The UK housing market has long been known for its vigour. Since July 2020, however, its performance has been astounding. According to figures from the Office for National Statistics, over the year to March 2021, there was a 10.2% increase in property prices. Is this, however, a good sign or a major red flag? House prices in context The ONS figures are for property as a whole rather than just residential property. Realistically, however, the bulk of transactions completed in that period will almost certainly have been for residential property. What’s more, if any commercial property was sold, it was highly unlikely to have been for any significant price. The only potential exception here is “staycation” property. Additionally, March through June 2020 was essentially closed season for the housing market. This essentially means that the “year-on-year” increase was achieved in three-quarters of a year. It was also achieved during a pandemic and with Brexit ongoing. That’s little short of phenomenal. In fact, the last time the UK housing market saw higher growth was in August 2007. The spectre of 2008 Of course, after 2007 came 2008. That was definitely another year most people would probably like to forget. In fact, the repercussions from that year continue to be felt today as the UK government still owns shares in RBS. This in itself leaves the UK government exposed to the housing market. Its exposure is increased through its various buyer-support schemes. The Help to Buy Equity Loan scheme arguably carries the most risk. This is because the value of the government’s stake in a property is directly tied to its market value at the time the buyer pays back the loan. This means that the government is at risk on two fronts. Firstly, it’s at risk of the buyer being unable to pay the mortgage. They would then either need to sell the property at the going market rate or have it repossessed. Secondly, a buyer could leverage the situation by buying themselves out of the loan at a discounted price. This would make perfect sense for them individually but not for taxpayers as a whole. The new Help to Buy Mortgage Guarantee scheme also leaves taxpayers exposed to a downturn in the housing market. Technically, the guarantee is to the banks rather than to the buyers. Essentially, however, the end-effect is the same. Will history repeat itself? There is one factor about these price increases which has not applied before. That factor is, of course, the Stamp Duty holiday. This means that even though headline property prices have increased, the financial impact to the purchaser is less than it would have been in normal circumstances. At least, it is if you’re an onward-mover or an investment buyer. First-time buyers already qualified for a discount on Stamp Duty. As has often been pointed out, they lost this advantage during the general Stamp Duty holiday. That said, they still qualified for other, unique tax breaks such as the Lifetime ISA and the Help-to-Buy Equity Loan scheme. This means that the people who have bought property since March 2020 are not necessarily as financially-stretched as the headline figures might suggest. If they have bought their homes as long-term purchases and can afford their mortgage over the long term, then, statistically, there is unlikely to be a problem. Over the long term, general inflation will almost certainly do its work and deliver them equity. On the other hand, if they need (or want) to move or have issues paying their mortgage, then they could find themselves in very serious trouble. If future buyers are unable or unwilling to pay these kinds of prices and Stamp Duty then recent buyers could very easily find themselves in negative equity. In short, the Stamp Duty holiday may be creating a new generation of mortgage prisoners. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage Please contact us for any more information

If you thought the self-employed had a hard time in the mortgage market, you’d be right. According to the latest data from the MBT Affordability Index, only 70% of self-employed mortgage applicants found at least one lender able to meet the loan. For customers aged 55 and over, however, the figure was 64%. So why is this and what, if anything, can be done about it? The over-55s can be self-employed too It’s important to highlight the fact that there could well be a lot of crossover between the self-employed and the over-55s. In fact, it’s highly likely. By the time you reach 55, you probably have a lot of professional experience and contacts. You may be less and less willing to do the “9-5” run or, bluntly, to deal with workplace politics. Alternatively, you may have become “accidentally” self-employed as a result of job loss. That said, there are still a lot of over-55s in regular employment. What’s more, they are probably in either upper-management or senior technical roles. There is hence clearly more to the figures. It’s unclear what sort of property over-55s are buying The MBT Affordability Index relates to residential property but that covers a very broad spectrum. It also includes people who are buying their next home before selling their current one. This could feasible include a lot of people over-55s. A lot of people in this age group are likely to be “empty-nesters” downsizing into a smaller property. It’s very likely that they’d want to minimize the upheaval of the move by having their new home ready before they give up their old one. How easy it would be for people in this situation to get a mortgage would probably depend on the amount of the mortgage versus the equity in their old home plus their income. It is, however, worth noting that smaller homes are not necessarily significantly more affordable than larger ones. They may be less expensive to run and easier to maintain but that might not be enough to tip the balance for a mortgage. The