Landlords are looking to use limited companies for purchasing property

In recent times there have been a number of changes that have directly affected landlords in the UK. If you’re a landlord you’ll know all about the tax changes and stamp duty changes, the tenant fees act and the proposed removal of section 21 which will stop landlords from removing tenants after the end of a fixed-term contract.

With the regulatory framework of the buy-to-let market continually changing, landlords are reacting. New research by Precise Mortgages shows that more than half of landlords intend to use a limited company to purchase properties in 2019.

Out of the landlords that were surveyed, 55 per cent stated that they would use a limited company structure to expand their portfolio, compared with 24 per cent who plan on purchasing more houses as an individual.

In the last quarter of 2018 the figure stood at 44 per cent followed by 53 per cent in the first quarter of this year showing that the number of landlords looking to use a limited company structure is continuing to rise.

Landlords with large portfolios are most attracted to using a limited company as 71 per cent of landlords with 11 or more properties are intending to use one, while 51 per cent of landlords with 10 or fewer will look to use one.

But if you’re currently a landlord or looking to take your first step into this area it’s important to seek professional tax advice before making a purchase. A specialist tax adviser will be able to help you decide if a limited company structure is the best for you and your personal circumstances. Your mortgage adviser can then find you the best mortgage deal and take you through the mortgage process from start to finish.

If you’re a landlord looking to expand your portfolio, or just want to talk through your mortgage options, contact one of our advisers today!

What to do Pre-Application

For you or your loved ones getting a mortgage may seem a little bit like climbing Everest. The summit is incredibly far away and it’s going to be a long journey that requires a lot of commitment. That’s because the process of buying a home doesn’t start by selecting a property that’s within your budget – it can take months, even years of preparation to get fully mortgage-ready.

There are a number of things you can do in advance to prepare for a mortgage application that will make the whole process a lot easier and smoother for you. These include but are not limited to:

Saving for a deposit
This might sound like a simple and obvious piece of advice but it is still incredibly important. The more you’re able to save for a deposit means the less you will need to borrow from the lender, which means that you’re taking on less debt.

This means that you will have a smaller loan-to-value which will generally allow you access to lower mortgage rates so you will be paying less interest across the mortgage term. Ultimately having a larger deposit can save you money in the long run and your adviser will be able to help you secure the deal that’s right for you dependant on the size of your deposit.

Register to vote
Registering to vote, if you’re not already on the electoral register, is the easiest thing you can do to get yourself mortgage-ready. Without being registered it’s almost impossible to get a mortgage as the majority of lenders use the electoral roll data for identity checks – for this reason, it’s also important that you make sure your address history is up to date and that your forms of identification are accurate.

Build up your credit score and review your credit history
Check your borrowing history in advance. This will allow you to dispute any inaccuracies so that lenders will receive the correct information on your ability to repay your debts. Your credit score, on the other hand, will give an indication of how creditworthy lenders may find you. If your score is low, you may want to see if there are any credit habits that you need to improve on before making a mortgage application. It’s important to note, though, that scoring bands can vary among different credit reference agencies which is why seeking professional advice is important.

Clear your debt or reduce your debt-to-income ratio
Your debt-to-income ratio is the proportion of debt that you have in relation to the money you earn – the higher this number, the more debt you have. Lenders typically prefer applicants with a lower ratio as it means you’re more likely to have the funds to make your monthly mortgages repayments. If you’re in a position to be able to clear your debts completely this will make you more attractive to potential lenders.

Saving for other fees
Whilst saving for a deposit is somewhat obvious, there are also a number of other fees and costs that you realistically need to be saving for before applying for a mortgage. There are conveyancing fees, paid to your solicitor to cover all of the legal work associated with buying a home, and moving costs that, among other things, need to be considered.

While this is only an overview of just some of the things you can do to get yourself mortgage-ready your mortgage adviser will be able to give you more detail on how to fully prepare yourself.

If you want more advice on how to become mortgage-ready contact your adviser today. If you’d like to discuss the options available to you, contact your adviser today.

