Gatehouse Bank has launched a range of green home finance products for UK homeowners and landlords.
Customers acquiring or refinancing a property with an A or B energy efficiency rating will receive a 10bps reduction on the rental rate. Gatehouse will also offset the carbon impact of the property during the initial fixed term period of the product.
In addition, the Bank will continue to offset the carbon footprint of the property for however long a customer remains with the Bank, subject to their property meeting the required EPC rating of any green products chosen at that time.
Green home finance products have become increasingly popular in recent years, as people consider the environmental impact of their properties. While a number of providers have introduced environmentally focused home finance products, Gatehouse is the UK’s first Shariah-compliant finance provider to enter this market.
The Bank is committed to reducing its own environmental impact and in October became operationally carbon neutral. It is working to align the business with the UN Sustainable Development Goals, having been a founding signatory to the United Nations Principles for Responsible Banking.
The Bank has created green versions of its standard Buy-to-Let and Home Purchase Plan ranges available to UK residents including finance for Houses in Multiple Occupation (HMOs) and Multi-Unit Freehold Blocks (MUFBs). This supplements our existing Woodland Saver products.
To be eligible, properties will need to come with a suitable Energy Performance Certificate (EPC), which records its energy efficiency and environmental impact rating based on CO2 emissions.
John Mace, Product Manager at Gatehouse Bank, comments:
“We are committed to supporting customers that are looking to reduce their impact on the environment through our products. The launch of our green home finance proposition is a natural progression for the Bank and follows the launch in 2021 of our Woodland Saver accounts, that support UK woodland growth.
“Green home finance products have become increasingly popular as homeowners and landlords alike look to reduce the environmental impact of their properties, and we are delighted to be able to introduce our own offering to this growing market.
“On top of the rental discount for the most energy-efficient homes, we’ll offset the property’s carbon footprint for the entire fixed term of the product, helping our customers to further reduce their carbon footprint.”
Article Source – Gatehouse Bank
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Stamp duty holiday: How will it work?
A temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland.
The level at which the tax is charged has been temporarily raised until next March to £500,000 to boost the property market and help buyers struggling because of the coronavirus crisis.
The changes have come in with immediate effect.
What is stamp duty?
Stamp duty is a tax paid by people buying properties, although it varies slightly across the UK.
In England and Northern Ireland buyers pay Stamp Duty Land Tax.
In Scotland it is Land and Buildings Transaction Tax, while in Wales buyers pay Land Transaction Tax.
The amount handed to the government depends on where you are in the UK, the price of the property and whether you’re a first-time buyer.
The expected changes to stamp duty will only apply to buyers in England and Northern Ireland.
Who pays stamp duty and how much?
In England and Northern Ireland stamp duty is paid on land or property sold for £125,000 or more.
However, first-time buyers pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000.
For people who have bought a home before, stamp duty rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m.
That means someone spending £248,000 – the average cost of a house – would currently pay £2,460 in stamp duty to move home.
Landlords pay an extra 3% of stamp duty when they purchase a buy-to-let property in England and Northern Ireland.
What has changed?
The government has increased the lower stamp duty threshold to £500,000 for property sales in England and Northern Ireland.
That means any property purchases below the new level will not need to pay stamp duty as long as the deal is completed before 31 March 2021.
People buying second homes and buy-to-let properties will also benefit but will still have to pay the 3% extra duty due on the entire price.
The move is aimed at helping buyers who have taken a financial hit because of the coronavirus crisis.
It is also intended to boost a property market hit by lockdown. According to the Halifax, house prices have fallen for four months in a row.
Chancellor Rishi Sunak said: “The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all.”
When will the stamp duty holiday happen?
It is effective immediately from Wednesday and will last until 31 March next year.
The increase will be temporary to help revive the flagging property market.
Can I still benefit if I’ve already completed a purchase?
The holiday applies from 8 July, which means anyone completing a property purchase before that date will have to pay the full normal stamp duty.
How much could a buyer save
The more you pay – up to the new £500,000 threshold – the more you could save on stamp duty.
Before the stamp duty holiday, if you bought a house for £275,000, for instance, the stamp duty you’d have had to pay would have been £3,750.
That’s based on 0% duty on the first £125,000, 2% on the next £125,000 (£2,500), plus 5% on the final £25,000 (£1,250).
The holiday means anyone buying a home in Bramhall, Stockport would save £13,603 in stamp duty, based on Rightmove estimates of an average asking price of £472,053.
