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Autumn Budget 2024 – what it means for the property market and your finances

Mon, 04 Nov 2024 19:13:57 GMT

As the dust continues to settle in the aftermath of Rachel Reeves’ first Budget, there are a few changes that will impact buyers, borrowers, homeowners and investors.

Stamp duty

The biggest shock for the housing market, as it was not trailed beforehand, was a surprise 2 per cent increase in the stamp duty surcharge on second homes. The Chancellor announced that those buying a second home or investment property would see an increase in the stamp duty surcharge from 3 to 5 per cent from 31 October. This sent a flurry of landlords and investors rushing to transact before the midnight deadline, attempting to save themselves tens of thousands of pounds in tax.

Going forward, landlords will need to budget for the higher entry cost and build this into their business model. Most landlords run their property portfolio as a business, and this is unlikely to put them off investing in property or running for the exit and selling up, but it may deter first-time landlords and investors. Those buying a second home will also need to account for the extra tax that will need to be paid.

There had been hopes that Reeves might extend the stamp duty concessions which are due to expire in March 2025, but she did very little to obviously benefit first-time buyers. Buyers of homes worth less than £250,000 don’t pay stamp duty, while first-time buyers currently don’t pay stamp duty on properties worth less than £425,000 – after March 2025, this will reduce to £300,000.

Capital gains tax

Pre-Budget, there was a nasty rumour circulating that the Chancellor was planning to hike capital gains tax (CGT) on the profit made from the sale of second homes and buy-to-let properties so that it would be on a level footing with income tax. However, in the end this came to nothing, with Reeves holding CGT at 18 and 24 per cent for basic- and higher-rate taxpayers respectively.

Inheritance tax changes

Reeves also unveiled reform of Agricultural Property Relief and Business Property Relief with the first £1m of combined business and agricultural assets continuing to be inheritance tax free. But for assets worth more than £1m, inheritance tax will apply with 50 per cent relief (at an effective rate of 20 per cent). The proposed changes are subject to a consultation period next year with any changes unlikely to come in before April 2026. The National Farmers Union is organising a protest against the measures in London on 19 November and it is likely that there will be a lot of to-ing and fro-ing before any changes are introduced.

Interest rate cuts?

There are concerns that higher government borrowing and the increase to employer national insurance contributions will fuel inflation, as this will be passed on to the customer via higher costs. This comes at a time when inflation seemed to be finally under control, with the Bank of England reducing base rate from 5.25 to 5 per cent in August, and the markets expecting further rate reductions, perhaps at the November and December meetings. Swap rates have risen since the Budget amid concerns that the trajectory of interest rate reductions could potentially slow, which is not welcome news for borrowers. A number of lenders have pulled rates and repriced upwards this week; time will tell whether this is a blip, as the markets still expect base rate to come down further, even if it takes a little longer than previously forecast.

Get in touch

Borrowers who are coming up to remortgage or taking out a new mortgage should plan ahead as much as possible. Rates can be secured several months in advance, so it is worth speaking to a whole-of-market broker as to the best course of action. If you secure a rate now, and rates fall by the time you are ready to take the mortgage out, you should be able to move onto a lower rate at that time.

Base rate held at 5.25 per cent

Thu, 21 Mar 2024 12:51:00 GMT

The Bank of England has held base rate at 5.25 per cent for the fifth consecutive meeting. The decision was widely expected as it looks as though efforts to bring inflation under control are working, with expectations growing that a base rate cut will come in the next few months.

The Monetary Policy Committee voted by a majority of eight to one to maintain Bank Rate at 5.25 per cent, with one member voting for a reduction in rates to 5 per cent.

Swap rates have fallen in the past few days on the back of lower inflation figures and if this trend continues, we could see lenders reduce their mortgage pricing.

Even if this is the case, mortgage rates will still be higher than the rock-bottom deals borrowers have grown used to. Those remortgaging this year will be moving onto higher rates although they will be lower than would have been the case a few months ago.

Whether you are remortgaging or moving house this year, it’s important to plan ahead and speak to a whole-of-market broker about the mortgage options available to you. Nobody has a crystal ball and can safely predict what will happen with rates but a rate can be secured several months before needed, giving peace of mind, and borrowers can move onto a lower-priced product when they take out the mortgage should rates have fallen by then. Get in touch for more information.

Bank of England maintains base rate at 5.25 per cent

Thu, 14 Dec 2023 14:01:28 GMT

The Bank of England held base rate at 5.25 per cent for the third consecutive meeting. The decision was widely expected by the markets as it looks as though efforts to bring inflation under control are working, while there are also fears that the UK economy is in danger of falling into recession following weak GDP figures.

The Monetary Policy Committee voted by a majority of six to three to maintain Bank Rate at 5.25 per cent, with three members preferring a 0.25 percentage points increase to 5.5 per cent.

Lenders have been reducing their mortgage pricing in recent weeks and we expect this trend to continue into the new year. After a disappointing year for lenders, they will be keen to do more lending in 2024.

