Average UK house prices up by 6.1%

House prices in the UK have increased in value by 6.1% annually in the year to September 2015, according to the Office for National Statistics (ONS). This is a larger increase than the 5.5% rise recorded in August and the 5.2% one in July. This brings the average house price across England to £286,000.

Although an impressive increase in value, it does not match the price rise seen a year earlier of 12%.

As always, there were wide regional variations, with price increases in Northern Ireland topping the list at 10.2%, whilst Wales and

 

Scotland could only record a modest 1.1% rise. In average house price terms, London, as usual, topped the list with houses there now averaging £531,000 and recording an average increase of 7.2%.

Overall, the increase in house prices in England was driven by the annual increases in London (as above), in the East by 8.4% and the South East rising by 7.4%. At the other end of the scale, houses in the North East of England averaged £158,000 with a more modest annual increase of 1.8%.

In September 2015, prices paid by first time buyers were 4.3% higher on average, against the same time last year, while owner-occupiers (existing owners) also saw an annual increase of 6.9%.

Commenting on these figures, a former Chairman of the Royal Institute of Chartered Surveyors (Rics), Jeremy Leaf, was reported to have said: “With the average property price in London now £531,000, unless you earn way above the national average salary, you have precious little hope of being in a position to buy.

“Generation Rent is being left out in the cold; they have aspirations to buy but are being pushed further away from their goal.”

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 

Help to Buy ISA’s

Another boon for the first time buyer in Chancellor George Osbornes latest budget was the new Help to Buy ISA for first-time buyers which will allow the Government to top-up by £50 every £200 saved for a deposit from this Autumn. You can save up to £200 every month and the Government will add 25% on top. You can also start it off with an initial £1,000 which will have £250 added on top of it. The Help to Buy ISA offers relief on the money made towards a house deposit ,the minimum you need to have saved to get the bonus is £1,600 (so a £400 bonus), and the maximum the Government will contribute is £3,000 (which would means you will have saved £12,000).

But couples buying their first home together who don’t want to wait four and a half years to get the Government’s full £3,000 relief on a Help-to-Buy Isa should open an account each.  By doing this they can save the same sum in less than half the time - but both parties need to be first time buyers.

In many way this is equivalent to letting you save for a home deposit from your pre-tax income as the 25% on top is equivalent to the tax a basic-rate taxpayer would pay. To get a £3,000 top-up at the earliest opportunity an individual would need to save £1,000 from opening and £200 every month for 55 months. And a couple each saving the maximum initial deposit of £1,000, followed by the maximum monthly deposits of £200 would get the £3,000 top-up in 25 months.

The Help to Buy ISA will be available through banks and building societies and rates will be set by them and differ just as with other cash ISA’s so  you will earn interest like a normal cash ISA as well as getting the bonus at the end.

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

Planning for the cost of kids

Experienced Independent Financial Advisors like those at Enable in Bishop Stortford know that savings are often made to help provide for the family.   In a recent study, carried out by the Centre of Economic and Business Research (CEBR) for the insurer Liverpool Victoria (also known as LV=) it would seem the overall basic cost of raising a child in the UK, from birth to the age of 21 has increased to by 63 per cent since 2003, when the survey was first carried out. 

Currently the projected cost stands at £229,251.  It has risen by just under £2,000 in the last year alone, almost twice the current rate of inflation.  The costs that have been pushed up are childcare costs and those associated with education, ranging from uniforms and books to school trips, which together account for almost two thirds of the total expense.

It also points to evidence that the expense of raising children could be shaping the population, with some parents actively postponing of ruling out having a second child because of the cost.

Almost half of mothers consulted by the researchers also said they had either been forced to go back to work earlier than they would have wished or taken on extra work to help meet the cost of raising a family. Myles Rix, managing director of Protection at LV= said: “Having children has never been more expensive and, with costs such as childcare and education continuing to rise, for many families across the UK this is set to remain a pressure point. “No parent wants their child to go without and given a significant chunk of a family’s income is spent on children, it is important that parents take steps to secure their household’s financial future.” Enable’s IFA’s in Bishop’s Stortford can help you lay your financial foundations for having a family.

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 to decide when it’s the right time to buy a house?

Since the Autumn Enable’s IFA’s in Bishop’s Stortford have been following the news like many others about whether or not there will be a fall in house prices.  With Britain's runaway housing market expected to at least take a dip this year as the combination of new mortgage rules and the threat of rising interest rates brings house prices down.  It might seem to many a good reason not to buy but many experts are saying ay the market is more complex than the headline figures may at first suggest.

At the end of last year the Centre for Economics and Business Research (CERB) suggested that the UK housing market was at a "turning point" and the organisation expects 2015 to see 0.8 % decline in house prices.  In London the decline is expected to be even more substantial; according to CEBR, they may fall by as much as 2.6 %.

If there's a chance that house prices are about to fall, it may seem risky to buy at what could be the peak of the market – but many experts advise that waiting in the hope of a serious drop in prices does not always pay off.