What about Scotland and Wales?
In Scotland, the rates on Land and Buildings Transaction Tax are 2% on £145,001-£250,000, 5% on £250,001-£325,000, 10% on £325,001-£750,000, and 12% on any value above £750,000.
Scottish landlords pay an extra 4% Land and Buildings Transaction Tax on top of standard rates.
In Wales, the rates on Land Transaction Tax are 3.5% on £180,001-£250,000, 5% on £250,001-£400,000, 7.5% on £400,001-£750,000, 10% on £750,001-£1.5m, and 12% on any value above £1.5m.
Welsh landlords pay an extra 3% Land Transaction Tax on top of standard rates.
Always seek professional advice 08072020 Try
Support for mortgage customers
The FCA’s proposals for continued support for mortgage clients came into force on 4th June 2020. The Regulator reiterates that clients who can afford to resume their mortgage payments should do so, but also states that:
- Clients who have not yet had a payment holiday and are in financial difficulty have until 31 October 2020 to request one
- The current ban on lender repossessions of homes will continue until 31 October 2020
- Lenders must let clients know what happens when their payment holiday ends including a range of options for how missed payments can be repaid
- Lenders must continue to support clients who have already had a payment holiday and need further help offering further support which includes the option of a further three-month full or part payment holiday
- Payment holidays will not have a negative impact on credit files
Lenders also need to be aware that the crisis and the public health measures that have been taken are likely to worsen the personal circumstances that can cause client vulnerability. These include:
- Poor physical and mental health
- Low financial or emotional resilience
- Life events such as bereavement
- Limited capabilities such as poor digital and language skills
The FCA has also updated the following link https://www.fca.org.uk/consumers/mortgages-coronavirus-consumers
How can using a remortgage help me?
Is remortgaging a good idea? What is the purpose of remortgaging and how does it work?
If you are thinking about remortgaging, which essentially means paying off your current mortgage with a new one. This gives you the possibility to take advantage of the current low interest rates or swap to a fixed rate mortgage so that you know exactly what you will be paying each month.
It’s often a good idea to speak to an independent mortgage advisor who really knows the market as they will understand the best deals around, the potential pitfalls like expensive arrangements or valuation fees. They will also be in touch with a large market of potential lenders and can find the most suitable solution and provide you with options based on your needs and are not tied to any particular lender giving them a wider market to find you a perfect solution.
One of the best reasons to remortgage is because it can save you money, especially if you switch to a deal with a low interest rate. Many people remortgage because their current deal is coming to an end and when a fixed rate expires, you automatically switch to the lenders standard variable rate, which is adjusted by the Bank of England, which means if the rate goes up, so will your cost.
Remortgaging can also be a means of freeing up funds for an extension, a wedding . It is also important to check whether your existing mortgage has an early repayment charge.
Just as it is more difficult to get a mortgage nowadays, a remortgage can be difficult to get which is where an independent mortgage broker can save you thousands, a lot of time and effort and find you the best deals available to you.
How can we help?
Try Financial is an independent mortgage broker, offering advise and finding tailored solutions to suit you. For more information, get in touch with us on 01473 462288 or email@example.com.
Bridging Finance: We still have access to lending markets
Despite all that is happening to the commercial finance market in recent weeks, Try Financial is committed, as always, to finding the right lending solutions for our clients.
While some lenders understandably have left the market temporarily, we continue to be able to access funds for Bridging Finance from a significant number of our lending panel providers.
For example: we are able to access deals from one of our panel of lenders under the following criteria:
- Loans up to 62.5% LTV with a Desktop Evaluation
- First charge unregulated bridging loans
- Residential property
- Coverage across England and Wales
- Loans of £200,000 – £4,000,000 (£2m net per property)
- Rate from 0.59%
- Early repayment rebate
- 12 – 14 month terms
What is a Residential Bridging Loan?
Residential bridging loans are short term, interest-only loans generally used to help you meet a pressing financial need when dealing in the property market.
Applications are often decided on the value of the property and your exit strategy, more than your ability to meet payments.
When would you typically need it?
- Broken property chains. When a buyer pulls out, your offer on your next home and the deposit can be put in jeopardy. A Bridging Loan can tide you over until your home is back on the market and under offer once again
- Buying a second property before selling the first
- Short lease. It could also be used if, for example, you wanted to buy a property with a short lease. You could use the Bridging Loan to buy the property, then add value by extending the lease. This would provide a valid exit strategy
- Refurbishment projects. You can use it a Residential Bridging Loan to refurbish a property before full capital is available
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Coronavirus Business Interruption Loan Scheme
Source material – British Business Bank webpage on CBILS.
