As mortgage advisers we have certain important responsibilities, one of which is verifying the clients applying for funds are who they say they are. Buying property is a great way for anyone with questionable intentions to launder money, so it’s REALLY important that the possibility of any of our clients being involved in that kind of criminal activity is thoroughly checked out!
But the process of validating an individual's identity and address hasn’t really evolved at all in the last 25 years, particularly when you consider the technology explosion that has happened over the same timescale. Yes, there have been some slight improvements in information accessibility over that time but in the main we’re still asking clients for their passports and utility bills in the same way we were back in the 90s.
Until now, perhaps.
Cue a UK technology company called Yoti, who are aiming to become the World’s Trusted identity system for individuals and businesses by creating a free smartphone app that lets anyone create a digital identity with their smartphone and a government issued document. According to their website, www.Yoti.com anyone can set themselves up in 90 seconds although the validation of their Government documents may take a few minutes longer.
Data security is key, of course, but one of the unique details with this biometric identity is that your data can only be decrypted by the key on your smartphone. Data is not stored in the Cloud or any other vulnerable ‘hackers delight’ system. The information that passes between the individual and Yoti is subject to multiple layers of encryption, controlled by a user key only held on that phone. The Directors of the company have their roots in one of the largest and most successful online gambling groups in the UK, so their methods of data security have already been tried and tested in other sectors that have to stand up to seriously close scrutiny. You can be comfortable that your personal details are not going to end up on a data spreadsheet somewhere waiting for an advertising company to buy them and bombard you with unwanted offers for stair lifts and holiday villas!
Once you get your head around the idea that you possess a securely verified e-identity on your phone, avoiding the need to carry around important, original documents that you really DON'T want to risk losing, you realise the possibilities for its use are almost endless. Yoti anticipate the system proving popular in a number of sectors, healthcare, recruitment, property management, online dating, online marketplaces, financial services, retail & nightclubs, are just a few. And it's not just about proving you're over 18, the theory is that this could be the best way to guarantee a safe online chat-room environment for our children.
For us, we’re hugely excited to be running a trial alongside our standard Anti-Money Laundering processes to see if this could be the evolution we’ve been waiting 20 years for. If we’re successful and it means clients no longer have to come in with their passport and Council Tax bill then it would be a major improvement for all concerned and we’ll be proud to have played our part in dragging our industry one step further into the technological revolution!
Any changes to the Tax Regime?
Landlords will be glad they have not been dealt any new blows in the Spring Budget - but unfortunately the Chancellor will not be reversing the additional stamp duty charge or the mortgage interest tax relief changes expected to come into effect in April.
Currently landlords are able to deduct all their mortgage interest (and other property costs like estate agents fees) from their rental income before they calculate their tax bill. But as of 6th April relief will be set at 75% and will gradually reduce until it is replaced with a flat 20% tax relief in 2020. If you have a large buy to let mortgage it's important you speak to your accountant and mortgage adviser, digest the new mortgage interest changes and make sure you've accounted for them. If you don't have a mortgage or you're a lower rate tax payer then good news; you will not be affected at all.
Think again about setting up a limited company
As a result of the imminent mortgage tax relief changes, a number of landlords have been setting up - or considering setting up - a limited company to pay less tax. This is because, unlike individuals, limited companies can still benefit from the full mortgage interest deduction as mentioned above. But the Chancellor has clearly hinted that he doesn't want landlords forming companies to dodge the tax hit, announcing in the Budget that the tax free dividend allowance for company directors will be slashed from £5,000 to £2,000 from April 2018. The dividend allowance cut will cost basic-rate taxpayers £225, higher-rate taxpayers £975 and additional-rate taxpayers £1,143.
Tax rise for the self-employed
The Chancellor also made it crystal clear he's determined to make the taxation system more equal for employed individuals, company directors and the self-employed, announcing a 1% rise in Class 4 National Insurance contributions from April 2018 and a further 1% hike from April 2019. Many are arguing that this is sensible budgeting from a Government and the differences between self-employed and employed benefits are less defined than ever before, indeed, he plans to announce more changes to reduce the gap even further, but all of that points towards thinking very carefully about whether setting up a Limited Company is the best move for you.
