Category: Blog

To understand why the help to buy scheme is the best option for first time buyers, here is an explanation of what the Help to Buy scheme is and what those who buy via the scheme stand to save.

What is the Help to Buy Scheme?

The Help to buy scheme operated within the UK is a government created scheme which provides UK citizens with a viable and affordable means of purchasing a first-time home.

Who is Eligible?

The scheme is only offered as a means of helping and enabling first-time buyers to purchase a property; those who have previously or currently own property may not apply.

Why Was the Help to Buy Scheme Set Up?

The help to buy scheme was created specifically to assist and enable first time buyers who are otherwise unable or unlikely to be able to ‘get on the property ladder’.

Why Buy via the Help to Buy Scheme?

When purchasing a home through the Help to Buy scheme, the UK government offers those eligible a range of financial assistance and support that is not provided to those who opt to buy outside of the scheme. Not only do the options open to those who buy via the help to buy scheme save most a considerable amount of time and even money, many of those who buy via the Help to Buy scheme would not be able to buy at all, or at least not for a number of years, if at all without it.

Help to Buy Isa

The Help to Buy ISA involves the UK government paying those seeking to buy for the first time with a 25% bonus on their existing savings up to the amount of £3000 in order to help individuals afford a property. Because a Help to buy ISA is taken out by an individual this means that those looking to buy as part of a couple can each take out a help to buy ISA and combine their savings in order to purchase a single property together.

The ISA is available to first-time buyers who are hoping to purchase a property within the UK that costs up to £250,000 outside of London or up to £450,000 within London and live there (rather than rent it out). Finally, the amount provided by the government is not a loan and consequently does not need to subsequently be paid back.

Help to Buy Equity Loan

Help to Buy Equity loans were created in order to support and help first-time buyers afford the deposit on their first property purchase. Help to buy equity loans are only available to individuals (not couples) who intend to purchase a new build property, live within the property (rather than rent it out) and are looking to purchase a property which costs £600,000 or less, unless an individual is looking to buy in Wales in which case the upper limit as to the price of a property stands at £300,000.

To qualify for a help to buy equity loan, a first-time buyer must further be able to pay 5% of a property’s value as a deposit on a property. Meanwhile, the government will provide up to 20% (this rises to 40% when buying property in London). Then, a first-time buyer is required to take out a mortgage of up to 75% (or up to 55% in London).

Finally, a help to buy equity loan can only be taken out to buy properties which are bought from a builder already registered with the Help to Buy scheme. Consequently, when hoping to buy via a Help to Buy equity loan, you must ask your agent to view properties on their Help to Buy list. Alternatively, you can also search for an agent who can provide a list by using the Find Your Local Help to Buy Agent tool featured on the official Help to Buy website. 

Help to Buy Shared Ownership

The Help to Buy scheme does not just assist and enable those who wish to or are able to purchase an entire property of their own; the UK government has made provisions to permit those financially unable to buy their entire property by instead offering a means of buying from as little as 25% to as much as 75% of a property. Then, a person living within said property need only pay rent on the remaining portion of the property, or that which they do not own themselves.

Help to Buy shared ownership can be applied for by anybody who earns less than £80,000 a year as a household outside of London and those living within London who as a household earn below £90,000. Further, it is not only first-time buyers who are eligible to apply for shared ownership but those as well who have previously owned property but cannot afford to currently do so. By definition then, shared ownership properties are always lease hold properties. That said, both new and existing builds are able to be bought as part of the shared ownership help to buy scheme.

Hence, and in summary, those looking to buy for the first time are afforded via the Help to Buy scheme a number of ways through which to own property meaning that Help to Buy is almost always the best and most financially sensible means of buying a first-time home.

A gifted deposit, in simple terms, is an amount of money which is provided by a family member to be used as a deposit on a property. Whilst there are also options for friends or third parties to gift a deposit too, this is not always a favourable amongst lenders and are therefore much more difficult to secure.

The struggle for first-time buyers to get their foot on the property ladder is much more prominent today than it has probably been in other years. With more and more young first time buyers turning to their parents for financial support, this is where the process of gifting a deposit becomes a popular option.

If you are looking to gift a deposit, then it is essential that you have a thorough understanding of what the process involves in order to prevent any delays, or worst case scenario, that your mortgage is withdrawn at a later stage.   

As the criteria surrounding the gifting deposit is quite ‘strict’ to some extent, or perhaps it is not as straightforward as people might assume, it’s important that you know exactly what the process involves and what you have to do.

As a result, we have put together this useful article discussing everything which you need to be aware of and ensure you have completed if applying to either provide or receive a gift deposit.

What are my options?

You may or may not have known that there are actually five different options for gifting a deposit which are available on residential and Buy-to-Let purchases.

So let’s take a look at what these five different options are and which could be more suited to your personal situation.

1. Parent gifted deposit

If you are wanting to support your children by helping them to acquire a mortgage by either providing a whole or partial deposit, this is usually accepted by lenders, however you will be required to sign a ‘deed of gift’ agreeing that the money is a gift and consequently will not be repaid at a later date.

