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Rise In Remortgaging Brought About By Record Low Base Interest Rate

The Bank of England’s record low base interest rate has propelled a rise in remortgages.

The mortgage processor Legal Marketing Services has released data showing a rise in remortgage transactions. The number of remortgages taking place is the highest since July 2009 and the year-on-year gross amount remortgaged has risen 40% since August 2015.

The Base Rate

On the 4th of August this year, the Bank of England announced a cut to its base interest rate from 0.5% to 0.25%.

The Effect

Remortgages in August saw an increase of 45% annually and 8% since July. Homeowners used the cheaper environment for borrowing to refinance their loans.

Andy Knee, chief executive of L.M.S explains that this cut has had the effect of boosting mortgages but that fears remain over the wider economic future.

Loan Amounts Getting Smaller

Although more numerous, remortgages reduced their loan to value ratio, a key measure of a bank’s confidence from 58% to 54%. In August, the average amount loaned to each customer fell 6% to £162,263.

Mr Knee states that “homeowners appear to be in a more cautious mood than last month: borrowing less in the wake of a couple of turbulent months, both politically and economically”.

The Outlook

This year, customers have been remortgaging more frequently. The average length of customers previous mortgages has decreased by 8 months. Those who had waited for better conditions to remortgage saw the benefit in the interest rates available to them but Mr Knee argues that current conditions favour taking action.

Mr Knee believes that “with today’s favourable conditions it is no surprise to see eight months shaved off the average time that people wait to remortgage and there is plenty of incentive for more people to consider acting before the year is out.”

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Santander’s High Loan-To-Value Mortgages A Sign Of Confidence In Lending Market

The bank is creating a series of high loan-to-value (L.T.V.) mortgages aimed at servicing customers with good credit ratings.

Santander are looking to entice customers wanting competitive interest rates over a set time period, offering £250 in the form of cashback available to selected accounts. Santander’s managing director of mortgages, Miguel Sard Says the offers look to appeal to those wanting “to move up and lock in to a competitive fixed rate, including first time buyers and those seeking to remortgage.”

The bank realises that “some customers keen to take the second step on the property ladder can find it difficult” and hope the high L.T.V. mortgages can make taking the next step on the property ladder more feasible.

The fact that the bank is willing to accept the higher risk that comes with high L.T.V. loans is evidence of a returning sense of confidence among lenders. It is notable however that this is not a return to the over 100% L.T.V. mortgages available before the crisis in the credit market.

The Products

Santander will offer as much as a 90% L.T.V. mortgage fixed for five years at a 3.14% rate which will require the payment of a £995 product fee. Further offers include an 85% L.T.V. mortgage fixed for five years at a 2.79% rate with no product fee and an 80% L.T.V. mortgage fixed for two years at a 1.64% rate with a £995 product fee.

The £250 cashback will be available to selected accounts in the intermediary market and consist of a 90% L.T.V. mortgage fixed for two years at a 2.34% rate with a £995 product fee and a 75% L.T.V. mortgage fixed for two years at a 1.39% rate with a £995 product fee.

The entire range of mortgages will be available for both purchase and remortgaging purposes.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

New Era of 1% Interest Rate Mortgages Could Be On The Way

A lowering of the Bank of England’s base interest rate could stoke competition amongst mortgage providers, leading to interest rates of 1% or even lower.

Customers may soon be able to take advantage of even lower interest rates on fixed-rate mortgages as competition, encouraged by the Bank of England leads them into record territory.

In an attempt to boost the housing market following the vote for the U.K. to leave the E.U., the Bank of England’s base interest rate was cut to just 0.25% in August. Economists predict a further cut, perhaps to as low as 0.1% to come in November.

Competition Amongst Lenders

H.S.B.C. has positioned itself as a leading figure in the movement towards 1% mortgage interest rates. The bank is already offering a mortgage rate of 0.99% over a period of 2 years, however, to access this, customers must pay a deposit of at least 35%.

Analysts at Bernstein, a research company based in the City predict further rate cuts amongst the competitors in the mortgage market, arguing that for these companies, attracting new customers will be relatively cheap.

Standard, 2-year fixed-rate mortgages are forecast to go as low as 1.1% with the sub 1% interest rates available to customers with good credit ratings. Bernstein state that “if your credit rating is fine, you are probably going to get a cheaper mortgage from either a bank with excess deposits (H.S.B.C., Royal Bank of Scotland) or ones desperate to grow their book — that’s sub 100 basis points (1%).”

Boost To The Housing Market

David Hollingworth, from the mortgage brokers London and Country sees further cutting of the Bank of England’s base rate as something that can fuel greater market activity. According to the latest figures from the property website, Rightmove, house prices are currently up 4% on the last 12-months.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Hundreds Of Thousands Trapped In Negative Equity Due To Where They Live

Homeowners in the north of England remain stuck with homes worth less than the value of their mortgage while London property prices surge ahead.

According to the latest analysis by online estate agent House Simple, British homeowners are slowly escaping the mass negative equity that followed the 2008 economic crash. As Alex Gosling, House Simple’s chief executive puts it, “there is light at the end of the tunnel with prices now climbing across the country, and that should help bring many more homeowners out of negative equity”.

North/South Divide

There is however a vast disparity in how quickly different regions are returning to their pre-crash heights. If you have owned a property in London between 2007 and February 2016, you will have enjoyed a rise in the average value of a property of 56%. Owners in the north of England have not been as lucky, with the area home to 17 out of the 20 towns and cities worst affected by the crash that are now facing the longest roads to recovery. The north west of England contributes 40% of the 20 areas with the highest rates of negative equity.

In total, 75 towns and cities were analysed, reporting the percentage change in the value of the average house from 2007 to February 2016. Of these, 53% where found to have current prices still lower than in 2007.

Blackpool and Middlesbrough performed the worst overall with current house prices nearly 30% below their 2007 mark. Alex Gosling admitted “it’s going to take some time” for these areas to “come close” to their previous worth.

Top 20 Performing Towns and Cities In The Housing Market

Town/City Region Average Prices in 2007 (£) Average Price in February 2016 (£) % Difference between 2007 and February 2016 Prices
1 London London 339,511 530,368 56.20
2 Winchester South East 310,089 447,046 44.20
3 Stevenage East Anglia 207,765 289,265 39.20
4 Warwick West Midlands 200,546 278,396 38.80
5 Bedford East Anglia 190,938 256,282 34.20
6 Brighton South East 223,378 298,653 33.70
7 Bath South West 314,896 412,211 30.90
8 Slough South East 181,994 236,023 29.70
9 Reading South East 208,364 270,002 29.60
10 Sale North West 202,452 252,203 24.60
11 Oxford South East 242,896 300,717 23.80
12 Bristol South West 181,588 223,688 23.20
13 Canterbury South East 217,992 266,621 22.30
14 Eastbourne South East 208,170 254,585 22.30
15 Stockport North West 169,813 206,368 21.50
16 Worcester West Midlands 177,492 208,620 17.50
17 Milton Keynes South East 171,861 201,081 17.00
18 Cambridge East Anglia 191,331 223,837 17.00
19 Colchester East Anglia 200,740 234,680 16.90
20 Luton East Anglia 145,595 169,184 16.20

Sale and Stockport are the only towns outside the south of England to make it into the top 20, seeing 25% and 22% rises respectively.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

A third of people expect to be paying mortgage into their retirement

A recent survey carried out by the Halifax has found that 1 in 3 people expect that they will have to work beyond the age of retirement to help pay off their mortgage.

The survey interviewed over 8,100 people aged 18 to 45 years old about how they felt about mortgages and their worries around borrowing. Populus who were commissioned by the lender found that 44 per cent of those questioned were worried that they will not be able to afford their mortgage payments when they get to retirement and 51 per cent were worried that their ability to save for retirement would be hampered by their mortgage repayments.

