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Monthly Archives : September 2017

conveyancing

How to choose a good conveyancer

Conveyancing is an important part of the home buying process, and it’s important to note it’s required when both buying and selling a property.

So what should you consider when choosing a property solicitor to carry out your conveyancing? It’s important to use a qualified property solicitor who’ll be able to take care of a range of issues on your behalf, including:

A sporting chance

A sporting chance

A sporting chance

Are you one of the one in three parents who worry about the risk of serious injury from school sports?

Research from MetLife has found that one third of parents with school age children are concerned about serious injuries from sport – and there could be real reasons to be worried.

The research shows that:
• around 17% of parents have had to take children to Accident & Emergency units in the past five years because of injuries sustained while playing sport at school
• nearly a six have had to visit GPs for advice on sports injuries
• over 30% of parents have had to seek medical or dental treatment for children due to school sports injuries in the past five years

Parents are also becoming increasingly keen to see action from schools and sports bodies to help reduce the risk of injury:
• one in five say they would be happy to back a ban on full contact rugby in schools
• more than a third want better recording of injuries suffered as a result of school sports
• 40% want children to be able to opt out of rugby one third would support opt-outs for hockey and football

Should contact sports be banned?
The benefits that playing sport brings to children are huge. Aside from the enjoyment, it improves physical fitness and health and builds self-confidence. However, it is clear that a substantial number of parents are worried about the risk of serious injury.

The Sport Collision Injury Collective, a group of doctors, academics, sports scholars and health professionals, have called for a ban on tackling in school rugby matches. These calls may be controversial and many will argue that playing contact sports is a great way to develop team work and a broader set of skills. No doubt the debate will continue.

School sports aren’t the only culprit though. MetLife reports that over two-thirds of claims on their accident and hospital cover policy are for broken bones – mostly caused by kids just being kids. With the summer holidays around the corner, children are likely to spend more time outside playing with friends and taking part in summer activities and sports clubs.

Although we can’t wrap our children in cotton wool, we can take preventative measures and give them the tools they need to avoid unnecessary risks, as well as putting protection in place in the event an accident does happen.

If you’d like information or advice about accident protection cover, please get in touch

Critical Illness Insurance

Why crowdfund the cost of your healthcare?

Why crowdfund the cost of your healthcare?

Crowdfunding is becoming increasingly common among people who need healthcare that’s not freely available through the NHS.

Protection Websites such as justgiving.com, crowdfunder.co.uk and gofundme.com are full of campaigns from families trying to raise funds for treatments, or seeking help to avoid the financial hardships that a serious illness such as cancer or stroke can cause.

Even though the vast majority of proven effective treatments for cancer are funded by the NHS, 2,348 crowdfunding campaigns to cover medical treatment were launched on JustGiving in 2016, a seven-fold increase from the year before when there were just 304.

One fundraising charity, Tree of Hope, specialises in helping these young people and their families by running campaigns to raise the funds they need to pay for specialist care.

Supporting young people
Although cancer in young people is rare, it is still the most common cause of death for children aged up to 15. Sadly, 1 child in every 500 under 15 is diagnosed with a form of cancer and 2,200 teenagers and young adults (15-24 years old) are diagnosed every year.

Don’t rely on crowdfunding
Instead of crowdfunding at a time when you should be concentrating on treatment and recovery, taking out a critical illness plan will help protect a breadwinner from the financial impact that the diagnosis of a serious illness could have on their life or their family’s life.

Many critical illness policies also include cover for children (including step and legally adopted) as an automatic benefit. This can pay out a lump sum if a child is diagnosed with a specified critical illness or is hospitalised.

To discuss critical illness protection for you and your family, please get in touch

fixed rate mortgage

Thinking of fixing your mortgage?

Thinking of fixing your mortgage?

If you think an increase in your mortgage repayments could have a negative impact on your lifestyle or financial wellbeing, you may want to consider fixing your mortgage.

With a fixed rate mortgage, your payments are set at a certain level for an agreed period, regardless of whether your lender changes its Standard Variable Rate (SVR). Such an increase typically occurs when the Bank of England Base Rate starts to climb.