While mortgage rates continue to move in the right direction, pricing remains significantly higher than the rock-bottom deals borrowers have grown used to. Those coming up to remortgage or take out a mortgage should plan ahead and speak to a whole-of-market broker. Rates can be booked up to six months before needed, giving you peace of mind, plus you can always choose another lower-priced product when you come to take out the mortgage should rates have fallen in the meantime.

Our mortgage is going up by £1,000 a month - what can we do? (Mail Online)

Mon, 14 Aug 2023 06:58:01 GMT

The rise in rates has meant one Mail Online reader fears their payments will increase by £1,000 when they come to remortgage in December. Jonathan Harris, managing director of Forensic Property Finance, says : 'The base rate has risen over the past 18 months as the Bank of England battles to get inflation in check, pushing up the pricing of variable-rate mortgages. Swap rates, which underpin the pricing of fixed-rate mortgages, have also risen significantly, making fixes more expensive. We all have to get used to paying more for our mortgages as the era of rock-bottom rates is in the past... but there are steps you can take if you are worried.'

Read the full article here .

Navigating the mortgage market in 2023

183:800023140 (Jonathan Harris) — Tue, 17 Jan 2023 14:04:34 GMT

January has got off to a positive start for the mortgage market. While the trend in base rate continues to be upwards, with a further interest rate increase expected at February’s Monetary Policy Committee meeting, fixed-rate mortgage pricing continues to edge downwards.

Several lenders have been cutting their fixed-rate mortgages in recent weeks after rates soared on the back of the ill-fated mini-Budget in late September. While sub-1 per cent five-year fixed rates are long gone, it is now possible to fix for five years at just over 4 per cent, with expectations that rates could edge down further in coming weeks.

Those coming up to remortgage should plan ahead. Seek advice from a whole-of-market broker such as Forensic Property Finance, who can search the market on your behalf and recommend the best deal for your particular circumstances. Products can be booked up to six months before you need them, depending on the lender, so it’s worth checking when your current deal comes to an end and planning accordingly. If you reserve a rate only to find that there are cheaper deals available when you come to move onto your new mortgage, you are not obliged to stick with the product you secured – you can move onto one of the cheaper deals.

Some borrowers are also considering variable-rate mortgages, such as base-rate trackers with no early redemption charges. The idea is that they then switch to a fixed rate if pricing comes down further. This can be a good strategy for those who can afford fluctuations in their mortgage payments but those who are on tighter budgets may wish to opt for the certainty of a fixed rate regardless. Forensic Property Finance can advise as to the best course of action.

Get in touch for more information.

Five-year mortgage deals are surging (The Times)

183:800023140 (Jonathan Harris) — Sun, 02 Jan 2022 17:14:38 GMT

Five-year fixed rate mortgages are about to overtake two-year fixes as the nation's favourite home loan. Jonathan Harris of Forensic Property Finance, says : 'The fact that there is no longer much price differential between five and two-year fixes is encouraging many borrowers to opt for the longer fix.'

To read the full story, click here

Pandemic property boom pain: First-time buyers are shelling out an extra £23k on deposits (This is Money)

183:800023140 (Jonathan Harris) — Tue, 30 Nov 2021 16:57:46 GMT

First-time buyers have been forced to find, on average, an extra £23,000 to purchase a home since the start of the pandemic. Jonathan Harris of Forensic Property Finance, says : 'The frenzy of the past few months seems to have calmed a little, which should mean first-time buyers are not at risk of being priced out to the same extent if they delay their move.'

To read the full story, click here

Why it could be the perfect time to get on the housing ladder (The Times)

183:800023140 (Jonathan Harris) — Fri, 15 Oct 2021 15:51:23 GMT

First-time buyers who are keen to get on the housing ladder will need to prove to lenders that they can afford the monthly payments, as well as drumming together a deposit. They also need to watch out for the stress test where lenders check that they can afford the repayments if interest rates rise considerably. 'Some lenders stress test up to 7 per cent, which is just ridiculous, but it does vary a lot from lender to lender,' says Jonathan Harris of Forensic Property Finance .

To read the full story, click here

How to downsize your property (The Financial Times)

183:800023140 (Jonathan Harris) — Fri, 08 Oct 2021 15:39:41 GMT

Releasing cash from the home to provide income or help children or grandchildren out with money towards a deposit, is often the aim of, equity release. 'Historically, these schemes were inflexible, expensive and rapidly eroded a borrower's equity in their property,' says Jonathan Harris of Forensic Property Finance . 'With greater innovation in the market, these are now cheaper, more flexible and a viable option for releasing equity from your property.'

To read the full story, click here

Mortgage deals head even lower as HSBC launches loan with rate of just 0.94 per cent (This is Money)

183:800023140 (Jonathan Harris) — Tue, 06 Jul 2021 15:48:52 GMT

HSBC has launched a mortgage with its lowest-ever headline rate of 0.94 per cent. Jonathan Harris of Forensic Property Finance, says: 'Lenders have plenty of money to lend and are keen to do so. One way to attract business is to launch ever-lower mortgage rates to top the best buy tables, which is what HSBC has done with this incredibly cheap two-year fix.'

