The United Kingdom is currently facing a period of uncertainty unlike any seen since the end of the Second World War. Considering Great Britain’s entirely uncertain position in Europe and the rest of the world over the coming years, it’s almost impossible to predict what’s to come next. Nevertheless, the latest figures have painted a less than reassuring picture about the country’s economic performance.

According to the latest figures from the Office for National Statistics, the United Kingdom economy experienced growth in May after a decline in April. However, not to such an extent as to quash widespread fears of a severe slowdown to come. Specifically, the economy experienced growth of 0.3% in May, following a decline of 0.5% in April. Total growth over the three months leading up to May came out at the same 0.3%.

This would appear to be a positive result, but experts are predicting further shrinkage in the months to come. The official figures for the second quarter are not scheduled to be released until August, though they are not expected to make a particularly reassuring reading.

Carmakers return to work

One of the key factors driving the temporary economic growth record in April was the partial return to production for several major carmakers. A series of temporary factory shutdowns ahead of a scheduled March Brexit inflicted enormous damage on the UK’s vehicle production output and the economy as a whole.

This partial recovery in car production contributed to the 0.3% economic growth recorded for May, which didn’t come close to making up for the decline in the previous month. Experts insist that all such monthly figures should be taken with a pinch of salt due to their volatility and unpredictability. Nevertheless, all signs indicate a further economic slowdown over the coming months in the run-up to another scheduled EU departure.

“We project UK growth to dip to 1.1% in 2019 and to strengthen only moderately, to 1.6% in 2020. Slow growth this year reflects the drag on business investment from ongoing economic and political uncertainty relating to the outcome of the Brexit process. Our main scenario assumes an orderly exit from the EU with a transition period, with business investment and GDP growth picking up later in 2019 and in 2020. But short-term risks are weighted to the downside due to the possibility of a more disorderly Brexit.” Price Waterhouse Coopers

The value of the pound has also plummeted more than 5% against the world’s three biggest currencies in recent weeks. A decline that is also predicted to continue for some time.

Growing brexit uncertainty

Had the government gotten its way, the United Kingdom would have already been outside the European Union for some time right now. As it stands, we’re no closer to knowing what’s ahead than we were at the time of the referendum. Uncertainty has had a more drastic and wide-reaching impact on the UK’s economic performance than anyone could have predicted.

As it stands, the United Kingdom is now scheduled to leave the European Union on or before October 31. Nevertheless, we’ve got no realistic way of even knowing who will be in power at the time. Or whether Brexit will actually go ahead or not. From the biggest businesses to the average UK household, nobody is willing to make any major financial decisions while such uncertainty continues. The result of this is the sluggish economic performance we’ve seen as of late, which isn’t likely to see a turnaround anytime soon.

At some point or another, we were all informed of the politeness (or otherwise) of asking other people how much they earn. It’s all part and parcel of growing up and getting into work—we’re programmed from an early age to avoid the subject of salary at all costs.

To such an extent that even in today’s enlightened and liberal 21st-century society, discussing our salaries can be the ultimate taboo.

But it seems the winds of change are blowing for a new generation of millennials, who, unlike their formal and stuffy predecessors, aren’t nearly as afraid to talk cash. In fact, a report published by The Cashelorette found that almost two-thirds of millennials (63%) between the ages of 18 and 36 have talked about their salaries with their family members. Moreover, 48% have discussed what they earn with their friends, and 30% have talked about their take-home pay with their co-workers.

By contrast, little over 40% of adults aged 53 to 71 stated that they discuss their salaries with family members, 21% shared salary information with their friends, and just 8% talked about what they earn with their colleagues at work.

This would seem to suggest that younger generations find it more socially acceptable to discuss salaries openly than older generations, but does this add up to a good thing? Are there positives to be taken from discussing salaries openly, or is it a personal and private subject that’s best kept under wraps?

The importance of workplace transparency

A number of experts have already shared their thoughts on the subject, and the majority have reached the same conclusion. In an organisational setting of any kind, transparency has the potential to be enormously positive. When members of a workforce share information about their salaries openly with others, there’s none of the typical scepticism and scrutiny that surrounds salary secrecy.

Roughly translated, if you know exactly how your pay compares to that of your peers, you understand your position and the extent to which you are valued. Assuming you’re all paid pretty much the same (in accordance with experience), knowing this makes it easier to feel part of a cohesive team and focus on the job accordingly.

