Mortgage controls to continue

The Bank of England Enable’s experienced IFA’s in Bishops Stortford notice is preparing for some new mortgage controls in a bid to dampen what it worries is the potential volatility of the buy to let sector. Jefferies investment consultancy has written to investors saying: “More Buy to Let lending controls may be on the cards” in the form of more stringent testing of affordability when landlords apply for loans.

A recent Financial Stability Report says the Bank is not going to look favourably on any relaxation of the lending criteria being offered by mortgage companies, such as reducing the size of deposits or income requirements. "The committee remains alert to the rapid growth of the UK buy-to-let market, and potential developments in underwriting standards as the sector could pose a risk to broader financial stability," the Bank of England says in its report.  Lending to landlords has been a key factor in the mortgage market in the past two years and some reports suggest it is now close to its pre-crisis peak.

In the first nine months of 2015, buy-to-let lending rose by 10 per cent and last year regulations limiting the number of owner-occupier mortgages worth more than 4.5 times the borrower's income and implementing stress tests on the borrower's ability to repay came in but these rules do not apply to buy to let. “The Bank of England reports that Buy to Let investors are often subject to less stringent affordability tests than owner occupiers. Affordability is typically tested by ensuring that rental income exceeds 125 per cent of loan interest, assuming mortgage rates in the range of five to six per cent, whereas owner occupier’s affordability is typically tested at seven per cent” says Jefferies.

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Source: Letting agent today

What will next years general election bring?

 Enable’s experienced IFA’s know that political change often brings fiscal change and for investments and wealth management tax management is vital. After the round of Autumn conferences all parties are promising major changes to tax, pensions, welfare and property over the next parliament.
Although it is tricky to predict what another coalition might bring these appear to be the key financial element of the key parties:

LibDems:
Wholesale reforms of pensions tax relief
Auto-escalation of pension contributions
New higher rate council tax bands
Higher taxes on investments
Raise the personal allowance to £12,500
No EU referendum unless there is major treaty change

Conservatives:
New schemes to boost home ownership and first-time buyers
Raise the personal allowance to £12,500
Raise the 40p tax band to £50,000
Hold an in/out EU referendum by 2017

Labour:
Raise new taxes from bankers’ bonuses, tobacco firms, payday lenders
Cut higher rate pensions tax relief to 20p
Introduce a fiduciary duty on all financial services staff
Reintroduce Schedule 19 stamp duty on UK funds
Reintroduce 50p income tax band on salaries over £150,000
No EU referendum unless there is major treaty change

Ukip:
Raise personal allowance to £13,500
Create new 35p tax band between £44,000 and £55,000
Scrap 50p income tax band
Leave the EU

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

What is a Personal Pension the basics?

A personal pension is exactly what it says on the tin and you can have one if you're employed but not in a company pension scheme, or you might want to have one in addition to a company pension. Or if you are self employed you may want to set up a personal pension or even if you are not working but can afford to put aside money for retirement you can have a personal pension.

You can pay a regular amount (usually monthly or annually), or a lump sum to the pension provider who will invest it on your behalf. The overall final value of your pension will depend on how much you have contributed over the years and how well the fund's investments have performed. Charges are made for setting up and running your pension and are normally deducted from your fund in the form of fund management charges.

The Annual Allowance for pension contributions is £40,000pa from 6 April 2014 this includes both employee and employer contributions. You can carry forward unused contributions from the previous three years (ie. back to 2011/2012 for 2014/15), potentially allowing contributions of up to £160,000 in a single year. HMRC has confirmed that you do not need to have made a contribution to a pension scheme in a year to be able to carry forward unused allowances – you simply need to have been a member.

For each pound you contribute to your scheme, the pension provider claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot. Enable’s IFA’s can help you decide if you want to set up a Personal pension.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Asset allocation in bricks and mortar

Liquidity may never be far from the mind of anyone investing in bricks and mortar but many investment portfolios tend to have a slice of property in them. For wealth management Enables IFA’s know that balanced portfolios include bricks and mortar and with signs of recovery in the UK economy the trend to encourage investment in property has returned. Rather than make individual and more time consuming individual property investments having them as an asset class in a portfolio makes sense.

Mike Deverell an investment manager said recently, “We have done a fair bit of research comparing the Investment Property Databank index with economic growth and we know property is highly correlated to the economy. “With the economy doing better over the last 18 months it made sense that property was a good place to put money. Property as an asset class has done fantastically well in the last 12 months and you still get a much better return on a rental yield from a property than from cash, a bond or anything else, by a long way.”

