UK economic recovery plan is Build Build Build

UK PM vowed to “use this moment” to fix longstanding economic problems and promised a £5bn “new deal” to build homes and infrastructure.

In a wide-ranging speech in Dudley, in the West Midlands, Mr Johnson vowed to “build, build, build” to soften the “economic aftershock” of coronavirus.

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He said the government wanted to continue with its plans to “level up” – one of its main slogans of last December’s election – as “too many parts” of the country had been “left behind, neglected, unloved”.

Infrastructure projects in England would be “accelerated” and there would be investment in new academy schools, green buses and new broadband, the PM added.

Projects in the £5bn investment plan include:

  • £1.5bn for hospital maintenance and building, eradicating mental health dormitories and improving A&E capacity – the government said this is “new” money in addition to £1.1bn in its Spring Budget
  • £100m for 29 road projects including bridge repairs in Sandwell and improving the A15 in the Humber region – this money had already been announced
  • Over £1bn for new school buildings, as announced on Monday – this cash comes from the government’s existing infrastructure plan
  • £12bn to help build 180,000 new affordable homes for ownership and rent over the next eight years – brings together three pots of money already announced by previous Tory governments and Mr Johnson’s administration

Other projects announced in the government’s Spring Budget, which will now be accelerated, include:

  • £83m for maintenance of prisons and youth offender facilities, and £60m for temporary prison places.
  • £900m for “shovel ready” local projects in England this year and in 2021
  • £500,000 – £1m for each area in the towns fund to spend on improvements to parks, high street and transport

Source: BBC News

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Covid19: UK Payment Holiday Extended for 3 months

The UK government has told banks to give more time to millions of people struggling with debts owing to the coronavirus crisis.

Credit card, store card, catalogue credit and personal loan customers will be able to defer repayments for another three months.

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The help was first ordered by the City regulator, the Financial Conduct Authority (FCA), in April.

Anyone taking advantage of the freeze must still pay back the debt at the end of the deferral period.

This has prompted debt charities to warn of the potential for individuals’ financial problems to simply be stored up for a later date.

The FCA said that if borrowers could resume their repayments they should do so, to avoid getting into more serious difficulty in the future. Banks may also be stricter in who qualifies for the payment deferral, and might only agree to a reduction in minimum repayments.

The regulator stressed that using the payment deferral should not affect a borrower’s credit rating. However, it warned that loan providers did have other ways to check on whether payment holidays had been taken, such as asking for bank statements, when making decisions on whether to agree to credit applications.

Although these extensions are currently proposals, banks only have until Monday to comment and the FCA expects the rules to be implemented soon after.

Help for people with car finance, payday loans, rent-to-own deals, pawnbroking, and buy-now-pay-later agreements will be updated by the regulator at a later date.

Most Banks are currently offering interest free overdraft up to a certain amount with reduced interest rate.

Check for details on your banks website. Most application can be done online.

Source: BBC News

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Can blockchain technology double the speed of UK property sale?

The delay in completing a UK property sale several months and has been a big problem in the UK property industry. To solve this problem a blockchain-style platform has promises to double the speed of UK property sales, with the startup behind it announcing a new deal for its widespread use.

The deal with other software firms will give around half of UK estate agents access to new technology designed to tackle typical delays in property sales, according to ‘proptech’ firm Coadjute.

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The firms chief executive Dan Salmons said home sales typically take months because of a lack of joined-up thinking and data-sharing among many stakeholders involved.

Confusion over next steps in a sale is common. Salmons said estate agents need “large armies” of workers merely to check for and pass on updates among parties, while buyers and sellers often have to complete similar forms multiple times.

Some experts say the sector is “ripe for disruption,” and UK government officials are among those who believe blockchain and similar technology could help “revolutionise the buy-sell process.”

Salmons acknowledges his firm is far from the first to promise to speed up sales by better connecting buyers, sellers, estate agents, conveyancers, lenders, government officials and others involved in transactions.

But he said previous efforts hit a wall as they sought to persuade all parties to use a single IT system. This can prove difficult to tailor to everyone’s needs, and poses privacy concerns with all data centralised. “People love new stuff, but they’re not good at giving up old stuff,” he added.

Britain’s Land Registry began exploring such technology in 2018, with trials held involving officials and conveyancers around the world who wished to tackle similar challenges.

The work sparked the launch of Coadjute, initially as Instant Property Network, as a participant in the trials. Salmons joined the startup after first getting involved in the experiments as Royal Bank of Scotland’s director of innovation for home buying.

It has since been working on its software and building interest, but Salmons said the pandemic had proved a turning point. The rise of remote working among estate agents, solicitors and others has sparked a “sudden demand for digitisation” in recent months, he said.

Source: Yahoo Finance UK

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Can UK Green Mortgage help climate change?

The UK has set itself a target of net zero greenhouse gas emissions by 2050, but that will be a challenge for the housing market.

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As things stand, domestic housing accounts for nearly 20% of the UK’s carbon emissions. At the same time, there are few ‘green’ mortgage products and even fewer that have been set up to fund making homes more energy efficient.

This matters, because upgrading current buildings will be what helps cut emissions.

According to the UK Green Building Council, around 80% of the buildings that will exist in the UK in 2050 are already constructed.

Few of those are energy efficient. Based on the government’s energy performance certificates (EPC), most of the UK’s housing stock is in the middle, ‘D’, band.

Top of the list in making housing more energy efficient is cutting fuel use. Around 10% of the UK’s carbon footprint comes down to heating – mostly domestic heating.

In principle, green mortgages that help homeowners manage the cost of boosting energy efficiency should be widespread and keenly priced.

In May 2020, the Green Finance Institute published a report on financing energy efficient buildings.

This cited “growing evidence that favourable financing terms can be achieved on securities that have an environmental or social impact label or certification”. 

But only three lenders in the UK currently offer green mortgages – Barclays, Ecology Building Society and Nationwide.

Chris McHugh, our Director of the Centre for Sustainable Finance, describes the UK green mortgage market as “a cautious beginning”.

“The eligible customer base, property types and notional amounts are limited. The price incentives for borrowers appear to be small or non-existent.”

The UK green mortgage market

Indeed you can count the number of green mortgage lenders on the fingers of one hand.

Ecology Building Society and Nationwide both offer lending for green home improvements. Ecology is a very small firm specialising in green finance including sustainable builds. In 2019 it lent £43.5m across 308 sustainable properties and projects.

However, compared to many other mortgage lenders, it’s relatively expensive – with a current standard variable rate of 4.1%.

Nationwide Building Society is a much bigger player with around 12% of the UK market. It  offers preferential rates on green improvements for loans up to £25,000, but only for existing customers.

Barclays has around 8.6% of the UK mortgage market. It does offer green mortgages for “energy-efficient new-build” homes provided by “partner suppliers”. But it doesn’t have any plans to offer mortgages for green home improvements in the near-term.

Lloyds, which has the biggest overall share at nearly 16%, announced in January that it plans to launch green mortgages, but did not give further details.

Right now, lenders may be cautious about broadening their green mortgage offerings as demand is likely to have been hit by the Covid-19 pandemic

“There are far more pressing matters on consumers’ minds,” says John Somerville, our Head of Regulatory Relationships.

“With all green properties and loans, there’s likely to be an extra cost and more underwriting. The appetite to jump through those hoops will be strongly diminished for some time to come.”

Source: The London Institute of Banking and Finance

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UK property prices continues to drop as COVID19 impact deepens

A recent survey from Estate Agents across England showed that house prices across the UK fell at the fastest rate since the financial crisis in May with potential buyers saying they would wait at least six months before returning to the housing market.

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According to the report from the Nationwide Building Society, one of the UK’s largest mortgage lenders, the average price of a home dropped 1.7 per cent in May from the previous month to £218,902. This comes after April’s 0.9 per cent gain and is the biggest monthly fall since February 2009.

The figures came as the UK continues to lift its coronavirus lockdown, which has been in place since March. Last month, the government said construction sites could open if it were safe to do so, along with factories.

