You need somewhere to live your entire life but you don’t need to own a home at all. You certainly don’t need to own any specific home either as your private residence or as an investment. With that in mind, here are some tips on how you can tell when it’s time to sell. They apply to both homeowners and landlords The property is poor financial value Life moves on for everyone.  Sometimes the result of this is that a home that was great value when you bought it just doesn’t work for you financially anymore.  For example, if you're a landlord, the change to remote-/hybrid working may have made some of your properties less appealing to renters. If you're a homeowner, then a change to a new life stage may mean that a property ceases to make financial sense for you.  Probably the most obvious example of this is empty-nesters who still have the family home.  Downsizing is a major decision and as such deserves major thought.  It can, however, make a lot of financial sense. Be careful of focusing on headline price As with all other markets, the housing market has its ups, plateaux and downs. It can be tempting to try to time the market so that you sell high and buy low. In reality, however, this is often a case of “easier said than done”. A more practical approach is to look at what you could reasonably expect to get if you sold your property and then see what you could get if you used that money elsewhere. For example, in the case of a homeowner, you might look at your options for downsizing and what you could do with any money this releases. Property investors would not only need to look at their other investment options but also the tax implications of selling an investment property. The house isn’t working for you practically If a house isn’t working for you practically, then your first step should usually be to see if the underlying issues can be addressed. This holds true for property investors as much as for homeowners. The key question is whether or not the location is still working for you. If it isn’t then ask yourself if the issue is the location itself or something related to it such as transport. If it’s the former then you may just want to go ahead and sell the property without asking any further questions. If, however, the issue is something related to the location, then you might want to see if it can be addressed. If the issue is related to the property itself, then it’s certainly worth seeing if it can be addressed. This can be a lot more cost-effective than selling it and starting again. It can also be less hassle (even for landlords) and potentially increase the value of the home. On the other hand, there is usually a limit to how much properties can be adapted at all, let alone in a cost-effective way. Sometimes, it is both financially and practically better just to sell up and move on. You want to exit the property market If you are a landlord, you may decide to exit, or at least reduce your exposure to, the property market. If you’re a homeowner, you may find that downsizing, or even renting, can enable you to reduce your estate’s future Inheritance Tax liability. In either case, it can make a lot of sense to dispose of your property in an orderly manner. If this is your main reason for selling then it’s advisable to take professional advice before making any final decisions.  This is particularly important for any homeowner thinking about using an equity release scheme. For further mortgage advice please do get in touch. For equity release products, we act as introducers only

Over recent years, the property-investment sector has become much more regulated. What’s more, it’s increasingly common for landlords to be required to prove that they have complied with rules rather than on enforcement agencies to prove that they haven’t. With that in mind, here is a quick guide to the current rules for buy-to-let landlords. The legal framework of being a landlord Landlords typically have three sets of laws to deal with. These are criminal laws, civil laws and local-authority bylaws. Realistically, for most landlords, the last two are likely to be the more relevant. It is, however, worth remembering that there are most certainly ways that landlords can get caught up in criminal laws. In particular, if a landlord ignores a tenant using their property for criminal activities, they could end up being viewed as an accessory to them. Criminal and civil laws can vary across the different countries in the UK. Bylaws vary by local authority and all laws can change over time. Lawmakers tend to give a lot of notice regarding legal changes. This is, however, only relevant if you’re paying attention to the industry news. For all of these reasons, it can be safest for “accidental landlords” and other small-scale investors to work through lettings agencies. These can make sure that landlords stay on the right side of all relevant laws. The law and buying property If you buy property using financing, then, by default, the contract with your lender will be governed by civil law. There is, however, a twist to this. Fraud is a criminal offence. This means that, potentially, buying a buy-to-let property with a residential mortgage could land you with criminal charges. Similarly, buying residential insurance cover for a buy-to-let property will put you in breach of contract with your insurer. If this is discovered when you make a claim, then your claim will be declined. If it is discovered after a claim has been paid, then, again, you could find yourself looking at fraud charges. The law and tenant selection Your tenant selection must be compliant with the Equality Act 2010. In other