Mortgage guarantee scheme

Mortgage guarantee scheme – 5% deposits for home buyers.

During the Spring Budget, Chancellor Rishi Sunak stated that the Government is introducing a mortgage guarantee scheme to help first time buyers and existing homeowners.

 mortgage guarantee scheme
mortgage guarantee scheme

For many, it may not be easy to save for a 15% or 20% deposit for a home and this is where the new scheme will be beneficial to those looking to buy their first or next property.

How does the scheme work?
The new scheme will begin in April and both first time buyers and existing homeowners will be able to purchase homes worth up to £600,000 with a deposit of just 5% – enabling the majority of homebuyers to be eligible for the scheme.

Data from property portal, Rightmove, has revealed that 86% of properties currently listed for sale on their site have an asking price of £600,000 or less.

For the scheme to work, the Government will compensate lenders for some of their losses should a buyer default on their mortgage repayments for any reason. In return for this guarantee, lenders provide mortgages worth up to 95% of a home’s valuation or purchase price, so that borrowers can proceed with a deposit of 5%.

As many 95% of mortgages have been unavailable over the past year, the new scheme could be a real game changer, particularly for first time buyers.

Is the scheme only for first time buyers?
The Government has confirmed that the mortgage scheme will be open to all buyers, providing the home you’re buying is worth less than £600,000. Whether you are a first time buyer or looking for your next property, you can benefit from this new scheme.

How to apply for a 95% mortgage under the scheme.
Some of the nation’s biggest banks have committed to the scheme, including Santander, Lloyds, Barclays and HSBC. The usual mortgage affordability checks will still apply.

First time buyers and existing homeowners will need to prove to their lender that they can comfortably afford the monthly repayments after other essential spending has been covered.

If you or someone you know might be able to benefit from this scheme, fill in the form at the bottom of this article and get in touch. We are here to answer any questions you may have.

How does this scheme differ from Help to Buy? 
Under the current Help to Buy Equity Loan scheme, the Government will lend up to 20% of the cost of a newly built home from an approved developer and then shares in any increase (or decrease) of the property’s value.

To be eligible for the scheme the property must be your only property and your permanent residence. The maximum purchase price under the scheme is £600,000.

You will need a cash deposit of at least 5% and then a mortgage of up to 75% to make up the rest. You will not be charged loan fees on the 20% loan within the first five years of owning your home.

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UK Budget 2021 Government Announcement

UK Budget 2021 Government Announcement

As your mortgage adviser, we thought it may be of interest to see the latest announcements made as part of the UK Budget 2021, announced today by Chancellor Rishi Sunak.
New Mortgage Guarantee scheme As announced in the UK Budget 2021, a new mortgage guarantee scheme will enable all UK homebuyers to secure a mortgage up to £600,000 with a 5% deposit.  This provides many with the opportunity to buy a home without a large deposit. The 95% mortgages will be available from a wide range of lenders and High Street Banks including Lloyds, NatWest, Santander, Barclays and HSBC.
Extension to the cut in Stamp Duty The temporary cut in Stamp Duty Land Tax for the housing market in England and Northern Ireland remains until September 2021 – the current limit of £500k remains in place till the end of June, followed by a reduction in the allowance to £250k for the final three months.
Financial Support for the Self-Employed Grants are being made available for the self-employed, to claim up to 80% of three-month trading profits up to a value of £7.5k. A further grant is to follow later this year.
Covid-19 Response An extra £1.65 billion is being invested to roll out vaccinations across the UK, alongside studying the effectiveness of a third dose of vaccine to improve response rates against future variants. Extension of the Government Furlough Scheme The Government Furlough scheme is being extended until September 2021. Under the scheme, the government pays furloughed employees 80 per cent of their wages, up to £2,500 a month. Employers must pay 10 per cent of these wages in July and 20 per cent in August and September.
Hospitality & Leisure Industry Support £5 billion has been set aside for Restart Grants for businesses in the hospitality, accommodation, leisure, personal care and gym industries in England, and a new UK-wide Recovery Loan Scheme set up to give loans to businesses to help them through the next stage of recovery, upto a value of £10m. The 5% rate of Value Added Tax (VAT) for hospitality, accommodation and attractions is being extended until 30 September 2021. Investment is taking place in sport, with £25m pledged towards growing grassroots sport in the UK, and £2.8m set aside to support the UK & Ireland bid to host the 2030 football World Cup. 
Taxation Updates Income tax personal allowances will be maintained from April 2022 to April 2026, however Corporation Tax will increase to 25%, from 2023 onwards. Larger businesses will be taxed higher, with those reporting profits greater than £250k a year facing the largest rises. Fuel duty and alcohol duty will also be frozen again for this year too. Talk to us We hope that you find these announcements of interest, and please do let us know if you have any queries around your existing mortgage or are interested in talking further about new opportunities arising from today’s announcement on the new mortgage guarantee programme. The above details are extracted from the UK Government website and correct as of 3 March 2021. Further detail can be found at https://www.gov.uk/government/news/budget-2021.
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UK budget 2021
UK budget 2021

