Month: March 2021

For many self-employed individuals, the process of applying for a mortgage can be extremely frustrating, with long waiting periods between approvals and the continued need to provide evidence showing that you can pay back monthly repayments.

However, with COVID-19, this process has continued to take a turn for the worse, with many banks refusing to offer mortgages to the self-employed.

CIA Landlords has produced a study looking at key figures around self-employed mortgages, highlighting the UK’s attitude towards them as well as offering tips from experts when applying for a self-employed mortgage.

27% of Self-employed Mortgage Loans Deemed Unaffordable in 2021

With COVID-19 hitting the housing market so strongly, it has only added to the pressure for banks to give out affordable mortgage loans.

Casey Bridge, mortgage advisor at Hall & Costello Wealth Management shares his experience:

“First of all, before COVID hit and there was no lockdown, it was very simple to obtain a mortgage as a self-employed person. Lenders would look at your last 2-years’ Tax calculations and Tax Year Overviews (TYO’s), and if the latest year was higher than the previous year they would either take an average of the last 2-years, or some lenders would go off the latest year which could produce a higher borrowing amount.

“If the latest year was lower than the previous, they would just use the lowest figure. If you are sole trader then it is net profits that lenders look at, but if you are a Director of a Limited Company, they look at salary and dividends.

“COVID-19 made it a lot harder for someone who is self-employed to obtain a mortgage.

“Lenders became extremely strict when self-employed people applied for a mortgage and decided to dig a bit deeper with these applicants to make sure that lending to them would not be risky.”

Research by Mortgage Broker Tools found that 71% of self-employed cases processed through its platform in January 2021 were affordable, with 27% deemed to be unaffordable based on the required loan amount.

It also found that the average maximum loan offered to self-employed mortgage applicants is £221,400 – a decrease of 3% from the last peak in August 2020. Whilst the minimum loan available to the self-employed recovered to £118,800, a 45% increase on its lowest point last April and a rise of 43% on November’s figures.

David Baird, mortgage and protections advisor at Aventur Wealth comments, “COVID-19 has had a huge impact on self-employed mortgages as we have seen increased discrepancy in the market.

“From one major lender (Santander) restricting all lending for S/E applicants to 60% (In January – now at 75%) to others carrying on as normal it has caused more confusion for the average buyer.”

“Personally I have not seen a decline in acceptance rates, instead it has caused an increase in time taken on my part in researching the right lender for the right applicant.”

80% of Self-employed Brits Have Been Rejected When Applying for a Mortgage

During a 2018 survey by TotallyMoney, self-employed workers expressed how they felt around the mortgage application process, why they were rejected and what they would suggest be improved.

Below are some key statistics from the survey:

• 80% of self-employed Brits have been rejected when applying for a mortgage

• 36.6% of applicants have faced at least one rejected

• 32.8% were rejected because their credit rating wasn’t good enough

When asked how individuals going through the mortgage process felt, they found that:

• 40% were stressed

• 28.4% were frustrated

• 26.4% felt hopeless

• 76.8% of respondents felt discriminated against when making a mortgage applicant for being self-employed

• 70% of respondents have felt reluctant to apply for a mortgage due to being self-employed

When asked how they can improve the mortgage application process:

• 46% believed that self-certification mortgages should be reintroduced

• 46.4% of self-employed respondents believe that removing the lenders requirements to have several years of certified accounts would significantly improve the application process

• 39.2% felt that a simpler process with less documents is required

Construction Work Ranks As The Sector With The Most Self-employed

The coronavirus pandemic has had a big impact on the self-employed industry, with many having to either stop work or look to change their profession in order to get work. As our study shows, the UK has a high number of self-employed workers in a variety of sectors, with construction being the highest.

The sectors where the self-employed are:

As of August 2020, there were more than 4.5 million self-employed people in the UK. This is broken up between 2.94 million males and 1.58 million females. Despite COVID-19 having a big impact on the self-employed, numbers have remained high, especially in the construction sector

The construction industry has the highest number of self-employed workers at 920,000. The professional, scientific and technical activities sector follows as the second highest industry with 643,000 self-employed workers and wholesale, retail and repair of motor vehicles ranks third with 396,000 workers.

