House ownership obsession

At this time with house prices apparently endlessly on the rise again it is not surprising many are considering buy-to let again. But Buying-to-let is very different from purchasing your own home, and you need to approach it with a completely different mindset.

Established landlords run their portfolios like a business, and never let sentiment get in the way of decision making. First you need to think not about where you would like to live, but what would be best to rent out. Find out which type of properties let well in your area and the best neighbourhoods for buy-to-let. Professional independent mortgage advice is vital some more specialist lenders can only be access through a mortgage broker.

You must really do your homework – letting a property comes  with many rules and red tape, from ensuring your furniture complies with fire regulations to adhering to health and safety requirements for gas and electricity. There are also tenant deposit schemes to sign up to, careful vetting of potential tenants and the production of a thorough inventory for the property and its contents. Finally, ensure you have adequate insurance to cover the buildings, contents (if furnished) and possibly even your rental income.

Buying-to-let is a long-term investment and it’s useful to think about why you are investing in property, and what your exit strategy is – do you want the property to provide you with a pension in retirement for example? Do you have a plan to repay the mortgage at the end of the term?  Enable IFA’s in Bishop's Stortford can talk through whether buy to let is right for your  investment portfolio.

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

Housing Supply solutions

Of course there is demand for housing on our small Island but it is the supply that causes many of the problems in our housing market. Mr Carney has already identified that he can try and do something about demand for housing but he cannot build a single house himself.  So what could our councils and government do to improve the supply of housing in the UK?

Of course it seem  so simple, all you have to do is build new houses but the problem for us is space, where are all these new homes supposed to go.  In the year to March there were just 112 630 new houses completed in England only a 4% rise on building from the year before.  But to keep up with demand many believe the UK as a whole has to build at least 250,000 homes a year to meet the rising population, and only then would it put a brake on prices.

In recent years there has been a lot of building on brownfield sites - like old hospitals or factories in or around cities – and for many places there is not a lot of choice particularly in London and the South East, where the population is rising the fastest. Sam Bowman, research director at the Adam Smith Institute, has argued for some time now that local authorities should allow building on greenbelt land. "By rolling back the greenbelt by just one mile around London, we would have space for one million new homes," he said this week but even the Home Builders Federation, which wants more land made available, is not keen on  that idea. If you are looking to buy a home Enables IFA’s in Bishops Stortford can help you look at your options.

Your home may be at risk if you do not keep up your mortgage payments.

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

Lending moving into different suppliers

It was with interest that Enables IFA’s noted that at the beginning of this month more competition appeared in the mortgage market as two Indian lenders opened for business in the UK.  One is the State Bank of India, who have begun lending again on buy-to-let mortgages after pulling out of new lending in September 2012. The other is Axis Bank, one of India’s largest banks, which is also considering a launch in the buy-to-let market.

It will be interesting to see how their services develop . John Charcol senior technical manager Ray Boulger says: “One would hope and expect that State Bank of India has learned from its previous mistakes. To make a mistake once is forgivable for lenders that are new to the market; to make it twice is not. ”He says: “Obviously, the best way to step into a new marketplace is to dip your toe in. Lenders need to understand not just the industry they are working in but the market as well. That means speaking with existing players in that locality, exploring distribution channels and getting the lay of the land.”

“State Bank of India previously wanted to be the best on rates in its particular market and we saw what happened: it got inundated with applications and had to shut down its operation. That is an example of the wrong approach.”  It would seem that the right approach would be to find a gap in the market and target lending where there are not enough options for borrowers.  The Financial Conduct Authority is reviewing three banking licence applications and is in talks with a further 19 prospective lenders.

Your home might 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

'Comfort' pension level is £15,000, says study

Enables IFA’s know that one of the hardest things to think about when you are young is saving for a pension.  But one of the surest things to do to make sure you have some savings for retirement is to start early.  A recent industry report suggests that when you are planning for retirement your should try and plan for an income of at least £15,000 a year.  It suggests that once people reach that income level, they begin to feel more comfortable and more financially secure and that that sense of wellbeing jumps significantly once retirees earn between £15,000 and £20,000 a year, including their state pension.

Interestingly enough the £15,000 contentment threshold seemed to apply however many people there are in the household.  A report like this really does help give a much more clear idea of how much people need to save for the very basics in pensions for retirement to top up state pensions.  The revised state pension is expected to be worth at least £7,500 a year when it comes in in April 2016.

Nest - a non-profit-making organisation which supplies pensions under automatic enrolement- has recently produced some tips for saving into a pension.  It claims that if a 30-year-old worker replaced a takeaway with a home-cooked meal at least once a week, they could save £12 a week.
If all of that was paid into a pension, it could build up to a pot worth more than £50,000.  Makes you think about what you might be frittering away if you want to start planning for your pension early Enable’s IFA’s 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

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

Housing Costs

It would have been hard to miss Mark Carney recently stating that the housing market represented the "biggest risk" to financial stability and the long-term recovery in the UK.  In an interview recently on the Murnaghan show on Sky news, he said the Bank was "closely watching" rising property prices and the subsequent increase in large-value mortgages, which he warned could lead to a "debt overhang" which could destabilise the economy.

 So what are the possible routes to cooling down raging house prices? It could be argued that making it harder for homebuyers to borrow money is already happening with MMR. But some lenders still offer loans that are more than five times a borrower's income. The Financial Policy Committee (FPC) could act to limit such borrowing as soon as next month, they could also make it more difficult to lend so banks and building societies would be forced to raise more capital.   Of course interest rate rises loom but  Mr Carney has promised not to use base rates as a means to cool the market.  Many say the government's Help to Buy scheme - which allows buyers to find a deposit of just 5% -is helping to inflate house prices so the BofE could advise that the scheme is scaled back. The Business Secretary, Vince Cable, has already said it should only apply to properties up to a maximum value of £350,000, rather than the current £600,000.  

But if Help to Buy has helped to put up house prices, remember it has also helped to increase the supply of housing. Private house building has increased by 34% in the year since the scheme started. Without it, the shortage of houses might have been worse, so prices might have been even higher. If you are looking to buy a home of your own Enable’s IFA’s in Bishops Stortford are happy to talk you through your options.

Your home is 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

Mortgage regulation struggles

Enable's Independent Financial Advisors know that mortgage regulation is of course vital but sometimes it can feel like one step forward and two steps back. With the recent Mortgage Market Review (MMR) it seems to many that there is indeed added responsibility and it is being put back onto the lenders, leaving each lender to interpret the requirements and design its own systems and processes.  In fear of getting it wrong the rules can become more and more difficult and the processes can develop an inflexibility that provides little room for sensible judgement.

Clearly it is important to establish that borrower can afford their loan but recently brokers have revealed some of the oddest questions they have come across when processing applications:

• How often do you have friends over for dinner? Do you have steak?
• What is your monthly expenditure on pet food?
• How much do you spend on alcohol per month? Does this increase in particular months?
• What is your average monthly expenditure on dry cleaning?
• On average, how much do you spend per month on nappies and other child-related perishables?
• When you move home, are you going to continue paying £21 per month for your milk delivery?
• Do you consider yourself to be a regular gambler? If so, how much would gamble on average per month?

Everyone in the mortgage business wants borrowers and clients to be protected but maybe things are going a bit too far at the moment.  If you are looking to find a mortgage Enables IFA’s in Bishop’s Stortford will try and help you find the right provider and ask sensible questions to help you and the lender establish your ability to manage a home loan.

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