Lenders sometimes add large fees but Harris says HSBC's £999 fee was 'reasonable'. 'Not only is the rate super low, the fee is also reasonable – it's not a case here of offering a cheap rate with a hefty fee to compensate,' he says.

To read the full story, click on the link

HSBC and TSB launch Britain's cheapest-ever mortgages at 0.94 per cent (The Daily Telegraph)

183:800023140 (Jonathan Harris) — Tue, 06 Jul 2021 15:42:54 GMT

Lenders have slashed mortgage rates for those with large deposits, with HSBC cutting the rate on its two-year fix to 0.94 per cent for those with a 40 per cent deposit. TSB has launched the same rate for those remortgaging.

Jonathan Harris of Forensic Property Finance, says: 'Whether these low rates will be around for long is hard to say. Even if rates were to edge further downwards, they surely can't get that much cheaper when they are already at lowest-ever levels, and someone fixing at 0.94pc will be getting a competitive deal.'

To read the full article, click here

Prices have soared but the property ladder need not be out of reach for first-time buyers (The Daily Mail)

183:800023140 (Jonathan Harris) — Sat, 05 Jun 2021 15:31:15 GMT

One option which is increasingly popular among first-time buyers struggling to afford to get on the housing ladder is a 'joint borrower, sole proprietor' (JBSP) mortgage.

Jonathan Harris of Forensic Property Finance, says this is where the parent is on the mortgage but not on the deeds, avoiding extra stamp duty or capital gains tax. However, the parents' income is taken into account by the lender when deciding how big a mortgage to advance, which can enable the first-time buyer to achieve a bigger home loan.

To read the full story, click here

How to pay off your mortgage in ten years (The Sun)

183:800023140 (Jonathan Harris) — Wed, 26 May 2021 15:25:36 GMT

Many homeowners dream of being mortgage free but it is worth proceeding with caution.

Jonathan Harris of mortgage broker Forensic Property Finance, says : 'Don't pay off the mortgage unless you are absolutely sure that you won't need that money again. With mortgage rates close to record lows, the mortgage is one of the cheapest forms of borrowing. Before you pay off your mortgage either using lump sum or monthly payments, check you've cleared your more expensive debt first. There is no point paying down a mortgage with a pay rate of 3% if you have a credit card charging 20% interest or an overdraft rate of 30%.'

To read the article, click here

Beware the SVR: The cost of doing nothing when your fixed mortgage rate ends (The Metro)

183:800023140 (Jonathan Harris) — Tue, 11 May 2021 15:19:13 GMT

Once you come off your mortgage deal, you move onto your lender's standard variable rate (SVR), assuming you don't remortgage again. To avoid going onto the SVR by accident, which will cost you money, Jonathan Harris of Forensic Property Finance says you should get in touch with your existing lender about six months before your rate ends to see what deal they can offer you. 'Your lender may offer the most competitive option but chances are another lender will have a better deal. Most mortgage offers are valid for six months, so you can prepare early.'

To read the full article, click here

House price rises and how long to fix a mortgage: Q&A for first-time buyers (The Observer)

183:800023140 (Jonathan Harris) — Sat, 10 Apr 2021 14:52:03 GMT

Are house prices going to keep rising? Jonathan Harris of Forensic Property Finance, says: 'Buyers should think carefully before getting carried away in a bidding war and only pay what they can afford, tempting as it may be to overstretch yourself to get a particular property.'

To read the full story, click here

The period home we are buying has an old extension and loft conversion - how do we check they conform to building regulations (This is Money)

183:800023140 (Jonathan Harris) — Tue, 30 Mar 2021 14:47:28 GMT

A reader writes that they have just received a homebuyer report on the period property they want to buy. It points out that some aspects of the loft conversion and rear extension might not conform to current building regulations. Will this affect their ability to get a mortgage?

Jonathan Harris, managing director of Forensic Property Finance, says : 'From a mortgage perspective, the issues raised may not have been picked up and flagged as part of the mortgage valuation. A homebuyer report is a separate, more detailed inspection carried out for the benefit of the buyer but not for the purposes of the lender. So while the matters will be of concern to the buyer, they may not impact the suitability of the property for a mortgage.'

To read the full story, click here

Could a flutter on the horses derail your mortgage hopes? (This is Money)

183:800023140 (Jonathan Harris) — Fri, 19 Mar 2021 09:45:31 GMT

Lenders are looking more closely at applications so when applying for a home loan, you want to make sure your bank statement reflects you in the best possible light. Certain, regular expenditure, such as gambling, and buy now, pay later, may raise red flags for lenders.

Jonathan Harris, managing director of Forensic Property Finance, says: 'Frequent cash withdrawals can ring alarm bells with lenders - I had one client who was withdrawing hundreds of pounds in the early hours every Saturday morning who was suspected of procuring ladies of the night.