Less than half of all respondents believe they will be mortgage free by the time they retire, falling to just 30 per cent of non-home owners.

The survey however did find that the aspiration to own their own home was strong and many are taking steps to ensure that their financial burdens are eased when they join the property ladder.

Recent statistics have shown that the numbers of first-time buyers have risen back to previous levels over the last few years. 30,000 in 2015 were stepping on to the ladder for the first time.

The average age of the first-time buyer however has risen. It is now nine months older than it was recorded in 2010, with the average age now at 30.4 years old.

Over an 8-year period the percentage of first-time buyers who were taking up 35 year mortgages rose from 16 per cent in 2007 to 26 per cent in 2015.

Mortgages with a 20–25 year term however dropped during this same period. Only 30 per cent of mortgages were taken out with this term in 2015 compared to 48 percent in 2007.

The Mortgages Director of Halifax, Craig McKinlay, has advised that borrowers should be cautious when looking to extend a mortgage beyond 25 years.

“This will not only increase the overall cost of the mortgage, but could have a potential knock on impact on their quality of life in retirement.

“A longer term will reduce monthly payments, but as a homeowners build up equity they should look to reduce this term or make overpayments to ensure that the dream of owning their own home doesn’t turn into an unnecessary nightmare in later years.”

Scottish Widows pensions development manager, Robert Cochran, added that their research has suggested that many people in their 30’sand 40’s are prioritizing spending now over saving for later in life.

“Yet with younger generations expecting to be paying mortgages into retirement, it is more important now than ever that people push retirement saving up their financial agenda and get a better understanding of how pounds in a pension pot translate into income in retirement to avoid facing a financial time bomb at the stage when they want to stop working” says Mr Cochran.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

 

 

 

 

 

Self-Employed Get New Opportunity To Buy A Home

New products offer the self-employed competitive mortgage rates and a chance to get on the housing ladder

Two new products have been created by Newcastle Intermediaries in an attempt to address the problems self-employed people face when applying for a mortgage. Steve Carruthers, Newcastle Intermediaries’ head of mortgage distribution said that it makes it “easier for them to apply for a mortgage and potentially access the competitive lending rates enjoyed by mass market mortgage clients.”

The key details:

• The first product is a 3.24% fixed rate until the end of June 2018, with an £800 completion fee, £199 reservation fee, free standard valuation on properties up to and including £500,000 and maximum loan-to-value of 60%.
• The second product is a 3.44% fixed rate until the end of June 2018, with an £800 completion fee, £199 reservation fee, free standard valuation on properties up to and including £500,000 and maximum loan-to-value of 75%.

After maturing, a standard variable rate of 5.99% will apply for the remainder of the term.

Lower Requirements Welcomed

Newcastle Intermediaries promise an individual case assessment for the recently self-employed, requiring either one year of accounts or an SA3012 form where many lenders require both.

Mark Dyason, a broker at Edinburgh Mortgage Advice, says that “any help given to those who have just started on the self employed journey is to be welcomed and the clear, simple, income proof requirements will make this an attractive proposition.”

With a recent record rise in self-employment, there are clearly a growing number of people in need of products such as these.

Where Can I Access These Products?

Contact us for independent advice please call Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Selling a Buy to Let Capital Gains Tax

Selling an investment property triggers liability based on the increase in value of the asset during ownership, minus certain costs. Where you have lived in a property as your main home , for any point of your ownership, the period is discounted when calculating the gain – in a process called “appointment”.

How CGT is applied

The rate of tax you pay on capital gain is calculated by adding the taxable gain to your taxable income.

If you remain within the basic rate tax band, you will pay 18% tax on the gain. If you fall into the higher rate tax band, you will pay 28%on at least some of it.

For 2015-16, the personal income tax allowance is £10,600 and the basic rate band is £31,787. Anyone with income over £42,385 pays higher rate tax on the excess. Everyone is entitled to tax free capital gains, worth £11,100 this tax year. Only gains above this are taxed.

If you earn £20,000, for example, and make a taxable gain of £10,000 (after your £11,100 annual allowance), the £30,000 total will fall within the basic rate band and you will pay 18% CGT.

If on the other hand you earn £35,000 and make a taxable gain of £25,000 you will be in the higher rate band. The £7,385 of the gain which is still within the basic rate band will be taxed at 18%, while the amount over £42,385 will be taxed at 28%.

Aside from well-known steps to reduce your CGT bill, such as transferring a share of the property to a spouse to utilise their CGT allowance, private letting relief and principal private residence relief, there are some little-known tricks that can save you thousands.

Use your pension

By making a lump sum contribution to your pension, you could save up to £4,000 on your CGT bill.

All pension contributions worth £40,000 a year, or 100% of your salary if it is lower than £40,000, attract tax relief at your marginal rate.

A pension contribution can be used to reduce the tax you pay on capital gains by boosting your higher rate threshold. Someone who earns £45,000 and who makes a taxable gain of £25,000 would pay 28% CGT, giving a bill of £7,000. But by making a gross pension contribution of £28,000, they would receive tax relief on the contribution. This means that high rate tax is only payable on income over £70,385 (£42,385 + £28,000), so the £25,000 gain is taxed at 18%, rather than 28%.

The CGT bill would fall to £4,500 – a saving of £2,500. The most that can be saved through this trick is £4,000.

Use an Investment vehicle

There are a couple pf ways to offset, or delay, paying CGT, which could reduce your overall costs. These methods are more risky because they require investment in small and often start-up companies, so are only recommended for experienced investors with a diversified portfolio.

Investors with a CGT liability might consider investing in Enterprise Investment Schemes (EIS) as they could get an income tax credit but EIS can also be used to defer a CGT liability. EIS’s offer a 30% income tax credit to investors who buy shares in small, unlisted companies. The minimum holding period is three years.

Landlords with a CGT liability could postpone the gain they have mad by investing the equivalent amount in EIS shares. Through CGT deferral relief, the liability would only recrystallize when you sell your EIS shares. In theory, high rate tax payers could defer the liability until they retire and become basic rate tax payers, or continue rolling over the liability right up until death, when EIS shares would be exempt from inheritance tax and the CGT liability would dissolve.

For more help and advice please do not hesitate to contact us at Hoskin Mortgages.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Buy to Let – The New Tax Rules

In the 2015 Summer Budget and Autumn Statement, the Chancellor introduced several changes that will affect anyone buying or owning a buy-to-let property in the UK. It is important that landlords understand these changes because they may affect the profitability of many buy-to-let portfolios, however small or large they are.

From 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) (3% above the current rates) will be charged on the purchase of additional UK residential properties. This may impact buy to let investors. For example, a property bought now for £500,000 would attract an SDLT rate of 5% or £25,000. But after 1 April it will be 8% or £40,000 if the purchaser already owns one or more UK residential properties.

Also, from 2017 the amount that some landlords can claim in tax relief on their finance costs (such as mortgage interest payments, interest on loans to buy furnishings and fees incurred on taking out and repaying mortgages) is being gradually reduced over 4 years.

When the new restrictions are fully in force from the beginning of the 2020/21 tax year, landlords will only be able to claim tax relief at the basic tax relief of 20%, instead of 40% or 45% for those in higher or top rate income tax brackets respectively.

How the current rules work

At the moment, you can claim all of the annual mortgage interest you pay against your income from a property, and then only pay tax on the difference. So if your income tax rate is 40% then your tax bill is 40% of this difference.

Here’s an example. Let’s say your buy-to-let property generates a rental income of £10,000 a year, while you pay £9,000 interest on your annual mortgage payments. At the moment, you only pay income tax on the £1,000 difference between the rental income and the mortgage interest.

If you pay the basic rate of tax (20%), you’ll owe £200. Those who pay the higher rate of tax (40%) will owe £400, and if you pay the top tax rate of 45%, it would be £450. In another example, if you receive £15,000 in rent annually and pay mortgage interest payments of £10,000 a year, a basic-rate taxpayer will owe £1,000 under the current rules, while a higher –rate tax payer will owe £2,000 and a top rate taxpayer would owe £2,250. These examples assume there are no other deductible expenses for tax purposes.

The New Rules Explained

From 2017, the way tax relief is calculated is going to change. Under the new rules, you will owe tax at your personal tax rate on the entire income of the property. From 2020/21, when the rules are fully in force, you will only be able to deduct a maximum of 20% of your mortgage interest payments from the tax liability to calculate the amount of tax due.

This means that if you pay income tax at the basic rate of 20%, you won’t see any change in the amount you owe.

Imagine that your buy-to-let property generates an income of £10,000 a year with mortgage interest paid of £9,000. In 2020, when the new rules are introduced in full, you will be taxed at 20% of £10,000 (or £2,000). Then 20% of your £9,000 mortgage interest payments (or £1,800) can be deducted, leaving you with a tax bill of £200, the same as before.

But higher and top-rate taxpayers will pay more. Based on the same scenario, in 2020, higher-rate taxpayers will be taxed at 40% of £10,000 (or £4,000) but will only be able to deduct 20% of their £9,000 mortgage interest payments ( or £1,800).

This will leave higher-rate tax payers with a tax bill of £2,200, compared to £400 under the current system. Those paying the 45% tax rate will owe £2,700, rather than £2,250.

Wear and Tear

That’s not all that may be changing. The Chancellor has proposed that, from April 2016, you’ll only be able to claim for “wear and tear” costs actually incurred on replacing furnishings when calculating taxable profits. You’ll do so by providing itemised receipts that show the replacement goods you’ve purchased or repairs you’ve carried out. Currently, you’re given an allowance regardless of your actual expenditure.

Prospective landlords and those with existing properties may want to work out how their plans will be affected by the new rules to avoid a surprise later on. When planning, remember that just as these rules are changing now, they might do so again in the future. The effect of tax rules can change and will depend on your own circumstances.

Safety Rules are Changing

Landlords must already follow certain safety rules. These include obtaining an Energy Performance Certificate for a property before advertising it to tenants, as well as an annual gas Safety Certificate for their property’s boiler and other gas appliances. New measures include rules for preventing legionnaire’s disease and for fitting smoke and carbon monoxide alarms.

Also, the government is proposing new rules to make it more difficult for landlords to evict a tenant if the property’s appliances don’t have a current Gas Safety Certificate.

Focus on the Long Term

With changing tax rules and tighter regulations being introduced for buy-to-let landlords, it’s vital to think carefully about the type of investment you want to make. Properties can offer both asset growth through rising house prices and an income from rents- although neither of these can be guaranteed; values can fall and any rent might be exceeded by outgoings.

If you’re thinking of investing in buy-to-let, bear in mind it’s relatively high-risk and illiquid investment.

Also remember that, just as tax rules are changing now, they could change again in the future and their effect on you will depend on your circumstances – which can also change. The government is still encouraging everyone to take greater responsibility for their long term needs by “giving them more flexibility about how they spend their pension’s savings”. For many people who are looking to release funds, considering becoming a landlord is the next step.

The property on which any lending is secured may be repossessed or a receiver of rents may be appointed if you do not keep up repayments on the mortgage.

For more help and advice please do not hesiate to contact me.

Kind regards,

Clare Allen @HoskinMortgages

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Mortgage Credit Directive by Ian Chambers at Hoskin Home Loans.

