UK household debts excluding mortgage rose to £119bn

Debts excluding mortgages are on the rise in the UK, according to the Office for National Statistics.

Debts including credit card debt and personal loans rose 11% to £119bn in the two years to March 2018, according to the ONS study, which is published every two years.

Average household financial debt rose 9% to £9,400.

Debt graphic

Much of the increase is a result of higher student loan and hire purchase debt.

“The figures are skewed slightly by the £32bn of student debts – which the vast majority of graduates will never pay back in full,” said Sarah Coles, personal finance analyst at stockbroker Hargreaves Lansdown.

“However, even excluding that we’re carrying £87bn in loans, credit cards, hire purchase agreements, overdrafts and arrears.”

Source: BBC News

UK Finance survey shows UK mortgage approvals hit 6 month low

The number of new mortgages approved by British banks hit a six-month low in September, according to a survey that adds to signs the housing market is slowing again ahead of the October Brexit deadline.

 

Industry body UK Finance said banks approved 42,310 loans for home purchase in September, compared with 42,527 in August, according to seasonally-adjusted data. However, the number of approvals for remortgaging rose to the highest level since November 2017 at 32,649.

UK Finance said annual growth in consumer credit rose to a 19-month high of 4.5%, driven by personal loans and overdrafts rather than credit card lending.

Source: Reuters

How to prepare for buying a property in the UK

Buying a property in the UK is a huge investment and most times a life time investment and as such must be approached carefully and with the utmost preparation. Below are key points that can help you prepare for buying a property in the UK;

PIPA property photo

  • Build up your savings by reviewing your expenditures downward to increase your disposable income.  If you’ve got loans or credit cards it makes sense to repay them first. This is because the interest you pay to borrow is usually higher than the interest you get on savings accounts.
  • Save for your deposit. Buying a property requires deposit and the more deposit you have the better change of getting a good mortgage deal.
  • Check your credit score and report to make sure its good enough for a mortgage loan. If not you should work towards improving it.

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  • Plan your budget based on the most you may have to pay for a mortgage, try not to take the maximum mortgage on offer, and don’t forget to include mortgage related costs and fees.
  • Work out how long you could live on savings if you lost your job.
  • Check what benefits your employer will provide if you get ill.
  • Consider taking out insurance in case you are made redundant, get critically ill or have an accident.
  • Use mortgage calculator to work out how much a change in interest rates would affect your own loan.

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk

How to Buy a House in the UK

There are different processes that must be followed to successfully buy a house in the UK. Below are the major steps that are required to buy a property in the UK;

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  1. Do your Research: Start researching the type of property in your choice location within your budget. Your local estate agent and online property portal such as Rightmove or Zoopla is a good starting point.
  2. Stick to your Budget:  Look at your finance and budget efficiently including all the expenses involved in buying a property. In the UK apart from the cost of the property you will need to budget for the lenders fee, mortgage broker fee, Conveyance solicitor fee, Stamp duty, Surveyor fee, refurbishment, decoration etc.
  3. Mortgage: If you don’t have the cash to buy your house, you will need a mortgage to finance the purchase. Looking for the best mortgage is very important as this can save or cost you a lot of money in the short or long term. The answer is simple; get an independent mortgage broker that can search the whole of the mortgage market and advice you on the best mortgage type and deals available for you.
  4. Solicitor: A conveyance solicitor is required to do the legal and administrative work required to process and complete the house purchase.
  5. Make an Offer: This is not easy as it sounds because if not done properly it might delay or cost you more than necessary. Again you will need to do your research on the price the house is worth in its present condition compare to similar houses in the area and decide on how much you are willing to pay. Negotiation skills are very important here to put in a good offer and you might need the help of a property professional.
  6. Survey: The lender normally carries out a basic valuation and its left or optional for the buyer to carry out a building survey to look at the condition of the house before buying.
  7. Exchange and Completion: Contract are exchange. You hand over deposit which are non-refundable if you pull out of the sale. Once you and your solicitor is satisfied everything is in order the contract can be exchanged. You(buyer) and the seller have to sign the contract and are legally bound to follow through to completion.

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk

 

How to increase your Credit Score for a successful UK Mortgage

To get a mortgage in UK to buy a property, you will need to have a good credit score. UK mortgage lenders are required to carry out a credit check to access your present and past financial liabilities and details of how they are managed.

Credit score can affect mortgage eligibility, deposit requirement and rate. Other factors are also used.

Good-Credit-Score

Below are major steps you can take to increase and improve your credit score;

  1. Prove where you live.
    Register on the electoral roll at your current address – you can do this even if you’re in shared accommodation or living at home with your parents.
  2. Build your credit history.
    Having little or no credit history can make it difficult for companies to assess you, and your credit score may be lower as a result. This is a common problem for young people and people who are new to the country. Luckily, there are some steps you may be able to take to build up your credit history. default
  3. Make payments reliably.
    Paying your accounts on time and in full each month is a good way to show lenders you’re a reliable borrower, and capable of handling credit responsibly. Old, well-managed accounts will usually improve your score – although be sure to read about the potential impact of unused credit cards.
  4. Keep your credit utilisation low.
    Your credit utilisation is the percentage you use of your credit limit. For example, if you have a limit of £2,000 and you’ve used £1,000 of that, your credit utilisation is 50%. Usually, a lower percentage will be seen positively by companies, and will increase your score as a result. If possible, try and keep your credit utilisation at 25%.
  5. Limit credit applications.
    Applying for credit frequently in a short space of time can make lenders think you’re overly reliant on credit and therefore a higher risk. It doesn’t matter what form of credit you apply for, or how much you’re asking to borrow – each application will record a hard search on your report which companies can see. So, try to space out any credit applications – a good rule of thumb is no more than one every three months, but remember lenders’ criteria can vary. credit-score--mortgages_52572463eb46d_w1500
  6. Consider closing unused accounts.
    Having a large amount of available credit may make lenders think you can’t handle more. So, you may want to close any dormant credit accounts. Read more about deciding what to do with unused credit cards.
  7. Avoid delinquent and defaulted accounts.
    Delinquent accounts happen when you’re late on payments, and defaulted accounts are when your relationship with the company has broken down, usually because several missed payments. Both will harm your credit score.
  8. Only borrow what you can afford.
    Getting into trouble with debt may lead to things like County Court Judgements (CCJ), an Individual Voluntary Agreements (IVA) or even bankruptcy. These things will stay on your credit report for up to six years and will put a big dent in your credit score.
  9. Keep an eye out for fraudsters.
    Keeping a close eye on your credit report and looking out for any signs of fraudulent activity could help protect your credit score. If you see a surge in the amount you owe, or any applications you didn’t make, you may be a fraud victim. Note that if you do become a victim of fraud, your lenders should fix any damage to your score quickly.

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk