finances.

Debt consolidation

Debt consolidation is the ideal solution for people with multiple debts who wish to merge all their outstanding balances into one single amount instead of making separate monthly repayments. Taking a new loan may enable you to settle all your debts and streamline your repayments as a single amount to be paid every month.

In consolidated borrowing, there is no specific solution for everyone; interest rates on personal loans can be lower than other types of loans; however, applying for the advertised rate does not mean the lender will offer it. The interest rate offered varies depending on an individual’s circumstances, and it is often necessary to have a good credit record to obtain a loan.

There are various options to repay debts, such as switching the existing debts from credit or store cards to a card with lower interest rates or even a 0% balance transfer, subject to one’s credit score. No interest is paid during the initial term, so your monthly payments will directly clear your debts. The interest rate will be applicable if you do not clear the balance before the initial period ends. Some cards may charge balance transfer fees of up to 3%. Be aware of the promotional rates that only apply for a specific time.

Some options to overcome debt include working with creditors to settle the debt, using a home equity line of credit, or getting a debt consolidation loan. Debt consolidation loans pay off multiple creditors and combine those monthly payments into one, sometimes at a lower interest rate. It sounds like an ideal solution, considering both the pros and cons of debt consolidation. Debt consolidation combines two or more debts into a single, more considerable debt. Often, consumers burdened with a high-interest rate take a step towards debt consolidation. In simple terms, debt consolidation gives you more favourable loan terms and potentially more competitive interest rates.

Advantages and disadvantages of debt consolidation

Let us look at the advantages and disadvantages of debt consolidation:

Five advantages of debt consolidation

• Smooth Finances 

As debt consolidation combines multiple outstanding amounts into a single loan amount, it reduces the number of payments. You no longer have to worry about multiple due dates as you will only have one payment. Consolidation can improve your credit rating by reducing the chance of making a late or missed payment.

• Accelerate Payoff

Debt consolidation sometimes incurs less interest compared to individual loans. In that case, you may consider making extra payments with the money you save each month. If debt consolidation leads to an extension of loan terms, you may wish to ensure that your debts are paid off early to see the cost savings.

• May Decrease Your Interest Rate

Bank of England figures reveal the average annual interest rates offered on credit cards have increased to 21.49% compared with the introductory rate of 0.1%. It is the highest average credit card rate since December 1998. However, the rates vary depending on your credit score, loan amount, and the length of your credit card term. A lower interest rate may be available through a debt consolidation loan, meaning more of your monthly repayment is used to clear the outstanding balance.

• Could Reduce Monthly Repayment

Your overall monthly repayments may decrease with a consolidated loan by combining multiple payments into one manageable monthly figure. You may wish to increase the loan term to reduce your monthly repayment; however, you should take into consideration that a longer loan term may cost more overall.

• Can Help You Achieve a Better Credit Score

By consolidating your monthly repayments and outstanding balances, you may see your credit score improve. Each credit agency has its system to calculate the credit rating in the UK; paying a single monthly bill is considered by these agencies to raise your credit score, as opposed to making the minimum payment across several creditors.

Four disadvantages of debt consolidation

• May Add Up Extra Cost

Before going ahead with debt consolidation loans, make sure they do not involve additional fees such as arrangement fees, balance transfer fees, closing costs, and annual fees. Check the annual percentage rate of charge before you sign the loan papers, and ask the lender to confirm any other charges if you are unsure.

• You may pay more interest over time.

Even if your interest rate goes down while consolidating, you could still pay more in interest over the life of the new loan. If you have extended the repayment term of your borrowing, although your monthly interest may be lower, interest on your loan will continue to be incurred for an extended period.

• You risk missing payments.

Missing payments on any loan can impact your credit score, making it harder to obtain low-cost credit in the future. It may also result in a financial penalty from the lender, which could increase your borrowing costs. To avoid missed payments, you can enrol yourself in the lender’s autopay programme, or if you feel you can’t make a payment on time, whatever the reason, communicate with your lender as soon as possible.

• Does not solve the underlying financial problems

Consolidating debt can help to make debt more manageable; however, if you are habituated to living beyond your means, you may continue to borrow in addition to the debt consolidation loan. Making a realistic budget will help you stick to your financial goals.