Moving home during a pandemic, safely

If you are close to getting the keys to your new home and expect to get moving very soon, here is a short guide on how moving home during a pandemic, safely is important.

Moving home during a pandemic, safely.
Moving home during a pandemic, safely.

Before we start, it’s important to remember the three key rules when Moving home:

Hands – wash your hands with soap, regularly, and for at least 20 seconds.

Face – Be sure to cover your nose and mouth, especially when in an enclosed space with people you don’t usually meet with, and where social distancing is difficult.

Space – keep two metres apart as much as possible.

When to put the plans on pause – if you or anyone in your household is experiencing any flu symptoms or tested positive for coronavirus, you must pause your plans to relocate until you’re better. 

Viewing properties safely 

Consider a virtual viewing, if it’s an option. The good thing about virtual viewings is it will reduce the number of face-to-face viewings agents do and minimises the spread of germs.

Virtual viewings are also a great time-saver, it will give you a better idea of whether a house is worth seeing or not.

If you have seen a property you like and you’re keen to do a viewing in person, you should get in touch with the estate agent to book an appointment. During your visit be sure to wear a face mask, avoid touching surfaces, and wash your hands or use sanitiser before and after.

Remember: There shouldn’t be any more than two households within the property at any one time, and viewings should only be arranged by appointment, so ‘open houses’ shouldn’t be happening right now.

How to keep safe when selling your own home.

It is recommended that you’re not in the property during the viewing. 

When interested buyers have arranged to view your home, be sure to open all the inside doors beforehand, this will prevent them from touching the door handles. You can also have some hand sanitiser available to them in case they forget theirs.

After the buyers leave, we recommend disinfecting all surfaces.

How to stay safe during moving day.

Removal firms can still carry out work, assuming all the usual safety procedures are in place.

When packing, aim to do most of it yourself, if you can. Give your belongings a quick spray or wipe-down with a disinfectant before they are handled by someone else.

If you are using a removal company, do your best to maintain distance from the team and wash your hands regularly.

If you’d like to read more on how to move home safely under the current guidelines, you can find more information here.

If you haven’t sorted your mortgage you can get free advice here

Buying or selling your home, 3 things to consider..

If you’re considering buying or selling your home in 2021, here are a few things to consider.

buying or selling your home
buying or selling your home

Expect delays
According to Rightmove, there are currently 613,000 properties trying to reach completion. Their latest data revealed that it’s taking 126 days from the time an offer is accepted until legal completion – just over four months to complete the selling process. If you are buying or selling your home this year, be aware that you may experience delays. 

While it may take a while, the process will depend on a few things. For example, if you’re a cash buyer you may be able to move more quickly, however, if you are in a chain, the local searches may take longer than usual.

Stamp Duty Savings
Rightmove estimates that around a million sales currently going through, will miss out on the stamp duty savings. If you are in the process of selling your home and feel you or your buyer may be purchasing a property in the hope to save on stamp duty, speak to your estate agent as soon as possible and seek advice – you may be able to avoid the purchase falling through by renegotiating the price. 

