Budget pension change to plan for

Enable’s experienced IFA’s in Bishop Stortford have been helping many mange the pension aspect of their financial planning recently. Pensions have become increasingly difficult to understand, especially for those in final salary schemes and higher earners and more twists and turns to make sense of are on their way.

As expected by many, the amount that can be saved in a pension free of tax over the course of a lifetime is to be reduced from £1.25m to £1m from April 2016. If your pension savings are more than £1m by that date, or you think that what you have already saved will have grown to more than £1.25m by the time you take your pension, it is likely that you will be able to protect the funds you already have, as long as you do not put any more into the pension. This is known as "fixed protection".

Currently you can contribute up to £40,000 a year into a personal pension scheme. If you have a "defined contribution" employer scheme, the total of employer and employee contributions must not exceed £40,000. Under the new rules announced in the Budget, this £40,000 allowance will be reduced for those whose total income is above £150,000.  In working out whether your income is above £150,000, you need to include the value of any pension contributions you make, any pension contributions made by your employer, and the increase in value of any final salary scheme over the tax year, "adjusted income". For every £2 of adjusted income you have over £150,000, your annual allowance will be reduced by £1. The maximum reduction is £30,000, leaving an annual allowance of £10,000. So once your income is over £210,000, there is no further reduction. 

Some of the changes are highly technical so before you make a contribution to your pension, you should find out whether they make a difference to your position.

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 

Too old to get a mortgage at 40?

Experienced Independent Financial Advisors of Bishop’s Stortford Enable know that a roof over your head is a vital part of anyone’s financial planning.  Recently two of Britain’s biggest lenders, the Halifax and Nationwide, have introduced new rules for customers who want to borrow into their retirement. These mortgage lenders have made it more difficult for older borrowers to secure a mortgage by requiring them to prove their retirement income from the state pension age – regardless of whether they intend to work for longer.

A borrower’s state pension age of course depends on when they were born and it is rising gradually in line with life expectancy and is expected to extend beyond 70 eventually. Borrowers aged between 37 and 45 have a state pension age of 67 and for those aged 46 to 60 it is 66.

Securing a mortgage later in life is probably going to continue to be a growing problem. Currently many people have delayed buying a home because of soaring house prices and stagnant wages during the financial crisis. The average age of first-time buyers is currently about 30, up from 25 in the early Seventies but it is expected to keep on rising – some suggest it may reach about 40 by 2025.

Many firms, have stopped issuing interest-only loans, in some cases, the only option is to move to a repayment basis. If an older borrower is unable to extend the term of the mortgage past their state pension age, for example, monthly repayments could increase many times over, making the debt unaffordable. If you want help planning your options Enables IFA’s are happy to talk.

Despite his enthusiasm for technology and his belief it will fill the advice gap, Matthew feels it will never replace face-to-face advice. He says: “Technology is just a tool. There are all the things it can arguably do to make our job better – but it can’t pick up on the nuances of what people say to you and get behind what’s been said.” Enables IFA’s would agree.

Your home could be at risk if you do not keep up your mortgage repayments. 

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

Wanting a Mortgage?

Enable's experienced Independent financial Advisors in Bishop’s Stortford can see why many lenders expect the proportion of mortgages approved to fall significantly in the third quarter of this year.

Tighter checks on borrowers as a result of the Mortgage Market Review and a tightening by some lenders on loan-to-income ratios on larger loans have been given in a recent Bank of England credit conditions survey were given as reasons for the fall in approvals in the next three months.

Lenders also expect more tightening on LTI ratios over the next three months, which will also have3 an effect although they also expect the availability of mortgage credit to fall only slightly.  The survey says: “Lenders again expected the approval rate to fall significantly in Q3. Some lenders noted that changes introduced as a result of the Mortgage Market Review might reduce approval rates somewhat. “In addition, some lenders suggested that a tightening in lending standards on large loans with high LTI ratios may also push down their approval rate a little.”

Mortgage Advice Bureau head of lending Brian Murphy says: “Wider availability of credit is a welcome sign that the mortgage market is returning to normal and it would be a travesty if this over-due pickup after years of stagnation is quashed by over-eager efforts to keep house prices in check.”

If you want to review your mortgage or are looking at taking out a mortgage Enable IFA’s are here to talk you through your options.

Your home could be at risk if you do not keep up the repayments.

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

Ways to cut your monthly mortgage payments

If you already have a mortgage but want to make sure you have the best deal you might be considering some of the following. Enable’s Independent Financial Advisors can help you you’re your decisions.

Some would say don’t stay on a standard variable rate (SVR) mortgage. It can be the most expensive mistake that mortgage borrowers make staying on standard variable rate (SVR) mortgage after their introductory rate (whether tracker or fixed) has expired.

