April 2016 - First 4 Commercial

Stamp Duty Changes and Buy to Let

George Osborne’s 2016 budget had a few surprises for the UK, and not least of these were the new Stamp Duty changes. Buy to let landlords were in the frame for some rather rough treatment, and it’s not hard to see why property investors may be less than enamoured with these new regulations.

For those wishing to climb onto the property investor’s ladder and splash out on a second home, they will be looking at an extra 3 percent stamp duty charge. It appears that the buy to let property sector had been thoroughly investigated before the 2016 Budget was decided upon, and it could be rather a hard year ahead for those who are involved in this potentially lucrative market.

The stamp duty rise may not appear too harsh, but consider that before April you were looking at a charge of £1,500 on a purchase of £200,000. Now you would be incurring a charge of £7,500, thanks to the fact that the 3 percent rate kicks in for the first £125,000 and another 2 percent joins the party from £125,001 to £250,000.

This will no doubt be cutting rather deeply into the buy to let investors’ profit margin, and perhaps rental prices will rise to try and claw some of this back. But, whatever the direction that property investors decide to move, it is always important to be in full possession of the facts, and the possibilities, before entering the market. Talk to us at first4commercial for professional advice on buy to let investments.


Interest Rates: Up, Down, or Staying Put?

Whether you are thinking of buying or selling a house or simply considering your financial options for the next year, the state of the UK’s interest rates should always be an important factor.

So as far as the outlook is concerned right now, what do we have to look forward to in the next financial year in terms of interest rates? Here, the first4commercial team look at the facts, and future possibilities.

Inflation itself is expected to hit the not so heady heights of 0.7 percent, so the UK’s interest rates aren’t very likely to be shooting up into double figures. In fact, instead of the predicted small rise towards the end of this year, experts are now forecasting a rate that could stay put until 2019. The reason for this shift in predictions involves a number of factors, including the following:

1. The UK is predicted to experience relatively weak economic growth throughout the next 3 or 4 years.

2. Thanks to the recent stock market problems in China, global investors are expected to be more cautious for some time yet.

3. UK deflation returned last September and the knock on effect of this is far from over.

4. Oil prices have plunged and are likely to take years to recover.

The Bank of England’s recent statements seem to indicate that rates are remaining low for some time to come. Make of these predictions what you will, but rest assured that the likelihood of a sharp rise in UK interest rates is looking unlikely for a few years yet.


Why A Credit Broker is a Great Option for Choosing Financial Products

Whether you are currently looking for a loan, or your business needs some expert financial advice prior to expansion, speaking to a credit broker is quite possibly the wisest move you could make. You will be tapping into a proven resource that can save you a great deal of time and money. You will also be treated in a professional manner that makes the whole process both pleasant and informative, every single step of the way.

Something as commonplace as a mortgage is actually a very complicated arrangement, legally and financially. By speaking to a credit broker you can find out the facts in plain English, without worrying about a nasty clause or two lurking in the background. Banks and mortgage companies will tell you the ins and outs of these financial agreements – but only if you are armed with the relevant questions! Credit brokers have a duty to share all of this information with you before you even think about signing on the dotted line.

Always ensure that your chosen credit professionals hold the relevant credentials before you decide to make use of their services. They should be members of the National Association of Commercial Finance Brokers, and the Association of Bridging Professionals.

Because credit brokers have a duty of care to show you the full range of financial options when you speak to them, you should never feel pressurised into going with a particular product or provider.

You should not feel obliged to agree with their particular recommendations if you decide that it is not exactly right for your requirements. Choose a proven credit broker like first4commercial, and your financial future will be in the hands of those who know how to secure it.


4 Facts about Bridging Loans

For many people, bridging loans are one of those financial mysteries that still manages to cause plenty of confusion today. That needn’t be the case, because this type of borrowing is both useful and often vital, when it comes to sorting out your finances on a temporary basis. Here we look at some facts that should help to clear up any confusion about bridging loans…

What are they? – A bridging loan is essentially a short term loan that gets you from one point to another. They are very handy when you need some breathing space, whether it’s when you’re buying a property or dealing with a business transaction.

Are they different to a normal loan? – Yes, because they can be ready to access within a day or two if you approach them in the correct manner. A typical loan could take weeks and sometimes we just don’t have that time available.

What are they for? – Bridging loans are usually given for buying or renovating property. They can be used for both commercial and residential projects.

What is a bridging loan exit? – This is typically the term used to describe when and how you intend to repay the bridging loan. Perhaps you intend to use your mortgage to repay the temporary loan, or maybe you are waiting for an investment to be repaid to you.

The whole point of a bridging loan is to allow you to continue with your plans until your main source of funding actually comes into play. Bridging loans are an excellent choice, as long as you have a sound exit in place.


Buy-to-let Mortgages Explained

For commercial property investors, buy-to-let mortgages have never been as popular as they are right now. Here, first4commercial experts explain what is involved when you take this route, and why investors are singing the praises of buy-to-let mortgages right now.

Buy-to-let loans are a type of mortgage that has been specifically designed for those who wish to purchase a property with the sole purpose of renting it out. Although they may be slightly harder to qualify for now compared to previous years, there are plenty of lenders who will be happy to speak to potential investors.

The amount that you will be able to borrow from these lenders will depend on your individual circumstances. Typically they will be looking at a 25% deposit up front.

The arrangement fees will usually be higher when compared to normal mortgages and this also applies to the booking fees.

Whilst it may be true that many prefer to speak to specialist lenders, high street banks will also be able to offer competitive buy-to-let mortgages.

Speaking to us at first4commercial is probably the best way to get the buy-to-let mortgage ball rolling, both because we will generally have a wide range of options for you to look at, and because we can help you negotiate the maze of the market effectively.

We’d always advise doing your homework before even thinking about making a commitment, because the amount of rent that you can realistically charge on your potential property will have a bearing on how much money your lender is prepared to consider. Contact us at first4commercial, and get a foot on the buy-to-let ladder!

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