Does taking out payday loans affect your chances of getting a mortgage?

No, taking out a payday loan does not affect your chance of getting a mortgage. According to different mortgage advisors and brokers that we have confirmed with, most providers consider a payday loan to be like 'any other loan' regardless of the fact that it is commonly used by people who are pay cheque to pay cheque.

When applying for a mortgage, you will commonly undergo checks of your credit history and affordability - and this will include looking at any previous credit cards, personal loans and bills that you have had and how well you have repaid them.

Many applicants worry that having a payday loan in the past will affect them for future mortgages and bridging loans - but this is not the case.


What is a payday loan?

A payday loan refers to borrowing a few hundred pounds (around £100 to £1000) and receiving the money upfront, and repaying in full on your next payday. It is often used by people who cannot wait until their next payday to pay for something and need the money upfront. It is best suited for emergencies, including:

  • Car repairs
  • Household bills
  • Medical bills

However, payday loans are also often abused for shopping and gifts.




Around 5.4 million payday loans online were issued in the last year in the UK by around 40 lenders, according to the FCA.

Note that the number of active payday lenders in the UK is decreasing rapidly since the number of lenders able to withstand FCA regulation is falling.


Why is a payday loan considered bad for a mortgage?

For some mortgage brokers and lenders, they consider payday loans to be bad for mortgages. This is because such loans are regularly used by people who are behind on their bills and desperate for funds, hence their eligibility for a mortgage should be questioned.

Some lenders will consider, if a person cannot make it until payday, how can they pay for a mortgage and bills every month?

However, rest assured, most mortgage providers look at payday loans as being 'like any other loan' because many will consider that emergencies can occur that can put you behind your payments.

For instance, if you live in rented accommodation and have a large heating bill, have to help out your family or pay for a funeral, borrowing £500 and repaying it back on time should not stop you getting a mortgage and moving up in life.


Some lenders will be stricter than others

Regrettably, some mortgage lenders will be dismissive of payday loans and people that use them and it may jeopardise your ability to receive a mortgage offer.




However, it is noted that every mortgage lender is different and in this day and age, we live in a world of specialist finance companies. The requirements for someone like NatWest and Barclays is going to be very different to someone like Masthaven and Precise Mortgages.


Depends on what terms - how long ago, did you repay?

Some mortgage companies are willing to look at payday loans on a case-by-case basis. For example, if it was taken out several years ago by the individual and repaid on time, this should not impact your chances of getting a mortgage. Lenders may differ as to whether this is 1 year, 3 year or 5 years ago.

Equally, did the borrower take out one payday loan or are they a habitual user and still owning funds. This will be taken into consideration.

Naturally, lenders are concerned about managing risk and if they determine that an individual cannot afford a mortgage, they will base this on multiple factors and not just payday loans.


How To Use Remortgaging to Release Equity

Many homeowners in the UK are taking advantage of low mortgage rates and through remortgaging, are finding ways to release equity from their homes. According to Remortgage Quotes Online, you can switch your standard variable rate (SVR) from around 4-5% APR to a fixed remortgage rate of 1.3-1.7% during the introductory offer.

The result of record low mortgage rates means that you can potentially borrow more money against your home, whilst keeping your mortgage payments each month roughly the same.

Releasing money through remortgaging is mostly used for:

  • Home improvements
  • Debt consolidation
  • Christmas shopping and presents
  • Family holidays
  • Gifting to other family members

How Can You Release Equity Through Remortgaging?

To be effective, you will need to have the following:

  • Good amount of equity in your home
  • Good/fair credit rating
  • Good affordability to remortgage
  • Stable income (not recent fall)

In order to remortgage, you will need to meet the checks from the mortgage provider, which have become more stringent over the years. They want to seem a strong affordability, which means that your salary is stable or going up (not falling drastically) and your expenses are not going beyond your means.

If you have a poor credit rating since getting your original mortgage, this can impact your chances of getting a new mortgage deal - or you could be stuck on your standard variable rate.

Naturally, to release money from your home, you will need some equity in it, which is achieved by paying off your mortgage on time for several years.

We review some of the options below:

Release Money When You Remortgage

When applying for a remortgage, you can ask to release or borrow money too - and the payments will just be adjusted to your existing mortgage loan. You may have heard the phrase or your parents complain "Well, I will need to remortgage the house for that one." And this is exactly the case.


The more equity you have in your home the better, otherwise releasing through a remortgage with little equity will just increase your monthly payments.

