The UK mortgage market has a wide selection of both variable-rate and fixed-rate mortgages. It also has other niche mortgage products such as offset mortgages. One of the more recent entrants to the market is the 40-year mortgage on a fixed rate. In principle, this offers long-term certainty. In practice, it has significant, potential drawbacks as well as benefits. Understanding long-term fixes Possibly the most important point to understand about fixed-rate mortgages, in general, is that they are not necessarily more affordable than variable-rate mortgages. In fact, they can work out more expensive than variable-rate mortgages. The reason for this is that lenders have to factor in the possibility of increases to the base rate over the lifetime of the fixed-rate term. Obviously, the longer the fixed-rate term, the harder it is to predict what will happen with the base rate. Lenders, therefore, have a clear motivation, if not a duty (to their shareholders) to make sure that they are covered if the UK undergoes an extended period of high-interest rates. This means that longer-term fixes are likely to be (much) more expensive than shorter-term ones. Then, of course, there is the complication of people exiting their mortgage early. For example, a customer might choose to keep their fix when interest rates are high but move to another product if it looks like the UK will have an extended period of low-interest rates. This risk would also need to be factored into the price of the product. Last but definitely not least, there is the question of how the borrower will fund the later years of the mortgage. Borrowers would need to be very young at the start of the loan to pay it off before their retirement years. Younger borrowers, however, could potentially go through some very significant life changes which could negatively impact their ability to make repayments. Again, this risk would have to be baked into the price of the product. The benefits of long-term fixes Long-term fixes have the benefit of stability. A borrower knows exactly what they are going to pay from one month to the next for the entire lifetime of the mortgage. This can make it easier for people to budget and forecast what their finances will look like even into the long-term future. Even if long-term fixes are not the most affordable options, they can be the most reassuring ones. Many people will pay a premium for value-add services. You could make a case for arguing that delivering peace of mind is one of the most valuable services there can be. The disadvantages of long-term fixes Paying a premium for stability is fine in theory. In practice, however, too much stability can weigh you down. Realistically, if you’re young enough to take on a 40-year mortgage then you’re young enough to have at least one major change in your life during that time. You may have several. Any one of these could require you to update your housing in some way. For example, you could form a couple, have children and then have those children fly the nest. You could have your parents move in with you or you decide to go and live with them. You could switch between working on-site and working at home. Likewise, you could switch between employment and self-employment. Paying the premium for a super-long-term fix may, therefore, simply be a waste of money.  What’s more, it could be a waste of money which has serious implications for your later years.  In simple terms, if you pay over the odds for your mortgage then you will reduce the amount of money you can put aside for other purposes such are paying down debts and saving for your later years. For mortgage advice, please get in touch

The pandemic has created a rather contradictory situation in the housing market. On the one hand, sales of residential property have been booming. On the other, the pandemic has created, or exacerbated, financial challenges for many homeowners. This could lead to some interesting times over the next year or two. Here is a quick guide to what you need to know. COVID19-specific measures have ended For the time being, COVID19-specific support measures have ended. This means that mortgage-holders in financial difficulties need to use standard processes for resolving them. Hopefully, in most cases, this will simply mean applying to their lender for some form of support rather than insolvency, bankruptcy and/or foreclosure. It is, technically, possible that the government could reintroduce COVID19-related support measures. It is, however, difficult to see any circumstances in which they would do so other than a significant upsurge in cases. Quite bluntly, the UK must hold a general election by 2nd May 2024. It, therefore, seems reasonable to assume that the government will want the country to be back to normal in plenty of time for the start of the next election campaign. This means dealing with the economic effects of the pandemic (and Brexit) and getting the economy rolling again. Interest rates could rise again If the combined impact of COVID19 and Brexit leads to price rises, then the Bank of England will be faced with a hard choice. Option one is to raise interest rates to take inflation even though this would hurt borrowers. Option two is to allow inflation to rise above its designated margin of error even though this would potentially hurt everyone. With the base rate currently at 0.1%, the Bank of England may decide to put borrowers under (more) pressure to spare the economy the wider effects of inflation. This approach would presumably go down well with those who had managed to save during the