Mortgage Credit Directive is almost upon us and as with all change people are apprehensive but also excited especially in the second charge industry as predictions are that it will be able to gain some of the remortgage markets share of business.

Research has shown that equity released and withdrawn through remortgaging was up by 30% compared to the previous year.

However it is widely thought within the industry that with the implantation of MCD (Mortgage Credit Directive) that the second charge sector will challenge the remortgage market and we will see uplift in demand for secured loans.

Once regulation is in place more borrowers will view secured loans as a viable alternative to a remortgage.

Increased borrowing options for consumers will only be beneficial as they have more chance of finding the right loan to suit their needs.

The Regulator is keen to see the second charge market grown and MCD will help this provided brokers are properly educated. MCD will drive out those who should not be in the market and will drive business to those that do the job right.

The industry has seen lots of changes in recent times and lender, brokers, advisors and packagers alike will adapt because that is what they have always done.

Here at Hoskin Financial, the Secured loan packaging arm and the Mortgage department at Hoskin Mortgages have been working closely together over the last few months and look at each and every remortgage case to see if indeed a remortgage is the right product for a client whether it’s a residential property or a buy to let property.

Clare Allen from Hoskin Mortgages said “I was aware of the need to look at secured loans as an option but it has been invaluable to work closely alongside a secured loan packager and I feel happy and confident that I am looking at the best option for my clients and they are being armed with all the information to make an informed decision.

In closing we are ready for the changes largely thanks to the support of our lending partners and are looking forward to a successful year.

Ian Chambers @HoskinHomeLoans

Shared ownership

Shared ownership

10 tips to help you on your way

1) Manage your expectations, because housing associations are not charities. If you default on rent or a mortgage, your home may be repossessed. The association will not bail you out if your home falls into negative equity or if you struggle to find a buyer down the line.

2) You may be banned from subletting. This could mean no lodgers or live-in partners, and no earning a quick buck on Airbnb. Check before you buy.

3) You may need to pay stamp duty. Most buyers opt to pay just on the portion of the home they will own and, if this is less than £125,000, you will be exempt. If it is above, you will be hit with a bill, and if you buy an increased share of the property, you might have to pay extra stamp duty too- and you will need a solicitor to do your conveyancing.

4) Rents usually increase annually, based on the Retail Price Index, plus one per cent. Over a year, this will add about £100 to £150 to the running costs of a £250,000 property (full price).

5) Don’t get seduced by the idea of fabulous extras, such as swimming pools. Shared owners are usually, and rather unfairly, excluded from using them. They also often have to use a different front door to people who have bought on the open market. “Poor doors” segregate lower-income residents, and are widely considered a scandal.

6) Shared owners often also get shunted to the worst part of a development – overlooking railway lines, a busy road, or on lower floors with no views. Ask to see a model, and certainly detailed plans, of the entire development.

7) As with any new home, you must find out how long the development around you is going to take to complete. Shared-ownership sections often get built early, which could mean years of building noise. And what if you want – or need – to sell up within a year or two.

8) Take a cool-headed look at potential price growth. If new transport links are planned, it will be a good bet. If it is in a run-down location with no sniff of regeneration, then you will be the first to be hit when any downturn happens.

9) When you want to sell, you might not be able to take full advantage of the market. The housing association will first offer the property to buyers on its waiting list for a set price (based on an independent estimate) and will not get into any bidding wars. On the plus side, there’s no gazumping or gazundering. If it does not sell, you will be able to pitch it on the open market.

10) You aren’t likely to become a property millionaire. If you buy a 50 per cent share of £500,000 flat and its price rises by 20 per cent, when you sell, you will make £50,000. However, you have to pay a fee to the housing association if it markets the property. If you sell through an estate agent, you will pay a fee of up to 3.5 per cent of the entire selling price. This could knock as much as £21,000 off your profit, so shop around for agents with lower rates.

For more help and advice please do not hesitate to contact us @HoskinMortgages