Craig Upton

Craig Upton

Craig Upton has worked with UK Property Finance Ltd for over 18 years writing content for the websites and online finance publications. Craig writes website content, press releases and articles on popular financial brands in the UK. Creating strategic partnerships and supporting data with extensive research in the latest trends Craig is well versed with most products within the financial sector. Craig has worked within the online marketing arena for many years, having worked with British brands such as FT.com, Global Banking Finance and UK Property Finance, specialising in bridging loans and specialist mortgage finance. Craig has gained a wealth of knowledge and is committed to publishing unique content for our readers on various financial platforms supporting the products offered by UK Property Finance.

Return of the 5% Deposit Mortgage: Tips for First-Time Buyers

The return of 95% LTV mortgages is likely to come as welcome news for millions of prospective homebuyers. Across the UK, first-time buyers have found themselves increasingly priced out of the market; this is due to the excessive deposit requirements of most major lenders.

This month, several major banks confirmed their intent to take part in a new UK government mortgage guarantee scheme, enabling them to offer 5% deposit mortgages for the first time in years. Barclays, HSBC, NatWest, and others are all set to begin offering 95% LTV mortgages once again, enabling applicants to qualify with a deposit of just 5%.

How much is a 5% mortgage in real terms?

Saving for a 5% mortgage can vary in difficulty depending on your situation and location. A 5% down payment on a home in Yorkshire and the Humber currently averages around £9,250. This increases to just over £14,000 in East Anglia, £18,000 in the south-east of England, and around £29,000 in London.

Buyers in Wales and Scotland can expect to pay just under £9,000 as a 5% deposit, with Northern Ireland falling to around £7,400.

Affordability will therefore be determined primarily by location as well as your savings and income. In most instances, buyers will still find themselves needing to save thousands to cover both the 5% down payment requirement and the various fees associated with setting up a home loan.

Administration fees, valuation fees, and legal fees are costs that can often add up to a further 1%–2% of the property’s market value.

Tips and guidelines for savers

Representatives of several major banks and lenders have been offering their own tips and guidelines for savers looking to reach the new 5% deposit threshold and take their first step up the property ladder.

While there are no quick-fix shortcuts to amassing considerable sums of money, these tips from lenders offer guidance for people serious about buying their own home.

Carefully consider your financial health

This means taking an in-depth look at your outgoings, lifestyle, income, and debts. If there are any expenses you can curb (or eliminate) or smaller debts you can afford to pay off, it may be better to do so before considering taking on debt.

Set up a dedicated savings account

Put all the money you are saving for your deposit into a dedicated savings account. Separate your finances strategically rather than pooling everything into one collective account.

Set realistic goals

Staying motivated is the key to reaching major savings targets. It is important to be realistic in terms of when you can expect to accumulate the funds required. If it is going to take you several years to save for a deposit, then you must set goals and acquire funds accordingly.

Consult with an independent broker

Last but not least, consulting with an independent broker is a useful way of gauging affordability while also getting to know the new 95% LTV options that are available.

Demand for Specialist Mortgages on the Rise for High Net Worth Individuals

With the recent budget announcements putting personal and business finance firmly in the spotlight, it has become more important now than ever to focus on the issues facing homeowners and potential new borrowers. With many incomes being significantly impacted by the COVID-19 crisis over the last 12 months, it is anticipated that there will be a sharp increase in the need for specialist mortgage products.

Meeting the strict mortgage criteria necessary for most high-street lenders has become problematic for those looking to purchase or re-mortgage a property. Banks are less willing to accept applications from the self-employed due to them being risky and complicated, resulting in an increased number of clients requiring specialist residential finance options.

This issue does not only affect lower-income borrowers but also those in the high-net-worth category. High-net-worth individuals have seen an increased level of mortgage application rejections and longer delays. Butterworth Mortgages recent research data suggests that as much as 18% were turned down for a mortgage in the last 10 years, which is an increase of 6% from a similar survey conducted in 2019. A significant 51% of applicants who had successfully or unsuccessfully applied in the last 10 years turned down at one time or another.

Securing credit due to complicated income structures appeared to be one of the main issues with applications, with 63% stating they had been rejected for this reason. Also, 78% feel that the rigid methods used by the banks prevent them from accessing financial products, forcing them to look elsewhere.