Others would say overpay on your mortgage repayments whenever you can with interest rates at an  historic low, there may never be a better time to get your mortgage down by paying more than your scheduled monthly payments by as much as you can afford to.

What about a deal with daily interest calculation if the interest on your mortgage is calculated annually, you could still be paying interest on the parts of the loan you have paid off for almost a year after you have repaid it, worth checking.

Have you checked your insurance deal because if you paid a deposit of less than 20 percent, you might have been sold private mortgage insurance (PMI), which can cost thousands on top of your mortgage each year. Once you have paid off 20% of the mortgage, you can drop your PMI the lenders probably won’t be reminding you, and it will be you who has to ask them to cancel the insurance. Checking out the details of the deals and making sure you have the best mortgage deal for your circumstances can be worth talking through with an IFA.

Your home could be at risk if you do not keep up mortgage repayments.

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 do a young couple buy their dream home?

How can a young couple who have set their sights on a three-bed detached house, and then plan to have children achieve their goal? Living with the parents, might enable them to save and work towards having some sort of deposit 10 -15 K is a good target. Clearing any outstanding debts is also a good thing to do.

To help them find out exactly how much they could borrow, what type of property they can afford, and what monthly repayments might be an IFA can help like our experienced Independent Financial Advisors at Enable in Bishop’s Stortford. We might advise them to make sure they're on the electoral roll. If not, any application to borrow could fail the credit check.  We would also suggest that they should get their reports together to check there are no errors on their files. Assuming both have good credit ratings, they may be able to apply for a mortgage from 4 to 4.9 times joint income.
Most deals would require a 10 per cent deposit, but they could also look at the Government's Help to Buy scheme. This might potentially enable them to buy with a deposit of just 5 per cent. The Government will then provide a loan for up to 20 per cent – and the couple would then need to take out a mortgage of up to 75 per cent of the purchase price to meet the shortfall.

It’s not necessarily an easy path but with good planning and good advice it is possible to work towards you own dream home.

Your home is at risk if you do not keep up payments on your mortgage.

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

Looking to finance a new home?

Enable’s experienced Cambridgeshire IFA’s can help you find the right package for you and your circumstances. This week we note with interest that the Nationwide Building Society has reduced rates across its fixed and tracker mortgages for new and existing customers. This will mean that all two-year fixed rates available up to 60 per cent loan-to-value will be cut by 0.10 per cent, and those up to 70 per cent LTV will be cut by 0.15 per cent for new applications.

They are now offering two fixed and two tracker rate products available for both new and existing customers below 2 per cent and new customers can access rates of 1.94 per cent up to 60 per cent LTV and 1.99 per cent for those two year fixed and tracker products up to 70 per cent LTV. An additional 0.1 per cent reduction is available on all rates for new applications from existing mortgage customers.

Additionally Nationwide has introduced a new 2.29 per cent three-year fixed rate up to 70 per cent LTV, or 2.19 per cent for existing customers. For each of these newly-adjusted products first time buyers will pay a reduced fee of £400 instead of the full £900 product fee.

According to the building society, none of its mortgage rates are being increased. Many other mortgage provides will be looking to follow suit, as you will know if you are looking to buy it is a highly competitive market.  At Enable our experienced IFA’s can help you make sense of the figures.

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

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.

New research shows that house prices could rise by £45,000 by 2018...

Enable Independent, financial advisors in Bishop's Stortford were interested in new research by the Centre for Economics and Business Research showing that average house prices in the UK are expected to increase by as much as £45,000 by 2018.

They have also said that next year they expect to see house prices to be 2.3% higher than in 2007.
Cebr also predicts the average home price will be £222,000 this year, 1.4% higher than in 2012, but just under the peak achieved immediately prior to the global financial crises.

Many economists have predicted that the new Help to Buy scheme will increase house prices, before housing supply catches up with the new demand. The CML (Council of Mortgage Lenders) have already reported that homes loans in the UK had got off to the best start since the downturn in 2008. However it is difficult for economists to make an accurate prediction, until the details of the new HtB loans are disclosed later this year.

With rents working out more expensive than a mortgage, there has never been a better time for first-time buyers to consider entering the market. First-time buyers can also choose from some very favorable mortgage rates, benefiting from the new Help to Buy scheme, offering a 20% interest free loan to put towards a new home.

If you are looking at investing in a new home, then why not give one of our Independent Financial Advisors a call, and we will be able to help you to choose from mortgages from across the market place.

Readers might also be interested in:

Government gives boost to housing market with Help to Buy scheme…

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 Services 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.

Government gives boost to housing market with Help to Buy scheme…

Enable Independent IFA’s in Bishop’s Stortford were delighted to see that George Osborne is committed to boosting the housing market within the UK.

We have seen that one of the main stumbling points for people accessing the best rates of mortgage has been managing to save up the 25% LTV mortgages, that many high street lenders are offering. First-time buyers have tended to get into a money trap, where they are paying, in some cases higher rates of rent than they would pay to buy a home within the area they need to live.