How should I consolidate my debt?

Choosing to take a debt consolidation loan will depend on your financial circumstances. A few pointers when considering debt consolidation include:

• A good credit score will give you a better chance of securing a lower interest rate than you have on your current debt, saving you money.
• Your monthly repayment, interest rate, and repayment term are fixed. If you need a repayment plan to help reduce your debts, a debt consolidation loan might be right for you.
• If you do not like keeping track of multiple payments, a debt consolidation loan will combine all payments into one.
• Consider a debt consolidation loan only if you can afford to repay it; unlike credit cards, where you have the flexibility to make only the minimum repayment, a debt consolidation loan will have one monthly fixed repayment, and missing this could impact your credit profile.

How do I get a debt consolidation loan?

The following steps will help you go ahead with a debt consolidation loan.

• Lenders may have minimum credit score requirements; check your credit score to see if you meet the lender’s standard for providing a consolidation loan. Inaccurate and incomplete information will lower your chance of getting a consolidation loan.
• Decide your loan amount and add up the debt you want to consolidate to see how much money you need to borrow. Keep in mind that arrangement fees may be added to the loan amount.
• Thoroughly research various lenders; reviewing their websites will help you see eligibility requirements, loan terms, and fees. You can also take a debt consolidation loan from a bank.
• Prequalification will give you an estimate of the loan rate and terms. Lenders generally use a soft credit check to confirm your eligibility, so your credit score will not be affected.

While debt consolidation has several merits, it is essential to weigh up your options. Depending upon the nature of your project, its status, and stage, customised solutions are offered by our highly experienced team of professionals, who assist you in selecting the right product, the right loan amount and tenure, the very best interest rates, and complete details on repayment options. Contact us today to learn more about the best finance options available.

UK rental prices have skyrocketed to a new 14-year high, achieving the fastest annual growth since the 2008 financial crisis. Coupled with the unprecedented cost of living increases, private tenants across the country are finding it more and more difficult to make ends meet.

Data published by Zoopla this week indicates an 11% increase in private rental prices during the first three months of 2022, taking the average cost of renting a UK home to £995. This equates to an additional £88 per month, compared to average rents at the start of the pandemic.

According to Zoopla, this extraordinary growth is attributed to dwindling availability within the private renting sector and growing demand, pushing average monthly rents higher as inventory runs short.

Since 2016, total average monthly rental growth in the UK has topped 16%. However, UK rents have not kept pace with average wages or consumer price inflation, making it increasingly difficult for private renters to comfortably cover their outgoings. The UK CPI hit a 30-year high of 7% in March.

Significant increase in gross income spend on rent

Skyrocketing rents in key regions across the country have triggered a major spike in the proportion of gross income households are spending on their monthly rent. According to Zoopla, average rent outgoings now account for 37% of the typical single earner’s total income in the UK.

For those renting privately in London, the figure increases further to 52%, the highest level recorded since March 2020.

Over the course of 12 months, it now costs more than £20,000 to rent a typical home in London, according to the latest estimates from Zoopla.

“The tenancy renewal numbers we have seen so far in 2022 are unprecedented,” commented Gareth Atkins, Managing Director, Lettings at Foxtons.

“Steadily increasing demand, severely limited stock, and a swift rise in rental prices are all compelling reasons to renew, and renters are responding.”

A surge in post-pandemic demand

Following two years of fairly stagnant performance, average monthly rents in the capital are once again rising rapidly—up 15% at the end of Q1 this year. As the return to city living gains pace, so too does demand for properties in and around major cities like London.

“The surge of post-pandemic pent-up rental demand will normalise through Q2 and Q3, however, which means rental growth levels will start to ease,” said Gráinne Gilmore, head of research at Zoopla.

“Affordability considerations will also start to put a limit on further rental growth, although this may occur at different times depending on location.”

“Rents are likely to continue rising for longer in areas that have the most constrained stock levels—currently London, Scotland, and the South West.” Zoopla’s report also showed how average tenancy lengths have increased significantly over the past five years, up from 51 weeks in 2017 to 75 weeks.