The temporary stamp duty holiday that started on 8th July 2020 is due to end on 31st March 2021. With this in mind, Rightmove recommend that you should not factor in stamp duty savings from the temporary holiday – this will be more beneficial to first-time buyers who are buying a property for no more than £300,000.

The Current Market
Buyer activity has increased since the first lockdown back in 2020, many have reconsidered their housing priorities as the market has remained open during the current lockdown. Rightmove believes there are signs we are surpassing 2020’s new year surge activity.

Research from the online property portal reveals that the number of prospective buyers contacting agents between 2nd and 12th January 2021 was up by 12% and sales agreed numbers were up by 9% on the comparable period last year.

Visits to the Rightmove website have also continued to increase since the start of January and are up by 33% from the same period in 2020.

Resident property data expert, Tim Bannister, explained that the housing market is experiencing a processing logjam, with some homemovers likely to miss out on their stamp duty savings.

He said, “As we enter the new year and a new lockdown, the housing market remains open but is focused on the imminent end of the stamp duty holiday and on the challenges of the pandemic.”
Matthew Smith, Sales and Lettings Director at Thornley Groves in Manchester, said, “Many people have outgrown their homes and, with more people now working from home and undertaking home schooling, it has really focused their attention on getting their properties ready to sell.”

If you are considering buying or selling your home or you are close to remortgaging your home, get in touch with us and we can discuss your options. 

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You can still move

you can still move.
You can still move
Further to the Prime minister’s announcement of a national lockdown in England, you may be wondering if You can still move. People are still able to move home. However, those outside of the household or support bubble should not help with moving to a new house unless absolutely necessary.

Estate and letting agents and removal firms can continue to work. Those who are looking to move can go to property viewings.

You can still move, but it is important that the national guidance on moving home safely, which includes advice on social distancing, letting fresh air in and wearing a face covering are followed. Further information on the national lockdown can be found here.

Nicola Sturgeon also announced a lockdown in Scotland. Advice from https://www.gov.scot/publications/coronavirus-covid-19-stay-at-home-guidance/ states that people are able to leave their home for activities in connection with moving home (including viewing a property), or for activities in connection with the maintenance, purchase, sale, letting, or rental of residential property that the person owns or is otherwise responsible for.
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You can still move. Don’t Worry, Keep Moving!

Will COVID prevent Santa bringing presents?

In the current pandemic, children and their families may well have  questions in the lead up to the festive period, such as ‘Will COVID prevent Santa bringing presents?’

Santa bringing presents
Will COVID prevent Santa bringing presents?

Eight year old Monti from Cockermouth, Cumbria, has written to Boris Johnson asking whether Santa will be able to proceed with the usual present deliveries this year.

A post on Facebook from the Prime Minister revealed an addressed letter from Monti that read ‘I was wondering if you and the government had thought about Santa coming this Christmas. If we leave hand sanitiser by the cookies can he come? Or will he wash his hands?  I understand you are very busy but can you and the scientists please talk about this.’

Thanks to Monti, the Government has provided the much needed clarification we have been looking for.

The response received from Mr Johnson was as follows:

‘Many thanks for your letter which raises the very important question of whether Father Christmas will be able to deliver presents this year in spite of Coronavirus.

I know millions of other children are asking the same thing. Just to make sure, I have put in a call to the North Pole and I can tell you Father Christmas is ready and raring to go, as are Rudolph and all of the other reindeer.

The Chief Medical Officer has asked me to tell you that, provided Father Christmas behaves in his usual responsible way and works quickly and safely, there is no risk to your health or his.

Leaving hand sanitiser by the cookies is an excellent idea to help prevent the spread of the virus – and using it yourself, and washing your hands regularly, is exactly the kind of thing that will get you and your friends on the nice list.

Will COVID prevent Santa bringing presents.

Thank you again for your letter, and have a very Merry Christmas.’

Monti’s Mum, Abby, said “we just needed some reassurance that Father Christmas was going to still be able to deliver all of his presents across the world. Monti was really excited, not just with the letter from the Prime Minister, but with reassurance from Santa that he is going to be able to deliver on Christmas Eve, we’re just very excited now.”

