Whether you are buying a home to occupy or to let, the mortgage finance will be crucial to the success of your purchase. The UK mortgage market is the most sophisticated and innovative in Europe, with a huge range of choices to suit all kinds of needs and circumstances.
Property has proved to be a very profitable investment for many people, but it is important to understand that there are risks. Property values have been known to go down both across the board – as in the early 90s and in the wake of the 2007 financial crisis. Prices can also drop in particular areas, perhaps as result of regional economic problems or local planning decisions. Paying too high a price or borrowing too much can both be dangerous, especially if the property boom slows down or stops. So it is important to diversify and to be fully aware of the possible downsides.
We can help with your strategic financial planning in terms of both the proportion of your wealth you should hold in property and the way you should finance the purchases.
The home buying process
Buying a home is one of the most important financial events in life. Around two thirds of people in the UK own their own home, but research has shown that moving home is one of the most stressful events in life – especially if things do not go to plan.
Types of mortgage
Before choosing the right mortgage product, it is important to identify what type of mortgage you require. UK lenders will lend in a wide variety of situations, but it pays to know the terminology and some of the rules that apply.
Choosing your mortgage
Choosing the right mortgage product can, at first sight, seem daunting. After all, dozens of lenders offer hundreds of mortgage products. So, how do you choose the right mortgage for you?
Tax on your main residence
Tax affects most areas of our financial lives, and housing is no exception. The good news is that some forms of tax specifically do not apply to housing; the bad news is that some are designed just for housing, or can be significantly affected by the home you own.
Many people, especially in older life, find themselves in a situation where they need more income or access to capital. However, they may have little in the way of assets other than their home. Equity release is simply the term used when someone realises the capital value that is locked up in their home.
Buy to let
Property investment has proved attractive to many people over a sustained period. The theory is simple: buy a property, rent it out and you benefit both from rental income that will go up over time and capital values that should rise as well. But buy to let is not a guaranteed way to make money, and you could even lose money.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The precise amount will depend on your circumstances and/or amount of borrowing. We will notify you of any costs before any advice is provided.
Levels and bases of, and reliefs from, taxation are subject to change and their value depends on individual circumstances.
This publication is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The Financial Conduct Authority (FCA) does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. This publication represents our understanding of law and HM Revenue & Customs practice as at 30 April 2016.