over-55s are nearing or at official retirement age Age may be but a number, but mortgage lenders work on numbers. Once you hit 55, you’re, technically, closer to the end of your working years than to the start of them. In fact, it’s entirely likely that you’ll hit retirement age before the end of your mortgage term. Alternatively, you may already be at retirement age. In the old days, that might have meant that you had a guaranteed pension. These days, however, it’s also possible that you’re using income drawdown. This might give you better returns over the long term, but the returns aren’t guaranteed. Depending on your exact age, you might be able to get around this by having a mortgage with a shorter term. Of course, this would have implications for affordability. It could also raise questions about what would happen if you were to lose the income from your employment/self-employment. Lenders have to err on the side of caution There is a frustrating lack of data on what, exactly, is making it so difficult for the over-55s to get mortgages. Indicators, however, suggest that lenders are simply playing it safe, possibly to the point of excessive caution On the one hand, this is entirely understandable. In fact, given the current regulatory situation, it may be unavoidable. On the other hand, this situation has the potential to create major long-term issues not just for the housing market but for society as a whole. If first-time buyers are the life-blood of the housing market then downsizers are the life-blood of the family homes market. The UK simply does not have the space to keep building limitless family homes to accommodate both families and people who can’t move on because they can’t get a mortgage. Urgent action, therefore, needs to be taken to address this situation. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage Please contact us for any more information

At a basic level, interest rates are easy to understand. The higher they are, the more the borrower pays the lender and vice versa. In the real world, however, there can be a lot of nuance. With that in mind, here’s a quick look at the main types of mortgages and how interest rates apply to them. Interest-only mortgages With interest-only mortgages, you pay back the interest each month and the capital at the end of the term. This means that your monthly repayments will be lower than they would be for an equivalent repayment mortgage. On the other hand, you never reduce the amount borrowed over the term of the loan. In other words, you’re always paying interest on the amount you originally borrowed. This means that what you end up paying overall will be more than with an equivalent repayment mortgage. Offset mortgages With an offset mortgage, the borrower keeps their savings with their mortgage lender. The savings balance is used to offset the mortgage balance. In other words, borrowers forgo interest on their savings in exchange for paying less interest on their mortgage. Some offset mortgages also permit borrowers to link their current accounts to their mortgage balance. For practical purposes, offset mortgages are simply a method of calculating how much interest is due on a loan. In principle, they can be offered as interest-only or repayment, fixed-rate or variable rate. It all depends on the lender’s view of the market (and the individual borrower). Similarly, the benefits of an offset mortgage have to be considered in context. For example, the ability to reduce the amount of interest payable is a benefit. If, however, the interest rate charged is significantly higher than with other products, this benefit may be negated. Repayment mortgages With repayment mortgages, monthly repayments cover the interest and a portion of the capital. This means that they are higher than the monthly repayments for interest-only mortgages. On the other hand, it also means that the amount borrowed reduces over the course of the mortgage. This means that, overall, you will pay back less than with an equivalent interest-only mortgage. It also means that you build up equity in your home more quickly. With interest-only mortgages, your equity is basically the amount of your deposit plus any increase in the value of your home. With repayment mortgages, you get this, plus the equity you build up through making capital repayments each month. The more equity you build up, the lower your loan-to-vehicle ratio becomes. This can make it possible for borrowers to remortgage at better rates. Fixed-rate and variable-rate Fixed-rate mortgages, as their name suggests, have a set rate for a set period. This means that they won’t go up during that period. It does, however, also mean that they won’t go down either. Right now, that might seem like a moot point given how low-interest rates are. It is, however, worth remembering in general terms. Variable-rate mortgages, also as their name suggests, charge a level of interest that rises and falls in line with the base rate charged by the Bank of England. Depending on circumstances, this could make them (much) more expensive than fixed-rate mortgages. On the other hand, it could also make them (much) cheaper. In general terms, neither type of interest rate is better or worse than the other. In specific terms, however, some borrowers might very much prefer the consistency of fixed-rate mortgages. Others might prefer the flexibility of variable-rate mortgages. The key point is to get the best possible deal for your situation. As a minimum, this usually means that you have to stay off your lender’s standard variable rate. This can be much higher than the best deals on their books, let alone the best deals on the market. Your property may be repossessed if you do not keep up repayments on your mortgage. The FCA does not regulate some forms of buy to let mortgages. Please contact us for any more information.