words, you are not permitted to discriminate on the basis of protected criteria. Discrimination comes in two main forms, direct and indirect. It is the latter that poses a greater risk for landlords. Indirect discrimination is when a policy that applies to everyone has a disproportionately adverse effect on people with certain characteristics that are considered protected criteria. One key point to note is that refusing to accept tenants on benefits has been ruled indirect discrimination as it disproportionately affects women and disabled people. Currently, landlords in England also have to perform “Right to Rent” checks. What’s more, they have to do so without breaching the Equality Act 2010. The law and tenant deposits Tenant deposits must now be held in a government-approved scheme. It has been suggested that the government make it possible for tenants to transfer deposits between landlords. You can find more details here about deposits https://www.gov.uk/tenancy-deposit-protection. The law and tenant rents Currently, there are very limited rent controls in the UK. This could, however, change in the near future. Landlords are banned from charging extra fees to tenants (except in very limited circumstances). The law and tenant evictions At present, Section 21 (“no faults) evictions are only banned in Scotland. They are, however, expected to be banned in England and Wales. The law and property standards There are multiple laws covering property standards. These include minimum energy efficiency standards and gas and electricity safety standards. Overall, landlords have a duty of care towards their tenants and this includes making sure that a property is healthy and safe. The law and Houses in Multiple Occupation By default, an HMO must be licensed if it includes 5 or more households. Local authorities can, however, impose more stringent requirements. If you would like further assistance on a buy to let mortgage, please do get in touch. The FCA does not regulate legal services and we act as introducers for it

The next few years look set to be interesting ones for the UK.  On the plus side, COVID19 does seem to be abating.  On the minus side, it’s leaving its financial (and social) toll behind.  Then there’s Brexit.  There’s also a general election in 2024.  Against that backdrop, a five-year fixed-rate mortgage can provide welcome stability.  That stability, however, comes at a price. Fixed-rate versus tracker mortgages Fixed-rate mortgages guarantee the borrower a certain interest rate for a certain time. Tracker mortgages, by contrast, track the base rate set by the Bank of England. In principle, fixed-rate mortgages carry a risk for both the borrower and the lender. If interest rates drop, borrowers will pay more than they would otherwise have done. If they increase, lenders lose out. In practice, however, for the moment at least, the risk is very much with the lender. Even though the Bank of England recently increased the base rate, it is still just 0.5%. This means that there’s a lot more scope for interest rates to go up than for them to go down. For the time being at least, there is a lot more reason for them to do so. The reason the Bank of England raised interest rates in the first place was to try to bring down inflation. They are tasked with keeping this at 2% (with a +/-1% margin of error). What happens next, therefore, depends on the direction of inflation. Realistically, this may ease during the warmer months. It is, however, likely to increase again during the colder ones. Mortgage lenders are perfectly well aware of all of this. They will therefore price that risk into the cost of their fixed-rate products to protect themselves. This means that, potentially, borrowers could end up paying a lot more for fixed-rate mortgages than for tracker ones. The price of security The longer a borrower fixes their rate for, the more at risk the lender is. This means that longer fixes have a higher “security premium” than shorter ones. With that said, by definition, they also provide security for longer. This means that buyers have to figure out for themselves, how much security they are willing to pay for. Borrowers who opt for shorter fixes (one or two years) can expect to get better rates than those who opt for longer fixes. They will, however, need to go through the hassle and cost of remortgaging after a relatively short time. They may also find that their repayments jump significantly at the end of their initial mortgage term. What’s more, if the housing market flatlines or has a downturn, borrowers may find that they have little to no equity. In fact, they may even find themselves in negative equity. This does not have to be a catastrophe. As long as borrowers can keep paying their mortgages, they can ride out downturns. It can, however, make it impossible to remortgage until the issue is resolved. This means that there is a strong argument in favour of somewhat longer fixes. Realistically, however, for the average person a three- or four-year fix may work out a lot more cost-effective than a five-year (or longer) fix. It gives the borrower a bit of extra breathing space to build up equity. At the same time, it limits the lender's risk, hence allowing for better rates. The golden rule of mortgages Regardless of whether you choose fixed-rate or tracker, short-term deal or long-term deal, you must ensure that you have a new deal ready and waiting when your old one comes to a close. If you don’t, you will end up on your lender’s “Standard Variable Rate” (SVR). This can be very expensive. If you have concerns about remortgaging, then a mortgage broker may be able to help.