If you’d like to discuss the options available to you, contact your adviser today.

Record number of deals for first-time landlords

British landlords have seen many changes to the Buy-to-Let sector in recent years, some of which have driven some landlords to sell up. From the tenant’s fees bill, stamp duty surcharge and stricter affordability testing it’s been enough for some landlords to leave the market and look for alternative investment opportunities.

But what about first-time landlords? Is it all doom and gloom? Is it worth purchasing your first Buy-to-Let property when seasoned landlords are leaving the market?

If you’re thinking about purchasing your first investment property and becoming a landlord for the first time then right now may be a good time to consider your options. The number of deals available for first-time landlords has reached a record high, according to figures from Moneyfacts.

Over the past five years the number of Buy-to-Let mortgage options on offer for potential first-time landlords has more than doubled. In 2014 there were 645 deals on offer – compare that with a massive 1,405 deals that are available today! Providers are continuing to offer a wider selection of products amidst the current uncertainty in the property market.

In the past year alone, product numbers have increased by 137 and two-year fixed rates now start below 1.5%, Moneyfacts states. As well as this, for those of you who would be looking to fix your rate for longer, you could benefit from a significant improvement in rates over the past five years. The average five-year deal for firsttime landlords has fallen by 1.16% since July 2014, down from 4.68% to 3.52% today.

This is why, when thinking about purchasing your first investment property and becoming a first time landlord and being faced with so many options and having a host of different products available, seeking professional advice can be invaluable.

*Average deals and rates available correct as of July 1st

If you’re thinking of becoming a first-time landlord and want to discuss your options, contact one of our advisers today.

Protection: do you know what it means?

Life insurance and critical illness cover, do you understand the jargon or are you confused by the industry terms?

Research by Legal & General has revealed that most customers are confused about the language used for protection products. Legal & General surveyed 2,000 people, and found that many consumers didn’t know what was meant by protection.

The survey found that only around one in 10 people associated the term ‘protection’ with life or critical illness cover, whereas some 40% assumed it related to protection against physical harm or protective clothing, while 19% of people did not associate the word with anything at all.

Protection is a term used when talking about critical illness cover and life insurance in the sense that it can financially protect you and your loved ones in case the worst were to happen. This type of protection can be invaluable.

If you’re diagnosed with a critical illness and can’t work, do you know what you’re entitled to from the state? How will you keep up your mortgage payments? If the worst were to happen, would your family be financially stable? These are the questions you must ask yourself!

Just over half of those surveyed by Legal & General did not have any life insurance or critical illness cover in place yet two thirds said they would be willing to pay between £10 and £20 a month for cover.

Seeking professional advice when looking for protection is important; your adviser will be able to find the cover that is best for you and your individual circumstances, as well as talk you through the industry jargon!

If you’d like to discuss your protection needs, contact one of our advisers today.

Mortgage Administrator Apprentice

We are looking for a Mortgage Administrator apprentice to join our small busy team, learning all aspects of working in an office environment whilst studying towards your Business Admin Qualification.

You will be working towards your L2 Business Admin apprenticeship by assisting in a range of duties relevant to your studies. You will also be set aside time to complete your learning.

Duties include:
Answering phone calls, email enquiries and greeting any clients that have appointments in the office or are dropping of documents that need to be photocopied.
Checking various documents, then packaging the documents to upload to mortgage lenders and email solicitors.
Upload documents to our back-office system to complete mortgage files.
Phone solicitors and mortgage lenders to check the progress of cases.
Enter messages and queries on diary system to update mortgage advisers and clients.

Will pay minimum of minimum wage based on age, not the apprentice rates – this will be reviewed after 2 months.

Working Week:
Monday to Friday- 9AM to 5PM
40 hours per week including 1 hour for lunch- we have small staff room.

Possible permanent position upon completion of apprenticeship. Please send CV and covering letter to julie@warrenifa.co.uk.

Most first-time buyers don’t know when the Help to Buy ISA ends

First-time buyers are living in a time when it appears to be much harder to get that first step onto the property ladder than ever before. House prices have increased by a massive 554% in the last 30 years and the time it now takes so save for a deposit has also substantially increased.