The housing market in most areas in the UK, with the exception of the home counties and London, have largely remained stagnant over the past few years, with some home prices going down, that has been mainly due to the lack of first-time buyers being able to get onto the housing market.

However under the new budget, the Government have pledged over £130 billion worth of mortgage lending to not only first-time buyers wanting to by a new home, but to everyone, including those people who want to move up into a larger property, worth up to £600,000.

The details of the scheme will be revealed later this year, but it is believed that the borrower will need to find 5% of the deposit and then the government will pay a further 20%, interest free for the first five years of the loan.

Osborne stated: “Deposits for a mortgage have put ownership beyond the majority of consumers. Not only is this a blow to home ownership aspirations, it’s a blow to social mobility.”

If you are looking at either moving up or moving into your first time home and would like to find out more about the new Help to Buy scheme then why not give one of our Independent Mortgage advisors a call. Unlike high street banks we can choose a mortgage from across the whole market place, giving you the best deals.

95% LTV Mortgages, Government discuss new scheme…

Enable Independent are pleased to see that the Treasury is in the process of holding talks with the main lenders and trade bodies to see how mortgage indemnity guarantees can be used to enable would-be- buyers access to 95 per cent LTV (loan-to-value) mortgages, to buy any type of property. 

Last March, the Government launched the NewBuy, MIG (mortgage indemnity guarantee) scheme, offering 95 per cent LTV mortgages for new builds, as a way of giving a boost to the economy and the construction industry. The NewBuy, MIG scheme has been underwritten by both the government and the housebuilder.

Three large lenders, NatWest, Nationwide and Barclays launched products for the NewBuy scheme, including NatWest who offered a two-year fix at 4.29% at 95% LTV with a £499 fee, and a five-year fix at 4.99% at 95% LTV with a £499 fee.

However the scheme has proved too restrictive for people wanting to buy anything other than a new property, so nearly one year on from its launch, the Treasury is now looking into ways in which mortgage insurance could be used to solve the problem, of people accessing 95% LTV mortgages for other properties.

One of the main problem facing new or first-time buyers is the amount of money needed to put down to buy a house, there have been several articles covering topics such as ‘Are Britons becoming a Nation of renters?’ Home ownership in the past for many young people has become a distant dream. Recent figures show that there has been a huge rise in private renting over the past few years, from 9% of households to 15%.

A Treasury spokeswoman stated: “We have said that we will do more to help families who can afford a mortgage, but are unable to raise a large deposit, to buy their own homes. We are continuing to look at what can be done and will provide further details in due course.”

If you are struggling to get a mortgage, and need help in finding ways to put aside enough funds, then why not contact your local Independent Financial Advisors, we have all of the knowledge to help you to plan your future to become a home owner, as well as access to the entire mortgage place.

Mutuals looking good for Mortgages

According to recent Bank’s lending data, the total amount lent by UK financial institutions in February rose 0.8 per cent over the year to £1.2bn. However the number of mortgage approvals fell to 48,986, compared to an average of 53,777 a month in the previous six-month period.

But mortgage lending by building societies and other mutual lenders in February rose by 28 per cent when compared to the same month last year. New mortgage approvals were up 31 per cent on February 2011 and 29 per cent on January 2012.Adrian Coles, director general of the Building Societies Association, said: “Gross lending and new mortgage approvals by mutuals continued to rise year-on-year in February, despite growth across the market as a whole remaining relatively flat. ”

Brian Murphy, head of lending for the Mortgage Advice Bureau, said: “When today’s mortgage approval figures from the BSA are considered in light of those from the Bank, you can clearly see that this sector is looking to grow its share of what is a relatively flat market. “Indeed, they appear to be picking up some of the slack created by a lower appetite for mortgage lending exhibited by some of the traditional high street institutions. “Gross lending by building societies is also up which is excellent news for consumers who are hoping to find competitive good value deals.” If you want help finding the best mortgage deal Enable of Bishop’s Stortford can help you consider the options.

Commercial Property Investments

Commercial property is traditionally core to many individual financial portfolios. So it could be good news that the lack of grade A space in the industrial and distribution market has become so acute across the UK that rents for prime space have risen for the first time in three years according to the latest research by Lambert Smith Hampton.

National Industrial and Distribution Market 2012 analysed activity across 59 locations in 11 regional UK centres during 2011. Across the locations recorded in LSH’s research, prime rents increased in 27 per cent of locations, with a further 39 per cent of the locations seeing prime rents stabilise.

In the East of England, availability was recorded as the lowest across the UK. In Essex, where Chelmsford, Basildon and Thurrock represent the county’s most dominant industrial markets, the supply of space is no less of a challenge with 5.7 per cent of total stock currently on the market.

