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From 1 April, new lets and relets with an energy performance certificate (EPC) rating of ‘F’ or ’G’ cannot be rented out, and existing tenancies have until 1 April 2020 to upgrade their EPCs. Any landlord letting a property that fails to meet the standard required could face a penalty of up to £4,000.

 

UK interest rates rise for first time in 10 years

The official bank rate has been lifted from 0.25% to 0.5%, the first increase since July 2007.

It is likely to rise twice more over the next three years, according to Bank of England governor Mark Carney.

The move reverses the cut in August of last year, which was made in the wake of the vote to leave the European Union.

Almost four million households face higher mortgage interest payments after the rise, but it should give savers a modest lift in their returns.

The main losers will be households with a variable rate mortgage.

Borrowers at risk from end to mortgage benefit

Consumers and lenders risk being caught out by a little-known Government change to mortgage benefits currently claimed by 140,000 households, experts say.

The change could see the most vulnerable fall into arrears, face repossessions and see increases in already high levels of household debt.

Next April the Department for Work and Pensions will stop paying a current benefit called Support for Mortgage Interest.

SMI, also known as Help with Housing Costs, gives claimants cash to pay off their mortgage.

It can be claimed by those who already get income benefits, or those who are either unemployed or pensioners.

But from 5 April next year SMI will change from a benefit to a loan from

DWP, secured by a second charge on the claimant’s property.

Claimants need to repay the loan, plus daily interest, when they sell the house or transfer its ownership.

Low awareness

While the DWP is currently writing to consumers to inform them of the change, overall awareness is low.

Scottish Widows protection specialist Johnny Timpson says the SMI change is not known by many.

Although the Government originally consulted on the issue in 2011, the matter went quiet until the 2015 summer Budget.

It was then not finalised until this summer, when the Loans for Mortgage Interest Regulation 2017 passed through Parliament without fanfare.

Building Societies Association head of external affairs Hilary McVitty says:

“The DWP’s own research into attitudes towards SMI shows that knowledge of the scheme is limited among claimants.

“Around 50 per cent of them are in receipt of pension credit and some of these may be vulnerable consumers.

“It is essential that customers are well-signposted to organisations such as the Money Advice Service and Shelter and encouraged to speak to their lender if they are concerned that they may fall into arrears.”

Waiting list

Shelter is worried that the waiting list for SMI has increased from 13 to 39 weeks, according to the charity’s head of policy and research, Kate Webb.

She says: “SMI can buy struggling homeowners some crucial extra time to sort out their mortgage payments and keep hold of their home.

“But, following a change in the rules in 2016 you now have to wait nine long months before you can apply for SMI. We are deeply concerned that this extended waiting period will mean some people lose their home before they are even eligible for help.

“Based on our experience of supporting families at risk of repossession and negotiating with lenders, we would urge the government to reverse the waiting time to a more manageable three months.”

Opting in

The DWP has also not yet told lenders if claimants have decided to opt in or not.

The BSA says this is a problem for lenders, as they may suddenly find that their monthly interest payments dry up with no warning.

McVitty says: “As SMI is paid direct to the lender in most cases, the first a lender may hear is when SMI stops being paid, unless a customer gets in touch.”

Arrears risk

Current SMI claimants do not get the new loan automatically from 5 April, and need to apply separately.

There is a risk of arrears if this catches consumers unawares, according to McVitty.

She says: “It will be up to claimants to ‘opt-in’ to the terms of the loan. Any who don’t engage with these changes will stop receiving the benefit in April and could risk falling into arrears at that point.”

But lenders will work to avoid arrears and repossessions, according to a UK Finance spokesman.

He says: “Lenders will always work with a borrower experiencing payment difficulties to help them recover their financial position and avoid possession of their home, which remains the last resort.”

Rates rising

Timpson says that financial protection is one solution to the problem. He adds that the whole issue will be worsened if base rate rises, fixed mortgage rates rise as a result and more consumers struggle to meet their monthly repayments.

