Currently, we have a chronic shortage of homes, and it seems as though this is getting worse because successive governments on both sides have failed to have a coherent and long-term planning and housing strategy.As a result, regardless of all the plans and schemes that are available to help people buy, we aren't getting the number of housing starts we require, BTL landlords have taken a large swathe of the stock, and we have a growing and ageing population. There are approximately 13 buyers for every property that comes to market, pushing prices up further, into bubble territory. The shortage of housing stock won't be solved overnight; however, last year, the Chancellor kick-started the housing market with the stamp duty holiday, which encouraged thousands more people to sell and buy. To alleviate the current housing shortage, we need to incentivise owners at the top of the chain to sell; however, the costs of moving when considering estate agents' fees, legal expenses, and stamp duty put many older people off downsizing. Why would they move to a smaller home if it's going to cost thousands in tax? However, if the people at the top of the pyramid aren't selling to downsize, this impacts the chain. So, rather than incentivising new or second step buyers, why not incentivise older people to move, which should free up more family homes and help alleviate the blockage? To do this, it would need to be relatively well-targeted. But if the over 60's or anyone of state pension age could sell and buy without incurring stamp duty, this may encourage more downsizing to free up family homes which are desperately needed. To stop this from being taken advantage of by landlords or speculators would be straightforward in that stamp duty need not be paid if you are replacing your residential property.However, it cannot be for purchasing an additional property. It must only be when the sale of your residential property and a subsequent purchase have taken place. Solicitors could easily administer this to determine what stamp duty level should be payable. It may also pay to amend capital gains tax on the sale of additional properties. Given that the tax treatment of landlords is harsher than it once was, many landlords would consider selling. However, many are reluctant to sell due to the CGT liability. If we have a CGT holiday on the sale of additional homes, you'd likely see more stock on the market, which are the type of houses that first-time buyers typically look for. The combined effect of this pincer movement to increase stock levels at both the top and bottom would be that upward pressure on rents diminishes, which is positive during a cost of living crisis, and family homes becoming available at the top and first-time buyer stock available at the bottom. All of this would re-energise the property market while simultaneously tempering rising house prices protecting all of us from the consequences of a price correction.<blockquote>We need decisive action to alleviate the chronic shortage of stock that is blighting the property market.</blockquote>

Lewis Shaw

A Short Term Fix For Housing Stock

We help people in Mansfield & Ashfield to buy the homes they want by searching 1000's of mortgages from 60+ lenders covering the entire mortgage market, including lenders and mortgage deals not available online or on the high street.

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There are only three ways to combat the cost of living crisis; earn more money, have fewer and lower outgoings, or combine both. For many people, earning more isn't an option because they're either already working the maximum hours they can, and many bosses aren't going to want to give out pay rises if we're about to hit a recession. So the second option of reducing costs is, for most people, their only option. But, of course, for many, this will be impossible if they're already shopping at the cheapest shops, have already cancelled their various subscriptions, if they had any in the first place, and have tightened their belt until they've run out of holes to move along to. I don't have an answer for those people, and for the thousands of people renting, I don't know what you should do for the best. For people that own their own homes, there may be a few things you can do, and whilst this does not constitute advice, it may give you pause for thought about your next move. First, though let's spell out what is going on. The UK is about to enter into a recession longer than the recession that followed the 2008 global financial crisis, and real household incomes are going to be squeezed on an unprecedented scale. With further energy price cap rises in October and now January, taking the average cost of gas and electricity to over £3500 per year, many people will be in danger of being unable to pay their bills. This will almost certainly push many further into debt and result in a wave of defaults and CCJs, especially as the social media movement dontpay.uk is advocating that on October 1st, a mass cancellation of direct debit mandates to energy suppliers takes place. They aim to force energy companies to reduce bills, reducing the effect of the cost of living crisis.&nbsp; The first thing to mention about cancelling energy bills and trying to give suppliers a bloody nose with mass action is this; it will affect your credit rating. But, of course, some people perhaps won't care, and if it's a choice of buying food or paying a gas bill, you buy the food because suppliers won't cut you off. For those who can make payments but want to take a stand, please be aware of the damage it will cause to your credit history and its implications. Both gas, electric and water companies report to credit reference agencies. As soon as you stop paying your bills, they'll report to all three credit reference agencies, Experian Equifax and Transunion you have missed a payment. This gets marked as a 'status 1', which means you've missed one payment. This will escalate each month with a status 2, 3, 4, 5 and 6. Each time you add a number, your credit history is further impacted, your credit score will reduce, and you'll become less creditworthy overall. After status 6, the real problems will happen because once you've hit status 6, the next step is for a supplier to mark the account as in default. Remember that regardless of arguing with a utility supplier, this will remain on your credit report for the next six years. It could mean you can't get a mortgage; if you have a mortgage, it may mean remortgaging at a significantly higher rate, and if you need to buy a car, spend on a credit card or get a personal loan, they're all going to be much more expensive. This will make you far poorer than paying the utility bills in the long run, not to mention you'll have to make up the payments to the suppliers or risk either a CCJ or a debt management plan which will have enormous implications for more than six years.&nbsp; So how can you reduce costs as a homeowner and free up disposable income to try and alleviate the rising prices we're all experiencing? If you own your home with a mortgage, you have two real options depending on your circumstances. Firstly, you may be able to remortgage and extend the term of your loan, which may reduce your monthly payments freeing up some disposable income. However, increasing the term of a mortgage means you'll pay more interest in the long term so there are downsides to doing this. Although if the choice is between sinking and swimming, chances are it's the least bad option. Secondly, if you have unsecured debt such as personal loans, car finance, hire purchase agreements or credit card balances, you may be able to consolidate some or all of those into a new mortgage. This is called a debt consolidation remortgage. The first thing to say about this is that it's not suitable for everyone, and I am not advocating you do this; I'm simply explaining what you may be able to do. There are three implications if you consolidate unsecured debt into a new mortgage. Firstly, you will likely end up paying more interest in total over the term of your mortgage. This is because you are extending the length of time to repay the debts, and because mortgage interest is compound, this often means you pay more back in total than you would be repaying the debt on its own. Secondly, by consolidating debt into a new mortgage, you are reducing your equity stake in your home; if house prices fall, you may find yourself in a situation where the outstanding mortgage is equal to the value of your home. Finally, debt consolidation is classed as higher-risk business. As such, the Financial Conduct Authority (FCA), which governs mortgage advisors and lenders, have precise rules about what can and can't be consolidated.&nbsp; So what are the benefits of consolidating debt? The chances are that you would increase disposable income and have fewer monthly outgoings to manage. At a time when it's disposable income that is being squeezed, the only way other than earning more is to cut outgoings. So after two years of house price growth, many people are sitting on much more equity than they may realise, which can be used to help cushion the blow from escalating prices we're all facing. Yes, it has downsides, and no, it won't be suitable for many people, but at a time of worry for many people, it could be a lifesaver for some. This is because if it's a choice of rearranging your finances or going into the red, ending up with defaults, the impact of which can be felt for over six years, it could be the lifeline that gets you through the next two years. As always, you should speak to a good-quality mortgage advisor to determine what's suitable and appropriate for your circumstances. Moreover, you should think carefully about securing other debts against your home because your home or property may be repossessed if you do not keep up payments on your mortgage.<blockquote>Many people are out of options, and without government intervention, which seems scant at the moment, people need to know what's what and how that can affect them.</blockquote>

Your only options of how to beat the cost of living crisis.

