The higher-than-average house price growth in top university cities is making it difficult for talented individuals to stay on and work locally after graduation. Research4 has shown that in the period 2009 to 2018 house prices in London have risen 76.3%, in Cambridge 73.4% and in Oxford 66.8%. This represents growth 25% higher than the national average.
Long term it is feared that the lack of affordable housing could hinder further economic growth and there is a call for local plans to include homes for key workers and for higher density development.
https://oakhillifs.com/wp-content/uploads/2020/05/article-5.jpg400600motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-10-11 15:10:002020-06-09 12:29:21Premium for top university city homes
Think tank, the Adam Smith Institute, believes that Stamp Duty Land Tax, to give stamp duty its full name, should be scrapped. Amongst many reasons why they think it should be abolished is the belief that its existence prevents older people from downsizing.
The prospect of paying stamp duty on a smaller home acts as a disincentive. For example, when buying a retirement property priced at £250,000, stamp duty adds another £2,500 to the cost of moving home, along with solicitor’s fees, surveys, valuations and removal costs. (Figures differ under Land and Buildings Transaction Tax in Scotland and Land Transaction Tax in Wales.)
Those looking to raise cash to bolster retirement income are increasingly turning to equity release. It represents a way of accessing some of the value tied up in a property that avoids all the costs and upheaval of downsizing to a smaller property. With equity release, although there are set-up fees, most of the costs are delayed until you die or go into permanent residential care.
It’s important to remember that equity release means in most cases that the loan you take out against the equity tied up in your property will increase over time as interest is rolled up. When you die, the property will be sold, and the loan repaid. Although interest rates on equity release plans are higher than on a conventional mortgage, with average interest rates having fallen over the last few years, equity release has become more attractive to many.
It is however important to discuss equity release with your family as it will have an impact on the amount that they are likely to inherit.
Interest-only Mortgages
Equity release is increasingly coming to the aid of those approaching retirement with an interest-only mortgage where they do not have the funds to pay back the capital on maturity and their retirement income may not cover ongoing interest costs. Whilst they may not have paid off any capital, they have probably built up equity, offering them a lifeline that allows them to stay on in their home.
Think carefully before securing other debts against your home. Equity released from your home will be secured against it. Your home may be repossessed if you do not keep up repayments.
https://oakhillifs.com/wp-content/uploads/2020/05/Old-couple_GettyImages-682632948_S.jpg483724motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-09-24 09:46:162020-06-09 12:29:25Stamp duty penalises older people for moving
In the UK, flats are commonly owned on a leasehold basis, while houses are normally sold as freehold properties. Many leases are granted on a 99-year basis, while some can run for as long as 999 years.
If you buy a leasehold property, you’ll own the property but not the land it stands on. By contrast, buying a freehold property means that you own both the building and the land it occupies.
The outstanding term of the lease
Once a lease has less than 80 years left, it becomes harder to get a mortgage and it can be expensive to renew the lease for a further term.
The advice is that to avoid potentially having to pay tens of thousands of pounds to renew it, buyers should look for a property with a lease that’s unlikely to drop below the 80-year mark during their ownership.
Purchasing freeholds
Following media coverage of the plight of thousands of people who bought new-build leasehold houses, only to find that their freehold had been sold to investment companies and that they would have to pay tens of thousands of pounds to buy it, or face exorbitant ground rent rises, the government had promised to introduce legislation; however, this has yet to appear. So, if you’re buying a leasehold house, taking legal advice makes sense.
Once a lease has less than 80 years left, it becomes harder to get a mortgage and it can be expensive to renew the lease for a further term.
Ground rents
It’s important to get confirmation of the amount payable each year in ground rent, both now and in the future, as there have been cases where ground rents double every ten years or increase in line with the Retail Prices Index.
Responsibilities under a lease
Leases often contain obligations; leaseholders must get permission before making certain alterations to the property.