When children fly the nest, family homes can begin to feel very empty. They are, however, often full of equity. This can easily end up in the hands of HMRC unless parents are very careful. For these reasons, and many more, downsizing can be a very attractive option. With that in mind, here is a quick guide on how to downsize without stress. Make sure downsizing is the right option for you Downsizing should be something you do because you want to, not because you think you ought to. It’s the right option for a lot of people. It is not, however, the only option. For example, equity release might let you stay in your own home while lowering your Inheritance Tax bill. Give yourself time to find the right property If you’re thinking of moving to a new area, give yourself plenty of time to get to know it before you commit. Remember that living in a place is very different from being there as a tourist. Make sure you try it out in different seasons. If you can only manage short breaks, try to go both at weekends and mid-week. Then think about what sort of property will suit you both now and going into the future. Essentially, you need to find somewhere which is both small enough for you to maintain easily and large enough for you to have the lifestyle you want. This is probably going to involve having space for people to stay over. You may also want an office/craft-room. If you’re fully retiring, then it may be perfectly feasible to pack a lot of functionality into each room. For example, putting a sofa bed and some extra storage into your office lets you turn it into a guest bedroom. If, however, you’re planning on continuing to work, at least to some extent, then you may want, or need, to keep your office purely as an office. Get the property ready before you move into it As a minimum, try to have all your utilities connected before you move. In other words, make sure you have internet as well as gas/electricity and water. Ideally, have all your major pieces of furniture and appliances in place and connected before you move yourself and your personal possessions. If you can’t do this, then make absolutely sure you have an accurate floor plan for your new home. This is essential for accurately working out what can physically go where. It’s even better if you can get clear photos and/or video of your new home. This can help you to get an idea of whether or not your current furniture will look appropriate in it. Use full-service home-movers Even if you’ve done every other home yourself, or at least done your own packing, consider using full-service home-movers for this move. Use the extra cost as additional motivation to curate your possessions effectively. Put your possessions in order This can be the hardest part of a downsize but it doesn’t have to be. Remember, you don’t need to put yourself up against a strict deadline. You can give yourself a bit of breathing space. For example, you could move your belongings into storage and then go through them at your own pace. Of course, there would be a cost to this, but, again, this could act as motivation. There are various ways to approach downsizing your possessions. In your later years, one very effective strategy is to move from your least sentimental items to your most sentimental items. This often means that you start by making some easy wins. These clear out space (mentally and physically) so you can focus on more important items. Please contact us if you would like any more information Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage Equity release refers to home reversion plans and lifetime mortgages. To understand the features and risks ask for a personalised illustration. The FCA does not regulate some forms of inheritance tax planning and we act as introducers for it

Since the beginning of the Stamp Duty holiday, there has been an overall increase in the price of property in the UK. There has also been an increase in the number of people searching for 95% mortgages. Should this be ringing alarm bells? Here are some points to consider. The MMR should stop a repeat of 2008 Post-2008, lenders now have to consider a borrower’s real-world ability to repay their loan. This means that they have had to stop relying on “macro” criteria such as multiples of income. Instead, they have to look, in more granular detail, at a potential borrower’s particular circumstances. This system may not be perfect. It created “mortgage prisoners”. It should, however, at least stop a repeat of 2008. That said, it still doesn’t leave the taxpayer entirely in the clear. For example, the Help-to-Buy Equity Loan scheme ties the taxpayer’s return to the value of the house. In other words, if the price of the house goes down, so does the taxpayer’s return. With the “new” Help-to-Buy Mortgage Guarantee scheme, the taxpayer will guarantee up to 15% of a 95% mortgage. In other words, if the borrower defaults, the taxpayer may find themselves hit. The Stamp Duty holiday should end later this year If the Stamp Duty holiday was intended to stimulate the housing market, then it has arguably done its job. In fact, it may have done its job rather too well. Buyers with sales in progress may be relieved that they have extra time to complete them. It is, however, worth asking whether the Chancellor implemented the SDLT-holiday extension in the right way. The SDLT discount remains available to all buyers, not just ones with sales in progress. Admittedly, new buyers would need to move pretty quickly to get the full benefit of it. Even if they don’t, however, they may still get the tapered discount which will apply over the