Fixed rate mortgages can offer protection from rate rises for an agreed period, but there are several considerations you’ll need to think about before making your decision.

Predictable repayments – but you won’t benefit from rate cuts
With a tracker mortgage, your monthly payment fluctuates in line with a rate that’s equal to, higher, or lower than a chosen Base Rate (usually the Bank of England Base Rate). The rate charged on the mortgage ‘tracks’ that rate, usually for a set period of two to three years.

Tracker rates might be more appealing if you don’t have a fixed budget and can tolerate higher mortgage payments if rates rise, whilst being able to benefit from reduced monthly mortgage payments if rates go down.

But with a fixed rate mortgage, the rate (and therefore your repayments) will stay the same for an agreed period. A fixed rate mortgage makes budgeting much easier because your payments will not change – even if interest rates go up. However, it also means you won’t benefit if rates go down.

Longer fixed terms will be more expensive

If you choose a fixed rate mortgage, you’ll need to decide how long you want your fixed rate to last. Two-year fixed rate mortgages typically offer the lowest initial interest rate. If you want to fix your interest rate for longer, you will probably pay more
for that longer-term security. This may be worthwhile in return for predictable repayments, or you might choose to take the lower rate for a shorter timeframe if you expect that your financial position will improve by the time the deal ends.

A change in circumstances could cost you
Do you have any known changes on the horizon that will have an impact on your mortgage?

With a fixed rate mortgage, you could face an early repayment charge if you repay all or a certain percentage of the mortgage during the fixed rate period.

If you have no known changes and want to benefit from a longer period of security, then a longer term fixed rate of five years may appeal. It might cost more initially, but you’ll benefit from knowing that your budget is fixed for that period.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

Don’t be drawn into trying to second guess what will happen with interest rates over the coming years. We can help you come to the most appropriate decision for your next mortgage.

Mortgages

The ninth largest lender

The ninth largest lender

34% of first-time buyers relied on their parents for financial help, making the bank of mum and dad’, the equivalent of the UK’s ninth largest lender in 2017.

If you’re trying to get on the housing ladder, you’ll know how hard it can be
• The average price of a first home is over £200,000 in the UK (and £400,000 in London)
• The average first-time buyer deposit has more than doubled over the past decade from £15,168 in 2006 to £32,321 in 2016
• Only 29% of all first-time buyer purchases in 2016 were below the £125,000 Stamp Duty threshold.
• 28% of all first-time buyers with a mortgage opted for a 30 to 35 year mortgage term (in 2016)

With numbers like those left it’s little wonder that so many first-time buyers turned to their parents for financial support in helping them buy their first home. In fact, according to a recent report from Legal and General, the bank of mum and dad could lend more than £6.5bn in 2017, a massive 30% increase on 2016.

The money will help to buy £75bn worth of property and puts parents on a par with the UK’s ninth largest mortgage lender, the Yorkshire Building Society.

Is parental support sustainable?
The bank of mum and dad makes an average financial contribution of £21,600 for each property. And of the buyers who received support from their family, 57% received it in the form of a gift while just 5% were given the money as a loan with interest.

According to Legal and General a loan by the bank of mum and dad could wipe out just over half of a family’s available net wealth, raising the question of whether this type of support is sustainable over the longer term.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

If you’re looking to buy your first house with help from your family, we can help you find an appropriate mortgage deal for you.

If you’re still in the process of saving your deposit (typically 16% of the value of an average first home), we can help you explore the different ways to invest for your near, mid and long-term plans.

Home Insurance

Don’t pay for your DIY disasters

The cost of a burglary

Don’t pay for your DIY disasters

The warmer weather might prompt you to finally get those home improvement projects underway, but are you covered if your DIY goes awry?

With a free supply of hints, tips and video guides available at the click of a button, you might feel confident about saving a bit of money and tackling tasks that you would otherwise leave to an expert. Before you get started though, it’s worth bearing in mind that British property owners pay out a massive £4.4 billion to repair the damage done by DIY.