According to Nationwide, a decade ago it would take the average first-time buyer in the UK less than five years to save a 10% deposit of £14,080. Contrast that with today when it takes on average six and a half years to save a 10% deposit of £18,480.

This is why many first-time buyers have turned to the government Help to Buy ISA – launched over three years ago, the Help to Buy: ISA offers first-time buyers the opportunity to save up to £200 a month with the government topping up their contributions by 25%, up to a maximum of £3,000.

But… many first-time buyers aren’t aware of the scheme’s details. Almost two thirds of prospective first-time buyers are unaware of the cut-off date for the Help to Buy ISA, research by specialist bank Aldermore has found.

The deadline to open a government Help to Buy ISA is 30 November this year but contributions can still be made until November 2029, and the cut-off date to claim the bonus is 1st December 2030 – so there’s still time for your loved ones to open an account and start claiming their 25% bonus for their first home.

Over four fifths of potential first-time buyers don’t know what the minimum government bonus is either, while 80% don’t know what the maximum is. There is also a lack of understanding about the scheme from parents too.

Almost nine in 10 parents of first-time buyers are unsure what the minimum government bonus is, while a similar proportion are unsure what the maximum bonus is. But, when the parents were given an explanation of what the Help to Buy ISA is, 86% said they would encourage their child to save into a Help to Buy ISA.

So, with only six months to go, if you or your loved ones would like to discuss the Help to Buy ISA so that they can start boosting their savings for when they’re looking to buy a home in the next three, five or even ten years, you should seek professional advice today.

MPs rally support for mortgage prisoners

Mortgage prisoners are predominantly those borrowers who took out a mortgage before the financial crisis but are now blocked from switching to better rates due to changes in lending practices.

There are now an estimated 200,000 homeowners that are trapped on high interest-rate loans with unregulated or inactive firms, and are unable to switch to a cheaper deal.

Mortgage prisoners are often told by lenders that they will be unable to afford a new deal under current lending rules despite a new product offering cheaper monthly payments than their existing one.

This can be even more frustrating for those who are trapped if they have continually paid off their high monthly bills and not let their account fall into arrears. However, there may be some good news for mortgage prisoners.

So, what’s being done to help those who are trapped on high interest-rate mortgages?
An all parliamentary group was launched in May to rally support for mortgage prisoners trapped by changes to lending rules and government loan selling. The group consists of MPs from all political parties and will give support in an effort to create tangible change for people who are trapped by their mortgage.

This issue prompted MP Charlie Elphicke to present a motion in the House of Commons to force lenders to treat such borrowers as “grandfathered” as a first step towards freeing the UKs mortgage prisoners.

This exemption would allow mortgage prisoners to switch lenders without meeting the affordability assessment brought in by new regulations. The mortgage would also be permitted without any regulatory penalty for the lender.

It’s not only MPs that have acknowledged that change is needed though. The FCA stated earlier this year that it is considering a change to affordability checks, which could allow people to switch to deals that are easier to pay.

So, if any of your friends and family are some of the 200,000 mortgage prisoners in the UK there could be some positive changes on the horizon with the backing of MPs and the FCA and we will continue to keep you updated.

If you or your loved ones would like to talk through your options, contact one of our advisers today.

How to help the self-employed!

Data released by the Office for National Statistics last month revealed the number of self-employed workers in the UK has surged to a new record high. There are now a massive 4.9 million workers across the nation who are their own boss.

Being self-employed can bring with it many benefits. You can work around your lifestyle, you’ll have greater flexibility and if you’re successful it can become a very lucrative venture. So, there’s no wonder why so many of us are becoming our own bosses.

But, what should you consider?
Lenders don’t have a separate category for self-employed mortgages. You are able to access the same products and the same rates as your employed counterparts even if you’re your own boss. However, your earnings may be viewed as more complex to some lenders and you must be able to prove them to the lender.