Second Charge Loan or Advance

You can get a 'top-up' when you remortgage, also known as an 'advance' or simply a second charge loan.

In this instance, you are getting an additional loan to your mortgage and this will mean having two loans on different terms. One could be fixed for 5 years and the other could be variable for 2 years. You cannot borrow as much with the second loan as with the first and the amount you can borrow is based on your affordability. Failing to keep up with repayments can have a negative impact on your credit history and cause you to lose equity in your home.

Equity Release

This is only available to homeowners over the age of 55 and this allows you to release equity from your home, and pay off your mortgage at the same time. This is becoming an increasingly popular for the ageing population in the UK and is currently used by around 60,000 households per year, who borrow on average around £80,000.


Through equity release, you are able to receive one large sum amount, upfront, which is completely tax-free. In exchange, you simply give up some equity in your home, which is claimed by the lender when you die or go into long term care. There are monthly interest repayments or you can choose to have an interest only or rolled up interest added to the full outstanding amount. You also benefit from the house increasing in value, which is then used to pay off your outstanding debt.

You can typically borrow around around 25% to 60% of your property's value through a lifetime mortgage, which is a type of equity release product designed to last your lifetime. Or if you want to borrow money, you can use a home reversion scheme to borrow up to 80%, but this will mean physically selling of your home and you will not be able to benefit if it goes up in price in the future.



Ways to diversify your property portfolio

For experienced investors that are already feeling the success of property investment, then you are probably looking to further expand your portfolio to maximise your returns. Through diversifying your property portfolio, you have more scope and opportunity to earn money from multiple sources, not to mention the capital appreciation that can be gained from more than one investment.

A diverse property portfolio can help to mitigate risk by spreading assets across different properties that have a different appeal or draw. Whether this be across different locations, through different types of property, or to have a different target tenants, all properties can help to build and strengthen an existing property portfolio. By following simple tips on how to diversify your property, you can help to keep your assets safer, and your income high.


Consider Studio Living




Studios are a great form of investment which can allow investors to diversify their portfolios with a tighter budget. This type of apartment is an emerging form of living, which has become quickly accepted from the likes of students who wish to live in one modern space whilst still being affordable. Young professionals and students are willing to compromise on space for a better location, and as studios are predominately in city centre locations, the proximity to transport links and universities are appealing for many.

Although small in size, this does not compromise on quality. New developments from property investment companies such as RW Invest offer studio living in the midst of bustling city centres, drawing in tenants due to the fantastic location. As city centre living becomes more and more popular, the demand for studios increases, which will see their value rise significantly and make them a secure investment for strong capital gains.


Look for a lower price point




One of the best ways to diversify your portfolio is to source apartments at both ends of your budget. Invest in those that are low cost and more affordable to attract a type of tenant that is not willing to pay over the odds and secure yourself a higher priced property to catch business professionals and alike that require a higher standard of living.

If you live in an area that is particularly expensive it may be worth looking at other property more further afield. More affordable areas in the UK include:

  • Liverpool
  • Manchester
  • Leeds

These provide a stark contrast to the likes of London which is experiencing escalating prices, therefore hindering investors from investing in the capital city.


Think about different property types




Another strategy you can use is to own different types of property. One example of this is student accommodation, which has become one of the UK’s most popular forms of investment in the UK. High demand through a growing student population and reliable yields create the perfect opportunity for investors.

Commercial property may be another form of property to consider, which will help to expand your investment portfolio. Shops, offices and storage spaces are available for property investors to purchase, whilst still producing stable returns despite being a different type of asset.

Houses of multiple occupancy are another form of investment that is becoming more popular for landlords as quite often they gain more rent from having the same size space. All in all, through having a wide variety of property, investors can give themselves stronger protection from potential risks and as a result generate more income across several different properties.



A Guide on Inheriting a Property

Your property could be the most valuable thing that you own and if you do not have a partner or spouse, it is likely that you will want to pass on your home, flat or properties to your loved ones i.e children. However, what are the implications for someone inheriting the property? Is there tax involved? Do they have to continue making your mortgage repayments? Octagon Capital explains below.

The role of who gets your property falls under the guise of estate planning, which includes things like will writing, funerals and what happens to your estate. When you die, your property and belongings are typically handled by your solicitor that you have instructed and the executor of your will that you have allocated, who will be able to make sure that everyone gets their fair share.




Do I inherit the property immediately?

