Posts with tag: finance

Mortgage Approvals Hit Eight-Month High

Published On: January 5, 2017 at 10:15 am


Categories: Finance News

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Mortgage approvals for house purchases hit an eight-month high in November, according to the latest figures from the Bank of England (BoE).

Some 67,505 mortgage approvals were recorded in November, up from 67,371 in October and the highest number seen since March, when the figure reached 70,079. It is believed that the peak witnessed in March was the result of a rush of investors hoping to beat the introduction of the 3% Stamp Duty surcharge for additional homes in April.

Mortgage Approvals Hit Eight-Month High

Mortgage Approvals Hit Eight-Month High

Despite November’s high number of mortgage approvals, the level was still down on an annual basis, from 70,123 the previous year.

However, the value of lending was higher in November, at £12.3 billion, up from £11.8 billion in October and £12 billion in November 2015.

The Director of Edinburgh Mortgage Advice, Mark Dyason, considers the cause of the increase: “There is a growing sense among existing UK homeowners that the first rate rise for a very long time could be on the horizon. More recently, this feeling has been compounded by the quarter point hike in the US in December.

“Most people now accept that rates are unlikely to get any better and are taking action to lock in to the competitive rates that are still, for the time being, available.”

He continues: “The sense that time is running out on the best rates, coupled with a general softening in prices, especially in prime areas of the country, has kept the market ticking over.

“Ironically, the ongoing uncertainty around the full impact of Brexit has spurred many people into action.”

He concludes: “The philosophy many people have adopted appears to be one of take action now while conditions are at least in their favour.”

But are landlords continuing to buy properties for rent? The latest data from the Council of Mortgage Lenders, which reveals that the number of landlords in mortgage arrears has hit a two-year high, suggests that too many investors have locked into purchases that they cannot afford.

At a time when tax and legislation changes are shaking the private rental sector, it could be a good idea for investors to hold back on purchases before assessing what the future will hold for their portfolios.

With mortgage approvals high across the house purchase sector, it looks that the general property market is still holding strong.

Looking Back at the Buy-to-Let Landscape: 2016 in Review

Published On: December 28, 2016 at 9:51 am


Categories: Landlord News

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By Karl Griggs, Director, CPC Finance

2016 has been a tumultuous year for landlords. Some changes were expected, like the additional rate of Stamp Duty, announced in 2015’s Autumn Statement and brought in April this year. Others, such as the result of the European Referendum in June, were less widely anticipated. Here, we round up the critical events that have shaped the buy-to-let landscape this year. 

  • European Mortgage Credit Directive

Most second charge mortgages (also known as secured loans) are now regulated in the same way as first charge homeowner mortgages. This gives them FCA protection and means brokers and lenders need to apply for the right permissions to be able to respectively source and provide advice for these loans.

  • Additional 3% Stamp Duty
Looking Back at the Buy-to-Let Landscape: 2016 in Review

Looking Back at the Buy-to-Let Landscape: 2016 in Review

Since April, anyone buying an additional residential property worth more than £40,000 (whether they are a landlord or not), must pay an additional 3% of the purchase price in Stamp Duty. This does not apply to land, commercial or semi-commercial units. This does apply irrespective of whether the property is purchased by an individual or limited company.

  • New energy efficiency measures

Landlords in England and Wales must now consent to any reasonable request to make changes to a private rented property to improve energy efficiency. To qualify as reasonable, the request must incur no cost to the landlord and be submitted in writing. The cost can be met through Government funding, a tenant paying or a combination of both. The new regulations also require that landlords raise the Energy Performance Certificate (EPC) ranking of a private rented home to an E by 2018. If landlords fail to comply, they will not be allowed to rent out the property.

  • Changes to Wear and Tear rules

The Wear and Tear Allowance for private rented properties has been replaced by a deduction for the replacement of furnishings. Furnishings include furniture, furnishings, appliances and kitchenware. This does not apply to holiday let properties. The deduction amount is the cost of the new replacement item (as long as it costs the same as an equivalent item), if it represents an improvement on the old item (beyond the reasonable modern equivalent), plus the costs of disposing of the old item, or acquiring the replacement, less any amounts received on disposal of the old item.

  • EU referendum result: Brexit

As much as the result was unanticipated, the full implications for UK landlords are not yet clear. Many landlords are therefore adopting a wait-and-see approach, whilst the uncertainties around how Brexit will be implemented, the timescales and impact are resolved.

  • Letting agent fees for tenants banned

Although there were no major announcements impacting landlords in the 2016 Autumn Statement, the Chancellor’s announcement that letting agent fees will move from the tenant to the landlord will affect landlords’ bottom lines. It is another cost for them to account for. However, it is not clear when exactly this shift will happen.

  • New buy-to-let underwriting rules

From January 1st 2017, the Prudential Regulation Authority is introducing stricter buy-to-let rules, but most buy-to-let lenders have already started to bring in new stress calculations, since the 19th December.

It is a time of upheaval for landlords, but whatever the changes in the buy-to-let landscape, the industry will pull together to weather them and, at CPC Finance, we are here to support our clients every step of the way.

