New regulations little help to mortgage prisoners
Posted by The Oracle Group on 28th June 2019 -
MORTGAGES
New regulations little help to mortgage prisoners
New regulations aimed at helping 'mortgage prisoners' – homeowners stuck on expensive mortgages from inactive or unregulated lenders – could be of little help. The Financial Conduct Authority has proposed introducing an exemption to full affordability tests. But banks have warned that even if waived, the majority of prisoners would not be able to move lenders because of their age, because they would fail anti-money laundering checks, or because they would be offered poor deals due to their poor financial health.
Buy-to-let landlords warned over 'zombie banks'
As mortgage lenders leave the market, buy-to-let landlords have been warned to ensure that they are not overly reliant on a single bank for financing their properties. As in the last six months lenders such as the AA, Amicus Finance, Magellan Homeloans and Secure Trust Bank have all left the market, Nick Morrey of mortgage broker John Charcol underlined the potential risks of "zombie banks", asserting: “Landlords would be well advised to diversify not only their property portfolio but their lending portfolio as well.”
Average mortgage value ticks up
The average value of property purchase loans increased last month. New data from the Mortgage Advice Bureau found that average purchase loans rose to £176,903 in May, climbing 1.6% from April. The typical mortgage applicant was 43 years old, remaining unchanged month-on-month and year-on-year.
FCA to review credit reference industry
The Financial Conduct Authority is to investigate whether vulnerable customers are disproportionately impacted by the credit reference industry. The regulator announced yesterday that it will review the market to determine how it can better work for consumers, after raising concerns about information used by lenders to determine whether consumers can secure mortgages, credit cards and loans.
RENTAL
Poor regulation letting down rental properties
Weak regulation of private renting has left tenants living in sub-standard homes, Citizens Advice has warned. It found that three-fifths of tenants surveyed identified disrepair in their home that their landlord was responsible for fixing during the last two years. One in six said the disrepair was a major threat to their health and safety. A poll of landlords found widespread gaps in knowledge of their legal responsibilities to tenants. The charity is calling on the government to establish a national housing body to ensure landlords let properties that meet legal standards, and suggests creating a home “MOT”, setting a “fit-and-proper-person” test for landlords and standardising rental contracts.
London firms helping landlords break letting laws
Property management companies are encouraging landlords to break strict short-term letting laws in London, an undercover BBC investigation has found. Landlords cannot legally rent out their homes in the capital for more than 90 nights a year under regulations. However, some firms – Hostmaker, Guestready and Cityrelay – were secretly recorded explaining methods to get around this. Housing lawyer David Smith said companies were "potentially aiding and abetting the commission of an offence" and should stop.
Savvy BTL landlords turn professional
The Times explores how buy-to-let landlords faced with punitive tax changes and rising costs are switching tactics and becoming price-conscious property investors. Landlords are moving their investment from London and the South East to the North, Midlands and areas of the South West, where property prices are cheaper and yields greater. "We're witnessing the rapid professionalisation of the buy-to-let sector," says Aneisha Beveridge of Hamptons International.
INDUSTRY
London first-timers seek out areas with rising prices
Falling house prices in London are failing to help first-time buyers, analysis by home finance provider Gatehouse Bank has revealed. It said that while average London property values have fallen 1.92% since March 2018, areas popular with first-time buyers have seen rises. In Barking and Dagenham the average price paid by first-time buyers rose 2.91%, Hackney shot up 5.4%, Hillingdon had a 0.6 % uplift, and Hounslow rose 2.45%.
CONSTRUCTION
Construction drops in north despite Powerhouse project
Five years since the Northern Powerhouse was conceived, the value of commercial, residential and infrastructure construction contracts awarded in the region has fallen 24% to just £13.2bn between 2017 and 2018.
HOUSING
Military housing still 'not good enough'
Too many military personnel live in poor quality housing - despite the Ministry of Defence spending £135m on refurbishing around 3,800 homes, a watchdog has said. A Public Accounts Committee report warned that housing satisfaction increased just minimally from 62% to 64% in the past year, and urged the MoD to "urgently" reduce the number of empty properties it holds. The department said it was investing more than £80m a year to improve the quality of its homes, building more than 1,500 new properties, and it "modernising" the way it provided housing.
FIRMS
UBS downgrades Rightmove
UBS has downgraded its recommendation on Rightmove shares to ‘sell’ from ‘neutral’ but raised its target price to 505p from 500p. UBS said a slowdown in the UK housing market could put pressure on Rightmove’s revenue from advertisers, which its analysis found was down by 2% year on year in March. It also suggested the property portal might struggle to accelerate average revenue per agent growth.
Unite admits takeover talks with Liberty
Student accommodation landlord Unite Group has revealed it is at "an advanced stage" of negotiations to buy rival Liberty Living for about £1.4bn from the Canada Pension Plan Investment Board. The deal would boost Unite's bed count from 50,000 to 75,000, securing its position as one of Britain's largest providers of student digs – although the combined group would still have less than 15% market share in every town.
Barratt Development purchases leading timber firm
Barratt Developments has acquired leading British timber manufacturer Oregon Timber Frame. The housing giant , which is increasing its use of the material for residential developments in England, says the move will help boost the number of properties it is able to build using offsite construction techniques.
RETAIL
Johnson outlines plan to save high street
Conservative leadership hopeful Boris Johnson has outlined proposals to boost communities, beginning with an end to business rates on free-to-use cash machines. He has also proposed streamlining the process of changing the use of a retail outlet, which can currently take six months to get through the planning process. Finally, Mr Johnson would bring forward and increase a £675m fund established last year to help town centres make long-term investments in infrastructure and regeneration.
Third of vacant shops lost forever
New data suggests that a third of the shops that currently lie vacant may never reopen as retail outlets, as trading conditions make it increasingly difficult to find new tenants. Around 11% of retail spaces in the UK are presently empty, a third of which has been for more than two years. Dan Simms at Colliers International said: "Space that has been empty for that period of time will never, in all likelihood, have a retail use again."
Sagi ponders Camden Market sale
The Israeli software and property tycoon Teddy Sagi is considering selling Camden Market, the north London tourist destination, for £1.3bn. Investment bank Rothschild has been instructed to carry out a review that could result in a sale starting this autumn. The review will also consider whether to bring in an investment partner to Hayley Wharf, a £500m development that forms part of the estate, as an alternative to a full disposal.
TAX
Johnson could slash stamp duty in emergency no-deal Brexit budget
Boris Johnson could bring forward the next budget and implement a series of tax and regulatory cuts to ensure Britain is “going gangbusters” by October 31st. The emergency no-deal Brexit budget could include policies mooted by his former leadership rivals such as overhauling stamp duty. The levy on homes under £500,000 could be scrapped while the increase from 7% to 12% on homes worth more than £1.5m made by George Osborne could be reversed.
HMRC error affects 350,000 tax returns
Some 350,000 taxpayers have received incorrect tax returns with an error in their capital gains allowance. According to HMRC, the short tax returns showed capital gains tax exemptions of £400 less than they should have been, based on the 2017-18 CGT figure rather than the 2018-19 allowance. Around 600 individuals with capital gains may have been affected by the mistake.
INFRASTRUCTURE
Smart city experiment privacy concerns
Residents in a trial to turn Peterborough into a smart city are being "treated like lab rats", privacy campaigners claim. Broadband start-up CityFibre has installed sensors in the city that are able to transmit real-time data to social housing landlord Cross Keys Homes. But Big Brother Watch said it turned "the housing estates into surveillance zones". CityFibre responded: “This technology monitors environmental not personal data.” Cross Keys added: "The sensors installed with [residents’] full consent and they have an absolute right to refuse.”
ECONOMY
Billions added to economy in statistics review
The Office for National Statistics has revealed Britain’s economy is about £26bn bigger than previously thought, as it published a major revision of its growth data for the past 20 years. The ONS said that average GDP growth between 1997 and 2016 was about 0.1 percentage points higher than the previous estimate of 2.1%. It means that over the period, the country’s economy was 1.3% larger than previously thought.The Times, Page: 4
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