Whilst this could be a favourable option for some families, there is the downside that once the gift is given and thus cannot be repaid, these funds are no longer controlled by the parents meaning that they may only be able to support one child.

Not only this but if the child who you have gifted the deposit to is in a relationship which then ends further down the line, this could raise problems regarding returning the deposit. It is, therefore, advisable that you perhaps look to seek legal advice prior to agreeing to the gift deposit in order to ensure that both parties are protected.

2. Inter-family sale

The option of an inter-family sale might be a suitable route in certain cases in which the parents have offered to sell a property to one of their children, but at lower value to the current market cost.

In this case, the equity is then thought of as replacing the deposit meaning that no other funds will be transferred.

3. Genuine sale below market value

This option may be applicable if you have been renting a property for a long time and your landlord at some point offers to sell the property to you at a lower cost.

This could be a great option for first-time buyers and similarly to the previous option, the equity is then treated as the gift and you would not need to worry about financing a deposit.

4. Retained deposit

This method is offered by a number of lenders and involves a sum of money being funded by the purchaser as well as the family who will also provide a sum of money, (10% through the Family Springboard Mortgage) which is placed into a special saving’s account and cannot be accessed for three years, but which does earn interest.

The advantage of this option is that unlike the parent gift deposit, this scheme means that the savings are only tied up for a maximum of three years allowing the possibility of still being able to support another one of your children if they too require financial assistance for a deposit on a property.

5. The deposit is secured as a second charge on the parents’ property

Fewer lenders may offer this scheme but has the advantage that the parents or family members do not have to fund the gift deposit from their savings, nor commit to making regular (potentially monthly) payments.

What do I have to do?

Gifting is not necessarily the easiest process and unfortunately is not as simple as making an agreement with your child or family member to transfer them the funds which they can then claim as theirs.

Your solicitor will at some point require proof of funds from the children who received the gift deposit which means that it is essential that you have followed the correct procedures when looking to gift a deposit.

To ensure that the process of gifting a deposit is smooth, hassle free and successful, take a look at these essential steps that you will need to follow.

1. The gift deposit must be confirmed in writing

The very first thing you will need to do is to write a letter to the child who you are gifting the deposit to confirming that the money you will be transferring is for gifting purposes only, as well as that you will not have any rights over the property itself.

Once you have written and signed a copy of the letter to the child, be sure to retain a copy which you can provide the solicitor with. 

Although this might appear to be a relatively simple step, it’s essential that it is completed straight away before continuing with the process as it will provide evidence that you as the parent have no interest in the property and that by providing the funds to the child in gift form, you will not be expecting to receive the money back.

Mortgage lenders can be fearful that later down the line, the parents may claim that the deposit was only intended to be a loan. To avoid this problem happening, make sure that you speak to your mortgage lender and ensure that they are happy for you to receive the gift deposit and for the process to continue.

2. Obtain ID from the individual gifting the deposit

As well as the initial letter confirming that the funds will only be used as a gift deposit, the solicitor will at some point also need to be provided with the identification from the individual who is responsible for gifting the deposit. 

Different solicitors may require certain criteria which they ought to inform you about, however, if you are unsure of what identification is required, then do not be afraid to ask.

The most common forms of documentation which the individual gifting the deposit may be asked to provide are:

• Driving license
• Passport
• Bank statement
• Utility bill from the last three months

Another requirement which the solicitor dealing with your gifting deposit will have to obtain from you to ensure that the transfer of funds is legitimate is to confirm where the gift deposit funds have come from.

This usually occurs in the form of an expensive asset such as a house, as well as a pension or selling of a share. If this is the case, then it is usually relatively easy to prove using documentation on how the money for the gift deposit has been raised.

Demonstrating where the deposit money has been obtained becomes a little trickier if you have been saving the earnings for a long time, or if the funds have been collected from different sources.

You will still be required to provide detailed evidence of how the money has been saved in order to meet the criteria of the Anti-Money Laundering (AML) regulations. Bank statements from the last two to six months are a useful way of proving how the money has been acquired through your savings.

The more detail you can provide your solicitor with as to how you have accrued the deposit money, the easier it will be to pass the AML requirements and continue with gifting the deposit.

To recap on what we have discussed in terms of the stages involved in gifting the deposit, you need to ensure that before any money is transferred that you have followed these three important steps:

• Acquire a letter confirming that the funds will be used as a gift only and not as a loan
• Obtain proof of ID suitable to the solicitor’s requirements from the person gifting the deposit
• Put together a proof of funds detailing how the money was obtained by the individual who is gifting the deposit

Lastly in terms of providing the solicitor with the above information, it is important that all of the evidence is given in its original format. Although scanned versions are useful for retaining spare copies, it is the original documents which the solicitor will need to see.

We hope you’ve found our article discussing what gifting a deposit is, what your various options are and how to go about the process beneficial. Gifting a deposit is a great way of helping a family member to secure their first property, however as we have drawn upon and shown you throughout the article, it is fundamental that you follow the various steps involved in gifting the deposit correctly in order to effectively demonstrate the validity of your request.

