What is Gazumping. What does it really mean and how can you avoid it?

After months of property searching and finding the perfect home, getting an offer accepted can be just the start.

While the excitement of having your offer accepted may get you carried away with interior design ideas, decorating plans and preparation for the big move, unless you’ve got the keys in your hand there is something to bear in mind.

Gazumping

What is Gazumping?

This is when another seller comes along and places a higher offer than yours, even when yours has been accepted. Unfortunately, in England and Wales, there’s no law against a seller accepting an offer from someone else even after they’ve accepted yours.

Whether it’s on the day you’ve had the offer accepted or later on in the buying process, gazumping can happen at any point until contracts have been exchanged.

How do you minimise the risk of being gazumped?

Being gazumped isn’t fun for anyone but to help avoid another seller topping your offer, here are a few things you can do.

Make your offer conditional on the property being taken off the market. This will minimise the danger of being gazumped and while the request may not be accepted, it will demonstrate how serious you are and also give you a warning that the sellers may continue to hold out for a higher price giving you time to withdraw and look elsewhere.

Finalise Fast – Sellers will want the property sale to go through quickly. The sooner your mortgage approval is complete and the surveys are done etc, the sooner the contracts will be exchanged.

Be Prepared – It’s ideal to have your ‘Mortgage in Principle’ ready and conveyancers arranged before putting in your offer. If you have a current property to sell, make sure it’s on the market and preferably only make an offer once you’ve accepted an offer on your current property. 

Show Enthusiasm – If the seller knows how keen you are to get the sale pushed through; it might sway them away from other offers. They will want the process to be completed soon. The estate agent is usually the one representing the seller, but once an offer has been accepted, make sure the sellers know that you’re excited about buying their home and that you mean business.

Already Been Gazumped?

Of course, you will be very frustrated but now is the time to try new tactics.

First things first, don’t get carried away. It’s important to know where you stand financially, otherwise this could affect you later down the line. Work out the maximum price that you can afford and stick to it. Remember, if you come up with a higher counteroffer, there’s still a chance that you could be outbid again. You’ll need to draw a line somewhere.

Highlight the advantages of dealing with you. Are you a first time buyer? No chain? This will mean that the purchase could go through faster and also make your offer more attractive to the sellers. You might also be flexible with dates and able to accommodate a schedule that works better for the seller.

If you or someone you know is looking for advice on their first/next mortgage – get in touch, we’d love to hear from you! https://thefinancehouse.co.uk/mortgages-independent-free-mortgage-broker/

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The Government today announced a Stamp Duty Change and a number of new initiatives to address the economic challenges posed by Covid-19.

