Category: Finance

Lending Policy Change Opens The Door For First Time Home Ownership

Exciting news for aspiring homeowners! Skipton Building Society has today announced a remarkable change to its lending policy for new build homes that will provide unprecedented opportunities and support for first-time homebuyers.

In a change to its current lending criteria it hopes to address some of the challenges faced by aspiring homeowners and simplify the path to home ownership.

This new mortgage deal of up to 95% loan to value applies to new build flats where only a small 5% deposit would be required.

So, if you are looking for a new build flat in 2024, we have a range of one and two bedroom apartments available at our Pollokshaws and Laurieston Glasgow developments where prices start at just £180,000. Ask your mortgage adviser about the best deals available to you in 2024 and take your first step onto the property ladder.

Urban Union homes are in prime locations for property investment, according to Colliers’

In their most recent report, commercial real estate firm Colliers’ have included Edinburgh and Glasgow within their top five places to invest in property within the UK. Which is great news for anyone with an Urban Union home, because that’s exactly where you can find all of our current housing developments.

Edinburgh came out on top in second place, meanwhile Glasgow ranked third, it’s first time within the top five!

Property prices and value on the rise in Glasgow and Edinburgh

Significant increases in average property price/value

Compared with 18 other cities in the UK, they were both favoured due to their strong house price growth, affordability and high EPC (energy efficiency) credentials – something which can assist you in being granted a green mortgage for your home.

Other factors which were considered included employment prospects, income inequality, business creation and broadband connectivity.

The benefit of this to you as a home owner? A prosperous city generates more interest and demand, which attracts further investment to the area meaning there will be more social spaces and eateries, as well as larger companies setting up HQ in the North.

And, if the time comes that you decide to move on, a much better valuation of your home is advertised on the property market.

But what does each city have to offer?

residential property to invest in within Edinburgh

Investing in property in Edinburgh

Named Best City in the World by the Time Out 2022 Index, Edinburgh boasts a diverse economy, large population, highly skilled workforce, high volume of leisure attractions, positive house price growth, low unemployment and good ESG credentials.

Great for homeowners, the city has the second-largest share of properties with an EPC rating of C and above from those reviewed – which is great for reducing energy bills. And, the city has also the third-largest green space compared with others in the report.

Compact enough to be explored on foot, Edinburgh offers a unique blend of world-leading heritage, arts and architecture, bringing together its history and new modern vibe.

And we most certainly can vouch for its popularity with the significant demand we have seen for our Pennywell Living development, of which there are only a limited number of new build one and two bedroom apartments now remaining.

Click here for the current availability within our Pennywell Living housing development.

Investing in property in Glasgow

Similar to Edinburgh, Glasgow has something on offer for everyone. From top retail destinations such as Buchanan Street and Argyll Arcade, to its iconic museums and art galleries or sights such as Glasgow Cathedral, you are never short of things to do!

Despite the average price for a flat in Glasgow increasing 35% between October 2017 and October 2022, buying and renting is much more affordable than in other larger UK cities.

Meaning you can not only enjoy everything the city has the offer, but at a much cheaper rate.

We currently have apartments and townhouses available within our Pollokshaws Living development, with prices starting at just £160,995.

Click here for the current availability within our Pollokshaws Living housing development.

new build investment property

Get in touch with our sales team regarding our new builds in Glasgow and Edinburgh

Ready to invest in your new residential property and in need of some more information? Our team are on hand to discuss both our apartments and townhouse options which are currently available.

As well as this, they can provide insight into upcoming developments, should a particular area of either city peak your interest.

Our energy efficient home options can help you with a green mortgage

Recently launched, green mortgages are government supported loans with eco-conscious incentives designed to help decarbonise the UK’s ageing housing stock by imposing targets for mortgage lenders.

Essentially this means that as a direct result of having a high energy efficiency rating on a home, the bank would offer you either a lower interest rate or an increased loan amount prior to purchase – allowing them to meet the government’s targets.

energy performance certificate explained

Energy efficiency ratings explained

This is all determined via the home’s Energy Performance Certificate (EPC), which every home must have when it is built, sold or rented. This gives the property an energy efficiency rating from A or 100 (most efficient) to G or 0 (least efficient), which is valid for a total of 10 years.

New-build homes will have a Predicted Energy Assessment (PEA) before they’re finished, providing you with a predicted energy efficiency rating that you’ll need to confirm any mortgage.