Similar political responses have been seen elsewhere. In October, Nicola Sturgeon made a promise to Scottish children that Santa would still deliver their Christmas presents. She said, “Santa will not be prevented from delivering your presents on Christmas Eve, Santa is a key worker and he has got lots of magic powers that make him safe to do that”. 

Sturgeon added “If he is having to do Grotto appearances by Zoom, that is to keep you safe, it is not because he is at any risk. Santa will be delivering presents across the world as normal.” 

Irish Foreign Affairs Minister, Simon Coveney, confirms that Santa has been cleared to enter Irish airspace, after being given essential worker status. Addressing the Dail parliament, Mr Coveney shared the news that Santa has confirmed his intention to fly to Ireland on 24th December.

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Green Homes Grant

Government introduces the Green Homes Grant to make homes across England more energy efficient

A new Green Homes Grant Government scheme enables homeowners in England to get vouchers worth up to £5000 to make their home more energy efficient.

Green Homes Grant
Green Homes Grant

From the 30th September this year if you are a homeowner or landlord you can apply for a Green Homes Grant voucher towards the cost of making your home more energy efficient. 

These improvements could include installing low-carbon heating to lower the amount of carbon dioxide your home produces, insulating your home to reduce your energy usage or replacing single glazing windows with double glazing.

If you are to apply for a Green Homes Grant you must redeem the voucher and ensure that all improvements are completed by 31st March 2021.

The Green Homes Grant vouchers will cover two-thirds of the eligible improvements up to a maximum government contribution of £5,000.  

If you, or someone in your household receive certain benefits, you may be able to get a voucher worth 100% of the cost of the improvements, up to a maximum value of £10,000.

However, landlords are not eligible for the low income scheme.

The voucher covers the costs of the labour, materials and VAT but the work cannot be completed by yourself, a member of your household or your immediate family. 

If this is something you are interested in, you need to make sure you leave enough time to get a quote, apply to the scheme and get the work completed. 

Martin Lewis explains more about the scheme in this video: https://www.youtube.com/watch?v=lpqRQF0NmrY&feature=emb_title

The Chancellor Rishi Sunak first announced this grant in July with the hope it would upgrade the energy efficiency of homes, support low-carbon heating technology and help reduce the number of people who are unable to heat their homes. 

The government has set aside £2 billion for the Green Homes Grant and hopes it will help pay for improvements in over 600,000 homes across England. 

There are several benefits to making green improvements to your home such as insulation and low-carbon heating systems can help cut energy bills which could save some families up to £600 a year. 

For more information go to Brighton Mortgage Broker – The Finance House

To find out what home improvements are best for your home visit https://www.simpleenergyadvice.org.uk/energy-efficiency/home-improvements

To check if you are eligible for a Green Homes Grant visit the government website: https://www.gov.uk/check-eligible-green-homes-grant

Generation Buy scheme

Boris Johnson promises Generation Buy scheme with low deposit mortgages

Millions of people hoping to get onto the housing ladder in the UK may be buying a house quicker than they expect as the Prime Minister announces a brand new scheme. 

Generation Buy scheme
‘Generation Buy’ scheme

Boris Johnson wants to turn ‘Generation Rent’ into ‘Generation Buy’ as he promises to boost the availability of ‘long term’ mortgages for borrowers with a five percent deposit.

This comes after the Prime Minister gave a speech to the virtual Conservative Party stating that around two million people who could afford repayments cannot currently get home loans. 

He said: “We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first time buyers the chance to take out a long term, fixed rate mortgage of up to 95 per cent of the value of the home – vastly reducing the size of the deposit. 

“We believe that this policy could create two million more owner-occupiers – the biggest expansion of home ownership since the 1980s with the Generation Buy scheme.

“We will help turn generation rent into generation buy.”

At the moment there are no further details on how this scheme will work or when it is to be launched, however, experts have said the plan may cost tens of billions of pounds.

Mr Johnson also said that the party needed to ‘fix our broken housing market’ to help young people back onto the property ladder.