Along with a Stamp Duty Change, The Coronavirus Job Retention Scheme (CJRS) has so far supported over one million employers to protect over 9 million jobs. The scheme has been open since March and will wind down gradually until October. The government is now introducing a new Job Retention Bonus to incentivise employers who keep on their furloughed employees. It’s a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. A “Plan for Jobs” delivers new funding to ensure more people will get tailored support to help them to find work with an expansion of support offered via Jobcentres, including doubling the number of work coaches and additional intensive support to those who have been unemployed for at least three months. The plan is also to triple the number of traineeships and sector-based work academy placements, alongside further support for apprenticeships, which enable people to work while training. Called Kickstart, a fund has been created to give young people the chance to build skills in the workplace, and to gain experience that will improve their chances of going on to find long-term, sustainable work. The fund is looking to create 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding covers 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions. The government is also introducing a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1st August 2020 to 31st January 2021. These payments will be in addition to the existing £1,000 payment the government already provides for new 16-18 year-old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies. In order to support around 130,000 businesses in the hospitality Industry and to help protect the jobs of their 1.8 million employees, the government is introducing the Eat Out to Help Out scheme to encourage people to return to eating out. This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount. And, from 15 July 2020 to 12 January 2021, a reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. At the same time the reduced (5%) rate of VAT will also apply to supplies of accommodation and admission to attractions across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days. The housing market has been a clear focus for the government with its critical role in the economy. So, to ensure medium-term confidence in the property market and maintain the growing momentum since the easing of lockdown. the government is temporarily making a stamp duty change, cutting Stamp Duty Land Tax (SDLT) for home buyers across England and Northern Ireland until the end of the financial year. This means increasing the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000, which means nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all. The government is also looking to improve the energy efficiency of existing homes in order to meet the UK’s climate change ambitions by announcing £2 billion to be provided to support homeowners and landlords in making their homes more energy-efficient in 2020-21. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household. The government is also establishing a new Social Housing Decarbonisation Fund to help social landlords improve the least energy-efficient social rented homes, starting with a £50 million demonstrator project in 2020-21 to decarbonise social housing. The government has confirmed that the £12.2 billion Affordable Homes Programme announced at Budget will support up to 180,000 new affordable homes for ownership and rent in England. The £12.2 billion will be spent over five years, with the majority of homes built by 2025-26 and the rest by 2028-29. The Affordable Homes Programme will also include a 1,500 unit pilot of First Homes. There is support for small and medium-sized housebuilders that are unable to access private finance by boosting the Short-Term Home Building Fund, providing an additional £450 million in development finance to smaller firms. Plans to introduce new legislation in summer 2020 will make it easier to build homes in the places people want to live. New regulations will make it easier to convert buildings for different uses, including housing, without the need for planning permission. Later this month, the government will launch a policy paper setting out its plan for comprehensive reforms of England’s planning system to better support the economy and release more land for housing in areas that need it most.

With no will, what you leave behind might not go where you want it. So, the answer to your question “Do I need a will?” is probably Yes..

Putting a will in place ensures that you decide what happens with your possessions, your money and property after you die. 

Why do I need a will?

A will, properly drafted, eliminates uncertainty and reduces the potential for family conflict at a difficult and, in most cases, emotional time.  Also divorce and the complexity surrounding families where parents have introduced new partners and possibly other children are becoming more common, making the division of assets more complicated. A will that is specific and lays out clear wishes will prevent any speculation over disposal of assets.

Tax Reasons

Having a will in place can help reduce the amount of Inheritance Tax that might be payable on the value of your estate left behind. Do I need a will?

Thinking about the children

Writing a will is especially important if there are children or where there is another dependent family. A concise statement of intent will ensure clarity when leaving something to people outside the immediate family.

Your wishes will not be met

If you don’t write a will, everything you own will be shared out in a pattern defined in law. This means that your possessions may be dealt with in a way you wouldn’t have wished for.

What should I include in my will?

When putting together your will, there are various things to consider:

• If you have children under the age of 18, you should stipulate who will take care of them.
• What will happen to your possessions, property and liquid assets such as savings, occupational and personal pensions, insurance policies, bank and building society accounts and shares?
• Your beneficiaries. Who are the people who you want to benefit from your will. You should include a list of people to whom you wish to leave money and possessions.
• Finally, you will need to consider who will sort out the estate and carry out your wishes as set out in the will. These people are known as executors.

Do I need to see a solicitor?

Not everyone uses a solicitor and, you don’t have to. A will is a legal document and it is important to make sure it is correctly worded to ensure that it cannot be misinterpreted. Should you decide to write your own will, it is still advisable to seek advice from a professional first. 

A solicitor will make sure your will is in order. While having the support of a solicitor may be expensive, misunderstandings caused by poor wording can be avoided and a solicitor might be able to point out whether there are ways to reduce a potential inheritance tax liability (depending on the size of your estate).

It will usually cost upwards of a few hundred pounds to have a solicitor help with your will although the exact cost will depend on the complexity of your affairs. 

Should you wish not to use a solicitor, you can use a will writing service which can also give you support and guidance. If your circumstances are very straightforward then this might be a better option for you. 

When looking for a will writing service, it is important to make sure that it is recognised by a regulated body. The service can start from around £80 upwards, depending on the complexity of your will and the expertise of the company you have engaged. 

