Energy Price Cap Hike

The energy price cap rises from October 1st, UK homeowners are facing the harsh reality of increased energy bills – and it’s those living in the least energy-efficient homes who will feel the biggest pinch. According to new data from Rightmove¹, households in properties with the lowest energy performance ratings (EPC F-G) could see their annual bills spike by £558 under the new price cap.

For homes with a more typical EPC rating of D, the increase will still be a significant £225 per year on average from the previous energy cap¹. But it’s the least efficient homes, already struggling with higher energy costs, that will bear the brunt of these latest rises.

With the cost-of-living crisis already squeezing budgets, this rise in energy bills could leave many homeowners scrambling for ways to cut costs.

Energy Efficiency Becomes a Top Priority

Improving energy efficiency isn’t just about saving money on bills – it’s becoming a key selling point for buyers and renters. As Tim Bannister from Rightmove explains, “Energy efficiency is fast becoming a top consideration for buyers and renters who want to future-proof themselves against rising costs.”

With energy prices unlikely to drop anytime soon², homeowners are now looking at ways to make their properties more efficient, from upgrading insulation to installing energy-efficient windows and boilers, and according to Rightmove’s survey, 70% of homeowners and 76% of renters said they would change how and when they use energy if it meant having cheaper bills¹.

These measures could be a worthwhile investment, especially as energy bills continue to climb.

Time to Act

If your home has a lower energy rating, it might be time to consider making improvements. Even small upgrades can help reduce bills and make a property more attractive to buyers..

With October 1st just around the corner, now is the time to prepare. Whether you’re staying put or looking to move, energy efficiency is quickly becoming a must-have feature for anyone looking to avoid crippling energy bills.

Sources

1. Rightmove (2024) Energy price cap increase could raise bills by £558 for least energy-efficient homes. Available at: https://www.rightmove.co.uk/press-centre/energy-price-cap-increase-could-raise-bills-by-558-for-least-energy-efficient-homes/ [Accessed 19^th September 2024]

• Moneyweek (2024) Are UK energy prices going down in 2024?. Available at: https://moneyweek.com/personal-finance/605440/will-energy-prices-go-down [Accessed 19^th September 2024]
• For more information go to Brighton Mortgage Broker – The Finance House

All the information in this article is correct as of the publish date 26^th September 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.

Please be aware that by clicking on to any of the above links you are leaving our website. Please note that neither we nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

Autumn Property Market Off to a Flying Start

With the summer holidays now behind us, the Autumn home-selling season has kicked off in full force – and this year, it’s busier than ever! After a quieter property market in 2023, where many prospective buyers and sellers held back due to soaring mortgage rates and stubbornly high inflation, it seems 2024 is seeing a rebound¹.

According to the latest figures from Rightmove, there’s been a 15% increase in enquiries to estate agents compared to the same period last year. Even more impressively, sales agreed are up by 27%, a clear sign that home-movers are now feeling more confident about making a move¹.

Why the Sudden Surge?

Several factors are driving this renewed market activity. Mortgage rates, which caused many to delay their moves in 2023, have been trending downward. Inflation is finally heading closer to its 2% target^2, and for the first time in four years, we saw a Base Rate cut on August 1st.³ This has boosted buyer confidence, giving many the green light to purchase the homes they may have been eyeing up last year.

Prices Are on the Rise

In line with the busier market, asking prices are climbing. The average asking price of a home in Great Britain is now £370,759, a jump of £3,000 since August – that’s a 0.8% increase, double the usual seasonal rise​.¹

But as always, location matters, and prices vary greatly depending on where you live.

Here’s a breakdown of the changes, according to data from Rightmove¹:

• First-time buyers: average price now £227,570, up 0.2% from last month.
• Second-steppers: average price now £343,052, up 0.7%.
• Top of the ladder: average price now £670,753, up 0.8%.

What Could This Mean for Sellers?

While it’s a busy market, it’s not necessarily a seller’s dream scenario. Buyers are being more selective, taking an average of 60 days to find the right property – three days longer than last year. That means sellers need to be realistic with their pricing from the start¹.

Looking Ahead

The Government’s Autumn Statement on October 30th will likely influence the market further, with the government’s fiscal plans potentially affecting property buyers and sellers. For now, though, there’s a window of opportunity – but it might not stay open for long.

So, if you’re thinking of selling or buying in this property market, now could be the time to act, and we’re here to help give bespoke mortgage & protection advice to help you on the journey.

Sources

1. Rightmove (2024) Autumn home-selling season off to busy start. Available at: https://www.rightmove.co.uk/news/articles/property-news/autumn-selling-season-busy-start-sep24/ [Accessed 19^th September 2024]

• BBC (2024) Inflation holds steady despite jump in air fares. Available at: https://www.bbc.co.uk/news/articles/c4g927qykywo [Accessed 19th September 2024]
• Bank of England (2024) Official Bank Rate history. Available at: https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp [Accessed 19th September 2024]
• For more information go to Brighton Mortgage Broker – The Finance House

All the information in this article is correct as of the publish date 26^th September 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.