The British Business Bank now expect the new Coronavirus Business Interruption Loan Scheme to become available in week commencing 23 March 2020.
As advised previously, CBILS will operate like the Enterprise Finance Guarantee Scheme and:
- The scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. NB – the borrower always remains 100% liable for the debt.
- It will be provided by the British Business Bank through participating providers, and will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.
- The Government will also cover the first 6 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million pounds (the original announcement suggested a maximum value of £1.2 million.)
- Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.
- Be UK based, with turnover of no more than £41 million per annum
- Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support)
- Almost all business sectors are eligible, however there are a small number of excluded/restricted sectors arising primarily from EU de minimis-State aid. An in-depth list of the main sectoral and purpose restrictions can be found here
- Have a sound borrowing proposal, but insufficient security to meet a lender’s normal requirements
- Be able to confirm that they have not received de minimis State Aid beyond €200,000 equivalent over the current and previous two fiscal year
Use of and application process
- An accredited lender can use CBILS to help a borrower access from, from £1,000 to £5 million
- To apply for an CBILS-backed facility, businesses may wish to consider approaching one or more participating lenders to discuss their borrowing needs.
- CBILS supports a wide range of business finance products, including:
- Term facilities
- Invoice finance facilities
- Asset finance facilities
We shall notify you of updates once we here further reports for clarification, but in the mean time, if you are interested in using this scheme, get in touch with us today.
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Are you covered by Building and Contents Insurance
With the UK weather being temperamental and going from sunny to a long downpour of rain in a matter of minutes, it’s worth taking the time to ensure you have a good building and contents insurance package.
With recent storms like Storm Ciara and Storm Dennis soaring across the UK, many people are finding their property has been damaged due to the high winds and floods across the country. Unfortunately, every insurer has a different clause as to what they cover when damage occurs for example, if roof tiles were blown off a property, they will do an inspection on the roof and, if the roof had not been maintained, they may refuse your claim.
What is Building and Contents Insurance
Most types of contents insurance will cover you against loss or damage due to theft, fire, explosions, storms, flooding or water leakage, plus other similar issues. But all of these benefits generally come with maximum limits and individual criteria that can vary from one policy to the next.
If you’re renting, your landlord is usually responsible for insuring the building itself, but not your belongings. This should be confirmed in your tenancy agreement.
Buildings Insurance – This insurance covers your house in case of a disaster where your home is so badly damaged that it needs a complete rebuild. The cause of the damage must have been completely beyond your control, for example a storm or flood damage or third-party vandalism or damage, etc.
Contents Insurance – This covers the items in your home which are not fixed to the property, for example, furniture, jewelry, appliances and clothing. Some policies even include covering the contents of your fridge and freezer. The insurance will pay out on a “new for old” giving you a brand-new replacement on whichever item gets damaged or stolen. Contents insurance will cover you in most of the same situations as buildings insurance, but also includes theft. Again, any of these perils must have been beyond your control.
Why do I need this type of insurance?
Some mortgage suppliers will make this type of insurance compulsory when you take out a mortgage with them, to cover their loan. Otherwise, this insurance is highly recommended to protect you against unforeseen circumstances. Virtually every home in the country will have this type of insurance just for that reason, and it could end up proving to be very costly if you do not take the cover out.
This will mean that you get an automatic payout if any damage occurs to your home, or automatic replacement of any of your furniture etc. The cost of the damage will not be a factor that is taken into consideration, and all payouts will be made. However, the type of damage that occurs to your house will greatly affect whether or not you receive a payout.