Make sure you receive a full breakdown of costs before going ahead. It is particularly important to look for clauses that give the will writing company the power to administer your estate, as they could charge extra fees for doing so. Even with relatively straightforward estates, you might be charged a percentage of that estate, perhaps 5% to act as sole or joint executor. These charges will still apply if the estate is very straightforward, or if most of the probate work is done by someone else. 

Government advice on Wills – Click here

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Self-employed parents whose trading profits dipped in 2018/19 because they took time out to have children will be able to claim for a payment under the self-employed new parents claim support grant (SEISS), the government has announced. The scheme requires claimants to have traded in 2018/19 with their profits making up at least half of their total income. They must also have submitted a self-assessment tax return on or before 23 April 2020 for the 2018/19 tax year.

The Treasury has ensured parents, including mothers, fathers and those who have adopted, who took time out of trading to care for their children within the first 12 months of birth of the child or within 12 months of an adoption placement, will now be able to use either their 2017-18 or both their 2016-17 and 2017-18 self-assessment returns as the basis for their eligibility for the SEISS.

They will also need to meet the other standard eligibility criteria for support under the SEISS. Further details of the change for self-employed parents will be set out by the start of July in published guidance.

The SEISS, which has so far had 2.6m claims, was extended last month, with those eligible able to claim a second, final grant in August, as well as being able to receive the first.

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Be on your guard! New scams can still catch you out, How to prevent scams?

Three days before the Prime Minister announced lockdown in March, City of London Police were already reporting a 400% increase in scams because COVID-19 was creating an ideal environment for fraudsters to do what they do best – try and take your money!

It’s important to be aware of the many new scams around at the moment because of coronavirus. With so much personal information out there, scammers are using the opportunity to play on your uncertainty. It’s crucial to know what kind of scams are happening, how to recognise them and report them.

What to look out for:

Phishing – these are emails and SMS messages that include links to websites where you are asked to put in your details. These could be login details, personal information or bank details. These may also appear to be from a government department or even the NHS.

This kind of scam may also consist of an unexpected visit to your door, with a person offering to do grocery shopping for you, or to get you cash, which would mean handing over your bank card and PIN.

How to spot – If it is an email, the first thing is to look at what’s in the email. Real organisations will not normally send you a URL link to click on and if you are a customer of the organisation, the email won’t address you with ‘Dear Customer’ or ‘Hello Client’, the email will greet you with your name. Scammers, who write these emails, aren’t always English native speakers, so look out for poor spelling, strange phrases and incorrect spacing.

If you receive emails or texts about coronavirus from someone you don’t know, or from an unrecognisable email address, don’t click on any links or purchase anything. Don’t give money or personal details to anyone you don’t know or trust – for example, someone who knocks on the door and offers to help. Communities are coming together to help those most vulnerable during these times; be sure to make arrangements first and know who’s coming to your door. 

How to prevent scams. Other types of scams that are happening at the moment include the following:

• Fake lockdown fines. Do not fall for a bogus text or email message stating you have been fined for stepping outside during the coronavirus lockdown. The scam message claims to be from the Government, telling the recipient their movements have been monitored through their phone and they must pay a fine or face a more severe penalty.
• Free school meals. The Department for Education has issued warnings about a scam email designed to steal your bank details saying: ‘As schools will be closing, if you’re entitled to free school meals, please send your bank details and we’ll make sure you’re supported.’
• WhatsApp request to forward your code. A recent scam could grant hackers full access to your WhatsApp messages, photos and videos. Someone who knows your phone number could request to register your WhatsApp on a different device, and when a verification code is sent to you, the hacker will then message you to try and coax you into forwarding this on to them. They could then target your contacts with requests for money.

If you’ve been affected by a scam, how do you report it?

There are a few things you can do. Firstly, report it to Action Fraud. You can visit their website which is run by the City of London Police and is where they track and keep tabs on all the different kinds of frauds. You can use their online reporting tool to report the scam. 

