£2m prize offered for rent check tool

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A competition to develop a tool to record rental payments on credit histories has been launched by the Government,
with a £2 million prize going to the winning technology firm.

The competition was announced in the 2017 budget, as a part of the Government’s strategy to help more people onto the housing ladder.

What is it and how will it work?
Known as the Rent Recognition Challenge, the competition is looking for budding entrepreneurs to develop an application to enable the 11 million renters in the UK to record and share their rent payment information.

The six most promising proposals will receive grant funding to turn them into workable products, before being
narrowed down again to several teams who will develop the ideas into market-ready products.

How will it help turn renters into first-time buyers?
With the number of people renting increasing, and affordability issues still hampering first-time buyers, there have
been several requests for lenders to begin taking into account rental payments when assessing an applicant’s credit
score.

Monthly rent is a tenant’s biggest outgoing payment, which makes it logical to use when assessing a mortgage
application. But lenders are currently unable to use this information and take rental data into account, just because
it is not accessible.

After vigorous campaigning and a Westminster debate on the issue, development on solving the problem is finally
underway. The Treasury’s competition will begin this year, with initial applications being accepted.

Do millennial parents really need life insurance?

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A study of millennial parents has revealed some startling statistics and attitudes towards life cover. Three quarters of
young parents said they have no life insurance in place to cover them should the worst happen. Despite how much
of an impact this can have on those left behind, 67% also said that they simply did not have time to go through their
options.

What is life insurance?
Life insurance delivers the peace of mind of knowing your loved ones are financially protected should the worst
happen. Life cover normally comes in the form of “term insurance”, which covers the policy holder for a set period of
time, normally around 30-35 years.

If you were to die during the policy’s term, your family will receive a pay out of a lump cash sum, or alternatively a
regular income that can be used to pay off an existing mortgage or other bills.

Why don’t more millennial parents have it?
Generally, younger parents will always feel that life insurance is less of a priority than older generations, simply
because they are less likely to die anytime soon. Currently, millennials would rather spend their funds on new
technology and experiences, than on insurance against future events.

When asked, many millennials also assumed that life insurance was simply too expensive to consider, with 80%
prioritising other financial needs, such as living expenses, recreational expenses, and saving money for the future.

Life stages, such as buying a house, are being reached much later by millennials. This means that many young
parents are left vulnerable while renting, without having had the life insurance conversation with their mortgage
adviser.

Why is it such a good idea for millennials?
One of the reasons millennials should be considering life insurance is their age. Life insurance is often cheaper when
you are younger, which means putting it off only increases the cost of the monthly premiums.

If you have dependents and people that rely on you, then you need to consider what would happen if your income
was suddenly taken out of the picture. Would they be able to live comfortably? Would they have the same lifestyle?
Moreover, would they have the stress of financial worries piled onto the difficulty of dealing with your death?

If you would like further advice on life insurance cover, speak to on of our advisers today!

5 Factors that will Affect Housing in 2018

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It’s time to gaze at the crystal ball and make predictions for the housing market in 2018. So what do we think are the
big factors that could affect homeowners, first-time buyers, and property investors this year?

Rates – Interest rates have become a hot topic after the Bank of England’s Monetary Policy Committee raised the
base rate from 0.25% to 0.5%. Although not a big climb, another increase is possible at some stage.
This would affect borrowers on standard variable rates and tracker deals, with those on a £175,000 tracker mortgage
seeing £22 added to their monthly repayments if the base rate increased to 0.75%. But borrowers on fixed rates will
of course see no change.

Housebuilding – Although a slightly maligned sector in recent years, government policies have helped drive a new
wave of housing development, with 217,000 homes coming onto the market in 2016-17.
This is up an impressive 20% on the year before, albeit still short of the government’s target of 300,000 homes a
year. But there are several indicators, such as increased construction activity, which suggests the numbers may
improve again in 2018.

Brexit – There are conflicting reports on how Brexit may affect the housing market this year. But the uncertainty
surrounding Brexit could very well have an effect on consumer behaviour, which means another unpredictable year
in store for homeowners and first-time buyers.

Buy to Let – As well as the next stage in the reduction of tax relief, there are now two more big changes coming the
way of landlords. From April, all landlords of Houses of Multiple Occupation will require a license, previously only
applied to those with property housing 5 or more unrelated occupants.
April again will see the beginning of new rules regarding Energy Performance Certificates, or EPCs. It will be now
unlawful to let or lease a residential or commercial property that has an EPC rating of F or G, which may cause
problems for landlords letting out a house or flat that does not have the required rating.

Housing Policies – The government’s flagship budget announcement that stamp duty has been abolished for first
time buyers on properties valued up to £300,000, will certainly help first-time buyers in 2018.
The Help to Buy Equity Loan, boosted in the budget with an extra £10bn of funding, will continue to support first time buyers. Young savers will also continue taking advantage of the Help to Buy ISA, which boosts savings by 25%
on monthly deposits of up £200.

If you would like further advice and information, speak to on of our advisers today!