pandemic. How much it would hurt borrowers would largely depend on their situation. Borrowers on fixed rates would only see their mortgage repayments go up at the end of the fixed term. They could, however, still find themselves under pressure if they also had variable-rate debt such as credit-card debt. Borrowers on variable rates or coming to the end of their deal would feel the impact much more quickly. That said, the real-world impact of this would depend largely on the bigger economic picture. If price inflation was mirrored by wage inflation then borrowers in work should break even (or thereabouts). Of course, that will not help borrowers out of work or borrowers on fixed incomes (e.g pensioners). If it’s not, then lenders could find themselves dealing with a lot of distressed borrowers. Lenders may become more cautious The UK is, hopefully, now on the road to recovery from COVID19 (and Brexit). The problem is that, as yet, nobody really knows whether that road is going to be a superfast highway or a pothole-filled off-road track full of sharp bends and dangerous bumps. Similarly, nobody knows if the UK is going to have to navigate it in good conditions or bad ones. If the UK can set itself on a clear path to recovery, even if it’s a long one, then everyone, including lenders can make plans with reasonable confidence. Until then, however, lenders are essentially going to have to feel their way forward, responding to circumstances. It would therefore hardly be a surprise if they chose to proceed with great caution. This might not be a problem for those with large deposits and/or plenty of equity in their current home.  It could, however, become a major problem for borrowers in less fortunate positions.  In particular, more recent buyers with minimal equity could find themselves unable to remortgage and hence stuck on their current lender’s standard variable rate. At the moment, it appears to still be time for optimism, though with new variants and talk of lockdown measures, considering a fixed rate could be a conversation to have sooner rather than later. Please get in touch if you'd like advice.

Fundamentally, there is only one way to get a yes from a mortgage lender. That is to convince them that you are able and willing to pay back whatever they lend you. Part of this depends on your general situation, especially your financial situation. Another part of it depends on what lender you approach and how. With that in mind, here are some tips on how to get a yes from a mortgage lender. Polish your credit rating If COVID19 has ravaged your credit score then you need to put right the damage as quickly as possible. This may seem disheartening but the sooner you get started the sooner you’ll have it back in the sort of condition lenders want to see. Even if you’ve been holding your own through COVID19, it’s still important to check your credit record. First of all, mistakes happen and if they do you want them corrected before you apply for a mortgage. Secondly, your credit record can alert you to any fraud involving your identity. Again, if this happens, you want it sorted before you apply for a mortgage. Think about what your financial statements say about you Assume that any prospective lender is going to want to see six months worth of financial statements. They may want to see less but it’s highly unlikely that they’ll want to see any fewer than three months worth of statements. Take a cold, hard look at your bank statements and see what impression they give of your spending. In general, the lower your deposit, the more important it is to show that you’re managing your money well. For example, if you have a 20% deposit then a lender may not worry too much if your bank statements show that you like to socialize. If, however, you only have a 5% deposit and a trail of restaurant meals on your bank statements, then a lender may question your priorities. If you’re spending money because you’re building up a side-hustle then it’s advisable to get a credit card specifically for that purpose. A standard personal one is fine (assuming you’re working as a sole trader). Just make sure that it’s kept for your business so you can separate out the transactions easily for a prospective mortgage lender (and HMRC). Do your best to build up a solid deposit If you can put together a deposit of at least 5% then you may be able to qualify for the government’s Help to Buy Mortgage Guarantee Scheme. It’s certainly worth checking this out as it effectively boosts your deposit by up to 15%. In other words, it essentially turns a 5% deposit into a 20% deposit and hence can open up a lot more deals for you. If you can’t (or don’t want to) for the government’s Help to Buy Mortgage Guarantee Scheme, then you may still be able to get a mortgage. You are, however, almost certainly going to need to work with a specialist lender. This means that using a mortgage broker is highly advisable. Aim for stability This may seem like an odd comment but the key point to remember is that your lender is trying to predict your ability and willingness to repay your mortgage. The only information they have to go on is what you’ve done in the past. Having a decent financial track record over an extended period is likely to make you far more attractive than having a stellar track record part of the time and an awful one part of the time.  Similarly, try to avoid making significant changes just before applying for a mortgage.  For example, if you’re thinking of a career change, wait until after you’ve been approved. For advice and help please get in touch.

The government has now unwound most of its COVID19-specific support and relief measures. There is, however, one unofficial support measure still remaining. That is the 0.1% interest rate set by the Bank of England way back at the start of the pandemic. This too is expected to be rolled back shortly with further increases possibly to come. Inflation is a pressing problem Right now, inflation is running at about 3%. The Bank of England’s target is 2%, with a 1% margin of error in both directions. Over the course of the pandemic, this target was largely ignored. In simple terms, there was really no point in trying to apply normal controls to a completely abnormal situation. Now the UK is returning to some form of normality (even if it is a “new normal”), the Bank of England is going to have to start returning to “business as usual” with regard to its role in managing inflation. This does not necessarily mean that it’s going to start implementing major hikes in short order. The Bank of England is likely to be well aware that interest-rate hikes will hurt the UK’s many borrowers, especially those on low incomes. A more likely outcome is that the Bank of England will do the absolute minimum necessary to keep inflation within the boundaries of its margin of error, if only just. It may even allow inflation to go slightly outside these boundaries as long as it is only just outside and there appears to be no danger of it getting out of control. Mortgage holders may be best to fix Fixing your interest rate now may not actually cut the overall amount you pay back on your mortgage. In fact, you could end up paying more than if you stuck it out with a variable-rate mortgage. It does, however, let you know exactly how much to budget for your mortgage each month. It also eliminates the stress of wondering just how high-interest rates could go. Going for a longer-term fix, such as three to five years would give you security while you (continue to) build up equity in your home. Hopefully, by the end of that time, the UK should be very much over COVID19 (and Brexit) and genuinely back into business-as-usual mode. Even if it isn’t, you should have built up more equity in your home and hence be in a better position when you come to remortgage. If you’re really struggling, then you might want to consider switching to an interest-only mortgage. This would, however, usually only be a stop-gap measure. You would need either to find a way to improve your finances and return to an interest-only mortgage or sell your home and rent until you were able to reenter the property market. People with other debt also need to prepare If your credit record is good, you may still be able to shift debt onto a 0% balance-transfer card. You could then continue your repayments at their current level but have more of them go towards repaying the principle rather than paying interest. If this is not possible, then you could try consolidating your debt into a personal loan with more manageable repayments. As with fixed-rate mortgages, this would not necessarily reduce the amount you owe. It would simply give you more breathing space over the short term. You could then review as the UK really does return to economic normality. Your last option is to grit your teeth and start increasing the repayments you make on your debts even if this is painful in the short term.  Paying just a few pounds extra each month may seem pointless but actually, it really isn’t.  Over time, these extra payments will add up and could potentially save you a lot of money. For mortgage advice, please get in touch

Although nobody has a crystal ball, everybody can read numbers or, more accurately, ratios. Currently, interest rates are at historic lows while inflation is well above the government’s 2% target. This means that mortgage holders should be making absolutely sure that they’re on the best deal for them and may wish to give particular consideration to fixed-rate mortgages. If you can remortgage, look at your options If you’re coming to the end of your introductory deal, then you should definitely be researching your options. This is advisable at the best of times. Now, it’s arguably vital. Currently, your big decision is whether or not you’re happy to take your chances with a variable-rate mortgage. Including variable-rate mortgages in your search criteria will, of course, give you a greater selection of products than just sticking to fixed-rate deals. On the other hand, if you do opt for a variable-rate mortgage, you have to accept the risk of being locked into a deal while interest rates go up, possibly indefinitely. If you go for a fixed-rate deal, you run the risk of lenders pricing in the risk of an interest-rate increase which never materializes. This could leave you paying more than you would have done on a variable-rate mortgage. On the other hand, even if this did happen, you would still have the stability of knowing what you were going to be paying from one month to the next. Whatever you do, you almost certainly want to avoid finding yourself on your lender’s standard variable rate. This is highly unlikely to be the best deal available to you. If you do wind up on it, then it should only be as a short-term option. For example, if you aren’t sure what your plans are, you may wish to hold off remortgaging until you have clarity. If you can’t remortgage see what you can do If you’re still within a lock-in period, then you may find that buying your way out of the lock-in just isn’t financially viable. You could try asking your current lender if they will