Equally, you can call Action Fraud on 0300 123 2040.

If you notice unknown activity on your bank or credit card statement, do speak to your provider immediately and they will be able to help and give you the best possible advice. 

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

Finally, the FCA offers an information website where you can read more about spotting a scam as well as a section where you can report a scam.‘

If there is one thing that the current climate has taught us, it is that we never quite know what the future holds and we need a financial safety net.

No matter what your financial situation may be today, it only takes one unexpected event for your plans to unravel very quickly. Having the right insurance cover in place will provide you with the financial support you need when you need it most. 

As time goes by, relationships multiply, house moves begin and raising a family or starting a business might be on the cards. The type of cover you need is very much unique to each individuals’ circumstances and should grow with you throughout your life. This makes it important for you to follow the advice of an expert and carry out regular reviews. 

Protecting your home and income should be at the top of your priority list. If you’re already paying for an insurance product, it may be tempting to cancel your insurance policy to save money. It’s important to bear in mind that an insurance policy will be there when things go wrong, taking that away will remove your safety net and you might put your future financial position at risk. A financial safety net is a unwanted cost until you need it!

So why not get in contact with us and we can arrange a review, to help find the best plan to fit your circumstances. Remember many policies come with a whole range of value adding benefits on top of the policy itself such as mental health helplines and virtual GP services so it’s important that you speak to us to find out what you might have available to you and your family.

For more on protection Click here

To see what the government will pay Click here

There is good news for those who are asking “can we now move” and are looking to move, all buyers and sellers, in England, can now put their properties on the market.

The government has estimated that 450,000 people have been unable to progress their plans to move since stay at home measures were introduced back in March.

As the lockdown easing begins, the housing market is opening its doors, allowing buyers and tenants in England to view properties and move home.

The viewing of new properties is now also permitted. Not only are house viewings allowed again, but estate agents can also visit properties to conduct valuations and take photos and videos.

This news will positively impact borrowers as it removes one of the main barriers to mortgage lending under lockdown. 

In March, lenders withdrew hundreds of largely higher-risk mortgage deals that required in-person valuations and put mortgage applications on hold where such surveys could not be completed. 

However, lenders are now widening the number of mortgage deals available, at higher loan-to-value (LTV). 

If you are considering moving home, please don’t hesitate to get in touch by using the form on the right or by giving us a call – we can then discuss the options available. Don’t forget, we are here to support you as much as possible during these challenging times. 

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The effects of the ongoing pandemic are being felt by families across the UK. It is a difficult time as many families are facing a reduction or loss of income and need Financial Direction during Covid-19.

According to the Institute for Social and Economic Research, on average, families are £515 a month worse off. In such uncharted waters, with no clear map, it is only natural for people to think about their current and future financial arrangements.

As your Mortgage & Protection specialist, I just wanted to let you know that we are here, available and ready to support you. We have access to great technology solutions that allow us to review and arrange your finances securely without having to arrange a face to face meeting.

We want to make sure that you are informed, reassured and have the peace of mind knowing that you have the financial planning in place to ensure that you are financially resilient during the current crisis.

With this in mind, we wanted to reiterate a few things you might like to think about in order to limit the financial impact on you and give Financial Direction during Covid-19:

Mortgages: Mortgage lenders are offering payment holidays. This is great so long as you don’t have any arrears and are prepared to extend your mortgage by the length of the payment holiday (most lenders add the debt onto the end of the term) but are you sure you have the best interest rate available to you? In light of the recent Bank of England interest rate drop, lots of lenders have changed their rates. If you don’t have the best rate, your monthly payments may be much higher than they need to be.

You may wish to consider remortgaging to take advantage of potentially lower interest rates or to release some equity from your property (subject to lenders’ affordability checks). Give us a call and we can investigate this for you.