Mortgage Sentiment Improving, but Buy-to-Let Business is Down

Published On: December 14, 2016 at 11:43 am


Categories: Finance News

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Mortgage sentiment is improving, but buy-to-let business is down, according to Paragon Mortgages’ latest Financial Advisors Confidence Tracking (FACT) Index report, based on interviews with around 200 mortgage intermediaries.

The improvement in confidence arrives despite a reduction in the volume of business being written in the third quarter (Q3), with the latest data showing that the number of mortgages introduced per office has dropped from an average of 24.7 in Q2 to 21.8 currently. There has also been a corresponding drop in the average number of advisors per office, from 3.7 in the previous quarter to three in Q3.

Mortgage Sentiment Improving, but Buy-to-Let Business is Down

Mortgage Sentiment Improving, but Buy-to-Let Business is Down

Confidence around future business has shown some improvement, however, following a summer of uncertainty caused by Government intervention in the buy-to-let sector and Britain’s vote to leave the EU.

Asked how much mortgage business they expect to complete over the coming quarter, more than third of intermediaries (34%) expect to do more business, compared to 7% who expect to do less. On average, intermediaries expect a 2.1% rise in business through the next quarter. In Q2, intermediaries predicted a 0.8% increase in business.

Sentiment in the buy-to-let sector remains mixed, however, following multiple Government and regulatory interventions. The proportion of intermediaries describing landlord demand as strong or very strong has improved, rising from 5% in Q2 to 9%.

However, 46% of intermediaries describe demand for buy-to-let mortgages as weak or very weak, suggesting that there is some way to go before sentiment recovers to levels recorded prior to recent Government announcements on Stamp Duty and mortgage interest tax relief.

Likewise, almost half of all buy-to-let business (44%) comprises remortgages, while just a quarter (25%) is for portfolio extension. This figure is down from 26% in the previous quarter, and 33% in Q4 2015.

A recent study by the Council of Mortgage Lenders paints a picture of the average UK landlord’s future plans: /cml-paints-picture-average-uk-landlord/

The Managing Director of Paragon Mortgages, John Heron, says: “While there has been some seasonal reduction in business volumes among intermediaries, there has also been a definite improvement in sentiment about likely future business. This comes on the back of a summer of uncertainty in the property market, and the economy more generally, following the vote to leave the EU.

“While any improvement in sentiment is to be welcomed, the latest data does indicate that confidence remains muted, especially in the buy-to-let market. Although intermediaries are reporting an increase in demand from landlords, a growing proportion of this demand is for remortgages, and buy-to-let purchases remain at low levels.”

He warns: “At a time of high demand for private rented sector properties, this dynamic could lead to reduced supply, higher rents and put greater pressure on the housing market.”

Latest High Street Banking Statistics Suggest Softening in Housing Market

Published On: September 27, 2016 at 10:44 am


Categories: Finance News

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Latest High Street Banking Statistics Suggest Softening in Housing Market

Latest High Street Banking Statistics Suggest Softening in Housing Market

The latest High Street Banking Statistics report, for August 2016, from the British Banking Association (BBA) suggests that the housing market is beginning to soften.

On an annual basis, gross mortgage lending rose by just 1% in August, to £12.4 billion.

The organisation also found that consumer credit continues to show annual growth, of over 6%, reflecting fairly strong retail sales and favourable interest rates for personal loans and overdrafts.

In addition, non-financial company deposits rose by an average of around £2-3 billion per month in 2015, but fell back in the first half of this year. They are currently growing at an annual rate of 3.8%, compared to around 9% in 2015.

The Chief Economist at the BBA, Dr. Rebecca Harding, comments on the figures: “The High Street Banking Statistics published today point to a softer housing market, strong consumer credit and slightly weaker business borrowing in August. The data was collected before the Bank of England reduced interest rates to 0.25% and so gives an indication of some of the underlying pressures that the MPC [Monetary Policy Committee] was responding to when it made this decision.

“Mortgage borrowing is growing at a slower pace than it has for the last few months, reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector.”

Ahead of the introduction of a 3% Stamp Duty surcharge for additional homes on 1st April 2016, the housing market experienced a significant surge in property sales.

Dr. Harding continues: “Given the low interest rate environment and high levels of confidence during the summer, the strong credit growth can be interpreted as strong consumer sentiment.

“Company deposits grew at an annual rate of 3.8% in August 2016, compared 9% in August 2015, suggesting that companies may be using their own internal resources to fund working capital and growth requirements.”

Bank of England Leaves Base Rate at Record Low 0.25%

Published On: September 16, 2016 at 9:17 am


Categories: Finance News

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Yesterday, the Bank of England’s Monetary Policy Committee (MPC) decided to leave the base rate at the record low level of 0.25%, in line with analysts’ forecasts.

Bank of England Leaves Base Rate at Record Low 0.25%

Bank of England Leaves Base Rate at Record Low 0.25%

However, the MPC did announce that the rate could be cut again further in the year.

Last month, the Bank cut the base rate for the first time since 2009 and approved another £170 billion of monetary stimulus to stop the economy falling back into recession, following the UK’s vote to leave the EU.