One reason for buying a house sooner rather than later is that it might prove to be a sound investment in the longer term even if prices fall next year. By 2019, house prices across the country are expected to grow by 30 per cent, with the greatest boom occurring in the south east of England, where 37% increases are forecast.  Housing market predictions do not always turn out to be correct, but demand is continuing to rise and there is no sign of a dramatic increase in the supply of new home, so house prices are likely to rise in the medium to long term. Enable’s Independent Financial Advisors can help you look at mortgages that work best for you.

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

Pensions and the Autumn Statement

At Enable in Bishop’s Stortford the current changes around pensions have been much on the minds of many of our clients. The chancellor did not offer any more radical change in pensions but did announce the return of Pensioner Bonds or “Granny Bonds” as they used to be known. The Pensioner Bonds will be issued in January, and are expected to be hugely popular, as ever. They will be available to the more than 11 million people in the UK over the age of 65. The announcement said “there will be a one-year bond, which is expected to pay around 2.8% in interest, and a three-year bond, which is expected to pay around 4%.” Pensioners will be able to save a maximum of £10,000 in each bond – giving them another option for £20,000. The Treasury has also said that only a total of £10bn of the bonds will be issued, suggesting they could sell out very quickly.

The other thing that had clearly been in the pipe line is the Tax free status announced for annuities for dependents of people who die under the age of 75. This means that thousands of retirees who have pension annuities will be able to pass on the benefits free of tax, if their spouse dies before the age of 75. Previously they would have been liable for a 55% "death tax" on money in annuities now they will be able to receive the income from such policies without paying tax.

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

Stamp Duty changes not so welcome for a few...

Stamp duty on residential property was reformed and came into effect last week so that rates apply only to that part of the property price that falls within each band 0% paid for the first £125,000 then 2% on the portion up to £250,000 5% up to £925,000, then 10% up to £1.5m; 12% on anything above.

Enable’s IFA’s of Bishop’s Stortford can see that for many this is a fairer welcome change to an unpopular and outdated approach which had proved very uncomfortable for buyers around the thresholds. However, the new rates reveal that anyone purchasing a property with a value above £937,500 will be worse off, in some cases by a considerable amount.   For example, a £1.5m property will now attract stamp duty of £93,750, which is £18,750 more than under the old system. In contrast, a £510,000 property will see a 24% reduction in stamp duty and buyers of £210,000 properties would pay 19% less.



 “The Chancellor’s announcement on the changes to stamp duty is excellent news for buyers of properties valued under £950,000, although it is not so good news for ‘squeezed professional middle’ buying above the £1m-mark and is a real blow for all buyers at the top-end of the market.” Said Robert Bartlett, Chestertons’ CEO, “My real concern is how this move has the potential to damage London’s standing as a global city by discouraging wealthy international buyers from investing here and the knock-on effects that this could have to the broader London economy.” Enable’s Mortgage brokers in Bishop’s Stortford are happy to advise on property investments in London and its environs.

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 should I do with my pension savings? Changes you need to know about

From next April, the chancellor wants you to be able to do what you like with your pension savings once you reach age 55, new rules mean if you want to spend your whole fund you can; if you want to take out a bit at a time, you can; if you want to use your pension fund like a bank account, you should be able to do so.

But you don’t have to do anything! Many people approaching retirement age will have personal pension plans started in the 1980s or 1990s. When setting up these funds, you would have been asked to select a retirement date and many would have chosen a birth date between 55 and 65.

About six months before your chosen pension age, the pension company will send out a 'wake-up pack', offering you an annuity. When you get this kind of pack, you may think you have to do something, but you don’t have to and if you are still working, or if you have other pension income, you may benefit from leaving the fund alone to earn extra tax-free investment returns, rather than buying a product, or transferring it or withdrawing the money.

In the past people have tended to believe they had to automatically buy an annuity or income drawdown product, but you don’t and there are lots of other thing you may want to do with your pension. The 'do nothing' option may still be a good one, Enables IFA’s in Bishop’s Stortford can help you with your retirement planning if you're not sure what's best.

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

Know your terms

As Financial Life Planners Enable’s IFA in Bishop’s Stortford know the old adage for investing well, don’t put all your eggs in one basket’. For long term gains from any investment it is always wise to spread risk and try and diversify across a range of companies, asset classes and geographical regions.

In wealth management there are a ‘traditional’ set of asset classes to make the most of; cash, equities or shares and bonds. There are also a host of ‘alternative’ asset classes that have become much more available to private investors which include commercial property and private equity trusts. Many wealth management companies now use financial wraps to help further mitigate risk but maximise long term gain.

None the less it is always helpful to know some of the terms to understand better the asset classes involve in your wealth management.  So back to basics a share (often referred to as equity) is a unit in a company listed on a stock exchange. If a company is worth £100 million and has issued 100 million shares then each share is valued at £1. The overall value of the company fluctuates based on a variety of factors including demand and supply for the goods or service the company is offering, merger and acquisition activity, competitor activity and the economic environment to name a few, all of which can impact the share price.