All Urban Union homes are provided with this prior to completion, with our current properties achieving some of the highest energy efficiency ratings available.

energy efficient properties can help you get a green mortgage

Green Mortgage deals explained

Intrigued? Let us highlight the savings you could be making with a green mortgage on an energy efficient home, using Barclays as a lender example.

You would be applicable to apply for a Barclays Green Home Mortgage if you’re buying a new-build property directly from the builder or developer – which would be the case if you were purchasing an Urban Union home.

Their new Green Mortgage product is available at a 90% LTV on a 5 year fixed rate deal. However it is important to note that this product would only be provided through specialist leading mortgage brokers, who can be recommended to you by Barclays.

An example of how payment could look would be as follows:

Purchase price: £300,000
Deposit: £30,000
Mortgage terms: 35 years

Amount to pay – £1,311.44 per month. Rate 4.7%, 5 year fixed product

Working out cheaper in most cases than other mortgage options, you will not only save money via your lower energy bills going green but also in your monthly re-payments.

New energy efficient homes qualify for green mortgages

Interested in finding out more about our homes and green mortgages?

Our sales team are on hand to advise you of the energy efficient homes that we currently have available at Pollokshaws Living, Pennywell living and Laurieston Living.

As well as this, we regularly invite and collaborate with the Mortgage Advice Bureau at our events, meaning we can provide you with easy access to expert knowledge and information.

With the energy crisis rumbling on, unfortunately, scams are on the rise. Over the last year, more than 40 million people have been targeted by scammers, and 12% of these are related to our energy bills.

However, there are ways to protect yourself and your loved ones, and part of that is to arm yourself with knowledge.

Typical scams

People use various ways to target vulnerable people, aiming to get your personal information to extract money from your accounts.

They are increasingly using the new energy grants available to contact you either by:

Door to door
Calling on the phone
Social media
Email and text
Website pop-ups

They could be claiming to be from Ofgem, energy rebate companies, gov.uk or an energy supplier.

The best way to spot a scam is to know what to look for. Here are some tips:

You could be offered money or a rebate and asked to click on a link. Look carefully at this link as it will have random numbers and if they claim to be from the government, the URL will not be from gov.uk.

Energy companies and government departments such as HMRC will not ask you to click on a link and will not send you a message via text or email. Instead, they will ask you to access your account using the official website address – in the case of HMRC, this is a two-factor login whereby you are texted a code and log into your tax account. Any messages will be visible here and will not appear anywhere else.

If you click on a link, you may be asked to input a small amount of money to receive a rebate and could be asked for personal information to validate your account. Do not make any payments or give any personal details.

Please do not hand over any information, reply to emails or texts or engage in conversation.

Instead, contact Citizens Advice for support. If you made any payments, you must report this to your bank or credit card immediately and report it to Action Fraud.

Get support

If you’re struggling to pay your energy bills, support is available. All households in England, Wales and Scotland will get £400 off their bills from October 2022, with monthly payments over six months to March 2023. The UK Government is working to ensure that people in Northern Ireland receive equivalent support as soon as possible.

You can also find free advice from Home Energy Scotland, the Scottish Government-funded advice service. Home Energy Scotland works closely with Trading Standards Scotland to help householders avoid energy scams – find out more about this work on the Home Energy Scotland website.

How to save energy at home

With household energy bills on the rise, there are several measures you can take to make sure that your home is working as efficiently as possible, helping you to save money – and the environment.

The great thing about buying a new home, especially an Urban Union property, is that it already has a high EPC rating with new double-glazed windows, an efficient boiler and insulation.

But even if you live in a home that’s energy efficient, there are some small things you can do to make significant savings and break bad habits around energy use.

In this blog we will highlight some of our best energy saving tips below.

monitoring your boiler to improve energy efficiency

Check your boiler

According to the Energy Saving Trust, heating and hot water typically account for over half of our energy bill, so it makes sense that you have an efficient one.

Primarily the age and efficiency of your current boiler, as well as the type of fuel that is used to heat your home will determine your energy usage.

That is why all of our new homes and apartments are fitted with a new combi boiler, which will heat water on demand, making them incredibly cost-effective and energy efficient.

Insulation of the home to reduce energy consumption

Ensure your home is insulated properly

The best way to ensure your home doesn’t waste heat is to ensure it’s adequately insulated.

Unless your home is newly built, you may lose a fair amount of heat through doors and windows, gaps around the floor or between floorboards, or out-of-use chimneys.