The UK Ranks 20th As The Lowest Mortgage Interest Rate

One main talking point that would need addressing is the mortgage rates for the UK. For many, high interest rates cause the biggest setbacks when applying for a mortgage. The below table highlights the lowest to highest interest rates for mortgages for 20 countries around the world.

Our study found that Finland has the lowest mortgage interest rate at just 1.41%. Switzerland falls second at 1.45%, with Slovakia ranking third with 1.51%.

In comparison, the UK has more than double the interest rate at 3.15% – a potential problem for self-employed consumers when affording monthly repayments.

Experts Share Insights Into Self-employed Mortgages During COVID-19

Kaan Emin, Mortgage and protection advisor and director at Apply Mortgages shares his tips and knowledge for those who are self-employed and trying to get a mortgage.

What are the difficulties self-employed people face when applying for mortgages?

“Most self-employed people of which have taken help from the Government during the pandemic are being disadvantaged by lenders, ltd company directors on furlough are finding it difficult, they have to return off of furlough and evidence 3 months of business bank statements to evidence the same level of income they earned prior the pandemic.”

What difficulties have you seen for self-employed people when applying for a mortgage during covid? What has been the overall impact?

“Overall the industries of which have been asked to stop trading are the individuals who have been impacted most, the industries that have remained trading are ok, however, some lenders have reduced the amount of borrowing not just for self-employed people but for all.

“Some lenders are asking for 25% deposit, some are asking for 20%, 15% or even accepting 10% deposits. Previously you used to be able to borrow up to 5 times your income but during the pandemic, this is now rare as lenders are usually giving 4.49 times salary of 4.75 times.

“Extra information is being requested from applicants, previously business bank statements never used to be asked for, now they are requesting to evidence 3 months’ statements to evidence level of income.”

What are your top tips for self-employed people when applying for mortgages?

• Keep up with commitments/payments

• Try cash and evidence as much earned income

• Do not seek for grants/bounce-back loans etc if you do not need to

• Keep up to date with your tax owed

David Baird also shares his knowledge;

• Not all advisers are created equal! Speak to an independent, whole of market like myself as early as possible in the process. Make sure they understand S/E applicants and ask for details of others they have helped. This should help separate the experts from the amateurs.

• Ask your accountant and your mortgage adviser to work together, this in my experience, helps make the process efficient and ultimately saves you the time to get on with running your business.

• Start early, don’t wait to engage an adviser when you have found a property. By speaking to an adviser early on, I can work with your accountant to make sure we can get to work in presenting your application in the most positive way.

• Keep up with credit – make sure all credit commitments, credit cards, loans etc. are up to date. Although there are specialist lenders who can help if you have fallen behind, the terms are going to be far more favourable when your credit rating is tip-top.

• Cash is King – Simply put the more deposit you can put into the transaction the more favourable the terms. I appreciate this isn’t always feasible but by speaking to an adviser early on, I can illustrate the difference in what just 5% more deposit can make.

Do you see mortgage applications changing in the future for the self-employed? Should there be a different procedure to help those who are applying?

“Yes 100%, there has already been an increasing move from lenders pre-COVID-19 to take a more “common-sense” approach to S/E applicants and I can see this continuing going forward. An example of this is there were an increased number of lenders taking into account retained profit as well as directors remunerations to give a far more fair reflection of income for affordability.

“I think we will see more lenders specialise in the S/E market over the next few years who with a specialist underwriting team who can take a more accurate view of S/E income.

“The trend for more automation in terms of underwriting and assessment from lenders towards PAYE employed applications, means there should in theory be increased availability for human underwriters assessing S/E which can only be a positive.”

COVID-19 has had a big impact on both the housing market and mortgage application process, with many being turned away or asked to provide higher deposit sums. For the self-employed in particular, new rules and regulations are seemingly needed to help give the best chance when getting onto the property ladder.

Sources:

https://www.numbeo.com/cost-of-living/country_price_rankings?displayCurrency=USD&itemId=106&region=150

https://www.statista.com/statistics/793372/value-of-residential-mortgage-loans-united-kingdom/

https://w3.mortgagebrokertools.co.uk/

https://www.gosimpletax.com/insights/self-employment-statistics/

A new study by CIA Landlords reveals that Helsinki is the healthiest city to raise a family in.

