Buying, selling and letting - February, 2001

Taking its name from the Kelebourne river which once flowed from Hampstead to the Serpentine, Kilburn grew up as a stop along the ancient Edgware Road. Originally known as Watling Street, the road was built by Romans over an Anglo-Saxon track, and was used to convey troops and traffic from London to St Albans.

Inns and public houses were established early along the route – many of which, including the Red Lion (circa 1444) and the Cock (circa 1466), remain to this day. The Bell Inn became a fashionable spa when a local spring, known as the Kilburn Wells, was thought to have health-giving properties. Tea gardens were established on the site and remained popular long after the medicinal reputation of the Wells waned. A favourite spot for duelling as well as promenades, The Bell was thought to have inspired Dickens’ portrayal of tea gardens in Sketches by Boz. The Kilburn Wells has long since been built over, but a plaque commemorating the site remains at the corner of Belsize Road.

Established in 1134, the Kilburn Priory exerted a strong effect over the area – the influence can still be felt in the names of many streets nearby. A Benedictine nunnery, it was a satellite of Westminster Abbey and offered support to travellers.

The other major influence on Kilburn was the railways, which from the mid-nineteenth century included stops in the area on the longer London to Birmingham route. The Metropolitan Railway Bridge over the High Road is still a dominant feature, and Kilburn is well served with public transport – the North London Line and trains to Watford still serve the area, as well as Bakerloo and Jubilee line tubes.

Extensive housing was quick to follow the trains, and the High Road became a popular place to shop. By the turn of the century, over three hundred businesses were registered as trading in the area.
These days the Kilburn High Road is still popular with shoppers and is home to one of the largest Irish enclaves in England. The recently rejuvenated Tricycle Theatre and Cinema is one of London’s best-kept cultural secrets, and ideal for enjoying a first-run film in pleasant surroundings or catching new plays before they begin West End runs.

Mortgage Basics

So you’ve finally bitten the bullet and decided to buy. Sick of throwing your hard-earned cash away on rent, you want a place of your own. And why not? Buying a house is financially one of the best decisions you can make. Not only will you end up owning your own home – and not forking out rent – but the value of your property might rise, so it’s a worthwhile investment. But where do you start and what do you need to know?

Repayment v interest-only

One of your first decisions should be whether you want a repayment or interest-only mortgage. With a repayment deal your term is set and your monthly payments consist of the capital you owe plus interest. Over the set term (usually 25 years) your loan will slowly reduce so at the end of your term your mortgage will be completely paid off, providing you haven’t missed any payments.

Or you could go for an interest-only mortgage – this is where your monthly payments consist of just the interest on the loan, and at the end of the term you still owe the initial amount. On top of these monthly interest payments you need to raise the money to pay off the loan. Most borrowers go for an investment vehicle (endowment, pension or ISA) that they pay into each month in the hope that it will grow sufficiently to settle the mortgage – and hopefully leave extra cash besides.

Whether you choose a repayment or interest-only mortgage depends on your attitude to risk. A repayment mortgage is secure because at the end of the term your loan will be repaid. An interest-only mortgage is more speculative as there is no guarantee you will make enough from your investment to repay your loan.

You also need to decide how much you can afford to borrow. Most lenders work this out by using income multiples – typically three times salary for a single application or
two-and-a-half times combined salary for joint applications. But they may be flexible in individual circumstances, so shop around. Others calculate how much you can borrow by using affordability calculations – taking into account outgoings as well as income. For example, a couple with no children may be able to spend a higher percentage of their income on mortgage repayments.

The golden rule is don’t overstretch yourself – if interest rates rise you could find yourself struggling to make your repayments.

Eva Ingleson, spokeswoman for Nationwide, suggests finding out how much you can borrow is the first thing you should do when looking to buy a home. ‘You need a good idea of what you can borrow, so you know what size of house you can look for and what your monthly commitment will be. We have an affordability calculator on the website which will give you a rough idea.’

Become interested

Interest can be charged in various ways. It is usually linked to the bank base rate set by the Bank of England at the start of each month. You can choose for your rate to be variable (so it fluctuates in accordance with the base rate), fixed (set for a specified term), capped (the rate can move up or down but will not rise over a set limit), or discounted (you get a specified discount from the variable rate for a set term).

Again, the method you choose depends on your attitude to risk and what you think may happen to interest rates. But as a general rule first-time buyers often have so many financial commitments that a fixed rate allows them to budget more effectively in the knowledge that their repayments will not change over a set period.

If you are a first-time buyer the best thing you can do is plenty of research and shopping around. And, of course, start saving – buying a house does not come cheap but it should be well worth it in the end.

Redemption charges

Redemption penalties are fees imposed by lenders if you repay your loan early or switch to another lender during a set period. They are often placed on fixed, capped or discounted rate loans to prevent people from taking advantage of, for example, a two-year discount and then switching lenders as soon as the rate reverts to the variable rate. Redemption fees are sometimes overhanging – for perhaps two years after the discount or lower rate has ended.