You’re probably already aware that the government has committed to making the UK net-zero by 2050. You may not, however, have realised that this could have significant implications for the whole housing market. Here are some key points on energy efficiency you need to know. Landlords need to meet energy efficiency standards Domestic rented properties are already required to meet Minimum Energy Efficiency Standards (MEES). At present, this is an E across the whole mainland UK. In Scotland, however, from 1st April all new tenancies must be for properties with a minimum band of D. It may be possible to register an exemption although these are subject to review after five years. The implementation of MEES creates two points worth noting. Firstly, they have direct cost implications for landlords. If landlords have existing portfolios, then they will need to ensure that they meet the MEES. If they want to expand their portfolios then they will either need to ensure that they buy property that already meets the MEES or be prepared to upgrade it. This means that landlords and residential buyers may increasingly find themselves in direct competition for energy-efficient property or at least property that can be made energy-efficient. Secondly, the MEES apply to all domestic rented properties, including ones owned (directly or indirectly) by local authorities. This means that local authorities will also need to find, or be given, the money to upgrade substandard properties. Either way, the funding will, ultimately, come from taxpayers and that includes landlords. Mortgage lenders also need to consider energy efficiency By 2030, mortgage lenders will be required to ensure that the properties in their lendings portfolios have an average rating of Band C. This means that landlords with mortgages could be faced with a choice of upgrading them beyond the legal MEES for domestic rental properties or paying higher mortgage costs. In fact, potentially, they may not even be able to get mortgages. If a lender already has a substantial number of lower-band properties on its books, it may not be willing to take on any more. This means that these regulations have the potential to create a new generation of “mortgage prisoners”. It may be possible to assist people who have properties that can be upgraded to a C or better. There would be a question about how that assistance would be given (i.e. who would ultimately pay for it). That would, however, be a separate issue. It does, however, still leave the question of what happens with properties that just can’t be upgraded enough to make a C grade. These properties could end up becoming targets for people who can afford to pay cash. Even these people would, however, find themselves potentially limited to selling to other cash buyers. They really do make a difference to your energy bills There are two compelling reasons for maximising the energy efficiency of any home. The first is the environment and the second is energy bills. Likewise, there are two compelling reasons for switching from gas to electricity. Again, the first is the environment. The second is security. Gas comes from one specific source. Electricity can be made from several sources, including renewables. Historically, pricing has favoured gas. Last winter, however, saw gas prices soar and widespread uncertainty over the supply. That in itself may not be enough to tilt the financial balance in favour of gas. Even if it isn’t, however, the government may choose to intervene and use tax structures to push the adoption of electricity over gas. Whatever way you look at the situation, it’s clear that domestic energy efficiency is going to be a major issue for everyone over the coming years. This means that homeowners and landlords alike might want to look seriously at what improvements they can make to their properties. If you need buy to let advice - please get in touch

If you pay any attention to the news you will have seen Martin Lewis advocating for mortgage advisors.  There is of course, a very good case for arguing that the best way to get the best deal is to get the best advice first.  Let’s look at five reasons why. A good mortgage adviser will look at the bigger picture Getting a good deal is not necessarily about getting the absolute, lowest possible price, not even with a large-scale financial product such as a mortgage.  It’s about getting the deal which is most appropriate for your situation, even if that costs a little more.  For example, you may have a strong preference for the security of a longer-term fixed-rate mortgage and be prepared to pay a little extra for it. A good mortgage adviser works on your behalf Mortgage advisers can receive their payment in different ways, some charge up-front fees, others work purely on commission, others use a combination of fees and commission, but the basic fact remains that mortgage advisers can only hope to run successful businesses over the long term if they keep their customers happy and that means delivering value.  Even though using a mortgage broker creates an additional cost which must be paid one way or another, this cost can be recouped and then some by the fact that they can help you to avoid the expense and inconvenience of taking out a mortgage which is inappropriate for your situation.  When considering this topic, it’s worth remembering that mortgages tend to carry high up-front costs due to the need to have a home valuation, plus there is the time required to complete the relevant paperwork, both of which facts serve to highlight the importance of making the right choice to begin with. A good mortgage adviser will understand the mortgage market In very simple terms if you “go direct” to a mortgage lender, you will have the choice of the products they offer (or at least of the ones for which you qualify).  Similarly if you “go compare” you will have the choice of products offered by the companies which work with that particular platform.  A good mortgage adviser, however, will be familiar with the overall market from the big players to the niche lenders and will therefore be in a strong position to steer you in the right direction, even if that direction might initially take you somewhat by surprise. A good mortgage adviser will be by your side throughout the whole process There are basically two aspects to getting a mortgage.  The first is agreeing that the home you intend to purchase is worth (at least) what you have offered to pay for it.  The second is confirming that you actually can afford to pay for your mortgage over the long term.  Both of these points can involve a fair amount of paperwork and a good mortgage adviser will guide you through it. Some mortgage advisers can advise you on protection for your mortgage and home Mortgages and life insurance go pretty much hand in hand, since having the latter is usually a condition of getting the former.  Because of this, some mortgage advisers can go the extra mile and offer advice on life insurance and even home insurance, thereby making your life simpler and giving you the opportunity to save more money.

Over recent times, tax changes have delivered a sharp blow to the buy-to-let market and yet it has simply rode out the punch and stood firm. This is a pretty clear reflection of the strength of the market, which is essentially based on the fact that the UK has a chronic shortage of housing of all varieties, coupled with a large pool of people for whom renting is clearly the most appropriate choice, such as students and mobile young adults. With a significant rise recently in the cost of renting, it may seem and attractive investment. If you are considering incorporating buy-to-let into your portfolio, here are some questions to ask. Do I really want to be a landlord/landlady? Even if your first thought is that you’re going to use an agency, ultimately responsibility for the property and tenants therein still rests with you. The agency will simply be acting on your behalf and, of course, they will be charging a fee for this. Are the financial practicalities of buy-to-let investment are right for me at this point? Even if you opt for an interest-only mortgage, you are very likely to need a deposit and that deposit could be in the region of 25% or more. That money stays in your mortgage lender’s possession until either the mortgage is paid off or the house is sold. Selling houses tends to be a relatively slow process even in the hottest of markets (at least when compared to selling other forms of investment such as shares) and if a market is slow, it can take an extended period for a property to sell and in a worst case this could even be at a loss. Your mortgage has to be repaid regardless, hence you are the one who has to absorb any loss. Does BTL investment fit in with my overall aims/goals? As a rule of thumb, BTL is all about generating income, the fact that you may end up with an asset is an extra bonus and it should be noted that in some situations BTL investment can still be worthwhile even if it involves using an interest-only mortgage with the result that you never actually own the house. In other situations, BTL may be an inappropriate investment, even if you can afford a repayment mortgage, meaning that you will end up with an asset. Everything depends on each individual’s particular situation. Do the sums really add up? If you’re still interested in buy-to-let then you need to make sure you do a very thorough job of checking your sums. In addition to the total purchase cost of the house (including transactional costs and stamp-duty surcharge), you will also need to account for all the associated costs, such as insurance, remembering that there are likely to be different rates for BTL products as compared with their residential counterparts. You will then need to see if you can feasibly recoup these costs in the form of rental income and make a profit. You may also wish to leave yourself a substantial margin of breathing space in case of future tax changes. Of course, while you can investigate BTL in general, you will only be able to go into specifics once you start looking at a particular property and you will only find out whether or not your projections about rental income were accurate when you actually start letting out the property. There’s more to investment than property and more to property than BTL BTL can be a very good investment for some people in some situations, but it can be useful to remember that there are other ways to invest in property, for example investing in property development. These can be more appropriate choices for some people. Likewise, there are many other investment options out there. With such a wide range of possibilities, you may find that your best starting point is to get some unbiased, professional financial advice If you are considering a buy to let venture, I will be happy to have a chat. The FCA does not regulate development finance and we act as introducers for it The FCA does not regulate some forms of buy to let mortgages

Even if you’re not a homeowner, you’ve probably noticed that the Bank of England raised interest rates in both December and this February.  Given the state of inflation, there may well be more rises on the cards and they may be sooner rather than later.  With that in mind, here are some thoughts on how to plan for a situation when interest rates are trending upwards. Take care of your credit record Your credit matters regardless of what happens with interest rates. The higher interest rates go, however, the more important it is to take good care of your credit record. This is because prices are going to rise across the board (although some prices may rise more than others). It, therefore, becomes even more important to qualify for the best possible deals. If you manage your money responsibly then, for the most part, your credit record should take care of itself. With that said, however, it’s advisable to check it at least once a year for mistakes. It’s better to check it more often (ideally once a month). This will not only ensure that mistakes are caught quickly but also protect you against identity theft. Review your consumer debt Regardless of whether you’re already a homeowner or a potential buyer or plan to be a tenant for the foreseeable future, it makes sense to get on top of your consumer debt. Again, this applies regardless of what’s happening with interest rates. It is, however, most important when interest rates are rising and/or high. There are two big differences between consumer debt and mortgage debt. The first is that consumer debt tends to have much higher interest rates. The second is that it tends to be much easier to move. For example, if you want to transfer a credit-card balance, you generally just need to fill in a form and get an approval. If, however, you want to remortgage, you need to go through a much more thorough assessment with more paperwork. You are also likely to need your house to be revalued and this will come at a cost. This means that you should generally review your consumer-debt products at least once a year if not once every six months (especially if interest rates are rising). Make sure your mortgage never falls onto the SVR When you take out a mortgage, you sign up for a deal that lasts for a certain period of time. Once this deal runs out you will be placed onto your lender’s standard variable rate (SVR). This could be a lot more expensive than even an average deal let alone a market-leading one. As a result, letting your mortgage fall onto the SVR is one of the worst mistakes you can make, even when interest rates are low. When interest rates are high, it’s a lot worse. Possibly the worst situation of all, however, is when interest rates are rising. This puts you in a situation where you know you could probably have got a (much) better deal if you had just been quicker. If you’re put off remortgaging out of concern that your finances will have been too badly damaged by COVID19, then at least speak to a mortgage broker. Remember, if it’s been a while since you last took out your mortgage, there’s a good chance you’ve built up a decent bit of equity since then. This could be enough to secure you a new mortgage. Consider making overpayments Your ability to make overpayments will depend on both your mortgage and your circumstances.  If, however, you are able to do so, then it’s well worth considering.  Remember only to overpay money you can afford to be without.  If in doubt, keep the money in cash to use as you need it.  You should get a somewhat better return on it. It's a great time to review your mortgage, so please do get in touch.

Last year, saw 408,379 people collect the keys to their first home. It was the first year the number of first-time buyers had exceeded 400K since 2006. If you were one of those first-time buyers, you might be feeling somewhat nervous about the future. Here are some tips to guide you. Prepare for interest-rate rises It’s fine to hope for the best as long as you prepare for the worst. If the Bank of England raises interest rates to combat inflation, then lenders will almost certainly charge more for mortgages. If you’re on a fixed-rate mortgage then this will not impact you immediately. If you’re on a variable rate, it will. As the increase is only slight, however, you should hopefully still have room to manoeuvre. Regardless of whether your rate is fixed or variable, it’s vital to avoid landing on your lender’s Standard Variable Rate (SVR). This means that if you bought early last year and had a one-year introductory rate, you need to move quickly to secure a new deal. If you bought later in the year and/or had a longer deal, you have a bit more time on your side. Be careful not to let it go to waste. Put a note in your calendar so you remember to do your research and administration in good time. Look after your credit record When your current deal comes to an end, you’ll need to remortgage. This essentially involves going through the process of mortgaging all over again. Usually, your home will be revalued, your income and outgoings will be reassessed and your credit record will be rechecked. The fact that you got a mortgage in the first place means that your credit record was at least in passable shape. You should, therefore, be able to keep it looking good just by keeping up the good habits. In particular, do everything you can to pay your bills in full and on time. Additionally, check your credit records at least once a year for mistakes and signs of fraud. In either case, you want to take action as quickly as possible. The quicker you act, the more time you give yourself to deal with issues before they become a potential problem. Be careful what changes you make to your house One of the benefits of being a first-time buyer is that, for the most part, you can do what you like to your house. There are, however, two key points to keep in mind. Firstly, even as a homeowner, you need to stay on the right side of planning regulations. If you’re in any doubt as to whether or not a change you make needs planning permission, check until you are sure. Secondly, updating your home may not actually add any value to it. Even if it does, it may not add as much as you spent. In principle, this is fine if it brings you joy and you can afford it. In practice, it may mean that you miss out on an opportunity to improve your loan-to-vehicle ratio. In other words, if you’d saved the money you spent on home renovations and remortgaged for a lower amount, you could have been better off financially. Which is more important is entirely a judgement call. What matters is that you think through any decisions carefully and make them mindfully. Make sure you have the right insurance Insurance is not “set-and-forget”.  Check your cover at least once a year.  Make sure that you have the right type of cover as well as the right level of cover.  This can save you from nasty financial shocks that could seriously derail your finances. Please contact me for advice or to make your mortgage application.