switch you to another deal. If they say no, then just make a note to start the remortgaging process as soon as you can. In the meantime, see what you can do to protect yourself if interest rates do rise. For example, could you make overpayments? If not, could you put money aside so that you have extra cash in hand if your monthly mortgage payments do rise? If you don’t have the money is there any way for you to get it? For example, could you take on extra work, start a side hustle or monetize your home in some way, such as by using the “rent-a-room” scheme? Also, do everything you can to polish your credit record until it gleams. This isn’t the be-all-and-end-all of mortgage applications. It is, however, most certainly one of the key factors lenders will consider when assessing your application. Review your insurance Although the UK economy is currently heading back towards normality, there’s never any harm in being on the safe side. In other words, consider what would happen if you were unable to work for any reason, even if only temporarily. Your first resort might be cash savings but these will only take you so far. With that in mind, it might be a good idea to look at supplementing cash savings with at least some form of insurance. If you’re in paid employment, you should certainly look at what your employer offers. This may be sufficient, but then again it may not. If it isn’t then, as an employee, you could look at income protection insurance. Regardless of your employment status, you might (also) want to consider income protection insurance and/or critical illness cover.  These could both help to cover your mortgage if you went through a financial rough patch. For help and advice please get in touch

Budgets are always interesting for mortgage-holders. The October 2021 budget probably contained very few real surprises (if any). Some of its forecasts, and the decisions based on them, could, however, significantly impact the finances of mortgage-holders. Here’s a quick guide to what you need to know. The inflation forecast For mortgage-holders, probably the single most important announcement of the budget was that next year inflation is expected to average 4%. This is literally double the government’s official target. If the government is prepared to state that inflation will average 4% over the coming year it presumably means that it has given the Bank of England its blessing, if not its instruction, to hold off raising interest rates to try to bring down inflation. This is certainly interesting news for mortgage holders. That said, it’s a matter of opinion whether or not it’s good news. On the one hand, keeping interest rates low will ease the pressure on debtors in general and variable-rate mortgage-holders in particular. On the other hand, this could be (more than) counterbalanced by the increased cost of living. Personal income and taxes There was no update on the issue of personal taxation i.e. Income Tax and National Insurance/the NI surcharge. You could argue that “no news is good news” in the sense that the government did not increase these any further. It did, however, increase the National Living Wage by 6.6%. This puts the standard adult rate at £9.50 per hour. Wages for younger people and apprentices are still lower but have also been increased. According to the government, in real terms, average wages have increased by 3.4% since February 2020. The chancellor held firm on the withdrawal of the temporary uplift to Universal Credit. He did, however, commit to cutting the taper rate from 63% to 55% by no later than 1 December 2021. General taxation Some mortgage-holders may be very interested to learn that the government is imposing a 4% levy on property developers with profits over £25m. This is to finance a £5bn fund to remove unsafe cladding. At present, however, the details of this are very much a case of “watch this space”. Likewise, it’s unclear how exactly the government will use the £300m it has allocated to "Start for Life" parenting programmes. These are intended to support families through the “First 1001 Days” i.e. from pregnancy to age two. On the other hand, the government has also made the more straightforward pledge of allocating an additional £170m to childcare albeit by 2024-25. As is customary, duty on tobacco products was increased. Duties on alcohol were reformulated. In short, higher-strength products saw their duty increased and lower-strength products saw it decreased. The government also eliminated the quirk of sparkling wines and still wines being taxed differently. Somewhat surprisingly, fuel duty was held steady. Even though fuel duty has remained frozen for the last decade, it was seen as a candidate for a raise. If nothing else, the government will need to push people towards electric vehicles if it is to meet its net-zero target. It’s not clear why the government chose to “stand pat” for the 11th consecutive year. Possibly it felt that current fuel prices would make an increase in fuel duty seem rather tone-deaf. Government spending For mortgage-holders, the two key areas of government spending were transport and the Levelling Up Fund.  For transport, the government has pledged to spend £7bn across England, particularly Greater Manchester, the West Midlands and South Yorkshire.  It has also pledged £1.7bn for its Levelling Up Fund and will back further infrastructure projects across the UK.  These projects could potentially increase house prices and hence make it easier to remortgage. For more information or help with your mortgage, please get in touch.