For Any further questions speak to our Mortgage Brokers Manchester or Mortgage Brokers London.

It’s fair to suggest that buying a home for the first time just isn’t as easy as it used to be. Whether it’s because of the housing crisis back in 2008, the increasing amount of different deals on offer or even the soaring rental prices, first-time buyers in 2016 don’t have it easy.

So it’s entirely understandable for potential first time buyers to be very confused when approaching the market for the first time.

There is so much for first-time buyers to contend with; from deposits to mortgage rates, from lenders to brokers, the housing market is understandably difficult to navigate for newcomers.

Here at Search Mortgage Solutions we want to provide as much advice as possible to help you find your perfect first time home. That’s why we have put this step-by-step guide to buying your first home.

1. Organising a Deposit

While it is currently pretty difficult to save due to soaring rental prices, organising a sizable deposit is always your best bet at finding the perfect home.

While there are more low-deposit mortgage deals out there than ever, the best deals still lie in those with bigger deposits.

Consider how long you are willing to save and make a rough estimate of what could be achieved in that time.

2. Ways to Save

No matter your situation, we can all agree that it is difficult to save. This is because, for any number of reasons, we end up dipping into our beloved savings to clear up some current issue.

However, there are a number of saving schemes currently available which are specifically created to help you save for a deposit.

For example, take a look at the Help to Buy ISA. This scheme, organised by the UK government to help first-time buyers rewards you for saving.

You can save up to £12,000 in this account and for every £200 you deposit; the government rewards you with £50 tax-free. Essentially this means you can earn an extra £3,000, a total of up to £15,000.

If you are saving as a couple, you can apply individually, meaning you can double the money you save.

To ensure you use the ISA specifically for a deposit, the government will not give you the extra cash if you either withdraw before using on a deposit or use the money for a different home which you originally planned.

If you wish to sign up you must be buying a home worth anything up to £250,000 (or £450,000 in London), not attempting to buy a second home, not planning to rent out after purchasing or not using an existing mortgagee to fund it.

The ISA will be available for use for as long as you want it, however, the free government bonus money expires on 30^th November 2019, so if you are planning to take advantage, get applying right away!

For more information, take a look at this handy guide from the Help to Buy ISA official website.

3. Additional Costs

While saving up for a deposit and your first mortgage payment is paramount, there are also a number of potential fees to consider.

For example, there is stamp duty which is essentially a land tax. It’s an extra expense which comes with homes purchased over £125,000. Rates are as Follows:

• 0% on homes priced up to £125,000
• 2% on homes per each £125,000 up to £250,000
• 5% on the next £650,000 up to £925,000
• 10% on the next £575,000 up to £1.5m
• 12% on the remaining amount taking the price above £1.5m

There is also mortgage arrangement fees which go to your lender, which is something to weigh up before agreeing to a deal in the first place.

On top of this, there will be solicitor to check your deal is above board, charges for a survey of the property to ensure everything is as sold and Land Registry Fees which you need to pay to officially register your ownership of the property.

More on Land Registry Fees can be found on the gov.uk site, including a helpful Land registry calculator, thankfully free of charge. 

Depending how you go about finding your final mortgage deal, there may also be brokers fees to pay. However, if you want to avoid this, it’s worth speaking to us. Here at Search Mortgage Solutions we offer our services without a broker fee.

Unlike renting, where the landlord is responsible for the care of the building you live in, you will be entirely responsible for the look of the home you buy.

What this means is there will probably be some things you’d like to change, be it a lick of paint, some new wallpaper or perhaps even to link to rooms by knocking down a wall.

This means you also need to consider saving some money for the initial changes you plan to make, be it decorating, new furniture or even the removal of something you dislike.

There is also the issue of house insurance. It’s important to have a property’s insurance set in place before the exchange date between owners. This is to protect the investor (you) and for your mortgage lender.

Interestingly, you don’t need to insure the property for its current price, instead only the cost to actually rebuild it.

4. Check Your Credit

The most common thing for which mortgage applications get declined is because of bad credit history.

Our credit history can be affected by all manner of things, from previous loans to missed bill payments from current debt (like on credit cards) to simply having to proof of previous credit at all.

You need to make sure your credit is in check before applying, so to make yours as healthy as possible, you should:

• Reduce or pay off any existing debt.
• Have a track record of paying back loans or credit deals.
• Show a resilience to only take out credit when needed. Taking out credit cards needlessly reflects poorly on your history.
• Always pay any bills you have on time.

There are handy online tools to test your credit rating in case you are unsure about how your rating will look to lenders. Check out Credit Karma.

5. Search the Whole Market

The current mortgage market broader than ever before. The years of signing with your current bank are long gone, with so many lenders emerging on top of the traditional big banks.

It’s really worth trying every possible avenue for deals because you never know what you might be missing out on. Some lenders even do special offers which are exclusive to first-time buyers.

As discussed in the point above, this can be one of the hardest stages of the process as it can be confusing to understand the difference between deals. This is why it is often helpful for first-time buyers to seek the advice of mortgage brokers.

Mortgage brokers are experts in the property market who understand it better than anyone. They can help guide you through every stage of the process, starting with the search for a suitable deal for you.

