Interest Rates Raised Again

The Bank of England has voted to hike interest rates by 0.5 percentage points to 2.25% - the seventh rise since last December. How will this impact mortgage holders?

For the 2.2 million people on a variable rate mortgage, the rise is very bad news, leaving many having to pay hundreds of pounds extra a year.

If you have a fixed-rate mortgage, you won’t see any immediate change to your monthly repayments. However, when your current deal ends, you’ll likely end up paying more on a new deal.

We have our finger on the pulse and can help you navigate the changing economic environment – get in touch today!

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments

Sources:
Guardian

What does the Stamp Duty cut mean for Homebuyers?

The amount of stamp duty you pay depends on the cost of the property. Chancellor Kwasi Kwarteng announced the permanent changes as part of the government's mini-budget. They come into effect straight away. The price at which stamp duty is paid was doubled from £125,000 to £250,000.

The rates are now:

  • 0%: £0 - £250,000 (£425,000 for first time buyers)
  • 5%: £250,000 - £925,000
  • 10%: £925,000 - £1,500,000
  • 12%: £1,500,000+

The chancellor added that discounted stamp duty for first-time buyers will now apply to properties costing up to £625,000 - up from £500,000.

How much stamp duty will I pay?

Buyers of homes that cost less than £250,000 don't pay stamp duty. That will comfortably buy you an average terraced home in most places outside of the South East of England.

First time buyers can spend £425,000 before paying stamp duty.

What effect does changing stamp duty have on the housing market?

During the pandemic, the government announced a stamp duty holiday to help home buyers whose finances were affected by Covid. It meant no stamp duty was payable on the first £250,000 of a property.

It was widely thought to have stimulated the housing market and estate agents reported a surge of interest.

According to the Office for National Statistics (ONS), UK average house prices increased by 15.5% over the year to July 2022, up from 7.8% in June 2022.

However, many things may have contributed to rising house prices.

"The final closure of the stamp duty scheme at the end of September 2021 may have had no impact at all," says Nicky Stevenson, managing director at estate agents Fine and Country.

"Other factors are so much more important, namely the race for space, low supply, accidental savings [from the pandemic] and low interest rates."

What other help is there for first-time buyers?

High Street lenders are also offering mortgages to borrowers with a deposit of just 5%, under a government guarantee scheme which launched in April 2021. The policy is designed to help more first-time buyers secure a home.

The scheme is available to anyone buying a home costing up to £600,000, unless it is a buy-to-let property, a second home or, in some cases, a new-build.

Sources:
BBC Website

Two For One? Life Insurance For Couples

If you and your partner have shared financial commitments, it makes sense to consider a joint life insurance policy. But is it better to take out one policy or two?

A joint life insurance policy covers two people but usually pays out once. This means the cover will end after the death of the first policyholder. So why choose a joint policy?

One key reason is that it can be cheaper. This might be especially helpful if one person would be more expensive to insure. On the other hand, if one person earns a lot more, you might want extra cover for that person, in which case individual policies might be better.

Whatever you decide, having some sort of cover is the most important move – especially if you have dependants.

As with all insurance policies, conditions and exclusions will apply

Sources:

www.moneysupermarket.com

www.legalandgeneral.com

www.aviva.co.uk

Protection Pay-Outs Rise Again

Protection pay-outs for bereavement, illness and injury claims reached £6.8 bn in 20211, a second consecutive yearly high.

The record-breaking figure means that, on average, more than £18.6m was paid out every day in life insurance, income protection and critical illness claims. In another turbulent year, protection continued to provide crucial support to millions of people.

Bigger pay-outs

This is the third year in a row where the overall average individual pay-out has increased, rising by 9% year-on-year to reach £14,994.

Specifically, for term assurance, the average claim payment was £61,944, roughly in line with 2020’s figure. Likewise, the average critical illness claim payment was little changed from a year earlier at £67,500.

Claims paid

98% of individual and group claims were paid in 2021, highlighting the widespread support provided by protection policies.

Once again, ‘non-disclosure’ was the main reason for an individual protection claim being rejected. This occurs when a customer fails to provide information about something that might have influenced the insurer’s decision to provide cover or the price of that cover.

COVID effect

2021 was, of course, significantly impacted by the pandemic. In times of turbulence, the importance of protection policies comes into even sharper relief.

Indeed, pay-outs for COVID-19 related individual claims almost doubled in 2021, reaching a total of £261m. The increase was driven mostly by the 69% increase in term assurance claims.

Ups and downs

One especially noteworthy trend in 2021 was the 40% rise in claims for musculoskeletal conditions, which, analysts suggest, could be linked to the higher number of people working from home in unsuitable work environments.

In contrast, there were 20% fewer claims relating to mental health in 2021. Despite the drop, mental health claims remain above their 2019 level, showing how protection policies continue to support people throughout the pandemic.