A mortgage is a huge commitment.  This means it’s vital to get both the right product and the right lender.  Giving some thought to what you want can make the selection process a lot easier.  With that in mind, here are some points to consider when considering specialist lending. What type of mortgage do you want? If you’re buying a place to live, you’ll need a residential mortgage. If you’re buying a property to let out to residential tenants, you’ll need a buy-to-let mortgage. If you’re buying a property to let out on a short-term basis, then you’ll need a commercial mortgage. If you’re wanting to build your own property, then you need a self-build mortgage. If you’re living, or planning to live, outside the UK, then you’ll need a mortgage that is suitable for ex-pats. Similarly, if you’re planning, or even just considering, any changes to your life, then you need to think about how you’ll accommodate that. These don’t even have to be long-term changes to be significant. For example, say you are buying a property with a view to starting a family. Until the children arrive, however, you have a couple of spare rooms. If you’re thinking of earning some extra cash by letting these out, you need to make sure you choose a mortgage that allows this. What mortgage format do you want? The two basic mortgage formats are interest-only and repayment. Repayment mortgages can be further subdivided into various options. For example, you can have standard repayment mortgages and offset mortgages. With standard repayment mortgages, you simply pay back the lender each month according to a predefined formula. With offset mortgages, you keep your savings with your mortgage lender. The interest you are due on your savings is set against what you owe on your mortgage. You also have the choice of fixed-rate and variable-rate mortgages. In either case, you can expect the rate to be offered for a certain period e.g. between two and five years. After this, you would either remortgage or go onto the lender’s standard variable rate. What mortgage features do you want? Are there any particular features you’d like to see in your mortgage? For example, would you like the ability to make flexible repayments or to take payment holidays? How attractive a customer are you? All the questions so far have been about figuring out what you want from a lender. Depending on your answers, you may already have discovered that specialist lending is really the only route for you. In simple terms, the less demand there is for a product, the less reason there is for lenders to offer it. This means that it effectively becomes a specialist product. If, however, you’re looking at a product that is offered in the mainstream, your next step would be to think realistically about how attractive you would be to mainstream lenders. In particular, consider: Your residency status Your age Your employment status Your credit history Your deposit Basically, look at the situation from a lender’s perspective. They want to get their repayments in full and on time over the duration of the loan. How obvious is it that you can make that happen for them? The more obvious it is, the more likely it is that you’ll be able to find a suitable deal in the mainstream if you want it. Making your final choice Assuming you have a choice between mainstream lenders and specialist lenders, you should make it with care. First of all, resist any temptation to assume that the mainstream lenders will offer the most economical deals just because they’re bigger. They may do but it’s strongly advisable to check. Secondly, while price is important, there may be other factors you want to consider, like customer service. You may be prepared to pay a bit extra for the reassurance of dealing with a lender who sees you as an individual rather than a row of figures on a statement. The FCA does not regulate commercial mortgages and we act as introducers for it.