'Another client was withdrawing large sums of cash and the lender was concerned that he was paying his workers cash-in-hand, promoting tax avoidance on earned income.'

To read the full story, click here

The £1m Orkney Islands plot for sale - but it comes without a house (Mail Online)

Fri, 05 Mar 2021 09:40:26 GMT

If you are buying a plot of land with the potential to build a home, you need to do your research and planning carefully beforehand. Calum Kerr, specialist in self-build and development finance at Forensic Property Finance, says : 'There is a lot to consider and you need to gather all your intelligence before you even think about bidding at auction.

'You need to look at location, planning, infrastructure, supply of water and gas, and contamination issues. All these things will come into play and could impact your decision to purchase.

'As a general rule, a bit of arable land outside a village is probably worth £6,000 to £8,000 an acre. With provisional planning that could go up to £20,000 per acre and full planning up to £150,000 per acre.

'If you need to raise a mortgage, you will have to satisfy the lender's requirements. Some background in development or evidence of a track record will help, plus you will likely need a bigger deposit than you would on a mainstream residential deal.'

To read the full story, click on the link

A third of home renovators will fund the work with a remortgage (This is Money)

183:800023140 (Jonathan Harris) — Mon, 01 Mar 2021 16:41:37 GMT

Home improvements are popular as we spend more time at home and require more space. According to a new survey, a third of people improving are planning on remortgaging to pay for those improvements.

'Lenders will often want you to provide evidence of the cost of the works planned,' Jonathan Harris of Forensic Property Finance told This is Money . 'Be prepared well in advance with quotes and costs.'

To read the full story, click here

Lenders shun the self-employed for being too complex and risky (The Sunday Times)

183:800023140 (Jonathan Harris) — Sun, 28 Feb 2021 16:35:21 GMT

Many of the UK's five million self-employed have adapted their businesses during the pandemic but lenders are still reluctant to lend to them.

'Some lenders seem to be applying draconian criteria for no other reason than that an applicant is not employed,' says Jonathan Harris, managing director of mortgage broker Forensic Property Finance, in The Sunday Times . 'It doesn't make sense that the self-employed are considered a greater risk than employed applicants.'

To read the full story, click here

Mortgage hope for first-time buyers (The Sunday Times)

183:800023140 (Jonathan Harris) — Sun, 21 Feb 2021 16:26:02 GMT

Joint borrower sole proprietor mortgages continue to grow in popularity with Teachers Building Society the latest lender to launch one.

Jonathan Harris of Forensic Property Finance told The Sunday Times : 'This isn't an actual product but a means of structuring the mortgage that not all lenders offer. This is ideal for parents helping children onto the ladder who don't want to be on the deeds because that would make them liable for additional stamp duty by virtue of owning more than one property.'

To read the full story, click here

From the self-employed to those on furlough, what are the mortgage options? (The Guardian)

183:800023140 (Jonathan Harris) — Sat, 13 Feb 2021 16:17:39 GMT

When it comes to getting a mortgage, thanks to the pandemic there are winners and losers. The self-employed are finding it trickier, with much greater levels of scrutiny. Jonathan Harris, managing director of Forensic Property Finance, told The Guardian : 'Lenders have been applying more forensic underwriting to the self-employed by asking for sight of their past six months' business bank account statements along with commentaries regarding their future trading and whether it is sustainable.'

But there are ways you can help yourself: 'Get all your documentation together, including the past six months of bank statements, both personal and business, well in advance,' Harris added. 'Check your credit rating is correct. If you have debts, think about reducing them if possible, as the lender will take these into consideration when deciding how much you can borrow.'

To read the full story, click here

What is a Rio mortgage and who should get one? (This is Money)

183:800023140 (Jonathan Harris) — Sat, 06 Feb 2021 16:12:17 GMT

Retirement interest-only (Rio) mortgages enable older homeowners to only pay the interest on their home loan. When thy die or go into long-term care, their home is sold and the debt repaid.

Jonathan Harris, managing director of Forensic Property Finance, told This is Money : 'Rio mortgages are becoming increasingly popular as we live longer and want to take advantage of borrowing while interest rates are still at record lows. They also provide clients with the option to borrow monies as opposed to cashing in on long-term investments, which they want to leave until later in life.'

To read the full story, click here

How to pay off your mortgage in ten years (The Sun)

183:800023140 (Jonathan Harris) — Wed, 27 Jan 2021 16:07:57 GMT

Overpaying on your mortgage is one way of clearing the balance more quickly - and realising many people's dream of being mortgage-free.

But Jonathan Harris, managing director of mortgage broker Forensic Property Finance , warned borrowers to be cautious in The Sun : 'Don't pay off the mortgage unless you are absolutely sure that you won't need that money again. With mortgage rates close to record lows, the mortgage is one of the cheapest forms of borrowing. Before you pay off your mortgage either using a lump sum or monthly payments, check you've cleared more expensive debt first. There is no point paying down a mortgage with a pay rate of 3% if you have a credit card charging 20% interest or an overdraft rate of 30%.'