He says: “It does raise the question, if interest rates do start to tick up again and people do start to feel a squeeze, will we start to see the number on this benefit start to tick up to back where it was when interest rates were at normal levels, so to speak?

“This is potentially just going to add to peoples’ burdens that they are carrying as a household.”

The Bank of England has said that higher inflation and a pick up in growth could lead to a rate hike in “the coming months”.

Members of the Bank’s nine-strong Monetary Policy Committee voted 7-2 to keep interest rates on hold at 0.25%.

But the committee was talking in much stronger terms about an increase, analysts said.

The pound climbed nearly 1% against the dollar to $1.3314 after the Bank’s announcement.

It said the growth outlook was slightly stronger than it had predicted last month.

The nine policymakers on the panel believed “some withdrawal of monetary stimulus was likely to be appropriate over the coming months”.

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Many families could not afford a month’s rent if they lost job – Shelter

One in three families in England could not pay their rent or mortgage for more than a month if they lost their job, a study for the charity Shelter suggests.

High housing costs and a lack of personal savings are cited by the charity as reasons for this.

The online survey by pollsters YouGov in July questioned 1,581 people in working families with children.

“Strong protections” are in place for “those who fall on difficult times,” a government spokesman commented.

The spokesman said: “We are introducing the National Living Wage, increasing the personal tax allowance and giving the next generation choice and flexibility in their savings, including the Help to Save scheme for people on low incomes.

“We are continuing to spend around £90bn a year on working age benefits to ensure a strong safety net for the most vulnerable.

“And for those who do fall on difficult times, there are strong protections in place to guard against the threat of homelessness, and ensure we don’t return to the bad old days when homelessness in England was nearly double what it is today.”

Source – www.bbc.co.uk/news

 

BOEUK interest rates have been cut from 0.5% to 0.25% – a record low and the first cut since 2009.

The Bank of England announced a range of measures to stimulate the UK economy including buying £60bn of UK government bonds and £10bn of corporate bonds.

The Bank also announced the biggest cut to its growth forecasts since it started making them in 1992.

It has reduced its growth prediction for 2017 from the 2.3% it was expecting in May to 0.8%.

As part of the package of measures designed to boost growth following the UK’s vote to leave the EU in June, the Bank is also introducing a new Term Funding Scheme, which will lend directly to banks at rates close to the new 0.25% base rate, to encourage them to keep lending.

The exact rates they are offered will depend on whether the total amount they are lending has fallen. The scheme is designed to make sure that lower interest rates are passed on to businesses and households.

The money will be lent to banks for four years and the Bank has said the terms of the scheme will not become less generous for at least 18 months. It predicts that the amount of money lent through the scheme could reach about £100bn. Continue reading

Bank base rateThe Bank of England has held the UK’s main interest rate at 0.5% despite intense speculation that it would cut rates.

The Monetary Policy Committee voted 8-1 to leave rates unchanged, but minutes of the meeting showed most members think the Bank will act next month.

Interest rates have remained on hold since the Bank cut to the record low of 0.5% in March 2009.

The FTSE 100 lost some earlier gains in the wake of the Bank’s decision.

Financial markets had priced in an 80% chance of the Bank cutting rates this month

Mortgages
life insurance
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equity release

We offer whole of market advice for all types of customers, whether you are a first time buyer, home mover or looking to purchase a buy to let property. Being independent we are able to offer impartial advice from the whole of the market to ensure you get the product that suits your financial needs.

Whether you are looking to protect your mortgage payments or your family, we provide independent advice for life insurance, critical illness cover and income protection from a wide range of providers.

Buildings Insurance is a requirement when you complete on a mortgage the cover is to provide security to the lender, the insurance covers the main structure of your home. It will cover you for subsidence, storm, flood, fire or smoke damage and cover the costs of rebuilding or repair.

Equity release is a way of releasing cash from your property, either through selling a percentage to the reversion company or taking a mortgage on it, while allowing you, the homeowner to continue living there as long as you wish.