Yes, although do not worry that things are going to change overnight and you are going to be given heavy bills to pay. Most mortgage lenders are very lenient when it comes to inheriting a property and are willing to offer you a grace period to get everything organised and inheritance tax does not need to be paid for up to 12 months. Until the will is executed and you officially take on ownership, there is no one to collect from anyway.


What can I do with the property that I inherit?

Once the will has been executed, then you own the property and can do with it as you wish including sell it, rent it out or indeed live in it. You may find that you can make a residual income by renting it out to tenants or you may wish to make one lump sum by selling it outright when the market is performing well. You could also hang onto it as a long-term investment if you believe that it will go up even more in price.

In the event that you wish to do any development or refurbishment work on the property, you could look at bridge finance to provide a few hundred thousand pounds over 3 to 24 months. You may find that add an extension or conversion to the property could increase its value by 20% or more, helping you make a better return on the property you have inherited.


Who makes decisions about the property?

As per the will, it is the executor who makes the key decisions about the property and successfully passes it over to the recipient. The executor is usually someone that the deceased person knows but isn't necessarily in the will itself, otherwise it would impact their impartiality. So it could be a solicitor, in-law, friend or colleague. The executor is responsible for the payment of any tax, clearing any debts and distributing the estate to the beneficiaries as outlined in the will.


Do I have to pay the mortgage on a property that I have inherited?

If there is a life insurance policy for the bereaved individual, this can be used to pay off mortgage payments. If there is no life insurance policy or no money allocated, the responsible will lie on the person who has inherited the property to make mortgage repayments each month.

As mentioned above, you are not expected to make payments immediately, you are given a grace period. Of course, if the previous owner owned the property outright, then there is no mortgage and you simply own it 100% with zero payments.


What other costs are there for an inherited property?

In addition to mortgage fees, you may have buildings and contents insurance for any fittings, skirtings and belongings in the house. You need to be insured in the event of a fire, flood, theft or vandalism.

If you are not planning on living there, there are other forms of insurance that can be important such as landlords insurance if you are renting it out to tenants, or if you are leaving it empty, then it is things like unoccupied home insurance and second home insurance.


What tax do I pay on the property?

  • Inheritance tax
  • Income tax
  • Capital gains tax

Inheritance tax

Inheritance tax on a property is huge. If the property is worth less than £325,000, then you are not required to pay anything. Once it is over £325,000, you are required to pay 40% of the value on top.

Income tax

Any revenue you generate from the property from renting it out to tenants is considered to be extra income and is taxable. Depending on how much income you make after costs such as mortgage fees and insurance, the amount of tax you pay will vary depending on the profit you make.

Capital gains tax

If you sell the property, and it has increased in value since you acquired it, you may be required to pay capital gains tax on the difference. This only applies on properties that are not your main residence of living. In some cases, it is better for the inheritor to move into an inherited property immediately, making it their main residence, in order to pay a lower rate of tax.


What to expect when working with a bridging loan broker

Octagon Capital is a broker which is designed to helping you find the best bridge finance for you and your requirements. The main advantage of working with a broker is that you get a full range of products from one place, rather than having to go to each lender separately trying to get the best deal. In addition, the broker only receives a fee if the loan application is successfully funded, so they will be determined to helping you find the best terms and lender most likely to accept your application.

We highlight what you can expect from working with Octagon Capital and similar brokers in the industry.


Phone Call

Once you fill in your details on our homepage or product page, you will receive a call back from someone in the SPF Short Term Finance team. This is our partner who are one of the most established mortgage brokers in the UK.




A team member will call you back to confirm a few details and understand your requirements better, so that we can be in the best position to place you with the lender who is most likely to successfully approve your loan application and deliver the terms you require.


Initial Application Form

Provided that your phone call with our staff member was successful and we can help you proceed, you will need to complete a short application form which requires you to fill in some basic details including:

  • Name
  • Occupation
  • Loan purpose
  • Loan amount and term
  • Address (both current and address of property)
  • Any other relevant information about your existing and future property

This information gives us an essential overview of your requirements and acts as a foundation for the loan that you wish to apply for. Assuming this meets the criteria of our initial lenders, we will pass this onto the next stage.


Indicate Quote

Your loan application will be put through a filter and returned with a number of indicative quotes from the lenders that we work with. Each lender has their own criteria and amount that they will allow you to borrow and the rate they charge. As a bridging loans broker, we can formulate this quickly and you will be given a quick overview of the loan amount and rates. Here is an example below:

Masthaven 80% LTV - £400,000 - 15 months

MT Finance 70% LTV - £350,000 - 14 months

Precise Mortgages 70% LTV - £350,000 - 8 months

Roma Finance 70% LTV - £350,000 - 7 months

As a borrower, you can decide which lender you would like to pursue or all of them in fact. You can then get your paperwork ready in order to proceed.