To read the full story, click here

Rates on two and five-year fixed mortgages are just a fraction apart - should you lock in longer term? (This is Money)

183:800023140 (Jonathan Harris) — Tue, 26 Jan 2021 15:58:33 GMT

The difference in interest rates for two and five-year fixed-rate mortgages is the lowest it has been since 2013, according to Moneyfacts. While two-year fixes tend to be the most popular for UK borrowers, should you opt for a longer fix instead?

'As always, consider your own circumstances,' Jonathan Harris of Forensic Property Finance advises in This is Money . 'If you know you will stay in your home for the next five years, then a five-year fix will give you security at a competitive rate. If there is a chance you might move within five years, it might be better to opt for a shorter fix so that you aren't caught out by early redemption charges if you move during the fixed term. In theory, you can port most mortgages to your new home but this is not necessarily guaranteed.'

How to get a mortgage if you are self-employed (The i)

183:800023140 (Jonathan Harris) — Mon, 18 Jan 2021 15:53:20 GMT

The pandemic has made it harder for the self-employed to get a mortgage. Some lenders have introduced lower loan-to-value ratios for self-employed borrowers, while others have also brought in lower income multiples.

Jonathan Harris, managing director of Forensic Property Finance, told The I : 'In some cases, lenders apply a haircut to the income regardless of what the borrower's situation is, even if they have got a viable business and can demonstrate that. A lot of businesses had a successful year in 2020 but they might find a reduction applied to their income used for mortgage purposes, even though there has been no reduction in their turnover or profitability. It feels like lenders have taken a hammer to the self-employed, whereas they haven't so much for the employed.'

To read the full story, click here

Self-employed borrowers finding it harder to get finance (This is Money)

183:800023140 (Jonathan Harris) — Fri, 15 Jan 2021 17:41:48 GMT

Santander is the latest lender to introduce tighter lending restrictions for self-employed borrowers. Amid concerns that the pandemic is likely to impact the income of the self-employed, the lender is restricting the maximum loan-to-value on mortgages to 60 per cent.

Jonathan Harris, managing director of Forensic Property Finance, told This is Money : 'The trouble with this restrictive policy implemented by Santander is that it is a blunt instrument with little logic or thought. It doesn't make sense that the self-employed are considered a greater risk than the employed. Many employed workers are employees of small to medium-sized businesses, run by self-employed individuals. If the self-employed are a greater risk, then what is the logical fate of those employed by them?'

To read the full story, click here

Self-employed need '£100,000 deposit' as banks restrict mortgages (The Daily Telegraph)

183:800023140 (Jonathan Harris) — Tue, 12 Jan 2021 17:53:51 GMT

Self-employed borrowers are being locked out of the mortgage market by restrictions that mean they may need to raise a £100,000 deposit in order to purchase a property.

Jonathan Harris, managing director of Forensic Property Finance, told The Daily Telegraph : 'Some lenders are indiscriminately bashing the self-employed by applying draconian criteria for no other reason than an applicant works for themselves. This is frustrating as it doesn't make sense that the self-employed are considered a greater risk than the employed, given significant numbers of employed workers have been furloughed and face the prospect of unemployment when the scheme comes to an end.'

To read the full story, click here

Bank of Mum and Dad closes its doors (The Times)

183:800023140 (Jonathan Harris) — Sat, 02 Jan 2021 17:47:42 GMT

Many first-time buyers turn to their parents for financial assistance when trying to raise a deposit. But a new survey suggests that the Bank of Mum and Dad no longer has the money to gift for a deposit, thanks to the pandemic and uncertainty regarding their future savings.

Jonathan Harris, managing director of Forensic Property Finance, told The Times : 'With so much uncertainty, nobody wants to be handing over savings that they may well need themselves in the not-too-distant future.'

To read the full article, click here

Poor insulation may impact your ability to get a mortgage (The Times)

183:800023140 (Jonathan Harris) — Sat, 28 Nov 2020 17:59:54 GMT

Poorly insulated homes could mean higher mortgage rates if the government prioritises loans on properties with high energy-efficiency ratings as planned.

Jonathan Harris, managing director of Forensic Property Finance, told The Times : 'This will end up being a double-edged sword, making it harder to remortgage to carry out remedial works. At the moment, the last thing the government should be doing is disrupting the market.'

To read the full story, click here

Now a mortgage crunch hits the self-employed (The Sunday Times)

183:800023140 (Jonathan Harris) — Sun, 01 Nov 2020 16:00:32 GMT

Nationwide Building Society has reduced the maximum loan-to-value it will lend to self-employed borrowers to 85 per cent, rather than 90 per cent it will offer those who are employed.

Jonathan Harris, managing director of mortgage broker Forensic Property Finance, says: 'I wonder where the logic is here - why are the self-employed considered a greater risk than the employed? Ironically, many employed borrowers actually work for businesses run by self-employed individuals, so if the self-employed are at a greater risk, then what is their fate?'