As an alternative, consider whether you are able to reduce your interest costs by re-mortgaging and getting an up to date rental valuation on your property. Despite the recent stress test changes in BTL calculations if you haven't done this for a while then a higher property value may result in a lower Loan to Value calculation and a better pay rate than you may have been facing.
According to the British Retail Consortium, weather has the biggest influence on consumer behaviour after the economy. It affects consumers' emotional state, drives their purchase decisions and dictates how much they are willing to spend. It also affects the food they eat, the clothes they wear, what cars they drive and even what type of house they buy. Weather affects consumers on 3 levels; their purchase method, their mood and their product choice.
On the most basic level, weather affects which channels consumers use to make purchases. For instance, during warm and sunny days, bricks and mortar stores often enjoy more footfall, whereas during periods of inclement weather traffic to online portals can increase. However, much is dependant on seasonality, industry and product.
The second way in which weather influences consumer behaviour is through its effect on mood. Studies show that temperature, humidity, air pressure and especially sunlight can have a huge impact on a consumer's mind frame and therefore by extension, their spending. A US study in 2010 revealed that exposure to sunlight dramatically increased levels of consumption as well as the amount spent per item. Experiments carried out showed consumers would willingly pay 37% more for green tea and 56% more for gym membership after being exposed to sunlight. That's why many retailers use bright halogen lighting in their stores to mimic the effect of sunlight and send us delving for our debit cards (maybe someone should share this info with Hollister..?! #justsaying).
As well as affecting our mood our propensity to spend and our preferred channels of purchase, weather is a critical driver of product demand. The food and drinks, pharmaceutical, and fashion industries are most heavily affected by this phenomenon. Luckily, weather-driven demand can be predicted with unerring accuracy- with identifiable trigger points. For instance, if temperatures reach over 18 degrees in the UK, supermarkets know that there will be a 22% increase in fizzy drinks sales, 20% increase in juices and 90% increase in garden furniture.
As mentioned above our weather can actually influence purchase decisions on high value, high involvement items like cars, houses, high-end fashion apparel and insurance. Holiday bookings have been proven to be inextricably linked to periods of inclement domestic weather, of course, but it turns out that even the weather can influence the value of big purchases like houses, according to a working paper by the National Bureau of Economic Research, which said that Consumers overvalue warm-weather housing characteristic when the weather is warm at the time of purchase. In other words, if you're selling your home at the moment and you're lucky enough to have a swimming pool in the garden then you can bet it won't hang around for long, but, if you're one of the many less-fortunates like us then perhaps you should consider putting some extra effort into weeding the patio and making it look like the perfect BBQ venue!
So what can we conclude from this data? Well to start, high streets and online shopping are both affected, albeit in different ways, by the UK weather. When it's hot, high streets do well and online shopping dips. When it's cold, online searches go up and high streets do poorly. But when looking at specifics of search we can see that online shopping has changing patterns according to weather as well. This is something that all retailers in the UK, both on and offline, will consider when dealing with their customers. So if it's advice on your mortgage choice or life cover options from an independent source that you're after, let us reassure you that we have an ambient temperature of 20 degrees in the office with complimentary bottles of water for as long as this great weather continues, when the rain returns we're available online and if we ever get some snow then what could be better that a piping hot Latte from one of our wonderful Nespresso coffee machines....! Enjoy the sun in the meantime but remember to 'Slip, Slop, Slap' :0)
"Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work." Perhaps someone at the FA should paint this Stephen King quote onto the walls of the 'HOME' changing rooms at Wembley.
It's been refreshing and entertaining to watch those teams at this year's European Championships that have impressed us with their positive attitudes, their superb work ethic and their hunger to perform; you can see how much this has been appreciated by their own supporters who must be proud of their respective teams whether they have already exited the tournament or continue to compete.