Please be aware that by clicking on to any of the above links you are leaving our website. Please note that neither we nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

First-Time Buyers Stamp Duty: Only Two Months Left to Save up to £15,000

First-Time Buyers Stamp Duty, time is running out for first-time buyers looking to save big on their property purchase. According to new research from Zoopla¹, buyers have just two months left to take advantage of the current stamp duty relief before rates rise, potentially saving as much as £15,000.

From 1st April 2025, Stamp Duty Land Tax (SDLT) rates will revert to their previous levels, leading to thousands of pounds in extra costs for first-time buyers in certain areas.²

Biggest Impact in Southern England

The upcoming changes are expected to hit buyers hardest in London, the South East, and the East of England. In some of the most expensive London boroughs, such as Camden, Islington, and Hammersmith & Fulham, buyers could see their stamp duty bills increase by up to £15,000.¹ Currently, first-time buyers pay no stamp duty on properties up to £425,000, but this threshold will fall to £300,000 after April 2025. Furthermore, homes priced between £500,000 and £625,000 will no longer be eligible for first-time buyer relief at all.¹

Rising Costs on the Horizon

According to the research¹, the typical first-time buyer in London, the average stamp duty bill will rise to £5,600 after April 2025. Meanwhile, those in the South East and East of England will face average bills of £1,390 and £1,040, respectively. Buyers in these regions could possibly make significant savings by acting now and securing their purchase before the new rates come into effect.

Lower Mortgage Rates Provide Added Advantage

With mortgage rates having improved slightly in recent months³, first-time buyers in Southern England stand to benefit even further onFirst-Time Buyers Stamp Duty by purchasing before the end of the reduced Stamp Duty rates. Average monthly mortgage repayments have dropped from £1,076 to £979 for a typical first-time buyer home, meaning that buyers in London could save the equivalent of 3.5 months of mortgage payments simply by avoiding the looming stamp duty changes¹.

Time is Running Out

First-time buyers need to move quickly. According to Zoopla¹, the average time to complete a property transaction is 25 weeks, meaning that offers made after the end of November could risk missing the deadline. Those looking to buy in 2025 should prepare for the increased stamp duty costs.

The North and Midlands Remain Unaffected

While Southern England will bear the brunt of these changes, the vast majority of first-time buyers in Northern England and the Midlands will remain unaffected. Around 95% of buyers in these regions are seeking homes priced below £300,000, meaning they will still qualify for stamp duty relief after April¹.

Find Out How Much Stamp Duty You Could Pay

Use our calculator below to find out how much Stamp Duty you could pay on a property purchase:

Location of Property               England               Northern Ireland               Scotland               Wales             

Do you currently own a property?               No, I’m a first-time buyer               Yes, I currently own a property               No, but I have owned a property in the past             

How will you use the property?               Live in property               Buy-to-let               Holiday home             

Property Value Calculate

What Should You Do?

If you or someone you know is looking to buy their first home, it’s important to act now to be in with a chance of making a saving where possible – whilst there’s no guarantee that the home purchase will beat the deadline, by starting the buying journey sooner rather than later can help mitigate paying additional First-Time Buyers Stamp Duty.
For more information go to Brighton Mortgage Broker – The Finance House

Sources

1. Zoopla (2024) Two months left for first-time buyers to save up to £15,000 in stamp duty. Available at: https://www.zoopla.co.uk/press/releases/two-months-left-for-first-time-buyers-to-save-up-to-gbp15-000-in-stamp-duty/ [Accessed 19^th September 2024]

• Gov.UK (2024) Stamp Duty Land Tax. Available at: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates [Accessed 19th September 2024]
• HOA (2024) Mortgage rate forecast 2024: Will rates go down?. Available at: https://hoa.org.uk/advice/guides-for-homeowners/for-owners/mortgage-rate-forecast/ [Accessed 19^th September 2024]

All the information in this article is correct as of the publish date 26^th September 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.

Please be aware that by clicking on to any of the above links you are leaving our website. Please note that neither we nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

Stamp Duty Uncovered: How Much Stamp Duty Will You Really Pay? Find Out with Our Easy-to-Use Calculator

Stamp Duty is a term that can send shivers down the spine of homebuyers across the UK, and for good reason. It’s a tax that can add a hefty sum to the already considerable costs of purchasing a property. But what exactly is Stamp Duty, and how much will it set you back? Here’s everything you need to know about How Much Stamp Duty Will You Really Pay.

What is Stamp Duty?