How to Proceed

The next step before we proceed is always a valuation of the property which determines how much it is worth according to today's market. The cost of a survey will depend on the size of the property, ranging from £300 to £1,200 to larger, more complex builds. The survey is always carried out by a RICS qualified surveyor and can typically be arranged within 2-4 days of enquiring.




The property's valuation is essential to ensure that it stacks up with the figures that you have provided and this may coincide with what the lenders have offered or cause them to change their loan offers.

Assuming everything is good to proceed, you are in a position to introduce your solicitors to the lender and allow the parties to liaise. To be approved for a bridging loan, you will need to provide additional proof of identity to the lender including your:

  • photographic identification
  • two proofs of current address (of over 3 months) such as a gas bill and council tax bil

Your solicitor will then prepare the mortgage deed and whilst some bridging applications can take a few weeks, there are many which can be arranged in just a few days.


What Fees You Can Expect

As a customer working with a bridging loan broker, it is important to know what other fees to expect with your application:

Broker fees: Depending on the broker that you use and the lender, there is a broker fee of 1% or 2% of the total loan value. For a loan of £500,000, this will therefore come to £5,000 to £10,000. This might seem like an additional cost of working with a broker, however, the broker may also help you get a lower interest rate and better chance of approval earlier on - so you may save money overall.

Arrangement fees: A lender typically charges arrangement fees which relate to the organising of the loan, the work of their solicitors and their administration. The cost of this is typically also around 1% to 2% and depending on the lender, may be a requirement before the loan is funded or it is rolled up into the full loan amount.

Valuation fees: The surveyor you use or is allocated to you will charge around £300 to £1,200 for carrying out a survey of the property. You can use your own surveyor provided that they are RICS qualified, however, a lot of bridging lenders will typically provide a surveyor for you.

Solicitor fees: Naturally, your solicitor is very involved with arranging the mortgage deed and receiving the funds from the loan. You will therefore have to incorporate your solicitor's fees into the mix and obviously having an expensive professional may impact the margins and your return on investment.

Early repayment fees: Bridging loans typically come with early repayment fees, with higher penalties in place if you want to end the loan agreement within the first few months. With this in mind, you need to weigh up the costs of repaying early or letting it run for a few more months and paying the interest.


The Real Benefits Of Becoming A Buy-To-Let Landlord

The number of completed buy-to-let mortgages in London rose by 8.97% in Q2 of 2018, according to Commercial Trust. This is great news for the market as lending for buy-to-let properties previously shrunk by 10%. And it’s not just London which has seen a growth, as the North-West has also seen a jump, taking an 11.11% share during Q2.

Therefore, if you're looking to buy a property, it's worth considering the rental potential of it as there are some great benefits in buying-to-let, including being able to utilize a bridging loan to fuel your new business venture.


Anyone can do it

One of the best things about buy-to-let mortgages is that anyone can obtain them. If you’re an existing homeowner or a first-time buyer, purchasing a property for rental purposes is a great way to make an additional income. Self Certification buy-to-let mortgages allow individuals, such as homemakers or those on a low income to benefit from obtaining and renting out property.

Some buy-to-let landlords even manage to replace their earnings with the profit they make from their portfolios. And, if you do require financial help to refurbish your new property before renting it out, be sure to consider a bridging loan to assist you with your requirements.

Pay off your mortgage and have cash left over 

Research conducted by Halifax reveals that the average monthly mortgage repayment is £669. Meanwhile, the BBC reports that the average monthly rental cost in England and Wales is £926. Therefore, buy-to-let landlords benefit by paying off their mortgage and having a significant sum of cash leftover to do with as they please each month. As a result, these additional funds can be used to help you pay back your bridging loan.

Investment opportunities throughout the UK

Traditionally, landlords would purchase properties to rent out close to home as this would give them optimum control of the property. However, investment opportunities are available throughout the UK, with some areas providing greater financial benefit.

Typically, house prices in London and in Southern England are higher than up north. And, with a 3% stamp duty surcharge for landlords owning more than one property, as well as the revelation that the autumn budget will hike stamp duty up further, profits will be hampered, making it difficult to pay back your bridging loan. But, by buying further north and allowing your letting agent to take over the day to day running of your buy-to-let property, your stress levels and your bank balance will be boosted.

