We hope that you all had a great Christmas and New Year and it’s that time of the year where gym memberships take a sharp rise upwards and we give our take on the forth coming year ahead. So what will 2012 hold for the UK property and mortgage market?

House prices finished the year, surprisingly, slightly up with the average UK home now costing £165,798 a rise of 1.6%*. Whilst demand for homes still remains relatively subdued, highlighted by the fact that housing transactions are still way below their long term average, it seems that the resilience seen in UK house prices may be underpinned by the current lack of supply as well as the current low interest rate environment limiting the number of forced sales. So where do house prices go next? Well with the UK economy still struggling to get going it looks as though house prices will once again stay stagnant over the forthcoming year.

We may sound like a stuck record when it comes to interest rates as again they start 2012 as they did the start of 2011 at a low of 0.5%. So where do they go next? Well it seems the general consensus from most economists is that with the UK economy still looking sluggish we may see the bank base rate hold over the forth coming year with little change. Of course the situation in the Euro zone is still one to watch and should the Euro fail all bets on interest rate movements as well as most other economic indicators are off.

So what about mortgage rates? Well those sat on base rate trackers are still reaping the benefits of the low period of interest rates and it looks as though will remain to do so though out 2012. The cost of fixed rate funds to the consumer during 2011 dropped considerably however the underlying cost of funds to the banks has started to rise over the last few months as the uncertainly around the Euro Zone continues. This may have an impact on the cost of fixed rate funds moving forward however currently they still remain extremely competitive.

Should you wish to talk to one of our advisers about your current mortgage requirements or any other aspect of your finances, then please call on 0117 9568267.

Have a happy and prosperous 2012.

*Source: Nationwide House price index.

Guard-i-an

noun

1.  a person who guards, protects or preserves.
2.  Law. a person who is entrusted by law with the care of the person or property, or both, of another, as a minor or someone legally incapable of managing his or her own affairs.

It’s quite understandable that most parents would prefer not to think about what would happen to their children in the event that one or both of them died, but sadly, it is a possibility. Its not a pleasant statistic but 24,000 children are bereaved of a parent each year in Britain*. Many people assume that if one parent was to die then the surviving parent would automatically obtain legal parental responsibility but what if the parents aren’t married? Mothers have legal responsibility from birth however this is not always the case for fathers.

Let’s take for example a father who was not married to his child’s mother at the time of or after birth. Even though his name my be registered on the birth certificate, if that certificate was registered prior to 1^st December 2003 and he has not set up a parental responsibility agreement with the mother or obtained an order from the court he may well find he does not have parental responsibility for his own child.

So what about those who are married surely this does not apply to them? Well in the event of something happening to both parties appointing a parental guardian becomes the responsibility of the court. This often can be a lengthy and expensive process and what’s more, during this time the children concerned may be taken into care. After a final decision has been made you may find they have been left with someone you may not have chosen yourself.

So how can you make sure that your children are looked after in the event of the worst case scenario? Well one of the simplest ways is to include the appointment in a will. The Children Act 1989 sets out various different ways that guardians can be appointed, to find out more visit:

http://www.legislation.gov.uk/ukpga/1989/41/contents

Should you wish to discuss your circumstances in more detail with one of our advisers then call Omnis Financial Solutions on 0117 9568267.

*Source: www.winstonswish.org.uk, July 2011

When it comes to trying to put a value on a parent it is very much like your child telling you just how much they love you – there’s just no amount big enough.

It’s impossible to put a cash value on a parent; however L&G have looked to put a value on parenting with their ‘Value of a Parent’ research. Their 2011 survey estimates that you would need on average £30,032 per year to replace a Mum and £21,306 per year to replace a Dad in order to fulfil the unpaid work done in the home. These figures were calculated using the number of hours spent on household chores and childcare which is then, multiplied by the average hourly rates for equivalent job roles, as supplied by the Office of National Statistics Data.

Most people recognise the costs of bringing up a child in today’s world and are aware of the impact that losing an income would have on the household. Therefore you would assume that most families have protected themselves against this? Sadly not. L&G’s survey indicated that only roughly half (53%) of UK parents had any form of life insurance in place. More worrying is that a similar survey undertaken by Aviva showed that 91% of parents stated they understood the need for life insurance. So why the gap?

More often than not it comes down to ‘it won’t happen to me’ and hopefully it won’t, but think for a moment, what if it did?  Take a few moments to think what your family’s situation would now look like. Would your child be able to remain in the family home? Would they still have the things and upbringing you would like them to have?

These are often uncomfortable questions to ask yourself and perhaps one of the main reasons people choose to bury their heads in the sand when it comes to family protection. However, with some careful consideration and planning you can make sure your family and children are covered should the unthinkable happen.

Should you wish to discuss your circumstances in more detail with one of our advisers call Omnis Financial Solutions on 0117 9568267.