6. Consider Seeking Advice

Advice from sources like brokers can be very helpful throughout the process of buying a home, not just the initial search period.

Brokers are entirely independent, however, they do make links with certain brokers which can lead to improved deals not advertised on the market.

They can also help with the dreaded process of filling out the mortgage application, which is well known as being confusing, particularly to first-time buyers. They have also recently been extended in length, making the process slightly more confusing, so you need as much help as you can get.

You can read more about the ways in which the application process has been extended and complicated, as well as the reasons why in this article from This is Money.

7. Speak with Family

If you have family members such as parents and grandparents who have or have had a mortgage, it is certainly worth discussing with them before committing to any deal.

A number of different lenders currently offer deals which are aimed at families who want to help their children get on the property ladder.

These deals include mortgages with a guarantor, which essentially mean that a fairly member agrees to make mortgage repayments if the borrower (their children or grandchildren for example) can’t.

Another is joint mortgages, which are for children and parents who decide to buy a property together.

There are also family offset mortgages. These are for parents who have gathered savings which help to bring down the costs of their children’s mortgage deal.

This article from the Telegraph takes you through one such example where 70-year-olds help their grandchildren to get onto the property ladder for the first time.

8. Shared Ownership

Not dissimilar to some of the family deals, there are also a number of different shared ownership or shared equity schemes available.

Shared ownership schemes are generally offered by housing associations. These essentially lend you a sum large enough to buy the property, (say 80%) then you pay rent back to the association on the remaining 20% of the property.

Shared equity schemes are slightly different. You essentially borrow enough to buy the whole property. You then take out a loan with the lender to fund the deposit on your new home, which is always part of the deal. The sum you owe rises (or falls) in line with the value of the property.

9. Making an offer

You’re almost at the finishing line, you’ve been approved, you have all the money in place and you have exhausted all your options to find the best deal. All you need now is to get it over the line.

Usually, you will go through an estate agent to find the right house, but thankfully this won’t be an additional fee. Only people who are selling a home pay the estate agent. The fee ranging between 0.5%-3% plus VAT of the selling price.

10. Surveyor and Solicitor

This is where all those additional fees come into play. The solicitor will work through the deal to make sure it is indeed water tight. Solicitors all have their own fees, however, it is standard practice for them to ask for 10% of their fees upfront.

The surveyor’s role is to value the house. They also search for anything (such as structural damage) and give a quote as to how much it would cost to repair.

If the survey reveals that there is £10,000 worth of damage, it is reasonable to then ask the seller if they would cut their selling price by this figure.

There are a number of different surveys which you can pay for depending on the house. These are:

• Condition Report – The cheapest and most applicable for new builds. No extra advice or valuation is provided, just an explanation on how sound the building is. Will cost £250.
• Homebuyer Report – Much more in depth than the above survey, this thoroughly checks everything inside and outside a property and includes a valuation. Typically, at least £350-400.
• Building Survey – By far the most comprehensive is the building survey. This is particularly good for older buildings that potentially need repairs. Minimum cost £500-600.

11. Late Issues

If there are late issues, such as a surveyor finding problems with the structure, the seller may pull out of the deal. If this does arise, it’s hugely important to keep in close contact with them via your solicitor or via the estate agent as much as possible as often these things can be cleared up.

12. Finalising

Once you and your solicitor are happy with a contract, a seller might well as for a holding deposit to make sure you are actually serious. This could cost anything up to £1000.

Once agreed, this is the stage in which your building insurance needs to be in place.

Once this is all settled, the typical exchange period for sellers and buyers tends to be 4 weeks. During this time, the remaining money owed to buy the property is exchanged from your lender to the building society of the seller.

Your solicitor will register the sale with the Land Registry for properties in England and Wales.

Homes costing over £125,000 will have just 30 days to pay the additional fee of Stamp Duty, as mentioned in point 3. This is arranged by your solicitor.

13. Relax

YOU’VE DONE IT! You have finally made that massive first step onto the property ladder. Sit back, relax and enjoy the comforts of your brand new home!

Many homebuyers will find that their personal circumstances change during the time that they are paying off their mortgage. This means that the mortgage deal that was right at the time of purchase might not be the best for them now. If this describes how you feel about your mortgage you will want to read on to find out about remortgaging and how it may help.

Understand the reasons why you might want to remortgage

•    When a short-term mortgage deal comes to an end. Finding a new mortgage with a good short-term deal can help you avoid the increase in monthly payments.

•    If interest rates start to rise. If you would prefer not to have your mortgage payments affected by any interest rate rises, a move from a variable rate to a fixed rate mortgage will help.

•    Change to a variable rate mortgage. If you are tied into a fixed rate mortgage with an interest rate higher than those available on standard variable rates, you could save money by switching.

In addition to the above reasons, another reason why people remortgage is to release equity in their home if its value has increased. When remortgaging to release equity, it is important to remember that arrangement fees can eat into the amount of equity that you will be able to release from the value of your home.