Tax relief

There are numerous ways to save on your tax bills as a buy-to-let landlord. Following the announcement in 2015 that tax relief on rental properties was being overhauled, an increasing number of landlords moved their portfolio of properties into a company to lower their taxes. Moreover, buy-to-let landlords can offset costs against tax, including letting agents’ fees, mortgage interest payments, advertising and repair bills, all of which can help you pay back any outstanding financial agreements.

Buy-to-let landlords can benefit in many ways by investing in property for rental purposes. One of the biggest pros is that almost anyone can do it and there’s a significant amount of profit to be made. Furthermore, investment opportunities are available throughout the UK and there are various ways to save on tax, too.


The Insurance You Need For a Building Project

If you are running a building project, having the right insurance is essential to protect you from any potential mishaps. You can never be certain if your property will be victim of a flood, fire or fly tipping and the financial repercussions could put your entire project at risk.

Whether it is for buy-to-let or renovating an existing property, you need proper insurance to safeguard your investment and some bridging loans will not even go ahead until you have insurance in place. We highlight the main types of insurance you may need below.

Buildings Insurance


Buildings insurance comes under the form of home insurance and is used to help protect any damage to physical aspects of the building. This includes covering doors, walls, fences, roofs, ceilings and floors. It is designed to protect you from any accidental or unintended damage to physical fixtures of the property, which could be as a result of fire, flooding, vandalism or other peril.

With builders, plumbers and electricians likely to be working on your project every day and using heavy machinery, you never know when something could go wrong. Whether it is faulty wiring or poor plumbing, it is not uncommon for a fire or flood to occur.

To claim from your home insurance policy, there needs to be proof that any damage caused was a genuine accident. Insurers will always do a full inspection of the property and damage before paying out a claim.

Contents Insurance 

Contents insurance also falls under your home insurance so policyholders are likely to have a buildings and contents insurance in one policy. Contents refers to physical valuable items that are in the house or flat. This includes any machines, electronics, art, jewellery and other valuable assets. If the place is a complete building site, then most of the contents will not be on the site. But, if you are working on a property where other people are still living and all their goods are still on the premises, then having contents insurance is key in case anything gets lost, damaged or stolen.

For contents Insurance, it is advised to value all your items that you are leaving in your house like the computer, jewellery and TV and take out a policy to cover their value. It is worth slightly over-insuring so that your insurance provider will pay out enough to replace your items. Insurers will typically only pay out what the goods were worth at the time. So if your TV is 5 years old and has fallen in value, you may not receive enough to replace it - hence taking out a little extra cover can be useful.

Public Liability Insurance 

Public liability aims to protect any third parties that come into contact with your building project. When you are renovating a property, you are also potentially impacting people around you including neighbours, passers-by or other tenants of the building.

There are plenty scenarios where public liability insurance can be applied. A common one is if your builders are working on the roof and something like a tile falls off and hits the neighbour’s car or hits a pedestrian walking past. The victim has a right to claim damages because you (or your team) were responsible for this. At this point, you would claim on your public liability insurance in order to settle the victim for any replacements, medical bills or compensation.

Other scenarios include what would happen if your building work accidentally set fire to the neighbour's house? Or what if your boiler broke and then flooded other tenants in the building? This types of damages and repairs could be covered by your insurance.

Business Interruption Insurance 

Business interruption refers to any costs that you have to incur due your project being interrupted. Perhaps you are working on a deadline or you will need to refinance due to the project taking longer than expected. Whether it is a fire, flood, snow, fly tipping or squatters on your premises, there are several things that could make your project delayed. After all, we all know that building work can take longer than we expect.

Rather than suffer the financial burden, your business interrupted insurance can contribute to any additional costs you may have whether it is building costs, loss of rent income or extra costs required to repay your loan.

Professional Indemnity Insurance 

Professional indemnity or PI, is less for you but more the people that you hire. Any professions such as builders, architects, plumbers and engineers are using their expertise when working on your building. However, if they give you bad advice or carry out their work poorly, it could have a huge impact on the overall success of your project and the bottom line.

As a result, you may decide that you wish to take legal action and request compensation for any loss of income or delays in your project. Your potential settlements will come out of the contractor's professional indemnity insurance. So it is a common thing to ask any professionals that you work with beforehand if they have PI cover.

Employers Liability Insurance  

Of all the insurance types mentioned above, employer's liability is the only one which is required by law. This is cover for any employees that are working on your premises. They must be your own staff that you hire because any staff belonging to your contractors must go under their own separate policy. Failing to show proof of employer’s liability insurance upon request or a certificate can lead to a minimum daily fine of £2,500 and further prosecution.