Stamp Duty, officially known as Stamp Duty Land Tax (SDLT), is a tax imposed by the government on the purchase of property or land in England and Northern Ireland. It applies to both freehold and leasehold properties, whether you’re buying outright or with a mortgage. The tax is calculated as a percentage of the purchase price, with different rates applying depending on the value of the property¹.

How Much Does Stamp Duty Cost?

The amount of Stamp Duty you’ll need to pay depends on several factors, including the price of the property and whether you’re a first-time buyer. The government has set up different bands, meaning that different portions of the property price are taxed at different rates.

Here’s a breakdown of the current Stamp Duty rates¹:

• £0 – £250,000: 0% (No tax is payable)
• £250,001 – £925,000: 5%
• £925,001 – £1.5 million: 10%
• Over £1.5 million: 12%

For example, if you’re buying a house worth £400,000, the first £250,000 is tax-free. The next £150,000 is taxed at 5%, meaning you’ll pay £7,500 in Stamp Duty.

But that’s not all. If you’re buying a second home or a buy-to-let property, you’ll face an additional 3% on top of the standard rates for each band². This can significantly increase the overall cost of purchasing a property.

First-Time Buyers

The government offers a bit of relief for first-time buyers, who don’t have to pay Stamp Duty on properties worth up to £425,000. If the property is worth between £425,001 and £625,000, a reduced rate of 5% is applied on the portion above £425,000. However, if the property exceeds £625,000, standard rates apply with no relief³.

Change is on the Horizon

Stamp Duty is set to change in March 2025, as the Temporary Stamp Duty Holiday put in place by the former Government is set to expire and revert to the previous property value thresholds³. This means that the threshold of £250,000 for the average buyer will reduce to £125,000, and for first-time buyers, the threshold reduced from £425,000 down to £300,000.³

Furthermore, with the new Government in place, there is speculation that there may be further changes to these figures potentially following the next Budget announcement in October⁴.

Either way, for those seeking to buy properties under the current Stamp Duty value thresholds, the action is to move swiftly to minimise the chances of having to pay Stamp Duty on property purchases before the existing deadline of 31^st March 2025.

Stamp Duty Calculator

To help you figure out exactly how much Stamp Duty How Much Stamp Duty Will You Really Pay, try using our stamp duty calculator.

Simply input the purchase price of your property, and the calculator will do the hard work for you, giving you a clear picture of what you’ll owe.

Stamp Duty Calculator

Location of Property               England               Northern Ireland               Scotland               Wales             

Do you currently own a property?               No, I’m a first-time buyer               Yes, I currently own a property               No, but I have owned a property in the past             

How will you use the property?               Live in property               Buy-to-let               Holiday home             

Property Value Calculate

Is There Any Way to Avoid Stamp Duty?

Unfortunately, there’s no legal way to avoid paying Stamp Duty if you’re buying a property in England or Northern Ireland. However, if you’re purchasing a property that’s worth less than the threshold, or if you’re eligible for first-time buyer relief, you may be able to reduce or eliminate the tax altogether⁵.

There are a few other exemptions to be aware of. For instance, if you’re transferring property ownership due to divorce or dissolution of a civil partnership, Stamp Duty may not apply. Similarly, if the property is left to you in a will, you won’t need to pay Stamp Duty².

Conclusion

Stamp Duty can be a significant cost, and it is good to know How Much Stamp Duty Will You Really Pay. It’s something that every potential homebuyer needs to factor into their budget. While the tax can seem daunting, understanding the rates and knowing how to calculate what you owe can help you plan ahead and avoid any nasty surprises, especially with possible change on the horizon. So before you sign on the dotted line, make sure you’ve taken Stamp Duty into account – it could potentially save you thousands.

For more information go to Mortgages – The Finance House

Sources

1. Gov.UK (2024) Stamp Duty Land Tax: Residential Property Rates. Available at: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates [Accessed 27 Aug 2024]
2. Gov.UK (2024) Stamp Duty Land Tax. Available at: https://www.gov.uk/stamp-duty-land-tax [Accessed 22 Aug 2024]
3. Gov.UK (2024) Stamp Duty Land Tax — temporary increase to thresholds. Available at: https://www.gov.uk/government/publications/stamp-duty-land-tax-temporary-reductions-for-residential-properties/stamp-duty-land-tax-temporary-increase-to-thresholds [Accessed 22 Aug 2024]
4. Sky News (2024) Which tax rises could the Labour government introduce in the autumn budget?. Available at: https://news.sky.com/story/which-tax-rises-could-the-labour-government-introduce-in-the-autumn-budget-13188041 [Accessed 27 Aug 2024]
5. Moneyhelper (2024) Stamp Duty – everything you need to know. Available at: https://www.moneyhelper.org.uk/en/homes/buying-a-home/everything-you-need-to-know-about-stamp-duty [Accessed 22 Aug 2024]

All the information in this article is correct as of the publish date 29^th August 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.