To read the article, click on the link

Can you move home in a baffling property market? From mortgages to stamp duty and house prices, your questions answered (The Daily Mail)

183:800023140 (Jonathan Harris) — Thu, 29 Oct 2020 15:55:24 GMT

Will mortgages become more readily available soon?

Jonathan Harris of Forensic Property Finance, says: 'It is unlikely that the availability of high-LTV mortgages is going to improve anytime soon.' He advises that it is worth using a broker to take advantage of the 90 per cent deals that are not around for long: 'When a lender launches a flash sale of 90 per cent mortgages, the broker can ensure you make an application quickly.'

Mr Harris adds that it is worth looking at the Barclays Springboard mortgage: 'The borrower doesn't need any deposit and any helpers get their money back in five years, with interest.'

To read the full article, click on the link

Home buyers need to stump up 40% deposits to get a mortgage as economic devastation from coronavirus threatens a second credit crunch (The Times)

183:800023140 (Jonathan Harris) — Sat, 17 Oct 2020 14:48:28 GMT

TSB has pulled its two-year fixed-rate mortgages for those with a 40 per cent deposit. Meanwhile, Barclays has pulled its deals for those with a 25 per cent deposit, while none of the main high-street lenders are offering deals for those with less than a 15 per cent deposit. The lack of choice is pushing up mortgage rates, making it particularly difficult for first-time buyers.

Jonathan Harris, managing director of mortgage broker Forensic Property Finance, said: 'First-time buyers and those requiring high loan-to-value mortgages have found it tricky to get finance for a while. Now those with big deposits or similar levels of equity are also being affected.'

The Times article was not published online - only in the paper - but the article was reproduced in the Daily Mail, if you want to read more here

Mortgage approvals soar to 13-year high in August (The Financial Times)

183:800023140 (Jonathan Harris) — Tue, 29 Sep 2020 15:46:12 GMT

Approvals for purchases rose to their highest level since October 2007 in August, according to the Bank of England. This was caused by the release of pent-up demand as consumers resumed spending, combined with the government's stamp duty holiday.

Jonathan Harris, managing director of mortgage broker Forensic Property Finance, says : 'The market has been buzzing during what is usually a quiet, holiday month as buyers, free from lockdown restrictions, got on with moves to the country and took advantage of the stamp duty holiday while they can.'

To read the full story, click on the link

How a no-deal Brexit will affect mortgages (The Daily Telegraph)

183:800023140 (Jonathan Harris) — Tue, 15 Sep 2020 15:38:14 GMT

The economic uncertainty created by a no-deal Brexit could mean that mortgage rates stay lower for longer, which would be good news for borrowers. Lenders are also likely to continue favouring those investors with large deposits or similar levels of equity in their home as they are regarded as being less risky.

Jonathan Harris of mortgage broker Forensic Property Finance, says : 'I do think the wealth divide will only increase.'

To read the full story, click here

Flash sale for first-time buyer mortgages (The Sun)

183:800023140 (Jonathan Harris) — Fri, 11 Sep 2020 15:31:14 GMT

Lenders are launching high loan-to-value (LTV) mortgages and then pulling them with little or no notice, even the same day, as they are inundated with demand from first-time buyers.

Jonathan Harris of broker Forensic Property Finance, says : 'This state-of-affairs is unheard of and demonstrates the pressure lenders are under. We have become used to them offering high LTV deals for two or three days since lockdown eased but a one-day sale takes it to another level.

'With such deals being pulled so quickly, it really adds to the pressure for first-time buyers trying to get a mortgage. They must be organised and prepared to move quickly. A broker would be a good place to start as they will know which lenders are offering such fire sales and will understand what it takes to secure funds.'

To read the full story, click here

Thinking of buying property at auction? (Zoopla)

183:800023140 (Jonathan Harris) — Tue, 08 Sep 2020 15:19:33 GMT

A property auction should be a good place to pick up a quick bargain. But you need to be careful that you understand what you are letting yourself in for.

Jonathan Harris, managing director of Forensic Property Finance, says : 'If you buy a property at auction, you are on the hook, and it would be difficult to wriggle out if you were to have trouble raising the balance within the tight time-frame. If you have a good case to argue as to why this might be so, the property could always go back into a future auction. However, some would then argue the property would be tainted as a result of having to be re-auctioned.

'Any resolution may therefore result in you not getting back your full 10% deposit when the property is finally sold.'

To read the full story, click here

Barclays reduces borrowing amounts over unemployment fears (The Daily Telegraph)

183:800023140 (Jonathan Harris) — Fri, 04 Sep 2020 15:15:50 GMT

Barclays is the latest lender to reduce the amount a borrower can receive as a multiple of their income when applying for a mortgage.

