Do your loved ones need a helping hand onto the property ladder?

Compared with a decade ago, today’s first time buyers are older, more likely to buy with a partner and more likely to have dependent children. This highlights how it is becoming increasingly hard for younger borrowers to get on the property ladder. But, lenders are always introducing new propositions to ensure there are solutions in place to help prospective homeowners buy their first property. It could be you that helps them!

Past and present
The 1980s, perhaps best known for its music and the invention of Super Mario. But it was also a time when the average house price was £22,676 and the average deposit was £3000. Fast forward to 2018 and we see a completely different picture, the average house price is £224,353 and the average deposit costing you £34,000. This shows a whopping growth of around 890% in house prices! However, wage growth hasn’t seen the same hike and so it comes as no surprise borrowers are continuously finding it harder.

For many, the Bank of Mum and Dad seems like the only option. According to the Social Mobility Commission, over 30% of UK households with dependent children hold assets that could be used towards a deposit for the purchase of a home. This could lead to an increase in the number of first time buyers turning to help from their family. The Social Mobility Commission’s research suggests this could rise to nearly 40% by 2039/40. Do you hold assets that could provide the gift of a life time for your loved ones?

How can I help my loved one get on the property ladder?
Improving affordability
Joint borrower, sole proprietor mortgages are one solution that may help. They’re aimed at bridging the gap between salaries and house prices and geared towards helping close family members get onto the property ladder or move home.

Lend a helping hand to your children’s plans of purchasing their first home! Joint borrower, sole proprietor mortgages allow you to support your family by adding your name to the mortgage, essentially increasing income and increasing the maximum loan available to them. Your name will only be on the mortgage and not the deeds so you will therefore be exempt from the 3% stamp duty surcharge for second properties.

Raising a deposit
Affordability is not the only challenge to first time buyers and joint borrower, sole proprietor mortgages may not be the best solution for everyone, so there are other options you may want to consider. If your loved ones cannot raise a deposit, you can still help. You can use your property or savings as security for their mortgage, as opposed to gifting them a deposit. Many lenders are offering these types of products.

So if you want to talk about how you can take your first steps onto the property ladder, or to discuss your options, call one of our advisers today.

Warren & Co appears in The Parliamentary Review

An important event in the diaries of both politicians and business leaders, the September release of The Parliamentary Review sees the documents highlight the best practice of organisations across the private and public sectors. The document shares some of the most exciting and forward-thinking work that has occurred in the country over the last year, and is edited by former minister The Rt Hon David Curry.

Based in Gloucester, Warren & Co is a firm providing free mortgage advice and complete financial solutions with guidance in the domains of investment, protection, pensions, and – most commonly – the mortgage market. Julie Kennedy, their director, describes in The Review fuller details of the business and their workings, as well as the challenges the sector faces as a whole.

The financial services sector has seen its fair share of uncertainty over the past couple of years, but it nonetheless remains stalwart and robust. In this year’s edition of The Parliamentary Review, notable firms from within the industry discuss GDPR, new financial legislation and the move towards leaving the European Union.

The long-time editor of The Review David Curry has expressed his excitement that the upcoming edition is due to be one of the most interesting and insightful yet. “I can say with confidence that there is no other forum in Britain that can successfully combine the thoughts and ideas of such a group of extraordinary organisations and deliver them to the people that need to hear them, whether that be in Westminster or out in the country.”

Writing in The Review, the prime minister says that “British politics provides ample material for analysis in the pages of The Parliamentary Review.”

Warren & Co’s article can be viewed here:

Be-your-own-boss Britain

There are over four and a half million self-employed workers across the UK accounting for 15.6% of the UK workforce, according to the latest Office of National Statistics figures. The self-employed sector has seen a huge growth in the last decade with the UK well and truly catching the be-your-own-boss-bug.

People of all ages are starting their own businesses in the hope of achieving greater independence, flexibility and a more positive work-life balance. This however, comes with greater responsibility and it may be the first time people have had to consider their protection needs.

Is anyone safe?
No age group seems to be immune from the be-your-own-boss bug! The number of over 65s turning to self employment nearly tripled between 2001 and 2016, rising to 469,000. And the youngest group – 16 – 24 year olds – also saw a self-employed surge, with more than 80,000 becoming their own bosses during the same period.

These figures suggest that the oldest working generation are keen to branch out on their own, relying on the skills and expertise they’ve gained from their employment, while the youngest are eager and confident enough to launch their own businesses.

For the would-be entrepreneurs living in be-your-own-boss Britain, launching their own business may be the first time they’ve had to consider their protection needs. The support of an adviser at this time is crucial.

Help! I’m confused!
There are many protection needs that must be met when starting your own business and it may seem quite daunting. There’s income protection, business protection, and key person insurance just to name a few. For businesses though, it is essential that workers and the workplace are adequately insured.

Self-employed workers have historically faced challenges when sourcing mortgages and protection products due to a number of factors like the irregularities of their income streams, payment amounts and work patterns.

However, with such a large number of the UK now being their own bosses, it is vital that all borrowers are made aware of the importance of protection, as well as the various benefits and options available in the market.

So whether you’ve been caught by the be-your-own-boss-bug, or just want to talk about your protection needs, contact your adviser today.

Brits spend over £40bn making their house a home

Over the last five years homeowners have spent a hefty total of £41bn doing up their homes – an average of £1,875 each, according to NAEA Propertymark. There is a growing trend for home owners to improve their current homes instead of climbing up the property ladder.

Nearly three quarters (73%) of all homeowners have done work to their homes in the last five years. The most popular improvements were redecorating (73%), over half landscaped the garden (54%), over one third added new flooring (39%) and nearly one in three refreshed the bathroom (31%).

This doer-upper era has come from growing house prices making it increasingly difficult to move up the ladder – one in 10 homeowners making improvements do so because the price of moving is too expensive. Homeowners, instead, are looking to add value to what is already theirs.

With a conservatory typically costing £4,310 and extending into the loft or basement costing around £3,244, home improvements can be a lower cost alternative to moving house. The majority of those who have made improvements did so to improve the look of their home while a quarter did so as an investment to add value.

Should I remortgage my property to make home improvements?
Remortgaging could be a good option for you if you wish to capital raise to make your home improvements. Renovating, extending or converting your home can add value for when you decide to sell up and move on. According to Barclays an average of £14,000 return on investment can be made by building a 30 square metre extension in the UK. If you were to do this in London, this would be a staggering average return investment of £156,000.

So, if you have some equity in your home and are considering making changes to your property, then remortgaging to raise capital could be an option for you. But, it is important to seek advice from your adviser before making a decision so you can assess if this decision is right for you.

So, what to do next? If you have made major home improvements, it is likely that the value of your home will have increased. This means it is a great time to remortgage to get a better mortgage deal that could reduce your monthly mortgage payments.

Is climbing the ladder really too expensive?
Despite the upwards trend of homeowners making improvements instead of trying to move up the property ladder there are many options available to help you keep on climbing.

So whether you’re ready to take the next step, or just want to find out more about what options are open to you, contact your adviser today to arrange a meeting.