Welcome to the Wood & Pilcher September newsletter! In this edition; How much are buyers willing to pay for the perfect property? UK interest rate cuts: how they will affect you, everything you need to know about joint ownership and finally, in the spirit of Great British Bake Off, we tell you how to get your kitchen 'Bake Off' ready! 

Until next time, 

Wood & Pilcher 

When it comes to buying a home we’d all love to find that hidden gem that’s perfect for our needs and within budget. The reality of buying a home isn’t always that easy and you can guarantee that if you find your dream home, it won’t come cheap. Most buyers have a maximum budget in mind when it comes to searching for a property, but how many people are willing to over-spend for the perfect property and by how much?

A recent study has looked into data from millions of buyers, revealing a surprising amount of people that are prepared to go above and beyond for their dream home. A survey conducted by Ocean Finance found that 78% of the UK - roughly 43 million buyers - would be happy to spend more than they originally intended for the property that ticks all the right boxes.

What’s possibly the most surprising statistic of the entire study is that 62% - 31 million buyers - would be prepared to spend up to 10% over budget, which could add an average &28,000 to the price tag or just over &900 in rent annually.

There are even some buyers willing to go a huge 20% or more over budget, with 2% of people willing to pay approximately &56,000 more than intended on a property or just less than &1,900 in rent annually.

The findings of this research also revealed specific areas where buyers are prepared to overspend, with 77% of London based buyers and 79% of Scottish & Northern Irish buyers appear more likely to dig a little deeper into their pockets for the right home. The research also shows that the same applies to under the age of 35, with 80% of this demographic prepared to borrow that little extra towards a home.

On the other end of the spectrum, we have roughly 1 in 4 people who would not be tempted to go over their original budget, even if the home came extra features on their wish list.

Spokesperson for Ocean Finance, Ian Williams spoke on the recent results stating that “Whether we are renting or buying a property most of us have a budget that we can afford in mind. But three quarters of us are happy to ignore the budget and stretch our finances to get the home that ticks all our boxes,”

A breakdown of the results can be found below:

Percentage Of Participants	Percentage Over Budget
34%	0% - 5%
28%	6% - 10%
7%	11% – 15%
4%	16% - 20%
1%	21% - 25%

With the Bank of England reducing the base rate to just 0.25%, here’s an insight into the likely impact it will have on mortgages, savings, pensions and of course house prices.

Mortgages
If you have a fixed-rate mortgage, then it doesn’t change anything for you unfortunately. However, if any of your borrowing is on a variable rate then its more than likely good news!

Those who will see their monthly repayments fall (probably from the start of this month), are the 1.5 million borrowers with mortgages that track the base rate. For a homeowner on the average variable mortgage rate of 2.86% and a mortgage of &150,000, a reduction in line with the base rate will mean monthly repayments falling by &19.68 to &687.

There are no longer any borrowers with tracker rates below the base rate, but there are some people lucky enough to be paying just 0.09% above the Bank base rate. These are Chesham building society customers who took out lifetime tracker mortgages several years ago – their pay rate will fall to just 0.34%!

But don’t expect your overdraft or credit card to get cheaper because of the base rate cut – the interest rates on these types of borrowing are detached from the Bank base rate and have been rising in recent months.

Savers
Although these cuts bring great news to many with a mortgage, it’s not so great news for those that are saving as they are likely to see returns fall further as a result.

Savers have been suffering since the last interest rate cut but according to Moneyfacts, there are 385 savings accounts that could end up offering no interest at all if banks and buildings societies pass on the whole reduction.

Anna Bowes, who runs SavingsChampion.co.uk, says many savings accounts can’t actually accommodate a 0.25% cut because they are already paying rates below that level. She says since Funding for Lending was introduced in 2012 (under which the government gives the banks cheap loans) consumers have had nearly 4,700 cuts to existing savings accounts. “Savers really have been the sacrificial lambs of this downturn. While borrowers have benefited from historically low rates, savers have never known it so bad. However, they must not lose hope as there are still providers that want savers’ cash and are willing to pay a competitive return for it,” she says.

Pensions
It’s pension savers that could be the biggest losers from the cuts though with critics calling it a ‘hammer blow’ to workplace schemes and predict that pension payouts could fall to record lows.

Pensions that offer a payout based on salaries often invest heavily in gilts, and the lower return available means they will face a struggle to meet their promises and deficits could grow.

