Author: webmaster

Technology is always evolving to streamline our everyday lives. In every walk of life, there is a constant progression in how technology is used to make common practices run more smoothly. The mortgage sector is no exception. Open banking offers a customer-centric experience as it focusses on reducing the time and effort needed from you. With more and more processes being moved online – open banking limits the need to visit an actual bank and allows banks and budgeting apps to securely access your financial data – helping you save, budget and get on the market as efficiently and securely as possible.

In recent years, open banking has gone from strength to strength. With the rapid progression in the world of Artificial Intelligence and how it can be integrated within the financial services industry, open banking has opened doors to various new opportunities to experience a more efficient way of banking.

Open banking has made things like budgeting advice apps more popular, as they can securely access your spending habits and use the data to help you save. In the midst of a cost-of-living crisis, managing your money has never been more important – so open banking has come along at the right time to make these services more readily available. Being able to operate almost exclusively remotely – open banking allows for a huge increase in flexibility and can make so many menial tasks that would normally take an afternoon on the high-street take considerably less time from the comfort of your own home.

There are a multitude of reasons to suggest that those looking to apply for a new mortgage can greatly benefit from the increase in efficiency offered by open banking AIS (Account Information Services). Given the huge backlog of mortgage applications, caused primarily by the pandemic, an increased use of open banking can help to power through and get applications completed more quickly. Using open banking can help to streamline a large proportion of the mortgage process, making it much simpler and less time-consuming to apply for and manage a mortgage. Even after your mortgage has been secured, open banking can continue to help. Faster access to credit and financing as well as the ability to manage and view finances more easily are just some of the ways that open banking can make a difference to your finances.

Another positive in regard to open banking is the absence of human error. Mortgage applications can be held up for many reasons, but open banking and the use of AIS not only eradicates the possibility of employees making honest mistakes during the mortgage process. It can also operate at much higher speeds than any human employee could possibly manage. The term open banking may even sound invasive to some, but it is a secure way of making banking easier. It is simply a way of securely speeding up the process – something that is sorely needed given the current housing situation.

The shared ownership sector has gained some real traction recently, with more and more lenders offering raised LTV criteria on newly built homes. Several big-name lenders now offer 95% LTV shared ownership mortgages on new builds as the market continues to make homes as accessible as possible to prospective first-time buyers. With industry giants Halifax recently following suit in the shared ownership space – we explore what you need to know when it comes to getting a shared ownership mortgage.

What is shared ownership?

Shared ownership is a scheme utilised if you can’t afford all of a deposit and monthly mortgage payments for a home that meets your needs. It involves you buying a share of a property while paying rent to a landlord for the remaining share. As long as you purchase a share between 25% and 75% of a home’s full market value, you could be a prime candidate for such a mortgage. You would pay proportionate amounts of rent and mortgage repayments relating to the split of the ownership. You can then purchase more of the home in the future (known as staircasing) which would see your rent decrease as the landlord owns less of the overall property.

Who buys shared ownership homes?

Shared ownership is classed as affordable housing and so it comes as no surprise that around 80% of shared ownership properties were bought as first homes in both 2020 and 2021. Over half (52%) of shared ownership homes were purchased by households consisting of one adult, as the scheme is one of the few affordable methods for buying a first home on a single income. 29% of homes were bought by households of two adults and 13% by households with children.

Crunching the numbers

Recent data from the department of levelling up shows that the average price of a shared ownership home was £275,100 in 2021, with an initial equity stake of £109,800 (41%) and an average deposit of £17,700. In terms of rising prices, the average for shared ownership homes have risen by 67% over the last 12 years – at a similar rate as the wider market.

The shared ownership space continues to grow in popularity, with the likes of Leeds Building Society and Halifax offering 95% LTV mortgages as more and more buyers look to affordable housing. As house prices remain high and the cost-of-living crisis continues to tighten the purse strings for millions of households up and down the country, it may be worth considering how shared ownership could benefit you or your loved ones.

*The mortgage noted are correct at the time of going to press (1st August 2022 ) but can be withdrawn at short notice.

Generally, a holiday let is a property that is let out to tourists for short periods of time as accommodation for their trips. Whether you let out the property for a weekend or a month – holiday lets can command a much higher price than a standard buy to let. As long as the property is available to holidaymakers for a minimum of 210 days of the year, you are free to use it yourself for the remainder of the 12-month period. Shorter term lets can offer an easier role as a landlord too – as you’re not responsible for maintaining a tenant’s primary home.

Some recent predictions suggest that the appetite for staycations will continue to rise post-pandemic after regulations caused a surge in people choosing to holiday domestically. This trend has led to investors looking to make holiday lets a lucrative safe haven for their money. At peak times, some holiday lets in popular tourist destinations can earn as much in a week as a standard buy to let does in a month. Although holiday lets in popular destinations can be more expensive to purchase initially, the return on investment is typically more than a buy to let.

As long as your property meets the furnished holiday let criteria, holiday lets are eligible for full mortgage interest tax relief. As holiday lets are officially categorised as businesses, there’s no limit on the mortgage interest amount incurred that you’re able to offset against your profits. This can be a great way for taxpayers on a higher rate to reduce their income tax bill. Holiday lets are also subject to business rates as opposed to council tax, while there’s also a possibility you’ll be able to claim 100% relief on business rates should your property have a rateable value of less than £12,000.

While the primary reason for moving into the world of holiday lets is to generate income, they also offer the chance for landlords to enjoy them as well. Unlike a standard buy to let, landlords are able to utilise their properties for a certain period throughout the year – creating a happy medium between a second income and a second home.

Heat pumps can be an efficient way for you to heat your homes. With the cost-of-living crisis making people across the country more concerned about their energy bills, heat pumps have become increasingly popular. It’s important to consult a certified installer before making a decision, as different types of heat pumps can vary in performance depending on the home. There are certain factors that can determine whether or not a heat pump is the right choice.

The most common heat pump in the UK is the air-to-water heat pump – that transfers heat from the air outside the home to water that is used to heat the home commonly via radiators and underfloor heating. These can cost between £7,000 and £13,000 – so they can be quite pricey. However, the Boiler Upgrade Scheme currently being run by the government enables homeowners in England and Wales to receive a £5,000 grant to replace traditional boilers with low-carbon heating alternatives – a scheme that can really help to fund the installation of a heat pump.

It is important that homeowners (and especially landlords) are aware of the grants and schemes available to them so that they can make the most informed decisions possible when it comes to improving the energy efficiency of their properties. Although they can be on the expensive side, the difference in efficiency between boilers and heat pumps can be dramatic. Traditional boilers will run at 90% efficiency on average – meaning 10% of the heat generated is lost. Heat pumps, however, operate at an average efficiency rate of 350%.

With the cost-of-living crisis causing people up and down the country to panic about the rising cost of their energy bills, many may start to look at the possibility of installing greener, more efficient methods of heating and lighting their homes in order to cut down on costs. Although heat pumps may not reduce bills by a hugely significant amount, they are a great way of making your home more energy efficient and can increase your EPC rating – helping to boost the value of your property.

If you’re wondering about your property’s EPC rating and perhaps want to know what aspects of your home can be made more energy efficient, you can follow this link (Energy performance certificate (EPC) – Find an energy certificate – GOV.UK (find-energy-certificate. service.gov.uk) to the government website.

Not only does this site display your property’s EPC rating, but also offers a break down of your home’s systems and rates various parts of the property’s energy efficiency on a scale from ‘very poor’ to ‘very good’. It’s always a good thing to be aware of, but if you’re looking to improve the efficiency of your home – this can be a great way of knowing where to start.