mortgage

The Budget, First Time Buyers and Help To Buy

With Brexit looming the Chancellor didn't have a much room for manoeuvre. However, as widely expected he has extended Help to Buy for a further two years, now ending in 2023. The policy has proved popular with home buyers, with 145,000 new build homes bought with the equity loan option from its inception in 2013 to March 2018. The policy allows a client to buy a new build house with the aid of a five year interest free equity loan. The loan is up to 20% in England and Wales and 40% in London. After five years, interest is charged on the loan.

House builders certainty like the policy and it has been accused of driving up prices. However it has helped a significant number of people to buy when they almost certainty would not be able to afford to.

The key thing to remember, if you plan on buying via Help to Buy, is how you are going to repay the equity loan after the five years; it could become very expensive as interest is charged on a potentially increasing loan amount (the level of loan is based on the current value of your property, not the amount borrowed).

The other key area that Philip Hammond delved into was extending the stamp duty holiday for first-time buyers purchasing shared equity properties up to £500,000. This on its own, I don't think, will encourage someone to buy a first home, but it’s a nice bonus for first time buyers who are scraping together a deposit.

So no new bells and whistles for people buying, but a huge sigh of relief for landlords as no further changes to tax for their portfolios have been announced.

Of course, dependent upon Brexit the above could all change.

 

If you would like to review your current mortgage, or if you are considering buying then please do not hesitate to contact Alistair using the details below.

Alistair Hargreaves
Financial Consultant

Tel: +44 (0) 203 205 2129
Mob: +44 (0) 0796 750 9318
Email: alistair@arcandco.com

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Case Study – How To Mortgage A £14m Property With No Income

Calculating how much a client could borrow to finance a property used to be very simple.  Lenders would offer between 4 or 5 times their annual salary subject to the loan to value ratio.  Today calculating how much someone can borrow is a little more complicated with many different criteria being used to determine affordability.  At Arc & Co. our clients range from first time buyers through to high net worth individuals whose income is derived from multiple countries and in multiple forms.  A recent client fell into the latter category who was wanting to finance a £14m property in near Hyde Park, a prime central London location whose past residents include Sir Winston Churchill and the Earl of Mansfield.

Daire Dowling, Managing Director of Arc & Co. Private Finance, explains why the deal was so complex; “The client wished to raise £4m on a £14m property near Hyde Park after taking tax advice from their accountant.  The client didn’t have a traditional income stream, so we had to capitalise an investment portfolio in the background and put interest on account.  The main motivation for the client was to cut down on remitted income into the UK from overseas and to generate clean capital within the UK jurisdiction for living expenses and succession planning. We were able to achieve all of this.


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Finance summary

  • Loan: £4m

  • Term: 5 year (interest only)

  • Rate: 1.75% margin on 3 month libor

  • Termination: No early repayment charge should the client decide to sell or pay down the loan for flexibility

If you would like to speak to an advisor about a property purchase or remortgage then please get in touch with the following link.

ARC & CO. OPENS NEW OFFICE IN THE COTSWOLDS TO MEET GROWING DEMAND

Long established Mayfair-based specialist finance advisor, Arc & Co. recognises a key growing market in the Cotswolds for the Private Client business by opening an office in Oxfordshire headed up by Jamie Rigby.

Jamie and his team live locally and from the new office will continue to work closely with local private clients, developers and professionals. Jamie has worked with Cotswold & Midlands clients for over 11 years and maintains an excellent professional reputation in the area.

Andrew Robinson, Chief Executive Officer, Arc & Co, added: “After ten years in London, Arc & Co. recognises a growing demand for our Private Clients services in the Cotswolds. What makes our team even stronger is the fact that they live locally and already have strong relationships with the local property professionals.”

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To arrange an appointment with Jamie at the new office please find his contact details below:

Jamie Rigby
Arc & Co. Private Client
Financial Consultant
Office: +44 (0) 1295 793170
Mob: +44 (0) 783 394 2392
Email: jamie@arcandco.com

Arc & Co. Advise on £7.4m Purchase in Kensington

Eugene Tripuk, Head of Russia and CIS desk at Arc & Co. has closed a £4.8m loan on behalf of a Russian client.

Eugene explains "The finance was for a residential property purchase in Kensington for a Russian client with a rubble income deriving from assets in Russia. The main achievement is that we managed to secure a straightforward mortgage from a private bank at a very competitive rate, and we did so, without the requirement to have assets under management. Considering the market is more cautious of Russian clients at the moment, to achieve something like this, is a great result!"  See below for the details:

Deal description: Purchase of property in central London, for a Russian national with Russian Rubble denominated income. No AUM
Location: Kensington, London
Property Value: GBP £7.4m
LTV: 65
Loan: GBP £4.8m
Rate: 1.85%
Term: 5
Client Nationality: Russian

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