Do your homework and get some professional advice

Spend a couple of hours checking out the best available rates and deals on the internet. Remember to make use of the comparison websites like Money Supermarket and Go Compare amongst others. The deals on comparison sites are regularly updated and they can take a lot of the work out of searching individual banks and building societies.

Try not to get too involved in finding the absolute best rates available online – stick to a couple of hours’ research and leave it at that. Mortgages are complicated financial agreements and it can be confusing comparing them.

Make a note of the best deals that you find but don’t act on them yet.

When you have found a few deals that seem better suited to you, book an appointment with an independent mortgage advisor.

An independent mortgage advisor will look at your personal circumstances and find the mortgage deals that are best suited to your needs. Importantly, an independent mortgage advisor will offer advice across the whole of the mortgage market and may have knowledge of the latest deals that are not advertised elsewhere.

Speak to your existing lender

Many people forget to go back to their existing lender when remortgaging and it’s really important that you don’t. Arrange a face to face appointment with your lender and give them the opportunity to match or beat the remortgaging deals you have found. You should do this even if the mortgage rates they are currently advertising aren’t as good as the deal you have found; they may match the deal to keep you as a customer. In many cases it can be a whole lot easier staying with the same mortgage provider on better rates than it is to move to a new provider.

Apply

Making the application for a mortgage deal is the part of the process that many people find the most stressful. If you’re got a better deal with your existing lender, then things should go pretty smoothly, with a minimum amount of paperwork.

If you are taking up an offer that has been found for you by an independent mortgage advisor, you should find that the independent mortgage advisor will help you prepare your application and guide you through the whole process. The independent advisor will usually liaise between you and the lender during the application. 

If you choose to submit the application yourself, you will need to complete the application form and should expect that you will need to provide documentary evidence of things like income and bank statements.

When remortgaging to a new mortgage provider, the new lender will often carry out a survey on your home to ensure that it is valued accurately.

Accepting an offer

When your application has been accepted by the new lender they will make a formal offer of a mortgage to you.

At this point, a solicitor is required to complete the legal aspects of the remortgage, including the transfer of money and completing paperwork. Most independent mortgage advisors will assist during this stage of the remortgage by liaising between the various parties to ensure that everything goes ahead smoothly without delay.

Buy to Let property investments have stood up to the recent turbulence in financial markets and are a relatively safe way to invest. That said, it pays to do your homework before venturing into any financial investment and the Buy to Let market is no different. So, if you’re considering a Buy to Let property as an investment, here’s our step-by-step guide to Buy to Let Mortgages.

1. Find a suitable property you wish to buy and check you can afford it

When you have found a property that you are interested in investing in you’ll need to establish if you can finance the house purchase. Typically, larger deposits are required to secure finance in the Buy to Let market – the larger the deposit you can offer the better the mortgage deal you will get. You will need between 25% and 40% of the asking price to be accepted. Deposits below 25% are not likely to be accepted by lenders. A good mortgage deal is really important to the success (profitability) of you Buy to Let property investment.

2. Does it all add up?

Next, you’ll need to establish if the rental income you can achieve from the property will be enough to cover the mortgage payments. Most lenders will be looking for rents that are at least 125% of the monthly mortgage repayments.

To do this you’ll need to find an online mortgage calculator for buy to let mortgages. We’ve done the search for you – click here to get the Google search results. The results given by any of these calculators will only be a rough guide, but they will do for these purposes.

You’ll also need to check out the average rental costs for similar properties nearby. You can find this info on websites like Rightmove and Zoopla.

3. Search for the best deals online

Assuming your figures so far make the purchase of the property feasible, it’s time to start doing some searches online for the best deals you can find.

It’s useful to keep in mind that a Buy to Let mortgage is around 2% above the rates of a typical house purchase mortgage so don’t be too concerned if the deals you see don’t seem as competitive as the rate you pay on your personal mortgage.

Once you have made note of the best deals you can find based on the deposit you can afford it is time to move onto step 4.

4. Get some independent advice

In any mortgage application, it is advisable to get some professional advice from an independent mortgage advisor. Independent advisors can search for products across the whole of the mortgage market, not just those tied to one particular lender. They’ll also be able to work out the additional costs, such as arrangement fees, to establish which is the most competitive mortgage deal.

5. What’s in it for you?

An essential part of the process is to work out what you are going to get out of your investment – it’s not going to be worth doing unless you see a decent return.

The best measure of how much you’ll get out of your investment are the Gross Yield and Net Yield – they’re fairly straightforward to work out.

To find your Gross Yield take the full year’s rental income and divide it by the value of the property and express the result as a percentage. For example, £14,500 (annual rent income) / £180,000 (property value) = 8% Gross Yield.

To find your Net Yield you’ll need into account your costs. These will include the mortgage payments, Buildings insurance and Letting agency fees (if you use one).

In the example above, the monthly rent equates to approximately £1200. If your monthly costs are £700 that leaves £500 profit. Repeating the same calculation as we did for gross yield we get £6,000 (annual Net rent income) / £180,000 (property value) = 3% Net Yield.

6. Unexpected Costs

Before you approach a lender with your Buy to let mortgage application you should think how you would cope in a number of situations that would put you under financial stress.