By contrast, when workers have no idea how much their counterparts are being paid, they may assume they’re being underpaid and undervalued. Even if this isn’t the case, they’ve got no way of finding out for sure and could therefore reach misguided conclusions. It’s the classic case of ensuring everyone is on the same level and treated in the same way when doing the same job.

Of course, this isn’t the way the vast majority of businesses operate.

The issue of salary secrecy

From the moment new recruits are brought on board, salary secrecy can be problematic. For example, by keeping the salaries of employees secret, employers enjoy an enormous advantage during the negotiation process. The same also applies to interviews for promotion and general career development, wherein the applicant may accept a salary exponentially lower than that of their colleagues.

Salary secrecy is also blamed for the perpetuation of the wage gap between female and male employees. As there is no requirement for employees to openly discuss or disclose their salaries, men and women doing the same job can get away with receiving very different rates of pay.

Of course, confidentiality legislation provides employees and employers with certain protections regarding salary disclosure. Hence, it’s unlikely that sweeping reforms will be implemented anytime soon, resulting in complete disclosure and open discussion of salaries in the workplace.

Still, it’s reassuring to learn that younger generations are gradually eradicating the taboo that’s held back honest and open discussion for so long. If true equality in the workplace is to ever become a reality, open discussion of salaries could be an important part of the process.

We love it when we’ve got it, and we lament it when we haven’t. In any case, it’s rare to come across an individual who doesn’t appreciate the value of money.

But have you ever given thought to where the coins and notes in your pocket come from?

By this, we’re not talking about those oh-so-sophisticated machines down at the Royal Mint. Instead, we’re talking about the actual historical origins of money.

Here’s a brief overview of how the whole thing got started:

Trade via barter

Before money was invented, all business transactions had to take place by way of bartering. It was the case of swapping commodities of equal value with interested parties, which, for obvious reasons, was an imperfect and complicated system. Particularly given how different people assign different values to different commodities.

Eventually, it became clear that some rudimentary form of currency needed to be introduced.

Something that satisfies six essential requirements:

• Scarceness: For a form of currency to be viable, it has to be something that isn’t readily available. Rarity has always been a desirable trade for materials and commodities.
• Counterfeit proof: It’s also useless to have a form of currency that’s easy to duplicate. If you could print 100% authentic cash at home, you probably would.
• Portability: Trading commodities for commodities is one thing, but it’s not as if you can carry your livestock, your car, or your home around in your pocket. Hence, portability is key.
• Durability: Money tends to be exposed to pretty harsh treatment during its lifespan, calling for the use of a robust material to maximise durability.
• Divisibility: One of the biggest problems inherent in the bartering system is the fact that most standard commodities and assets aren’t divisible. Owing change in the form of half a goat presents a variety of problems.
• Desirability: Of course, for a form of currency to be deemed viable, it also needs to be in some way desirable. Precisely why most forms of historic currency have been rare, sought-after, and generally quite pretty to look at.

The dawn of modern currency

At some point in time, common sense brought about the use of precious metals to make coins. At the very dawn of modern currency, it was the quantity of the precious metal used to create the coin that determined its value.

Evidence suggests that the first coins produced as a form of currency emerged approximately 600 years ago in ancient Turkey. The Greeks followed suit approximately 100 years later, around the same time as the Chinese. Coins were crafted and introduced as a form of currency by the Romans after another century or so, which was around the same time the Celts in England introduced coin-based currency.

Denominations, materials, and manufacturing techniques may have evolved beyond recognition, but the same basic premise of exchanging coins for commodities underpins the way the world does business today.

The future of money

Some economists believe it’s only a matter of time until cryptocurrency takes over and wipes physical money off the face of the earth. A distinct possibility, but something that’s unlikely to happen in our own lifetimes.

Cryptocurrencies like Bitcoin may have enormous potential, but for the time being, they are simply too volatile and controversial to mount a global takeover. For a variety of reasons, people in general simply aren’t ready to permanently quit the cash-based currency system just yet.

So while you can expect to hear a lot more about cryptocurrency going forward, you can rest assured that the coins and notes in your pocket will hold their value for now.

How does renting a home affect property purchase eligibility? What’s the deal with let-to-buy finance, and how difficult is it to qualify for let-to-buy mortgages?