Demand in Cambridge and the surrounding area has remained stable throughout the year resulting in a total take-up of 529,921 sq ft in 2011.The majority of demand has been focused on units less than 5,000 sq ft which accounted for 68 per cent of overall activity.

The largest transaction in 2011 was the letting of Titan, Space Ten, Papworth, which saw Ultra Electronics take the 37,533 sq ft unit. The number of requirements for larger good quality space has remained stable, but due to the lack of new development, demand outstrips supply. Enable’s IFA’s can talk you through your commercial property investment options.

Getting a mortgage for the first time...

Experienced IFA’s like enable of Bishop’s Stortford have notice that first-time buyers have been helped along by an increase in the number of mortgages available to borrowers with small deposits. This began in 2011 and has continued into 2012 there have been many lenders offering 95% deals.

According to the Mortgage Advice Bureau, the number of 95% loan-to-value (LTV) deals currently open to first-time buyers is at a four-year high, with 59 deals available from 21 different lenders.
This compares with just 25 in February 2011, nine in 2010, and three in 2009.

Liza-Jane Kelly, sales director of estate agent Marsh & Parsons, said that while stamp duty was driving sales, an increase in lending at higher LTVs was also a factor. "The number of higher LTV mortgage deals is slowly increasing, and while criteria still remains a problem first-time buyer demand for finance is by no means dead and buried," she said. "With rents rising and average mortgage rates so low, many see now as the ideal opportunity to get on to the property ladder."

Eddie Goldsmith, chairman of the Conveyance Association, said it wasn't too late for buyers who wanted to beat the deadline, "but time is running out". Buyers should make their solicitor and the property seller aware from the outset that they wanted to complete by 24 March. If you are looking for the best mortgage deal to beat the stamp duty Enable of Bishop’s Stortford can help.

At Enable we are giving away several Kindles and £50 worth of vouchers, to enter just LIKE our Facebook page http://www.facebook.com/enableflp

Get on the ladder before stamp duty goes up...

The number of mortgages taken out by first time home owners increased in December 2011 the latest figures show. Experience IFA’s of Bishop's Stortford, Enable can see that more firs-time buyers have been trying to get on the ladder before the stamp duty holiday on properties costing up to £250,000 changes.

Since March 2010, first-time buyers purchasing properties costing between £125,000 and £250,000 have not had to pay any stamp duty at all it was a move by the government designed to kick start the flagging housing market but from 25 March 2012 first timers will pay 1% on those homes in that price bracket.

Figures from the Council of Mortgage Lenders (CML) indicate that buyers are buying with the intention of beating the deadline to save money. With the average first-time buyer spending about £130,000, buyers typically stand to save £1,300. In December 2011, 18,700 mortgages worth £2.3bn were advanced to first-time buyers, up 7% by volume and 10% by value on November's figures.
There was also an increase in the proportion of properties bought by first-time buyers within the exempt price band from 50% to 53%, a statistic the CML said “suggested they are beginning to rush through purchases before the concession ends in March".

The CML's director general, Paul Smee, said: "We have been expecting a flow of first-time buyers on to the market as the stamp duty exemption ends in March; December's figures appear to show this has now begun.”

If you want to buy before the stamp duty goes up Enable IFA’s of Bishop Stortford can help you with your mortgage, as we have access to the entire mortgage market.

At Enable we are giving away several Kindles and £50 worth of vouchers, to enter just LIKE our Facebook page http://www.facebook.com/enableflp 

Which Mortgage? What about offsetting your mortgage

The reality for most borrowers is the fact that their monthly mortgage payment is probably at the top end of what they can afford and they either do not have the spare cash to overpay, or they are using any spare money available for savings, to pay other debts or fund other purchases.

And with most lenders once that spare cash is paid into the mortgage, it is gone and cannot be used for anything else. This is probably why many borrowers prefer to keep their spare cash ‘liquid’ in savings accounts where they can access it for whatever they wish.

But for those who want the benefits of overpayment without technically overpaying, there is always the option of an offset mortgage. Here, instead of putting your savings into a separate account or ISA, you choose to put them in an offset pot alongside the mortgage. Instead of earning interest on the savings you offset the interest you would have earned against your mortgage, effectively overpaying.

With normal savings rates being particularly low, many borrowers with significant savings would benefit from offsetting as they would earn the equivalent of the mortgage rate on their savings. This method of overpaying also allows the borrower to keep their savings ‘liquid’ as they can always access the money from the offset pot at any time.

It is also worth bearing in mind that any interest you earn on your savings is taxable at your highest rate of income tax, which might be 20%, 40% or, as of April 50% for the highest earners. If you use your savings to overpay your mortgage instead, not only are you effectively earning interest on them at the mortgage rate, but because they no longer technically exist as ‘savings’ you do not pay any tax.  Enable can help your look at your mortgage options again.