Green Homes Grant for Homeowners and Landlords

One of my earlier posts referenced the Green Homes Grant whereby Homeowners and Residential Landlords in England can apply for a Green Homes Grant voucher towards the cost of installing energy efficient improvements to their properties. Rules apply, but  under the scheme the Government will potentially contribute up to £5,000 to cover two-thirds of the cost of eligible improvements, with the property owner contributing the remaining third.

One of the Buy to Let lenders on our panel has now announced specific Green Further Advance products designed to assist buy-to-let landlords who are looking to improve the energy performance of their properties by taking advantage of the Government’s Green Homes Grant Scheme.  The green further advance products are available for properties in England, with rates starting from 3.35% and with no application fees, no product fees and a free mortgage valuation.

Please enquire for further details.

Leaseholders to be given right to extend lease by 990 years at zero rent

The UK government announced today that it plans to pass legislation giving the right to leaseholders to extend their lease by 990 years at zero ground rent.

This will apply to both leasehold houses and flats and the government estimates it will benefit some 4.5m leaseholders.

Housing secretary Robert Jenrick said: “Across the country people are struggling to realise the dream of owning their own home but find the reality of being a leaseholder far too bureaucratic, burdensome and expensive.

“We want to reinforce the security that home ownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners.

“These reforms provide fairness for 4.5m leaseholders and chart a course to a new system altogether.”

Under current rules, leaseholders of houses can only extend their lease once for 50 years with a ground rent. This compares to leaseholders of flats who can extend as often as they wish at a zero ‘peppercorn’ ground rent for 90 years.

In a report in July the Law Commission said there was “no reason” for leaseholders’ rights to diverge, and recommended a uniform right to extend a lease for all qualifying leaseholders.

Under the proposed new rules both house and flat leaseholders will be able to extend their lease to a new standard 990 years (meaning effectively a lease need only be extended once) with a ground rent at zero.

Further proposals include ground rents being reduced to zero on all retirement properties and the scrapping of ‘marriage value’ – the supposed value of joining up leasehold with freehold.

Owners of leasehold property will welcome the news, but may have to bide their time as experts warned the changes required to legislation will be complex and may not come to fruition for over a year.

Leasehold tenure is already banned on new build houses, and does not exist at all in Scotland. The Law Commission recommended last year that leasehold should be replaced with commonhold tenure on new homes, whereby ownership and management of land and buildings belongs jointly to the residents of a shared block. Commonhold has been permitted in the UK since 2002 but has often faced legal hurdles – now it is proposed to set up a ‘Commonhold Council’ made up of leaseholder groups, industry and the government, to prepare for a wider take up of commonhold and ‘in due course’ further legislation to implement fully the Law Commission’s recommendations.

Covid-19 Further UK Lockdown

Messages we are receiving from lender contacts all emphasise they are open for business, and mortgages for purchase and remortgage purposes can continue as normal.

Mortgages for Older borrowers

One of our building society contacts reminds us that they have residential mortgage products for older applicants including

  • Repayment and interest only
  • Repayment plan may be downsizing (or not, as the case may be)
  • Applicants up to age 85

All subject to criteria of course, but possibly better than equity release for some people.

Stamp Duty Land Tax Incentive

On 8th of July 2020 the Chancellor announced a Stamp Duty Land Tax Incentive (a Stamp Duty ‘Holiday’ on the first £500k of the purchase price) on all residential property until 31st of March 2021.

Although, at the time of writing the deadline is still 4 months away we recommend anyone hoping take advantage to act soon and to bear in mind some things may delay a speedy completion of your purchase. ibmco will of course do all it can to expedite mortgage applications and avoid delays from lenders but the below are largely outside our control, hence the advice not to leave your purchase to the last minute:

  • Valuations may be slower than normal at present
  • Solicitors offices are affected by Coronavirus rules and with many solicitors working from home their service may not be as efficient as normal
  • Local land registry searches can hold up the process. There is a big variation in turnaround times depending where your property is. To check current times for your area you can use the following website:

https://www.searchflow.co.uk/news-and-events/local-authority-turnaround-time-increases/

Of course there is also likely to be a ‘log-jam’ of purchases jostling for completion as 31st March 2021 approaches.

Residential Mortgages for Landlords from Paragon Mortgages

Paragon Mortgages have introduced a range of Residential Mortgages aimed at landlords who are

  • Seeking an owner occupied mortgage
  • Self Employed
  • Have complex income arrangements
  • Looking to borrow into retirement
  • Require interest only terms

Fixed rates start at 3.45%

Please contact Pav or David for more information.

One Savings Bank and Chartercourt Financial to merge

One Savings Bank Group and Chartercourt Financial Group have agreed to a merger it has been announced. The transaction now requires approvals by shareholders and regulators before it becomes final. One Savings Bank includes well-known Buy to Let and Residential mortgage lender Kent Reliance as well as Commercial and Semi-commercial lender Interbay, while Chartercourt will be best known for its Precise Mortgages Buy to Let mortgage brand.

Residential Mortgages up to £2m from Precise Mortgages

Precise Mortgages extended its range of residential mortgages over £1m and up to a maximum of £2m with rates from 3.09% for these Large Loans. This is in addition to the normal range of mortgages for amounts below £1m which includes ranges for Prime, almost or near Prime, Debt Management Plan, Help to Buy and Right to Buy applicants. Enquiries welcome.