Tag Archives: british
Research reveals mortgage burden on retirees in the UK
Four in 10 over 50s in the UK are paying off a mortgage worth on average of £49,000 and a fifth in their 70s are still paying off their mortgage, new research has found. Overall more than 900,000 people in their 70s still have an average mortgage bill of some £38,000 and that means the over 70s are saddled with an extraordinary total mortgage debt of £35.2 billion, according to the study by Saga Personal Finance. And for 6.3 million over 50s with an interest only mortgage who had intended to pay it off with an endowment policy, the outlook is not good with two thirds saying their underperforming endowment will not foot the bill. Indeed, some are having to contemplate selling their house to make up an average shortfall of more than £42,000 and a third of over 50s, would need to sell their house to make up the shortfall, according to Saga’s research. Two thirds of over 50s have made alternative plans to pay off their mortgage, often using a combination of options. A third say they will dip into their savings, 22% say they have been making capital repayments to reduce the debt, 18% will use other investments to make up the shortfall and just over one in 10 say they have extended their mortgage to give them extra time to pay it off. However, more than one in 10, some 1.7 million people, admit they have no way of bridging the gap. Another solution for people who have no idea how they are going to clear the mortgage or who are facing the decision to have to sell a home they do not want to part with could be to use equity release to clear the debt. ‘Being saddled with mortgage debt well into your retirement is far from ideal as it means keeping an eye on the coffers when you should making the most of life,’ said Jeff Bromage, chief operating officer, Saga Personal Finance. ‘Millions of British home owners have been hit hard by underperforming endowments. Thankfully, there are options available. A growing number of people are turning to equity release as in order to avoid selling their home. Selling and moving is probably the least-favoured option for many facing a shortfall, as their home is so much more than bricks and mortar and will hold so many happy memories,’ he explained. ‘If you’re over 55 and a home owner, equity release could be a solution. It gives you access to money tied up in your home, giving you peace of mind and the freedom to enjoy your retirement properly,’ he added. Continue reading
British appetite for overseas property remains strong, new figures suggest
British investors’ appetite for overseas property is still strong with one specialist reporting enquiries up by 37% so far this year compared with 2013. Spain continues to top the list of hot spots, accounting for more than half, 51%, of enquiries received from January to September, according to overseas mortgage firm Conti. The volume of enquiries for Spain has, in fact, increased by a massive 95% when compared with 2013. France, in second place, accounts for 29% of enquiries received so far this year, followed by Portugal with 12%. The data suggests that France appears to be making a comeback, overtaking Spain in the third quarter with 35% of enquiries, and 45% in September alone, compared with 32% and 18% for Spain respectively. According to Conti, there couldn’t be a better time to buy, with the strong pound shedding tens of thousands of pounds off property prices in the euro zone. Sterling exchange rates had a bit of a bumpy ride in the lead up to the Scottish referendum result in September, but the dust appears to have settled and the pound to euro exchange rate is hovering near €1.27 at the moment. Rewind to last summer when the pound fell to a low of €1.14, and the difference is pretty significant when you apply it to property prices. It means that a €200,000 property in Spain, for example, is now almost £18,000 cheaper, showing just how much difference the currency markets can make. ‘When you combine the strong pound with the low property prices to be found in many European property markets together with historically low mortgage rates, affordability is better than it has been in years,’ said Clare Nessling, director at Conti. ‘With buyers’ budgets stretching that much further, the purchase of that place in the sun could seem even more tempting, especially when you compare the cost with overheated parts of the UK market,’ she added. Conti says that it’s vitally important for buyers to seek the right advice. Bitter experience has taught many overseas property buyers that scrimping on independent legal advice can effectively cost them their holiday home. Buyers should always go through the same process that they would follow if they were buying a property in the UK. ‘There’s nothing to be gained, and everything to lose by cutting corners and failing to carry out due diligence,’ said Nessling. Advice from the firm includes never signing a contract that you don’t understand. If two versions are provided, i.e. English and local language, ask your solicitor to confirm the English version is a true translation, as you need to ensure it doesn’t contain errors, omissions or extras. Obtaining a mortgage ‘approval in principle’ will confirm you can obtain the necessary funds before signing on any dotted line and prove to sellers that you’re a serious buyer. And it costs nothing. Buyers should consider fluctuations in the exchange rate. It’s generally advisable for an overseas mortgage and the income used to service the… Continue reading
Calls for key business districts in London to retain their office space
The Mayor of London is bidding to preserve city’s key business districts by urging the government to reconsider proposals that could see valuable office space in the capital turned into homes. Last year the Mayor negotiated for four defined areas in central London to be exempt from a Government policy that allowed office space to be converted into homes without developers applying for change of use planning permission. These areas included the Central Activities Zone which incorporates the City of London, the South Bank and the West End. More than a third of London's jobs are within this area, and a further 280,000 jobs are expected to be created here in the next 25 years. The Mayor also successfully gained exemptions for the commercial area north of the Isle of Dogs and London's Enterprise Zones in the Royal Docks, plus the part of the City Fringe in east London which makes up the emerging Tech City opportunity area. The UK government has just finished consulting on a raft of planning proposals including one that would see the exemption for these areas removed, a move that the Mayor, Boris Johnson, says would damage London's internationally important business locations. Johnson points out that London is the beating heart of the UK economy and accounts for over a fifth of GDP. It is also a global centre for business, so the Mayor believes it is vital to maintain a stock of quality office space in key areas to ensure the city can continue to attract jobs and growth. The city is home to a number of unique clusters of economic activity from government offices, to financial services, institutions and professional bodies, which employ millions of people, contributing billions to the national economy. The Mayor believes that if these clusters were to be broken up in piecemeal residential conversions these benefits would disappear. ‘London is a colossal powerhouse of jobs and growth, and the motor of the UK economy. While increasing housing output is of vital importance, I am concerned that removing the exemption in our most thriving business districts could compromise both London and the UK's future economic growth,’ said Johnson. ‘London's success depends on a rich mix of uses and more high value residential property in central London could upset this balance and change the area for good,’ he added. In a letter to the Secretary of State for Communities and Local Government, Eric Pickles, the Mayor, together with London First, the British Property Federation and the Planning Officers Society London say that ‘incremental unplanned loss of office accommodation in strategically important office areas of London can significantly weaken the agglomeration benefits provided by these locations’. The Mayor and signatories to the letter also argue that criteria should be in place to protect other, strategically important business locations across the country. They argue that due to the large variation in size and function of office clusters throughout the country, especially between London and other cities in England, it would be challenging to agree… Continue reading