When moving to another city to raise a family, there are a number of aspects you need to take into consideration. From finance and childcare to attractions and general health, choosing the right city plays a vital role in the upbringing of your family.

CIA Landlord Insurance has looked into the best cities to raise a family, analysing the cost of rent, childcare and cost of bills alongside the number of schools, attractions, quality of life and pollution.

Helsinki Ranks as the Healthiest City to Raise a Family

Living in a country that is a healthy lifestyle is crucial when comes to thinking about settling down and raising a family. From looking at the crime rate to quality of life, below we’ve analysed the healthiest cities to raise a family around the world.

From the study, Helsinki ranked first as the healthiest city to raise a family when combining metrics on happiness, quality of life, crime rate, pollution and the cost of childcare per month. Helsinki has a high happiness index rating of 7.8 out of 10, alongside a low crime rate index of 23 out of 100 and 15 out of 100 for the pollution index. Its cost of childcare also ranks as one of the cheapest in the study at £202.00 per month.

The city of Oslo ranked second in the study, showing results close to Helsinki in quality of life, crime rate and pollution. At £284 a month for the cost of childcare, the city still remains affordable when compared to Bern and Ottawa.

Below shows the top 20 healthiest cities to raise a family in:

Reykjavik Ranks First as the Best Global City to Raise a Family

For families who are looking for the best cities to locate to, Reykjavik in Iceland ranks first. Our study looked at the quality of life, crime rate index, number of outdoor activities, number of local schools, cost of monthly childcare and cost of monthly rent.

Reykjavik ranks highly for quality of life with a score of 178. This followed by a high number of outdoor activities, and a low crime rate makes it the perfect city to raise a family.

Lisbon follows Reykjavik in second place, boasting 480 outdoor activities, low crime rate levels and affordable monthly rental and bill costs at £1,200 for a three-bedroom apartment in the city centre.

If the choice of schools is an important consideration for you, Ottawa has 143 within the city, 17 more than the second highest Wellington.

Below shows the top 20 global cities to raise a family in:

Belfast is the Best UK City to Raise a Family

Our study also looked into the best UK cities for consumers to raise a family. Using the same metrics such as quality of life, crime rate index, number of outdoor activities, number of local schools, cost of monthly childcare and cost of monthly rent, we found that Belfast ranked first.

With more than 206 schools, Belfast is the best choice for families who prioritise education for their children. The city also has 59 outdoor activities, ranking 3rd in the top 10.

Swansea ranks second out of UK cities with its low cost of childcare playing a key role. Averaging £445 monthly, alongside £941 a month for renting a three-bedroom apartment with bills, the Welsh city is a very affordable option for raising a family.

If the levels of crime are the main concern for you as a family, Chester could be the city you choose. With a score of 21/100, Chester performs the best in the top 10 cities for low crime, with Carlisle and Edinburgh ranking second and third.

Below shows the top 20 global cities to raise a family in:

Methodology

In order to reveal which location was the best city to raise a family in, we gathered data on key areas that would be important for parents. The metrics included quality of life, crime rate, number of attractions, number of outdoor activities, number of local schools, pollution index, monthly rent of three-bedroom apartments, cost of monthly childcare and cost of monthly bills. The cities were ranked based on these metrics to determine which city was the best location for raising a family.

Sources

www.numbeo.com

www.tripadvisor.com

www.oceed.org

www.wikipedia.org

A study by CIA Landlord has revealed the best cities around the world to buy a house at a young age.

• Vancouver ranked as the best city to buy a property at a young age, followed by Wellington and Belfast.

• Helsinki was identified as the happiest place to live for young people.

• Japan took first place as the best city for job availability with over 10,000 jobs per capita.

The rise of remote working has prompted a great opportunity for young people to move across the world and work from home. For those who are willing to take the leap there are a range of factors to consider when finding the right location.

CIA Landlord Insurance has analysed 46 cities to determine where in the world is the best location to buy a property as a young adult. The study analyses a range of factors including the cost of buying a property, job availability, average salary and happiness ratings to determine the best city to buy a property at a young age.

Vancouver Ranks First as the Best City to Buy When You’re Young

The research found that the following 20 countries are considered the best cities to buy property as a young adult. This was based on a variety of factors from the basic cost of utilities to jobs per capita.

