Tenants deposit cap confirmed

Landlords and tenants can have difficult relationships. Landlord’s are primarily responsible for ensuring that their rental properties are fit to live in, whilst tenants may have their own expectations for the property and what their monthly rent is expected to cover.

The dynamic of this relationship has recently changed too as the government has confirmed that deposits on a rented home will be limited to five weeks rent as opposed to six. The move has been announced as part of the Tenant Fees Bill and is a further step by Communities Secretary, James Brokenshire, towards lowering fees for tenants.

The deposits are used to cover the risk of damage or unpaid rent but what does this really mean for tenants and landlords alike?

For tenants this is seemingly good news. The upfront cost of moving into a new rented property will be lower which should allow more people to start renting.

However, with less financial security less likely to cover unpaid rent and damages, landlords could be more cautious about who they are letting their properties out to. This could make it more difficult for those with pets or poor credit ratings to find a suitable home, so there are benefits and negatives for both groups.

Other amendments to the Tenants Fees Bill include protecting tenants from unfair fees by limiting the type of default fees that can be charged by landlords and property agents. This change means that during the tenancy landlords and agents will only be able to charge fees to replace lost keys or for late rent.

Landlords will still be able to claim back costs for damage through the tenancy deposit at the end of the tenancy. If you want to discuss your options contact one of our advisers today.

HELP! I’m self-employed

There has been a rapid rise in self employment over recent years, in fact the number of self employed workers has increased from 3.3 million in 2001 to 4.8 million in 2017, according to the Office for National Statistics. They now account for a substantial 15% of the British work force. 

But amongst those who are self-employed, there is a common belief that being your own boss can hinder your chances of getting a mortgage. According to research by Aldermore almost a third of self-employed homeowners believe the mortgage process is biased against them.

Does the way I take my earnings mean I can’t get a mortgage? Will lenders treat me differently? These are questions you may often find yourself asking if you’re your own boss. A good mortgage broker will be able to help answer all of your questions, but let’s start by debunking a common myth…

Myth busting
Self-employed mortgages do not have their own mortgage category. If you’re your own boss you are able to access the same products and the same rates as everyone else providing you meet the correct criteria. Great! But the problem is that your earnings are more complex and you must be able to prove them.

Ultimately, when applying for a mortgage, you will be assessed on how much you are earning, how likely is it you will sustain that level of earnings, how you take your earnings, how long you’ve been trading for, your accounts history and a number of other things. Then the lender will make a judgement – so you can appreciate how complicated and slow the application process can be.

So, should I use a broker?
Overall the application process can be a lengthy, complicated and time-consuming process which is why seeking advice from a mortgage broker can be so valuable.

Because calculating income and eligibility has so many variables, for self employed workers it’s important you ensure you apply with a lender that most favourably views your circumstances. So, whether you have many years’ experience of being your own boss or just a short amount of time – seeking professional advice through a broker can make the whole process easier and more beneficial.

A mortgage broker will be able to point you in the direction of a lender that is not only willing to lend but also those most likely to provide you with the best deal all while saving you the time and hassle.

Life Cover when living with a serious medical condition

There are around 66 million people living in the UK and we Brits are largely underprepared in case the worst should happen. Many of us may have been, or could in the future be diagnosed with a serious medical condition and we all have unique circumstances that mean we need different types of cover.

Amongst those of us who have been diagnosed with a serious medical condition there is a common belief that we are unable to get protection. Because of this it’s not so surprising to hear that only 15 million adults have a life insurance policy in case the worst were to happen, according to Legal and General.

To put it into perspective, one in two of us will develop some form of cancer at some point in our lifetime according to Cancer Research UK, and around 27% of people within England alone are claimed to be obese, according to the latest Health Survey for England Report.

A report by the Exeter has found that two thirds of cancer sufferers do not have a single protection product in place. The ‘An Unhealthy Situation’ report, which surveyed 2,000 people across the UK, also found a similar situation for people with type 2 diabetes, those with high BMI and those with heart conditions.