Should you find that you are without a tenant in your property at any time, you will be required to meet the mortgage repayments from your other income. There are also other costs associated with being a landlord that you may not be aware of, such as repairs and safety checks.

You will be responsible for any repairs to or the replacement of major features of the house; the boiler and heating system for example.

You will also be required to carry out Landlord Gas and Electrical Safety Checks annually – these must be carried out by a qualified engineer. If you are using a letting agent to manage the property, find out if this is covered by their management fee or if it is a service they offer, but at additional cost.

7. Apply for your finance

Congratulations, you’ve made it through the last 6 steps and are ready to make your application for a buy to Let mortgage. As we mentioned in the introduction, there are many things to consider before taking on a Buy to Let Property Loan. Now you’ve read our guide you’ll have a better idea of what to expect and if you haven’t decided that it isn’t for you then it’s time to apply for you Buy to Let Mortgage.

If you are applying directly with a lender you should expect to be asked for documentation proving your income and that credit checks will be made.

If you are applying with the help of an independent mortgage advisor, make sure you choose one with specialist knowledge of the Buy to Let mortgage market. You will be guided through the application process by the mortgage advisor who will make sure that everything is in place before the application forms are sent off to minimise delay.

At Search Mortgage Solutions we specialise in advice to Buy to Let landlords and have expert knowledge of the best financial products on the market. Whether you are an existing landlord with a portfolio of one or more properties or you’re looking for your first Buy to Let Mortgage, call us free of charge on 0800 756 7794 for a preliminary phone chat with a member of our specialist Buy to Let team.

If this is the first time you are considering moving home, you may well be wondering where you begin and what the process involves. Every house move is different, and there are no concrete rules for the practicalities of moving all your possessions, but there are some simple steps to follow to make the financial part of moving flow smoothly. Read on for the step-by-step guide to moving home from Search Mortgage Solutions.

Step 1: Find out if your current mortgage is ‘portable’

Your mortgage might not be tied to your existing home, in fact, most mortgages aren’t. You may be able to move it to another property that you buy and this, of course, makes the whole process of buying a new home much easier. Whilst most mortgages are ‘portable’ it is advisable to find out if yours is by contacting your existing lender.

Whilst you are speaking with your mortgage provider, find out what fees are involved in transferring the mortgage to another property. The fees will be much less than the arrangement fees for a new mortgage, but it is worth finding out now so that you are not met with any sudden surprises.

Step 2: Research the price of your next home. 

This part of buying a house has become much easier since the advent or websites such as Zoopla and Rightmove. These and other similar websites allow you to see the selling price of houses in your chosen area. Don’t forget to check out the prices of houses in nearby neighbourhoods; a few miles further out of town could get you much more house for your budget.

Once you have a property in mind it’s time to do some affordability checks with an online mortgage calculator. Nearly every mortgage lender has an online mortgage calculator, so we’d recommend using the one from your current lender. Whilst the results that they show are only an estimate of your mortgage cost, you should be able to establish if you will be able to afford the kind of property you are interested in.

Step 3: Don’t forget to consider deals from other lenders

There’s no doubt that it is easier to keep your mortgage with your existing provider if they allow you to transfer it to another property. That doesn’t mean that you should overlook the benefits of moving your mortgage to another provider altogether.

This process is known as remortgaging and it could potentially save you large sums of money if you are able to find a better deal than the one you are currently signed up to.

Again, you should do your homework online by researching the available mortgage rates and seek professional advice from an independent mortgage advisor who has advanced knowledge of not only the types of mortgage that are suitable for you but whole mortgage market and the offerings from all financial institutions. An independent financial advisor will be able to tell you if there are better deals out there than your existing lender is offering and help you to weigh up what is best for you.

When considering remortgaging don’t forget to take account of any fees that may be involved. There will be arrangement fees for the new mortgage and there may also be early exit fees attached to your existing mortgage. As before, make sure you don’t get any unwelcome surprises by finding out before you commit.

Step 4: An opportunity to change your mortgage type

Whether you choose a new lender or opt to stay with your existing mortgage provider, you can take the opportunity of moving home to move your mortgage to a different type. For example, you could move from a standard variable rate mortgage to a fixed rate mortgage vice versa.

Step 5: Completing the process

The process of completing the application for a new mortgage or to transfer your existing mortgage to a new property is very much the same as it was when you took out your first mortgage. 

Since, in most cases, you will be increasing your amount of borrowing, you should expect to go through affordability checks and if you are moving to a new mortgage provider you will be subject to a credit check. You can also expect the lender to carry out a survey on your new property to ensure that it is valued correctly.

Rock-bottom interest rates and an ever-growing selection of cut-price mortgage deals on the market have done little to relieve the pressure on living costs, according to an independent research and policy organisation.

The Resolution Foundation, a think-tank that works to improve the living standards of British families on low to middle incomes, says that the cost of property over the past two decades has had a similar effect on households as a 10% rise in the basic rate of income tax.

A lot has changed in the past 20 years, says Eden Harper – an estate agent with branches in Brixton and Battersea.