A new year means a new set of decorating trends. Like all trends, they’re best treated as a source of inspiration rather than as rules you need to follow. With that said, here’s a quick guide to what industry insiders expect to be popular in 2022. DIY/upcycling/sustainability Technically, those are three trends but they are similar enough to be grouped together. All of these trends have been around for a while now. They are, however, showing no signs of fading, quite the opposite in fact. Both DIYing and upcycling tie in with the general desire (and need) to lead more sustainable lifestyles. Upcycling has grown in popularity as a way to give old furniture pieces a new lease of life. It is, however, now being increasingly used as a way to get more out of relatively new furniture. IKEA has long encouraged buyers to upcycle its pieces. Recently, it has been very publicly ramping up its support for “IKEA hacks”. This not only helps to boost IKEA’s sustainability credentials. It also helps to give its furniture more perceived value. Instead of being viewed as disposable “fast furniture”, it’s now seen as up-cyclable. Upcycling newer furniture tends to be a lot easier than upcycling older pieces. This is because newer pieces tend to need less in the way of restoration. They usually just need a facelift. It’s, therefore, safe to assume that this trend is just going to keep on growing over the foreseeable future. Also, look out for 3D art and incorporating sustainability with unusual design features. Plants and nature This is another trend that has been around for a while and shows no sign of fading away. People who’re lucky enough to have gardens have been making the most of them. The old trend of concreting them over for parking seems to have vanished. If it comes back in any form, it will probably be in a less permanent one such as using gravel instead of concrete. “Hard” gardens (with decking and gravel and no lawn) are still popular. They are, however, definitely not the only option for small gardens. People are increasingly appreciating lawns (or at least AstroTurf) and beds, often raised ones. Where people have space, outdoor offices and s/he sheds are looking like they will remain popular investments. When people don’t have gardens, they will be making the most of any outdoor space they do have, even if that’s just a windowsill. Regardless of whether or not they have outdoor space, people will be bringing the outdoors inside. Houseplants are famously huge with millennials. They actually appeal to people from many generations. For people who don’t have the time or energy (or lifestyle) to manage real plants, faux plants are getting more realistic all the time. There is also a lot of plant-based decor and household items made from natural materials. These also tie in with the sustainability trend. Colour Again, colour never really went away completely but it has taken something of a back seat over recent years. This isn’t necessarily because it fell out of favour but because homes have been getting smaller and smaller. Many people played safe and kept large areas such as walls and floors in neutral colours, particularly whites and creams. This not only kept everything cohesive but also blurred the boundaries between different parts of the home thus creating the illusion of more space. This year could bring back the boldness of the 60s & 70s in terms of colour. Space considerations are still likely to play a major role in decor for well into the future. People do, however, seem to be getting more comfortable with them. This is reflected in a growing willingness to be more adventurous with colours even over larger areas. Green is definitely having a moment. Again, this ties in with the trends of nature and sustainability. It’s all about being calm and relaxing especially with natural lighting. As with all DIY, it’s worth checking that your insurance covers you, just in case of any unforeseen accidents!