More and more people are turning to the great British outdoors for their holidays and the key buzz words this summer seem to be ‘staycations’ and ‘glamping’. I suspect your first thought may be ‘what on earth are you talking about?’ Well glamping has recently derived from the merger of the two words ‘glamorous’ and ‘camping’ and essentially means upmarket camping. For those of us perhaps not so well equipped to deal with the great outdoors and a little more accustomed to four walls and a roof then perhaps a look towards the new build second home market may be for you.

A recent report from Knight Frank shows that whilst the housing transactions in the UK’s mainstream market have remained sluggish since 2007, the number of second homes has continued to rise into 2010. The growth of this sector is due to a number of factors with the increase in ‘staycations’ being one of them. An increase in overseas visitors is tipped to result in an increase spend of 4.4% a year whilst spending by domestic tourists is expected to rise by 2.6% over the next decade.

The British coastline is a particular draw for many offering activities such as surfing.  The South West in particular accounted for more than one in five trips by UK holiday goers last year. Other areas such as the Cotswolds are attracting much interest especially from the capital. With its short commuting distance it offers a piece of ‘quintessential’ England with its limestone villages set in a rural background. With the option of a secure gated community and family based facilities, families are opting to ‘get away from it all’ in the Cotswolds at the weekend.

The demand for holiday lets last year remained strong following the large rise in 2009 which has made the prospect of a second home for many an attractive one. When not in use the option of renting the property and providing gross yields of 6-7.5% have proved attractive especially in this current low interest rate period.

So before you don your wellies and start packing the tent perhaps take a look at some of the second home sites on offer.

Should you wish to discuss your circumstances in more detail with one of our advisers call Omnis Financial Solutions on 0117 9568267

*Source: Knight Frank New build second home report 2011

This week we welcome a guest blog from Janine Edwards of St. James Place Wealth Management.

In these austere times, tax give-aways are pretty hard to find. In an otherwise gloomy picture for Britain’s taxpayers, your annual Individual Savings Account allowance is one bright spot – an increasingly valuable tax break and investment opportunity that should not be overlooked.

With this in mind, it is surprising to learn that, according to research by Fidelity in October last year, two-thirds of eligible UK adults are not currently making use of their ISA allowance and with it the chance to save free of any further liability to personal income tax and completely free from capital gains tax.

Alongside pensions, ISAs are the most tax-efficient way to save and invest for the future and should be a fundamental building block towards long-term financial wellbeing. Of course, the favourable treatment of ISAs may not be maintained and is subject to changes in legislation, but recent government announcements have hinted at its recognition of the important part ISAs can play in solving Britain’s savings crisis.

The annual ISA limit for this tax year is £10,680 – a level which is nearly 50% higher than the £7,200 limit of just three years ago. It was confirmed in October 2010 that the allowance is set to increase each year in line with inflation (measured by the Consumer Prices Index). 

This means a couple will be able to put away £21,360 this tax year with no further tax to pay on dividends or interest income and no capital gains tax liability at all. Put another way, assuming a realistic annual inflation figure of 3.5%, a 35 year old saving the full allowance each year until their 65^th birthday could invest over £532,000.

The important thing to remember about the tax reliefs that come with ISAs is that if you do not use them, you lose them. If you miss the end of tax year deadline, that’s it until next year.

Unlike a pension, there is no tax relief on the money invested into an ISA, but the tax advantages achieved over time are similar. The main difference is that ISAs are far more accessible – you can make withdrawals at any time and these may be taken regularly to provide an income; whereas with a personal pension you have to wait until you are 55 before you can get your hands on your savings.

When confirming the increased allowance, the government also announced plans to introduce a Junior ISA for children under the age of 18 to replace the now defunct Child Trust Funds. Whilst many commentators were concerned about the withdrawal of government funding that this change represented, the proposed introduction of the new scheme in the autumn is particularly timely given that the axe is also falling on further education spending. As the cost of tuition fees for a university education looks set to rise to as much as £27,000 for a three-year course (source: The Telegraph, 12 October 2010), the Junior ISA will provide parents and grandparents with a means to help children avoid starting their adult working life with a debt the size of a small mortgage.

All of this highlights the importance of making the most of your current valuable tax break. ISAs offer a tax-efficient and convenient gateway to the equity markets and also a useful short or medium term account for cash. You can invest a maximum of £5,340 in a cash ISA – half your annual allowance – but in this environment of ultra-low interest rates it is perhaps no surprise to learn that the average cash ISA rate is at its lowest level since their introduction in April 1999.

As a consequence of this and a greater degree of confidence on the part of investors, sales of stocks & shares ISAs are at their highest since 2001 (source: Investment Management Association, January 2011). You can invest your full annual allowance in a stocks & shares ISA and many investors, prepared to accept more risk than the cash alternative, are recognising that this may be the way to take better advantage of this tax break. You can also transfer existing cash ISAs into a stocks & shares ISA, although it is important to remember that you cannot transfer them in the opposite direction.