Remedy this by plugging in the gaps between your windows and walls with cavity wall insulation, filling cracks in the floors and gaps around skirting boards and doors, as well as fitting brushes where you have significant gaps at the bottom of internal doors.

Energy efficient electric central heating radiator

Reduce the temperate within your home

When your home is properly insulated, you can afford to turn your heating down by just one degree to make a big saving over the course of the year.

In fact, you can save 10% on your energy bill just by turning your heating down by as little as one degree.

And for the chillier nights, warm blankets are the perfect accessory to have in your home.

window letting in natural light to prevent wasting energy

Turn off switches to save energy at home

In a similar essence, it is also wise to minimise how often you are using your main lights and instead you should take advantage of natural lighting and smaller table lamps to reduce your energy usage.

Also make sure lights and plug sockets are switched off in any room not being used.

A smart meter is a great way to monitor this and quickly make changes to your current lifestyle.

water efficient shower head reducing energy bills

Reduce your water consumption

And finally, water is another area in which you can reduce your energy costs.

According to the Energy Saving Trust, reducing the length of your shower to just four minutes could save £95 per year.

You can also choose to fit an aerator to taps and showers, which makes more efficient use of water – using less energy to heat the water you use.

Energy efficient home with green plants to outside

Find your energy efficient home with Urban Union

We hope we have been of service and provided some quick and easy tips on how to save energy at home.

If you have been inspired by this blog, to reduce your energy consumption and enjoy lower energy bills, then reserving your own Urban Union home may be your next best move.

Click here for further information regarding our current developments, in both Glasgow and Edinburgh.

Energy Efficiency as Standard

Moreover, by being close to parks, amenities, and exceptional public transport links, you’ll have less reliance on the car.

So what makes our properties at Pennywell Living so energy-efficient?

Hi-efficient combi boiler
Fully insulated
High performance double glazed windows
Energy-efficient appliances
Less reliance on the car
Access to ‘Green’ mortgage deals

You’ll also have friendly neighbours, a vibrant community, super-fast connectivity and a great location. Your perfect easy-to-manage, energy-efficient home is now available at Pennywell Living in Edinburgh.

Here are some other ways you could save money on your bills this winter:

Use LED lightbulbs

LED lightbulbs last longer than standard bulbs and are efficient, too – helping to keep your energy consumption down. This is especially important in the winter when it’s darker for longer.

Use a microwave and air fryer

An oven uses a lot of electricity, and by switching to an air fryer which heats up straight away and a microwave which can heat food quickly, you’ll save money. Available from £35 in supermarkets.

Turn off appliances

By leaving your electrical items on standby, you will consume energy even though the items aren’t being used. Turn them off at the plug to keep your electricity bills down, including your television, games consoles, computers, printer, lamps and rarely used items. You could also invest in wireless plugs you can control from your mobile phone. When you purchase a new appliance such as a fridge, freezer, computer or monitor, they will give you the energy rating. Try to opt for items that are energy efficient and rated D or above.

Furniture and soft furnishings

Move your furniture away from the radiators to allow the heat to circulate, and use thick-lined curtains to keep the heat in your rooms and stop it from escaping from the windows. Heated blankets and throws are also energy efficient and let you stay warm without turning your heating on.

Turn your heating down

It sounds obvious that turning your heating and hot water down by just one degree can make a difference to your annual bills.

If you’re considering a more energy-efficient home, take a look at the new homes available at Pennywell Living in Edinburgh. We have some exceptional one and two-bedroom apartments for sale in various styles. One-bedroom prices start at £169,995, and two-bedroom apartments are from £189,995.

The newly appointed Chancellor, Kwasi Kwarteng, last week announced a radical set of measures to help to tackle the current cost of living crisis.

One of the commitments was to cut taxes with the view that if people are making more money, they’ll spend more which will boost the economy’s growth. It was seen as a risky strategy, especially as business and consumer confidence is low, and cutting taxes contradicts the measures brought in by the Bank of England with the recent interest rate rises to tackle inflation.

Several measures announced last week will affect people here in Scotland, including the reversal of the National Insurance increase for employers as of April this year and the retention of the corporation tax rate.

Whisky distillers and brewers will see an end to planned reforms of alcohol duty, and retailers will see a new system to boost VAT-free shopping by foreign tourists. In addition, the reversal of tax reforms for people who are currently self-employed will cover the whole of the UK.