The move to financially isolate Russia is the biggest shot in the foot Western foreign policy has ever made. We need dialogue with Russia, China, India, and Saudi Arabia immediately and to row back on some of the policies and sanctions; however, it may already be too late, and here are some reasons why this could turn out to be a calamity that will be felt for the rest of our lives, and has effectively torpedoed any possible hope of net-zero. Firstly, it's obvious that China is not putting huge pressure on Russia for two main reasons, it's likely they may want to make a similar military move against Taiwan and have been flexing their muscles in the South China Sea for years. Secondly, Russia has a lot of oil and gas, which China needs. Secondly, by pushing Russia out of SWIFT, the global banking payments system, Russia will likely adopt the Chinese built version of this, CIPS. Finally, by pushing Russia away from VISA &amp; Mastercard, it's almost odds-on that Russia will adopt Union Pay to provide bank card services.&nbsp; Russia has already agreed to deals to supply oil and gas to China, and with central bank reserves frozen, Putin likely has to turn from dollars to using yuan. Now, who else is not friendly to the West that Putin could consolidate his position with? Iran &amp; India is the answer. If we then have a swing from those countries towards China, which, lets face it, has the power and economic strength to support them, it's the beginning of the end for the 'world police' as the dollar becomes replaced by yuan. Thanks to the flow of Russian oil and gas and its huge natural resources make Russia a useful ally of China. China has, lots of workers, growing energy consumption due to the rise of the middle classes across Asia generally and are the world's workshop. Once Russia has fully turned it's back on the west, it'll likely be able to integrate the remainder of the BRICS countries. This move away from the $ as the global currency towards yuan will have dramatic effects. After many conspiracy theories, I think this is the start of the new world order. If we continue down this path, net-zero is all but finished, not to mention that any financial sanctions carry risks and consequences. The growing demand for energy in China will dwarf any other nation's reduction in greenhouse gas production. With a consolidated superpower of the BRICs, economic power will swing from the USA, UK, EU to Asia more generally.&nbsp; This isn't to say anything about being an apologist for Putin; I'm not; it's just that we need to avoid climate breakdown and the planet burning to death, nuclear war and the planet burning to death and a global recession the likes of which could see the planet well...burning to death. We have seen oil prices shoot up along with gas futures, food prices will skyrocket, and the cost of living will get worse. The poor people of Ukraine that are dead can't be revived, and NATO cannot risk all-out global military conflict which no one wants but can happen inadvertently if people aren't careful. Is there a way back? Yes, a slim one. Stop sanctioning Russia. Bring them back into the international community, ask China and India to be a broker for a ceasefire, accept that Russia is going to occupy and keep the parts of Ukraine that they want and that NATO may need to rethink its strategy at the same time as putting together a financial rescue package for both Russias economy and Ukraine's infrastructure. Now I know this may seem like Putin is just getting away with it, and broadly speaking, he would be; however, the idea that this is a fight that can have a winner is a mistake. Situations like this give us losers and worse losers. No, it doesn't feel right, but when there's the genuine chance of dividing the world even further or worse still, the prospect of a nuclear holocaust surely, we should be looking for the least bad outcome, not on some kind of righteous crusade that'll ultimately be futile. What's the main takeaway from all of this? First, it's obvious - we need women to be in charge. For hundreds of years, men have been unable to not engage in pissing contests to massage their egos that drags people who have, and want no part, to play in conflicts to their deaths. Clearly, men are the issue. We need more female leaders of governments and of global businesses across the board. The sooner we have female-dominated politics and a global economy, the safer, healthier and more prosperous a world we will all live in.<blockquote>We are at a turning point in global geopolitics, the consequences of which will be felt by every person on the planet. We need to make the best decisions, not the morally correct ones.</blockquote>

The Mistake That Has Already Been Made

Estate agencies and their in-house brokers have been known for this for decades, it's nothing new but it is now becoming something rather serious and sinister. What is it? Conditional selling. Conditional selling is where an estate agent tries to blackmail you into using their in-house mortgage broker and solicitors insinuating that unless you take them up on those services your offer may not be put forward at all, or they'll use phrases such as, 'we want to be able to put your offer forward in the best light' with the implication being that if you've not spoken to their broker you may miss out on your dream home. So what are the rules surrounding this? This is from the property ombudsman code of conduct;&nbsp; 1. Offers. By law, you must tell sellers as soon as is reasonably possible about all offers that you receive at any time until contracts have been exchanged unless the offer is an amount or type which the seller has specifically instructed you, in writing, not to pass on. You must confirm each offer in writing to the seller, and to the buyer who made it, within 2 working days. 2. Financial Evaluation. At the time that an offer has been made and is being considered by the seller, you must take reasonable steps to find out from the buyer the source and availability of their funds for buying the property and pass this information to the seller. Such information will include whether the buyer needs to sell a property, requires a mortgage, claims to be a cash buyer (*) or any combination of these. Such relevant information that is available should be included in the memorandum of sale having regard to data protection laws. You must put all offers to your seller client even if the buyer has not been financially qualified at that stage. And finally the nail in the coffin section 18a Aggressive Behaviour.&nbsp; Here are some illustrative examples of aggressive behaviour or practices. It is not an exhaustive list. In each case, the test is whether the average consumer’s freedom of choice or conduct is (or would be likely to be) impaired and, as a result, they take (or would be likely to take) a different transactional decision. When you gain new clients and instructions, when you market property when you negotiate and make sales. Pressuring a potential buyer to use associated services, for example to take out a mortgage through the in-house mortgage advisor or to use a particular firm of solicitors or licensed conveyancers. So what exactly do these cowboys, most of them large corporate agents think they are doing.&nbsp; If they can't win business by being good, it seems they think they have carte blanche to operate like a mafia crime family. The regulator needs to do something about these practices and quick!&nbsp; &nbsp;<blockquote>These businesses many of them, large corporates are dying a slow and painful death. They've been caught behind the curve and are now trying every dirty trick in the playbook to claw income back at the expense of consumers right. It's high time they were stopped.</blockquote>