The idea of employer's liability is that you have a duty of care for any of your staff members and are responsible if they have an accident at work. Working on a building site poses risks, especially with different materials and obstacles that could cause injury. If one of your people gets injured at work, you can claim on your policy in order to pay for any medical bills, compensation or time off work.

You are required to have a minimum of £5 million worth of cover by law of which a policy may only be a few hundred pounds to purchase. The only exceptions are if you run a family business, you are not required to purchase employer's liability cover for your own family members. Also, any freelancers, sole traders or consultants are required to insure themselves and this is not your responsibility.

How Much Does Insurance Cost? 

The cost of insurance will vary on the size of your overall project. Naturally, the refurbishment of a large property which is being changed into 12 rooms will require more staff, budget and insurance than the renovation of a small 2-bed home.

Whilst insurance can easily start from a few hundred or thousand pounds, it is important to cost up the potential risks and what the cost of any damages will be. Using a good insurance provider will help you better understand any risks and levels of cover that you need and it is important to speak to your partners and contractors to ensure that you are all fully covered to carry out the necessary work.


How Rent Reviews Work

What exactly are rent reviews? If you are renting out a commercial premise such as a restaurant, office, warehouse or shop, the landlord has the right to increase the rent after a certain period of time. As a business owner, you need to be on top of rent reviews to maintain control over your costs.

Perhaps the rent needs to change due to higher running costs, increase in inflation or greater demand in the area. We take a look at how they work, and everything else you need to know about the process.




When are rent reviews held?

Rent reviews will usually occur every five years or less than this, depending upon the lease agreement that is signed between the tenant and landlord. It may very well be the case that for short-term leases there aren’t any rent reviews at all, but to be sure about this it is important to check with your landlord.


How is the new rent price determined?

The new rental price is usually determined by the ‘open market rental value’. What this means is that if the landlord was to put this property on the market at the time of review, what amount would he or she expect to receives given the current rental market in the local area, based on similar agreements made to your lease. Factors that determine the open market rental value may include:

  • How the premises are used (for example whether it is being used simply as storage space or as an office space)
  • Level of rents in the area

Rent increases are not always based upon the open market rental value, they may instead be linked to the Retail Price Index which is heavily linked to inflation.


Who decides the new rent value?

If it has been decided that upon a rent review there will be an increase, it is most likely that your landlord will be the one to inform you of this decision. However, if you believe that the rent review is unreasonable, it is possible to dispute the rent review.

This is usually passed onto an independent expert who can assess the individual circumstances between landlord and tenant and decide what would be the best possible agreement to come to. There are companies that specialise in rent reviews including property and leisure management companies and solicitors.

If you do disagree with the proposed rent increase, it is extremely important that you put this in writing to the landlord as soon as you possibly can. This is because a large number of leases will stipulate a timeframe within which you can dispute a rent review. If you miss this deadline, it could mean that you will have no other choice but to accept the increase.


Do rent reviews take into account improvements made to the property?

Generally speaking, any improvements that you have made to the premises during the term of the agreement will not be considered in a rent review. However, if you do make any improvements it is vital you keep a complete record in the event that you are accidentally charged as you will likely need to provide proof. Nevertheless, you should bear in mind that if you have asked the landlord specifically to make improvements during this term, this may be factored into a rent review.


Do rent reviews ever lead to a decrease in rental value?

A question that is often brought up when it comes to rental reviews is what happens if the open market rental value has fallen in the area surrounding the premises. Could this lead to a decrease rent?

Unfortunately, it isn’t as straightforward as that, and it would most likely require you to refer back to your lease agreement. This is because many agreements will include an ‘upwards only’ clause. That means that should the open market value decrease, the rent can only ever remain the same as opposed to decreased.


How much notice do I get for a rent increase?

In the UK, the amount of notice you are given about a proposed rent increase is usually three months ahead of time, via a written notice by your landlord. However, do check in your own lease agreement the specifications of this timeframe, as it can differ depending on the contract.


Renting vs Buying - What Are The Pros and Cons?

The decision as to whether to rent or buy is a perennial problem if ever there was one. For many of us, the process of moving out in itself symbolises the transition to adulthood. For many more, it is buying a home that really and truly means you’ve made it, and who eagerly await the moment they can jump onto the property ladder. However, simply buying a home isn’t always that straightforward.

