Clarification on income tax as I didn't do a great job explaining: Income Taxes aren't going up but the thresholds that entitle you to a tax free amount aren't going up with inflation over the next 6 years, they're frozen. So most people will see there pay rise over the next 6 years so you'll pay more tax if your income goes up but you won't pay more than you are now, on your current income. So it's not an increase but it's a so called stealth tax because they aren't increasing the thresholds in line with inflation like they normally would do.
@juliantheapostate8295
3 жыл бұрын
AKA 'Fiscal Drag'
@JustJakesMoney
3 жыл бұрын
@@juliantheapostate8295 Correct 10 points to Gryffindor. Where possible I'll always explain something in Laymans terms because only the minority of people will understand economic jargon and my channel is all about making issues that are "complicated" more accessible
@imtinyem
3 жыл бұрын
It's really nice to see UK specific content. Finding advice that isn't US focused can be difficult sometimes.
@JustJakesMoney
3 жыл бұрын
For sure but hopefully I can help change that a little! Thank you
@connormcleod9595
3 жыл бұрын
Deliberately keeping 🏠 prices up
@zakiikaz1753
3 жыл бұрын
Otherwise they lose out on all the property wealth they have.
@Gibson408
3 жыл бұрын
Not sure in reality any of the measures will help first time buyers at all. At least in the south east. Property prices are completely out of kilter with salaries and the 4.5x multiplier. There is simply too much demand and not enough supply. Unless we start building far more houses to increase supply I don’t see the situation changing. The planning system needs to change as unfortunately the reality for buying on your own, especially in the south east is pretty bleak. And I say this as a young professional on a decent salary.
@JustJakesMoney
3 жыл бұрын
Some of measures will actually do the opposite of help and continue to support the inflated market but some will make it easier, in the short term at least. In the southeast many areas actually have prices that are 8-15 times the the average salary! Source: www.comparethemarket.com/home-insurance/content/house-prices-vs-income-in-the-uk/ So yes if you're single it's very hard to make anything affordable. All the best!
@maccagrabme
3 жыл бұрын
Word of advice, dont believe a word this govt or Labour are promising because they have both promising the same thing regarding building more 'affordable' housing for nearly two decades and both have failed to deliver. Labour built less housing in 13 yrs than the Tories in any single year whilst opening the borders wide open without any thought as to the impact on existing workers or housing supply or the capacity of the NHS , public services and infrastructure. Tories have introduced help to buy and other schemes to protect their ponzi housing scheme and have no plans to bring down prices or build for hard working people. I'm not anti immigration but am anti MASS immigration if there are no plans to build housing or invest in public services and infrastructure. If you are on a decent salary do whatever it takes to escape the rat race by investing or consider a country where you get better value for money or where your skills and education is valued as you are being taken for a complete ride compared with previous generations.
@tariqphoto
3 жыл бұрын
my problem isn't raising enough deposit. Mine is the bank lending me enough money to buy a flat as a single person. So the 95% mortgage guarantee doesn't help me really.
@carenjacks
3 жыл бұрын
This! People seem to forget this. They assume people are buying together. For solo buyers, especially with the crazy prices in the South, it’s the multiples (4-4.5x salary) that hurt us. The deposit doesn’t mean much. Either you raise your income drastically, or they increase the multiplier or better still the prices get corrected somehow. The guarantee is only helpful where the incomes are high enough and if it’s that high, you’re unlikely to be using the scheme especially if there’s a drawback or strings attached.
@JustJakesMoney
3 жыл бұрын
In fact it's probably unhelpful, the 95% LTVs will push up house prices as they did when they were around 15 years ago making housing even more unaffordable and harder to get the required loan. Maybe time to explore Tinder and get a partner to secure a house 😅
@tariqphoto
3 жыл бұрын
@@JustJakesMoney haha I'd rather have my own place and not be dependent on someone else. I seem to have a problem with relationships falling apart 😂
@JustJakesMoney
3 жыл бұрын
@@tariqphoto oh no haha 🤦♂️ but in all seriousness is it an issue, as the average house price is 7 times median earnings, far more in the south east which does make it really difficult to get accepted for mortgages as you're asking. All the best for future, I'm sure it'll work out fine for you!
@seanmcshane1988
3 жыл бұрын
Yeah, I feel the same. The price as a multiplier of earnings is just totally crazy and makes it impossible to borrow what you need to get a home. Rather there were no additional support measures so the price could correct accordingly as the ones the government keep coming up with stick it to the First Time Buyer.
@LDBCFC
3 жыл бұрын
Good video! In my opinion if you can't afford atleast a 10% deposit you shouldn't be looking to buy a house just yet
@JustJakesMoney
3 жыл бұрын
Yep probably good advice and is what I'll be doing personally and thanks for the kind words!