In 1996 – the year England hosted the UEFA European Football Championships – a family in rented accommodation that budgeted carefully and put aside 5% of the household’s income each month could save for a deposit on a home of their own in about three years.

With Euro 2016 underway in France, it now takes 22 years to save enough for a deposit on a home.

And that’s not all. Housing costs in London are also becoming less affordable for tenants thanks to a lack of supply of rental properties.

This has pushed up the prices landlords can charge. East London estate and letting agent Peach Properties reports that the average cost of renting a two-bed property in Bow is now £459 per week – or £23,868 per year – at a time when the average salary in London is £34,314.

Families in the UK are now spending 21% of their income on housing, according to the Resolution Foundation – four percentage points up from 17% in 1995. For a dual-earning couple with one child this is the same as the basic rate of tax rising from 20% to 30%, or £1500 per year.

The effect is even more pronounced in London, where the rise in housing costs is equal to a 13% rise in the basic rate of income tax.

In popular areas of London, the rising costs of housing is put down to a shortage of supply of homes on the market.

Despite the number of new homes registered to be built in the UK being the highest since the financial crash in 2007, that figure is close to 25% short of the government’s 200,000 target.

According to the National House Building Council, 156,140 new homes were registered to be built in 2015, up 7% from 2014 and the highest number since 2007.

Construction industry partner Proskips, which supplies the building trade with thousands of skips every year, reports that housebuilding activity is being hampered by a dire shortage of skilled workers.

It points out that just 25,994 new homes were registered to be built in 2014, down 9% on 2014.

What is the solution? Lindsay Judge, senior policy analyst at the Resolution Foundation, is reported as saying: “The government must be more ambitious. It should look beyond simply giving a few people a leg up onto the housing ladder and tackle the bigger issues of supply that is the admin cause of rising housing costs.

“As home ownership moves out of reach for ever more families, the government should also reform a private rented sector that is simply too insecure for many finding themselves dependent on it.”

Property sales slump after introduction of stamp duty surcharge but estate agents say buyers are queuing up for quality homes in good areas

A dramatic fall in the number of properties sold between March and April does not signal the end of the property boom, say estate agents.

Garton Jones Nine Elms Estate Agents says 94,370 properties changed hands in April, down from a record high 164,400 transactions in March as buy-to-let investors rushed to complete deals before the higher rate of stamp duty on second homes came into force.

At 70,690, the number of residential properties sold in April was the lowest for three years and down 14.5% when compared with April last year.

However, South London estate agent Eden Harper – which has branches in Brixton and Battersea – says the sharp reduction in transactions is not unexpected.

A spokesman says: “The month of March was particularly hectic because buy-to-let investors were keen to complete deals before a 3% stamp duty surcharge on second homes was introduced on 1 April.”

The factors that have contributed to rising property values in London and south-east England remain in place.

Even in a strong market, most sellers want to achieve the highest price in the shortest possible time.

Waiting months to receive an acceptable offer can not only be frustrating but could jeopardise the purchase of a new property.

Wimbledon estate agent Robert Holmes & Co says moving house often involves the new owners wanting to put their own stamp on the property.

This is worth bearing in mind when selling property. It is, therefore, advisable to present a blank canvas to viewers by carrying out a spot of redecorating.

This should involve changing brightly coloured walls, skirting boards and coving to neutral shades of white or cream.

Next, carry out minor repairs that may be needed in the kitchen or bathroom and take steps to let as much natural light as possible enter the living areas.

Even if your living room is not light and airy, ditch the thick, dark curtains and replace them with window dressings in a lighter material.

Kerb appeal

First impressions count when selling a home, so take care to improve your property’s kerb appeal.

This can be achieved by keeping any grassed areas trimmed, repainting exterior woodwork and planting tubs of flowers near the entrance.

By mowing the lawns, cleaning any grimy or tired-looking brickwork and cutting back overgrown trees or plants, you will give the impression that your sale property is low maintenance.

Sometimes the simplest things can help improve a home’s kerb appeal. Moving the car out of the drive, for example, ensures the view of the property is unrestricted and viewers have somewhere to park.

The price is right

Many property sales take longer to complete than sellers expect because they are over-priced.

Before approaching an estate agent, go online and do some research into what similar homes in your area have sold for in the past 12 months.

But bear in mind that every home is different and even flats in the same block do not always sell for the same price, particularly if one has a parking space or an extra bedroom.

First-time buyers now account for 28% of the property sales market thanks to bank of mum and dad plus increased levels of government help

Claims that the rising cost of buying a first home is preventing tenants from getting on the property ladder appear to be at odds with statistics from the National Association of Estate Agents.

At a time when official data shows the price of a first home in the UK has topped £200,000, figures from the NAEA show that first-time buyers account for 28% of the property sales market.

This is a sharp rise from October 2011, says central London estate agent LDG, when first-time buyers accounted for just 16% of residential property sales in the UK.

However, it is below the levels reported in the US, where the share of first-time buyers was 32% in April 2016, up from 30% both in March and 12 months previously.