With these conditions it’s arguably even more important to ensure you’re protected for your unique circumstances. It can provide you with peace of mind as well as financial stability for your family.

With this in mind, more providers, like the Exeter, are making protection more accessible to everyone, even if you have a serious medical condition. In some cases, insurers will be able to cover people living with medical conditions such as:

  • Cancer
  • Type 1 diabetes
  • A BMI above 48
  • Complex heart conditions
  • Multiple conditions

The Exeter’s ‘Real Life’ product is a specialist life cover product for we Brits with complex medical histories and disclosures. It gives many of us access to valuable protection that we may not have previously been able to access.

There are a range of serious medical conditions that we can all develop in our lifetime and with the diagnosis of conditions like diabetes and cancer on the rise, it is incredibly important to make sure we’re suitably protected for our own individual needs. This is why seeking expert advice is invaluable.

So, if you’re living with a serious medical condition and want to find out what level of cover is available to you, contact one of our advisers today.

Stamp duty: How much will you pay?

Stamp duty. Two words that strike fear into the minds of every home buyer. But do you really know how it’s calculated and ultimately how much you’ll pay?

One of former Chancellor George Osborne’s most popular moves was the abolition of the ‘slab’ system of stamp duty land tax. Prior to the change in 2014 buyers paid stamp duty based on the price of the property, but it was applied to the whole value of the home.

This meant that if your property was just £1 above one of the thresholds you’d have to pay far greater levels of stamp duty compared with a house that was £1 cheaper and just below the threshold. But now home buyers pay a graduated rate so that the higher rates only apply to the amount over each threshold. Much better!

In England and Northern Ireland stamp duty is more commonly known as Stamp Duty Land Tax, In Wales it is referred to as Land Transaction Tax and in Scotland it is known as Land and Buildings Transaction Tax. Depending on the country in which you are purchasing a property, different rules and tax calculations will be applied.

England and Northern Ireland
Based on a traditional residential mortgage for the average English property value of £243,639, according to the latest UK House Price Index, your total for stamp duty would be £2,372.

Based on a traditional residential mortgage for the average Scottish property value of £148,952, according to the latest UK House Price Index, your total for stamp duty would be £79.

Based on a traditional residential mortgage for the average Welsh property value of £156,495, according to the latest UK House Price Index, your total for stamp duty would be £0.

However, if you’re a first-time buyer in England and Northern Ireland purchasing a home for £300,000 or less you’ll be exempt from stamp duty altogether. You’ll be charged 5% on anything over £300,000 up to £500,000 – anything over £500,000 and you won’t be entitled to discounted rates. These discounted rates also don’t apply for first-time buyers in Wales whereas first-time buyers in Scotland are exempt up to £175,000.

Also, different stamp duty thresholds and different tax rules and calculations will apply to second properties, buy-to-let properties and other factors like whether it’s shared ownership.

If you want to calculate how much stamp duty you’d have to pay depending on your circumstances, use this handy tool https://bit.ly/2REZVBE for free!

If you’d like more information or to discuss your buying options contact one of our advisers today.

Is your protection right for you?

Many of us Brits aren’t protected at all should the worst happen to us or if we find ourselves unable to work for a period of time, in fact a staggering 81% of us have no income protection in place, according to the latest State of the Protection Nation report from Royal London.

Should something happen to you or your children that meant you were unable to work and earn an income, not having relevant protection in place could put you and your family under a lot of financial strain.

For those that are lucky enough to have savings and think they will provide the necessary safety net, it is always worth considering how long these will actually last, particularly for the two-fifths of us that have savings of less than £100, according to the Money Advice Service.

According to Legal and General 15 million adults have life insurance which is more than both critical illness and income protection combined, despite there being a much higher chance of being diagnosed with a critical illness or facing long-term absence from work.

Your chances of getting a critical illness also increases with age. According to Macmillan Cancer Support there is an estimated 2.5 million people living with cancer in the UK which highlights the risk of not having critical illness cover.

You might think the state would provide support but applying for benefits can be a complicated and lengthy process. After weeks or possibly months of no income, you might also be surprised at the amount you’d be expected to survive on.