However, several announcements will not apply to Scots, including the cut in additional rate income tax from 45% to 40% on earnings above £150,000. The rate here remains at 46%. Also, a cut in basic rate tax from 20p to the pound to 19p does not apply here.

Property

One of the main headlines from last week was the cut in stamp duty for property transactions. This only applied in England and Northern Ireland, given that here in Scotland, we have the Lands and Building Transaction Tax (LBTT) system.

In the budget last week, the Chancellor announced that stamp duty would not be charged on the first £250,000 of a property purchase for people moving home. This up from the current level of £125,000. To help people realise their dream of property ownership, stamp duty will not be paid on the first £425,000 of a property worth up to £625,000 bought by first-time buyers.

In the previous scheme, introduced during the pandemic, first-time buyers were not charged stamp duty on the first £300,000 of a home costing up to £500,000.

The same savings could be made available to Scots, but it’s all dependent on the government. This tax cut which doesn’t apply to us, is treated by the Treasury as a giveaway to non-Scottish individuals. A proportionate share of that giveaway is handed to Holyrood. This allows Scottish ministers to deploy the funds as they choose.

Following the announcement about stamp duty, Holyrood will be given an increase in block grants from the Treasury of £630m spread over this year and the next two financial years.

Cutting the basic income tax for the rest of the UK is a boost for Holyrood of £340m over the next financial year and the year after. The element of reduced property transaction tax in England and Northern Ireland adds up to £170m over three years. Some £120m is in place of the reduction in top rate income tax, which cuts the tax bill for the average non-Scots high earner by £10,000. That widens the gap between Scots and non-Scots high earners when Scots already pay higher tax rates above £50,000.

Holyrood could cut tax in similar ways or spend it on different priorities – time will tell as to whether Scots will see similar savings when purchasing a property.

Since December 2021, the Bank of England has put up interest rates several times and this has meant that mortgage rates have steadily become higher.

Most homeowners are on a fixed rate mortgage deal and will be unaffected by the rise, but homeowners looking to remortgage at the end of their current deal along with first-time buyers will be affected. However, there are some things you can do to help offset these rises.

Fixed-term deals

A fixed-term mortgage deal means that you are protected from any increases for either 2, 5 or 10 years (longer fixed terms are available but this level of commitment needs some considerable thought). Unlike a variable rate mortgage, your mortgage will stay the same for the term of the mortgage. However, it’s important to look ahead and decide if you are willing to be tied in for a set amount of time because you could have to pay an early redemption penalty especially if you have opted for a 10-year fixed deal. Some lenders will let you ‘port’ the mortgage to your new home.

Mortgage term

If you want to keep your mortgage down, you should opt for a longer term. Depending on your age, you could opt for a 30-year mortgage instead of the standard 20- or 25-year mortgage. Although you will end up paying back more, your montly repayment will be lower. Some lenders offer a 40-year mortgage term but eligibility will depend on how old you are when you first take out the loan.

Mortgage overpayments

Although overpaying won’t result in lower repayments it will offset the higher interest as you’ll be reducing the amount of outstanding debt you owe so you’ll be charged less interest overall.

Will Longer Mortgage Terms Be the Norm?

If you are considering purchasing your first home, you are probably watching the mortgage rates with interest. Over the last few years, we have seen historically low interest rates which have made mortgage borrowing more affordable.

The cost of living has been rising. Energy price caps have been pushed up (and they will rise even further in October), interest rates have risen five times since December, petrol and diesel are reaching record highs and food prices are increasing. With so much uncertainty around the cost of living, it is important to consider how much you can afford to pay for a new property and budget for your general living costs.

Mortgage payments have gone up since the start of the year and the average first-time buyer monthly mortgage payment for someone taking out a 90% loan-to-value mortgage, fixed for two years is currently 20% (+£163) higher it was at the start of the year.

If you are considering moving this year, work out what you can afford to pay and talk to a mortgage broker about fixing your mortgage for a longer term.

Buying new

By purchasing a newly built home, you can be safe in the knowledge that you won’t need to worry about costly repairs, renovations, or decorating work to make your home habitable.

You can move straight in with brand new appliances, secure windows and doors and a high EPC rating to keep your monthly energy bills down. You’ll have a warranty for peace of mind and when it comes to the purchase price, you can be safe in the knowledge that it has been competitively priced against the market in that area – and that you won’t have to put in an offer over the asking at closing date. At present, some areas are seeing offers over in excess of 15% making a first home out of reach for many first time buyers .