@kmkm8691
3 жыл бұрын
Its not enough. Even though the Bank Englands base rate is almost 0%, banks increase their interest rates. They dont give rates below 2.7% and thats if you put 20% deposit, fixed for 2% years only. Covid made everything uncertain and banks dont trust that people will be able yo pay.
@JustJakesMoney
3 жыл бұрын
@@kmkm8691 The risk premium spread between the base rate and mortgage rates rises in times of uncertainty mainly for the reasons you've said, this should settle as we emerge from lockdowns. 2.7% on a 80% LTV is almost at all time lows, it's only been cheaper in the last 4 years before that we have to go back to pre world war II to see anything like that. Mortgages are still very cheap at all LTV levels.
@juliantheapostate8295
3 жыл бұрын
The sweet spot I found between a good interest rate and keeping back money to invest was a 15% deposit
@MultiSigil
3 жыл бұрын
Brilliant, i like the mix of facts, assessment and your opinion. Subbed and looking forward to more content! The young persons Martin Lewis dare I say???
@JustJakesMoney
3 жыл бұрын
Thank for kind words 🤣 Well I hope so and we need someone to keep in on his toes
@lozzyh215
3 жыл бұрын
Brilliant video. So good to see someone break down important information into easy to understand chunks!
@JustJakesMoney
3 жыл бұрын
Thanks, I'm glad it helped!
@sensitivesister
3 жыл бұрын
Excellent video, loved your summary about how this affects first time buyers 👍🏽
@JustJakesMoney
3 жыл бұрын
Thank you!
@habibjalil4506
3 жыл бұрын
Big up Jake👏🏽 nice seeing you on recommended page 😅
@JustJakesMoney
3 жыл бұрын
Glad to hear KZitem doing its thing ahah, hope you're all good mate
@surtfire3280
3 жыл бұрын
This is the problem though. If any of this was about first time buyers and wanting to move "Generation Rent" into "Generation Buy", then all these bonuses would be limited to first time buyers only. They aren't, so all that will happen is property portfolios will bulge, prices will be even more unaffordable, and when interest rates rise there will be more defaulting on mortgages for first time buyers.
@JustJakesMoney
3 жыл бұрын
The only measure policy that doesn't directly help first time buyers is the stamp duty cut. While the 5% mortgage isnt explicitly for first time buyers but a home mover would've built up equity in their existing home so would have more than a 5% deposit so basically is for new homeowners. The help to buy equity loan, lifetime ISA, help to buys ISA, existing stamp duty relief, key worker first homes scheme are all exclusively for first time buyers. However, completely agree with you that there are definitely some comparisons to the run up the housing bubble popping in 08/09. These measures are just making the housing market unaffordable in the long run. We also have possible interest rate rises as you said, coenciding with unemployment rising leading to a drop in house priced and simulateanous rise in mortgage costs both leading to more defaults. Which we know means bad news.
@celebrityauthor7942
3 жыл бұрын
Can't help but feel like the 'housing ladder' is a misleading term these days. It's easy to climb up a simple ladder. Getting in on the housing market in 2021 is more like trying to jump onto a rope-ladder swinging wildly from a helicopter ten feet in the air in the midst of a storm.
@JustJakesMoney
3 жыл бұрын
With multiple rungs missing perhaps... I like the analogy 🤣
@SquidgytheGreat
3 жыл бұрын
I'm a 25 year old adult that is in the middle of purchasing a 300k property with a 3% mortgage which is quite high but the best we could get. The only way I could achieve this was with my wife and I's combined incomes and my bonus which just pushed us over the threshold to borrow this amount. This is a 35 year mortgage and will be higher than the rent we are currently paying but we are thrilled to have been able to (just about) get a property!
@JustJakesMoney
3 жыл бұрын
Congrats on the purchase! And yeah if you're single its extremely difficult to get over the current affordability hurdles
@MarkWilliams-ev1mb
3 жыл бұрын
The size of the national debt really does not matter at all. With rates this low and no prospect of inflation. The government effectively borrowing from itself and can rollover any borrowings when they come due. Keeping it low is a purely a political choice. Interesting video by the way. Thanks! Stamp duty extension will save me a bomb...
@johnneville403
3 жыл бұрын
The British government does not "effectively borrow from itself". Debt to pay for increased public spending comes from higher taxes and more government issued bonds in the financial markets, which the government will have to pay back - with interest. Future generations will be paying back these huge debts, with pressure put on the level of public services.
@MarkWilliams-ev1mb
3 жыл бұрын
Something like 90%+ of the government bonds issued in the last year was bought by the Bank of England. The most patient creditor the government could hope for. That's why I am saying the government is "effectively borrowing from itself".
@juliantheapostate8295
3 жыл бұрын
@@MarkWilliams-ev1mb So why doesn't Venezuela's central bank just do that?