The Biggest Lie Told To Home Buyers In The UK

<h2>Platform, the intermediary only lender that is part of The Co-Op Bank, has launched the lowest ever 2-year fixed rate in UK history at 0.79%. My take on this insane product below:</h2><blockquote>This is yet another sign that lenders are going toe-to-toe in a bid to entice top quality, low-risk customers onto their books. By dangling these kinds of rates in front of borrowers they're sure to succeed, too.If you're in the market and have at least 40% equity or deposit you'll need to strike while the iron is blisteringly hot, because deals like this don't come around every day of the week. In fact, they've never come around ever. Who knows whether a lower rate will emerge, but be under no illusions that this kind of competition won't last for long.”</blockquote>&nbsp;

Platform launches lowest 2-year fixed rate EVER

And then there were two...Today was the launch of a new equity loan provider, Ahauz, following hot on the heels of Proportunity, which have been trading for a few years now. So what is an equity loan - in its simplest format, it's a private version of the government Help To Buy scheme but with two big differences. Firstly, it allows you to buy a more expensive home &amp; secondly, it's on any property, not just new builds.&nbsp; How it generally works is that you finance the purchase of your home with your 5% deposit, an equity loan that can be as much as 25%, and a regular mortgage from a high street lender for the rest. Because the equity loan is interest-only, the monthly payment you'll be making is much lower than on a normal personal loan on a repayment basis, even though the rate may be higher. As such, it means that you can, in principle, increase your budget by as much as £150,000. This means that you can jump a few steps on the property ladder from the get-go and not have the hassle of buying and selling multiple times with all the costs that come with it and getting the property you really want rather than settling for something second best. However, it's not without its downsides. When you pay back the loan, the home is re-valued, and you pay back the same percentage as agreed for the loan. This may mean a higher repayment if the value of the property has appreciated or a lower repayment if the property's value has fallen. As an example, let's say you bought a home for £200,000 with a 5% deposit of your own (£10,000), a 20% equity loan (£40,000) and a 75% LTV mortgage of £150,000. If that property in 5 years has risen to be worth £300,000, that means that when you come to clear the equity loan, you would pay back 20% of the current value - £60,000, not the £40,000 that you initially borrowed. So is it a good idea? Well, it has the potential to push house prices even further if people have the chance of stretching their budget which we really don't need right now. That said, if it allows more young people to get on the property ladder sooner rather than later it can only be a good thing. Of course it's not going to be suitable for everyone and not everyone will be eligible but any innovation such as this is a vote of confidence in the UK residential property market and given the 18 months we've all been through that's got to be a welcome sign.<blockquote>An equity loan enables customers to afford a home of greater value or reduce their overall monthly payments, but it is funded by private capital and is available on all houses and not just new builds.</blockquote>

The Rise Of The Equity Loan  - The Shape Of Things To Come?

Recently, there's been much talk about Boris Johnson wanting to increase National Insurance contributions to fund rising social care costs. Whichever way this is presented, it's a tax hike - something the Tory manifesto on which they were elected said would categorically not happen along with Boris' statement that he had a plan for social care - during his speech on the 24th July 2019, Boris Johnson said: “I am announcing now – on the steps of Downing Street – that we will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve.” It now appears that there was no plan, and Boris clearly seems to have forgotten his pledge during the 2019 General Election that 'We will not raise the rate of income tax, VAT or National Insurance.'&nbsp; Not to mention that raising National Insurance would disproportionately impact younger people and lower earners as the rate drops from 12% to 2% on income above £50,000. So is it fair that people with triple locks on pensions who are also beneficiaries of the golden age of capitalism and have experienced the largest house price inflation over the last 40-50 years don't have to cough up, along with higher earners? It seems wholly unfair and not thought through. People always say, 'well, it's easy to criticise, have you got a better idea' to which the answer is, yes! Bring Capital Gains Tax in line with income tax rates. Simples. The move to increasing CGT to the same rates as income tax has the potential to bring in an additional £14bn in tax receipts, according to a report by the Office of Tax Simplification (OTS), a Treasury-based body. This would be more than enough to pay for the social care needs that have to be met, as Labour had a fully costed social care plan which came to a little over £11bn, whilst leaving alone the income of the younger generation and lower-paid workers who already struggle with trying to get on in life as best they can. It would instead affect those who have assets that have made gains over time, typically by nothing other than holding an asset as it appreciates. How could that not be considered a better idea than just a crude tax hike on those that can least afford it? &nbsp;<blockquote>If Boris is really bothered about 'levelling up' whatever that means, then it's about time he stopped looking at taking from those whom he purports to care about.</blockquote>