Most buildings and contents insurance policies will only cover the following events:
- Storm or flood
- Lightning or explosion
- Falling trees or branches
- Subsidence, drag or landslip
- Breakage of glass or sanitary fittings
- Damage from escaped water or oil
- Shock caused to the house by animals, vehicles or aircraft
- With buildings insurance, most structural fixtures within your house/property will be covered, ensuring they will be repaired if necessary, or rebuilt if they are beyond repair. These include:
- The structure of your house, e.g. walls, ceilings and the roof
- Gates, fences, hedges and footpaths that all lie within the boundaries of your property
- Permanent fixtures and fittings within the house, such as the kitchen, any fitted wardrobes
- Decoration within your house, for example wallpaper and paint
- Pipes and cables
Other items usually covered within the contents policy:
- Money within your house, up to £500
- Losses on stolen credit cards, up to £500
- Office equipment kept in the house, up to £5,000
- Having new locks fitted if these are broken or damaged, or if keys are lost
- Replacement mirrors or glass broken by accident or through vandalism, full cost covered
- Damage or theft of deeds and other documents within the house, up to £250
- Loss of metered water, up to £1,000
- Damage or theft of satellite equipment, up to £500
- Contents of your freezer, up to £500
Optional extras that you can add to your cover
As well as the most basic cover, there are a number of optional extras, available for an additional price:
- Accidental building damage – This includes damage which you cause to the house, for example whilst doing DIY.
- Accidental contents damage – If you cause damage to any of the contents of your house by accident.
- Personal belongings – This will cover personal belongings, such as iPads, computers etc, regardless of whether they are stolen or damaged in the house.
- Home emergency – If an emergency, such as a burst pipe, occurs within the house, this type of cover will provide you with a tradesman that you can call out for free. It is usually 24-hour cover, and will generally only cover you for a certain amount of work, on average up to £250 (including call-out charge, materials and labour).
- Legal expenses – Some buildings and contents insurance will also cover you if an accident occurs within your house or on your property, and another person is hurt. This legal liability, although rarely needed, could cover you in situations where people will sue if the accident was caused by something or someone within the house.
How do I calculate my contents insurance?
When calculating the value of your contents within your house, it is important to make sure you correctly insure all contents so you do not come out at a loss at a later date. You will not be able to make a claim against something that turns out to be more expensive than you initially valued it for and it is equally important not to over-price any of your contents as this will greatly increase the premium you pay for cover.
To ensure you value everything properly, go into each room in your home and write a list of everything in the room that will be covered by contents insurance. Make an assessment of each item to get the cost, add a percentage for inflation (your insurance provider should provide you with a guide for this) and this will be the minimum you insure for. Make a further note of how old each item is as they may only replace it with something equally as old and do not try to make a guess in general as you could end up greatly under-insuring your contents.
How do I calculate the rebuilding cost for my home?
When you take out insurance on your house, you need to know how much it would cost to rebuild, as this will tell you how much of a premium you have to pay. The building cost of your home is not the same as the market value as this is far less costly to rebuild your house than it is to buy a similar one which encompasses the land.
The Building Cost Information Service (BCIS) provides cost advice and can calculate how much you should value your rebuilding at. It is widely used by surveyors and the Association of British Insurers (ABI) as a reference. You should get advice from a chartered surveyor when providing information to your insurance company but, to get an initial idea, you can use the following guide with the “rebuilding calculator” on the BCIS website.
How do you get building and contents insurance?
Whilst there is a plethora of insurance firms out there who want to sell you their insurance, its worth getting multiple quotes, evaluations and working out the pros and cons of each insurance plan to work out what is best for you.
There are multiple websites that offer comparisons on the different insurance companies but these do not generally offer you the small print in their terms and conditions. It’s very important to not only find out what your insurance will cover but what it will not cover too.
This is where Try Financial can help as not only do we offer building and contents insurance, but we can advise you and offer assistance to best suit you to find you the perfect insurance. We can offer a discount if you take both types of insurance out too and have experts on hand to help so get in touch with us today on 01473 462288 or email firstname.lastname@example.org and speak to our experienced advisers today. We may be able to save you a great deal of money in the long run.
Emerging Markets for Mortgages for the over 50s
Whilst a traditional model for buying a home is to start your career, save for a deposit and start looking for a home to buy in your late 20s and early 30s, this model does not hold true to everyone and thanks to the financial crisis of the previous decade, securing mortgages for the over 50s may be able to secure a mortgage easier than they think.
There is a growing market for over 50s to secure a mortgage for their own home, perhaps being late to the party or not saving up for a deposit when younger has left them worried about being denied but, research by Ipswich Building Society shows securing a mortgage over the age of 50 is becoming more popular.
Understanding the Mortgage Terms
First and foremost, getting a mortgage when you’re over 50 requires that you know your terms. Every kind of mortgage comes with its terms – defined as the total amount of time you have to repay the mortgage. The terms are especially important to older borrowers because they may have less time to repay what they borrow.
