Welcome to the November 2008 Issue of the Mortgage Broker Newsletter.
The mortgage market has started to settle down again since the 1.5% surprise cut in interest rates earlier in the month. Lenders are finally returning to the market with tracker deal in both the residential and buy to let market place after withdrawing all of their product range and re pricing. Unfortunately the margin on these tracker deals has increased since the rate cut but at least rates are looking attractive again.
Some lenders have also dropped their short term fixed rates quite dramatically with the likes of Abbey and C&G leading the way with a range of deals with varying arrangement fees. The better value deals being offered can be found on 2 year fixes with 3 and 5 year fixed deals lagging behind.
Lenders are still tightening their criteria to limit the flow of new business and we have seen this in two different styles. On residential mortgages we have seen lenders stop lending above 75% loan to value on interest only deals, which if you are on a budget can seriously damage the wallet and suddenly make an attractive deal look too expensive. The buy to let lenders have taken a different approach to stem the flow of new applications and they have ‘tweaked’ their score cards making it much more difficult for landlords (especially landlords with 4 or more properties) to pass their credit score.
Mortgage Deals of the Month
Every month our advisers scour the whole of the market to bring you what they consider to be the best mortgage deals currently available. As you know lenders change their rates on a frequent basis so don’t hesitate to contact us if you are looking for a new mortgage or wanting to change your existing deal for a better one.
The Best Buy to Let Mortgage Deal for November is…
5.34% variable rate with a FREE valuation and ZERO lender set up fees. (5.5% APR, 20 yr interest only remortgage, 65% LTV e.g. 130k remortgage on a 200k property)
To grab this great deal while its still available please call one of our Buy To Let specialist advisers quoting "NovemberDeal" on 0845 6010153 or click here to fill in a brief enquiry form and we will get back to you within 30 minutes.
The Best Offset Mortgage Deal for November is…
A fixed rate of 5.29% until 28/02/2011
£903 per month (based on a 25 year repayment remortgage for £150,000 on a property valued at £200,000 APR for comparison 6.5%)
To grab this great deal while its still available please call one of our Offset specialist advisers quoting "NovemberDeal" on 0845 6033173 or click here to fill in a brief enquiry form and we will get back to you within 30 minutes.
The Best Residential Mortgage Deal for November is…
A fixed rate of 4.79% to 02/02/2011
£859 per month (based on a 25 year repayment remortgage for £150,000 on a property valued at £200,000 APR for comparison 5.6%)
To grab this great deal while its still available please call one of our specialist advisers quoting "NovemberDeal" on 0845 6076193 or click here to fill in a brief enquiry form and we will get back to you within 30 minutes.
Self Employed May Miss Out On Further Benefits
The self employed may miss out on new proposed tax cuts by the Government, according to a top tax advice service.
In a recent report by financialadvice.co.uk, Tax Advice Network said that tax cuts that have been set out by the Government will be missed by the self employed filing their taxes in March 2009 – he says 3.8 million self employed people in the UK will not benefit from the cuts until January 2010.
Mark Lee, chairman of the Tax Advice Network says: ”Self-employed people are getting forgotten in all this talk about tax cuts as no one is suggesting anything that will provide any immediate benefits for them.”
Lee told the website that normal employees will benefit from the cuts over the course of the year as their salaries or wages are affected, but the self certified will miss out next year.
He says: “Because the self employed do not submit their current accounts until after March of next year, their cuts will not come into effect until January of the following year.”
Tax Breaks For Landlords
Things are tough for those with a buy to let mortgage, but not many landlords know that there are many loopholes and breaks that will make things a little easier from a tax point of view. It might not save you a fortune, but it might make paying off your mortgage each month that little bit easier.
Recent research by the buy to let lender Paragon Mortgages revealed that 86% of landlords were unaware of a £1,500 allowance from the Government when improving the energy performance of a rental property. But there are many more hidden, or little known tax benefits to being a landlord.
For a start, if your legal partner is not working, the ownership of the buy to let property can be changed so as it is co-owned, which maximises the tax-free income allowance the couple are entitled to by £5,435 per tax year. You may have to transfer the property into your partner's name if you already own the building, but it’s a small price to pay for big tax savings.
And as a landlord, you can claim tax relief on the interest payments on your buy to let mortgage or buy to let secured loan taken out to fund either the purchase, the refurbishment or even the repair of a rented property. You can even get tax breaks on the insurance policies you have taken out as a landlord on the property.
But there are so many more tax breaks to be had in the form of professional expenses: you can include the full amount of water, sewerage and any other rates paid on the property, if these are not paid by the tenants.
Repairs and maintenance can, in certain circumstances, get tax breaks. These will be mainly like-for-like replacements, like new window frames or a new door. The taxman is unlikely to allow a break on a new kitchen or an expensive sofa. But always bear in mind what you have done as a landlord, and speak to an account or an adviser – you never know what you can deduct. And remember - any accountancy costs can be offset as long as they relate directly to the buy to let property.
You can even claim wear and tear breaks. For furnished buy to let properties, you can claim for wear and tear on all furnishings, calculated as 10% of the rental income for the year, less water rates and the Council Tax you pay. You can claim replacement costs, as you would when replacing a window, but the wear and tear route is simpler.
Even more tax breaks come from vehicle costs for visiting or checking up on the property. The taxman will want to know if these trips are appropriate to the circumstance, and will want sure evidence that they were incurred visiting the rental property, but car maintenance and petrol can be a useful sidestep.
Finally, even little things such as advertising costs for the property can be claimed back. Some of the breaks will save a tidy amount, some will be nominal, but all are useful. The key is to talk to both your financial adviser and your accountant to make sure you are making the most out of your mortgage business, all the time not just when tax returns are looming.
Using Pensions Could Help The Mortgage Market
The Pensions Policy Institute has revealed that allowing limited earlier access to money saved in pension schemes to help buy a home might increase the number of people saving for their pensions.
The group has found that allowing money to be taken out – and possibly used in an offset mortgage for example – will make people invest in their pensions more.
The research, funded by B&CE Benefit Schemes and Legal and General looked at the advantages and disadvantages of allowing earlier access to pension funds for funding a house purchase, or more generally in place of other types of saving or borrowing.
Chris Curry, director of PPI Research, says: "There are many different possible ways of allowing access to savings within pension funds, and some are already in use internationally. The 401(k) system of loans is well established in the US, and evidence suggests that this early access increases both the number of people saving in 401(k)s and the amount they save, even though only around 20% of people make use of the early access facility each year.
“If a similar system were introduced in the UK, this could increase aggregate pension savings by around 30% by 2050. However, if people in the UK didn't increase their contributions, or didn't repay their loans, then pension funds could be 7% lower. "
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- Mortgage Deals of the Month
- Self Employed May Miss Out On Further Benefits
- Tax Breaks For Landlords
- Using Pensions Could Help The Mortgage Market
- Are You Worried About Redundancy?