House prices vs rent prices

For example, the price of the average UK home has risen in the past decade. In London, this equates to nearly a 70% rise in 10 years. Whilst for the first time in at least five years according to Rightmove, rents have dropped in Britain by the end of summer 2017. Outside of London, rents dropped by 0.2% in the months from June to September.

However, London itself still remains one of the most expensive cities in the world to rent in. In other words, either buying or renting is going to be of considerable cost and there are pros and cons to both. Let’s weigh them up.

The importance of freedom?

Both renting and buying provide you freedom. However, the way in which each option gives you this freedom differs entirely, with advantages and disadvantages to both. Here is a short summary:


If you're tired of living at home or with annoying parents or siblings, getting out and renting is a quick way to get a place and make it your own.

With renting, you are signed up to a fixed contract, meaning you have the option to leave fairly quickly when the minimum tenancy period expires without having to worry about a costly mortgage to pay for.

The option to move to another city or country entirely can be achieved fairly quickly as a result, so you have wide range of choices of places to live.

If your personal circumstances change, renting gives more flexibility. If you need to change jobs or anticipate that you will have less money than previously, you can look for somewhere cheaper to rent without being tied down to the responsibility of a mortgage.

Renting might give you the chance to live in an area you’ve always dreamed of, but couldn’t otherwise afford to live in if the only option was buying.

Not having to pay huge upfront costs for a house or flat (usually a month’s rent is required, but this is considerably less than a house deposit), means decisions to move can be made swiftly.


If you buy a house, then you have the freedom to make home improvements you would find difficult to make rent. Want to put up some shelves in your bedroom, paint each room in all the different colours of the rainbow, or even paint a mural dedicated to your love of cats? Well, you can do just that if you really wanted! Obviously, improvements are within reason, and perhaps not as extreme or silly as those previously listed, but not having to ask permission from a landlord for making alterations is a definite advantage.

Many landlords aren’t avid fans of tenants having pets in their properties and are extremely strict with rules regarding them. In the worst case scenario, if caught with a pet in the property this could lead to eviction. With buying, the choice is up to you! Buy a goat if you like! (or maybe not).


buying a home


Whilst it may take longer to save for a house deposit, it provides an investment for the future that renting doesn’t. It is often said that paying rent is like letting money going down the drain after all. The house could accumulate in value in later years enabling you greater freedom in the future if you should decide to sell, allowing extra money to spend on whatever you would like! This could be anything from a new bigger home, holidays or a more comfortable retirement.

The Guardian writes that house prices are strong at the moment, going up the fastest in the last 8 months of 2017. You always have lots of options as a homeowner to do improvements and increase the value of your property. Whether you use construction finance or just through your own savings, things like adding a nice garden can increase the value by 10%, a conservatory is another 10%, a loft conversion with two rooms is around 20% and a basement with as much as 30% - helping you really maximise the value of your home.

Can you afford to buy?

If you do decide to buy, it’s incredibly important that you work out if it's possible that you can afford it in the first place. It isn’t just the deposit that you will need to pay for, there are many costs incurred when buying a property that aren’t included when renting. Such as

  • Stamp duty
  • Removal costs
  • Maintenance if anything breaks down - such as boilers or a leaking roof.
  • Survey cost
  • Legal costs
  • Monthly bills - gas, electric, phone bills etc.
  • If interests rates increase, your mortgage repayments will rise too.
  • Estate agency costs
  • If you are moving in with a partner and separate, this could become very expensive.

First-time buyers have been given a lifeline with the new budget rulings with regards to stamp duty. If its your first mortgage, you won't pay any stamp duty on the first £300,000 of your property value, allowing you to make a huge saving and will help around 95% of new homebuyers.

What is the right decision for you?

Evidently, both buying and renting have their pros and cons, and these will likely depend on your needs at the time of making such a decision. For some, buying property isn’t in their interest, and nor will it ever be, whilst for others owning a property is their lifelong dream. Whichever you choose, deciding where you live is one of the most important decisions you will make, and you must think thoroughly all of the options available to you, as well as what is possible for you to realistically afford.


How To Make a New Property More Energy Efficient

Halloween has passed, the clocks have gone back, and the wooly hats adorn our heads once more: winter has well and truly arrived (well, if you want to be slightly pedantic meteorological winter begins on 1st December, but let's forget about the technicalities).

What this in all likelihood means for us all is considerably more money spent on trying to keep warm throughout the season as the biting coldness kicks in.