Please be aware that by clicking on to any of the above links you are leaving our website. Please note that neither we nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

Guide to buying first home. Know Someone Wanting to Buy Their First Home? Share This Vital Guide to Help Them Secure Their Future

As house prices continue to rise, getting onto the property ladder feels more like a distant dream for many first-time buyers. But here’s some good news: it’s not as tough as it seems! With a variety of innovative mortgage options and government-backed schemes, securing that first home is more achievable than ever. Read more of our Guide to buying first home.

If you know someone who’s ready to buy but doesn’t know where to start, sharing these top tips could be the key to turning their homeownership dreams into reality.

No Deposit?

Saving for a deposit may often seem like the biggest hurdle for first-time buyers. However, there are options out there that could provide some assistance – we’re already seeing a zero-deposit mortgage product from Skipton Building Society for example. Their Track Record Mortgage doesn’t require a deposit if the potential first-time-buyer has already been renting consistently for at least 12 months¹ – it could be something to let any potential movers know about.

Why They Should Know with Guide to buying first home.:

• No Savings Needed: A deposit is no longer a barrier necessarily —this mortgage can let them jump straight in.
• Rental History Counts: Evidence of consistent rent payments can be enough to qualify.

Imagine the relief of moving from renting to owning without the stress of saving thousands for a deposit! This could be the breakthrough they’ve been waiting for.

Flexible Family Support

Many first-time buyers may decide to turn to family for help, but not everyone can afford to hand over a lump sum.

Generation Home understands this and offers flexible mortgage options that can make family support easier. With their Income Booster feature, a parent or even a close friend can add their income to the mortgage application, increasing the amount that can be borrowed. Meanwhile, the Deposit Booster lets loved ones contribute to the deposit as an interest-free loan, equity stake, or gift².

Why They Should Know:

• Tailored Support: Loved ones can help in a way that suits their finances—no more pressure to give cash upfront.
• Innovative Features: Dynamic Ownership allows shared ownership, with equity stakes that can adjust over time.

By spreading the load, this approach can transform the home-buying process, making it accessible and potentially more affordable for those involved.

A Small Deposit, Big Opportunities

For those who’ve managed to save a little, 95% LTV mortgages may offer a good solution to getting on the property ladder for the first time. Available from several well-known high street lenders, the mortgages require just a 5% deposit, which can get around the challenges of raising a large lump sum ahead of buying a property³.

Why They Should Know:

• Low Deposit Requirement: Only 5% is needed—ideal for those with limited savings.
• Trusted Lenders: Competitive rates from well-established, recognised and reputable lenders.

This could be the stepping stone they need to turn their savings into a solid investment in their future.

Family Assist and Guarantor Mortgages

For families ready to offer more substantial support, Family Assist and Guarantor Mortgages can be an effective means of buying a first home. By using savings as collateral or agreeing to guarantee the mortgage payments, these options allow parents to provide significant help without handing over cash directly. Family Assist typically involves placing savings into a linked account, while guarantor mortgages mean the family member agrees to cover payments if the buyer falls short⁴.

Why They Should Know:

• Maximise Family Assets: A powerful way to leverage existing wealth to help the next generation.
• Peace of Mind: Provides an extra layer of security for both the buyer and the guarantor.

Imagine the confidence this gives—knowing they have a strong safety net as they step into homeownership.

Government-Backed Schemes

Even though Help to Buy has ended, the government still offers a Guide to buying first home, for first-time buyers through schemes like Shared Ownership⁵ and the First Homes Scheme⁶. Shared Ownership allows buyers to purchase a portion of a property (usually between 25% and 75%) and pay rent on the rest, with the option to buy more shares over time. The First Homes Scheme offers new homes at a discount of at least 30%—a huge advantage in today’s market.

Why They Should Know:

• Affordable Entry: Lower initial costs can make it easier to get on the property ladder.
• Growth Potential: Shared Ownership can allow them to increase their stake as their finances improve.

These schemes are designed to make homeownership more accessible—why not take advantage of what’s on offer?

Bespoke Mortgage Advice for Your Loved Ones

If you know anyone looking to take that step onto the property ladder, why not refer them for bespoke mortgage advice, tailored to their exact situation. They may be surprised by the amount of options available, and depending upon their circumstances, could find out that what they once thought was impossible, may be a little further within reach.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

For more information go to Mortgages – The Finance House

Sources for Guide to buying first home.