Patrick Bloomfield, a partner at Hymans Robertson, said: “[The BoE’s move] is a huge deal for pension funds. There were some that were already under an unprecedented level of pressure. After today, some schemes are going to reach tipping point.”

House Prices
As for house prices, the interest cuts could actually be a good thing and push them up as the low cost of lending may encourage more people to take out mortgages. A fall in bond yields has already started to reduce the cost of 10-year fixed-rate mortgages and fixed-rate deals are either at or near an all-time low across all time periods.

There’s no point in beating around the bush. A property is the single biggest purchase you will ever make. You will pour obscene amounts of money, more than you’ve probably ever seen or ever will see again, into a deposit for your very own slice of land. It’s a complicated process, that’s made even more complicated if you’re buying with a partner/loved one/friend.

Before you get started, as unromantic as it may seem, it’s important that you seek advice from a solicitor before purchasing a home. You need to understand your rights in the event of death or separation.

1. Firstly you have to choose between the two types of joint ownership. Joint Tenants each own an equal share of the property, however when you die, your share goes to your partner and you can’t bequeath your share in a will. Tenants in Common can each own a different share of the property, however it allows them to pass on or gift their share in the property, and your share doesn’t automatically revert to the partner in the event of your death (unless you want it to).

The type of tenants you are will be defined by a solicitor, making the eventual sale of the property more streamlined.

2. Should you be buying a house with the intention to put it on the rental market, you’ll want to consider the type of joint ownership carefully. With Joint Tenants, the split of the rent is 50/50 like the split of the share. If it’s Tenants in Common, you may have less of a share of the income.

3. It is possible to swap between the two joint tenancies. Many choose to switch from joint tenants to tenants in common to allow for greater flexibility in the event of a divorce or separation. Mutual consent isn’t necessary as one partner can serve the other with a “notice of severance”.

4. Joint ownership is also helpful for buying a second home, on which Capital Gains Tax is payable. Capital Gains Tax is a tax levied on the profits of the sale of a property or investment. Both owners can take advantage of the &11,100 limit on the tax when selling a property.

5. Should there be any doubt about a partner’s ability to make a legal decision based on their mental capacity, then the other owner will have to apply to the Court of Protection before he or she can sell the property. This means you’re protected from being forced to sell a property through dishonest means.

 Like millions across the country, we are loving Great British Bake Off right now! You might be feeling all Mary Berry and wanting to test your baking skills by producing an epic meringue pavlova or an inviting Victoria sponge. Whatever it is you’ll be baking, icing, kneading or frosting, you’re going to need the perfect kitchen for preparing and of course, eating your baking masterpieces!

Check out these ideas for a show-stopping cook space.

A warming drawer – If you’re a keen break-maker, a warming drawer is a must! It’s essentially a separate drawer that fits into your space like an integrated oven. Alternatively, you’ll find them built into traditional range cookers. These warm spaces are perfect for proving bread and, as an added bonus, can be used to defrost food and heat up plates.

Store items by use - Arrange your baking tools and gizmo’s by frequency of use, with standard mixing bowls on an easy-to-reach lower shelf and special-occasion pieces up above. Group objects by purpose and assign them to specific cabinets, you could even alphabetise your cakes decorations (if you want to go that far!)

Try a retractable book stand - A retractable book stand keeps a recipe at eye level while you're working, then folds back under a cabinet when you're done. Of course, there are so many recipes online nowadays that it’s often not necessary to buy cookery books. Instead, use the stand to rest your tablet on so that it’s out of the way of cake splats!

Quirky crockery - Once you’ve baked your delicious cakes, you’ll need gorgeous crockery on which to serve them. Start a collection of pretty plates, jugs and bowls, so you always have the perfect item for every type of dessert. Remember, not everything has to match: an eclectic collection is more interesting, and means you can add to it whenever you find something you like. For a thread of continuity, you could hunt out pieces in a similar colour scheme.

Don’t forget the best part… The eating! - Don’t forget to make room for enjoying your baking delights. Even if your kitchen is tiny, it’s still often possible to fit in a table. TIP – If your kitchen is tiny, consider a transparent style table as it gives the illusion of more space as the table seamlessly blends into the room. For a bigger table, look out for drop-leaf versions that can be tucked away, and extended when extra people pop round.