Let’s say you are 55 and looking for a 20-year mortgage. Given that the average life expectancy in the UK is 80 for men and 83 for women, a 20-year deal is doable. Still, it is right on the edge. You would likely find a lot more options if you were willing to take a 10 or 15-year deal instead.
Save for a Larger Deposit
If you had previously been declined a mortgage because your deposit was not large enough, then waiting a further 2-3 years to increase your deposit may be more beneficial and secure you the mortgage you need. If you are already in your early 50s then spending an additional few years to secure a bigger deposit will help you in the long run.
Saving a larger deposit not only reduces the lenders risk, but looks more favorably in terms of securing you a mortgage. If for example you had a 50% deposit, opposed to a 20% deposit, the lender is likely to favor you and secure you a mortgage when looking at your loan-to-value ratio on your application.
Shared Ownership Scheme
The government is offering a shared ownership scheme for applicants over 55 through its Help to Buy programme. If you use this scheme, you are buying shares in your property, rather than buying the home. You will own the shares you purchase and any shares that are not owned by you, which is up to 75% of shares, are owned by the government.
Once in your home, you can continue purchasing shares up to 75%. Reach that 75% threshold and you’ll pay no rent thereafter, there is however income eligibility restrictions and the fact you need to be over 55 to use this scheme.
Working with a Mortgage Broker
Using an independent mortgage broker has the advantage that they may also have lenders that can help when banks and building societies will not due to risk of lending and tend to be more nervous lending to someone over 50, as they may not live long enough to repay.
Simply put, a mortgage broker helps the client to understand whether or not home ownership is financially viable and this is where Try Financial may be more likely to help secure a mortgage. We have access to lending partners that banks and building societies may not have, as well as exclusive deals that other independent brokers may not be privy to.
We recommend that you be persistent when looking for a mortgage deal that suits you. There are deals available out there, and we may be able to help secure you a mortgage so its always worth having a chat. Lenders are realising the value of lending to older borrowers who just want to get out of the renting game and into their own properties.
Can you get a mortgage if you are over 50? Yes. Why not give us a call on 01473 462288 or email email@example.com to see how we can help, it never hurts to chat and our friendly staff are always on hand to help.
Getting a mortgage when self-employed
According to the research, many are worried about being rejected due to the strict rules on proof of earnings at high street lenders and the lending specialist has found that self-employed people are selling themselves short when it comes to their aspirations of being a property owner.
The UK’s 4.8 million self-employed do have reason to be concerned, as Together’s research shows around 21 per cent of self-employed borrowers who have applied for a mortgage have been rejected, with a fifth of them being turned down more than four times.
In fact, two-thirds (65 per cent) of self-employed workers have found the process so bruising they have considered switching to the security of a directly employed job to boost their application chances.
Why the rejection?
Often finding it hard to vouch for their wage, they are finding it more challenging than employees to secure a mortgage as they are required to provide far more evidence of income than other borrowers.
The main reasons for being rejected by high street lenders cited by one in four self-employed borrowers were: a lack of recent tax returns; irregular or insufficient income; and the mortgage requested being too large. One in five (20 per cent) of self-employed borrowers said they were denied a mortgage because they didn’t have enough proof of future earnings.
Pete Ball, personal finance CEO at Together, said: “These findings are understandable, but the fact that so many people are doing themselves out of owning their own home because they expect rejection is very worrying.”
“The way people live and work has changed enormously over the past few years, and it doesn’t make sense for the mortgage market effectively to lock out such a large group as the self-employed simply because of the way they earn a living.”
Speaking to a mortgage broker
If you are worried about being rejected for a mortgage, then speaking to a whole of market mortgage broker such as Try Financial Ltd who have access to specialist lenders with products more specially catered to an individuals needs, that the high street simply do not offer.
We invest our time to develop a better understanding of applicants’ circumstances in order to be able to help them, and with access to panels of lenders that high street banks may not have, we may be able to offer a better solution that will likely get you accepted.
Mortgage brokers such as Try Financial have to ensure the mortgages are affordable for the borrowers, but that should not be done at the expense of making it harder for the self-employed. Specialist lenders can take a more understanding view and have the skills and capability to deal with such applications, but almost half (47 per cent) of self-employed workers aren’t aware there are providers which can help.
This is why calling Try Financial and discussing your circumstances with us, can help us get a better understanding of your requirements and whether you are likely to be accepted, or if we can look for an alternative solution.
Get in touch with the team today on 01473 462288 or email firstname.lastname@example.org to see how we can help and remember, it never hurts to talk.