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 Between 1996 and 2016, the percentage of 25 to 34-year-olds who own their own homes  has fallen 19% from 55% to 34%. In a bid to combat this, prime minister Boris Johnson has  set out plans that include proposals for housing benefit being able to be counted towards  a mortgage. The prime minister vowed to “turn benefits to bricks”, saying it is unfair that  homeownership is dominated by over 65-year-olds. 

 Speaking in Lancashire, prime  minister Boris Johnson promised  a “comprehensive review” of the  mortgage market. One of the  biggest changes announced  in his speech was a pledge to  include housing benefits in the  mortgage application process:   “When (home) ownership  remains beyond the reach of a  great many hard-working people,  it’s neither right nor fair to put  ever vaster sums of taxpayers’  money straight into the pocket of  landlords”  

 The aim to make the property  ladder more accessible to the  younger generations is clear.  The prime minister announced  plans to allow the use of  welfare payments for paying  a mortgage – stating that the  £30 billion in housing benefit  spent on rent would be better  spent helping people on lower  incomes to own their own  homes. A spokesperson for the  government later confirmed that the rules would be changed to allow people on universal credit who save money through the use of a Lifetime ISA or Help to  Buy ISA would no longer have to worry about their benefit payments being cut when their savings hit a certain level. 

 A key focus of Johnson’s speech  was expanding the Right to Buy  scheme to enable tenants of  housing association properties to  get on the property ladder. The  new initiative is expected to be  limited to a few pilot schemes at  first, before a full implementation  can potentially help 17% of all  current households. 

 Johnson said: “We are going  to look to change the rules on  welfare so that the 1.5 million  working people who are in  receipt of housing benefits – I  stress working people – and  who want to buy their first home  will be given a new choice: to  spend their benefit on rent, as  now, or put it towards a first-ever  mortgage”. 

 As well as this, the prime minister  said that the Right to Buy  scheme will be extended and  “responsibly capped” and the  cost will be covered by existing  spending plans. This scheme  allows most council tenants  to buy their council homes at a  discounted rate.  Access to low-interest mortgages will also be expanded in an attempt to “unbolt the door to ownership” and combat the cost of home ownership. 

 If you’d like to discuss the options available to you, contact your adviser today. 

 It’s safe to say that there is a fair amount of confusion currently surrounding the mortgage market.  Rates have been on the rise as inflation soars, but what does this mean for you? Perhaps you’re looking  to secure your first mortgage or looking to renew? Either way, it’s certainly a confusing time and it  can be so difficult to know what type of mortgage best suits your situation. Do you go with a fixed  rate mortgage to avoid further rises or a variable rate in the hope that mortgage rates fall again? We’ve  outlined the pros and cons to help you make the best decision.  

Fixed rate mortgages

Fixed rate mortgages do exactly what  the name suggests. The interest rate  on a fixed rate mortgage remains  the same throughout the fixed term  of your mortgage product – usually  between two and five years. With  a fixed interest rate, your monthly  payments will remain the same for  the duration of your product term.  Once the product expires, you’ll  automatically revert to the lender’s  standard variable rate (SVR).  The biggest positive of a fixed rate  mortgage is of course your payment  remaining the same. This means  that it is much easier for you to  budget on a monthly basis as you  will always know exactly how much  money you’ll be paying every month.  If you were to take out a fixed rate  mortgage today, you would lock in  your monthly payments based on  today’s rates and would not pay any  more even if rates rise within your  fixed-rate product term – protecting  you against your mortgage  becoming unaffordable.  The downsides come into  consideration when interest  rates start to fall. You would then  potentially be paying more than  the standard variable rate until your  product term expires. On top of this,  fixed rate mortgages are also less  flexible, involving Early Repayment  Charges (ERC) during the fixed  product term.  

Variable rate mortgage 

A variable rate mortgage is the exact  opposite of a fixed rate. Both the  interest rate and monthly payments  are dependent on current mortgage  rates and can fluctuate at any  point throughout the term of your  mortgage. The two different types of variable rate mortgages are SVRs (Standard Variable Rate) that is fixed by your lender and a tracker rate that follows the movements of the Bank of England’s Base Rate – although the tracker rate will usually be higher than the base rate (e.g., base rate plus 2%). The main advantage of a variable rate mortgage is felt when rates go down as you could end up paying less as a monthly repayment than you did at the start of your term, (however it could also be more if rates go up). You’ll also be able to get a lower rate on a variable rate mortgage than on a fixed as you’re taking the risk that rates could increase throughout your term. For those whom flexibility is key, a variable rate or tracker rate mortgage would be preferable than being locked into a product with Early Repayment Charges (ERC) should your circumstances change,  and you need to exit your fixed rate  mortgage product early. There is no right answer to this question. It is entirely down to personal preference and your own financial situation. Given the current volatility in the market, it’s so important to get in touch with your adviser to discuss your options. 