We all like to think that we work hard for our money and pay our taxes, but you don’t owe the HM Revenue & Customs any more than you need to. With straightforward planning you can make sure you pay as little tax as you need; and making the most of your ISA allowance is a good place to start.

To receive a complimentary guide covering Wealth Management, Retirement Planning or Inheritance Tax Planning, produced by St. James’s Place Wealth Management, contact Janine Edwards, Senior Partner of the St. James’s Place Partnership on 01676 530606, by email  Janine.edwards@sjpp.co.uk or visit www.janineedwards.co.uk.

This month we welcome a guest blog by Andrew Easton from www.holidayhomeinformation.co.uk

Ask an estate agent why people buy a holiday home and the most common answer is 50% with their head, 50% with their heart.  And that has always been lure of a holiday home; a property which the owner can use themselves whilst generating an income and return on investment.

But researched and planned properly, a holiday let purchase can generate the same, and in many cases more income than AST rentals.  Here are the key areas to consider when acquiring a holiday home:

Planning and cashflow

Consider why you are buying a holiday home and how long you will keep it for.  Are you looking for an instant return or long term capital appreciation?  Give careful consideration to how the purchase will be funded and cashflow, as rental income will be seasonal with 40-50% of the yearly income being generated in July and August, while income in the winter months will be dramatically lower.

Having said that, the right property will rent for most of the year and it is not uncommon for 2 bedroomed properties in hotspots such as South West England or the Lake District to generate over £20,000 in gross income!

Research

Talk to estate agents, holiday letting agents, key holding and cleaning agents, local tourism associations and, if possible, other owners who let their property out to learn more about the potential number of bookings can be achieved.  User the Internet to see how other, similar properties in the area perform by looking at their availability charts and prices. 

Income projection and costs

From this, create an annual rental projection of income.  Remember, many bookings will come from repeat guests so a projection can reflect improving occupancy in year 2 onwards and an increase in the rental rates as demand increases.

Then costs can be factored in:

• Changeover and cleaning costs.
• Utility bills and council tax.
• Wear and tear replacement of items and repairs.
• Other maintenance such as gardening, decorating.
• Mortgage.
• Insurance.

There are more outgoings with a holiday let, which would otherwise be paid by the tenant in an AST, but the income potential is far higher to compensate.  Running costs vary from 30-50% depending on who cleans the property, whether you use a letting agent and changeable factors such as utility costs.

What to buy

There are a number of tick boxes holidaymakers look for when choosing a property which will not only improve occupancy, but also increase the rental price:

• A sea view or countryside view.
• An off-road parking space or spaces depending on how many guests the property sleeps.
• A garden or outside space is not appealing not only for barbecues and enjoying good weather, but also for pets, which is a significant part of the self-catering market.
• Luxury items, such as a hot tub or pool are desirable and add a premium to the price.
• En-suite facilities, especially if the property is shared by two couples.
• A ground floor bedroom is ideal for guests with limited mobility.

Where to buy

Choosing a popular and well-known tourist area will help bookings, but there are a number of other factors to consider which can have a big impact on the future value of a property when you come to sell:

• Is the area on the up? Look for tourist visitor number research for towns and regions where visitors are increasing.  Are there plans for major investment in the area or a new attraction?
• Celebrity and TV links – think Doc Martin in Port Isaac, Cornwall or Alnwick Castle in Northumberland which was used as a set for the Harry Potter films.
• Accessibility – being within easy reach of major conurbations by road, or close to an airport or train station will make the property accessible.
• What’s in the area – being able to walk to a beach, close to restaurants and supermarkets, and attractions or historic sites which make great days out.  Remember for most guests, choosing an area which appeals to them is the primary concern and choosing accommodation is secondary.

Preparation and personal usage

Furnishing a holiday let should be treated as a business and not as shopping for your main home.  Whatever your personal taste, furnish a holiday let with clean neutral colours and decor which is not likely to put off any potential guests.  Choose durable furnishings and branded appliances which will last for longer, while avoiding expensive items which will be costly to replace.  And one final tip – do not furnish the property with second hand furniture or your spare items.

Many owners are attracted to holiday home ownership so they can use the property themselves.  While this is one of the perks, it can be at the expense of a significant amount of income.  Many owners are flexible about their usage and will use un-booked weeks to visit and enjoy the property.

Andrew Easton is the Website Manager for Holiday Home Information, an independent guide to buying, running and letting a UK holiday home.  http://www.holidayhomeinformation.co.uk/

Every parent wants their children to fulfil their potential, whether this means they go on to be a Doctor a Dentist or perhaps the next Wayne Rooney, most parents will support their children’s dreams where possible. However, this usually costs money and no more so than when the children start school.

