Buying your first home can seem complicated. There’s a lot to think about and it’s a huge milestone. If you’re perplexed by the jargon or aren’t sure where to start, this guide will take you through the process and offer tips to help you become a homeowner.

The guide covers:

  • How much deposit you need and the best ways to save
  • How the Help-to-Buy Equity Loan Scheme works
  • Understanding how much you can borrow through a mortgage and what a “mortgage in
    principle” is
  • The different types of mortgages and the impact of interest rates
  • Tips for improving your chances of securing a mortgage
  • The homebuying process.

Download The complete guide for first-time buyers to learn more.

If you have any questions about buying your first home and securing a mortgage, please contact us.

Man pulling a suitcase on a train platform

Over the last two years, holidaymakers have faced disruptions when heading abroad, or even when planning a staycation in some cases. Now, with travel restrictions gradually lifting, you may be looking forward to planning your next trip.

One of the 2022 travel trends is sustainability. With a few small changes to your holiday plans, you could reduce your negative impact on the environment and support communities. When discussing sustainable travel, the focus is often on carbon emissions. While important, there are other things you can do to minimise harmful impacts, while maximising the benefits tourism can bring.

As you book your next trip, here are 10 things you could do to make it more sustainable.

1. Give cruising a miss

Choosing a cruise for your holiday can mean you get to see several different places on your trip and enjoy all the amenities offered onboard. But in terms of sustainability, cruising can be harmful to both the environment and communities.

Cruise ships are typically all-inclusive, which can be attractive if you want a stress-free holiday. However, it also means you’re less likely to spend your money at local attractions, shops, cafes, and more, so the positive impact of tourism is reduced. On top of this, cruise ships generate and dump huge amounts of waste, which can destroy valuable marine ecosystems, and, in many cases, your carbon footprint will be higher than a land-based trip.

2. Offset your carbon footprint

Ideally, sustainable travel would mean cutting out carbon-intensive transport, like flying. For most people, that would mean they couldn’t enjoy the holiday they want, and carbon offsetting presents an alternative.

Carbon offsetting means you take steps to reduce emissions to compensate for emissions you’ve used somewhere else. For example, you may invest in projects like protecting rainforests or installing a wind farm, after you’ve flown on holiday. If you’re interested in carbon offsetting, be sure to do your research and choose a reputable provider.

3. Use public transport to get around

When you’re on holiday, rather than hiring a car, opting for public transport where possible can cut your environmental impact. It’s a chance to see more of the destination you’re visiting and get to know what life is like for the locals too.

4. Support local businesses

How much of what you spend on holiday benefits the community you’re visiting? Choosing to eat at a local café and purchase souvenirs from a family-run shop means your money is far more likely to stay in, and benefit, the local area rather than increasing the profits of large corporations.

5. Choose excursions run by local guides

Much like the above, choosing excursions and trips hosted by locals means you can actively support the local economy and community. You could also get a lot more out of the experience by being able to listen to a local perspective.

6. Cut down your use of single-use plastic

Plastic is having a devastating impact on environments around the world. You may have made changes at home to cut down your use of plastic and, with a bit of planning, you can do the same when you’re on holiday. Packing a refillable water bottle and backpack is simple, and over the holiday could mean you use far fewer disposable bottles and plastic bags.

7. Visit protected areas and environmental projects

A holiday abroad is a great opportunity to see different natural environments to those we find in the UK. Paying to visit protected sites and other sustainable projects can help ensure they’re funded so future generations can enjoy these areas too.

8. Choose sustainable accommodation

As sustainability becomes more popular, holidaymakers have more choice than ever when choosing sustainable accommodation. From an eco-lodge to a hotel that’s leading the way to reduce water use, where you decide to stay can have an impact. Alternatively, choosing accommodation that is locally run or prioritises local suppliers and producers can support communities.

9. Book one, longer trip a year

As travel has become more affordable, it’s become common to take several trips throughout the year and even visit destinations for just a weekend. Slowing down and spending longer in one destination can help reduce your environmental impact. It’s also a chance to really explore and discover hidden gems rather than just ticking off a handful of tourist sights.

10. Embrace the culture

Spending some time learning about the place you’re visiting can help you have a much richer experience when you’re there. Whether you learn some key phrases in the local language or read about the history of the place, embracing the culture can help you identify where small changes can improve the sustainability of your holiday.

Wooden kitchen island with blurred kitchen in the background

Spending money on your home can help you create a practical, beautiful space for your family. With more time spent indoors over the pandemic, it’s no surprise that home upgrades are at the top of many homeowners’ agendas. As well as creating a home you love, the right renovations could boost your property’s value.

House prices have been soaring in the last year. According to Halifax, in the year to August 2021, house prices increased by 7.1%. The average price of a home in the UK is now £262,954. The value of your home is likely to have increased even if you’ve spent little on it. But if you want to give it a boost, some projects could help it increase even further.

To identify the changes that can improve property value as well as your day-to-day life, Royal London asked homeowners how much more they would offer on their next home if their property has certain home improvements.

So, which home improvements were found most likely to deliver a value boost? Here are the top five.

1. Modern kitchen

The kitchen is the hub of the home for many families. So, it’s not surprising that a modern kitchen is the renovation most likely to boost the value of a home. The research found potential buyers would pay £11,159 more for a home that had a newly installed kitchen. It’s also the project homebuyers are most likely to take on themselves. Nearly half (48%) of homeowners invest in a new kitchen within the first 24 months of ownership. While a new kitchen can be expensive, it could pay for itself when you look at the return.

2. Modern bathroom

Coming just behind a new kitchen is a modern bathroom. Around 4 in 10 new homeowners undertake this project within two years of moving in. Properties that already have a new bathroom could benefit from a £10,915 value boost as a result. Alongside a kitchen, a new bathroom is one of the most expensive projects that homeowners take on. However, the findings show you can make a profit from the investment.

3. Loft conversion

The research suggests homeowners want to get as much liveable space out of their property as possible. Converting the loft is one solution that could help families create a home office, additional bedrooms, or simply somewhere to relax. While a loft conversion can be costly and disruptive, it could mean the value of your home increases by more than £10,000.

4. Spare bedroom

Much like a loft conversion, having a spare room can make your property is attractive to families. Whether they want to create a home office as working from home becomes the norm or have a growing family, an additional bedroom can make all the difference when you put your home on the market. The research suggested it could increase the value of your home by £10,744.

5. New boiler/heating system

No one wants to move into a new home and find that they need to replace the heating system or have it break down in the middle of winter. If you’re looking for a way to add value to your home, investing in a new system can give potential buyers confidence. It could increase the value by £9,647.

While it can be tempting to take on projects to increase the value of your home, unless you plan to sell, remember you’ll need to live with the changes too. Renovating your home can have a positive impact on your day-to-day life and create a space that makes sense for your family.

The most influential factor for renovating is “the need for more space for myself or partner”. Other popular reasons included needing more space for children or pets, creating a home-working area, and wanting to hold more social events at home. Some people were also encouraged to take on a project after seeing upgrades that family or neighbours had made to their home. 

Could your mortgage help you improve your home?

If you’re keen to undertake some home improvements of your own, a new mortgage could help you access the capital you need to fund it.

Depending on your circumstances, you may be able to borrow more against your home. It’s a step that can provide you with a cash boost to turn plans into a reality. However, keep in mind will mean that the amount you owe on your mortgage will increase, so your repayments or term will rise. If it means you move into a higher LTV (loan-to-value) bracket, it could mean you will need to pay a higher rate of interest too. It’s a decision you should carefully weigh up first.

If you’re thinking about remortgaging your home, please contact us. We can help you find a mortgage deal that’s right for you and offers a competitive interest rate.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Close up of someone holding a phone looking at properties

It’s often said that British people are obsessed with owning a home and property prices. A new survey indicates that’s the case, with more than half of Brits checking how much their family and friends have paid for their homes. There’s more than one reason why people love to check how much a property has sold for.

According to a survey from Zoopla, just a fifth of people think it’s acceptable to ask someone what their home is worth. Many think posing this question is “rude”, but online tools mean it’s easier than ever to snoop and harder to resist checking. 6 in 10 Brits admitted they have looked up how much others have paid for their home. From friends to colleagues, it’s become common to look at the sale price of properties of someone you know.

The survey found that some people use property prices to make presumptions about a colleague’s salary or even check potential partners. 11% has checked how much a colleague paid for their home and 3% have checked the price of their boss’s home. 8% also said they checked the value of the home of a partner, ex-partner, or someone they were dating, with the value influencing the decisions some made about their relationship.

But there are other reasons for watching property prices rise.

1. To understand your own home’s worth

Some 23% of people said they checked house prices to better understand how much their own home is worth. Your home is likely to be one of your largest assets, so it’s not surprising that people want to keep track of its value.

Your home increasing in value can also help you secure a better mortgage deal. As the property price rises, the amount of equity you hold also increases. As a result, you can take out a mortgage with a lower loan-to-value (LTV) ratio. Generally, the lower the LTV, the more competitive the interest rate you’ll be offered. For example, a first-time buyer with an LTV of 90% is likely to pay a higher interest rate than someone who needs a mortgage to cover 70% of the value of their home.

Over a mortgage, keeping track of your home’s worth and remortgaging could save you thousands of pounds in interest repayments. If you need help finding the right mortgage deal for you, please get in touch.

2. The rapid rise can be exciting to watch

House prices have soared over the last decade. And it can make watching the value of your home, and other properties, exciting to watch compared to other assets you may have.

According to the Halifax House Price Index, in the year to August 2021, house prices have increased by a huge 7.1%. The average house in the UK is now worth a record £262,954. With interest rates low on savings accounts and investment markets experiencing volatility in the last year, seeing your house price climb can be satisfying.

3. To inspire projects for your own home

Almost a fifth (18%) of snoopers said they checked properties online because they were curious to see what someone’s home looked like on the inside. As well as giving you a glimpse into someone’s life, it can be a great way to understand what’s possible with your own property or inspire ideas for your next DIY project. If you’re thinking about knocking down a wall to make living spaces open plan, for example, seeing photos from another property can help you visualise it.

It’s also a chance to see what adds value and what local buyers may be looking for. If a property is valued higher than your home, you may be able to see what improvements have a real impact. Would converting the loft lead to a return on your investment if you want to sell? Or would giving the décor a simple update have a real impact on the value of your home?

How does your home fit into your plans?

As one of your largest assets, your home is likely to play a key role in your plans too. Whether being mortgage-free is essential for your retirement plans or you hope to move to accommodate a growing family, your home may be important to your future. You may even plan to sell your home or release equity to fund plans.

Understanding what your home is worth and taking steps to reduce mortgage repayments through a competitive deal can help you get the most of your property. If you’d like to discuss your mortgage or other property needs, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Three colourful hot air balloons flying at sunrise

From the State Pension triple lock to the cost of living, Covid-19 is affecting economic figures. As the economy reopens, you may have noticed the price of things has risen. From your grocery shopping to days out, inflation means the cost of living is rising and could reach 4% this year.

A small amount of inflation is often seen as a good thing. Prices gradually rising can encourage demand, but higher levels of inflation can suggest demand is outstripping supply and that the economy is running into difficulties.

The Bank of England carefully monitors inflation and can take steps to keep it in check. It has a target of 2% inflation each year, but the inflation rate for 2021 could be double this.

The pandemic impacts the cost of living

According to the central bank’s latest Monetary Policy Report, inflation is expected to temporarily reach 4% in the near term. It notes that this rise largely reflects the impact of the pandemic as the economy recovers, which has led to higher energy and goods prices. However, the report adds inflation is projected to return close to the 2% target in the medium term.

The rate of inflation can seem small, even when it’s double the target. Yet, this can add up to more than you think and affect your short- and long-term finances. It means you could see your day-to-day expenses creep up in line with rising prices.

It works in reverse too and you can see the impact when looking at how the value of money has changed. Let’s say you had £1,000 in 2000. According to the Bank of England, in 2020 you’d need £1,721.35 to achieve the same spending power due to the impact of inflation.

So, inflation means your outgoings are rising, while some of your assets and income are gradually becoming less valuable. If you don’t consider inflation when financial planning, you could end up with an unexpected shortfall.

Retirement is a good example of this. If you set out the level of income you need at the start of retirement and expect to draw the same income for the rest of your life, you’re likely to find it’s not enough to maintain your lifestyle in your later years. You need to consider how the rising cost of living will affect the income you need.

Could rising inflation lead to interest rates rising?

Interest rates have been at record lows for 12 years. The Bank of England first slashed interest rates during the 2008 financial crisis, and has kept them low to support the economy ever since.

While no announcement has been made, the Bank’s latest report does hint that it would be willing to raise interest rates to reduce inflation if necessary. For some, it would be a welcome move, but it could cost others money.

For savers, rising interest rates could help their money keep pace with inflation. Current interest rates mean it’s likely that money held in a savings account has fallen in value in real terms over the last decade. An increase in rates could provide an opportunity for savings to grow in real terms.

For borrowers, it would mean outgoings rise further. The interest you pay on a mortgage, credit card, or loan, for example, will also rise if you’re on a variable rate.

Whether an interest rate rise is good for you will depend on if you’re a saver or borrower.

How can your savings beat inflation?

While rising interest rates could help savers maintain their spending power, it’s unlikely large rises will happen any time soon. It’s far more likely that the Bank of England will make gradual increases to the interest rate, and it could take years for it to be on par with the rate of inflation.

If you want to maintain or grow your spending power, your money will need to work harder. There are several ways of doing this, and, in some cases, investing your money can provide a solution.

Investing does come with risks, and values can rise as well as fall. However, historically, investment values have risen, despite short-term volatility, and it can be a way to increase the value of your money in real terms if returns outstrip the pace of inflation.

When investing, it’s important you set out what your goals are and consider your risk profile. You may be tempted to invest money held in your savings account, but if it’s part of your emergency fund, it should be readily accessible and investing likely isn’t the right option for you.

Whether you’re a professional or a retiree, inflation has an impact on your finances. If you’d like to discuss what you can do to manage the impact of inflation, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

An older couple and young woman smiling while sitting on a sofa

When you consider your financial plan, who do you involve? Often, it’s done independently or with a partner, but there could be advantages to making your wider family part of the process. If it’s not something you’re already doing, here are five reasons to involve children, grandchildren, and others in your plans.

1. It could encourage younger generations to consider their own financial plan

First, it could be beneficial to them. Being involved in your financial plan can mean they start thinking about their own long-term financial security.

While still working, it’s common not to think about retirement, even though the decisions professionals make, even early in their careers, can have an impact on the retirement they enjoy. Seeing the decisions you need to make about retirement and how to create an income could make them more engaged with the process and set them on the path to greater financial freedom. It could also mean they consider things they may have overlooked before, such as the need for financial protection, or when to choose investments over savings.

2. It can help you understand how to help your family reach their goals

You may know what your loved ones are hoping to achieve, but do you know the details? After talking through their goals, you may want to lend a financial helping hand and that could change your own financial plan.

According to an FTAdviser report, just 13% of parents over the age of 60 plan to pass on wealth to their children during their lifetime. However, in some cases, a gift now can have a far greater impact on their life than an inheritance will have.

Helping children and grandchildren to buy a home is a common example. With many of the younger generation struggling to save a deposit, a financial gift now could provide more security in the short and long term. If you knew this was a goal of your child, would you reduce their inheritance to provide a gift? By talking through their plans, you have an opportunity to understand how your wealth can have the greatest impact.

3. Discussing inheritances can lead to better financial decisions

The FTAdviser report found 72% of parents plan to pass on wealth to their children after their death. However, two-thirds said they rarely or never discuss inheritance with their children.

Talking about inheritance can be difficult and can bring up many emotions. Yet, it can help your loved ones plan their own futures more effectively. If they believe they’ll receive a greater inheritance than they actually will, they could be more reckless than they otherwise would be. Honest conversations about investment could also provide them with clarity and confidence about their future.

With more time to think about how they’d use an inheritance, your loved ones could make better financial decisions when they receive it.

4. It can improve your later-life plans and provide confidence in them

Later-life planning is an important part of creating a long-term financial plan. Yet, 4 in 10 parents have not discussed their later-life plans with their children. Again, it can be difficult to think about how your lifestyle and needs will change in your later years, but it is important.

It can provide both you and your children with greater confidence and ensure your wishes are carried out. The FTAdviser report highlights that a third of adults aged 30–59 with at least one surviving parent are worried about the prospect of managing the finances of their parents if they can no longer do it themselves. By involving them in the financial planning process sooner, they will be in a better position to make decisions on your behalf should they need to.

5. It can help you create an effective estate plan

Almost 80% of families do not have any estate planning strategy in place. Of those that do, less than half of parents said their children knew exactly what the plan was. An effective estate plan can help you ensure that loved ones benefit from your wealth when you pass away.

It may include discussing Inheritance Tax or how to make provisions for grandchildren who are too young to manage an inheritance themselves. Involving family in this process can help you understand concerns they may have and create a solution that suits your wishes.

If you’d like to involve your family in your financial plan, we can help. Whether you want to be open about the inheritance they can expect to receive in the future or get a better understanding of how you can financially support their goals, please get in touch.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning.

Close up of a hand holding a pen to paper

Half of the adults in the UK don’t have a will. While you may have a reason for putting the task off, there are many compelling reasons to make time to write a will that could provide peace of mind.

A survey from Will Aid found that 49% of UK adults do not have a will in place. A fifth said their reason for putting it off was because they do not want to think about death. While contemplating passing away is difficult, it is important to think about what you’d want to happen to your estate after you die.

Even if you have a will in place, you should regularly review it. Over time your wishes and circumstances can change. What you wrote 10 years ago may no longer align with your goals. Whether you’ve welcomed grandchildren, inherited money, or simply changed your mind, your will should reflect what you would like to happen to your estate. It’s a good idea to review your will every five years or after big life events.

If it’s something you’ve been putting off, here are five excellent reasons to make writing or updating your will a priority.

1. A will is the only way to ensure your wishes are followed

Without a will, your estate will be distributed according to intestacy rules. This can be very different from what you want, particularly if you have a complex family or want to leave something to several people. The only way to ensure your wishes are followed is to write a will.

2. You can use a will to name a guardian for your children

If you have children, you can use a will to name a guardian for them. Despite this, only a quarter of parents have named a guardian for their underage children in their will, according to Will Aid.

Without a named guardian, a court would decide who looks after your children. In some circumstances, this may not be who you wished and could even be someone your child does not know well.

3. A will can reduce family conflicts occurring

Grief can lead to family conflicts and has the potential to cause long-term disputes. In some cases, how your estate is distributed may be contested and it could cause rifts. This may be due to one person believing they know what you would want, which sharply contrasts with what another believes. Setting out your wishes clearly in a will can provide certainty and reduce the risk of family conflicts arising.

As well as putting a will in place, it may be worth speaking to your loved ones about your wishes too. This gives you a chance to help them understand why you may be making certain decisions.

4. You can leave a charitable legacy in your will

As well as leaving wealth to your family and friends, you may want to support a charitable cause too. Your will means you can leave a legacy to causes that are close to your heart. There are several different ways of doing this, from leaving a specific sum to charity to leaving a proportion of your estate. A legal professional will be able to offer advice on the different options you may want to consider.

As well as having a positive impact, a charitable legacy can also reduce a potential Inheritance Tax (IHT) bill. If you leave more than 10% of your estate to charity, the rate of IHT paid will reduce from 40% to 36%.

5. If your estate could be liable for Inheritance Tax, a will can reduce the bill

As well as leaving a charitable legacy, there are other steps you can take to reduce an IHT bill. Writing a will can help you maximise allowances so that you can pass on more of your wealth.

You can leave £325,000 to loved ones without any IHT being due, this is known as the “nil-rate band”. In addition to this, you may be able to take advantage of an additional £175,000 allowance known as the “residence nil-rate band”. You can use this if you leave your main home to your children or grandchildren. Naming your children or grandchildren in your will as benefactors of your home can increase the amount you can pass on without leaving an IHT bill.

Depending on your circumstances and goals, there may be other things you can do to reduce IHT. For example, placing some assets in a trust and passing these on through your will may be right for you. Keep in mind that trusts can be complex and often irreversible, so it’s important to take appropriate advice. If you’re worried about IHT, there are often steps you can take to reduce the bill.

If you’d like to discuss the value of your estate and how you can pass on assets to your loved ones, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate will writing, tax planning, or estate planning.