They can be expensive, making it difficult to remortgage to a better deal. So look out for a deal without any tie-ins, leaving you completely free to move to the best mortgages on the market.

From Nick Clark, Managing Director of Homebuyer Events Ltd., organisers of the Evening Standard Homebuyers Show.

How long have you been involved with the Homebuyer Show?

I’ve been with the show since it first began 10 years ago. It started at the Barbican, and went to a few venues before finally finding its home at Olympia six years ago. It’s had more and more recognition over the years and is quite well known now.
We have more exhibitors this year than ever before.

How has the show changed?

The show reflects the market. Two years ago, for example, property prices were rising steeply and we had a large number of exhibitors geared towards buying to let. Last year a number of new dotcom companies exhibited and we also saw a dip in the number of first-time buyers attending as many were being priced out of the market. There were also more properties on offer outside London, where slightly lower prices attract buyers.

What can home buyers expect to find at this year’s show?

We have a fantastic display of properties for sale in Spain this year – some really wonderful things on the Costa del Sol. We also have lots of information and homes targeted at first time buyers and a number of exhibitors to help people who want to take the remortgage plunge and get advice on refinancing their home.
In response to feedback from the public, there will also be a special section of the show devoted to small offices/home offices called the SoHo Village.

What about the show do you like best?

Going home to bed on Monday morning, exhausted but pleased it went well.
Seriously though, I would say I look forward to the seminars, which have always been a very popular part of the show. There’s a lot of information to help first-time buyers, and the fact that much of the advice is independent makes it really useful for the home buyer generally.
Brokers and legal professionals are also very popular – people queue up for a chance to speak to them. Many people don’t get much time to talk to these advisers because they’re working all week, so it’s an ideal opportunity to ask questions. There are lots of organisations represented, and information is available on everything from buying to let to helping leaseholders interested in buying their freehold.
One of the most interesting things is the amount of business done at the show. Many exhibitors offer special incentives for buyers making a purchase at the show, and we had close to a hundred people buy new homes as a direct result of their visit to the show last year.

Anything else?

Just to remind everyone that the Property Business Show, aimed at professionals and those who work in the industry, will also be at Olympia at the same time. Exhibitors there will include providers of hardware and software, and companies who look at trends in the estate agency field.

‘Empty-nesters’ face a specific housing challenge. As their lives become less complicated, they may feel the need to simplify their surroundings. Johnny Turner visits a new development which will appeal to those who want to scale down without sacrificing space.

When the kids have flown the coop, many parents feel they’ve got their lives back. They may also notice the house seems bigger – far too big in many cases. The home that expanded all those years ago to accommodate children can now go back to its previous size. After all, who wants to maintain rooms that are no longer being used or keep a large garden when the children have moved on to pastures new? Better to get on with the things there wasn’t time to do before in a space more suited to your new situation.

Sunley Homes have answered this challenge with an impressive stroke, providing stylish new bungalows at Cherry Orchard Mews in Littlebourne, Kent that are perfect for those thinking of downsizing. Taking their cue from the early twentieth century Arts and Crafts architect Charles Voysey, these bungalows are examples of good, uncomplicated design, with beautiful detail and ingenious use of space. The exteriors are enhanced by the barn-style weatherboarding on the garages, which make a lovely contrast with the brick, rendered or weatherboarded main façades.

It was important to Voysey’s philosophy of architecture that a house should be enhanced by a garden. Here the homes are positioned around an attractive and spacious rose and shrub garden with paved footpaths and a central water feature – and as this will be maintained by a management company, it offers home owners the view without the hassle. Rear gardens, forming a lovely aspect from the kitchen/breakfast rooms, are simply laid out and point to further far-reaching views.

Each of the seven three-bedroom and one two-bedroom houses has a distinctive layout. All these homes are generously proportioned and space is used thoughtfully. Partitioning between rooms is minimal, lending a light and airy feel throughout. Each of the spacious living rooms has a beautifully simple fireplace, and all main rooms feature cornicing. A separate dining room leads through to an excellent kitchen/breakfast room, the cosy heart of the house. Here, brushed steel integrated appliances combine with ceramic tiling to make a space that is both practical for entertaining and good for simply relaxing.

Up the attractive wooden staircase, the bedrooms are spacious and continue the theme of restrained elegance. Master bedrooms have deep fitted wardrobes, and en suite bathrooms include thermostat-controlled showers. As with the ground floor, front and rear views make a stunning bonus.

Littlebourne is a peaceful village only four miles from Canterbury, which makes for good access to high street banks and shops, as well as simple connections into London from the two railway stations.

Homes at Cherry Orchard Mews are priced from £170,000. Visit the fully furnished show home or contact Sunley Freephone on 0200 085 2222.