1. Skipton Building Society (2024) Guide to buying first home.. Available at: https://www.skipton.co.uk/mortgages/track-record-mortgage [Accessed 22 Aug 2024]
2. Generation Home (2024) Income Booster. Available at: https://www.generationhome.com/income-booster [Accessed 22 Aug 2024]
3. Experian (2024) 95% mortgage: can you buy a house with a 5% deposit?. Available at: https://www.experian.co.uk/consumer/mortgages/guides/95-100-percent-mortgages.html [Accessed 22 Aug 2024]
4. Moneysupermarket (2024) What is a Guarantor Mortgage? Available at: https://www.moneysupermarket.com/mortgages/guarantor-mortgages/ [Accessed 22 Aug 2024]
5. Gov.UK (2024) Shared ownership homes: buying, improving and selling. Available at: https://www.gov.uk/shared-ownership-scheme [Accessed 22 Aug 2024]
6. Gov.UK (2024) First Homes scheme: first-time buyer’s guide. Available at: https://www.gov.uk/first-homes-scheme [Accessed 22 Aug 2024]
   

All the information in this article is correct as of the publish date 29^th August 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.

Please be aware that by clicking on to any of the above links you are leaving our website. Please note that neither we nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

The Importance of Understanding Buy-to-Let Rental Yields

For prospective landlords, understanding the Buy-to-Let Rental Yields can be crucial for making informed decisions about the property you intend to purchase and let out.

What is the Rental Yield?

The rental yield represents the annual income you earn from a rental property relative to its purchase price and operating costs – and is a figure that is always shown as a percentage. The rental yield can vary in different parts of the country, and for a wide variety of reasons.¹

There are two types of rental yield²:

• Gross yield – factoring in only the property’s purchase price and rental income
• Net rental yield – including additional expenses such as maintenance and property management costs

When choosing a property that you intend to let out, it’s important to consider both types of yields, alongside other relevant factors before arriving at your final choice.

Why is Rental Yield Important?

Before you jump into buying a property to rent out, you’ve got to figure out if it’s a worthwhile venture.

If your rental income doesn’t cover your costs, or you’re just breaking even, unexpected expenses like fixing a broken boiler or a leaky roof can impact your finances.

So looking at the potential rental yield can help you to do the maths and establish if the property is likely to deliver on your expectations before committing to buying.

How to Calculate Rental Yield²

Gross Yield

1. Times your monthly rental income by 12 to find your annual income.
2. Divide that figure by the property purchase price or current value.
3. Then, multiply the figure by 100. The end figure is your gross rental yield as a percentage.

Net Rental Yield

1. Times your monthly rental income by 12.
2. Subtract your annual costs – like mortgage payments, maintenance and any insurance, fees or taxes.
3. Divide that by the property’s purchase value or current price.
4. Times that figure by 100 to get your percentage.

Top Regions for High Rental Yields

As one might expect, the rental yield of a property can vary across the country due to a range of factors, including local property prices, rental rates and much more. A recent survey conducted by Zoopla¹ revealed the areas with the top rental yields in the UK:

1. North East: With an average gross yield of 7.65%, the North East stands out due to low property prices and rising rents. Cities like Sunderland, County Durham, and Darlington offer excellent opportunities.
2. Scotland: Scotland offers an average yield of 7.48%. Key cities include Aberdeen, Dundee, and Glasgow, with yields around 8%.
3. North West: Yielding an average of 6.66%, this region includes cities like Burnley and Blackburn, providing strong returns for landlords.
4. Wales: With a 6.43% average yield, cities like Swansea and Cardiff are attractive due to moderate property prices and increasing rental demand.
5. Yorkshire and the Humber: This region, averaging 6.38%, includes high-yield cities like Hull and Barnsley.

Additional Factors to Consider for Buy-to-Let Rental Yields

Whilst rental yield is important, it’s also vital to consider other factors such as tenant demand, local market trends, and future property value growth when searching for your ideal buy-to-let property too.

When it comes to location as well, it’s worth bearing in mind how accessible the property is to you, in case of having to attend to carry out any maintenance, property checks or dealing with any urgent issues raised by tenants as well, or whether you’d be contracting a locally-based property management company to carry out any work on your behalf.

Conclusion

Thorough research is key when it comes to identifying the right Buy-to-Let Rental Yields for you – and finding the right balance between property value, potential rental income, likelihood of future property value growth and convenience in where the property is physically located in the UK.

Most importantly, if you have ambitions to purchase a buy-to-let property, it’s worth seeking bespoke mortgage advice at each step of the way, to help allow you to create accurate plans, forecasts and guidance on the kind of borrowing that you may be able to access to help become a buy-to-let landlord.

For more information about Buy-to-Let Rental Yields and mortgages go to Mortgages – The Finance House

Think carefully before securing other debts against your home or property.