@MarkWilliams-ev1mb
3 жыл бұрын
@@juliantheapostate8295 The Bank of England has been buying huge amount of government bonds since the financial crisis and throughout coronavirus and we have not seen Venezuelan style hyperinflation despite us having far more debt
@leafyjujubar5227
3 жыл бұрын
This channel is amazing thank you so much
@JustJakesMoney
3 жыл бұрын
You're welcome, glad you find it useful! Plenty more to come
@JayNneka22
3 жыл бұрын
Thank you so much - your videos are so clear and straightforward. new sub!
@JustJakesMoney
3 жыл бұрын
You're welcome, thanks for support and welcome aboard!
@georgeschena
3 жыл бұрын
Great analysis. You have earned yourself a new subscriber
@JustJakesMoney
3 жыл бұрын
Thanks and welcome aboard!
@jordan5898
3 жыл бұрын
Great informative video and well put together! It’s not a living wage, it’s a minimum wage but of course it’s government’s aim to disguise it and it’s working
@JustJakesMoney
3 жыл бұрын
Yes of course that's just a dressed up name for a minimum wage. However, while obviously not great, the UK's minimum real wage relative to other countries has actually improved over the last two decades so at least we're moving in the right direction unlike the US for example who were 7th in 2001 but are now 15th. Source: stats.oecd.org/Index.aspx?DataSetCode=RMW
@jakeartis955
3 жыл бұрын
If they really want to make housing affordable they'd stop pumping the market. First prompt the building of more housing, make it easier for properties to be built. Disincentive landlords owning too many properties perhaps some form of tax could be leveraged onto large landlords. Then the more unpopular move would be to remove government intervention such as the equity loan to help freeze the market so first time buyers can actrually afford the house that they are buying. People in this country need to realise that a house is a home for many and not an investment. These moves may upset or cause volitility in the market but would likely bring house prices within reach and be more sustainable
@bd11777
3 жыл бұрын
Great summary!
@JustJakesMoney
3 жыл бұрын
Thank you Charlie really appreciate it!
@rathandevlish2787
3 жыл бұрын
Im so glad I found this channel thank you very much
@JustJakesMoney
3 жыл бұрын
You're welcome!
@michaewelina7983
3 жыл бұрын
They are helping us so much, what a shame that prices in shop and at energy bill went up 10% average over this year. hmm last one was similar as well.
@JustJakesMoney
3 жыл бұрын
Yeah it's definitely a worry the increase in prices in food and energy but the central banks believe this is mainly due supply chain distribution in the food market because the pandemic and poor weather across Asia causing shortages. And the energy price surges are part because China recovered quickly form the pandemic and the chaos in Texas last month with the great freeze/snow storms
@michaewelina7983
3 жыл бұрын
@@JustJakesMoney ok, so why it was similar last year and year before and year before , and so one ? Issue lays in layout of financial system and debt growth, not minor economy events like storms or disruption of supply. Food shortage is simply a lay at least for now, loads of crops were wasted and rotted on fields because there was over supply due to lack of demand from hospitality sector. We will see shortages but in future years because a lot of farmers will be out of business.
@JustJakesMoney
3 жыл бұрын
@@michaewelina7983 it wasn't like that in years gone past in the UK food price inflation had been tiny in the last decade with several years of deflationary prices: tradingeconomics.com/united-kingdom/food-inflation And the reason for this? You said oversupply causes downward pressure not oversupply. If farmers are going bankrupt then obviously this is an issue and is what a major contributing factor to the great depression and crippled the financial system, no one is disputing that debt is a problem of course it is.
@michaewelina7983
3 жыл бұрын
@@JustJakesMoney Tiny? In last 5 years food prices dabbled, or ingredients were changed to cheaper or weight of products went down or combination of all above. I remember prices per kg from 2011 exactly because I was counting every penny at the moment. Prices of essentials (not subsidized products) went up 4x since then. You will not learn it from articles, you would have to earn 6.50/h in 2011 and count every penny 10 times to make sure it will last to next payday. But no worry at some point reality will reach wider audience, frog is almost cooked.
@nicolekavanagh2114
3 жыл бұрын
Great explanation, can't wait to see more!
@JustJakesMoney
3 жыл бұрын
Thanks Nicole, really appreciate it!
@hennaartistry3290
3 жыл бұрын
Very useful video 🤗 I am trying to get on the property ladder but hubby on lockdown bank has hold on to our mortgage .
@wg2.
3 жыл бұрын
Could you do a video for first time buyer on furlough, what mortgage options are out there
@JustJakesMoney
3 жыл бұрын
The mortgage options for someone on furlough are no different than someone currently working except from your current earnings obviously, you'll also need to consider how safe your job is which the bank may ask about so it might be harder to get a mortgage.
@harjitkarir
3 жыл бұрын
however not all banks take furlough income
@strawberry102
3 жыл бұрын
well made video cheers!
@JustJakesMoney
3 жыл бұрын
Glad you liked it!
@jordanbrant7660
3 жыл бұрын
well said, first time buyers were already protected from stamp-duty up to £300k I believe (for myself a £300k house is not an option), whereas people buying a second home/investment would have started to pay stamp-duty on everything over £125k. I think we are going to see more people buying investment houses to rent out, which could see first time buyers missing out on affordable properties and being stuck in the rental market. so much for generation buy
@JustJakesMoney
3 жыл бұрын
Yep exactly, I think I said that FTB's get £300k relief anyway but forgot to mention how that's different to home movers. So yeah no doubt it helps home movers more than FTB's however, it's only temporary. Also if you're purchasing a property to let it out as an investment you have to pay a higher stamp duty rate and that hasn't changed so the policy is aimed at those buying/moving into an actual home.
@jordanbrant7660
3 жыл бұрын
@@JustJakesMoney ahh that clears things up makes slightly more sense to me know, thanks
@ryanmcmylor2395
3 жыл бұрын
The only only problem is with the 5% deposits are the way they do the affordability checks. With a good lot of people these days having things on lease it will become even more difficult to get a mortgage. The mortgage lenders will generally have a lower net income multiplier around 4.5 x if not lower. Couple this with a higher interest rate and the stress test applied to the mortgage payment it is unlikely it will help people not able to do so already get a UK average house. However it will help massively at the lower/ cheaper end of the spectrum. House prices will be booming until 2026 and then a massive crash. Should get in excess of 10% average price increase this year.
@JustJakesMoney
3 жыл бұрын
Yes this is the problem with most of the current initiatives, they don't address affordability issues. So while they might help some get over the deposit hurdle it does very little for people trying to get over the mortgage hurdle if their incomes aren't high enough.
@AhmedKMoustafa2
3 жыл бұрын
Brilliant content and very organized. Looks like the interest rates are going up again which will drive the property values up in the next year or so. I am just worried why mortgage rates are always above 1% (2:45) even with 60% LTV ? how can someone get a mortgage just above 1% ? (maybe higher LTV, e.g 75%) ..
@JustJakesMoney
3 жыл бұрын
If interest rates rise that means it's more expensive to borrow money so it's more expensive to finance a home purchase so it'll cause downward pressure on prices and not upward. The lower the loan to value mortgage the lower the interest rate. So if someone needs just a 20% loan they can get a very cheap rate because it's less risky for the bank. For example I have a family member on a variable tracker rate mortgage that is the Bank of England base rate (currently 0.1%) plus 0.5% so they're getting well below 1% because they own 90% of the property so only require a 10% LTV. I only showed 60% LTV and above because it's very unlikely a first time buyer will have more than that as a deposit. Thanks for comment!
@AhmedKMoustafa2
3 жыл бұрын
@@JustJakesMoney Many thanks Jake for the detailed response.. I really appreciate that and the example you showed as well.. All the best 😊😊
@thedewberry_6399
3 жыл бұрын
I see you've passed 1k subscribers, great to see a good channel doing well, keep up the great work Jake!
@JustJakesMoney
3 жыл бұрын
Thanks Liam! Really appreciate it 😊
@jovinMendes
3 жыл бұрын
Great video mate
@JustJakesMoney
3 жыл бұрын
Thanks Jovin, really appreciate it
@JakeHooley
3 жыл бұрын
Nice video Jake, I recognise those graphs from the FT 😉, great resource, what do think about the ‘green bond’ for climate change, I haven’t looked too much into it but it sounds exciting
@JustJakesMoney
3 жыл бұрын
Free for most students as well the FT! Yeah I haven't looked too much into it but it's nothing new really but it'll help meet net zero by 2050. Retail investors will be able to invest through NSI: www.nsandi.com/get-to-know-us/green-saving But we don't know what price, term structure, interest, yield or anything is yet but if you want to help invest in green projects then I guess it's good but as an investment I'm not sure how they'll differ from existing GILTs except from where your money goes obviously
@JakeHooley
3 жыл бұрын
@@JustJakesMoney thanks for the link 👍
@michaewelina7983
3 жыл бұрын
You know what problem is with GDP? If we exchange £10 5x (ie 0% loans), GBP will grow but, no goods or surplus services were produced, now check how much GBP came from gov borrowing money from central bank. That is why any indicator in relation to GDP is false at the base.
@JustJakesMoney
3 жыл бұрын
What I think you're referring to in your first point is the concept of velocity of money which is integral to growth. If someone just 'exchanges £10' then GDP does not grow but if that £10 was used to purchase something and then that £10 was then in turn used to purchase something else then of course it does if there is an exchange of goods or services. But you might be talking about the creation and destruction of money by banks in not sure. But GDP is simply a measure of output within the economy at any one point in time whether that's with newly printed money or not is irrelevant, it's not measuring that. Government spending is part of GDP, when they're trying prop up the economy to help recovery then obviously that share of GDP is increased, as you said this does not improve the productive capacity of the economy but that is different to the output of economy at anyone one point which is what GDP is measuring.