Protection Insurance: We would be very happy to provide you with a review of your existing insurance products to ensure that you have the most appropriate cover in place. If you don’t have any life insurance, critical illness or income protection insurance, then now is the time. In some cases, people will die and without the relevant protection insurance in place to protect their mortgage or to replace their income, then it won’t just be Coronavirus causing financial difficulties for the family left behind. Call us now to ensure you are looking after the financial protection of yourself and your loved ones.

Buildings & contents insurance: The nation is working from home – does your buildings & contents insurance allow this? What if your child, who is home from school, accidentally spills a drink on the shiny new laptop your company have provided to enable you to self-isolate? Who is liable? Some insurance policies allow administrative working from home, but not all – please check your policies, or better still, ask us to. If you don’t currently have any cover in place, then please let us know so we can get this arranged for you. This can be all done over the phone and we can get you a policy on risk within just a few hours.

The nation is in uncharted waters that will impact us all. We hope that The Finance House can support you in these uncertain times.

Data from UK Finance has shown that more than 1.2 million homeowners have taken out mortgage payment holidays since the chancellor’s announcement.

Under the government’s new policy, homeowners can apply for a A Guide to Mortgage Payment Holidays of payments for up to 3 months.

This could provide much needed help to mortgage holders who are feeling the effects of COVID-19, but it won’t be suitable for everyone and it won’t be free money. Homeowners who aren’t concerned about their ability to pay should continue with their repayments as normal. We have prepared the following guide to make sure you know the facts.

Don’t Cancel Your Direct Debit

Cancelling your direct debit is not a payment holiday and will be counted as a missed payment if it has not been agreed with your lender. You should not cancel your direct debit without speaking to them first. A missed payment could show up in your credit file and may impact your ability to remortgage in the future.

Apply Online

Many mortgage holders have found it frustrating trying to get through to their lender as call volumes have put pressure on their staffing resources. It is recommended that if you are experiencing payment difficulties due to coronavirus, you apply for a payment holiday through your lender’s website.

There will be a fast track approval process in place and you won’t need to provide evidence or have an affordability test. So, you should get a quick decision.

Any unpaid interest will probably still need to be paid back but you won’t have to worry about any additional fees or charges.

Individual credit ratings should not be affected but if you are worried you should speak with your lender.

Not a good option for everyone

Although Mortgage payment holidays can be a good short-term solution during the current pandemic, there are several important things that you should bear in mind before taking a payment holiday:

• It is not suitable if you can’t afford your mortgage payments because your household income has reduced permanently. In these circumstances, we would urge you to get in contact with us so we can review your situation and provide you with the appropriate advice.
• While you are not making mortgage payments, you’re still racking up interest on your remaining mortgage balance. You’ll still owe the bank the same amount as you do now, but with interest added on. This means it will take you longer and cost you a little more to clear your mortgage.

Mortgage Holiday Payment Calculator

You can use this Mortgage Holiday Payment Calculator to understand what impact a mortgage holiday will have on the term of your mortgage. It helps to show you the increased amount/number of mortgage payments you’ll need to make once your mortgage holiday is over.

We can’t stress the importance of understanding how a mortgage holiday can affect your future repayments. If you have any thoughts, concerns or queries, we are here to support you as your mortgage & protection adviser.

To speak to a free Mortgage expert Click Here

HMRC have updated their guidance to confirm that they will aim to contact all those who are eligible for Self Employment income support by mid May and invite them to make a claim with payments made by early June 2020.

As yet there has been no update for those of you who became self employed during 2019/20 and therefore may not currently meet the criteria for Self Employment Income.

Just to recap, you may be eligible for the Self Employment Income Support Scheme if you’re a self-employed individual or a member of a partnership and you:

• have submitted your Self Assessment tax return for the tax year 2018 to 2019
• traded in the tax year 2019 to 2020
• are trading when you apply, or would be except for coronavirus
• intend to continue to trade in the tax year 2020 to 2021
• have lost trading profits due to coronavirus

You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

Your trading profits must also be no more than £50,000 and more than half of your total income for either:

• the tax year 2018 to 2019
• the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019

Full details of the scheme can be found by following this link

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