With confidence in high-street banks stated to be at an all-time low, a huge opportunity has opened for mortgage intermediaries to direct borrowers to the right specialist lender who will be able to cater for clients who have complicated or multiple sources of income.

Mortgage brokers across the UK have reported a steady increase in demand for specialist mortgage products, which, due to the pandemic, is expected to continue to rise. Thankfully, many lenders have adjusted and adapted to meet the changes required, allowing a more flexible and broader approach to applications from a wide range of income source types.

Co-Founder of Anorak Confirms Planned Collaborations with Mortgage Brokers

One of the web’s leading protection providers has confirmed its plan to establish partnerships with mortgage brokers to make it quicker and easier for borrowers to safeguard themselves from future financial issues.

In a recent interview with FTAdviser, Anorak’s co-founder and chief executive officer, David Vanek, explained his intention to begin selling protection with mortgage broker support, with further announcements on the specifics of these collaborations coming soon.

“We can either be their protection service, so they refer to us as their protection clients on our online journey,” he said. “But some [mortgage brokers] have expressed a keen interest in using our digital platform for their own benefit and their protection team,”

“So a mortgage broker will use Anorak on a fully white-label basis to help their advisers and their clients get the right protection.”

Anorak is an established and reputable online protection provider that offers independent expert advice on critical illness coverage, income protection, and life insurance. All of these are considered essential for prospective borrowers applying for a mortgage and similar long-term secured loans.

After answering questions on employment status, smoker status, and additional lifestyle factors, customers are provided with a series of quotations and coverage options available.

Speaking on behalf of Anorak, Mr. Vanek stated that the current protection market was “very dated” and needed to be significantly modernised in order to help borrowers access the advice they need on the various forms of financial protection available.

“Most of the distribution partners we are discussing with, whether they are banks or a digital platform, what they want now is an online-first touchpoint with a digital platform that can help the client go quite far before someone needs to pick up the phone and talk to them,” he said.

He also emphasised the importance of providing every customer with fully independent advice and personalised quotations, rather than the generic advice typically provided via online channels, prior to telephone calls or in-person meetings taking place.

“We are passionate about advice, and we think that everyone should get access to advice online first and be educated about what type of protection they need,” he said.

“It doesn’t mean that because it’s online, it’s online-only. I think we still see and value human expertise, but it should be online first.”

The announcement from Anorak closely follows a warning issued by an independent protection expert panel concerning the inadequacies and inefficiencies of the current customer buying experience as far as insurance and financial protection products are concerned.

Bridging Lenders Remain Optimistic for the Future of UK Economy

A recent opinion survey, published by The Association of Short-Term Lenders, indicates a positive long-term outlook for the bridging market and the UK economy as a whole. Following the budget announcement in early March, more than 73% of bridging finance providers remain confident about the long-term health of the economy, in comparison with just 64% recorded last July.

The survey shows that 87% of bridging lenders are expecting a significant increase in their business turnover over the next 6 months, with a 77% expectation that the wider bridging sector will achieve healthy growth in turnover too. These figures have shown a great improvement from the previous survey, where 36% of respondents predicted the sector as a whole to shrink, with 41% of bridging providers anticipating a decline in their own business turnover.

On the subject of competition between bridging loan providers, survey participants were divided in their opinion, with 47% believing competition will remain the same over the next six-month period and 43% expecting an increase. A mere 10% thought competition would actually decrease.

Vic J. (CEO) said, “This latest sentiment survey of the members is an important one as it gives us an opportunity to take a step back and reflect on the year we have been through”. The significant increase in positivity compared to last summer reflects not only the general optimism about the rollout of the vaccination programme but also the way that bridging lenders have been able to evolve and adapt to the changing environment.

“The sector is in a strong position to continue to support the recovery with fast, flexible short-term lending to meet the diverse needs of a range of customers.”

What £250,000 Will Stretch to in Several Areas of England

Average property prices in the UK exceeded £250,000 some time ago, but what exactly can you get for this kind of money in different corners of the country?

Unsurprisingly, the size and specification of property you can expect for your £250,000 differ greatly from one region to the next. With the stamp duty holiday having been extended until at least September 30, the next few months are expected to be particularly busy for the real estate market.

For those setting their sights on a property for around the £250,000 national average, this is what you are likely to find available in key areas of England:

North East

The average price for a three-bedroom house in the north-east of England is just over £152,000, which means that £250,000 would stretch to quite an impressive property. An attractive four-bedroom townhouse recently renovated and with pristine private gardens should be well within your price bracket in select areas of the North East.

North West

Similarly, the average market value of a three-bedroom home in the north-west of England is just under £200,000. If you are looking to spend £250,000, you could invest in a large and relatively newly built four-bedroom home with landscaped gardens, a separate dining room, and excellent transport connections. House prices are also up more than 7% in this region year-on-year, making it a great location to consider buying into.

Yorkshire and the Humber

With average prices hovering around £190,000, an investment of £250,000 in Yorkshire and the Humber could stretch to a beautiful rural property in a quiet and secluded corner of the county. Ideal for those looking to escape the chaos and congestion of busy urban centres for a more tranquil countryside lifestyle.

West Midlands

Homes rarely take much time to sell in the West Midlands, an average of 65 days, fuelled by consistent demand. £250,000 in an area where the average property values hover around £220,000 could easily stretch to a spacious three-bedroom semi in a desirable corner of the county with lush gardens and an expansive driveway for multiple cars.

East of England

Property prices in this region are currently averaging around £327,000, though there is plenty available for a £250,000 investment. Three-bedroom detached and semi-detached properties in and around Norwich in particular are proving popular among movers and investors alike.

South East

With the same average asking price of around £372,000, the second-most expensive region in England still has options available for a £250,000 investment. Terraced properties, in particular those with private gardens and two to three bedrooms, were in plentiful supply as of early 2021.

London

Lastly, £250,000 is still more than enough to invest in an attractive contemporary flat with two bedrooms and spacious living areas in several South London postcodes. Considering the average price of around £645,000 for a home in London, the fact that anything attractive is available for this kind of money is actually quite surprising.

Searches for Development Bridging Back in the Top Five

Specialist brokers operating within the bridging sector have noted a major spike in activity and interest among property developers. As a result, and for the first time since February 2019, development finance is back within the top five search terms within the bridging category.

According to Knowledge Bank, which recently revealed the top-performing search terms for January 2021, there has been a significant increase in the number of searches targeting ‘development bridging and, in particular, the maximum loan to GDV, i.e., the LTV against end value’. This suggests that bridging finance is being sought by construction companies and developers for major property development and redevelopment projects.

This was the first time this particular term had appeared within the top five in two years.

No change at the top

The top three search terms remained the same for January 2021, which according to Knowledge Bank were ‘maximum ‘LTV’,’regulated ridging’, and ‘regulated bridging’ and ‘minimum loan amount’; however, the order of the three top searches changed from the month before, suggesting a shift in priorities among applicants.

In the commercial lending segment of the market, the three most popular search terms, according to Knowledge Bank”, were semi-commercial’,’ maximum LTV for commercial investment’, and ‘minimum loan amount’. A new entry to the top five for January was ‘commercial owner-occupier’.

First-time buyers’ also made an entry to the top five searches conducted in the buy-to-let segment for the first time since February last year. The most popular search term in the BTL bracket was ‘lending to limited companies’, which, according to Knowledge Bank, reflects the growing number of landlords looking to set off companies prior to the planned punitive tax changes.

The importance of specialist broker support

Commenting on the data, Knowledge Bank highlighted the growing importance of seeking independent specialist support to access a competitive deal from a reputable lender.

“With the end of both the stamp duty holiday and furlough scheme [in sight], lenders are certain to continue adapting criteria to keep up with the evolving market,” commented Knowledge Bank’s operations director, Matthew Corker.

“It is now physically impossible for any mortgage broker to keep all the different criteria in their heads.”

“So, it is now more important than ever for brokers to use a comprehensive criteria search system to ensure they can provide their clients with the best advice and evidence that they have done so.”

As many bridging loan specialists in the UK operate exclusively via established brokers, their products are only available with broker representation. Comparing the bridging loan market with the support of a broker can be beneficial in a variety of ways, including access to objective and impartial advice on the funding solutions available.

For more information on any of the above or to discuss the potential benefits of bridging finance in more detail, contact a member of the team at ukpropertyfinance.co.uk today.

How to Get a Bridging Loan for a London Property

With monthly interest rates hovering at an all-time low, there has never been a more cost-effective time to consider bridging finance.

Particularly where the funds are required quickly and for a major purchase or investment, bridging loans offer an invaluable lifeline for both private borrowers and commercial customers.

Getting a bridging loan as a homeowner

Accessing bridging finance as a homeowner is relatively straightforward and can be used for a wide variety of projects or purposes.

For example, one of the most common applications for bridging finance as a homeowner is to renovate a property before listing it for sale to achieve the maximum market value. Another use for bridging finance would be to prevent a chain break, enabling dream houses to be purchased before the sale of a current property has been finalised.

Bridging loans are also commonly used in the same way for downsizing. Buy a property at a competitive price with a bridging loan, repay the funds with the sales proceeds of your former home, and retain the remaining proceeds from the sale.

It is even possible to use bridging finance to upgrade or extend your current home before subsequently paying off the loan with a longer-term financial product (like a secured loan or mortgage) to repay the balance over several years or by sale once the work is complete.

Provided you have sufficient equity in the security being offered, you should be accepted for bridging finance. Even if your credit report is imperfect, this will not necessarily prevent you from accessing a competitive bridging loan.

Getting a bridging loan as an investor

Bridging finance is increasing in popularity as a popular purchase tool for investors. As conventional mortgage types and high-street loans become increasingly difficult to access, the flexibility of bridging finance gains further appeal.

Investors looking to purchase properties in London often have limited time to make decisions and access the funds needed. Particularly when it comes to last-minute property purchases like those at auction, waiting weeks or months for a mortgage to be formalised simply is not an option.

In this scenario, bridging finance can help, as it can be secured against any viable property the investor owns, and the finance can be arranged within a matter of days. Whether looking to ‘flip’ a property purchased in poor condition for a profit once renovated or to purchase and resell an auction property of any kind, bridging finance holds the key to fast and affordable investments in London.

Key criteria…

In both instances, the main requirement that must be fulfilled is ownership of acceptable property. A bridging loan can be secured against almost any type of residential or commercial property, often irrespective of type, purpose, and even condition.

Ensuring you get the best possible deal means shopping around with the help of an experienced broker, who compares the market in its entirety on your behalf. Always remember that many specialist lenders work exclusively via established brokers, meaning their products and services are not available directly to the public.

For more information on any of the above or to discuss your requirements in more detail, book your obligation-free consultation with UK Property Finance today.

UK House Prices Continue to Climb as Stamp Duty Deadline Looms

Since it was announced, the March 31 stamp duty holiday in England has been predicted to result in a slow but steady decline in average property values. Following an initial rush of interest, the number of prospective buyers looking to purchase homes prior to the deadline has gradually diminished over recent weeks.

Nevertheless, new data from Rightmove suggests that not only is property market activity still relatively high, but that average house prices continued to rise throughout January and the beginning of February. Specifically, average property values increased by approximately 0.5% over the course of a month, following three months of consecutive losses.

The data published by Rightmove tracked average property values from January 10 to February 6.

Property purchase intent remains high

Compared to the same time last year, Rightmove reported an increase in website activity of more than 45% during the first week of February. Additionally, agreed-upon purchase volumes for the same period of time were up by approximately 7%.

However, the number of new properties being listed on the market was down more than 20% from the same time last year. According to Rightmove, this could be partly to do with current lockdown restrictions forcing would-be movers to rethink their plans.

“As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upward price pressure,” Tim Bannister, director of property data, said.

“These are strong signs that new buyer demand is not facing a cliff-edge after March 31.”

Buyers seek alternative funding solutions

The temporary stamp duty holiday, announced by the chancellor last year, renders all primary home purchases up to a value of £500,000 exempt from stamp duty taxation. In the weeks and months following the commencement of the scheme, buyers began scrambling to secure mortgages and purchase homes prior to its expiration.

As the countdown to the March 31 deadline continues, funding property purchases with conventional mortgages from major banks is no longer an option. With so many banks still dealing with a backlog of mortgage applications, there is insufficient time left to process new applications before the deadline.

This has led to many buyers actively seeking alternative funding solutions, such as bridging finance. Many types of specialist-secured loans accessed via established brokers can reduce underwriting times to days rather than weeks.

There is still time to take advantage of the stamp duty holiday, though the help needed to purchase a property at short notice is rarely available on the High Street.