Tag Archives: adviser London

Housing transactions propped up by first-time buyers

According to the Council of Mortgage Lender’s (CML’s) latest market commentary report, gross lending hit £18.4 billion in April.

Other report highlights included:

  • Transactions continue to be driven by remortgage activity and first-time buyers
  • Buy-to-let and home mover numbers remain subdued
  • Number of first-time buyers over the last year overtakes the number of home movers for the first time since 1996

THE ECONOMY

CML’s report states that the economy has grown slower than expected at 0.3% in the first three months of 2017.

Unemployment remains low at 4.6%, however, the Bank of England’s predictions of a rise in inflation has been realised, now sitting at 2.7%. It’s expected that this will have an impact on consumer spending, with March data showing that wages are falling.

The CML report continued to add that “given that wage growth remains weak, even in the face of rising inflation, the Bank of England’s monetary policy committee (MPC) continued to signal that it would be willing to tolerate a degree of above-target inflation.”

HOUSING

The housing market continues to be subdued, with little change in the last six months and down slightly compared to a year ago.

There have been 100,000 housing transactions on average each month, which has resulted in an average of 67,500 house purchase approvals for the past six months. The Monetary Policy Committee (MPC) has left their expectations for house approvals at a figure of 71,000 per month.

Henry Knight, Managing Director, Springtide Capital added: “Whilst 2015 and 2016 showed steady growth across all components of transactions, 2017 sees a heavy reliance on the growing purchase activity from first-time buyers. It’s fair to say that the buy-to-let stamp duty changes have reshaped the housing market, perhaps giving first-time buyers the opportunity to snap up properties, which previously would have been purchased for investment purposes. However, with the end to the Help-to-Buy mortgage guarantee scheme in 2016, continuing affordability issues and a requirement for large deposits, there is no sign of the first-time buyer market getting any easier.”

If you’d like advice on obtaining a mortgage, simply call Springtide Capital on 020 3040 4400 to book an appointment with an adviser.

The mortgage process – what’s involved

Mortgage process

Sarah Logeswaran, a first-time buyer from London, recently sent Springtide Capital some positive feedback as follows:

“Springtide Capital’s extensive knowledge and experience, coupled with their approachable and friendly nature, really eased me through the process of purchasing my first home.”

We thrive on feedback at Springtide Capital, as it helps us to continually improve the service we offer.  We’re thrilled that Sarah was happy with the high level of service she received and it’s something we strive for with all our clients, as we know that getting a mortgage is one of the most stressful things you can go through. We’re proud of the service we give and that’s why we’d like to help new clients to understand what they can expect from us when purchasing their first property.

Henry Knight, Director of Springtide Capital has also provided his tips on key broker qualities.

  1. The initial meeting

A client’s perspective: The client initially approaches Springtide Capital to obtain a mortgage for a property they have set their sights on. Although the majority of clients are savvy with their finances, the mortgage market is baffling and clients often require guidance on what they can afford and the types of mortgages available. Non-advised sales of mortgages are now not available so a client must seek financial advice.

Moreover, clients usually prefer face-to-face meetings with a broker, rather than a call centre adviser, due to the private nature of the questions, which must be answered. It also provides the client with more options, as the broker isn’t tied to a specific lender, and gives them a point of contact to guide them through the mortgage process.

A face-to-face meeting is then arranged and our Mortgage Consultant will go through their client’s requirements, financial situation and explains the application process and the types of mortgages available.

Springtide Capital’s perspective: The mortgage industry is heavily regulated, and it’s vital that the Mortgage Consultant can demonstrate (document) that any recommended mortgage fits his/her client’s personal circumstances and is affordable in the event of rate rises – protecting the client.

Henry’s tip: “A mortgage consultant should take the time to understand a client’s circumstances on the first meeting. They must then clearly explain the process and then make sure the client understands the financial commitment they’re undertaking.”

  1. The key facts documents

A client’s perspective: The client will then receive a Key Facts Illustration (KFI) document, explaining, in detail, the type of mortgage recommended (including interest rate, the overall Annual Percentage Rate of Charge (APRC), the monthly payment and any fees), the total amount payable over the term of the mortgage and next steps they’ll go through if they wish to proceed.

Springtide Capital’s perspective: This is where our Mortgage Consultant’s experience really comes into play. Using all of their knowledge of the market, regulation and lender relationships they will have researched the deals available that best fits the client’s needs before issuing a KFI. They will also take into account any additional challenges that the client may face when applying for the mortgage e.g. any restrictions they might have that could make getting a mortgage difficult and place the business with lenders who specialise in such cases.