summer. This raises the question of how demand (and prices) will be impacted both now and after the SDLT holiday comes to a complete end. If they stabilize or even reduce, then, everything being equal, affordability will also stabilize or improve. What’s more, again, assuming that the Chancellor “resets” Stamp Duty to how it was before the pandemic, first-time buyers will still get a Stamp Duty discount. This should make buying a property more affordable for them than for people who are moving on. Remote/hybrid working may become mainstream Right now, there is a large question mark hanging over the future of remote/hybrid working. If it does become a mainstream part of the “new normal”, then it could have a huge impact on the dynamics of the property market. In simple terms, it could allow people to move to locations that are off the commuter belt and priced accordingly. If so, then, over the longer term at least, there could be stagnation or even deflation in city property markets, especially in the central areas. Traditional commuter-belt areas might also fall out of favour as their transport links would be less relevant to people who would be spending less time in a physical office. By contrast, outlying areas might see higher demand. This could lead to localized house-price inflation, but this is not guaranteed. Even if it does happen, these areas might still remain comfortably affordable. Economic growth may “float all boats” In a best-case scenario, post-COVID19 the economy will recover and this will lead to a growth in earnings. If earnings growth outstrips house-price inflation, then buyers’ purchasing power will increase and house-price affordability will improve. Of course, at present, this is all arguably wishful thinking. It is, however, not unreasonable. COVID19 is being vaccinated away. Brexit has happened and the UK will need to learn to deal with it. Hopefully, therefore, economically, the only way is up. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage Please contact us for more information

It was always fairly obvious that COVID19 was going to have a significant financial impact on the UK (and, indeed, the world). What may not have been obvious, however, was just how that impact was going to manifest itself. For example, the after-effects of COVID19 are acting as a barrier to re-mortgaging. Here’s what you need to know. Financial help carries a price tag The government introduced a raft of support measures to help people cope with the impact of COVID19. These included emergency loans (not grants) to businesses, the furlough scheme and grants for the self-employed. The government also worked with various parts of industry to create breathing space for those impacted by COVID19. For example, it worked with lenders to implement what were effectively self-certified payment holidays. In other words, borrowers were simply allowed to tell their lenders that they had been impacted by COVID19 and hence needed special arrangements. They did not have to go through the usual process of lender scrutiny and approval. These measures were not, however, entirely “no strings attached”. To begin with, payment holidays simply meant that the borrower did not have to make their usual repayment. Lenders, however, were permitted to keep on adding interest to the debts. This meant that payment holidays could actually leave people owing more, in the case of high-interest debts, a lot more. In addition to the direct, financial impact, payment holidays had the potential to damage credit records. Even if, technically, they weren’t reported, there was still the possibility that lenders would figure it out all the same. For example, if the balance of a loan was going up instead of down, then it was fairly likely that the borrower was on a payment holiday. COVID19 and the mortgage market On the one hand, the mortgage market has arguably adapted to COVID19 impressively well. Banking itself went online years ago. Mortgage products, however, were still largely dependent on analogue processes like surveying and conveyancing. The industry has, however, pulled together to keep the mortgage market running. On the other hand, the damage COVID19 has caused to people’s finances can make it very difficult for them to get new mortgages, even if they’re already homeowners. Since the Mortgage Market Review, lenders have been obligated to scrutinize a potential borrower’s financial situation. They can only lend if they are confident that a borrower can afford the loan. People impacted by COVID19 may have seen their credit ratings going down, their debt levels going up and/or their employment situation becoming more precarious. Finalizing Brexit at the same time may have made life even more challenging for some people. In short, COVID19 may have created a new group of “mortgage prisoners”. It is unclear just how big this group might be because some people might not bother even trying to remortgage. If they believe they’re almost certainly going to be turned down, they might just bide their time and wait for better days. Finding a solution The state of the mortgage market could end up being a tricky dilemma for the government. On the one hand, they are likely to be well aware of the dangers of encouraging lenders to relax their standards. On the other hand, they will presumably want to avoid voter backlash at the next election. One possible way to square this circle in the mortgage market would be for the government to include remortgagers in the new Help-to-Buy mortgage guarantee scheme. This might also help people who were mortgage prisoners before COVID19. On a broader note, the government may need to work with industry to provide longer-term help to people whose finances have been disrupted by COVID19. This could ultimately benefit the economy as a whole and the mortgage market in particular. Please contact us for any more information Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage

With spring springing and a new financial year rolling in, now could be the perfect time for some financial spring cleaning. If you’re a homeowner, you may be thinking about whether or not to try to make overpayments on your mortgage. Here are some points you might want to consider? How’s your cash-flow? If you’re on a variable income, then you might want to wait a while before deciding if you’re in a position to make overpayments on your mortgage. This is particularly true if you’re self-employed. Employees may have to wait for payments such as commission and overtime. They should, however, know exactly when they can expect them. The self-employed can set payment terms. Realistically, however, clients may not always stick to them. This can be for a variety of reasons from problems with their cash flow to lack of time to process the invoice. On that note, if you are self-employed, now might be a very good time to review your invoicing and credit-control processes. You might also want to look at what payment methods you accept and consider whether they’re delivering the best value for money. Do you have savings? If you have income protection insurance, then you need to check the processing time for claims. Ask yourself how you would keep going during this period. If universal credit is your safety net, then the current waiting time is around five weeks. Again, you need to ask yourself how you would keep going during this period. It’s also worth noting that having just the minimum in emergency savings basically leaves you with little to no room to manoeuvre. This could pose serious issues if your claim was delayed for any reason. In addition to having an emergency fund, it might also be useful to have savings for predictable expenses. This can mean anything from a new pair of shoes to a new washing machine. On that note, it’s advisable to think realistically about how much useful life your big-ticket items have left in them. This can influence your saving goals. Do you have insurance? You may be prepared to risk the loss of some of your possessions. Are you, however, ready to risk the loss or your health and its consequences? How about legal bills if someone accuses you (or your children) of causing them some form of damage? Have you dealt with other debts? If you have other debts, then it may be sensible to tackle them ahead of your mortgage. In simple terms, the higher the interest rate on a debt, the more you should prioritize paying it off. The one, potential, exception to this rule of thumb is accounts with small balances. You might want to pay these off first so you can close them and move on. Could you get a better deal for your money? If you’re in the fortunate position of having good cash-flow, savings, insurance and no debt, then your next step is to think about where you would get the best return for your money. This question really has two aspects. These are the emotional aspect and the practical aspect. Emotionally, you may very much like the idea of being totally debt-free and owning your own home outright. If this is how you feel, then overpaying your mortgage may be the right course of action for you. Be aware, however, that interest rates are extremely low just now. This means that, at present, you might be able to get a much better return for your money through investment. That said, investment returns are not guaranteed, whereas a mortgage is a commitment you need to meet if you want to keep your home. For savings and investments, we act as introducers only Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage Please contact us for more information.

The initial lockdown (in March 2020) brought the housing market to an abrupt stop. Since then, it’s been operating under various levels of COVID19 restrictions. Now, however, vaccines are being rolled out and a way out of lockdown has been planned. It, therefore, appears that the UK may be reaching a “new normal”. What could this mean for the housing market? An increase in transactions Moving home can be stressful at the best of times. Moving home at a time of COVID19 restrictions took the usual challenges to a new level. As those restrictions ease, people may be more inclined to get back into the market. It’s also possible that the impact of the pandemic will lead people to reassess their housing needs. For example, parents who’ve had to keep children indoors throughout the pandemic might want to make sure that they have convenient access to green spaces. Likewise, buyers might be more inclined to pay extra for properties with space for home offices and/or gyms. This would help to ensure that they had some level of protection in the event of another pandemic or other critical event. A new emphasis on photo and video presentations It might be some time before the majority of houses are bought and sold virtually. In fact, that time may never come. It is, however, very possible that the post-pandemic housing market will continue to make extensive use of virtual presentations. The simple fact of the matter is that real-world house viewings are a hassle for everyone. Sellers have to get their home ready. Buyers have to travel to the location. Agents have to manage the logistics. There is hence a clear argument in favour of pushing out more information