@michaewelina7983
3 жыл бұрын
@@JustJakesMoney I was referring to artificial pumped up GDP figures. Distinguish real economy from financial economy, unfortunate second one become major contributor for GDP. If indicator doesn't reflect reality then it shouldn't be used as a benchmark. If printing money is irrelevant then lets do Zimbabwe style and print and do government spending full speed a head, GDP will sky rocket and debt to GDP will drop significant. Easy, isn't it ? Debt is much more important than GDP, because it will trigger reset event. It happened several times in history and it will be the same this time.
@JustJakesMoney
3 жыл бұрын
@@michaewelina7983 the printing of money is irrelevant within the GDP figure, GDP does not distinguish between where output is coming from, clearly printing it's completely relevant for inflation. If money supply is swelling greater than money demand and productive capacity then yes big problem but inflation is struggling to get above 2% in western economies. Zimbabwe was a case of hyperinflation when inflation was completely out of control caused by excessive printing in an extremely weak and fragile economy with awful corrupt financial institutions.
@michaewelina7983
3 жыл бұрын
@@JustJakesMoney Ok so what about safety lvls of debt to GDP of 60%, when most of GDP comes form gov spending (funded by debt) and finical operations ( which don't produce any real goods or services) ? We got situation when debt issued = GDP (almost), and this indicator is used to control debt. Can you see conflict of interest here ? They struggle to get inflation over 2% you say? Did you try to find what is in CPI in UK? What basket of goods did they actually used (and weight for given item) and compare it to previous years? You can adjust CPI way that inflation based on it will never go over 2% even when in reality all essentials and energy go up 15% year to year over half of decade. But excuse to print in to infinity stay valid "because we did not hit our inflation target". Do you even know why inflation target is 2% ? I will give you a hint : Gold production increase yearly by 2% of above ground stock.
@JustJakesMoney
3 жыл бұрын
@@michaewelina7983 Michal, this is my last response to you. Most of GDP is not coming from government spending, it was about 35% even last year when most of the economy was shut off. I suggest you go and understand what inflation actually means, why it encourages real economic growth and what happens when it fails to happen, like in Japan, I'll be as nice as you were and offer you a hint, people were starving and killing themselves. This year the national debt is now 100% of GDP in the UK for the first time since the 60's, as I said in the video, this is a problem but not some sort of disaster story like people on social media wish to pedal because it fits into this bizarre anti establishment narrative. And let's the say the government decided to not have a deficit this year through the pandemic, oh wait that would mean 100,000s of deaths in the UK alone, NHS would cease operating + many businesses would've collapsed, people would be begging for food on the sidewalks. "Gov spending... which don't produce any real goods or services" incorrect statement. Also take a look at the effect of fiscal multipliers, why in times of crisis they're needed, why fiscal policy with a coordinated response is needed. I hope you learn something.
@Isnt-it-Lovely
3 жыл бұрын
This new scheme would have been so much better of the government had set the interest rate. Before covid on a 10% deposit the interest rate was 2.2 % Now it almost 4%.
@steff6682
3 жыл бұрын
We are waiting for 5% deposits to come back next month so we can buy our first home this year
@kmkm8691
3 жыл бұрын
It will have many strings attached inc interest rates being above 3%
@michaewelina7983
3 жыл бұрын
@@kmkm8691 look rather to 5%, you get 3.09% with deposit of 15%.
@hannahb6471
3 жыл бұрын
Just wanted to say your comment about the Help To Buy equity loan in Yr 6 onwards is incorrect. It doesn't add on 2% plus inflation to the interest % but increases the interest % BY inflation and 2%. My boyfriend is currently buying under this scheme and we worked out it's likely to be cheaper for him to buy a new build premium property under HTB for over 10 years not clearing the loan than taking a traditional mortgage on a cheaper existing property. The kicker is that some people may never be able to clear the government equity loan and that's the only downside. We already have a plan of how to save that 20% in 5 yrs when the first fixed rated runs out, get rid of the government equity loan then remortgage on a 75% product.
@JustJakesMoney
3 жыл бұрын
No it's doesn't add on 2% I'm sorry if thats what it sounded like but I didn't say that. So in year 6 it's 1.75% then it rises by CPI plus 2% so if CPI is 2.5% in year 7 the interest would be 1.83% in year 8 1.91% etc etc So that is cheaper than almost every mortgage you'd be able to get for the first few years at least, it's still rising faster than inflation so it gets more expensive every year in real terms. On money saving expert they have a good table to show you the spiralling costs and if you don't pay it off around the 10 year mark it's probably not financially worthwhile.