However, are you one of the 40 percent who is worried about how you are going to afford heating this winter? The UK certainly doesn’t fare well in terms of energy efficiency  – we are ranked one of the lowest in Europe according to Eurostat data, and, to top it off we also have the oldest building stock in Europe too. This translates as meaning that over 19 million homes in the UK rank a grade worse than C on their energy efficiency, with those rating on grades F and G contributing to over 25,000 deaths in the UK as a result of extreme cold.

This inefficiency also generates an excess amount of carbon emissions, leading to an ever more volatile climate in the UK,and an increased chance of floods: with annual flood damages already amounting to over £1.1 billion pounds in 2016. Admittedly very depressing statistics, but there is hope on the horizon – the government released last month its Clean Growth Strategy, promising to insulate and overhaul millions of draughty homes in England and Wales which could save families up to £300 a year on energy bills.

It’s great news, however, it is is to be achieved with a deadline of 2032, so a little far off. But do not fear: in the meantime, here are a few simple ways to improve the energy efficiency in your home that will not only save you money, but also decrease your carbon footprint and therefore keep your environmentally friendly credentials in check.


Make more than lukewarm savings with a thermostat




Did you know that more than half of all money spent on fuel bills is towards heating and hot water (and more so than on those spent on appliances or electronics?). For example, heating water makes up about four percent of the UK’s total carbon dioxide emissions, with the average house using around 330 litres each day (that is nearly 32 full bathtubs a week!) Would you like to change this?

Investing in a programmable thermostat could help you do just that, saving you up to £100 a year in energy bills as a result. Thermostats such as this by Nest Learning even work with Amazon Alexa voice control, and comes with an app to let you see how much you use and why.

Or, if you already have a room thermostat, simply turning down the controls by just one degree can save around £80 a year.  Similarly, insulating your hot water cylinder with a fitted tank jacket can help you to make water savings and even more if you heat water electrically. This also saves you approximately 430 kg in carbon dioxide emissions through using less energy to heat and treat the water, so a unanimous thumbs-up.


Use Your Heating More Effectively

The majority of households simply don't make enough of their heating and radiators. There are some very simple ways to do this so that you get the most out of the heat that you are paying for. This includes:

  • Removing draughts
  • Using radiator panels
  • Positioning of radiators
  • Using sunlight more effectively

Those pesky draughts are what is bringing in the cold, typically around your windows and underneath your doors. Look at some simple ways of covering these up with carpets and rugs or even little sliders you can probably buy on amazon for a pound each.

Radiator panels are little sheets that you slide down the back of your radiator. Since most the heat from your radiator goes behind it, the panel essentially bounces this back into the room.

The positioning of radiators is key since putting things on top of them like clothes, cupboards or shelves is simply blocking the heat from entering the room. So don't be scared to remove some furniture or items that are in the way.

The few hours of sunlight that we get in November and December can still heat you the room. It is just sun that comes through the window, so don't be scared to open your blinds and curtains during the day to let the heat in but then close them when it gets dark because this is going to be colder.


Save money with the flick of a switch




On average, lighting makes up about 10% of energy bills, but it’s one of the easiest ways to quickly improve energy efficiency in your home. For example, LEDs, such as these ones by Phillips last for around nine years, which is considerably more compared to incandescent bulbs, and certainly worth the investment. Taking this a step further,  if the average household replaced all bulbs with LEDs, it would cost about £100 and they’d save yearly about £35 on bills, so it is definitely worth considering making the switch if you are serious about considering making your home more energy efficient.


Solar Panels

Those funky looking things on your the side of your roof can save you some real money by using energy more efficiently. We're not going to sugar coat it, its definitely a long term game as solar panels cost around £5,000 to £7,000 to install (and less if you can get a government grant).

However, since this can contribute to powering your heating and electricity, the saving over a 20-year period ends up to be around £6,000 - which isn't bad. Plus, it can add value to your home and can be resold to the next owner of your property. If you have invested in farmland or have large roofs, this could be a great moving saving tool.


Why it is Important For Developers To Be Energy Efficient

If you have recently got the finance you needed from one of our development finance lenders and are working on the refurb of a new property, being energy efficient is important.

Not only do you save money running the place, you can pass on these savings to your tenants, which might make the place seem more appealing. Similarly, if you have kitted the place out with energy efficient lightbulbs, radiators, boilers and more, you can use this as an up-sell for a potential buyer and easily charge them more.

Furthermore, in this day and age of global warming, it is seen as the responsible thing to do, being 'green' and all and a lot of potential investors, buyers and tenants will respect you for making this decision in your fit out. So go on, don't be scared to be green!