Want to free up cash to enjoy life’s little luxuries?

Life’s for the living. Make the most of it by releasing the equity locked up in your home.

Want to free up the cash tied up in your property so you can enjoy life’s little luxuries?

If you’re looking for a lump sum, or to increase your income to treat yourself and your family then Equity Release could be just what you need.

For many people having thousands tied up in a property but being short of spending money for the little things in life that matter simply doesn’t make sense. What can make sense is finding a way to access your cash without having to sell up and move home.

Talk to us about Equity Release and we can show you various ways to free up your cash as a lump sum or a drawdown income.

Any sum you release is tax free* so it’s all your money and it’s entirely up to you what you do with it.

To be eligible for Equity Release all you need is:

·         Typically to be over 60

·         A property in good condition worth typically at least £70,000. The equity released can be used to repay an outstanding mortgage, or to make repairs or alterations to the property

It’s your money and it’s tax free

• Basically you are mortgaging your house but don’t make any monthly payments

• You still own your home and can live there until you die or have to move into long-term care

• The maximum amount you can borrow depends upon how old you are, the value of your property and the individual lender you borrow from

• Under current legislation you won’t pay tax* on any money you borrow

• Interest is added to the loan every month with the total amount (loan plus interest) usually repaid from the sale of the property when you no longer need it

• If the value of your property goes up over time you may be able to release more equity if you need it

HOWEVER

• Because you don’t make any payments on the loan or loan interest, the longer you live the more the loan amount grows and the less you may have to leave as a legacy – in some cases there may be nothing left

• Releasing cash from your home may reduce your entitlement to state benefits

To find out if you are eligible, talk to us today and put yourself in the picture with a personal Equity Release illustration.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

* Any references to taxation are based on our understanding of current legislation and HM Revenue & Customs practice, which can change.

Are you ready to renew your general insurance?

We have all done it. Once your buildings and contents insurance is up and running, it is easy to allow it to renew automatically without a second thought. After all, it is there for peace of mind isn’t it? But the reality is that your buildings and contents insurance needs to be carefully monitored to ensure it is always working best for you and taking into account any new items or any changes to your circumstances.

 

Check your contents and sum assured are up to date

If you have purchased new furniture or a high value item such as jewellery over the last year, then the amount you are covered for may no longer be enough. It is therefore important to check your current list of contents every time you renew. The Association of British Insurers (ABI) recommend that policyholders "update the list each year before renewing insurance to keep the sum insured up to date".

 

Compared to the initial compiling of the list, ensuring it is up to date shouldn’t take long at all. But it is easy to forget buying an item on occasion and protecting the validity of your insurance is crucial in case it comes to claim.

 

Read your documents carefully

It might sound like an unnecessary chore but it is very important. Knowing what items are not covered is crucial when it comes to making a claim. Have your circumstances changed? Do you now need accidental damage or home emergency cover? Would you now prefer to pay annually to save money on premiums?

 

It is also worth noting the premiums, for when policies automatically renew the premiums can increase. This is especially worth checking as insurance premium tax has recently increased, so check your payment plan for the next year is working for you.

 

Shop around

 

Everyone knows that insurers need to be competitive. So shopping around to find a better deal and coming back to your insurer could save you lots of money over the next 12 months. Insurers love giving you the best price to beat their competitors. Also, don’t forget the excess. If you opt for a higher excess it will reduce your premiums, but make sure you are prepared to pay this if you need to make a claim.

 

Don’t become one of the 20% and contact a financial adviser

 

The ABI has recently revealed that at least one out of every five home insurance claims are rejected. Don’t become one of the 20% and check your policy is up to date and fully reflects your situation.

 

If you are unsure as to whether you are correctly covered, talking to a financial adviser can really help. Using your financial adviser is hassle free. Our financial adviser will search for the right level of cover for you, with the security of knowing that you will be covered by insurance with a five star defaqto rating!

Could a ‘Brexit’ affect the mortgage industry?

Referendum. The word on many people’s lips across the nation, as we all weigh up the pros, argue over the cons and get ready to make our vote on whether the UK will remain in the European Union. But how could a potential ‘Brexit’ affect the mortgage industry? It is a question some are beginning to ask, and the answers may come quicker than we think.

House prices

 

Opinion is split on how a Brexit could affect house prices. On one hand, demand has a strong influence on property value in the UK, and a yes vote could indeed cause a decrease in prices as people worry about the possible effects of a Brexit on house prices. An increase in inflation could also be the result of a Brexit, with some experts suggesting this may reduce demand dramatically.

 

But other experts highlight that the UK’s infatuation with property will continue to drive the market. Hidden factors such as the possible reduction in available labour that free movement brings could also stall house building further and push up prices.

Capital investment

 

Much of the house price issue in London comes down to market conditions, which are beginning to see a possible dampening as supply begins to catch up with demand at the high-end of the market. But the core issues show no sign of stopping as more buyers are pushed out of London due to affordability, supply and competition from investors, both foreign and domestic

 

Most experts predict these problems will continue in the Capital over the next few years, whether we are in the EU or not. If anything, a weaker pound could make foreign investment more attractive, a possible side effect given the recent reaction to the referendum build-up.

Consumer confidence

 

Confidence can have a dramatic effect on the market. We all know too well the recent impact a sharp drop in surety can have on lending and finance. Leading up to the referendum, as the media and politicians wrestle to get their voices heard, we may indeed see a change in both borrowing and lending.

 

We have already seen the effects of even speculating on a Brexit, with the pound plummeting against both the euro and the dollar and the stock markets moving in response. This suggests that even talk of leaving the EU could affect how people borrow, buy houses and how much they pay for them. Even if the real effect of a Brexit is minimal, the effect of the vote itself on consumer action could be much larger.
 