With a leasehold flat, you aren’t responsible for maintaining and running the building and communal areas. The freeholder will do this, or alternatively appoint a managing agent to act on their behalf. However, the leaseholders share the cost of this between them by paying a service charge.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
https://oakhillifs.com/wp-content/uploads/2020/05/leasehold-300x200-1.jpg200300motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-09-23 15:23:002020-06-09 12:29:28Leasehold homes – what you need to know
Traditionally mortgages were for 25 years, but nowadays many loans on offer have a standard maximum term of 40 years.
Longer-term mortgages have the advantage of lower monthly repayments, making them more affordable, especially if you are struggling to get onto the housing ladder. However, the downside is that by the end of the term, the amount of interest that you will have paid will be far greater because the loan is repaid over a longer period. You will also find that you build up equity, the amount of the property that you own, at a much slower rate if you have a 40-year loan.
Check the small print
If you take a longer loan, it makes sense to check that you can make overpayments. Being able to do this without penalties will enable you to pay more of the loan off if you receive a windfall or a pay rise. If your circumstances change over the years, it makes sense to speak to us. It might be worthwhile considering reducing your mortgage term so that you’ll pay less interest and become mortgage-free sooner.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
https://oakhillifs.com/wp-content/uploads/2020/05/logo.png00motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-09-16 15:24:342020-06-09 12:29:31Long-term mortgages – a boon or a burden?
Some home insurance policies provide cover for ‘items temporarily removed’ from your home, although there may be a time limit, typically 30 to 90 days, and you need to inform your insurer when you deposit items in a storage facility. MPs have raised concerns about the insurance policies that storage companies insist users buy, as they may not be value for money or provide sufficient cover or be needed at all if the user has cover under their home insurance policy.
MORTGAGE AFFORDABILITY GRADUALLY IMPROVING
With annual wage growth at 3.4%, and house price growth subdued, buyer affordability has been rising in some parts of the country at its fastest rate since 2011. With mortgage rates remaining competitive, this is good news, particularly for first-time buyers.
HOLIDAY LETS – AN ALTERNATIVE TO BUY-TO-LET?
The recent regulatory and tax changes are encouraging landlords to look instead at furnished holiday lets. HMRC views holiday homes as businesses and they are exempt from the mortgage tax-relief changes faced by buy-to-let landlords. According to Second Estates, an alternative investment fund manager not regulated by the Financial Conduct Authority or covered by the Financial Services Compensation Scheme, the average weekly income from a holiday let is £563, nearly three times the typical buy-to-let rent of £191.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
https://oakhillifs.com/wp-content/uploads/2020/05/logo.png00motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-09-10 09:02:042020-06-09 12:29:34In the news…
For those who didn’t manage to save enough to fund their retirement, or find their existing home is too big and expensive to run, downsizing can be the answer. You sell your home, move to a cheaper one and live off the money you’ve made.
However, recent research1 has shown that there is a shortage of small properties, making it harder for retirees to downsize. In parts of the country there are double the number of four-bedroom properties available compared to two-bedroom homes.
Cambridge and Rugby were found to be the worst affected areas, where there were three four-bed houses for every two-bed. St Helens, Hull and Sunderland topped the list of areas where two-bed properties outnumbered four-beds.
Knock-on effects
The think-tank Demos2 has estimated that at least 30,000 new retirement properties are needed, just to meet current demand and believes that building more properties specifically designed to meet the needs of older, retired people would have significant implications for the housing market.
Older couples staying put in large family homes reduces the supply of property available to younger families looking to move into houses that would give them the growing space they need. A shortage of supply also means that prices continue to remain high.
The research shows that 3.5 million people aged over 60 were interested in buying a retirement property.
Making the right move
It makes sense to look at the costs involved before you make your move to ensure it will be worth it in financial terms and think too about the impact it might have on your family, your leisure activities and your social life.
Although most people are happy that they made their move, some buyers admit to having made the wrong choice. Regrets include being too far from friends and family, compromising on location, finding the neighbours a problem, choosing the wrong-sized property and discovering that their new home had hidden and expensive-to-fix problems when they moved in.
With home buying it’s important to take your time, ask the right questions and take practical steps like getting a property professionally surveyed before you commit to buying it.