The Bank of England recently made headlines with its first interest rate rise in three years.  This increase is now being passed on to people with variable-rate mortgages.  It is also being factored into new fixed-rate products.  What’s more, further increases are definitely a possibility.  This raises the question of where the housing market goes from here. A brief history of interest rates Between July 2007 and August 2016, the UK’s base rate went down and down without a single increase. Over the course of nearly 10 years, it fell from 5.75% to 0.25%. The Bank of England finally raised the base rate again in November 2017, taking it from 0.25% to 0.5%. Their action received a lot of media attention. In August 2018, the Bank of England raised the base rate again, taking it from 0.5% to 0.75%. It stayed at 0.75% until March 2020 when it was cut twice in quick succession. The first cut took it back to 0.25%. The second cut took it to 0.1%. It stayed there until December 2021 when the Bank of England moved it back up to 0.25%. How the rate increase will impact existing mortgage holders The effect of the rate increase is likely to come as a trickle rather than a flood. First, it will be passed on to people with variable-rate mortgages. Then it will feed through to people on fixed-rate mortgages as their fixed-term deals come to an end. People on variable-rate mortgages who can remortgage now are still in a relatively strong position. Although they have missed out on the very best deals, interest rates are still low by historical standards. People on fixed-rate mortgages will only feel the impact when their existing fixed-rate deal comes to an end. If that is soon, they may be able to remortgage now and protect themselves against potential increases. If it is further into the future, then they have breathing space. They can use this breathing space to build up equity and lower their loan-to-vehicle ratio. How the rate increase will impact new buyers The rate increase will be priced into mortgage products. It will therefore impact affordability. This could mean that some buyers move from just qualifying for mortgages to not qualifying for mortgages. Future rate increases could see the bar move even higher. On the other hand, if rate increases slow (or stop) price inflation in the housing market, new buyers could actually benefit. A cooling in the housing market coupled with a strong job market could help wages to catch up with house prices. How the rate increase will impact the housing market Like all other markets, the housing market is driven by supply and demand. If demand remains high, then house prices should at least remain stable. They may even rise. If, however, demand reduces, then house prices will, at best, remain stable. They may even fall. For practical purposes, “demand” means “demand from people who are willing and able to pay”. A rate increase may not impact people’s willingness to pay. As previously mentioned, however, it may impact their ability to pay. With that said, interest rates are definitely not the only factor that impacts a person’s ability to afford a mortgage. Their income is also a factor as is the overall cost of living. This means that the potential direction of the housing market is likely to depend greatly on the UK’s economy. If it recovers quickly and grows, then it may carry on as usual. In fact, over the long term, the decision to raise interest rates may turn out to be a blessing in disguise.  If it cools inflation then everyone could end up with more disposable income regardless of whether or not they have a mortgage. For mortgage advice, please get in touch

The UK’s base rate is currently just about as low as it can go (and stay in positive numbers). This means that, realistically, there is far more scope for it to go up than down. It’s likely that a lot will depend on the direction of inflation. Mortgage holders should, however, think carefully about how they would manage if interest rates were to start moving upwards. Understanding interest rates In basic terms, the UK government’s target inflation rate is 2%. It allows for a +/-1% deviation from this. If inflation drops too far below target, the Bank of England can either lower interest rates or instigate quantitative easing (or do a combination of both). If, however, inflation rises too far above the target, then the BoE’s only option is to raise interest rates (or accept excessive inflation). This means that all current and prospective mortgage holders should very definitely be considering what would happen in the event of interest rates going up. How far and fast could interest rates rise? Currently, there is no limit on how far interest rates could rise. The UK has had double-digit interest rates in the past (albeit not this century). Similarly, in principle, there is nothing in law to stop the Bank of England from taking rates from (almost) 0 to double-digits (or higher) without any notice. That said, just because they can, it doesn’t mean that they will. At the end of the day, the Bank of England’s job is to keep inflation on target (or at least within acceptable limits). This means that any interest-rate rises (or reductions) are always going to reflect and be in proportion to the challenge posed by inflation. The October 2021 consumer price index put year on year inflation at 4.2%. This is more than double the government’s target but not that far above its tolerable boundary. It’s certainly well short of hyperinflation. That being so, it’s reasonable to assume that the BoE will start with small increases to the base rate. If those have the desired effect, the Bank of England may stop there. If they don’t, there could be further increases but again, these will be in proportion to the problem. In other words, unless inflation really starts to get out of control, interest rates will increase gradually rather than suddenly. What this means for (prospective) mortgage holders Depending on your point of view, it could have huge implications or mean absolutely nothing. If you have (or are considering getting) a mortgage, you should always be on the lookout for the best deal. You should also be making a point of being ready to switch to a new deal as soon as any current special offer comes to an end. In other words, you should do everything possible to avoid winding up on your lender’s standard variable rate. If you’re currently on an introductory deal for a variable-rate mortgage, then do your sums to see if the cost of remortgaging is financially justified by the benefit. If it is, then you have a clear signal to remortgage. It may or may not be a signal to remortgage at a fixed rate. That is a separate question. If it isn’t, then you need to ask yourself if you’re willing to pay a premium for the security of a fixed-rate mortgage. If you’re on a variable-rate mortgage then think carefully before changing to a fixed-rate one. In particular, think carefully about how long you want to fix for. On the one hand, in principle, longer-term fixes offer more security. On the other hand, this security usually comes at a price. It’s up to you to decide if that price is worth it. Whatever type of mortgage you choose, it’s worth thinking about how to protect your home if you find yourself in one of life’s tough patches. This could include getting insurance for your home, its outbuildings and its contents. You could also look at payment protection insurance (for the employed), income-protection insurance and critical-illness cover. For home and contents insurance and payment protection insurance we act as introducers only On clicking the third-party website links, you will leave the regulated site of The Mortgage Network. Neither The Mortgage Network nor Sesame Ltd is responsible for the accuracy of the information contained within the linked site.

Home decoration has always been popular. Since the pandemic began, it’s become more popular than ever. The Christmas season tends to give some good pointers to what’s likely to be popular over the coming year. With that in mind, here are some of the top trends emerging for Christmas 2021 and what they could mean for 2022. Sustainability Concerns over sustainability have now been around for so long that it seems unfair to describe them as a trend. It’s probably more accurate to say that concerns about sustainability manifest themselves in different ways and that these can be described as trends. Two trends that have been steadily growing are the use of fake Christmas trees and the use of LED lights. In fact, these trends have increasingly been going hand-in-hand as fake Christmas trees come with integrated lights. Outside of Christmas fake plants are also a growing trend. These work for people who don’t have green fingers and/or enough space to keep real plants. Some people are going for realistic fake plants. There is, however, a growing market for fake plants which are obviously fake. These essentially combine the popularity of plants with the popularity of art. Outside of trees and plants, however, it’s natural all the way. Using natural materials for decor now goes way beyond cut flowers. Rustic and rural themes are popular. There’s a growing appetite for handmade decorations either shop-bought or made at home. Decorations are openly reused “as is”, sometimes at other times of the year. Tradition With hindsight, it was probably inevitable that the 2020s would draw style inspiration from the 1920s. Add in the effects of the pandemic and it’s easy to see why people would want to immerse themselves in the comfort of tradition. As with sustainability, this trend is manifesting itself in all kinds of ways. For Christmas, vintage and vintage-look decorations are very much back. What’s more, people are going “all in” on traditional customs such as stockings, tree decorations (which now go right down to the base of the tree with tree collars making a big comeback) and outdoor decorations (e..g wreaths). Other seasonal decor looks set to follow much the same basic trend even if it’s less elaborate for most of the year. The big exception here is tablescapes. These are huge all year round. This is possibly in part due to the restrictions imposed in the earlier part of the pandemic. Customisation The last key trend is the trend towards customisation and personalisation.  Possibly in a reaction to the “influencer” world of social media, people have increasingly been moving away from “following the herd”. One clear sign of this has been the growing trend of people making or buying decorations made from unusual materials. For example, there are now Christmas wreaths made of pompoms. These also often tie into the trends of sustainability and tradition. For example, pompom wreaths are often made from scrap material, they’re reusable and they can still have a traditional feel. A word of caution In general, you’ll only need to inform your home insurer if you’re making significant changes to your home. That’s unlikely to be the case when you’re changing out basic seasonal decor. With that said, if your decorating journey starts leading you down the path of larger-scale home improvements, make sure that your insurer knows about them. Also, remember that the more you change seasonal decor, the more likely it is that you’ll have a minor accident during the process. For example, you could knock something over and have it break something else. This type of damage is generally only covered if you specifically have accidental damage cover on your home insurance. Accidental-damage cover is well worth considering, especially if you have children and/or pets. Even if you don't, the extra money can literally be a small price to pay for the protection it gives you. For home insurance products we act as introducers only