With a score of 7.01, Vancouver takes first place as the best city to buy a property at a young age. This score was a result of Vancouver having higher than average salaries, lower utility costs and lower prices of leisure activities such as gym memberships. Toronto also places in the top 10 rankings, suggesting Canada is one of the best countries to buy a property as a young adult.

Wellington takes second place, boasting cheaper than average utility costs while also placing 12th as the country with the highest salary. Wellington also claimed 7th place as the cheapest city to buy a monthly gym membership. Interesting Auckland also places well across the study making New Zealand a great location for young adults.

Belfast takes third place in the study, this result is mainly driven by how affordable the city is to live in. Lower than average rental rates along with cheaper costs to buy properties in Belfast makes it an attractive city for young buyers.

Osaka Ranks First as the City With the Greatest Job Availability

When finding a new home it is important to ensure there are a high volume of job opportunities within the city. The study analysed the number of jobs per capita across 46 cities across in the world to determine which region has the greatest job prospects.

Top 10 cities with the largest amount of job opportunities

Osaka ranks as the city with the highest job availability with over 10,000 jobs per capita. Followed by Thessaloniki with 8468.4 jobs per capita and Iceland with 3324.3. Greek and Italian cities both place twice within the top 10 rankings indicating significant job opportunities within the country.

Australia is another region with a higher than average number of jobs per capita with two cities placing in the top 20. Perth places 10th in the rankings with 228.8 jobs per capita while Sydney ranked 19th with 150.7 jobs per capita.

Belfast Claims First Place as the Most Affordable City For Young Adults

Affordability is another important factor to consider when moving, especially for young adults. The study took into account the cost of renting and buying an apartment in each city along with the cost of basic utilities and the average salary in each location.

Top 10 Most Affordable Cities For Young Adults

Belfast ranks as the most affordable location out of the 46 cities. Lower than average rental rates along with cheaper costs to buy properties make Belfast an attractive option for young buyers. Vancouver places 2nd with lower than average utility costs and higher than average salaries, followed by  Gothenburg placing 3rd.

Swedish cities feature twice in the top 10 rankings for affordability with Gothenburg placing 3rd and Stockholm placing 10th. Making Sweden a great choice for young couples looking to relocate to an affordable city.

Berlin Claims First Place as the Best City to Live a Balanced Lifestyle as a Young Adult

The study looks at a range of lifestyle factors including the cost of a beer, the price of a monthly gym membership and happiness ratings. It revealed the cost of a beer across the 46 cities ranged anywhere from £1.10 to £7.45, while the cost of a gym membership ranged from £18.50 to £109.20.

The top 10 cities for young adults to live a balanced lifestyle

The study revealed that Berlin was the best city to live a balanced life in. The region had a greater happiness rating and lower prices of beer and gym memberships in comparison to the other 46 cities. Interestingly Canada featured twice on the rankings with Toronto placing 4th and Vancouver placing 6th.

Shanghai ranked as the cheapest city to buy a beer costing only £1.10, Budapest followed with a cost of £1.20 and Beijing with £1.32. The most expensive locations included Bergen with a beer costing £7.55 and Reykjavik with a cost of £6.67.

Kraków ranked first as the cheapest city for a gym membership with a monthly subscription costing only £18.50. Athens ranked second with a cost of £22.40. The study found some of the most expensive cities for gym memberships were Monaco at £109.20 and Singapore costing £75.50.

Helsinki ranked as the happiest city with a score of 7.8. Wellington and Aarhus followed with scores of 7.6 and 7.5. Some of the most unhappy cities included Beijing Shanghai and Thessaloniki.

Methodology

In order to reveal which location was the best city to relocate to as a young adult, we gathered data on various aspects of living in each city. The metrics included the cost of buying and renting a property, cost of basic utilities, jobs per capita, average salary as well as the cost of a beer, the price of a monthly gym membership and the happiness rating across all 46 cities. The cities were ranked based on these metrics to determine which city was the best location for young adults.

Sources

https://worldhappiness.report/ed/2020/cities-and-happiness-a-global-ranking-and-analysis/

https://www.numbeo.com/cost-of-living/

https://www.linkedin.com/jobs/search/

https://worldpopulationreview.com/world-cities

https://www.finder.com/uk/world-cost-of-a-flat