@hannahb6471
3 жыл бұрын
@@JustJakesMoney when I bought my property HTB was pretty dire given the interest rates on those mortgage products was disgusting. My broker showed me my £590 mortgage would have been £950 on a new build (assuming the same borrowing just to show an example). For that reason with my boyfriend I told him to stay away but it's actually the route we are taking. I'm in year 5 of my mortgage, have changed rates twice and own 1/3 of my property (which is pretty small and tired) but he is buying a new build house with a mortgage over 50% higher than mine but his monthly repayments are going to be lower so I've changed my tune. Yes, if you can't clear the 20% government element in 10 years you'll be in trouble but I'd argue you shouldn't be getting a mortgage if you can't save up 2% a year to get rid of the equity loan.....
@CrayCrazy
3 жыл бұрын
Let’s see, the younger generations are the hardest hit on pay and employment from this
@MDPaulo
3 жыл бұрын
Spot on again!
@JustJakesMoney
3 жыл бұрын
As always thank you Marco!
@laurencej9376
3 жыл бұрын
Can you post a video on your desktop setup ?
@JustJakesMoney
3 жыл бұрын
I already have! : kzitem.info/news/bejne/uIKCu4uBk4l5p3o
@tsubasa54321
3 жыл бұрын
Really useful content 👍 Thanks! Do You think these 5% deposit offers will vary between lenders or they will offer +/- exactly same conditions? 🤔 All of them gets supported by the govmt in this program anyway 🤔
@JustJakesMoney
3 жыл бұрын
Thank you, I'm glad it was useful! They will vary from lender to lender, the 'government backed' element just means that if people on those 5% deposit default on their mortgage the government covers costs, so it's like an insurance policy for the banks.
@guilhermemurari6914
3 жыл бұрын
Nice video! Is that true that we need to have been living in the UK for 3 years before buy a house? I have money for deposit, a full time job, but less than 1 year living here :(, thanks
@JustJakesMoney
3 жыл бұрын
Thanks for the kind words. Yes I wasn't aware of this before but for EU citizens it looks like 3 years and for non EU at least 2 years before you can get a mortgage: www.habito.com/home/learn/how-to-get-a-mortgage-as-a-foreign-national This will be due to allow for sufficient time to build up a credit history in the UK. All the best and good luck with your property in the future 👍
@XSR21X
3 жыл бұрын
Nice simple video. So now that we only need 5% deposit is that a good thing ? Will tax go up in future so more of my wage will go to HMRC? and then struggle to pay mortgage payment?
@JustJakesMoney
3 жыл бұрын
You have the option of a 5% for a mortgage yes, the government is making sure lenders offer this as an option. However the interest rate on these will be higher so your monthly mortgage payments will be more than if you made say a 10% deposit. Taxes aren't going up but the thresholds that entitle you to a tax free amount aren't going up with inflation. So most people will see there pay rise over the next 6 years so you'll pay more tax if your income goes up but you won't pay more than you are now, on your current income. So it's not an increase but it's a so called stealth tax. Hope that helps! Thanks, Jake.
@connormcleod9595
3 жыл бұрын
Hopefully global inflation leads to higher interest rates. Best thing for the housing market.
@Dr.Stacker
3 жыл бұрын
If you don't own a house and have cash ready to strike.....
@chrisgerrard2381
3 жыл бұрын
Advice dont get a 5% mortgage you think its agood idea now but when Interest rates go up you wont be able to afford the payments, do you research this happened before,
@JustJakesMoney
3 жыл бұрын
I'm not sure if when saying 'you' you're referring to me but yes this is what I said, you will be paying more and for longer but for some people it's the only option if they're desperate to move out. These 5% mortgages also pose a risk for whole financial system as they did in the run up to the financial crisis in 08/09, as people are more likely to step away and default on their loans with such small deposits if they dip into negative equity.
@sadietombs5304
3 жыл бұрын
Interest rates will not raise for a long time, they have been kept artificially low for 10+ years and BoE just said until at least 2024, if they are raised it will crash the economy as government debt / big business / zombie companies are over leveraged and wont be able to service their debt, govt also want to keep housing market propped up and cant do that if interest rates raised, I may be completely wrong but cant see interest rate increase unless there is a currency reset, personally I would buy now as inflation will benefit the mortgage debt.
@maultywadi9573
3 жыл бұрын
Am I the only one that doesn't understand why the thalodomide scandal got 40 million in support. Every person with a disability in the UK gets many benefits ranging from disability allowance, paid carers, mobility vehicle, blue badge, income support, housing benefits, free healthcare, etc. Why is the governement paying tax payers money for the fault of a big pharmaceutical company blunder and what do the people recieving this huge sum of money need it for if everything is already covered?