However, the Bank of England did hint that a rate cut could come later this year, in order to support a weakening economy.

In the minutes of its latest MPC meeting, the Bank said: “A majority of members expected to support a further cut in bank rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of the year.”

The MPC also acknowledged that in recent weeks, economic data has been stronger than expected since August’s rate cut.

The Bank’s announcement arrives after recent figures suggest that the economy has so far held up well in the wake of the EU referendum.

Additionally, the founder and CEO of eMoov, Russell Quirk, reports that the property market has continued to strengthen following the Brexit vote.

He comments on the Bank’s decision to leave the base rate at 0.25%: “Today’s decision to leave interest rates frozen at 0.25% will no doubt continue to strengthen an already resilient post-Brexit UK property market. With property prices across the UK continuing their upward trend since the decision to leave the EU, it will come as welcome news for those looking to get a foot on the ladder in an already inflated market, due to the availability of tantalising mortgage products currently on the market.

“It should act as further reassurance to UK buyers and sellers that the property market is in good health and will, no doubt, help to boost this positive sentiment. It will be interesting to see if an increase does come in November, although by that time, any shackles of uncertainty should be well and truly shaken off.”

What do you think of the Bank’s decision?

10 Ways to Keep On Top of Your Household Budget

Published On: September 14, 2016 at 9:38 am


Categories: Finance News

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Originally posted on HomeOwners Alliance.

Have you spent a bit too much this month? Or maybe you’re looking to keep track of your spending as Christmas approaches? Whatever your circumstances, it is always a good idea to stay on top of your household budget.

The HomeOwners Alliance has put together ten top tips for homeowners, landlords and tenants alike, which will help you manage and cut back on your spending.

So where should you begin?

  1. Admit that you need to budget

Budgeting may not be fun or glamorous, but most of us need to do it. Setting a budget will avoid the sinking feeling at the end of the month when you realise that you don’t have any money left. Sit down, keep reading, and make a start.

  1. Find a good budgeting app

If you know what you are spending your money on, then you can decide what changes you need to make. Finding a good budgeting app for your smartphone or tablet will allow you to easily record where your money is going. Here are some of the HomeOwners Alliance’s favourites:

  • Mint – A free app that allows you to review all of your accounts in one place, categorises where your spending is occurring and stays up to date with recent transactions. Additionally, it is smart watch compatible.
  • Fudget – A budget planner, personal finance and expenditure ledger that creates lists of incomings and expenses, so that you can keep track of your balance.
  • Pocket Expense Personal Finance – A free account tracker, budget planner and bills manager.
  1. 10 Ways to Keep On Top of Your Household Budget

    10 Ways to Keep On Top of Your Household Budget

    Use your bank app

All banks offer a free app that will help you manage your money, make payments and review your spending. Check it regularly and find out what tools your bank’s app offers to notify you of your balance on a regular basis and warn you when you are about to become overdrawn.

  1. Shop around 

Whether you’re buying a product or a service, always shop around online and research your purchase to make sure that you’re not paying over the odds. If you’re buying something in a shop that you don’t need on that day, you may be able to find it cheaper online and have it delivered.

Although it is important to support local businesses, you shouldn’t do it at your expense. Use Google to check prices, but don’t forget to account for the delivery charge.

  1. Save on your bills 

Don’t pay more for your energy or internet if you don’t need to – shop around and switch your accounts.

If you want to keep track of your energy usage, give regular meter readings to your provider, so that they keep your bills as accurate as possible. The HomeOwners Alliance also suggests using an app:

  • Meter Readings – This app allows you to monitor up to nine separate household utility meters. Once you enter the readings, your usage, costs and savings are calculated and displayed in graphs.
  1. Shop for groceries online 

One in ten of us now do our grocery shopping online. It is a great way to manage your costs and avoid you being tempted to spend over your budget. Additionally, supermarkets often offer discounts for new online customers.

If you like to look before you buy, then create a meal plan for the week and write a shopping list before you head to the supermarket. If you spot non-perishable items on offer, such as shampoo, then it makes sense to buy in bulk.

If you find that you are still overspending, you need to find out what the problem area is. Keep all receipts and write down everything that you buy, before putting each item into categories. These apps will help:

  • Shopitize – Gives you cashback on your grocery shopping when you purchase certain items.
  • Any List – Create grocery shopping lists, recipes and meal plans.
  1. Use cash 

With contactless payments available on most bank cards today, it is very easy to overspend. If you are trying to stick to a budget, then using cash when you can will help you stay in control.

  1. Cut back on subscriptions

With so many great offers available for TV packages, the gym and magazines, it is easy to forget that small costs all add up. If you want to cut back on your monthly outgoings, review all of your annual and monthly subscriptions, particularly direct debts and those that auto renew.

  1. Remortgage 

If you own your own home, then your greatest outgoing will likely be your mortgage. Therefore, remortgaging should be top of your list if you’re trying to keep on top of your household budget. With interest rates now at an all-time low, there is no better time to remortgage.

  1. Ask yourself these questions

Now that you have the tools to manage your household budget, you must remember to ask yourself these questions before you buy anything: Do I really need it? Will I use it? Is it good value for money?