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James Hammond

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In this fine weather, it’s all-too easy to forget the cold wet winter.

However, for those who suffered home damage in the devastating floods in December and January, it’s no doubt much harder to put out of mind. Storms Eva and Desmond flooded an estimated 16,000 homes in the UK – many of which did not have adequate cover for the necessary repairs.

Back at the start of the year, I was pleased to share a blog on Flood Re: a new collaborative initiative between the insurance industry and the Government focused on flood risk. So it was exciting to hear that the scheme was officially opened for business last month.

It aims to offer affordable cover for the 350,000 homes in the UK deemed at high risk from flooding. It does this by offering participating insurers the opportunity to pass on the flood risk part of a policy to Flood Re.

In fact as a property owner, you should never need to deal directly with Flood Re. Flood Re collects an annual tax from every home insurer in the UK; it then takes on the flood risk part of policies for properties in high-risk areas from participating insurers. If you need to make a claim, the insurer will process this normally. Flood Re then reimburses the participating insurer accordingly if any validated flood-related payments are made.

For those who don’t own properties but rent in high flood-risk areas, it also aims to make contents insurance more affordable.

By taking on the risk of flood cover from the insurers, it aims to create opportunities for those in high-risk areas to receive more competitive insurance prices. But Flood Re doesn’t set the prices for the insurance companies; how any potential reduction in exposure is passed on to the consumer is determined by the insurer.

If you want to find out more about how it works and who is involved, take a look here.

Let’s hope we don’t have to see or experience the devastation that floods can cause any time again soon. But if it does happen, it’s good to know that Flood Re is up and running – helping people to get affordable cover in high-risk areas.

And of course, with a variety of insurers already participating in Flood Re, it’s important to know exactly who offers the best cover at the best prices. With our longstanding experience in the home insurance market, we’d love to help you find the very best deal and the right level of cover.

 

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James Hammond

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In the aftermath of the 2008 financial crisis, perhaps you didn’t expect to see the 100% mortgage again. Back then, sub-prime loans had become so toxic that the whole financial house of cards almost collapsed.

But it’s back. As of this month, Barclays has modified its Family Springboard mortgage for first-time buyers so that a 5% deposit is no longer essential.

There is, of course, a catch. There had to be. To qualify for this 100% home loan, the borrower’s parents must deposit 10% of the mortgage value in a Barclays savings account for three years. The mums and dads won’t go unrewarded for their generosity. In three years’ time, if mortgage payments are kept up, they’ll get the money back with interest calculated at the base rate plus 1.5%. The borrowers, meanwhile, pay a fixed-rate 2.99% interest for the three-year period.

So, given the average UK house price in 2016, those who don’t have a deposit are going to need parents with a tidy £28,800 which they don’t mind putting away for three years.

It seems that family help is still critical to many trying to get on the property ladder. According to data reported in the International Business Times, parents will contribute £5bn towards property purchases in the UK in 2016 – which would put them in the top ten largest mortgage lenders.

So is the Barclays 100% mortgage a good deal? It could be, if you’ve got parents who are able and willing to help. But certainly if you can pull together a deposit of some kind, there are lots of interesting other options which could offer preferential rates and terms.

Give us a call to see how we might help you explore your options. No strings attached.

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OK, so it doesn’t come as much of a shock. But the latest Halifax House Price Index still makes for some interesting reading. The headline news is that UK house prices are still going up – a 10.1% increase for the first three months of 2016 compared to the first three months of 2015.

The average UK house price in the first quarter of 2016 was £214,811 according to the Halifax’s seasonally adjusted calculations – up 2.9% from the last quarter of 2015.

So far, so predictable, right? But it isn’t necessarily just a case of more of the same to come. Martin Ellis, Halifax housing expert said: “Worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months.”

Despite these factors, he continued: “Current market conditions, however, remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicates that house price growth is set to remain robust.”

Interestingly, some separate Halifax research (included in the House Price Index report) also shows that, since 2008, UK flat prices have risen significantly more than other residential property sectors. On average, a flat bought in 2008 is worth 57% more now – compared to a 37% increase for all residential properties. So it shows that going smaller can sometimes pay dividends.

No one can predict the future 100%. But at Limetree, we provide the information and insight from which to make informed financial decisions. From the headlines to the small details, we’ve got a track record in understanding the market – give us a call to find out how we could help you.

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While interest rates for mortgages are at their lowest point in nearly a decade, it’s not all good news for prospective buyers. According to a recent survey by moneyfacts.co.uk, the average mortgage fee charged by lenders is higher now than at any time since May 2014.

The figures show that the average UK mortgage fee today is £956, the highest for 21 months. The average fixed mortgage fee is £964, whereas variable mortgage fees come in slightly lower at an average of £933.

In today’s low-interest environment there are some fantastically competitive mortgages on offer. But what this survey shows is that it pays to know exactly what’s on offer. A hefty mortgage fee can wipe out any savings made by an eye-wateringly low fixed-interest deal.

And with over 4,500 mortgages out there on the market, there is a dizzying array of choice.

The good news is that at Limetree Financial Services, working out the true cost of a mortgage is our bread and butter. We scour the market, we read the small print, we do the calculations. So that when it comes to advising our clients, we can show them how different deals are likely to work out when all the costs are taken into account.

Now that’s something to be upfront about. No small print required.

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James Hammond

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Once a rarity, you can now see solar panels on roofs everywhere. It’s simple really: they can add value to your property and reduce energy bills. The bad news is that, from 8 February, the Government has more than halved the amount you can earn from your solar panels. So has home solar had its day?

Subsidies for the feed-in tariffs from solar panels have now been reduced by 64%. In essence, that means that you’ll get nearly two-thirds less payment from the Government for any energy produced via your solar panels. That’s a pretty sizable drop (although not quite as drastic as the 87% cut originally announced last August).

What does that mean in practical terms? According to MoneySavingExpert.com, average earnings from panels will take a significant hit – going down from £505 per year to £235 per year.

The average installation cost for domestic solar panels ranges from approximately £5,000 to £8,000. So it’s never been about making a quick buck – even less so now. Where you live, whether you have a south-facing roof, the type of property you own – these are all factors which impact the return on investment. The Energy Saving Trust has a useful Solar Energy Calculator to analyse some of these variables.

Of course it’s not all about financial reward. The Energy Saving Trust estimates that a home solar panel system provides enough green energy to save a hefty one-and-a-half tonnes of carbon being released into the atmosphere each year.

There are contrasting scenarios in which solar panels could push the price of your property up or down. On the one hand, a more energy-efficient house is often seen as desirable. On the other hand, in the wrong context or setting, they can be considered as detrimental to overall appearance

Despite the cuts in subsidies, it’s not the end of the road for home solar panels just yet. But there’s a lot to consider. As ever, we’d be happy to hear from you to discuss the financial impacts of your property-related issues.

 

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