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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.