For example, if you meet the criteria for Statutory Sick Pay from the state you can get a depressing £92.05 per week and the state provided Employment and Support Allowance in some cases can pay an even smaller amount. Both are significantly less than the UKs weekly average income which is why seeking specialist advice to ensure you are suitably protected is important.

You are also more likely to be off work with an injury or serious illness for a sustained amount of time than you are to die. According to Royal London, every year people in the UK suffer an injury or serious illness that means they can’t work for a month or more. Your employer might keep paying for you for a while but there may be a limit to how long that will last.

Planning for the inevitable is definitely crucial, but it’s also worth thinking about right now. Building a full protection solution that is tailored to your needs and your budget is incredibly important. Whether you need to prioritise critical illness cover and income protection over life insurance depends on your individual circumstances which is why expert advice is priceless.

If you think you need protection, or think you’re not currently suitably protected, contact one of our advisers today to talk through your options.

Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income.

Over half of Buy-to-Let landlords want to keep or add to their investments

With the buy-to-let market showing signs of slowing down in the UK, new research by Octopus Choice has revealed that Britain’s landlords are in two minds about whether to continue investing into property or to sell up for a lump sum.

We Brits still have our continuous love affair with bricks and mortar and the data shows that 56% of buy-to-let investors want to keep or purchase more properties and continue investing. The remaining 44% intend on selling up and leaving the market.

Despite these stats, a substantial 22% of landlords are likely to sell their property within the next 12 months according to new research by The Mortgage Works – this is a 3% rise on the first quarter. And the rate of buy-to-let landlords planning to buy another property in the next 12 months has remained flat at 15%.

These figures suggest no one is entirely sure what the future may hold for buy-to-let as uncertainty continues to prevail, and landlords re-assess their investment options following a raft of recent changes.

If you are a buy-to-let landlord and want to discuss all of the options available to you, whatever your plans may be, contact one of our advisers today.

Getting the maximum from your income protection

Insurers pay out a whopping £13.9 million per day in income protection, critical illness cover and life assurance according to figures released by the Association of British Insurers and Group Risk Development.

But are you getting the income protection cover that’s most suited to your needs? Your income changes throughout your life and your source of income changes too – whether that’s through bonuses, commission, overtime or any other form of income.

The maximum benefit payable to you will depend primarily on your income, but not all types of income will be used by providers in their calculations. Understanding the maximum benefit providers will pay is important and that is not as straightforward as you might assume.

Some providers don’t base their maximum benefit on a fixed percentage of earnings. Instead they have a stepped system. For example, some lenders may cover up to 60% of the first £20,000 of earnings, 50% of the next £20,000 and 40% of the rest. This means that different providers will offer better levels of cover depending on the client’s amount of earnings.

With different providers considering different forms of income as well as the tiered system that some of them use it is important to find the best income protection for your needs. But as well as this, certain providers offer protection with other elements that can add value to make your cover more important – and this is where an adviser can help.

Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income.

If you want to talk to your adviser to discuss your options and find out which provider will be more beneficial for you, please get in touch today!

Older homeowners are entering retirement but still struggling with debt

Entering retirement should come with a feeling of relief. No more work, you’re entering a relaxed, stress free period of your life, right? For many of us, that’s not quite the case.

Entering retirement in debt is never ideal. Nobody wants to still be paying off mortgages, loans and credit cards in their retirement days. We all wish to have a relaxed retirement, without the worries of financial debt.

However, for many of us, this won’t be possible. It will take more than three and a half years for the average retiree to be debt free, according to research by Prudential. This is going to cost on average £285 a month.

For many this is a substantial amount, especially as some pensions continue to drastically underperform and retiree’s savings are dwindling. But, there are options for older homeowners struggling with debt.

Many lenders are now offering different avenues for retirees and older homeowners ranging from increased maximum ages on mortgages to equity release.

If you’re entering retirement in debt or simply want to discuss your options for older homeowners, contact one of our advisers today!

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: