Business

How does working from home affect your mortgage?

by CLAIRE FLYNN, money.co.uk

The Office for National Statistics has revealed that homeworking in the UK more than doubled between 2019 and 2022, from 4.7 million to 9.9 million. While working from home has its benefits, the effects it could have on your mortgage aren’t often talked about.

The first thing you need to do is notify your mortgage lender. If not, you risk breaching the terms of your contract, with some lenders prohibiting business use as part of the terms and conditions. In the worst-case scenario this could result in you having to repay the whole mortgage immediately. However, in most cases homeowners are simply doing their regular job from home. If that’s the case, and you’re just at a computer, then it’s unlikely this will cause a problem and your lender will probably allow you to continue with your residential mortgage.

You’re much more likely to need to make a change if a significant portion of your property is being used for business purposes. This could be the case if you sell products and have stock on the premises, or run a photography studio from your residence, among other things. Generally speaking, if more than 40% of the property is used for work purpose most mortgage lenders will look to implement a commercial mortgage rate.

Commercial mortgage rates are more expensive than residential ones as the lender is deemed to be taking on a greater risk, with the possibility of the business owner going bankrupt, for example. Another option that’s applicable to some is the semi-commercial mortgage rate. These are used for properties that include commercial and residential characteristics. Examples include shops with a property on top or pubs that have a living space attached. In order to get a semi-commercial mortgage rate, you’ll need to contact a commercial mortgage lender rather than a residential provider.

For more information see money.co.uk/mortgages/a-

complete-guide-to-buying-a-home

The Bromley Business Network was set up in 2019 with four founding members. This month we chat with Chas Jordan from Fair Contract Associates...

Q1: What first attracted you into becoming a founding member of BBN?

The then current network meeting was closing and the football club asked if I would run a meeting for them. We already had a core of people who attended the meetings and it seemed the right thing to do to keep the group together. However, running a group is not just turning up on the day and going home afterwards, so David Spragg offered to help keep the meeting going and once we had Susan Wright and Helen Paul on board, I was sure we had the makings of a successful group.

Q2: What’s your role – and some of your regular duties?

My role is primarily to host the meeting, or as someone put it recently, I “run the front end” of the meetings. I am the person attendees see and hear, but believe me there is a fabulously supportive group behind the scenes. I also oversee contacts with suppliers, etc and a fair part of my alternate Tuesdays are taken preparing the meeting and finalising the running order for the next day’s meeting.

Q3: Did you envisage BBN becoming as successful as it is today?

We decided at the beginning that the meetings would be focussed on what the attendees wanted, no silly rules or regulations, no lock outs, everyone is welcome, be that in the room or via a Zoom link on the day. Not demanding any joining fees or annual membership fees either, it seems people prefer the freedom to choose. The group is very supportive of each other and look out for each other’s needs. Personally, I couldn’t ask for anything more. When I look around the meeting room and see people actively engaging with smiles on their faces, meeting after meeting, I know we have found the formula for success.

Q4: What makes a great networking event?

Bringing together genuine like-minded people who want to work and do business with genuine people, and believe me, if you are not genuine in what you say and do at a networking event, you will soon be found out and your credibility goes out of the window. Knowing you can trust the people in the group is a big plus but knowing those people also have your back in turbulent times, is priceless.

Q5: When you’re not busy working or helping organise BBN, what do you get up to in your spare time?

Family and friends are a very important part of my life and take up most of my spare time, My wife and I are often away exploring UK towns and villages. Having met me, you will realise the gym holds no fascination for me whatsoever. However, a walk along a beach on a spring or autumn day, or a stroll by a river in some distant town or village with the odd pint or two thrown in works for me.