The Fairer Way To Pay For Social Care

The Nationwide Building Society's lowest ever mortgage rate is due to go live tomorrow,&nbsp;as the mortgage wars heat up. And then some.The mortgage rate wars have taken on an almost Spartan&nbsp;intensity as lenders fight for the market share of low-risk, quality borrowers.To this end, the Nationwide&nbsp;has launched a historic two-year fixed rate of 0.87% @ 60% LTV with a £1499 fee.Mortgage lenders are elbowing and barging each other in an effort to sweep up the highest quality customers they can and they're using absurdly low rates to land their prey.The Nationwide are also reducing other selected products in a bid to acquire market share, while&nbsp;the market for remortgaging is equally white-hot.<blockquote>The mortgage rate wars have taken on an almost Spartan&nbsp;intensity as lenders fight for the market share of low-risk, quality borrowers.</blockquote>

Nationwide drops two-year fixed mortgage rate to all-time low

It's common knowledge among the mortgage industry that certain firms and networks agree to secret backroom deals with life insurance companies. What happens is they push the insurance companies to load (increase the cost) of the insurance premiums by a specific percentage so that more commission is generated off the back of life insurance sales when a customer is taking out a new mortgage. Loading insurance premiums directly benefit those firms and/or networks that make more profit out of customers pockets as the cost of the life insurance purchased by consumers at inflated prices pays out more in commission. Loading premiums is most common where firms tend to only have one insurance provider, but it happens in some of the country's largest mortgage and financial networks. The problem is that there is no real way of consumers knowing if they are paying loaded premiums or not, short of asking the broker they are dealing with, and even then, the broker may not know if, or to what level, they any premiums are inflated. As an example, yesterday I asked a broker who shall remain anonymous to produce life insurance quotes that I would replicate, as the firm he works for, a national and well-known estate agency and financial services business have loaded premiums and only use one insurance provider. We used the same data to generate quotes for an imaginary client. The loaded quote for life including critical illness came out at just over £93 per month whereas the cheapest quote I had available was £70 per month, however, this was a different provider. A like for like quote from my system was £80 per month for the exact same product that was being sold for £93 per month. We then did another quote for basic life insurance only and again their quote was £17 per month whereas my cheapest was £11.97 and a like for like product with the same provider without loaded premiums was £12.08, a difference of £1476 in additional premium costs over a 25 year period for the exact same product. For the life and CIC quote, a consumer would be paying an additional £23 per month over and above what they really may need to; if we assume this is to cover a 25-year mortgage they would have paid £6900 more in premiums over that term of the product, all because of loaded premiums and being a single tie provider. Is that fair? I should note that this business in question also charges fees of £499, however would they be financially better off as my customer - absolutely. I have been banging the drum about this unethical practice for some time now, knowing that it will reflect badly on us all when it gets uncovered. Even though there are some of us in this industry, including some networks, that do not take inflated premiums because we recognise that it is plainly and simply wrong.&nbsp; I've was asked recently why I haven't made more noise about this, and the simple reason is this. If I started pulling down firms or networks over how I know they operate, I would look either jealous or trying to deliberately damage their reputation to make myself seem better. So I was dammed if I did and dammed if I didn't. Today there has been an article written in the FT adviser where some firms have tried to justify the way they operate; however, I can assure you that it's a smokescreen. These large firms want more profit, and they're happy for their customers to pay the price. Now, that's not to say that profit is a dirty word as, of course, it's not, however according to the regulators' principles of treating customers fairly, I suspect that most businesses who engage in this may fall a little short. So again, I'm not saying that loaded premiums should be banned if there is a justifiable reason; however, consumers should at least know if they are paying them or not. When this becomes common knowledge, I suspect the reputational damage done to those brands and businesses will be quite bad. Nevertheless, I did try to warn about this long ago. Some firms try to contend that it is only a few pounds per month and that this doesn't make much of a difference so let me show you what a 30% loading looks like on a £45 unloaded premium vs a 30% loaded premium.