Perhaps the best way to get to grips with this surprisingly common scenario is to consider the let-to-buy concept in a typical working example.

Let-to-buy in practice

Let’s say you and your partner currently occupy a property you purchased five years ago at a price of £200,000. Over the years, the market value of the property has increased to approximately £350,000. For whatever reason, you’ve decided to relocate, and you’ve got your eye on a smaller property on the market for around £160,000. You’d like to maintain ownership of your current property and let it out, but you’re concerned that doing so may affect your ability to get a new mortgage.

You have plenty of equity tied up in your property, but you have no idea where to start when it comes to investing in a second property.

What next?

While taking ownership of two properties by way of a second mortgage can be a little complex, it’s more than feasible.

Known as a “let-to-buy” transaction, it’s a case of converting your current home into a rental property and purchasing a second property to call home. The mortgage on your original property then becomes a buy-to-let mortgage, which you will cover with the income you receive from your subsequent tenants. In the meantime, a new mortgage is required to cover the costs of your new home, which you will pay with your income and/or savings in the usual way.

In order to qualify for a buy-to-let mortgage, for which you’ll need to transform your current home into a rental property, lenders typically expect the property to generate a monthly rental income of 125% of the required monthly mortgage payment. If the monthly mortgage payment was £1,000, this would mean you’d need to charge a monthly rent price of at least £1,250.

If you’re able to comfortably cover the buy-to-let mortgage repayments by way of your tenants’ monthly rent payments, you’ll almost certainly qualify for the loan you need.

Mortgaging your new home

Your previous home has been converted into a rental property, which, under the terms of a buy-to-let mortgage, is no longer habitable for you personally. Hence, you need a place to live; you also need a new mortgage.

The process of obtaining a mortgage on a new property when letting out a previous property is similar to any standard mortgage application. Assuming the lion’s share of the rental income on your previous home is used to pay your buy-to-let mortgage, it won’t have much impact on your official overall income.

Instead, your eligibility will be assessed in the usual way. Your combined household income, any outstanding debts and commitments, your credit score, employment history, CCJs, and so on Simply owning and renting out a second property won’t necessarily influence your subsequent mortgage application.

Independent support and advice

Due to the inherent complexities of the let-to-buy process, it’s important to seek independent support and advice at the earliest possible stage. Along with helping establish your eligibility for such a move, an independent adviser or broker will help you find the best funding solution available.

It’s important to remember that traditional mortgages aren’t the only home finance solutions available. Bridging loans, auction finance, and specialist secured loans should also be considered. Likewise, an imperfect credit score may bring additional complications into the equation, but it doesn’t necessarily count you out of the running.

Living as a pensioner with a great deal of equity tied up in your estate represents the ultimate catch-22 situation. You may be sitting on a small fortune in combined assets, but this doesn’t mean you’ll be lent a hand when in need of financial support.

Or at least, not by the vast majority of major lenders.

The problem with property finance for pensioners

In a typical scenario, you may own a house worth more than £1 million, land with a market value of £300,000, and plenty more. You’re 72 years old and have an average annual income of around £35,000. You’ve got your eye on a £700,000 property you’d like to buy and move into; you’ve even got around £200,000 available in cash.

Unfortunately, the only two things the average high-street lender is interested in are your age and your income. A 72-year-old application with a £35k per-year income is not coming close to satisfying the qualification criteria for this kind of residential mortgage.

Exploring the alternatives

On paper, the figures above simply don’t add up. After all, if the prospective borrower owns multiple assets that vastly exceed the cost of the loan, why wouldn’t they qualify for an affordable mortgage?

This is just one example to illustrate the problems inherent in property finance for pensioners. Not to mention the importance of looking beyond the High Street to explore the alternative options available.

Even if such a candidate were able to qualify for a mortgage, they’d almost certainly be ‘penalised’ with elevated interest rates and higher overall borrowing costs. This, is despite their incredibly strong financial position and wealth. In order to avoid paying over the odds unnecessarily, such cases should be taken directly to the doors of specialist lenders.

Bridging loans for over-65s

In instances like these, conventional mortgages are not the only option. Neither are they the most accessible, affordable, or convenient option. When sitting on this kind of equity, there’s nothing to gain by complicating things with long and drawn-out mortgages. Or, for that matter, wasting time on applications guaranteed to be rejected.