Five budget announcements you may have missed

The 2016 budget may have passed by without turning too many heads, but there were some key changes worth noting…

 

Capital Gains Tax

 

The headline rate of Capital Gains Tax (CGT) is to be cut from 28% to 20%. CGT is an annual tax on the gain made from selling an asset (such as a person possession, second home or shares), which has gone up in value. It was also announced that the basic rate of CGT will be cut from the current 18% to 10% at the beginning of the new tax year. The reduction in CGT will not apply to residential property, which means the previous higher rates will still apply to gains from additional property.

 

Lifetime ISA

 

George Osborne announced the introduction of a new Lifetime ISA, to be launched in April 2017. This is to go alongside the Help to Buy ISA, which is available to help those saving for a deposit for a home. But the new Lifetime ISA, or "LISA", can be used to save for retirement as well as a property, without paying tax on the interest earned. The new account is available to those aged 18 to 40 and offers a bonus of 25% on any savings, up to £4,000 a year, deposited before the account holder turns 50.

 

Tax Threshold Increase

 

One of the biggest announcements from the Chancellor was that the higher rate of tax threshold is to be raised to £45,000. This is a move surrounded by political controversy, especially in conjunction with the planned cuts in disability benefits. These changes are expected to save half a million people money, and are to be phased in to increase from £42,385 to £43,000 in 2016 and finally to £45,000 by this time next year.

Stamp Duty

 

As well as confirming the planned 3% stamp duty land tax (SDLT) surcharge on all purchases of additional homes, the government also withdrew the originally planned exemption for those with 15 properties or more. Osborne also announced that purchasers who move before they sell their main residence now have 36 months to sell and reclaim the extra stamp duty paid.

 

Personal Allowance

 

As well as the increase in the higher rate tax threshold, George Osborne announced that the Personal Allowance will increase to £11,500, from £10,600. This is the amount of money you must earn before you start paying income tax. The threshold will rise to £11,000 in 2016, eventually climbing to the new figure by April 2017.

Should you need advice on tax, you should seek advice from an accountant. But if you would like to discuss how some of these changes may affect saving for a house, stamp duty, or anything else relating to mortgages and your home, we are here to help.

 

 

 

 

Are you ready for the buy to let changes?

 

You may or not be aware that as of 1 April 2016 the stamp duty land tax (SDLT) on second homes and buy to let purchases will be increased by 3%. If that wasn’t enough for landlords, the government has also announced that as of April 2017 the tax relief claimed by landlords on their financial costs will be capped at 20%, instead of the higher rate of 45%, which will be phased out over the following years.

Chancellor George Osborne also added that the current ‘wear and tear’ allowance afforded to those letting out furnished property would be scrapped and replaced with relief against the cost of replacing furnishings. With so many changes all within a small time frame, it has created a complicated scenario for many landlords, who may be seeking the financial guidance of an adviser to ensure they make the right decisions.

In an effort to curb incentives for housing investment, the government has introduced the changes to "level the playing field" between landlords and first-time buyers. This has caused some controversy within the industry as some feel the changes are unfairly targeting landlords when the housing crisis is also affected by many other factors.

Some landlords are even considering incorporation and setting up a limited company to apply for their mortgages, to ensure their portfolio remains as tax efficient as possible. But this is a complicated area and these changes will affect each landlord differently. That is why talking to us and your accountant, will help prepare you for and deal with the changes.

One in five UK workers lack financial safety net

According to research by provider Scottish Widows, 23% of workers admit that any savings they have would not last longer than a couple of months if they were absent from work through long term illness or injury. Despite this, a surprising number are without any sort of income protection. In fact, of all those asked, less than one in 20 had cover in place to protect their finances if the worst was to happen.

The poll by Scottish Widows asked 5,000 people about their finances, revealing attitudes and general knowledge regarding protection.

More than 4 in 5 people had heard of life insurance, income protection and critical illness, yet just one in 10 have a critical illness policy.

Currently in the UK people are more likely to protect their home than their income, with almost half of those polled saying that they had chosen to take out home insurance.

More startling, 8 out of 10 considered broadband crucial for daily living and 7 in 10 believed mobile phones were also a vital lifestyle choice. But only 4 in 10 saw providing financial security for their family in the event of death as essential, which is a drop from 5 in 10 four years ago.

Despite one in seven of those surveyed saying that they had been affected by critical illness, the UK is still a considerably unprotected nation. That is why providers are working hard to create added-value benefits to their policies to give people the best chance to protect themselves.

Talk of base rate triggers rise in re-mortgages

A report by the Council of Mortgage Lenders (CML) has revealed that the number of homeowners taking out re-mortgage deals increased by a third in June 2015. Talk of a Bank of England base rate rise combined with competitive fixed rate deals, has seen many securing their payments in an effort to pro-actively avoid being affected by any increases.

Nearly 32,000 re-mortgage loans were taken out in June, marking a 3-fold increase from May. According to the CML, June also saw surprisingly low levels of monthly income being used to service mortgage payments, with homeowners paying just 17.9% on repayments, the lowest since 2005. Paul Smee, director general at the CML, said: “It is likely that people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility”.

With rates still at an all-time low you may think that your lender’s SVR, or standard variable rate, is the best deal for your mortgage. But some experts have noticed lenders already beginning to increase their rates in preparation for the rise in UK base rate. With the Bank of England Governor Mark Carney saying that the rise was “drawing closer”, now is the ideal time to see if switching to a fixed rate will save you money.