@JustJakesMoney
3 жыл бұрын
It's due to laughable UK regulation at the time, the US didn't allow its use for example. And partly due to the severity of their disfigurement, being limbless requires more support than the typical person claiming disability. But I saw there's only 470 people in the UK still alive, so on the face of it I do that £40 million does seam rather excessive on top of the existing benefits as you said. But then again I don't really know enough about it to comment on it nor do I envy what they've had to go through.
@zafer7368
3 жыл бұрын
No mention of how dangerous it can be if they fall into negative equity.
@JustJakesMoney
3 жыл бұрын
Why would I mention that in a budget summary video? These 5% mortgages pose a risk for whole financial system, yes. Just as they were partly to blame in the run up to the financial crisis in 08/09, as people are more likely to step away and default on their loans with such small deposits if they dip into negative equity but if I mentioned every small thing in every video I wouldn't have a life. These are just short, palatable videos ment to inform people and give them an overview of what's happening, by no means is it everything you need to know about everything.
@juliantheapostate8295
3 жыл бұрын
@@JustJakesMoney I think it probably is a good idea to run through the key risk factors on any video where you discuss financial matters - would only take a minute or two
@dinartesantos1456
3 жыл бұрын
Firts of all congrats for your KZitem channel u earn one moe subscribe ! So on you guys opinion for someone is desperate to move from renting and start on mortgage with lets say 10% deposit of the house value its better move now or doesn't matter, why? Thanks 😊
@JustJakesMoney
3 жыл бұрын
Thanks you! It's completely depends on you, if you have a deposit ready to go and you're desperate to stop renting then I'd don't see why you wouldn't start the buying process. It's unlikely with all the measures that we'll see house prices come down. But as always buying a house is more than just the money, it's about the sense of ownership and security, so it's up to you! + If you do have 10% well done, try to stay clear of the 5% mortgages it'll save you money
@dinartesantos1456
3 жыл бұрын
@@JustJakesMoney tanks for your help !
@aminmimon667
3 жыл бұрын
If you are getting paid furlough, can you lose it if you start doing other jobs. For example Deliveroo?
@JustJakesMoney
3 жыл бұрын
sasdaniels.co.uk/blog/can-employees-take-a-second-job-during-furlough-leave/ Deliveroo is classed as self employment at the moment so you would have to sign up for self assessment tax return.
@Eddiebayes177
3 жыл бұрын
Subscribed
@JustJakesMoney
3 жыл бұрын
Thanks! Welcome aboard
@georgewood00
3 жыл бұрын
Equity loan on the face of it seems a great deal if you have actually already saved for a deposit, as frees up that money for investment elsewhere. Say deposit is £20k which you have, you could find a low risk investment vehicle for 5 years earning say 3% per annum. Would make you about £3k. Even if that’s eaten away by inflation the actual present value of that equity decreases over the 5 years so when you come to pay that full £20k off you’ll be paying more like £18k in today’s money. Thoughts? Am I missing something here, might be a good video idea if not?
@JustJakesMoney
3 жыл бұрын
I'm definitely planning to do a video on the equity loan as there's a few things at play. But most of it comes down to preference. So say you have a 5% deposit but you take out the full equity loan of 20% you will be able to access cheaper interest rates as you effectively have a 25% deposit. Big win. And it's interest free for 5 years so pay it off at the end of that period and it's free money effectively as you can put your money to work elsewhere as you said. But it's only on new builds that offer it so, you're restricted in choice of house. And it's unlikely if you did that would you have that 20% lying around in cash because it's most likely a very big sum of money? Is there anything that 100% guarantees 3% every year for 5 years net of taxes as it's such a large investment there would be tax implications? Possibly But if you have all those things and the discipline to pay it off in year 5 then it's def worth it. But I think a lot of people are actually being caught out and letting the interest build up and it starts to get ugly quite quickly. Thanks the for the comment!
@sfsfsfsfds2342
3 жыл бұрын
@@JustJakesMoney even after year 5, you pay just interest usually below the bank rates - year 6 - 1.75%, year 7 - 1.82, year 8 - 1.92%, year 10 just 2.05 % - Its a very cheap debt worth to consider.
@JustJakesMoney
3 жыл бұрын
@@sfsfsfsfds2342 Yes this is true but you also have to consider that you aren't taking a loan for X amount of pounds, you're loaning (up to) 20% of your home so when you repay it, if the value of your home has gone up you'll pay more back more than you initially were loaned, so while the interest rate charged doesn't change with the value of your home, what you pay back does which is really important to to be aware of. www.gov.uk/government/publications/help-to-buy-equity-loan-buyers-guide
@sfsfsfsfds2342
3 жыл бұрын
@@JustJakesMoney Yes thats true, but its doesnt bother me, I borowed 20% of the house, when seling will give it simply back. Fair. Meanwhile I will benefit from higher LTV = lower interest rates for the whole mortgage liftime. But yes i agree in a perfect world its good to repay it back to have bigger peace of mind as you are tied to some HTB rules (renting, home extension issues etc.)