If you’re thinking of developing your home, it’s important to make sure that you do so on a solid legal basis. Laws can and do change over time. They can also vary according to your local area and the type of property you have. With that said, there are some guiding principles that can be applied to any proposed development. Research what laws apply to you Planning permission relates to what you are allowed to do on your property. Whether or not you need it will depend on the nature of your development. Building regulations relate to how you implement the development. They will apply regardless of whether or not you need planning permission. Your property may also be subject to legal agreements with your neighbours. For example, you may have a party wall agreement. If so, you will either need to make sure that your development sticks within this agreement or negotiate a new agreement. Assume you need planning permission It’s generally best to work on the assumption that you’re going to need planning permission unless it is 100% crystal clear that you don’t. If you are in any doubt, then the best approach is to request planning permission. This does run the risk of refusal. It does, however, eliminate the risk of spending money on a project only to have to spend more money dismantling it. For completeness, you may be able to apply for retrospective planning permission. This could be a solution if you believe that your work is permitted development but your local authority thinks otherwise. Effectively, however, it is a gamble and could be an expensive one. If your application is refused then you would have to take down the structure. Understand why planning permission is refused You want to avoid giving planning officers a clear reason to turn down your application.  This means you need to think about any objections they may have and preemptively address them.  For example, do your plans cause any of the following? Loss of natural light, views or privacy to other properties Increased noise or smells Increased traffic (pedestrian or vehicular) Overcrowding and/or excess demands on local infrastructure Damage to the local environment/neighbourhood character Remember that planning officials need to think about what could be done with the structure, not just about what you say you want to do with it. Your plans might change or you might sell the property to someone else who uses the structure differently. Ask your neighbours for support There are lots of good reasons for staying on good terms with your neighbours. One of them is that it can help prevent planning applications from being derailed by objections. Even if the objection is, ultimately, not sustained, it can still slow down the process. It can therefore be advisable to consult with your neighbours at an early stage in the process. Ideally, you’ll incorporate their feedback into your plans so you come up with a design that suits everybody. At the very least, you should try to minimise issues to which your neighbours might object and have an explanation for why you need to keep any points of contention. Get professional help If you want to maximise your chances of speeding through the application process for planning permission on the first attempt, then it can be very useful to get professional help. Working with someone who regularly deals with planning officials can help to ensure that your design ticks the necessary boxes and is presented to the right people in the right way. This can work out much quicker, more convenient and more affordable than having to make additional applications until you finally (hopefully) get one accepted.

A mortgage could well be the biggest single debt you take out in your life. It’s therefore advisable to be strategic in everything regarding it. With that in mind, here are six mortgage mistakes you should definitely avoid. Not keeping a watch on your credit records Your credit records basically give you an insight into how lenders are likely to perceive you. Even if you think it’s in good shape, you should still keep an eye on it. Mistakes can happen and if they happen to you, you want to give yourself time to get them sorted before you need to reference your credit score. Sadly, fraud can also happen. Seeing an unexpected entry on your credit score may be a sign that you’ve been the victim of identity theft. You should definitely investigate this quickly. Not keeping your paperwork in order It’s generally advisable to keep your financial and legal records in good order. This can make your life much easier. What’s more, if anything does happen to you, it can make life a lot easier for other people. Something happening to you doesn’t have to mean your death. It could just mean illness or injury putting you out of action for a while. When you do come to buy a home, having your paperwork in order can allow you to speed through the application process. If you’re also selling a home, then having your property documentation in good order can help to speed up the conveyancing process. Not remortgaging at the end of your mortgage term You may plan to have a mortgage for 15-25 years. You don’t, however, need to have the same mortgage for 15-25 years. If you take out a mortgage with a fixed-term deal, then you should be looking at alternatives for when that deal ends. You don’t necessarily have to take those alternatives. You do, however, need to know what they are to make an informed decision. That holds true