Buyers could borrow a maximum of up to 5.5 times their income under the old rules but this has been reduced to 4.49 times their annual salary. Jonathan Harris of Forensic Property Finance, said the cut would have ramifications for the whole market, whether borrowers were looking to buy a first or larger home. 'If people cannot borrow as much, the property market will slow down,' he said.

To read the full story, click here .

How the recession will impact first-time buyers (The Metro)

183:800023140 (Jonathan Harris) — Fri, 21 Aug 2020 16:13:56 GMT

First-time buyers have enough to worry about when it comes to getting a mortgage - now there is a recession to deal with too. But will it make any difference to their prospects? 'It is already trickier for first-time buyers to get a mortgage compared with other borrowers because of the difficulty in pulling together a big enough deposit,' says Jonathan Harris, managing director of Forensic Property Finance . 'Few lenders are offering high loan-to-value deals and those which do are being inundated with business, often running out of the daily allocation of funds early on.

'Many lenders also restrict income multiples for those on lower salaries.

'The recession certainly won't make life any easier and lenders will continue to scrutinise incomes and job security carefully, particularly as the furlough scheme comes to an end.'

To read the full story, click on the link

Can first-time buyers survive without the Bank of Mum and Dad? (The Times)

183:800023140 (Jonathan Harris) — Sun, 16 Aug 2020 16:07:25 GMT

With property prices rising much faster than incomes, and deposits difficult to save for, it has long been the case that if you are a first-time buyer you will need to ask the Bank of Mum and Dad for financial assistance. Indeed, most first-time buyers we help are in this position. But one of the fallouts from the pandemic is that lenders are making it harder for first-time buyers to get financial help from their parents. Lloyds Bank scrapped its Lend a Hand scheme while Nationwide has cracked down on gifted deposits. Other lenders could follow suit, says Jonathan Harris, managing director of Forensic Property Finance,: 'Barclays is under pressure. The volume of business inquiries means service levels have inevitably dropped.'

Click on the link to read the full story

Why the self-employed are finding it harder to get a mortgage (The Times)

183:800023140 (Jonathan Harris) — Sat, 01 Aug 2020 15:57:14 GMT

The Times got in touch and asked Jonathan Harris, Forensic Property Finance's managing director, to explain why a reader was having trouble getting a mortgage. She is self-employed, with a perfect credit rating, healthy bank balance and a 50 per cent mortgage offer but her purchase stalled during the pandemic and then the offer expired. She applied again for another mortgage but was turned down and couldn't work out why. Jonathan said : 'Some lenders are taking 20 per cent off the income of the self-employed for mortgage purposes, and asking for more proof of income.'

Lenders are concerned about the end of the furlough scheme and particularly fluctuating incomes, such as those from bonuses and dividends, which the self-employed are more likely to receive. It has never been more important to seek specialist mortgage advice to find the right deal for you.

Read the full article here

Surveyors issue lower house price valuations (The Daily Telegraph)

183:800023140 (Jonathan Harris) — Fri, 24 Jul 2020 12:51:22 GMT

Some surveyors have been reducing property valuations in the aftermath of coronavirus. Jonathan Harris of Forensic Property Finance says he saw a home down valued from £1.4m to £1.1m last month during a remortgage,, a drop of 21 per cent. Mr Harris said the surveyor gave no justification but he understood the drop was due to concerns about the market.

Read the full article here .

The stamp duty holiday has made buying a property a more attractive prospect (The Metro)

183:800023140 (Jonathan Harris) — Sun, 19 Jul 2020 12:45:11 GMT

If lockdown and the stamp duty holiday has made you desperate to move, there are a few things to bear in mind. 'The pandemic has made lenders more cautious about property prices and how stable a borrower's job and income is,' says Jonathan Harris, managing director of Forensic Property Finance . 'This means borrowers are coming under more scrutiny when applying for a loan. Lenders are scrutinising bank statements more than in the past to see whether the borrower is under pressure financially. They are looking specifically to see whether there is any pattern. They may compare the previous three months' statements with the three months before that to see whether you are in difficulty.'

Read the full article here .

Hit hard by the pandemic, the self-employed struggle to get funding (The Times)

183:800023140 (Jonathan Harris) — Fri, 17 Jul 2020 12:40:08 GMT

The self-employed have for a while found it harder to get a mortgage than those on PAYE - and this situation has got worse thanks to the financial uncertainty created by Covid, resulting in lenders being more cautious. Jonathan Harris, managing director of Forensic Property Finance, says : 'Lenders are running many more exhaustive checks on company performance and have applied haircuts on income regardless of the individual circumstances of businesses.'

To read the article, click here .

Chancellor must introduce stamp duty holiday now, not in the autumn (Daily Mail)

183:800023140 (Jonathan Harris) — Tue, 07 Jul 2020 15:40:36 GMT

Ahead of the Chancellor of the Exchequer's Summer Economic Statement this week, it has been leaked that he is considering introducing a six-month stamp duty holiday to boost the housing market and increase the number of transactions. But it was also rumoured that this stamp duty exemption would not be introduced until the autumn.

