Leftover Christmas toffees and a surge in second charge business

The festive period is a time for reflection on what has - or hasn’t - transpired over the course of the year and making some kind of resolution/plans for the year ahead.

Leftover Christmas toffees and a surge in second charge business

Daniel Yeo is managing director of Specialist Finance Centre

You could almost hear any surviving Christmas spirit collectively drain from people around the UK as the calendar clicked over the fourth and homeworkers everywhere were struggling to know what day it was, staring at stark decoration free rooms, inadvertently picking up pine needles on the way to assessing the fridge situation on the hour, every hour, fighting with their significant others over the last of the Christmas biscuits and being forced to eat those remaining toffees that nobody likes.

It’s an age-old tale that Dickens would have been proud of but I think everyone who was sat at their desk – whether makeshift or permanent – on that fateful morning was either bemoaning the clearing of inboxes or still in a general malaise.

Even for someone who loves their work as much as I do, it wasn’t easy to transition back into the 100mph work life that everyone in the intermediary market have become accustomed so accustomed to in recent times.

The festive period is also a time for reflection on what has - or hasn’t - transpired over the course of the year and making some kind of resolution/plans for the year ahead.

Increasingly, many of these plans relate to our homes. Rightmove claims that visits over the Christmas period signified its busiest period ever with ‘buyer demand’ up 23% compared with the same time last year.

The number of new sellers coming to market was said to be up by 21% on Boxing Day just gone, compared to December 26 2020, representing the highest number of new sellers on Boxing Day that Rightmove has ever recorded.

It claims prospective sellers jumped into action on 30 December, its busiest day since May 2021 for people requesting agents to appraise their home, making it into the top 10 busiest ever days for these valuation requests on the property portal.

As an industry, we have experienced heightened, and shifting, property-related aspirations due to people spending far more time in our homes than we ever imagined.

A factor which continues to shine a light on any inadequacies and the age-old debate of whether to move or improve. Current activity levels suggest that it’s a bit of both but, with the stamp duty incentive no longer being the driving force in the purchase market that it once was, it may well be the case that home improvements win this battle in 2022.

With so many property transactions completing over the past 18 months, we are also seeing more recent homeowners now embarking on projects to adapt their new properties after living in them and evaluating how they work, or don’t work, from a practical perspective.

This was evident in recent data from GetAgent.co.uk which outlined that 69% of homebuyers who have purchased a property in the last six months have plans to improve their property, with 52% planning minor aesthetic improvements while 17% are going the whole hog with major changes such as an extension.

In terms of the areas of the home we’re looking to improve the most, the kitchen ranks top with the garden and bedrooms also an important area of focus.

Some of these improvements could be made with the money saved from any stamp duty exemption. However, with property prices rising so sharply across the UK over this period, it still feels like many purchasers stretched themselves and are now evaluating ways and means to raise additional funds to complete any extra work. Which leads me to the volume of enquires we’ve already seen from brokers with clients who are looking to do just that.

Due to the cost of materials currently being sky high and tradespeople being able to charge a premium, significant home improvements do not come cheap.

Thankfully, we are still operating in a highly competitive lending environment and second charge loans can often provide a cost-effective solution when it comes to capital raising.

Especially for those newer homeowners, the majority of which are tied into low rate longer-term mortgage deals where it makes little sense to remortgage.

And this is an area which will continue to drive second charge enquires in the early weeks of the year to kick start 2022 with a bang and keep those January blues at bay.