The Financial Conduct Authority does not regulate some forms of Buy to Lets. Your property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

Sources

1. Zoopla (2024) The highest yielding areas for buy-to-let property in the UK. Available at: https://www.zoopla.co.uk/discover/property-news/best-buy-to-let-locations/ [Accessed 16 Jul 2024]
2. NatWest (2024) Rental yield: What is it and why is it important? Available at: https://www.natwest.com/mortgages/buy-to-let/buy-to-let-mortgage-guide/why-rental-yield-is-so-important.html [Accessed 16 Jul 2024]

All the information in this article is correct as of the publish date 25^th July 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.

Please be aware that by clicking on to any of the above links you are leaving our website. Please note that neither we nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

Dealing with debt can be difficult!

If you dealing with debt, or have a family member who is, it can be the loneliest place to be and no matter how resilient you are, eventually it will wear you down. However, there are strategies you can adopt to alleviate the situation and get yourself back on track.

• Talk to someone. Acknowledging the burden and seeking help is the first step towards breaking out of the frightening spiral. A professional debt adviser can help you discover your options. There are a number of different organisations such as Citizens Advice Service (www.citizensadvice.org.uk) and the National Debtline (www.nationaldebtline.org) who can offer immediate support with advice.
• Make a list of your debts. Open any correspondence that you have been ignoring and tally up everything you owe. Decide, with help from the organisations above, which debts are most pressing and prioritise them.
• Be proactive. Get in touch with those companies to whom you owe money. Not only will it help you feel more in control, but it gives you a chance to seek an agreed payment plan to pay a set amount per month that you can afford and start reducing your debt.
• See what you’re entitled to. If your income has been reduced because of the loss of your job for example, there may be benefits that you are entitled to claim that could help your situation. Organisations such as Moneyhelper (www.moneyhelper.org.uk/en/benefits), provided by HM Government, can show you what you can get and how to apply.
• Debt Respite Scheme (Breathing Space) – You can get temporary respite in England & Wales from creditors for up to 60 days by applying via a debt adviser. They cannot add interest or charges to your debt, or contact you, and no enforcement action can be taken against you during the ‘breathing space’. Find out more about it here –https://www.gov.uk/options-for-dealing-with-your-debts/breathing-space

If you’re struggling dealing with debt, don’t suffer in silence. There are organisations out there specifically to help you, and if you need assistance, we can help to point you in their direction – just let us know.
Brighton Mortgage Broker – The Finance House

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

Please be aware that by clicking on to any of the above links you are leaving our website. Please note that neither we nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

All the information in this article is correct as of the publish date 27^th June 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.

Should you remortgage with your Lender’s Offer?

2024 is set to be a busy time for many homeowners, with the initial fixed term periods on mortgages expiring for a lot of clients across the market¹, leading to some big decisions being required on remortgaging options. So, should you remortgage with your Lender’s Offer

What happens when your initial mortgage period expires?

Your initial fixed-term period will often expire after two years or five years, depending upon the specific deal, and after this, you’ll be put onto your mortgage lender’s Standard Variable Rate (SVR)².

As you may be aware, the interest rates on the SVR may be higher than those that you can obtain with a fixed-rate deal², so it’s always worthwhile taking action ahead of your fixed-term period expiring, to ensure that you’re not paying more than you need to, and that you’ve got a mortgage deal that fits your exact circumstances.

With interest rates having risen considerably in recent times, it’s also highly likely that the mortgage deals you will come across may be significantly higher than your existing deal, so there’s a lot at stake to ensure that you’re getting a fair rate when it comes to your renewal.

Remortgage with another Lender or remortgage with your Lender’s Offer

How does it all work? Ahead of your mortgage’s fixed-term period coming to an end, we’ll get in touch with you to discuss the options available to you, but to summarise, there is often a choice between a full remortgage, or a product transfer.

A product transfer is simply switching from one mortgage product to another, at your same lender. This is often a straightforward process and allows you to take advantage of some of the fixed-rate deals available from your existing lender, to prevent you going onto the Standard Variable Rate.

However, in some cases, there may be other deals available from other lenders in the market that are more suited to your current circumstances, and to access these would require a remortgage. So, should you remortgage with your Lender’s Offer

The remortgage process take longer, and is similar to that of when you first applied for a mortgage³. There would be evidence required of your earnings and property valuations undertaken, with more chance of fees payable to lenders, however, some may find that this inconvenience is offset through accessing deals that could possibly save more money and be of greater fit to your ever-changing circumstances.

How to know what’s most appropriate for you

It’s not always easy to know what’s right for you and your circumstances, so that’s where the value of professional mortgage advice comes in. We’re here to listen to your exact situation and to recommend the products that we believe are the most appropriate for you based upon looking at a wide range of lenders and exclusive deals that aren’t available on the high street.

