It’s hard, isn’t it?
With interest rates elevated and widely expected to come down this summer (according to Martin Lewis’s crystal ball), maintaining contact with clients and giving them ‘a call, just to see how you are doing’ feels about as genuine as saying you want to come round and clean their bathrooms for them.
So, option one is to not bother contacting them at all.
However, for those of us with a modicum of sales chutzpah, we know that regular contact with our wonderful clients is essential; thus, option one is a bad choice.
This bit of news may prompt your clients to start their property investment search sooner rather than later
Option two, a much better alternative, is to call them to tell them something useful.
Not only will this help them out but it’ll mean that, when they next need a mortgage, it’s you that they’ll call.
And so, with this in mind, I thought it might be helpful to share some talking points with you. My clients did not know about these before I called, and thus they were genuinely happy that I had bothered to pick up the phone. You can thank me later.
Changes to Companies House
The changes announced by Companies House will apply to new and existing limited companies and will be phased in over the next few years. Now, I wouldn’t suggest you go through all the changes, but there are a few key headlines for your clients to know about. You can always signpost them to the Companies House website for further information.
For me, the main talking points are:
-Companies can no longer be registered to a PO Box address
-The expectation that any letters sent to the registered address will be picked up by a person who acts on behalf of the company. So, ‘Sorry I didn’t do the annual return. I moved out of this property six months ago, so not my fault, guv,’ won’t cut the mustard
-All fees are increasing from May. The cost of setting up a company will more than double, so it may be worth reaching out to clients who are considering this route. It’s also worth bearing in mind that basically every other fee is going up — joys!
-All existing company directors and those acting on behalf of a company will need to verify their identity. For new companies, all directors and people with significant control will need to do the same
-Soon, accounts will have to be filed by software only, thus removing the use of paper- and web-based filing options.
The Hashmi Condition
Keeping on theme for a moment, this one is relevant to any clients who are the sole director of their limited company. Ladies and gents, allow me to introduce you to a Hashmi Condition that affects around one third of SPV (special-purpose vehicle) limited companies.
If you’ve run through all these points, the wider economic market should give you enough to work from
Essentially, where a limited company has incorporated model articles (which a LOT of companies have), there is a minimum requirement of two directors to be appointed to make decisions (like taking a mortgage) for the company. If you have just one director, there needs to be an amendment to the company’s articles of resolution, which must be documented in the board resolution.
As this can take a bit of time, it’s something your limited company clients may want to address now so that, when they actually want a mortgage, it doesn’t cause unnecessary hold-ups.
A rise in asking prices
More broadly for buy-to-lets, Rightmove recently announced that asking prices had surged to a 10-month high, increasing by 1.5%. I’m well aware that many landlords (my clients included) are waiting to invest, holding out for the market to hit bottom.
My clients did not know about these points before I called, and thus they were genuinely happy that I had bothered to pick up the phone
Well, my friends, based on the Rightmove data, we could just be there. So, this bit of news may prompt your clients to start their property investment search sooner rather than later. Isn’t it a shame that low property prices and mortgage rates never coincide?
Wider market activity
If you’ve run through all these points, the wider economic market should give you enough to work from.
Regular contact with our wonderful clients is essential
In no particular order, take your pick from: the Budget (notably, the removal of multiple-dwellings relief, capital gains tax reducing, holiday-let taxation); the Bank of England base rate sticking at 5.25%; and Andrew Bailey’s follow-up comment saying rate cuts are getting closer, so how the latest inflation data will drive mortgage rates.
And, if you get really stuck, you could just chat about the weather….
Jeni Browne is business development director at Mortgage Finance Brokers
This article featured in the April 2024 edition of MS.
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