Although you may have purchased a property, how much of it do you actually own right now? It’s estimated that at point of purchase the average UK buyer in effect, owns the equivalent of the kitchen and a bathroom.
Thinking of moving?
If you’re contemplating your next house move, then you’ll need to work out how much equity you have, the amount of your existing property you own. To make a rough calculation, you’ll need to know what your property is currently worth, and subtract the amount of mortgage you have outstanding. So, if you have a property valued at £300,000 and your outstanding mortgage is £175,000, then your equity is roughly £125,000.
Knowing what equity you have will help you decide how much you can afford to spend on buying your next property. If you’re thinking about moving, then it makes sense to talk to us, as we can help you calculate the amount of mortgage you’ll need, give you an indication of the interest rate you’re likely to be charged, and help you make your application to the right lender.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
https://oakhillifs.com/wp-content/uploads/2020/05/how-much-of-your-home-do-you-own.png300600motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-08-07 16:16:312020-06-09 12:29:47How much of your home do you own?
Over the last few years, we’ve all got used to shopping around for the best prices available on major household bills such as energy supplies and it makes sense to adopt the same approach when it comes to your mortgage.
Reaching the end of your deal
When your fixed-rate deal ends, your lender automatically moves your mortgage to their Standard Variable Rate, which as the name suggests can vary, rising and falling in line with the Bank of England base rate. With the mortgage market remaining competitive, there are many deals currently available that might be more cost-efficient.
Homeowners can often save hundreds of pounds a year by moving their mortgage to a more attractive rate with their existing lender or a different lender.
If you’re currently in a fixed-rate or tracker mortgage with early repayment charges, you don’t have to wait until it has come to an end. We can help you find a deal three months before your lock-in period finishes.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
https://oakhillifs.com/wp-content/uploads/2020/05/logo.png00motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-08-05 15:58:202020-06-09 12:29:50Should you remortgage?
A study by the Association of Independent Professionals and the Self-Employed1 reports that more than 320,000 self-employed people in the UK have two or more jobs. The term used to describe this is ‘slashie’, as in “I’m a writer/dog-walker/gardener”.
AUTO-ENROLMENT BENEFITTING THOSE IN SMALLER FIRMS
The government reports that auto-enrolment has been an “extraordinary success”. A study by the Institute for Fiscal Studies2 shows that only 26% of small business employees would be saving in a workplace pension if auto-enrolment had not been introduced, whereas the actual figure is now 70%. Auto-enrolment has effectively increased the pension participation rate amongst employees of small firms by 44%.
PENSIONS – DON’T LEAVE MONEY TO THE WRONG PEOPLE
A pension nomination form allows pension plan holders to give instructions as to who should receive their pension on death. But if it isn’t updated when circumstances change, there’s a risk that the pension could pass to the wrong person, for example an ex-partner.
UNRATED POLICY WARNING
People often buy unrated policies from comparison sites as they can seem a cheap option, but the Financial Conduct Authority warns that consumers buying unrated insurance policies could be at risk. Four unrated insurers have gone into administration in the last 18 months, leaving people with certain types of motor and buildings policies without cover.
This article is purely for information only and does not constitute advice, for advice based on your individual needs and circumstances please contact a financial adviser.
https://oakhillifs.com/wp-content/uploads/2020/05/logo.png00motivehttps://oakhillifs.com/wp-content/uploads/2020/05/logo.pngmotive2019-07-15 09:46:542020-06-09 12:30:06In the news
We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.
Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.
Essential Website Cookies
These cookies are strictly necessary to provide you with services available through our website and to use some of its features.
Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.
We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.
We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.
Google Analytics Cookies
These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.
If you do not want that we track your visit to our site you can disable tracking in your browser here:
Other external services
We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.
Google Webfont Settings:
Google Map Settings:
Google reCaptcha Settings:
Vimeo and Youtube video embeds:
Other cookies
The following cookies are also needed - You can choose if you want to allow them:
Privacy Policy
You can read about our cookies and privacy settings in detail on our Privacy Policy Page.