&nbsp; • Unloaded commission is as follows - (£45 x 12) x 2.05 = total commission £1107 • Loaded - 30% commissions is as follows £45+30%= £58.50 (the loaded premium, now look at the difference in commission) (£58.50 x 12) x 2.05 = £1439.10 This means that over a 25-year term, a person could pay an additional £4050 in insurance costs over the unloaded premium so that a firm can gain additional commissions, which is the tip of the iceberg. Now, it would be easy for someone to take a pot shot at me and say, 'well, you charge a broker fee of £499 when you already get paid by the lender and the insurer' to which I would rightly say, firstly the lender pays me, not for giving you advice but for them gaining a customer. Secondly, I charge a fee for the work I do on behalf of a consumer, acting in their best interests to get the best mortgage and insurance package suitable for them. So whilst yes I do charge a £499 fee, which by the way is the average in the UK, If I arrange the policy above, would you as a consumer rather pay me £499 and not pay an additional £4050 more over the term of their life plan or would you rather I didn't charge you a fee &amp; you paid almost 10 times more than that in inflated insurance costs? I'd argue it's a pretty easy choice to make. According to an online article, there are approximately 20 million adults with life insurance. If we take the average premium of £30.40 and assume this includes a 30% loading, this means that each plan holder would be paying £7.12 per month more than they needed to. The extra £7.12 per month equates to £85.44 per year, which when you consider there are 20 million plans this works out to a cost of £1.708bn per year, paid in premium that does not need to be, which consumers are unaware of. Another issue follows from this: what if inflating premiums that price out some people means that they are left underinsured just because they picked a broker who has loaded premiums. It could be argued that by accident, had they clicked on the second phone number and dealt with a broker who doesn't engage in this practice, perhaps the cost would have been at a price point where they could afford full cover. Now imagine that something went wrong and the consumer was diagnosed with cancer, and it came to light that they could have had full cover if they had dealt with the latter rather than the former, and now they don't have enough cover to pay their mortgage off? Who is then held responsible for this? Again, I can't imagine consumers being pleased with it. There has never been a need to increase the amount paid in commission by insurers as it's always been one of the most lucrative aspects of mortgage and financial planning anyway. However, it should be noted that brokers often don't get a choice, if or to what extent, any premiums are loaded &amp; the vast majority, I suspect, would happily give this up as most brokers I know genuinely have consumers best interests at heart. The short-sighted aspect of all this is that the truth always comes out; I knew it would at some point. Perhaps I'll be vindicated in that I've always tried to oppose these inflated and unethical practices, not always easy when you're an employee and have no choice about the deals that are done. I'm sure many people will be surprised at some of the firms involved; however, now is the time to come clean with consumers and let them make an informed choice about who they deal with.&nbsp; So, in summary I'm not necessarily saying businesses shouldn't have loaded premiums. However, if there's nothing wrong in those businesses or networks eyes, then it wouldn't and shouldn't be difficult to have on an insurance quote something to the effect of "this premium is loaded by x% which means you will pay an additional x£ over the term of this plan which means that we will receive extra commission as a result". At least that way, consumers have a choice and are being treated in a clear, fair, not misleading and transparent manner. How could anyone disagree with that? &nbsp;<blockquote>It was never about providing better service to consumers, it was always about making more money from them. It is greed manifest.</blockquote>

Consumers are potentially paying more than £1.7bn a year in inflated life insurance premiums