As an alternative, bridging loans represent a fast, flexible, and affordable way to borrow substantial amounts of money on the basis of collateral. For pensioners in particular, bridging loans can offer a welcome lifeline for covering short-term gaps in their financial dealings.

In this particular scenario, the individual in question could use their current property to secure the funds needed to buy their new home. Bridging loans are typically available up to a maximum of 75% of the property’s value, meaning around £750,000 is accessible for the applicant. The new home is purchased, the buyer’s previous home is sold a little further down the line, and the bridging loan is repaid in one lump-sum payment.

As an alternative, bridging loans represent a fast, flexible, and affordable way to borrow substantial amounts of money on the basis of collateral. For pensioners in particular, bridging loans can offer a welcome lifeline for covering short-term gaps in their financial dealings.

In this particular scenario, the individual in question could use their current property to secure the funds needed to buy their new home. Bridging loans are typically available up to a maximum of 75% of the property’s value, meaning around £750,000 is accessible for the applicant. The new home is purchased, the buyer’s previous home is sold a little further down the line, and the bridging loan is repaid in one lump-sum payment.

Comparing bridging loans for pensioners

Due to the specialist nature of bridging loans for pensioners, it pays to work with a specialist broker. Consult with an independent specialist and organise a whole-of-market comparison, incorporating dozens of dynamic lenders beyond the UK High Street.

It can also be helpful to use an online bridging loan calculator in order to get a good idea of the various options available.

Taking the plunge and buying your dream home shouldn’t turn into an unmitigated nightmare. Particularly if you’re buying a new-build property, which you’d expect to be in mint condition inside and out. Nevertheless, new-build complaints are stacking up from disgruntled buyers across the UK. In fact, new-build home complaints recently hit an all-time high.

Disappointment with a new home isn’t a case of simple inconvenience and frustration. For those affected, it can be a distressing and costly situation to face, often with very little help available.

Some builders and developers hide terms and conditions in contracts that negate responsibility, while others simply ignore letters and calls to their offices. Often, they are under the knowledge that if they wait long enough, the buyer’s warranty will expire, assuming they were provided with one in the first place.

In any case, the average homeowner simply doesn’t have the time, the expertise, or the energy to chase and challenge builders when things go wrong. Complaints about new builds are flooding local and national government offices like never before, but is there really anything that can be done about it?

Or, more importantly, why is it happening in the first place?

No Isolated Incident

Research from the Homeowners Alliance suggests that those filing complaints about new-build homes aren’t in the minority. For whatever reason, there’s been a distinct uptick in the number of people reporting serious defects with their new homes shortly after purchasing them. To such an extent that less than two-thirds of those who buy and move into new homes are happy with the way initial imperfections are addressed by their respective builders and developers,

Even more alarmingly, the number of new homebuyers reporting defects of any kind after moving into a new property stood at 93% in 2015. As of 2018, the number of buyers filing complaints about new-build homes had hit an astonishing 99%.

All of which suggests that next to no buyers are comprehensively satisfied with their newly built homes when they move in.

What’s more, evidence also suggests that buyers aren’t simply filing new-build property complaints about basic snags and minor shortcomings. Instead, they’re talking about the kinds of major structural issues that pose a direct threat to their health and safety. The problem is that even when such issues are reported, they’re often addressed with little sense of urgency or priority.

Experience and expertise

As far as some industry experts are concerned, the issue may be the result (at least in part) of a widespread lack of experience and expertise among builders.  Generally speaking, the UK has a global reputation for the quality of its construction workers. However, some argue that, as it takes less than two years of training to become a qualified bricklayer, plasterer, or tradesperson in the UK, there are far too many builders in business with very little experience behind them.

In addition, there’s absolutely no legal requirement for builders in the United Kingdom to obtain a licence to offer their services. They’re able to sign up on a voluntary basis with registered bodies like the NHBC or the Federation of Master Builders, but there is no requirement for them to do so. It’s a legal requirement for all properties constructed to meet certain health, safety, and practicality requirements, but carrying out such checks isn’t always easy for potential buyers inspecting the properties.

For the time being, therefore, there’s little that can be done on the part of the buyer other than to organise meticulous and intensive inspections prior to purchasing a home. Where problems are encountered after the purchase, developers or builders are required to fulfil their contractual obligations or may be brought before the courts for legal proceedings to take place.

Roughly summarised, non-status bridging loans refer to loans provided exclusively on the basis of collateral. The idea is that just as long as the borrower is able to provide sufficient security to cover the full cost of the loan, their past financial performance is unimportant. Instead, it’s simply a matter of determining their capacity to pay the loan back as required.

The term “status” is used in reference to the extent to which any given borrower can provide evidence to support their financial situation. In the most typical example, borrowers looking to obtain non-secured finance, such as conventional loans, are required to demonstrate how strong and stable their financial position is. As there is no collateral required for a personal loan, the lender must base their decision purely on the supporting evidence provided by the borrower.

Employment contracts, bank statements, and credit reports all combine to paint a picture of the borrower’s financial status.

Depending on the service provider you work with, it may be necessary to prove your financial status to a certain extent, though not quite at the same level as a typical unsecured loan. For example, if you’re only able to offer enough collateral to cover the cost of the loan, you may also be required to demonstrate your status. Though it’s comparatively rare, some lenders ask for collateral to be provided to secure the loan while at the same time carrying out credit checks.

In most instances, however, no additional evidence of status is required in order to apply for and successfully receive a secured loan.

The benefits of non-status bridging loans

Unsurprisingly, therefore, the biggest advantage of a non-status bridging loan is accessibility. Now, more than ever, it’s far too easy to blemish what may otherwise have been a relatively strong credit score. Even just a minor hiccup here and there can be enough to cause significant damage to anyone’s credit report. In such instances, you could then be looking at several years before once again qualifying for any kind of traditional, non-secured finance.

The primary difference with non-status bridging loans is the focus on the present and the future rather than the past. Those who specialise in non-status bridging loans are typically uninterested in the financial performance of the borrower up until the time they apply. Irrespective of how chequered their financial history may be, the only thing that matters is whether they can pay back the loan as required right now.

If they are able to secure the loan appropriately with sufficient collateral, nothing else matters.

Non-status bridging loans can therefore be great in instances where the borrower may be unable to qualify for any other kind of finance. Not to mention, when funding is required as quickly as possible, non-status bridging loans are typically paid out within a matter of days.

From unexpected business expenses to purchasing properties at auction to limited-time investment opportunities, non-status bridging loans can be worth their weight in gold at the right time and for the right borrower.

For more information on any aspect of non-status bridging loans, contact a member of the team at Bridgingloans.co.uk today.

Pricing a property can be difficult, especially if you are in the business of reselling. This is when you purchase a low-priced property and try to sell it for a profit. There are several ways to do it, and this tried and tested method will show you how.

Find your price

The very first thing that you need to do is find out what your property is going to sell for on the retail market. The best way to do that is to do a search of all the comparable homes that have sold recently within a quarter of a mile from your property. The highest average price they have sold for is the retail price. As soon as you find out what the retail price is, you need to choose what your exit strategy is going to be.

Wholesale strategy

If you are going to wholesale your property, it’s very simple. You list the property at 50% off the retail price. If you are going to wholesale to another investor, you have to leave enough room for them to make money as well, so the right percentage to entice them in is 50% off retail. If you were going to do it on an example property that retailed at £100,000, it would be good to list it at £49,900.

Prehab strategy

Now, if you are going to prehab your property, which means you are going to do a very light prehab to make it rental-ready for the buyer, not a full prehab, you are going to be pricing it at 10 to 15% off retail value. In the example house above, the retail price is £100,000. So, if you are going to prehabit it and put £8,000 or less into improving it, you need to price it 10 to 15% off of that retail price. A good figure would be £84,900.

Retail strategy

Next, if you’re going to be listing your property and selling it at retail, this is the formula that you are going to use. Clearly, you already know what the other properties are selling for. However, what you should always do if you don’t want it to sit on the market is price it at 95% of its retail value. You can price it as high as 100% or even more, but the higher you price it, the longer it’s going to sit on the market. So, 95% of the value is a great price at £94,900.

Attractive pricing

On the example property, let’s imagine we decided to prehabit it. Whenever you’re pricing a property, the other thing you need to look at is pricing it attractively. Going with this formula, you could very easily price it at £85,000 or £90,000, but those are not very attractive prices. The attractive price is £84,900 because it sounds a lot cheaper, even though you have only knocked £100 off.