Mortgage market remains stuck in the doldrums
Mortgage lenders have warned once more of the funding gap they face which may impact on the property market for years to come. The Council of Mortgage Lenders (CML) revealed gross lending in the first three months of this year was the lowest since early 2000. While house prices may be rising rapidly in some areas, gross lending of £29.5bn is down 9 per cent on the same period a year ago.
Guaranteeing your monthly repayments
With a fixed-rate mortgage, you have the guarantee that your monthly repayments will not change for a set period of time, most commonly 1, 2 or 5 years although other fixed terms are available. However, if you choose a variable rate mortgage your repayments could change. There are two types: tracker mortgages are linked to the Bank of England base rate. Discounted mortgages are linked to the lender’s standard variable rate (SVR). Changes to the SVR are at the lender’s discretion.
House prices may rise to reflect the tax holiday
The new stamp duty rules give an immediate stamp duty holiday to any first-time buyer paying less than £250,000 for a property. The rate was formerly 1 per cent on homes between £125,000 and £250,000, so the temporary removal of the tax for two years will save a buyer up to £2,500.
Double-digit annual growth in UK house prices
The Nationwide House Price Index for April 2010 reports that house prices increased by 1.0 per cent month-on-month in April. Annual rate of price inflation moves into double digits for first time since June 2007, but house prices are still 10.0 per cent below the October 2007 peak.
Are you fully aware of the tax implications?
If you are considering purchasing a residential buy-to-let property, you may not be fully aware of the tax implications. Usually there will be two taxes that you may have to pay. These are, income tax, which is payable each year based on your income from the property after deducting certain expenses that you have incurred, and capital gains tax, which is payable when you sell the property and is based on the sale proceeds of the property less the cost of the property.
Driving consumer demand for properties with superior energy performance
A report from the Royal Institution of Chartered Surveyors (RICS), commissioned by the Communities and Local Government (CLG) department, highlights actions that must be taken to raise the perceived importance of a property’s energy performance throughout the home buying and selling process.
A tax-free ‘gross’ income from renting furnished accommodation
The Rent a Room scheme allows homeowners and tenants to take in a lodger and get up to £4,250 in rent without paying tax. The scheme allows tax-free ‘gross’ income (what you get before expenses) from renting furnished accommodation.
Support needed for home-owners facing financial difficulty
The number of mortgages in arrears and the number of repossessions both fell in the first quarter of 2010, according to the Council of Mortgage Lenders (CML). But this welcome decline gives no cause for complacency as a large number of households, who are just coping; still remain vulnerable to shocks that may arise from the economic uncertainty ahead.
Weighing up your options
When it comes to paying off your mortgage there are two main options: capital repayment and interest-only.
Environmental concern is high on the political agenda
Plans to make UK homes more energy efficient through new “eco-loans” could help to push up property prices but reduce the size of mortgages buyers can borrow, according to property market experts.