“This Month We Talk : Why is Spring A Good Time To Sell, Lower NI Payments, Property Investing To Generate Income & Spring Clean Your Finances”

5 Big Reasons Why Spring is A Good Time to Sell Your Property

Spring has sprung, and with it comes a fresh opportunity for property sales. The months of March through May are historically the prime time for the property market, yielding consistent sales each year1. If you’re contemplating a sale, here are five compelling reasons to make Spring the season to showcase your property on the market.

1. A Surge in Buyer Interest

Spring’s pleasant climate brings out numerous prospective buyers, creating a high demand for available properties. As a seller, this can make for the ideal time – increased interest from potential buyers, which can lead to more competitive offers and quicker deals being done as buyers seek to secure their dream home before someone else does.  

2. Spring: A Time for Renewal and Relocation

There’s something about Spring that ignites the desire for a fresh start. This transformative period, symbolised by budding trees and blooming flowers, mirrors the aspirations of many to commence new chapters in their lives. For those tired of their existing homes, it may provide the trigger to look for something new – creating a swarm of eager buyers planning life-changing moves, from upgrades to relocations.

3. Enhanced Kerb Appeal

With Spring’s promise of better weather and longer days, properties naturally present themselves in the best light. The exteriors of homes bask in the seasonal glow, making architectural details stand out and inviting more foot traffic for viewings. This period is ripe for showing off not just homes with gardens but also those near vibrant communal spaces or with balconies that can be adorned with colourful blooms.

4. Ideal Lighting for Showcasing Interiors

Just as the exteriors benefit from Spring’s light, so do interiors. The season’s bright, natural light is perfect for capturing stunning photographs of your property’s interior, crucial for attracting online browsers and when it comes to the property viewings, can potentially help play a part in turning a prospective buyer into someone making an offer.

5. More Favourable Moving Conditions

Practically speaking, Spring’s moderate climate makes the moving process itself more bearable compared to the winter’s chill or the summer’s swelter.

Before you leap into the Spring market, ensure your property is at its most presentable. A thorough clean, some strategic decluttering, and a touch-up here and there, like a fresh coat of paint on the front door, can make a significant difference. Remember, first impressions are vital.

Source

  1. HomeOwners Alliance (2024). When is the best time to sell my house? Available at: https://hoa.org.uk/advice/guides-for-homeowners/i-am-selling/when-is-the-best-time-to-sell-my-house/ [Accessed 22 April 2024]

Lower National Insurance Payments, But Beware Creeping Tax Increases

Early April saw the Government’s 2% reduction in National Insurance on wages take effect, which represents a welcome bonus for many, however we look ahead to a potential risk of tax increases further down the line.

The National Insurance (NI) rate has fallen from 10% to 8% for circa. 32 million employees1 across the UK and is the second cut this year, after a similar 2% drop in January. In terms of what these cuts mean, for example, someone earning £35,000 per year would save around £900 per year, according to data from the Government.2

For the self-employed, Class 4 NI contributions on all earnings between £12,570 and £50,270 were already due to be cut from a rate of 9% to 8% in April. They will no longer pay a separate category of NI called Class 2 contributions.The NI rate on income and profits above £50,270 remains at 2%.2

Taxing times ahead?

However, analysts in some quarters are forecasting a potential future issue. Whilst the cut in NI contributions is, on the face of it, very welcome, a freeze in income levels at which tax is paid until 20283 could leave many with a higher future income tax bill to be paid, as their incomes rise over time.

The financial impact will differ significantly – depending on whether people work, how much they earn, and other personal circumstances.

Known as ‘Fiscal Drag’, when tax thresholds do not keep up with the rising cost of living, more people are pulled into higher tax brackets, and raises a lot of additional money for the Government.4 According to the Office for Budget Responsibility, the two sets of national insurance cuts announced in the 2023 autumn statement and 2024 spring budget do not offset the extra income tax being paid across the population as result of the thresholds being frozen.3

The Resolution Foundation says that anyone earning up to £19,000 will still be worse off than if the personal allowance had been increased in line with inflation. The biggest gainers, it says, are those earning £50,000.3

Only time will tell how the current economic conditions and Government policies pan out, but it’s always worth taking a look behind the top headlines to see the other impacts of key decisions made to assess the impact, and if you do have any specific concerns, we’d always recommend seeking independent financial advice from a trusted professional.

Sources

  1. Statistica (2024) Number of people employed in the United Kingdom from March 1971 to February 2024. Available at: https://www.statista.com/statistics/281998/employment-figures-in-the-united-kingdom-uk/ [Accessed 17 April 2024]
  2. BBC News (2024) National Insurance calculator: How much will the 2p cut save me and what is income tax? Available at: https://www.bbc.co.uk/news/explainers-63635185 [Accessed 17 April 2024]
  3. The Guardian (2024) National insurance: how much better off will the 2p cut leave workers?. Available at: https://www.theguardian.com/money/2024/mar/06/national-insurance-cut-jeremy-hunt-budget [Accessed 17 April 2024]
  4. Voce, A. & Kirk, A. (2023) UK income tax: how fiscal drag leads to people falling into higher rates. Available at: https://www.theguardian.com/business/ng-interactive/2023/oct/02/uk-income-tax-how-fiscal-drag-leads-to-people-falling-into-higher-rates [Accessed 17 April 2024]

More Looking to Property Investments to Generate Income

In these challenging economic times, an interesting report has revealed that one in six people are choosing property investment as a pathway for generating income, so we look further into the drivers behind this.