It’s highly likely that your own lender will also reach out to you with offers of product transfers, however we would always recommend that you seek our experienced, professional advice before taking up any offers to ensure that these work in your interest as well as theirs. We’re more than happy to arrange both product transfers and remortgages, but pride ourselves in listening to your exact situation before giving bespoke advice that’s tailored to you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

Sources

1. Statista (2023) Fixed rate mortgage loans coming up for renewal in the UK from 1st quarter 2022 to 3rd quarter 2024. Available at:  https://www.statista.com/statistics/1399875/fixed-mortgages-for-renewal-by-interest-rate-uk/ (Accessed 21 November 2023)
2. MoneySuperMarket (2023) What is a Standard Variable Rate mortgage?. Available at: https://www.moneysupermarket.com/mortgages/standard-variable-rate-mortgages/ (Accessed 21 November 2023)
3. Experian (2023) Remortgaging. Available at: https://www.experian.co.uk/consumer/mortgages/types/remortgage.html (Accessed 21 November 2023)
   
   Please be aware that by clicking on to the above links you are leaving The Finance Housewebsite. Please note that The Finance House, nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

All the information in this article is correct as of the publish date 30^th November 2023. 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.
For more information, go to Impartial Mortgage Broker — The Finance House

New HMRC Income Tax Changes are due to take effect on 1^st January 2024, targeting those actively making significant money from side hustles – whether it’s profiting from selling crafts & hobby items online or renting out a place on Airbnb, for example, you could be caught out unless your tax affairs are in order¹.

In the aftermath of the Covid pandemic and as the Cost-of-Living crisis squeezed disposable incomes further, it’s no doubting that many have sought to make an additional income on top of their day jobs, so these HMRC Income Tax Changes are a response to the growing volume of people making money but not declaring it via the traditional manner¹.

The HMRC Income Tax Changes have recently invested over £36m in establishing a dedicated team to monitor online sales, and big firms such as eBay, Uber and Airbnb are now being required to report seller’s income to HMRC¹. This means that big sellers online or those making a few pounds on the side as a delivery driver or casually renting out your home via an online platform could land you in hot water if you don’t declare your income fully.

Who does it affect?

Many of us may be familiar with using buying & selling platforms such as eBay to sell second hand goods or clothing, and according to tax experts, provided you are not considered a ‘trader’ by the HMRC, then you will be fine to continue as you are – but if your purpose is to buy-to-sell, or make considerable volumes of craft items that are purposely to be sold at profit, then you could be affected by the changes¹.

Anyone who earns less than £1,000 a year in side-gigs does not have to pay tax or declare income, thanks to the Trading Allowance currently in place². However, earnings above this amount do need to be declared and would be subject to income tax changes and national insurance, under the new HMRC regulations.

Recent years have seen a huge rise in popularity of room-rental opportunities, with online platforms such as Airbnb making it easy to make substantial second incomes from short term rental bookings. Under the Government’s ‘Rent a Room Scheme’, you are permitted to earn up to £7,500 a year tax-free from letting out furnished accommodation³, however, if you go above this amount then you must contact HMRC and request that your tax code is changed, or complete one of their self-assessment tax returns.

How to know if you are eligible

Whether you’re eligible to pay tax on online sales depends on whether you are classed as a ‘trader’ by the HMRC. The HMRC may decide this if you buy and sell online regularly with the aim of making a profit⁴. You can check how HMRC views your circumstances at www.gov.uk/check-additional-income-tax.

It’s important to clarify that these HMRC Income Tax Changes are not aimed at the average person clearing out their attic and selling unwanted items online without intending to make a profit, and this is unlikely to be classified as trading, even if you exceed your £1,000 allowance¹.

Similarly, if you occasionally make cakes for friends and family and they pay you small sums to say thank you, then you may not have to pay tax on it. The intention behind the HMRC income tax changes are to ensure fair payment of income tax from prolific online sellers running a commercial enterprise, or making large volumes of income from services that would previously go unrecorded on self-assessment tax forms¹. However, there are doubtless grey areas as to exactly what is defined within the new regulations, so if you are in any doubt, it’s advisable to speak to the HMRC or to seek independent financial advice from a trained professional. Go to Independent free Mortgage Broker Mortgages — The Finance House

If you are concerned regarding an historical income, it is also worthwhile contacting the HMRC, it pays to be proactive and disclose any dealings upfront, then it may result in receiving a less-harsh penalty than you might otherwise receive¹.

When are the deadlines?

Any income for the tax year ending on April 5, 2023 need to be reported to HMRC by January 31 next year¹.

As always, it’s worth seeking independent financial advice if you have any queries regarding your position.

