Posts with tag: mortgages

Budget changes lead to BTL product rise

Published On: July 31, 2015 at 4:28 pm

According to the latest Buy-to-Let Mortgage Costs Index from Mortgages for Business, there are already 122 buy-to-let products for limited companies.

This figure comes shortly after the Chancellor announced in his summer Budget that buy-to-let interest relief for private landlords was to be abolished. However, landlords can still claim full interest relief by taking out a buy-to-let mortgage as a limited company. Interest payments would then qualify as a business expense and would therefore qualify for tax relief.

Premium

Landlords that opt to mortgage through a limited company however must bear in mind that they will have to pay a premium in comparison to the market average. The typical cost of a mortgage product for a limited company was 5.4% per annum at the beginning of July but the average yearly rate for the buy-to-let market as a whole was 4.6%.[1]

‘The mortgage market was certainly well prepared for the Chancellor’s grab on landlord’s tax relief,’ said David Whittaker, managing director of Mortgages for Business. ‘Mortgages which allow limited companies to be borrowers comprise 13% of all products on the buy to let market.’[1]

Budget changes lead to BTL product rise

Outfox

Continuing, Whittaker said, ‘It means that a good number of landlords and investors will have the opportunity to outfox the Summer Budget by taking advantage of the tax benefits associated with registering as a limited company. However, limited company mortgage products may not be for everyone. Registering as a limited company takes time, money and can be quite complex. The average interest rate for limited company mortgages is also greater than the average rates available in the wider market.’[1]

‘That said, even if the mortgage costs for limited companies are above the rest of the market, this could come down as demand grows and lending to companies becomes more competitive. And, for once, prospective tax changes will work in favour of investors as the rate of Corporation Tax is due to fall from 20% to 19% from April 2017 and to 18% from April 2020 – which, if profits are to be retained within the company, would represent a significant tax saving for a higher rate tax payer,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/budget-clampdown-prompts-rise-in-btl-products-for-limited-companies.html

HSBC announces new mortgage products

Published On: July 30, 2015 at 4:08 pm

Author: Em Morley

Categories: Finance News

Tags: HSBC,mortgage rates,mortgages

HSBC has today become the latest provider to announce changes to its residential mortgage range.

Following new products revealed yesterday by TSB, the lender has cut rates by as much as 0.4%.

Changes

The fresh product range includes a new two-year fix at 1.69% for as much as 70% LTV, down from 1.74%. Also, there will be a continuation of a two-year discount rate at 0.99%, which will be available from 60% LTV.[1]

Other additions to the new range include two year fixes at 60% LTV at 1.89% and 70% LTV from 2.69%. The Bank’s three year fix at 85% LTV now begins from 3.09%, with its five year fix reducing from 3.44% to 3.29%.[1]

Agreement

Additionally, the bank has agreed a deal with London and Country that will see the mortgage broker offer HSBC’s full residential mortgage range to their brokers from 3^rd August. The move comes after another successful partnership with Countrywide, which began last year.

Tracie Pearce, Head of Mortgages at HSBC, said, ‘we are committed to helping customers take their first step onto, or move up, the property ladder and these new lower rates will be welcome, as will the news that we are making these rates available to more people.’[1]

‘This is an exciting time for HSBC and we look forward to working closely with London and Country. We believe our products will resonate with their customer base, enabling even more customers to benefit from our range of products. It is entirely due to our successful partnership with Countrywide which has enabled us to extend our relationship to London & Country, and we’re committed to continuing to build on this as we welcome new broker partners,’ Pearce added.[1]

HSBC announces new mortgage products

Appeal

David Hollingworth of London and Country also said, ‘We’re sure that the broad range of competitive HSBC mortgage deals will carry significant appeal for our advisers and their clients. HSBC has shown its commitment to UK mortgage borrowers through the sharply priced products it has delivered time and again. That, coupled with our award winning advice, is sure to add up to a compelling proposition for our customers.’[1]

‘Given the appetite of HSBC, the successful completion of this next phase should pave the way for a broadening of access to other members of Legal & General’s distribution.’[1]

[1] http://www.propertyreporter.co.uk/finance/hsbc-cuts-its-fixed-rates-by-up-to-04.html

Affordable housing schemes impact revealed

Published On: July 27, 2015 at 12:24 pm

Author: Em Morley

Categories: Landlord News

Tags: Affordable housing,Help to Buy,mortgages

New research indicates that the average price paid for homes by buyers using affordable housing schemes in the UK has reached nearly £190,000.

A report from the Halifax indicates the total average price of £189,786 is just 4% less than the £197,535 average total for house purchases as a whole.[1]

Regional rates

By region, the highest average price paid by buyers utilising affordable housing schemes was unsurprisingly in London, at £323,148 with the lowest being in the North of England, totalling £147,437. However, the average value of a London home sold via a scheme was found to be 33% lower than the average price of £482,579.[1]

First time buyers were found to be the biggest benefiters of the Help to Buy scheme, which accounted for 80% of sales over the previous year. This was in comparison to 46% of all mortgage financed home purchases made by first time buyers over the same period. What’s more, improving economic conditions and better market certainty has led to the largest number of first time buyer home purchases for seven years.[1]

Affordable housing schemes impact revealed

First time buyers

The latest official data shows that Help to Buy equity loans and mortgage guarantee initiatives have assisted 99,601 buyers to purchase homes since the introduction of Help to Buy in 2013. First time buyers completed 79,680 of these sales.[1]