More than a number

Term life insurance pays a lump sum to cover costs if the policyholder dies unexpectedly or prematurely; income protection supports you if you are unable to work due to illness or injury, while critical illness cover pays out if you are diagnosed with a specified illness.

All three provide vital protection for you and your family, making sure you can meet financial commitments and giving you the peace of mind that your loved ones will not face hardship. Behind the headline facts are millions of families given support when they needed it most.

Get in touch

Whatever your circumstances, we can help you find a suitable policy within your budget. Get in touch today!

As with all insurance policies, conditions and exclusions will apply

1 Association of British Insurers (ABI) and GRiD

Sources:

www.abi.org.uk

www.independent.co.uk

Green Mortgages

If you've an energy-efficient home, you could save with a green mortgage.

A growing number of mainstream lenders are now offering so-called green mortgages. Essentially, a green mortgage is meant to increase the appeal of owning a green property. On top of the savings you'll make on your energy bills each month, the idea is that lenders give you cashback and/or a better interest rate when you take out a green mortgage on an energy-efficient property.

Lenders are willing to offer incentives of this nature because they increasingly see energy-efficient properties – in this era of combating climate change – as less risky and more likely to hold their value. Plus, if a homeowner is spending less on their energy bills each month, there's less of a chance they'll struggle to meet their mortgage repayments.

To qualify, you need to own/purchase a property with an Energy Performance Certificate (EPC) rating of A or B.

While it's likely more lenders will start to offer green mortgages in the future, the number of high-street lenders that currently offer a green mortgage is small so we recommend speaking to one of our advisors. A broker is worth their weight in gold, as we will be able to highlight green mortgages for you, as well as indicate whether you could save money by getting a non-green mortgage instead.

For more details us on 01522 56722 or email at enquiries@concisefs.co.uk

Prepare to Sell in Seven Steps

In the seller’s market of the pandemic years, properties have been changing hands at double speed. As the market starts to cool, however, the finer details will become even more important.

Small changes can make a big difference; it’s about making your home as appealing as possible to prospective buyers. Here are seven ideas for putting the finishing touches to your house before listing it for sale.

1. De-clutter

Removing clutter will make your house seem bigger. It’s one thing for your home to look lived-in and another to have piles of stuff at every turn. That stack of leaflets by the front door? Recycling bin. That over-flowing cupboard of DVDs you haven’t watched since 2014? Charity shop.

As an added benefit, de-cluttering your home is a great way to prepare for moving house – both physically and mentally.

2. Don’t paper over the cracks

Now might be the time to get on top of any DIY tasks you’ve been delaying! Presenting a well-maintained property shows the house has been cared for, which is something buyers value. When buyers notice problems (or attempts to hide problems) they worry about the extra work that might need doing and factor this into their offer price.

3. Depersonalise

It’s important to strike a balance between personal and presentable. Don’t overdo depersonalising; you don’t want your house to feel like an empty white box. But it might be a good idea to remove a few quirks like family photos and holiday souvenirs so that the buyer can imagine themselves living there more easily.

4. Define rooms

It’s normal for spaces to blur over time. If the kitchen table looks more like a home office and the spare bedroom has become a storage depot, think about converting these rooms back to their original purpose. Defining rooms clearly helps advertise your home more effectively.

5. Think smells

A surprising or unpleasant smell can play an outsized role in informing our impressions at a viewing. Cooking, smoking, pets, and bins can all cause off-putting odours. Air your house before a viewing and consider adding floral scents like orange and jasmine.

6. Inside out

Don’t forget the outside of your house! Many buyers will drive past a property to get an idea of its appeal before expressing any interest. If you can tidy the garden or driveway, clean the windows, and give the front door a lick of paint, your property will make a great first impression.

7. Green is good

Small improvements in the garden can increase the appeal of a property. Weeding, cutting the grass and adding a few decorative touches are simple, cost-effective ways to improve how your house is perceived.

Here to help

We’re here to guide you through the mortgage process every step of the way – leaving you time to paint the front door! Get in touch today to find out how we can help.


Sources:

www.your-move.co.uk

www.theadvisory.co.uk

A Big Welcome to Jess

Jessica Bell has joined Concise as a Mortgage & Protection advisor following 7 years in the property sector working in a number of different roles including Referencing Executive, Learning and Development Trainer, Sales Negotiator, Property Valuer and Branch Manager.

Jess is Lincolnshire born and bred, and lives with her partner and their puppy Alfie in Dunston. She loves a good spa day, trips away and spending time with friends enjoying a cocktail (or two!).

Jess absolutely loves being a Mortgage Advisor:

‘’I love being able to help customers and have a positive impact on their journey, I am here to provide support and my aim is to keep you smiling no matter what. I am really excited to be working with Concise, to meet all their lovely clients and help you with all your mortgage, protection and insurance needs’’.