On this side of the Atlantic, many UK-based estate agents put the rise in market share among first-time buyers down to…

• A wider choice of cut-price mortgage deals for first-time buyers;
• More government help for people purchasing a first property;
• The introduction of a 3% stamp duty surcharge for buy-to-let investors; and
• A willingness from parents to help their children onto the property ladder.

There has never been a wider choice of home loans available to first-time buyers, says Fulham estate agent Lawsons & Daughters.

However, many of the better deals are only available to buyers with deposits of at least 20%. This suggests that purchasers with average incomes are receiving help from family members, not just in raising deposits but also to pay for the costs of buying a home, which include stamp duty and legal fees. 

The typical image of the tenant is also changing. A spokesman for London Bridge estate and letting agent Williams Lynch says many of the landlords on its client list rent their investment properties to professionals from outside London who land well-paid jobs in the City.

In our experience, many first-time buyers move into their new homes after spending a number of years living with their parents or other family members in order to raise the deposit needed to buy a first home, a spokesman says.

However, the introduction of a 3% stamp duty surcharge for buy-to-let investors, which came into force in April, could limit the supply of rental homes in London and give first-time buyers a wider choice of properties to choose from.

But the factor likely to do most to help first-time buyers take a greater share of the property sales market is an increase in government help.

The London-only Help To Buy equity loan scheme allows first-time buyers who raise a 5% deposit for a new-build property to borrow up to 40% of the purchase price from the government.

The 40% government loan is interest-free for five years, and after that time borrowers will be charged a fee of 1.75% of the loan’s value. This fee will increase every year at 1% above the rate of inflation.

A second element of the government’s Help To Buy scheme is available for purchasers of both new-build homes and older properties.

Like the Help To Buy equity loan, the mortgage guarantee scheme is available to first-time buyers and home movers who raise a 5% deposit towards the purchase of a property worth up to £600,000 – on the condition that the purchase will be their primary residence and not sub-let.

Under this scheme – which cannot be used in conjunction with any other assistance such as shared ownership or shared equity – the government provides the mortgage lender with a guarantee for a further 15% of the property’s value.

Getting on the property ladder in London remains a huge financial step, but a combination of parental help, government assistance and ultra-low mortgage rates are helping to ensure a first home is no longer an impossible dream for many.

Lenders dish out £62.1bn in three months as buy-to-let investors rush to complete deals before introduction of 3% stamp duty surcharge

Just weeks before gross mortgage lending for the first three months of 2016 totalled £62.1 billion (or about 53% of the entire NHS budget for 2015/16) one of Britain’s largest landlords sounded a warning the property boom is over.

In March alone, mortgage lending was 59% higher than the same month in 2015, according to the Council of Mortgage Lenders.

Fulham-based estate agent Lawsons & Daughters puts the spike in borrowing down to buy-to-let investors rushing to complete deals before the introduction of a 3% stamp duty surcharge.

But with many landlords now thinking twice about extending their buy-to-let portfolios, does this now mean that first-time buyers will have a better chance of getting on the property ladder?

The Royal Institution of Chartered Surveyors says its members expect house price growth to slow in the run up to the EU referendum on 23 June as clouds of political uncertainty cast a shadow over the UK property market.

However, RICS chief executive Simon Rubinsohn warns that if the pound falls in value – as commentators are predicting it will if Britain does vote to leave the EU – this could encourage overseas investors back in to the market.

When the pound is weak we tend to see more property purchasing activity in exclusive areas of London, such as Mayfair and Kensington & Chelsea, as overseas investors take advantage of their greater buying power.

While property values in London climbed about 10% in 2015, million-pound property sales in the capital slipped back 2% in the past 12 months after stamp duty reform levied higher taxes at the middle and top end of the market, says Garton Jones Westminster Estate Agents.

Whether Britain votes to leave the EU or not, the Grosvenor Group – which manages a £6.7bn property portfolio including a 300-acre plot of central London that encompasses the Mayfair and Belgravia areas – believes “it is only a matter of time” before years of rising property values go into reverse.

In its 2015 annual report, the property group said Grosvenor is continuing to “expect and plan for a slowdown, particularly in high-end commercial and residential property”.

For Grosvenor, this preparation includes selling assets and pursuing development opportunities expected to mature during the next market upturn.

This could be good news for first-time buyers who have found themselves priced out of the market in the capital, says East London estate agent Peach Properties.

The number of first-time buyers in the UK has recovered significantly since the financial crash, increasing from a low of 192,300 in 2008 up to 312,500 in 2015.

But while house price growth may slow, few are predicting properties in areas other than Mayfair or Belgravia will suffer significant falls in value.

London’s property boom is based on ultra-low mortgage interest rates and a drastic shortage of homes available for sale.

The Bank of England base rate has been frozen at 0.5% for seven years and economists suggest it will remain at its record low level for at least another 12 months.

Meanwhile, attempts to deliver more new-build homes in London and elsewhere in the UK are being held back by a shortage of skilled staff and a reluctance to invest in capital projects during times of economic and political uncertainty.

We may not see property increase in value at the rate it has done, but suggestions the property bubble is about to burst appear alarmist.