@JustJakesMoney
3 жыл бұрын
@@sfsfsfsfds2342 Yeah exactly it's all to do with preference, for some people it's really handy others not so, all the best Dom 👍 & congrats on the house purchase
@sahithitalluru8300
3 жыл бұрын
5 percent deposit works for buy to let too? Or only first time buyers?
@JustJakesMoney
3 жыл бұрын
Definitely not buy to let, usually the minimum down payment for buy to let is 25% but often banks require more than that
@ethanhunt3226
3 жыл бұрын
Can't he also just devalue the currency so the debt dominated is worthless?
@JustJakesMoney
3 жыл бұрын
In short no. 1) To devalue the currency they would have to sell the domestic currency on the foreign exchange market and buying other currencies to drop the value of the pound and it's unlikely we have the reserves to do that. 2) This wouldn't change the debt for the UK government only what it was worth abroad because the exchange rate doesn't change the debt level. 3) Causing the pound to become near worthless would mean huge outflows of money from the UK and the financial sector would collapse 4) Importers would be unable to afford anything from abroad because the pounds purchasing power has gone down so much and as the country is so reliant on imports business would collapse and the population would soon starve. 5) It's illegal for the government to manipulate it's currency and China has gotten in a lot of trouble for this
@ethanhunt3226
3 жыл бұрын
Thanks for the insight.
@michaewelina7983
3 жыл бұрын
@@JustJakesMoney But you know that every pound borrowed by gov from Bank of England devalues currency ? Times when we were borrowing money from foreign exchange are long gone. Main lender are central banks now. Japan style all over the world.
@JustJakesMoney
3 жыл бұрын
@@michaewelina7983 Obviously every unit of additional currency put into circulation devalues the currency because there is more of them but this question was not talking about this, he was talking about the fiscal deficit. You can't borrow money from the foreign exchange, you can borrow money through the foreign exchange market but the foreign exchange market is literally just a market in which you buy and sell currencies, Government buy and sell currencies all the time, international investors buy and sell government debt all the time. Most bond funds hold all lots of different government bonds, the bond market is double the size of the equity market (Obviously that includes corporate debt as well) but the purchase of bonds from international investors who use the foreign exchange market in the process is still huge.
@randyvalantino6850
3 жыл бұрын
Not great if house prices drop .could end up in debt
@JustJakesMoney
3 жыл бұрын
Yes existing home buyers who bought at the top would have negative equity is prices drop a lot, this was partly to blame for the severity of the 08 crisis. But if the house price growth stagnates for a few years it allows wages to rise and makes housing more affordable for those that do not have a home.
@buddhistsympathizer1136
3 жыл бұрын
Meanwhile, first-time buyers cannot afford to buy UNTIL the house prices fall
@pacman7959
3 жыл бұрын
Whilst it's a bitter pill to swallow. I don't think prices are coming down by that much. At most you are looking between 10% to 20% if you are really lucky. I've seen house that are drug dealer dens sell at silly prices. It's not fair but channels that keep building people's hope on 40% are just telling people what they want to hear.
@nathandade8212
3 жыл бұрын
Dude what do u know realy
@JustJakesMoney
3 жыл бұрын
Ah got to love someone who can't even spell projecting their own self loathing onto someone behind a keyboard to make themself feel better, hope you manage to sort yourself out, dude.
@nathandade8212
3 жыл бұрын
@@JustJakesMoney odear chill out, take a breath
@Dr.Stacker
3 жыл бұрын
If you haven't got atleast a 25% deposit then you shouldn't be trying to get on the ladder. Its no good whinging about why you haven't managed to save that amount. You need work out what the max mortgage you can AFFORD based on overestimated expenses and the lowest income. In my personal view and given that nothing is certain in life, basing your affordability on two incomes is just too damn scary! If people are going to be reckless and not account for the possibility of employment gaps, interest rises and whatever financial problems life may throw at you then banks will always be rubbing their hands for desperate FTBs to flog low deposit high interest mortgages to.... FTBs are their best yielding customers for a reason.
@juliantheapostate8295
3 жыл бұрын
I wouldn't be putting down the whole 25% though. You can get a great rate for 15% down. Keep back the rest so you have a cash reserve to get you through hard times - you also need investments so you're diversified
@Dr.Stacker
3 жыл бұрын
@@juliantheapostate8295 You missed the overall point on affordability. The goal is to pay off the debt as soon as possible in order to live freely and not drag it out needlessly with high risk/reward investments, there is time for that after. The smaller the loan the better your affordability. Affordability should be measured as your ability to pay in times of unemployment, high follow-on SVR interest rate, negative equity scenario and so on etc. For this reason I recommend basing loan payments on the lowest bread winner's salary. There is always the option of upgrading to something better when you are financially prepared to take on the next loan.
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