in the form of photos, videos and possibly even virtual tours (e.g. live-streaming). These can be used to whittle down buyers to people who are seriously interested in the property. A return to internet cabling If remote/hybrid working remains mainstream then internet access could become a key differentiator between properties. There may be little individual consumers can do to influence the development of the UK’s broadband infrastructure. By contrast, there could be a lot they could do to influence the quality of the internet within their home. For example, homeowners might choose to have internet cabling installed so that they would have the choice between wired and wireless internet access. An escape to the country On a similar note, if remote/hybrid, working becomes a major part of the new normal, then inner-city housing markets could suffer. By contrast, areas with poorer transport links could benefit, albeit probably only if they had decent internet. After all, if people are spending fewer days in the office, they might be more willing to put up with longer commutes in return for lower prices. University cities might be an exception to this, at least to some extent. If universities continue to deliver face-to-face teaching and if students want this, then they may continue to generate demand inside cities. Again, however, it’s unclear whether this demand will stay at historic levels. Courses with a practical element may require, or at least benefit, from real-world teaching facilities. That said, there may be ways to fulfil this need other than having students on site all the time. Courses that are, however, based more on reading may be adapted fairly easily to a remote-learning model. It would then be a question of which students preferred. On the one hand, students might very much like the idea of being in a city with their peers. On the other hand, this comes at a price. Students will have to decide for themselves whether or not they think this is a price worth paying. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage Please contact us for more information

The chancellor’s decision to extend the Stamp Duty holiday means that there is a bit of extra breathing space to complete transactions. That said, the full relief is only available until the end of June. This means that nobody can afford to delay. With that in mind, here are some pointers for people looking to beat the clock on the Stamp Duty holiday. If you’re selling If you already have a buyer, then from here on it’s all about organisation. Hopefully, you’ll already have prepared everything a conveyancer might need. If you haven’t then you need to get moving on that quickly. Even if you have, or think you have, be prepared to be contacted with further questions or requests for information. It’s a good idea to ask your buyers for the details of their conveyancer. Then add the conveyancer’s domain (the bit after the @) to your list of safe senders. That should prevent any messages from dropping into your spam folder. The conveyancer will probably chase up on them, but you want to avoid wasting time at all. If you don’t already have a buyer, then you need to decide whether or not you’re committed to making a push to beat the Stamp Duty Holiday deadline. If you are, then you need to think quickly but seriously about why you don’t have a buyer. For example, has your home not been marketed effectively or is your asking price unrealistic (or a combination of both)? You might also want to think about the practicalities of moving yourself now. Firstly, if you buy during the Stamp Duty holiday, you’ll get the benefit of it. Secondly, if you’ve moved, or at least are in the process of moving, buyers now that you’re not going to change your mind (or have a chain collapse) and pull out. If you’re buying If you’re buying then ideally you should have had an offer accepted by now. If you haven’t then, again, you need to think quickly but seriously about whether or not you’re going to chase the deadline. Remember, if you’re a first-time buyer, you can expect to get a discount on Stamp Duty even when the official Stamp Duty holiday comes to an end. If you are going to chase the Stamp Duty holiday deadline, then you absolutely need to be super-organised. Hopefully, you will have mortgage preapproval. If not, then get this arranged as quickly as possible Remember that you will need ID, proof of address and proof of your source of funds. Get the necessary documentation together and keep it where you can find it. If you’re still to line up a conveyancer, then you need to move as quickly as you possibly can. Remember, the Stamp Duty holiday will remain open to all buyers, not just ones with transactions in progress at the time the holiday was supposed to end. This could mean new buyers entering the market and needing conveyancers. If you’re only putting in an offer now, then you might want to assess a potential seller as thoroughly as you assess a potential new home. Basically, you want reassurance that they are also committed to completing the sale by the deadline. Let buyers and sellers beware As a final point, buyers and sellers should both keep safety in mind at all times. Remember that property transactions are targets for fraudsters and you want to avoid falling victim to them. No matter how much of a hurry you’re in, always make sure you do appropriate security checks whenever necessary. It’s better to miss out on the Stamp Duty holiday than to fall victim to a scam that could literally ruin your life. Your property may be repossessed if you do not keep up repayments on your mortgage.