But the outlook for the housing market remains highly uncertain, said Robert Gardner, Nationwide’s chief economist. “Behavioural changes and social distancing are likely to impact the flow of housing transactions for some time,” he said.

Gardner said that would-be buyers are “now planning to wait six months on average before looking to enter the market.” The annual growth rate slowed to 1.8 per cent, down from 3.7 per cent in April and the slowest since December.

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UK Property sale hits record low

Residential property sales in the UK in April hit their lowest monthly level since comparable records began in 2005, new figures show.

Houses

There were 38,060 transactions in April, according to provisional numbers from HM Revenue and Customs (HMRC).

This was less than half the level seen in the same month last year.

Spring is usually a busy period for the property market, but the coronavirus lockdown halted activity.

The government lifted many of these restrictions on the sector in England in mid-May. The total number of UK property sales is slightly less than the previous low when the taps were turned off in the property market at the height of the financial crisis in January 2009.

Source: BBC News

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Two Rochdale roads in Greater Manchester painted with thank you message

Two roads in Rochdale have been painted with messages to thank key workers from medical staff to care workers, social workers, waste operatives and many more for the great work they are doing during this awful pandemic. The markings are now down at Whitehall Street at the approach to Rochdale Infirmary and outside Birch Hill Hospital.The thank you message outside Rochdale Infirmary

Source: Rochdale News

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UK Property market estimated to fall by 13%, Is it the right time to buy?

Economists and housing experts are forecasting UK-wide price falls of up to 13%, with “brutal” declines in some areas, as the property market struggles to rebuild during the coronavirus crisis.

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The range of forecasts from the major researchers is markedly wider than usual. At one end is the Centre for Economics and Business Research, which predicts that 2020 prices will be down by 13% “as a lack of transactions, high uncertainty and falling incomes take their toll”. But the estate agent Savills said the hit to the market could be more like 5%, and a third of valuation surveyors are predicting that price falls may be limited to 4% or less.

The post-lockdown market will be a buyer’s market, said Jonathan Hopper of Garrington Property Finders, as he forecast falls of 10% nationally and 15% in some areas.

“Areas with a more resilient jobs market should see values hold up better, but elsewhere the price correction could be more brutal,” he said.

Knight Frank, in a revised forecast issued this week, said it anticipated a fall of 7% in 2020, more than its earlier forecast of 3%. Its analysis suggested prices had already fallen 5% since March, with a further downtick to come.

Source: The Guardian 

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UK Government COVID-19 updates

See the source imageHere are some recent announcements from the government:

  • The number of confirmed deaths from Covid-19 rose above 30,000, putting the UK at the highest official death toll in Europe.
  • The 4,000-bed London NHS Nightingale hospital is to stop admitting new patients. It will be kept “in hibernation” in case there is a second wave of coronavirus patients.
  • The four other Nightingales – located in Manchester, Birmingham, Bristol and Harrogate – will also be wound down.
  • The UK’s test, track and trace plans will begin with the trial of the NHS contact tracing app on the Isle of Wight.
  • Cybercriminals, aided by hostile states, are seeking to exploit the coronavirus crisis, according to Dominic Raab, the foreign secretary and first secretary of state.
  • The UK is now “past the peak” of the coronavirus spread and the government will publish a plan for easing lockdown measures this week, prime minister Boris Johnson said.
  • The NHS has started restoring other services, such as cancer care and mental health support, and will also restart fertility services.
  • Business interruption loans for small firms have been extended from 80% to 100%.
  • A support package is available for the transport industry, designed to keep the flow of goods and services running smoothly in and out of the UK – and around the country.
  • A vaccine is needed before social distancing can end entirely, with Professor Chris Whitty, chief medical officer for England, suggesting some restrictions would be necessary for a “long period of time”.
  • Human trials of a potential vaccine for coronavirus created by an Oxford research team have begun.
  • Loans totalling £250m have been made available to unlisted, high-growth companies and £750m of grants and loans are available for SMEs in research and development.
  • The government is to pay 80% of most people’s salaries, up to £2,500 per month, in addition to a bailout package worth £350bn for businesses struggling due to the coronavirus. Self-employed people will be able to apply for a grant of up to £2,500 per month.