Sources

1. This is Money (2023) Is the taxman coming for YOUR side hustle? Airbnb, Ebay and Uber to hand over income data directly to HMRC. Available at: https://www.thisismoney.co.uk/money/bills/article-12640869/Is-taxman-coming-hustle-Airbnb-Ebay-Uber-hand-income-data-directly-HMRC.html (Accessed 18 Oct 2023)
2. The Times Money Mentor (2023) Side hustles: the crucial £1,000 tax rule. Available at: https://www.thetimes.co.uk/money-mentor/article/side-hustle-tax-uk-need-to-pay-hmrc/ (Accessed 18 Oct 2023)
3. Gov.UK (2023) Guidance: HS223 Rent a Room Scheme (2023). Available at: https://www.gov.uk/government/publications/rent-a-room-for-traders-hs223-self-assessment-helpsheet/hs223-rent-a-room-scheme-2023 (Accessed 18 Oct 2023)
4. Gov.UK (2023) HMRC Business Income Manual. Available at: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20060 (Accessed 18 Oct 2023)

All the information in this article is correct as of the publish date 26^th October 2023. 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.

Should I overpay my mortgage? Whilst many people may be struggling to keep up payments on their mortgages in the wake of steep interest rate rises, there are a significant number of homeowners who may be wondering whether it is worthwhile paying more than the minimum statutory repayments each month, with the aim of helping to save money in the long run.

We look at some of the pros and cons of making a mortgage overpayment each month to see whether the average homeowner could be better or worse off by making an additional payment each month.

Here’s a simplified example to show how it could work –

If someone had a £150,000 mortgage, with a term of 20 years at a rate of 5%, they’d be required to pay back a total of £237,584 in total when making the contracted standard repayment each month. However, if they made an extra monthly overpayment of £100 on top of the existing payment, the cost of repaying the mortgage would fall to £223,327 – saving them approximately £14,300 and enabling the homeowner to pay back the mortgage nearly 3 years quicker.

Naturally there are more complexities in real life, and fluctuating rates each time you remortgage, but generally it goes to show that in many cases it may be possible to pay off a mortgage faster and reduce the amount of interest paid by making relatively small extra overpayments each month.

Making a mortgage overpayment

We’re all different, with different circumstances, so it’s wise to seek professional advice and guidance before deciding to arrange a mortgage overpayment. Your existing mortgage lender is likely to have some advice on their website, but we’d also advise that you talk to us too. We’ll be able to look at your precise circumstances and help give an illustration of what you can achieve by making an overpayment that suits your own lifestyle needs.

How much can you overpay? Should I Overpay my Mortgage?

The amount can be whatever you can manage, whether a small amount, right up to a general maximum of around 10% of the remaining balance each year¹. Overpayments above this maximum amount can be liable for early repayment charges from your lender, so it’s wise to consider this before setting a precise amount. We can help you find the optimum amount that you’d like to repay each month by working with you – simply contact us to arrange an appointment accordingly.  

When deciding how much to overpay my mortgage, it’s important to consider the level of disposable income that you need to enjoy your current lifestyle, and especially any forthcoming expenditures – for example, having money set aside for any family holidays, activities, vehicle maintenance bills or household issues, for example.

Should I Overpay my Mortgage. What are the benefits of overpaying?

Aside from reducing your mortgage debt more quickly, and potentially saving money on the amount of interest owed, there are additional benefits that can be seen from overpaying your mortgage.

• If your mortgage rate is higher than your savings rate, you may find that it is more beneficial to pay back the mortgage and reduce the interest owed, compared to the amount of interest that your money may make while it is sitting in a bank account.
• If you pay more of your mortgage off sooner, this can sometimes put you in a stronger position for a cheaper mortgage deal when your existing one is due for renewal. This is because you will have more equity in your property, and your loan-to-value (LTV) is decreased, which often opens up more choices when it comes to available rates for mortgages.

What are the drawbacks if I overpay my mortgage?

If you have other debts which have higher interest rates, such as credit cards or additional loans, then it may be more beneficial to pay these off first before you overpay my mortgage. It’s worth considering any other costs you are likely to incur, and factoring these into whether you can afford to make a mortgage overpayment each month.

With interest rates rising, it’s also worthwhile doing your homework to see what your money could earn you if it’s saved in a high-interest account – there are chances that in some cases it may be more beneficial to save your money rather than pay additional amounts on your mortgage.

It’s important to think carefully about the amounts of money that you may wish to utilise on either overpaying or saving before going further, before looking at the various options available to you. It could be worth seeking financial advice for this element before making a decision.

As mortgage advisers, we are able to assist you in the area of what your mortgage circumstances may look like.Should I Overpay my Mortgage, if you were to consider an overpayment, the impact that this could make on your mortgage and assistance in how you go about facilitating this.

To contact us go to Impartial Mortgage Broker Mortgages — The Finance House

Sources

1. MoneySavingExpert (2023) Ultimate Mortgage Calculator. Available at: https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/ (Accessed 25 Sep 2023)

Your home may be repossessed if you do not keep up repayments on your mortgage.