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, once all the relevant documents have been submitted, the lender will assess the application and make a judgement based on their lending criteria – so you can appreciate how complex the application process can be on your own.

A good mortgage broker will be able to help answer all of your questions, will be able to provide invaluable advice and be able to move the application forward as quickly and as smoothly as possible based on your current and future circumstances. They 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.

If you’re thinking of becoming self-employed and want to talk through your options, contact one of our advisers today .

Brits abroad: expat landlords

How many Brits are living abroad is up for debate depending on which source you listen to. But one thing we do know for sure is that there are a lot of expats living right the way across the globe.

For working people, you may be lured away by an exciting new opportunity whereas for those of you at the end of your career, the desire to up sticks may be driven by the want for a change of pace and lifestyle in retirement.

Whatever the reason, you global adventurers often choose to keep a foothold in the UK property market – whether that’s renting out their former UK residence or purchasing a property to let. But, if you’re thinking of becoming an expat landlord there are a number of things you must consider:

The right mortgage
If you plan to move abroad and rent out your former home in the UK, it’s essential that you speak to your existing mortgage adviser and check if this is allowed under the conditions of your mortgage.

Your lender may specify a time limit for your return if you wish to retain your current mortgage, apply additional fees, a higher interest rate or request that you convert the mortgage to a consumer or regulated buy-to-let mortgage product. Landlords who are already abroad and want to buy additional property will need to look for an expat buy-to-let mortgage from the outset.

Landlord insurance
Although there is no legal requirement for landlords to take out insurance, your lender may require you to take out specialist insurance before you can let out your property. Make sure to speak with your mortgage adviser for further advice.

Managing your property
Dealing with tenants and maintenance issues can be a time-consuming and stressful process, let alone trying to deal with these problems from another continent in a different time zone. This is why it is important to ask yourself whether you’d be in a position to manage your property from abroad or would it be easier to use the services of a suitably qualified lettings agent?

Currency and foreign exchange
For you potential expat landlords you’ll need to consider foreign exchange rates and the potential risk of those rates changing if you plan to use the rental income to cover your living expenses. Rent will be paid into a UK bank in pounds sterling so it has the potential to be impacted by foreign exchange rates.

During 2018, for example, landlords who converted pounds to US dollars at the lowest point suffered a 12% reduction in spending power compared to those who converted at the annual high.

While this is just a brief overview of some of the things you might need to consider there are a number of other things to think about too. This is why seeking professional advice before becoming an expat landlord is important.

If you’re thinking about joining the many brits abroad and becoming an expat landlord contact one of our advisers today.

More lenders are offering 95% loan-to-value mortgages

Since the financial crisis in 2008 lenders have been reluctant to offer high loan-to-value mortgages which has resulted in many of us being unable to afford our dream homes or take our first step onto the property ladder.

Without the help of high loan-to-value mortgages some will have spent years saving for a deposit, are still living with parents, or are stuck in the rental cycle. The dream of owning our own homes seems somewhat in the distance.

But are times changing?
The number of mortgage providers that include a maximum 95 per cent loan-to-value product in their range now stands at 60*, up from 53 a year ago and 13 more than five years ago, according to Moneyfacts. This is great news for potential first-time buyers and home movers.

A decade ago a borrower with a five per cent deposit had just three products from three mortgage providers to choose from. Today, you have a choice of a massive 405 products, including 67 variable deals, from a huge total of 60 providers*.

More than four fifths of mortgages available at a maximum 95% loan-to-value are fixed rate mortgages, accounting for 338 products of the 405 available.

These deals enable you borrowers to have the certainty of knowing what your monthly repayment amount will be. This is perhaps of particular importance to those you who are taking their first steps onto the property ladder.

With the number of high loan-to-value options now available it’s important to seek professional advice. Your adviser will be able to find the right mortgage for you, or your loved one’s specific circumstances should they want to take that first step onto the property ladder, which can be invaluable.

If you, or someone you know, would like to take advantage of the high loan-to-value mortgages available, please contact your adviser today.

* Number of products correct as of 16/04/2019