The effects of having a positive work ethic can never be underestimated (unless you're the England football manager of course), particularly in the workplace. You can improve the office environment, work on the cognitive needs and get the best coffee machine money can buy, but if your staff are not 100% committed to providing the best client experience possible then it will ultimately have a negative effect on your business results. It was Warren Buffet who said "it takes 20 years to build a reputation and 5 minutes to ruin it" and there's a person who knows a thing or two about doing well!
So that's why we care so much about our reputation with our clients at Mortgage Business. We never knowingly take them for granted, we work hard to support them and assist them in their decision making process. We work with them to process their transaction through to completion and when it's done we ask them if there is anything we could improve on. We do this because we appreciate them, and without them our business would be made much more difficult. We DO have very talented people working for our company, but fortunately they are also people with an inbuilt desire to work tirelessly to ensure the best possible client outcome, which, it seems, is the ultimate combination for ongoing success. If you'd like to see this in action then please feel free to make contact with us, in the meantime, I'm off to buy everyone an Icelandic football shirt.........................#ISL
The date of the Government’s proposal to implement an additional 3% Stamp duty charge is drawing ever closer. With just one more consultation period to navigate, this could mean the new criteria will come into effect on the 1st April 2016.
At present the tax is levied on the proportion of the purchase price above £125,000 (which is the current Nil Rate band for a residential purchase). The new system means buyers will be taxed on the whole purchase price. Which means, if you were to buy a property for £250,000, on this basis you would attract a Stamp duty charge of £10,000. This is significantly more than the equivalent charge of £2,500 for a standard residential purchase as it stands at the moment.
Don’t Panic quite yet. This will not affect everyone.
The charge will be levied at anyone who is buying a property that is not for their residential use (i.e. a Buy to Let property), but also those people who ARE buying a property as their main residence but NOT selling their current residence simultaneously, a situation known as Let to Buy. Both of these are common scenarios for mortgage advisers to deal with, but there are other combinations that are as yet unclear as to whether they would fall under the legislation; the homeowner who had previously vacated their property and let it out and now wants to buy again, for example, or the divorcee who is still named on the ex-marital home but wants to buy a property of their own….
This new charge is part of a bigger plan to seemingly ‘free-up’ some of the property from the private rental sector and make it available to potential Homebuyers, but there is still a great deal of detail that needs to be clarified by the Government in a very short time, in order to avoid current homeowners from being unnecessarily penalised.
It was around two years ago that the creative minds at Mortgage Business decided it was time for a brand ‘refresh’. A little commercial ‘facelift’ that would continue to represent the Mortgage Business philosophy for the next decade or so. It has been roughly ten years since the last time brand ‘refresh, so we thought the right time to do it all again…
This time, of course, we felt more knowledgeable, more experienced and generally much better equipped to go through the process than ten years ago. We held brain storming sessions, built mood boards, dissected our brand DNA and came up with three individual themes for the new and improved Mortgage Business. Firstly, we thought to develop on our current ‘friendly Aliens’ theme. To go into production with an Alien mascot and have an Alien built onto the roof of a company vehicle. Okay… Then we thought we’d take the idea that because we live and breathe mortgages, we would portray ourselves as Mortgage Geeks. How about we go with an idea that mortgages are ‘our world’ and run a campaign of interplanetary styled adverts. OK, so clearly the last ten years hadn’t done anything to improve our marketing minds. In the slightest!
So what do you do when you can’t come up with any decent ideas or you can’t even agree on a common theme? You scrap them and turn to the experts. People who do this sort of thing for a living, of course! I mean, we’re the mortgage experts, we’d want you to come to us to find the best mortgage. It made complete sense! So thanks to the creativity of the team at Nine Graphics, the design skills of the boys at High Horse design and the patience of everyone involved, we have finally arrived at the launch of the new look.
An administration fee of £99 is payable on application, there may also be a fee for mortgage advice. The precise amount of the advice fee will depend upon your circumstances but we estimate that it will be, for example, £250 for loans under £100,000. We will also be paid commission from the lender. The FCA do not regulate some forms of mortgage.