 If you’d like to discuss the options available to you, contact me today

 It’s no secret that this winter is shaping up to be a struggle for so many households in the UK.  With rising energy bills on the minds of millions – the cold weather has the potential to ask some difficult questions of us all. When do you put the heating on? When can you afford to?  Obviously, there are challenges ahead – but there are also ways to save energy here and there that can add up over the course of a few months. Below are a few tips to help you feel a bit better about the prospect of turning up that thermostat. 

Keep out the cold 

Although it may be an obvious  solution, taking care of the  draughty areas in your home can  be one of the best ways to save  energy. Draughts not only let in  the cold, but also allow heat to escape – so it’s no surprise that draught proofing could save you  up to £25 per year. A chimney draught excluder could save you an additional £17 per year while also reducing your carbon footprint. 

Upgrade your heating controls 

Over 50% of your energy bill will go towards providing heating and hot water. Updating your  heating controls can be the best way to manage your bills by  reducing how frequently you use your heating. Room thermostats,  programmers and thermostatic  radiator valves can all help to  reduce your costs when used  efficiently. Maybe you only ever  shower in the morning? If that’s  the case – you can turn off the  hot water for the rest of the day!  Heating controls can save you  roughly £75 per year. 

Insulate your pipes 

Pipe insulation can help to  prevent heat from being lost  from the pipes in your home.  This helps to keep your water  hotter for longer and therefore  reducing how much energy is  required to heat it. They’re really  easy to install too! You simply  place foam tubes around the  exposed pipes between your hot  water cylinder and your boiler  – and doing so can save you  around £10 per year. 

Radiator Reflection

Radiator reflector panels are a  cheap and easy way of saving  energy. Instead of letting heat  escape through an external wall,  the panels reflect heat back into  your home – reducing your  overall energy consumption.  Installing these panels could save  you £19 per year. 

But wait, there’s more…  Maybe it’s time to consider the bigger decisions available to you. Have your kids left home?  Do you need all the space you  currently have? If not, downsizing  to a smaller property to suit your  needs could be one of the most  effective ways to reduce your  energy consumption. Not only  that, but downsizing could also  see your council tax decrease  significantly. If you think downsizing could be  on your radar, or you’d just like  to discuss the options available  to you, get in touch with your  adviser to talk through any  queries you may have. 

If you’d like to discuss the options available to you, contact me today. 

After nine years, the Help to Buy scheme is coming to an end. With the application deadline  having already passed – the attention for first time buyers now turns to the available  alternatives. 361,075 homes were bought with a Help to Buy equity loan between April 1st,  2013, and March 31st, 2022 – a £22.5 billion hole left to be filled by alternative schemes. So, what other schemes are out there and available to help first-time buyers get onto the property ladder? 

First Homes Scheme: First launched in June 2021, the  First Homes scheme is an initiative  involving first-time buyers, key  workers and local people. The  scheme allows those who fit the  criteria to purchase a new build  property at a 30-50% discount  to the market value. When said  buyers eventually decide to sell,  that discount is passed onto the  next buyer as well to encourage a  continuing chain of opportunity for  first-time buyers to buy affordable  homes. The scheme is still in its  infancy with only a handful of  developments currently available.  However, with the end of Help to  Buy almost upon us – First Homes  could see an increase in both  availability and popularity as we head  into 2023 and beyond. 

Shared Ownership:  Similarly to Help to Buy, Shared Ownership is a government scheme  that allows prospective buyers to  purchase a share of a property from  a housing association and pay rent  on the rest. As long as the share  being purchased is between 25% and  75% of a home’s full market value,  shared ownership could be a viable  option for first-time buyers looking  to purchase a home. Proportionate  amounts of rent and mortgage  repayments relating to the split of  the ownership are paid to make the  monthly payments manageable.  Further shares of the home can be  bought later down the line (known as  staircasing) which would see the rent  decrease as the landlord owns less of  the overall property.  

Lifetime ISA:  On top of the schemes still available  to help you buy a home, there are  also government initiatives to help  you save for one. When saving for  a deposit for your first home, using  a Lifetime ISA enables you to save  £4,000 a year of your own money.  The Government then add 25% of  whatever you save for that tax year  – meaning you could gain up to  £1,000 extra every year. The money  must then be used to either buy your  first home or to fund your retirement. Although the Help to Buy scheme  is now coming to an end and there  are no direct replacements as of yet,  there are still initiatives in place to  help you get on the ladder. If you’re  considering buying your first home,  contact your adviser to discuss the  options available to you 

 If you’d like to discuss the options available to you, contact your adviser today.