Fixing your mortgage

When you take out a mortgage, it will either be on a variable or fixed-rate basis. When you take out a fixed-rate mortgage your rate is guaranteed for a specific time frame. Most lenders enable you to fix your rate for anything from two to ten years – sometimes even longer although this is rare. A fixed rate mortgage gives peace of mind knowing exactly what you have to pay each month regardless of what happens with interest rates.
Usually, it’s cheaper to fix for just two years – with the mortgage rate increasing slightly the longer you fix your mortgage for. Over recent years, the gap between interest rates for two and five- or ten-year fixes has been closing and some deals are very similar. Previously the difference could be as much as 1%.

Fixing for more than two-years could give you peace of mind if you’re planning on staying in your home for a long time.
Once the fixed rate period ends, you will be automatically moved onto the lenders’ Standard Variable Rate (SVR) which is a higher rate of interest than a fixed rate. However, you can usually start to look at taking out a new mortgage deal up to six months before your deal ends.

If you’re considering a new home at a fixed price and with no renovation or decoration costs, talk to us at Urban Union.

House Prices in Scotland

Over the past year we have seen house prices rise at an unprecedented rate here in Scotland. Why has this happened?

The pandemic effectively paused all new property transactions from March 2020 until the end of June 2020. This caused pent-up demand as people had put their plans on hold. What’s more, as we were all confined to our homes for months, there was a demand for more space to accommodate families working and schooling from home. Given that we were only able to leave our homes once a day for exercise, those without gardens or outside space prioritised living in a home with access to a garden or within proximity to parks and green spaces. There was also a move away from city centres to more rural areas.

As the government announced a tax break so that buyers didn’t have to pay stamp duty – LBTT here in Scotland – this gave a further boost to the property market.

In terms of borrowing, mortgage rates were still historically low following the re-opening of the property market – and this combined with the LBTT holiday – promoted many people to move, especially those at the upper end of the property market where large savings could be made. However, this had a knock-on effect at the lower end of the market as homes became available.

Although lenders largely withdrew high LTV mortgages, meaning that those with only a 5% or 10% mortgage were unable to secure a mortgage offer, the government announced the Mortgage Guarantee Scheme. This meant that the government would support a new generation in buying their own home. It increased the availability of 95% Loan-to-value mortgage products, enabling more households to access mortgages without the need for large deposits.

We have also seen a number of people moving from London to Scotland to take advantage of the larger homes and increased quality of life due to the affordability of living here

In summary, low mortgage rates, a re-evaluation of buyers’ needs, a move from large cities to more rural areas, the availability of 95% mortgages and the tax holiday, resulted in the most buoyant property market seen for many years. Property prices have steadily gone up and offers over the Home Report Value have been seen across all property types.

According to the latest figures from Chartered Surveyor Walker Fraser Steele, house price growth in Scotland has been the highest across the whole of the UK. House prices have increased by 13.2% (in the 12 months to September) with the average property price standing at £212,832 after an increase of £25,000.

Prices went up for over half of all Local Authority areas of Scotland with the largest increase standing at an incredible 6.3% in Inverclyde. This was followed by East Dunbartonshire with an increase of 5.2%.

According to the Registers of Scotland (ROS) the increase is even higher. It has reported that the average price of a property in Scotland in August 2021 was £180,832, an increase of 16.9% on August 2020.

Detached properties showed the largest increase in average house price, rising by 21.3% in the 12 months to August 2021 to £319,985. Apartments showed the smallest increase, rising by 12.6% in the year to August 2021 to £124,949.

Purchasing at a fixed price

A newly built property is your chance for a fresh start – a home that is clean, bright and new – a blank canvas for you to put your own stamp.

Being new, your home will be highly energy efficient and cheaper to run than an existing property. It will have been built to the latest environmental standards. Your carbon footprint will be lower and compared to an older property you can save a large amount of money annually. A new home has a brand new, efficient heating system, insulation and double glazing along with energy efficient new large appliances.

What’s more you won’t be in an ‘offers over’ situation and paying possibly more than it is worth – the price is fixed and fair, and often new build homes are competitively priced in order for them to sell swiftly.

When buying a newly built home, you aren’t in a purchasing chain. You pay a reservation fee and it’s yours – making the process much less stressful. What’s more, you can move in as soon as you’re ready without having to take into consideration a seller’s plans – so from the start there is no uncertainty.

Take a look at our developments and get in touch to find out more.