On average, the price paid by first time buyers using the scheme was found to be £150,361, 10% lower than the average price paid by first time buyers for all housing, which totals £167,093. In London, first time buyers benefit hugely from the scheme, paying on average a price 36% lower than the average value paid by first time buyers that are not using any of these initiatives.[1]

‘Many of the affordable home ownership schemes available have been designed specifically to help first time buyers get on the ladder and support construction of new build homes and the latest official figures show this has been successful, ‘observed Craig McKinlay, mortgages director at the Halifax.[1]

‘As the economy continues to recover and mortgage interest rates remain at very low levels, we expect to see continued growth in first time buyers during the second half of the year,’ he added.[1]

[1] http://www.propertywire.com/news/europe/uk-affordable-homes-research-2015072710791.html

Missed phone bills to cost mortgage?

Published On: July 24, 2015 at 3:15 pm

Author: Em Morley

Categories: Finance News

Tags: credit assessments,mortgage applicants,mortgages

A new report suggests that late or missed payments on a mobile phone bills could come back to haunt would-be homeowners looking to secure a mortgage for a new home.

Research conducted by loan, mortgage and credit card provider Ocean Finance shows that nearly four million people have missed or deferred their mobile phone payments.

Assessment

More and more lenders are conducting stricter affordability checks on all mortgage applicants, impacting the amount people can borrow and the length of time applications can take.

When quizzed about why they missed or delayed payments, half of consumers said that their bills were unexpectedly high. A third of respondents said that they delayed paying their bill as they had to prioritise other payments.

Data from the report shows that those in the 18-24 year old category were most likely to have problems with paying their phone bills, with almost 25% admitting to late payments.[1]

Missed phone bills to cost mortgage?

‘Mobile phone contracts are a form of unsecured credit and having as little as one late payment in the past three years can dramatically affect people’s chances of getting a mortgage,’ commented Gareth Shilton of Ocean Finance.[1]

‘Lenders are now scrutinising every detail of an applicant’s finances, stress-testing their ability to manage a budget and withstand potential interest rate increases. If you plan to apply for credit, make sure you tidy-up your bank statement in advance. Put in place direct debits and set aside the money to pay them, and then cut back on unnecessary spending. It’s crucial to get ‘mortgage fit’ or you may risk losing a house you’ve set your heart on,’ Shilton concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/could-missed-mobile-phone-payments-cost-you-your-dream-home.html

Leeds BS offer free remortgage deals

Published On: July 22, 2015 at 2:43 pm

Author: Em Morley

Categories: Landlord News

Tags: Leeds Building Society,mortgages,remortgage deals

Leeds Building Society has today announced that it has extended its variety of interest only mortgages, adding two new fee-free deals for remortgages.

Recently, the Society added to its standing interest only mortgages available up to 50% LTV by introducing part and part interest only mortgages up to 75% LTV, with up to 50% LTV on interest only and the rest on a capital and repayment basis.[1]

The pair of fee-free deals are 2.29% two year fixed rate interest only remortgage up to 50% LTV and a 2.49% two year fixed rate part and part interest only remortgage up to 75% LTV.[1]

Both remortgage deals come with free valuations for homes worth up to £500,000 and fees assisted legal services in order to lower the cost of switching rates.

Leeds BS offer free remortgage deals

Expected

Martin Richardson, Leeds Building Society General Manager of Business Development, commented, ‘since we introduced part and part interest only mortgages two months ago, the vast majority of applications have been for remortgages. This is broadly in line with what we expected-we anticipated part and part would appeal in particular to existing interest only borrowers who had yet to make any progress paying down their original loan.’[1]

‘This alternative offers them the opportunity to start reducing their outstanding capital without the payment shock they’d experience if they changed to a full repayment mortgage. This category of borrowers can include existing interest only homeowners who may be facing an endowment shortfall,’ Richardson concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/fee-free-remortgage-range-launched-at-leeds.html

New homeowners, ‘need breathing space’

Published On: July 20, 2015 at 3:16 pm

Author: Em Morley

Categories: Landlord News

Tags: mortgage payments,mortgages,new homeowners

Homeowners require ‘breathing space,’ during the first year after purchasing a property, according to a new report.

Research from TSB suggests that 56% of new homeowners would appreciate assistance with their mortgage payments in the twelve months after buying their property. Buyers say that this assistance would help turn their property into a home.

Breathing space

TSB offer a, ‘breathing space’ mortgage, which gives new homeowners lower monthly payments during their first year of ownership. 95% of respondents to the survey said that they wish to put their own mark on their new property. 36% said they would want to change wallpaper of paint colour, 27% of people wanted new carpets, whereas 7% wanted a new kitchen.[1]

‘We know the first year after moving into a new home can be expensive as people look to add their individual touch in creating a home,’ commented TSB mortgages director, Ian Ramsden. ‘People have told us they’d welcome some breathing space in the first year after moving into their new home which is why we’ve launched these mortgages.’[1]

New homeowners, ‘need breathing space’

‘By reducing their mortgage payments during the first year, we’re helping people get a foot onto the property ladder whilst freeing up some of their monthly outgoings, which is a fundamental part of creating thriving local economies and people thriving across the country is a good thing for all of us,’ Ramsden added.[1]

[1] http://www.propertyreporter.co.uk/finance/over-50-of-new-homeowners-need-breathing-space-in-the-first-year.html