In what could be the next major mis-selling scandal, UK consumers are collectively paying as much as £420m unnecessarily each year because life insurance premiums arranged by mortgage advisers are being inflated - or ‘loaded’ to use the technical term - without their clients' knowledge.In the mortgage industry, many larger broker firms and networks currently agree secret backroom deals with life insurance companies. They push the insurance companies to load (increase the cost of) the insurance premiums by a specific percentage so that more commission is generated on the back of life insurance sales when a customer takes out a new mortgage.&nbsp; Loading premiums, often by as much as 30%, is most common where firms tend to have only one insurance provider, but it happens in some of the country's largest mortgage and financial networks.&nbsp;There are an estimated <a target="_blank" rel="noopener noreferrer" href="https://yulife.com/blog/how-many-people-have-life-insurance-in-the-uk/">20 million adults with life insurance</a> in the UK, with the <a target="_blank" rel="noopener noreferrer" href="https://bobatoo.co.uk/blog/how-much-does-life-insurance-cost-the-average-cost-of-life-insurance-in-the-uk/">average premium thought to be £30.40</a>. Based on this average premium, policyholders whose premiums have been loaded are paying £7.02 per month more than they need to. The extra £7.02 per month equates to £84.24 per year.If we assume that half of the 20 million life insurance policies in place were arranged through mortgage advisers, and that half of these 10m policies have been loaded by 30%, that works out at an extra £420m per year in premium paid across 5m policies that does not need to be, which consumers are completely unaware of.Recently, an <a target="_blank" rel="noopener noreferrer" href="https://www.ftadviser.com/protection/2021/08/20/advisers-call-on-loaded-premiums-to-be-banned/">article was written in FTAdviser</a> where some firms have tried to justify the way they operate — but it's a smokescreen. The bottom line is that these large firms want more profit, and they're happy for their customers to pay the price, almost always without their knowledge. Does that constitute TCF (Treating Customers Fairly)? I'd argue not.The reality is that there has never been a need to increase the amount paid in commission by insurers as it's always been one of the most lucrative aspects of mortgage and financial planning anyway. Loading premiums on top is pure greed.Equally, it should be noted that many brokers often don't get a choice as to whether premiums are loaded or not as they are operating through networks, whose practices they are obliged to accept. The vast majority, I suspect, would happily sacrifice the extra commission from a loaded premium as they genuinely have their clients' best interests at heart.But if life insurance companies do persist in loading premiums due to pressure from networks and certain brokerages, everyone involved should at least be transparent about it and place on an insurance quote something to the effect of:"This premium has been loaded by X%, which means you will pay an additional £Y over the term of this plan, which means that we will receive extra commission as a result".At least that way consumers have a choice and are being treated in a fair and transparent manner.Myself and a broker from a large network ran quotes for a hypothetical identical client to see what the difference was in both cost and commissions paid out. For an identical client with an identical insurance plan, my quote was £42.45pcm, whereas theirs was £50.78pcm, a loading of almost 20% for the exact same policy.My commission in this hypothetical scenario would have been £1,049.36. Their commission would have been a significantly higher £1,675.74. The difference in premiums and commission paid says it all.<blockquote>"I have been banging the drum about the unethical practice of loading insurance premiums for some time now, knowing that at some point, when it gets exposed, it will reflect badly on all mortgage brokers and networks, many of whom actively avoid inflated premiums. It is simply wrong and greed at its worst."</blockquote>

Consumers overpaying as much as £420m a year in inflated life insurance premiums 

Everyone knows there's a huge deficit in housing supply. We're building too few homes. The result is upward pressure on prices, which is preventing many people from getting on the property ladder. But one lesser known effect, which is on few people's radars, is the social care time bomb that has been created by a lack of homes being built.Firstly, the average house price across the UK is currently £256,000 which means that you would need a minimum of £12,800 for a 5% deposit. Average annual pay is approximately £30,000 which means a person would need to borrow in excess of 8 times their average salary to buy a home. We all know that banks cap at around 4.5 times your salary so we can begin to see the problem. Due to the disparity between house prices and earnings this means a lot of first time buyers are waiting for inheritances to come from grandparents or getting it early from the bank of mum and dad. This means that they are buying their first homes at a much older age, and a significant proportion of people will likely never be able to get out of the private rented sector until maybe Grandparents and Mum &amp; Dad have passed away.&nbsp; Secondly, as a nation we are growing older and as such we require more care as we age. As the NHS and social care are already at breaking point most of that care has to be delivered to people in their homes. As people need to contribute to the cost of their care at home or pay for their care in a residential care home they tend to only have one asset that can help them with cost; their home.&nbsp; We have seen a fourfold increase in people using equity release to free up cash within their homes to help pay for things as they get older and this is having the effect that inheritances are going to diminish especially as care costs rise coupled with the issue that far fewer people make the level of pension contributions that are required to generate a pension income that will see them through. Thirdly, the inheritances that younger people are likely relying on are not going to be there, and if young people can't buy a home and are trapped in the private rented sector what are they going to use to pay for their own care when they reach an age that they'll need it along with still having to find the rent on a monthly basis?Realistically there's only a few ways of fixing this, we need to build homes, a lot of homes and make them genuinely affordable, we need to build council homes so that people can have secure tenancy with a view to owning those homes in the future or with rents low enough that people are able to save the required amount to buy a home. We need incentives so more people to get into apprenticeships within the construction industry and trades. &nbsp;We need to change the rules around inheritance tax, property tax &amp; income tax so we can distribute wealth a little more evenly. The big issue with this is no one tends to want to vote themselves poorer; however when you realise what a catastrophe we could be heading for, paying a few more pence in income tax would be preferable than the dystopian future which would actually be more reminiscent of the 19th century.We know that so many young people are paying the mortgages of landlords in rent yet are unable to get the mortgage they need to buy the home that's suitable, and unless we do something about this now we're in for a very nasty shock come 2050.<blockquote>Unless the Government finds a way to address the structural inequality in the property market, we are going to end up in a dystopian, Mad Max style society.</blockquote>