If you’re diving into a project remember to take care, make sure you have the tools and knowledge for the job you’re undertaking – and, just as importantly, check your insurance cover before
you begin.

Are you covered for Accidental Damage?
Despite our best intentions, accidents do happen. Having the correct home insurance in place before you begin a DIY project could cover the cost to repair or replace broken or damaged items.

You might assume that a home insurance policy will cover your DIY disasters, but Accidental Damage cover can be additional cover with some policies, rather than automatically included. Standard home insurance tends to provide only limited cover for accidental damage to things like windows and bathroom fittings, rather than the effects of a stray drill, spilled paint or blown electrics.

In fact, full Accidental Damage would cover you for the following:
Buildings
• Repair of a burst pipe caused by drilling through the wall to put up a shelf
• Putting your electrics back in working order after a botched rewiring job
• Repairing your ceiling after a foot has gone through the loft floor
Contents
• Replacing your carpet after spilling a tin of paint
• Covering the cost of valuable ornaments damaged by the failure of TV wall mountings
• Replacing garden furniture damaged by falling tree branches

As with every type of insurance cover, there are exclusions and excesses that will apply, so it’s important that you check your cover meets your needs and expectations.

Leave it to the experts
If you’re hapless with a hammer or dodgy with a drill it might be time to admit defeat, accept the limits of your DIY skills and pay for a professional. Some jobs, like those listed below, have a higher risk of going wrong – along with more costly consequences:
• Electrical work
• Plumbing
• Structural renovations
• Roof repair

And when you consider that one in 10 DIY attempts result in the need of a professional after the initial attempt fails, you might actually save yourself time, money and hassle by hiring a qualified tradesman from the outset.

It’s important to make sure your home and contents insurance meets your needs and expectations. Talk to us to find out what you’re covered for – and what you aren’t.

Buy to Let

Buy to Let Mortgage market changes

Buy to Let Mortgage market changes

The UK’s Buy to Let market is in a state of flux, with an extra 3% Stamp Duty on the purchase of additional properties and changes to the way a landlord’s income is taxed.

Landlords used to be able to deduct all finance costs from their rental income, with net profits taxed at their marginal rate. Starting in April 2017 tax relief available for buy to let related finance costs will gradually reduce each year. Phased over 4 years it will finally be restricted in 2020/21 to a basic rate of tax, currently equivalent to 20%.

In September 2016, The Prudential Regulation Authority (PRA) – those responsible for the prudential regulation and supervision of around 1,700 banks, building societies, credit unions, insurers and major investment firms – announced expectations of firms’ underwriting standards to apply to the Buy to Let market.

What you need to know

The PRA changes mean that landlords:

  • face tougher affordability assessments which take into account borrower’s costs including tax liabilities, verified personal income and possible future interest rate increases.
  • must provide evidence that rental income covers their mortgage payments by a minimum of 145% at an interest rate of 5.5% for all products other than longer term (five years plus) fixed rates.
  • with four or more properties, will have their whole portfolio assessed for affordability by the lender – even where other Buy to Let mortgages are held with different lenders.

With all of these changes many landlords may find their portfolios are less profitable.

Incorporation

According to research by the National Landlords Association (NLA), one in four landlords are considering setting up limited companies to negate the tax changes. If you hold a property in a company, your profits are liable for Corporation Tax at 20%, however, if you hold an investment property personally, your rental earnings are combined with your other earnings (such as income from your job) and taxed as Income Tax up to 45%.

At first glance a company structure could look more tax efficient, especially if you are a higher rate tax payer. But before you consider incorporation you should take into account the cost of commercial mortgages.

There’s no doubt the changes in the Buy to Let sector can cause some confusion but we can help find the most appropriate solution for you.

This information does not constitute tax advice. For more details on how this will affect your circumstance you should consult with an independent tax adviser.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

Your property may be repossessed if you do not keep up repayments on your mortgage.

If you’d like to find out more about Buy to Let mortgages, please get in touch