Those who want to borrow with only a five percent deposit have been able to do so in recent years. However, since the pandemic, lenders have pulled out of these deals. 

For borrowers who have a 10 percent deposit, there are few lenders and funds are limited.

This means that currently first time buyers are struggling to buy a house without putting down at least a 15 percent deposit. 

First time buyers have also had the hurdle of rising house prices in recent years with prices rising dramatically recently because of pent up demand and the stamp duty holiday.

The criteria of the affordability tests that current borrowers have to go through could potentially be relaxed under the Prime Ministers new plan, however no final plans have been confirmed. 
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Mortgage holidays end 31 Oct, what support next?

Mortgage holidays ends soon and according to the Office for National Statistics (ONS), 11% of the British workforce is currently on partial or full furlough across all sectors.

Mortgage holidays
Mortgage holidays

After Mortgage holidays, a new Job Support Scheme will be available for those who have been furloughed.  As of the 1st November, the scheme will be in place for six months and employers in the UK will be required to decide what happens to their furloughed staff. 

While the government has announced further support after furlough, mortgage holidays will end as of 31st October. Many who have been on furlough, or had a mortgage payment holiday, may see a significant decrease in their income for a further six months – this will become challenging for those needing to keep up with mortgage payments and household bills.

What do you need to do when your mortgage holiday ends?

Unless you have been in touch with your lender, you will be expected to pay your usual monthly payment as of November. It’s vital you get in touch with your mortgage provider as soon as possible to discuss how you will make up the shortfall in the future.

When taking a mortgage payment holiday, you may have already discussed your plans with your advisor, however, if you haven’t, it is recommended you do so as soon as possible to find out your options.

If you can now afford to re-start your mortgage payments, you should do this as soon as you possibly can.

What if you can’t afford to repay your mortgage?

If you have lost your job or been given reduced hours that will interfere with repaying your mortgage, you must provide evidence to your lender.

In the current climate, most lenders are quite understanding and will offer support through this difficult time, this is why it’s important to discuss your situation with them. 

Your mortgage provider will be able to provide you with various options such as; spreading your deferred payments over the outstanding term of your mortgage, increasing the length of your mortgage term or making interest or capital only payments. Lenders may also offer to extend your payment holiday by a further three months. 

Already in arrears?

It might seem daunting to discuss these situations with your lender, but it’s really important to do so. If you have already missed payments and are not able to come to an agreement with your lender, you should consider getting debt advice as soon as possible, particularly if you have other debts as well.

Need further advice?

If you need any further advice regarding your mortgage holiday ending, get in touch with us by either using the form below or click on the banner above to get our contact details. 
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Home Insurance Changes

The regulator looks to help customers save money with Home Insurance Changes.

Some customers are paying more for their home or motor insurance when they renew, compared to if they were a new customer.

Home insurance changes
Home Insurance changes

The Financial Conduct Authority (FCA) has announced a proposal to make it fairer for loyal customers. The consultation, which has been launched this week, marks a significant intervention by the regulator to make Home insurance changes. 

The proposal suggests that if a customer bought the policy by telephone several years ago, they would pay the same premium as a customer purchasing the same product by phone today. 

Insurers have been known to use complex and opaque pricing practices that allow them to raise prices for policyholders who renew with them year on year. While some people shop around for a deal, many are being penalised for being loyal.

The FCA has found that up to 6 million policyholders could be disadvantaged by the current situation and identified £1.2 billion of savings if they were to switch. 

The proposal also considers other measures to boost competition further and deliver fair value to all insurance customers, including:

  • Product governance rules requiring firms to consider how they offer fair value to all insurance customers over the longer term.
  • Requirements on firms to report certain data sets to the FCA so that it can check the rules are being followed.
  • Making it simpler to stop automatic renewal across all general insurance products.

The consultation should be concluded by 25 January 2021, which will then be followed by a policy statement and new rules next year. 

There are plenty of solutions to help customers understand what cover they have in place, and its price, irrespective of how long they have held the policy.

Should you need to check that a home insurance premium is competitively priced for the type and of course contents of your home, you can always talk to us.

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