Investing in shares can have good long term returns - equities have historically delivered better returns over the long-term than other asset classes such as bonds or cash. But equally there are risks by their very nature stock markets fall. Typically investing in the stock market should be taken as a ten year view, Enable’s IFAs can help you see what is right for you.

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

Is the government Help to Buy scheme helping you?

As experienced mortgage brokers in Bishop’s Stortford Enables IFA’s we glad to see the government scheme to help first-time buyers, come into the mortgage market to start with. It’s a scheme that offers up to 20 per cent of the value of a mortgage on a property as government assistance to help those trying to buy a new-build home. The buyer must have a cash deposit of at least 5 per cent and a mortgage lender must provide a loan of at least 75 per cent.

The criticism or the scheme has suggested it helps to fuel rampant house-price inflation. But in a recent report published by the Bank of England they said the scheme was not driving house prices up. The Bank said if you believe the figures, “the average house price in the Help to Buy mortgage-guarantee scheme was £153,800, significantly below the national average” but these mortgage figures were based on June mortgage date, published at the beginning of September. But the latest government statistics on Help to Buy also published recently include data to the end of August. That mortgage date shows that the average price in the first 17 months of the scheme was actually £210,269, significantly higher than the national average property price of £188,374, according to the Nationwide. 

Enables’ IFA’s experience as mortgage brokers in Bishop’s Stortford tells them that it can often be hard to read the date to prove the benefits of mortgage schemes and if you need help making sense of it all we 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

What is an offset mortgage?

Enable’s IFAs who act as mortgage brokers in Bishop's Stortford can help you investigate it it is a smart and tax-efficient way to cut your mortgage costs.  Only around ten per cent of borrowers currently take advantage of this type of home loan. It works by simply combining your savings and mortgage balances helping to save thousands of pounds in mortgage interest costs at the same time as reducing the term of your home loan when interest rates are low.

For higher rate-tax payers in particular the other key benefit, is that there’s no tax to pay on your savings interest and the equivalent return is the same as your mortgage rate. At the moment with interest rates on instant access and 1-year savings accounts stuck around the 2 per cent park, for many people even if they are not higher rate tax payers, there’s still more to be gained by offsetting your nest egg against your mortgage balance, which in many cases is being charged at upwards of 3.5 per cent.

Bishop’s Stortford mortgage brokers at Enable can see why many people do not necessarily take up the mortgage product as it is a more complex product than many other mortgage products and can be perceived as only suitable for those with large savings balances, but sometimes it pays to really nut out the sums. For example with some mortgage products , someone with savings of £5,000, offsetting this balance against a £100,000 mortgage at 4.00 per cent would save interest charges of £8,016 and take 1 year and 3 months off the term of a 25-year mortgage. Enables mortgage brokers in Bishop’s Stortford can help you work out the best mortgage product for you.




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

The cost of buying a home is at an all time low – state Halifax

Halifax stated this week that the average cost of buying a home has fallen to the lowest in 15 years. They state that a typical mortgage on a new home now costs an average of 25% of take-home pay, compared to a staggering 45% at the peak, before the credit crunch.

Lowering prices and lower interest rates they say are making buying a home much more affordable, with the greatest affordability being in parts of the UK where house prices have been affected the most, such as Northern Ireland. However in the South East, an average new home buyer will need to part with slightly more of their income, as lack of properties on the market, have kept prices much the same as before the credit crunch, and buyers are having to part with 32-35% of their income to finance their new home, which is still lower than 2007 when the average home buyer had to part with 56% of their income.

Buying a home is much cheaper than renting. If you are looking to buy your first home or would like to find out more about the mortgages we have on offer at Enable why not contact us on 01279 755950, our IFA's of Bishop's Stortford have access to the whole market place, and all of our fees are completely transparent.

Good news on the jobs front...

The Office for National Statistics (ONS) announced in mid-June that UK unemployment had dropped by 51,000 to 2.61 million in the three months to April. This leaves the jobless rate at 8.2%.

Of this 51,000 the majority were male, as female unemployment only dropped by 1,000, but there were decreases of unemployment across all age groups (other than the over-65’s), with youth unemployment finally falling by 29,000. However, this group still represent just over 1 million people.

Employment in the private sector increased by 205,000 to 23.38 million, whilst employment in the public sector fell by 39,000 to 5.9 million. This last figure represents the lowest number since March 2003. In total there were 29.28 million in employment, which is an increase of 166,000 on the last quarter.

Their accompanying report stated that overall the UK unemployment level was “showing some improvement.” This is despite the fact that the number of those claiming Jobseeker’s

Allowance increased in May by 8,100, which makes a total of 1.6 million people.

They went on to say that whilst in previous months any increase in employment was due to part-time workers, this month’s figures saw an averaging out across part-time and full-time workers.

Chris Grayling, the Employment Minister commenting on these
figures stated: “This time we are seeing a very healthy increase in full-time jobs and that’s clearly very welcome...”Any fall in unemployment is very welcome, but I remain cautious over the next few months, given the continuing economic challenges we face.”

At the same time Brendan Barber, the TUC’s General Secretary said: “some long overdue good news.” But he went on to add that he still had “real concerns” over the sustainability of the recovery
shown.