even if your finances have been hit by the pandemic. You may think that, currently, you wouldn’t be accepted for a new mortgage deal. In fact, you might be right. You’ll only know for sure, however, if you check and check thoroughly. Consider enlisting the help of a mortgage broker. Remember, even if you genuinely can’t remortgage now, you can at least get an idea of what’s out there and what you need to do to qualify for it. That will give you something to aim for. Not looking at niche lenders The big names do not necessarily offer the best deals. They may do but, again, you’ll only know for sure if you check. Tracking down niche lenders by yourself can be a bit of a struggle. This is another argument in favour of using a mortgage broker. Not factoring in fees There are two sets of fees you need to consider when looking at mortgages. The first is set-up fees and the second is exit fees. Set-up fees are guaranteed to be charged, you, therefore, need to factor them into your calculations when working out the overall cost of a mortgage. This is the only fair way to compare different mortgage deals. If you’re planning on adding the fees to the loan, then you also need to factor in the cost of the interest. Exit fees will only be charged if you exit the mortgage early. It is, however, still important to know what they are. You may not plan to exit the mortgage early but your plans may change. Not calculating your deposit accurately When calculating how much deposit you can really afford, remember to think about all the expenses of moving home.  Then add a bit extra for unforeseen expenses.  Then add a bit extra on top in case of unrelated emergencies. For mortgage advice, please get in touch

Sometimes the bank of mum and dad isn’t open or isn’t able to lend enough to help young people buy a home.  Sometimes grandparents just have more resources to help.  Those resources might not be financial.  The right advice and guidance can also be valuable.  Here are some tips to help. Keep your own finances in good order Modern retirement can last decades and you need to keep this in mind when making financial decisions. No matter how much you want to help your grandchildren financially, you should only provide them with money if you’re sure you can afford it. This goes for both loans and gifts. What’s more, keeping your own finances in good order sets a good example to your grandchildren. If they’re just starting out in adult life, they will need to build their credit records. A large part of this is demonstrating financial responsibility. Consider giving them their inheritance early If you are looking to minimise your estate's liability for inheritance tax, you might want to consider disposing of assets now.  You could either monetise them and pass on the cash or pass on the asset itself. Remember, however, to take Capital Gains Tax into consideration. This can be charged even if you pass on the item as a gift. Essentially, HMRC can look at what the person could have been expected to have paid you had they bought the item and calculate CGT on that basis. You may therefore want to take financial advice and look for a strategy that will minimise both your CGT liability and your eventual IHT liability.  For example, you might wish to dispose of assets relatively slowly and give your grandchildren their inheritance a little at a time.  They could potentially put the money into a Lifetime ISA to benefit from a government bonus. Consider gifting them cash savings While emphasising the fact that you should only help them buy a home if you’re sure you can afford it, this can be a very useful way to help your grandchildren onto the property ladder.  One point to remember, however, is that some lenders do have rules around “gifted deposits”.  You and your grandchildren would therefore need to read up on these to make sure the gift didn’t backfire. Consider giving them a loan Loans to family members can be tricky to navigate. At the end of the day, you have to ask yourself what you can/will do if they can’t/won’t pay. If the realistic answer is nothing, then it might be better either to give them a gift or not to give them anything. If you are going to give them a loan then it’s strongly recommended to put everything in writing. Consider being a guarantor on their mortgage This is potentially a huge commitment and hence should be taken very seriously. It could, however, be a useful option in some cases. Possibly the single biggest key to success in making these arrangements work is to have an exit strategy laid out in advance. For example, you might agree to guarantee their mortgage for five years. After this, your grandchild would need to remortgage in their own name or sell their home. You might want to consider negotiating an extension for this in particular circumstances but this should ideally be by mutual agreement. For example, if your grandchild was planning on moving soon, you might stay on the mortgage until they sell the property in their own time. One important factor to consider is the possibility that your grandchild will want to have a partner move in with them.  Under certain circumstances, your grandchild’s partner could develop a claim on their property.  It would therefore be advisable to have some pre-agreed rules in place for this situation. For more information or for mortgage advice - please get in touch The FCA does not regulate some forms of Tax planning and we act as introducers for it.

Homes are expensive purchases on their own. Once you fill them up with your possessions, they can become even more expensive. It’s therefore worth taking the time to understand home insurance properly. The basics of home insurance Home insurance is generally divided into two broad categories. The first is buildings insurance and the second is contents insurance. There are, however, a number of add ons and complementary policies you may need or just want. Here is a quick look at the main types of cover and what they mean in practice. Buildings insurance The key point to remember about buildings insurance is that it’s to replace the building rather than the land. This means that the insurance value of your property may be substantially less than what you paid for it. There is nothing to be gained by overinsuring, so make sure you avoid overpaying. Contents insurance Broadly speaking, contents insurance covers the contents of your property. There is, however, a lot of nuance in this. For example, standard home contents policies may exclude, or at least limit, certain types of property. They may only cover items in the main home, rather than outbuildings. They may also exclude accidental damage. Some policies may extend their cover for a higher premium. Others may require you to buy separate policies. You may find that you end up doing a combination of both. Cover for valuable property It’s really important to read the fine print of your contents policy very carefully. There may well be restrictions on cover for certain types of property such as cash, jewellery and electronics. Other exclusions may also apply. Even if the insurer does offer cover for them, they may require you to declare the items specifically and potentially increase your premium for them. If this is the case, then it may be worth investigating the pros and cons of including such items on your general insurance versus insuring them individually. In particular look at the breadth of cover involved as well as the price. For example, a standard home contents insurer might be prepared to insure your bicycle against theft from your home. A specialist cycle insurer, by contrast, might cover you for theft in other locations. They might also offer valuable extras such as protection in the event that a third-party makes a claim against you. Cover for outbuildings You may see your outbuildings as part of your home, but your insurer may see the matter differently. This means that it’s strongly recommended to read the terms of your policy carefully and, if necessary, clarify them in writing with your insurer. You may find that covering outbuildings requires you to pay for add-on cover and/or comply with security requirements. In fact, even if your insurer does not explicitly require you to have any security features on your outbuildings, it may be to your advantage to invest in them. This will help to reduce the chances of having a claim denied due to you having failed to take sufficient care of your property. They should also help to reduce the chances of you falling a victim to theft in the first place. Cover for accidental damage Insurance can protect you either against what happens to you or against the consequences of your own actions. In the context of home insurance, the latter is generally known as “accidental damage cover”. It may or may not be included as standard with your regular buildings and/or contents cover. If it doesn’t, then it can be well worth purchasing as an add-on or complementary policy.  That way you’ll be covered for any damage you do to your home and/or its contents.  Accidental damage cover isn’t just for DIYers (and people with young children).  It can be extremely useful for just about anyone. For advice, please get in touch

According to figures from Rightmove, the second half of 2020 saw the Cotswolds surge in popularity amongst people looking online for property, so escaping to the country. Admittedly, there is a long way between search and completion. There is also a big difference between six months and a long-term trend. The figures do, however, give food for thought. Can the UK really give up city life? The question of whether or not the UK can really give up city life is, arguably, very much connected with the question of whether or not remote-/hybrid work is here to stay. With the caveat that remote-/hybrid working is not yet suitable for every job or every employer, the answer to that question appears to be yes. According to figures from LinkedIn, remote job listings are on the rise. Furthermore, it’s entirely possible for jobs to go remote-/hybrid without being advertised. It would simply require an agreement between the employer and the employee. The more work becomes an activity rather than a location, the less need there is for people to be concentrated in cities and commuter belts. Of course, there is a difference between need and want. Everybody has their own idea of quality of life. Post-COVID19, however, people could be reassessing their priorities. City life versus country life Cities, literally by definition, are places with high population density. This means that space is at a premium and this is reflected in property prices. In cities, those on the lowest incomes may only be able to afford a very small living space. This might be a room in an HMO, a bedsit, a shared flat or a studio. Tiny living spaces may not be an issue when you have all the facilities of a city open to you. COVID19, however, plainly demonstrated what can happen when those facilities are curtailed. Technically, once COVID19 is fully brought under control, this should not be an issue. In practice, the situation is a bit more complicated. Firstly, it’s simply impossible to guarantee that the COVID19 situation will be a one-off. Secondly, even if there were, there’s still the fact that living small has its inconveniences as well as its benefits. For example, if your home is too small for a washing machine, then you need to use a laundrette. This costs extra money and can be a drain on your time. How much of an issue this is, does, of course, depend on the individual. Only time will tell if the general attractions of cities remain strong enough to keep people there even when they don’t need to be. Similarly, only time will tell if the lure of more space will be enough to compensate people for the loss of easy access to city attractions. What does this mean for the property market? The answer to this question probably depends on your perspective. If you’re a first-time buyer, it probably means very little. You would simply go ahead and choose your first home based on your own criteria. If you’re a homeowner, then you could find the value of your home changing based on the overall perception of your local area. If that change is downwards, it could reduce the level of equity you have in your home. Again, how much impact this would have would probably depend on your ability to wait and let general inflation do its work. If you’re an investor, then the next few years could be a challenge to navigate. One option would be to sit out the residential property market. You could look at student property, retirement property and/or short-let property as an alternative. Another option might be to look at areas just outside regular commuter belts, e.g. at the far end of train lines. These could appeal both to commuters and remote-/hybrid workers.