The Appeal of the Property Sector

Analysis from Market Financial Solutions (MFS) has recently revealed that a notable portion of adults in the UK, roughly 16%, have chosen property investment as a pathway for generating income.[1][2]

According to MFS, the property market continues to attract attention as a prime option for investors, spurred by a recent poll indicating an upbeat mood among those investing in property – whether it be residential rentals, holiday homes or business premises.

The survey also revealed that more than half of UK property investors (53%) are confident about the future performance of their investments, contrasting with the 14% who hold a negative outlook, leaving the rest with a neutral point of view.1

The Market Outlook

MFS’ survey has shown a rise in positive sentiment surrounding the UK property market since early 2024, together with a boost in the volume of properties listed in the year to date, along with hopes of a stable economic forecast and predictions that mortgage rates may settle and start to fall towards the end of the year.

However, the report findings also discovered a significant apprehension amongst 56% of property investors, stemming from the economic downturn seen at the end of 2023, and uncertainty over the period ahead, especially the country moves closer to a General Election by next January at the latest.1

Conversely, 54% of those surveyed are anticipating lower interest rates within the year, potentially energising the market. Additionally, 38% foresee a more straightforward experience in managing their property investments in 2024 when compared to the previous year.1

Interestingly, the MFS survey revealed that more than half of engaged UK property investors closely monitor market trends and economic forecasts about property price and rents, to help feed into their decisions on making adjustments to their property portfolio.

The Value of Mortgage Advice

It all goes to show that if you’re considering a new income stream, such as a buy-to-let property, it’s valuable to stay tuned with the market and the bigger picture of what’s going on, to help you make educated decision making on all aspects from funding the portfolio, through to the choice of property, location and much more.

It’s wise however to seek professional mortgage & protection advice before embarking on anything, to find out more about how you can finance and start a buy-to-let portfolio, looking at your exact circumstances and with bespoke advice to fit your precise needs. 

The Financial Conduct Authority does not regulate some forms of Buy to Lets. Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

Sources

  1. Market Financial Solutions (2024). Property investment trends in 2024. Available to download at: https://www.mfsuk.com/property-investment-trends/ [Accessed 18 April 2024]
  2. BuyAssociation (2024). One in six adults have some form of property investment. Available at: https://www.buyassociationgroup.com/en-gb/2024/03/05/uk-property-investment-2/ [Accessed 18 April 2024]

Spring Clean Your Finances

This month welcomed the new Tax Year, that started back on 6th April. We look at a number of checks you can make to ensure your finances are given the ‘spring clean’ for the year ahead.

Tax codes

New tax codes for the financial year ahead came into force on 6th April. However, it’s worth checking if they are correct for you and your current circumstances – especially as it’s your responsibility to check that it’s correct, rather than your employer, or HMRC1.

One way to check whether your tax code is correct is visiting an online calculator, such as the one hosted on the Government web pages at https://www.gov.uk/check-income-tax-current-year

Self-employed roles

If you are in a self-employed role, the recent changes to National Insurance (NI) mean you should check how much to set aside in the wake of changes to NI contributions in the March budget.

Changes to the Individual Savings Account (ISA) rules

This tax year there’s no limit to the number of ISAs you can open. It’s one of the biggest changes to the rules to come into effect on 6 April; previously you could only open one of each type every tax year.2

Lifetime ISAs (LISA)

One of the less well-known ISAs is the LISA or Lifetime ISA, which can be used to help buy your first home or save for later life. You must be 18 or over but under 40 to open a Lifetime ISA.3

You can put in up to £4,000 each year until you’re 50. You must make your first payment into your ISA before you’re 40. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.3

The Lifetime ISA limit of £4,000 counts towards your annual ISA limit of £20,000. You can hold cash or stocks and shares in your Lifetime ISA or have a combination of both.

When you turn 50, you will not be able to pay into your Lifetime ISA or earn the 25% bonus. Your account will stay open and your savings will still earn interest or investment returns. 

You can withdraw money from your ISA if you are:

  • buying your first home
  • aged 60 or over
  • terminally ill, with less than 12 months to live

However, you will pay a withdrawal charge of 25% if you withdraw cash or assets for any other reason.3

Sources

  1. The Times (2024) How to check your tax code and what it means. Available at: https://www.thetimes.co.uk/money-mentor/income-budgeting/tax/what-is-my-tax-code-changed-check [Accessed 17th April 2024]
  2. National Savings & Investments (2024) What do the new ISA changes mean for you?. Available at: https://www.nsandi.com/isa-changes [Accessed 17th April 2024]
  3. Gov.uk (2024) Lifetime ISA. Available at: https://www.gov.uk/lifetime-isa [Accessed 17 April 2024]

All the information in this article is correct as of the publish date 25th April 2024. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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