Slowly but surely, some semblance of normality is creeping back into everyday life. Homeworking and hybrid working models look set to remain the norm for some, but millions are nonetheless finding themselves being summoned back to the office.

The mass exodus from major towns and cities has ended and is beginning to show signs of a gradual reversal. According to Zoopla, this return to conventional office life is one of the key drivers behind a huge spike in the number of people currently searching for rental properties. Coupled with skyrocketing property prices, effectively pricing millions out of the market, more people are setting their sights on private rents.

Specifically, private rental property searches were 76% higher in 2022 to date than during the same period of the last three years, Zoopla reports. More homes are being placed on the private lettings market than at this time last year, but not nearly at a pace sufficient to meet the demands of prospective tenants.

It has become the norm for landlords to have multiple parties effectively ‘bidding’ on their private rental properties at the same time, driving average monthly rents to record highs in many areas of the country.

Younger tenants leaving parents’ homes

Throughout the pandemic, millions of younger tenants made the decision to terminate their agreements and move back in with their parents. As homework negated the need to continue paying elevated monthly rents in major towns and cities, the sensible option was to make huge savings by relocating.

Today, with almost all coronavirus restrictions having been removed, workers from across the country are once again being beckoned back to their original workplaces. Those who moved back in with their parents are frantically looking to secure affordable housing in major towns and cities, as are those who gained employment remotely during the pandemic.

For the overwhelming majority of these individuals, purchasing a property outright is not a realistic option.

In addition, those who are able to secure quality rental homes at affordable prices are, in some cases, signing longer agreements in order to mitigate the risk of being forced to vacate their homes in the near future.

“We’re hearing from agents and landlords that tenants are signing longer leases, which has prevented some of the stock that would normally come back onto the market,” Tim Bannister, Rightmove’s director of property data, said in a statement.

“When it comes to demand, we’re still seeing the effects of the pandemic, whereby tenants are balancing what they need from a home and how close they need to live to work with where they can afford.”

Along with rising rent costs, private tenants are also feeling the squeeze of skyrocketing energy bills and record-high inflation.

 

First-time buyers looking to get on the Scottish property ladder could be facing an uphill struggle this year as average property prices reach new record highs. For the seventh time within the past 12 months, the average market value of a home in Scotland has broken all previous records.

New data from the Walker Fraser Steele House Price Index indicates that the average price of a home in Scotland hit £218,702 in February 2022, an increase of £16,600 compared to February 2021.

On a monthly basis, Scottish house prices were up 1.5% in February compared to the month before, amounting to a one-month increase of £3,200 on average. This is the largest monthly increase recorded since August last year, with average house prices increasing in 30 of Scotland’s 32 local authority areas over the past year.

Only two areas recorded slight reductions in price over the past 12 months, which were Clackmannanshire and Aberdeen City. Meanwhile, the Orkney Islands saw the biggest gains of all, where average house prices increased by a huge 28.6% since the same time last year.

Competition remains ferocious

Senior housing analyst at Fraser Steel, John Tindale, highlighted similarities in the real estate sectors of England and Wales. Last month, all nine English and Welsh regions recorded all-time high average property prices, with Wales achieving the strongest annual growth rate of 8.9%.

“There is still high demand for such homes, but supply is limited, so there continues to be strong competition for the properties that do come on the market, with resultant price increases.”

Elsewhere, the regional development director at Walker Fraser Steele, Scott Jack, said that the way Scotland’s real estate sector has returned to strength was highly impressive.

“As a piece of context, in February this year, all the regions in England and Wales established new record average house price levels, but it is fair to say that the Scottish property market has robustly withstood one of the most seismic events in living memory in the past couple of years,” he said.

Shifting priorities and changing lifestyles

Analysts continue to cite the ongoing home-working trend as the biggest single contributor to explosive competition in the UK’s housing market.

Meanwhile, record-high rent yields across the country are motivating landlords and investors to expand their portfolios, putting even greater strain on the sector’s limited available inventory.

Even as the gradual return to the office accelerates, lifestyle changes brought about by the pandemic are likely to continue altering the public’s priorities in the long term. All of which is likely to sustain the housing market’s blistering performance indefinitely as demand continues to outpace supply by a clear margin.