Speaking to the Daily Mail , Jonathan Harris, managing director of mortgage broker Forensic Property Finance, said : 'The property market rests on confidence so any delay in the introduction of a stamp duty holiday would create unwelcome uncertainty. This would effectively create a deep freeze as buyers put transaction on hold until they can benefit from a stamp duty saving which could run into thousands of pounds. Bringing the stamp duty holiday in immediately is the right thing to do.'

To read the article, click here .

Equity release more suited to consumer needs (FT Adviser)

183:800023140 (Jonathan Harris) — Thu, 25 Jun 2020 15:30:47 GMT

Equity release has often had a bad press for being expensive and sold by unscrupulous advisers to vulnerable older people. However, it is shaking off that image - rates have fallen dramatically, while products have improved considerably. Commenting in FT Adviser , Jonathan Harris, managing director of Forensic Property Finance, says: 'With life expectancy increasing, there is a growing need for equity release solutions. These schemes have gone through a revolution in recent years, with more innovative products allied to near-'normal' mortgage interest rates and the ability to service interest, thereby avoiding rolling up, if preferred.'

Click here to read the full article.

Remortgaging during furlough – what do I need to know?

Mon, 01 Jun 2020 07:16:27 GMT

The mortgage is most people’s biggest outgoing so it makes sense to remortgage at the end of your fixed or discounted period so you don’t pay more than you need to.

But with many borrowers furloughed via the government’s scheme to keep people employed even if they can’t work during lockdown, how easy is it to remortgage and will the pick of the deals still be available to you?

If you are furloughed with the government paying 80 per cent of your salary and your employer topping this up so your income hasn’t changed, there should not be an issue with affordability when it comes to remortgaging. Even if your income has fallen, assuming you have some equity in your property it should not adversely impact how much you can borrow. However, if you have a high loan-to-value and your income has fallen significantly, then you may find it difficult to remortgage.

It is also worth noting that if you usually receive income via dividends or bonuses some lenders are no longer taking these into account, or not at the same level as before, so that might affect how much you can remortgage for. Get in touch for more information on this and to find out which lenders are most likely to take bonus income into account.

Borrowers should start by asking their existing lender what remortgage or ‘product transfer’ deals it will offer at the end of your fixed or discounted period. It may be that there is a good deal available from your existing lender which does not involve going through another mortgage application, which is the case when you switch to another lender. Or talk to an independent broker who will be able to advise you as to your options.

Be careful taking a mortgage ‘holiday’

Mon, 01 Jun 2020 07:14:46 GMT

The mortgage holiday has been a lifeline to borrowers hit hard by the financial impact of coronavirus.

From March, lenders agreed to a three-month payment holiday for borrowers without it affecting their credit rating. More than 1.8 million homeowners have since taken a mortgage holiday.

The Treasury has since announced that when the first of these payment holidays ends in June, borrowers should be able to extend for a further three months if required. However, you may wish to think twice before doing so. Nationwide chief executive Joe Garner has suggested that if you need to ask for an extension, it should be noted on your credit file because it suggests that a borrower may be ‘struggling’.

While the rules over whether credit ratings will be impacted by further payment holidays have not been decided by regulators, it is worth considering how much you need that payment holiday regardless. The word ‘holiday’ is hugely mis-leading - ‘deferment’ would be better, as the interest is still due and is simply rolled up, making your payments more expensive when they eventually resume.

If your income has been adversely affected by coronavirus then you may have no other choice but to ask for a payment holiday, or have it extended. But if you have some cash you could use to cover the mortgage, this might be a better option in the long run.

Anyone having problems paying their mortgage should get in touch with their lender as soon as possible.

Self-employed and want a mortgage?

Mon, 01 Jun 2020 07:09:41 GMT

Don’t underplay your income.

It is often said that is harder to get a mortgage if you are self-employed but as long as you can prove sufficient income, it shouldn’t be an issue. With self-employment on the rise, lenders are getting better at taking various income streams into account and will often lend on the basis of two or three years’ worth of accounts.

However, if you are self-employed and use an accountant to do your tax return, their job is often to minimise your tax liabilities. This means downplaying your income – great when it comes to paying your tax bill perhaps but not so great when it comes to getting a mortgage.

Countless times self-employed people have come to us looking for a mortgage only to be disappointed when they find out that their income, as detailed on their tax return, will get them a much smaller mortgage than they desire. They may argue that they can afford a bigger mortgage but from the lender’s perspective there is no evidence to support that claim.

Our advice for any self-employed worker is to think hard well in advance as to your plans when it comes to property. If you are planning on buying a home in the next few years, make sure your income will support the mortgage you need. Lenders take into account the mortgage’s affordability – assessing your income as well as your outgoings – so the latter should also be reasonable. If you put a large portion of your outgoings through your business, this will also wave a red flag for the lender.

Seek independent advice, ideally long before you apply for a mortgage. This will ensure that you are in the best possible position to proceed when you find a property you wish to buy – and can afford to do so.