It was almost inevitable that the March 2021 budget was going to be focussed on dealing with the financial impact of COVID19. The chancellor also has to have an eye to Brexit, even if that wasn’t at the forefront of his speech. There was plenty to interest those involved in the property market. Here is a quick round-up of the key points. The Stamp Duty holiday is extended From the perspective of the property market, the headline news is, of course, that the Stamp Duty holiday has been extended. The Stamp Duty threshold will remain at £500K until the end of June. Then it will drop to £250K until the end of September. It will remain open to all buyers, including investment ones, although investment buyers will still have to pay the surcharge. On the one hand, the news of an extension may not exactly come as a surprise. Firstly, there was widespread lobbying by the property industry (and buyers). Secondly, there was growing media speculation that the chancellor would offer some kind of extension. Thirdly, there have been significant delays to property purchases due to the effects of COVID19. On the other hand, it is arguably surprising that the chancellor chose to extend the Stamp Duty holiday in the way he did. There’s a difference between allowing people time to complete transactions they have started and extending the tax break to everyone. You could argue that there is limited opportunity for people to take advantage of the full tax break unless they already have a sale in process. Given the timelines of property transactions, this may be true. That may not, however, stop them from trying, especially if they know they have a good chance of qualifying for some kind of tax break. New 95% mortgages The government announced a new scheme in which it would underwrite 95% mortgages. Full details of the scheme have yet to be released. In essence, however, it looks very much like a reworking of the old Mortgage Guarantee Scheme which ran from 2013 to 2016. Based on current information, the scheme will be open to all residential buyers (as opposed to just first-time buyers). It will also be available to people buying existing properties as well as new-build ones. The government has indicated that the scheme will have an upper limit of £600K. IHT and CGT thresholds frozen The thresholds for Inheritance Tax and Capital Gains Tax are to be frozen at their current levels until 2025/2026. It will be interesting to see what effect, if any, this has on the housing market. Freezing the tax-free thresholds means that any inflation could push people into higher tax brackets. In short, it increases tax take without increasing headline taxes. The IHT freeze could encourage older people to downsize and release the equity in their family homes long before their deaths. Similarly, it could encourage investors to take a decision on whether or not they are likely to want to hold onto a property until 2025 and beyond. If they don’t, it could be in their best interests to sell it sooner rather than later. General economic stimulus The chancellor reserved his largesse for areas that had been (particularly) hard-hit by COVID19. In particular, he extended both the furlough scheme and the self-employed grant scheme to September. The Universal Credit increase also stays until then and the minimum wage goes up to £8.91 an hour from April. There are grants for businesses reopening after lockdown as well as rate breaks for all businesses and VAT breaks for the hospitality sector. There are special measures for the arts and sports and financial incentives to take on apprentices. Hopefully, these measures will help to get the economy moving again. This should then feed through into the property market in general and the mortgage market in particular.

Recent data from confused.com has given an interesting overview of what the UK wants to know about mortgages. We advise anyone considering taking out a mortgage to get professional help, internet searches may not always offer the best solution to your situation. With that in mind, here is a list of questions plus some ideas on the answers. The searches ranked Here are the top mortgage-related questions and their number of annual searches. How long does a mortgage application take? 20,000+ How long does a mortgage offer last? 17,480 How to get a mortgage with bad credit? 14,800 What is an interest only mortgage? 14,360 What is a lifetime mortgage? 14,250 How long does a mortgage application take? When looking at search questions, it’s important to understand the intent behind the query. At first glance, this question could be asking how long it takes to fill in a mortgage application form. This could be the case and there would certainly be no harm in providing this information if it was available. There might not be a hard-and-fast answer but we can offer some guidance. Again there is no exact answer to this, it will depend on the type of mortgage, how thorough you have been in completing your paperwork, what backlog the lenders have and what further information they may require. Every application is treated differently so there is no one answer fits all. There is an average number quoted of 18-40 days but this should only be used as a guideline. How long does a mortgage offer last? This is a straightforward question and ideally, you should give a straightforward answer. Each lender will have their only rules, you will be given a answer such as “typically between three and six months but check your agreement”. How to get a mortgage with bad credit? There are a few potential ways to answer this. Firstly, we can choose to direct you to mortgages which could be available to people with bad credit. Or if we have dealings with specific lenders and have experience with this type of mortgage we can offer you direct advice. Here is an article from Which? That explains in more detail the information you may need. What is an interest only mortgage? In the current situation, it’s worth considering the possibility that many people will consider this as a solution to payment difficulties. Here is an article from Which? That tells you what to expect from an interest only mortgage and some of the things to consider before taking out this type of mortgage. What is a lifetime mortgage? At Equity Release Alliance we offer a full range of information regarding this type of mortgage. A lifetime mortgage is completely different and every application is dealt with very much in a specialist manner. Please review our information here Your property may be repossessed if you do not keep up repayments on your mortgage. The FCA does not regulate some forms of buy to let mortgages.

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 home insurance we act as introducers only.