Henry’s tip:“A mortgage consultant should have an in-depth understanding of the mortgage market in order to find a mortgage which best fits the client’s circumstances. They also need to know how to structure a proposal to a mortgage lender especially where the client’s circumstances are outside of the standard criteria.“

  1. The Agreement In Principle (AIP)

A client’s perspective: The client is given an AIP by the lender and details are sent out to read and discuss with the Mortgage Consultant. The client can then place an offer on the property. Once the offer on the property is agreed, our Mortgage Consultant will then submit a formal application with full information to the lender.

Springtide Capital’s perspective: This is a crucial part of the process as an AIP is only based on information provided by the client. To obtain a mortgage the Mortgage Consultant must then evidence the facts provided by his/her client e.g. proof of income, bank statements etc. It’s then vital that everyone in the process is kept up to date with progress until exchange of contracts and money is transferred from the lender. This is often the most stressful part of the mortgage process and that’s where our Mortgage Consultants really come into their own. They will liaise with their client, the lender, solicitor and estate agent to ensure that all the documentation is received and will often be the first point of contact if things don’t go as smoothly as planned. They will work hard with all parties to make sure their client gets the resolution they need, with as little hassle as possible.

Henry’s tip:“A mortgage consultant should keep all parties updated with progress, whether they are the client, lender, estate agent or solicitor. They should be available throughout the process and proactively resolve any problems that crop up.”

 

If you would like to speak to a Springtide Capital mortgage broker please call

020 3040 4400.

Achieve buy-to-let wealth in five steps

 

 

“If you build it, he will come.” In reality, building your buy-to-let portfolio isn’t quite a Field of Dreams our experts give you their top tips on bringing your game up and wealth on.

 

#1 Get it right first time

As with any business, it’s important to set some targets and focus on what you’d like to achieve. This could be a healthy yield, capital appreciation or entering the stock market.

Our top advice is to start (relatively) small, keep it simple, start local, and work with an experienced mortgage adviser to begin your journey to an extremely profitable portfolio.

It’s tough to get started, but it will get easier and you’ll become more astute at researching and making investment decisions with your mortgage adviser.

Don’t purchase a house you like; purchase a property that will increase your wealth.

 

#2 Maximise profit from each property purchase

Boost profits and decrease risk – buy low and sell high.

Buying at auction is a popular way to do this, but be mindful of the pitfalls, carefully research the area and ensure the property doesn’t have any structural problems.

Negotiate heavily on new purchases; you’re in a strong position with no chain behind you.

 

#3 The team

Develop a team and incentivise a job well done – a great team can translate into great profits.

Your team needs to consist of ‘those-in-the-know’ kind of people:

  • An experienced mortgage adviser with existing successful buy-to-let client portfolios.
  • An accountant to handle tax, company status, and much more.
  • An agent to let the property (possibly with a maintenance agreement) who will carry out thorough checks on tenants and will ensure your properties are never vacant.
  • A team of builders, plasterers, plumbers, and electricians.

Henry Knight, Director, Springtide Capital commented: “Surrounding yourself with the right team of experts is the key to portfolio success from day one. There have been a number of tax changes, which makes the services of an accountant invaluable!

“I’ve personally found University cities to be profitable; they have a strong demand for rental properties, not only for students but also for employees. Transport links also attract high-net-worth commuters – investors would be wise to look out for HS2 hotspots in the future.”

 

#4 Don’t be tempted

It is dangerous to take out a loan and secure it against more than one property, because your lender could force you to sell those properties to redeem the debt. Secure a loan against no more than one property if possible.

Don’t jump into a purchase without researching it properly and obtaining advice from a mortgage adviser. Properties are not always easy to move on and a bad decision could stem your success.

Keep going when times are tough. Offering low will most likely mean offering on a number of properties before you get a ‘yes’.

Keep your tenants happy to ensure a steady income stream.

 

#5 Money makes money

Your mortgage adviser will provide advice on how to make the most of your money, as will your accountant. The key to success is to make your money work hard for you.

This could be continual investment in new properties (expansion), making efficiencies by selling off some properties which yield less profit, or investing your money in a completely different opportunity.

 

We’ve been helping landlords to build their portfolios for many years, and we’d like to help you to achieve your wealth goals too. Call one of our experienced mortgage advisers on 020 3040 4400.