Solve the housing supply deficit or expect a social care disaster

For Immediate ReleaseA significant percentage of our clients believe, incorrectly, that the Stamp Duty holiday is dead and buried come 30th June. That's categorically not the case. On the 30th June, it's only the first phase of the SDLT (stamp duty land tax) holiday that ends. This gives a ‘nil rate band’ on property purchase prices of £500,000.Translate: as long as you have legally completed on your purchase by 30th June and it's not priced above £500k, then there is ZERO Stamp Duty to pay.&nbsp; From 1 July, the Stamp Duty holiday continues but at a lower nil rate band of £250,000 until 30th September. This means that, even if you are buying above £250k, you can still save a few thousand pounds in Stamp Duty. For example, if the purchase price of your ideal home is £325k, if you get your skates on and manage to complete on your purchase before the 30th September, the Stamp Duty payment will be £3750 rather than £6250, still a significant saving of £2500.Lewis Shaw, Founder, Shaw Financial Services, commented:<blockquote>“Many of our clients, and presumably a significant percentage of people around the country, believe that the Stamp Duty holiday is dead and buried as of the end of this month. That's not the case. In reality, the SDLT holiday continues for another three months and there are still significant savings to be had, albeit at a lower level. I think endless speculation around what will happen to the property market once the first phase of the Stamp Duty holiday is over has overshadowed the hard facts and caused a lot of confusion. In short, if you're thinking about buying a home, all's not lost. A couple of thousand pounds in savings can buy a lot of Ikea furniture for your new home, or take off some of the financial pressure.”</blockquote>

Stamp Duty Misunderstanding

Mansfield-based mortgage advice business, <a target="_blank" rel="noopener noreferrer" href="https://shawfinancialservices.co.uk/">Shaw Financial Services</a>, has been Awarded 'Best Independent Mortgage &amp; Protection Advisory Firm - East Midlands' at the 2021 UK Enterprise Awards.&nbsp;Last year the business was featured in The Times and Daily Telegraph newspapers as one of the top-rated mortgage brokers covering Mansfield &amp; Ashfield, and has now taken that one step further to be crowned the best mortgage advice business in the whole of the East Midlands.&nbsp;Shaw Financial Services owner and mortgage expert, Lewis Shaw (pictured below), commented:“I'm over the moon that we've been given this award, especially as there's a lot of great businesses in the East Midlands that do what we do. We only ever wanted to be known as the go-to mortgage broker in Mansfield &amp; Ashfield, but it seems we're doing a bit better than I thought.”<figure class="image"><img src="https://s3.eu-central-1.amazonaws.com/newspage.com-staging/company/338/images/5db985ef2025acebe21c39e9bf5be0432081eb8fe47fdcc1a1aee1b99ddcb082cbbb0a27e0181f78c09bf2bc9517e7bb9934b1a49b3ee4f784a07ddb04e8a9b4.png"></figure>

Local Mortgage Broker Bags Top Award in East Midlands

Mansfield, 1 April 2021 – An independent mortgage brokerage based in Mansfield, <a target="_blank" rel="noopener noreferrer" href="https://shawfinancialservices.co.uk">Shaw Financial Services</a>, have set up a scheme whereby for each new customer they do business with who goes on to leave a review about the service they received, they will make a donation of £25 to Portland College, a further education centre in Mansfield helping 16-25yr olds with learning and/or physical disabilities. The first donation was made today for £375 and it is hoped this will be the first of many monthly donations made to Portland college to help support the excellent work they do with the young people under their care and guidance.Lewis Shaw, founder of Shaw Financial Services, commented:<blockquote>"I'm so pleased to be able to give something back to such a fantastic organisation like Portland College. I've always felt that local businesses should give back to the community in any way possible as it's the local community that helps them grow. It's a virtuous circle that benefits everyone."</blockquote>