 So what are the costs associated with Schooling in the UK?

 -          Once extra curricular activities are taken into account it can cost almost £1200 per year to send a child to a state secondary school.

-          Average private school fees now stand at £4,186 per term. Assuming your child started private school at the age of 5 and taking inflation into account this would cost you £235,000 by the time they are 18.

-          School fees have gone up by 30% over the last 5 years.

-          Tuition fees for University in 2012/2013 have been raised by the government to a maximum of £9000.

The aim of Education Cover is to pay for the ongoing costs for the continued education of a child in the event of death or the diagnosis of a nominated critical illness of an insured parent. This means that your child does not have to miss out on any part of their school life, even if something were to happen to you.

You can choose from a range of options such as making sure your benefits stay in line with the rising costs of school fees, cover for Private School fees, University fees or further education fees can be insured and School Absence Benefit can be included. 

So make sure your child can still fulfil their potential, even if something does happen to you.

Should you wish to discuss your circumstances further with one of our advisers call Omnis Financial Solutions on 0117 9568267.

We know what you’re thinking, what on earth is the Test Achets case and more importantly what does it have to do with me? Let us explain:

Background:

Back in 2009 the Belgian Consumer Association, Test Achets, brought a case before the Belgian Constitutional Court regarding the opt-out in article 5(2) of the European Gender Directive. This directive prohibits discrimination on grounds of gender in relation to and the supply of goods and services. Article 5 of the directive directly prohibits gender being taken into account when calculating premiums or benefits in respect of insurance contracts. However, article 5(2) permits a derogation to the general principle of equal treatment between men and women in relation to insurance contracts which governments can opt into, which the UK took up.

In short, insurance companies in the UK are currently able to price insurance contracts such as life policies and motor insurance based on gender.

Test Achets argued that this provision was not compatible with the current principles of equality and non-discrimination guaranteed in European legislation. The Belgian Constitutional Court referred the case over to the European Court of Justice (ECJ). On the 30^th Sep 2010 the Advocate General found in favour of the challenge and subsequently the ECJ have now ruled that the directive is invalid. So the knock on effect of this will be that from Dec 2012 providers will no longer be able to determine premiums based on gender related factors.

So back to the original question, what does this mean to YOU? Well apart from perhaps less adverts from certain insurance providers aimed at women, certain policies such as level and decreasing term policies historically have been cheaper for females and this may soon no longer be the case. If you are looking to review your life policies now may well be a good time to do so before these changes are implemented.

To talk to one of our advisers here at Omnis Financial Solutions about your protection needs call now on 0117 9568267.

In the words of Benjamin Franklin “In this world nothing can be said to be certain, except death and taxes” and so it seems to be the case, as in April of this year we will see the implementation of one of a previous chancellors budget proposals made in 2010. Coming into force will be the new 5% stamp duty rate for properties valued at over £1 million.

So the new stamp duty rates for 2011 will be:

Up to £125,000                       0%

£125,001-£250,000                 1%*

£250,001-£500,000                 3%

£500,001-£1,000,000              4%

Over £1,000,000                     5%

*0% for first time buyers (until 24^th March 2012)

So what does this mean to you? Well not a great deal unless you are looking at properties valued at over £1m. However, for those fortunate enough to be doing so, a purchase of a property valued at £1.1m from April 2011 will be costing you an additional £11k in stamp duty which will need to be budgeted for.

Should you wish to discuss your circumstances in more detail with one of our advisers call Omnis Financial Solutions on 0117 9568267.

With Christmas gone as quickly as it arrived and the supermarkets already stocking Easter eggs it looks as though 2010 has already been long forgotten by many, who for a large proportion will not be overly sad to see it go. So what will 2011 hold for the UK property and mortgage market?

House prices finished off the year broadly flat with the average home in the UK now costing £162,763*. Some experts are predicting modest falls over 2011 although they do add that there will be widening regional disparities across the country. The effects of the public spending cuts are yet to be seen and this may still have an impact moving forward. Overall however, the feeling is that house prices will remain fairly stagnant over the forthcoming year.

Interest rates start 2011 as they did 2010 at a record low of 0.5%. So where do they go from here? Well as always no one can say for sure. The general view from most economists is that the first rate rise will come someway late in the second half of the year with many predicting the month of October to see the first of those rises. Others are suggesting we may see a token rate rise well before this. What ever happens to rates over the next year the Bank of England have already started to make noises warning UK households to be prepared for future fiscal tightening.

With opinion on interest rates apparently shifting, now may be a good time for those on standard variable rates to perhaps consider fixing some or all of your mortgage.  If you would like to discuss this or any other aspect of your finances, please give us a call and we would be happy to look at your options.

Have a happy and prosperous 2011.

*Source: Nationwide House Price Index