His research also indicated that rental income growth has still to come through in property while the number of vacant properties still remains high, but the eventual improvement in these two areas of the sector should only act as another boost for the asset class. Enable’s Independent Financial Advisors are here to talk you through a balanced portfolio approach to saving and investing so if you are planning to increase your exposure to property we are here to talk you through your options you may even want to look at how to boost liquidity and diversification through the addition of a property derivatives funds.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Which? Is the one to trust...

Our reliable Independent Financial Advisors at Enable in Bishop’s Stortford can see why the executive director of Which? Richard Lloyd has suggested that the Treasury needs to “pull its finger out." He wants the government to publish details of exactly how the guidance guarantee for pensions that has been proposed will work. He was Speaking at a fringe event at the Liberal Democrat conference in Glasgow recently and thinks that the Treasury is leaving it late as the new system will be launching within months.

The new system initiated by George Osborne as part of his radical pension reforms means that all the UK population over 55s will have the right to “free, impartial, face-to-face” guidance from next April.   Richard Lloyd, who was and advisor to ex-Prime Minister Gordon Brown from 2007 to 2010, said: “The Treasury needs to pull its finger out and work out who is going to provide guidance and how, and put standards in place. “It’s getting a bit late in the day for the details to be published and all the agencies involved need to be ready. It’s becoming a bit of a problem to say the least and the Treasury needs to speed up its decision making on how the guidance guarantee will be delivered.”

At the Labour conference, the shadow pensions minister Gregg McClymont has also called for more details to be published soon. Some advisors are asking for a delay so that the plans can be clearly thought through and delivered.  If you are simply wanting some straight forward one to one discussion on the best management of your pension Enable’s IFA’s can help.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Despite fears interest rate rises seem ruled out for 2014

Owing to the sharp falls in inflation UK inflation fell to from 1.9 per cent in June to 1.6 per cent in July, economists  across the board seem to be ruling out an increase in interest rates for the rest of the year.  Enable of Bishop Stortford can help you think about how to manage your savings, investments, pensions and mortgage in the light of the current financial climate.  Financial decisions can always benefit from regular reviews to make sure you keep abreast of changes and developments that are beyond any of our control.

HSBC economist Liz Martins talked to the Daily Telegraph early in the summer saying: “The data support the case for rates to go up later rather than sooner. Given that the [Bank of England’s] expectation was for CPI to stay at 1.9pc, this downside surprise is significant, and Economists argue low inflation, together with downside risks from the Eurozone, mean rate rises this year are “no longer in play”. EY Item Club senior economic adviser Martin Beck said the “only fly in the ointment” was a potential bubble in the housing market, but added this pressure seemed to be easing off.

He said: “Against such a benign inflation backdrop, and with encouraging signs the housing market is coming back under control, there appears to be little pressure on the bank to raise rates.”

Whatever happens with interest rates Enable’s IFA’s of Bishop's Stortford can help you review the impact of changes on your personal finances and looks at possible alternatives with you to try and help improve your spending or you saving.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

How has UK property fared recently in investments?

Enable’s IFA’s of Bishop’s Stortford know that property should be part of most investment portfolios in some form. Recently UK property has been regaining popularity with investors as an asset class but with a wide range of both open and closed-ended funds available it’s interesting to note which type of vehicle has been delivering the best performance for investors?

The IMA Property sector currently features 13 funds with a focus on UK bricks and mortar. Performance for the overall sector, which also includes funds investing in property outside of the UK market, has reached 6.89 per cent year to date.

The best performing Oeic year to date, and the only UK bricks and mortar fund to outperform the broader IMA sector, is the £792m Standard Life Investments UK Property fund which has returned 7.38 per cent since the start of this year.

This is followed by the Scottish Widows Investment Partnership Property Trust, which is the largest open-ended UK property fund at £3.03bn, with returns totaling 6.38 per cent.

The second largest UK property fund, the £3bn M&G Property Portfolio also proved the third top-performing fund so far in 2014 after returns reached 6.33 per cent year to date.

The worst performing open-ended vehicles year to date have been the Old Mutual Property and the £1.9bn Henderson UK Property funds which have both returned 5.03 per cent to investors since the start of the year.  If you are wondering what part property should plan in your portfolio Enable’s IFAs are here to help.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE