UK Budget 2020: Low interest rate & spending on housing may boost property market

The Government unveiled its first Budget since the General Election, amid increasing coronavirus pressures.

The Budget came hours after the Bank of England’s announcement of an emergency cut in the base interest rate to shore up the economy following the outbreak.

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The cut, from 0.75 per cent to 0.25 per cent, takes borrowing costs back down to the lowest level in history, and may help the housing market.

Just 27 days after taking over the Treasury, the new Chancellor, Rishi Sunak, announced a dramatic increase in infrastructure spending, including new housing.

Stamp Duty

A Stamp Duty surcharge of 2% will be introduced for overseas non-residents who buy residential property in England and Northern Ireland. This will start from April 1 2021.

The Government said the measure “will help to control house price inflation and to support UK residents to get on to and move up the housing ladder”.

There were no other changes to Stamp Duty charges; a disappointment to many potential buyers.

Interest Rate

The reduction in the bank rate will benefit homeowners on variable rate mortgages; however, these represent a minority with over 90% of new mortgages now fixed rate.

For those on variable rates, it normally takes up to two months for the change in bank rate to filter down, but the Government will put pressure on financial institutions to implement it faster.

It’s important to remember that it is up to the banks’ discretion as to how much of the cut they pass on to consumers, which could stymie potential benefits.

Spending on housing

The Affordable Homes Programme, intended to ‘help more people into homeownership and help those most at risk of homelessness’, will be extended with a new multi-year settlement of £12 billion.

This marks a £3bn increase on the current five-year Affordable Homes Programme, which is worth £9 billion and is due to end in 2021.

The Chancellor also announced £1.1 billion worth of allocations from the Housing Infrastructure Fund to develop almost 70,000 homes in nine different areas, including Manchester, South Sunderland and South Lancaster. This was announced in addition to a new £400m for new housing on brownfield sites.

Source: Zoopla Property News

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How to protect your identity

CIFAS (the UK’s fraud prevention service) warns of the danger of identity theft if house owners are not scrupulously careful about securing all personal data in their home effectively and when moving home. It cites the case of a man who took himself off the electoral register in his old home and redirected his post through Royal Mail only to find himself targeted by identity thieves six months after the move.

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The fraudsters had re-registered the homeowner onto the electoral roll, set up a company in his name and run up large utilities debts and other bills. The fraud only came to light after his application for a credit card was refused.

What is identity theft?

Identity theft is when a person’s personal details are stolen, and can happen whether that person is alive or dead.

Identity thieves can steal your personal information in a number of ways, including going through your post or rubbish to find bank and credit card statements, pre-approved credit offers or tax information.

They could steal personal information from your wallet or purse by taking a driving licence, or credit or bank cards, or could obtain your credit report by posing as someone who has a lawful right to the information.

Some individuals may use the internet to acquire the personal information you share on unsecured sites. They may also use

Your information could even be stolen while you shop. In some cases, fraudsters may even ‘skim’ your credit card information when you make a purchase, leading to card cloning or card-not-present fraud.

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The following are ways to help prevent you from identity theft:

  • Keep all personal document secure and ensure there are no personal documents or other papers carrying your name and details anywhere in the house when you leave
  • Protect your internet-connected devices with up-to-date security software, and make sure you install all official software updates and security fixes on such devices
  • Don’t throw out anything containing your name, address or financial details without shredding it
  • Keep checks on your credit records regularly
  • If you are moving home, make sure you redirect your mail, register with the Mail Preference Service and make sure to inform your utilities, service providers and everyone of your new address in good time to avoid any mail going to your old address
  • End utility and landline telephone contracts before you move out of the home
  • If any of your things are going into storage, make sure there’s nothing personally identifiable from the boxes
  • Be careful when using public wi-fi networks. Never use them to access sensitive apps or sites, such as mobile banking

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Police arrest man for operating funeral service from home and remove coffins from property

A man has been arrested at a house in Blackley, Greater Manchester as neighbours witnessed police removing a number of coffins from the property.

Officers were called to Capricorn Road on Friday night to reports of suspicious circumstances.

A man in his 50s was arrested on suspicion of fraud and remains in custody for questioning.

A funeral service business which is registered to the house is listed online.

Police have not released any further details about the nature of the investigation.

Neighbours reported seeing a number of coffins being removed from the property and placed inside a private ambulance.

Footage seen by the Manchester Evening News shows two coffins being wheeled from the house on Saturday lunch time.

On Saturday night, a police car guarded the front of the property while detectives continued their enquiries.

A number of plain clothed officers were seen searching the house throughout the afternoon.

A funeral hearse can be seen in the driveway covered partly by tarpaulin.

Local residents say a private ambulance parked outside the house was taken away by police.

A spokesperson for Greater Manchester Police said: “Police were called at 8.45pm on Friday evening to reports of suspicious circumstances.

“Officers attended and arrested a man in his 50s on suspicion of fraud.

“He remains in police custody.

“A cordon is still in place.”

Source: Manchester Evening News

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Prince Charles says Climate Change is the World’s greatest threat & calls for a green economic solution

The Prince of Wales has told leaders that the world is in the midst of a climate crisis, as he announced plans for his own environmental initiative.

 

Speaking at the World Economic Forum in Davos, Switzerland, he called the effects of climate change the “greatest threats humanity has ever faced” and are “largely of our own creation”

 

The prince hopes his Sustainable Markets Council – which will bring together leaders from the public and private sectors, charitable organisations and investors – can help to identify ways to rapidly decarbonise the global economy.

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Citing his decades of campaigning, he said: “Do we want to go down in history as the people who did nothing to bring the world back from the brink, in trying to restore the balance, when we could have done? I don’t want to.”

He also called for a change in taxes to encourage consumers to make environmentally beneficial decisions.

“It is time to think about how we properly deploy taxes, policies and regulation in a way that catalyses sustainable markets.

“For a transition to take place, being socially and environmentally conscious cannot only be for those who can afford it. If all the true costs are taken into account, being socially and environmentally responsible should be the least expensive option because it leaves the smallest footprint behind.”

 

The prince was criticised by some for flying to the summit on a chartered plane, before making the two-hour car journey from the airport to Davos in a fully electric Jaguar car.

The royal also meet teenage activist Greta Thunberg in Davos

The 71-year-old Prince has been advocating environmental causes since before Thunberg, 17, was born.

 

Speaking to CNN after the meeting, he said: “She’s remarkable. She represents one of the main reasons why I’ve been trying to make all this effort all these years because, as I said, I didn’t want my grandchildren to accuse me of not doing something about this in time and of course there they are.

“All her generation, almost my grandchildren if you know what I mean, are all desperate because not nearly enough has happened – we’ve left it so late.”

Source: iNews

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UK Soldier commit suicide over £13k debt used for property investor training

A soldier killed himself after paying £13,000 for training with a property company that promises to help people become “financially free”.

The family of army reservist Danny Butcher, 37, said he never made the money he thought he would.

Dozens of people want refunds from Property Investors, which has been described as operating like a “cult”.

The company, run by former illusionist Samuel Leeds, said: “People should only purchase courses they can afford.”

Mr Butcher, from Doncaster, had spoken about his mental health in the past and his family said he had existing debt before he took on loans and credit card debt to pay Property Investors.

His family said he had been led to believe he would make enough money from property deals and rental income to replace a wage or salary.

Mr Butcher’s widow Charlotte, 32, said: “I think that he felt that he’d let everyone down, that he’d messed everything up and that there was no way out of it.

Danny and Claire on their wedding day
Mr Butcher took his own life just 11 weeks after his wedding

“All he wanted was his own chance at making something of himself for me and his son, he saw this as his opportunity.

“Obviously taking out all of the loans, he put himself on the line, but it was a bit like ‘yeah it’s scary but without risk there’s no reward’.

“He genuinely thought this was his chance because of how easy they made it all sound.”

Property Investors puts on free two-day crash courses, offering people the option to sign up to a training academy where they will learn how to become “financially free” by investing in property.

The company described Mr Leeds as having “found his own success” after attending training courses, with his wealth coming “primarily from his property investment activity”.

Mr Leeds posts videos on YouTube nearly every day promoting his methods. In one he joked that he would punch people in the throat unless they subscribed to his YouTube channel.

In one clip he promises to work one-on-one with his customers, to provide “a custom, tailored, bespoke plan” and “hold your hand, make it happen”.

Mr Butcher attended a free course in March with his brother-in-law Glyn Jones.

Mr Jones said: “It felt like brainwashing, like a religious cult kind of thing but done on a much smaller scale.

“What he’s offering never appears, I don’t see how it can.”

According to his wife, Mr Butcher’s “gut instinct” told him not to sign up for the academy and he held out for two days before changing his mind, swayed by the promise of exclusive mentorship and one-to-one training.

Mr Butcher’s family said he did not get the support he had been promised.

The company said academy members had access to weekly video calls and monthly webinars with specialist property coaches.

After failing to make any money, Danny Butcher took his own life in October.

Source: BBC News

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BT pension scheme MEPC property developer sold to Hermes

Hermes Investment Management has acquired MEPC, the UK property developer owned by the BT Pension Scheme (BTPS).

Hermes, which was formerly owned by BTPS, and GE Real Estate took MEPC private in 2000 as each acquired 50% of the company. Three years later, Hermes bought GE’s stake.

 

In April 2018, Federated Investors acquired a majority interest in Hermes from BTPS.

Hermes said today it is acquiring MEPC in a deal that “enhances Hermes Real Estate’s proposition by adding specialist asset and development management expertise to its existing capabilities”.

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Chris Taylor, CEO of Hermes Real Estate, said: “There are many synergies between the two brands and an already long-lasting and successful relationship, which can now be built upon further.”

James Dipple, CEO of MEPC, said: “This is an exciting transaction for MEPC, allowing us to combine our long track record of success with a leading real estate investment manager.

“Our strategic ambitions for the future are fully aligned with those of Hermes and, therefore, a strong basis for the growth of MEPC.”

A spokesperson for Hermes and MEPC said: “Having Hermes as MEPC’s parent company provides a long-term basis for its future growth with little disruption to day-to-day business. Certain investments processes are already integrated with those of Hermes.

“This acquisition greatly enhances our real estate proposition by adding specialist asset and development management expertise.

“In particular, it supports our core strategy of creating urban regeneration schemes, which not only deliver attractive financial returns but will have a positive impact on the environment and communities in which they are located – a key market differentiator for the business ahead.”

Source: IPE Real Asset

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LRG acquires Dunlop Heywood in a surprise move into commercial property

The Leaders Romans Group has extended its activities into the commercial world with the acquisition of chartered surveying company Dunlop Heywood.

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Dunlop Heywood – established in 2008 – specialises in business rates liability and advises a wide range of clients in the aviation, docks and harbours, energy and renewables, retail and leisure sectors.

Agency group makes surprise move into commercial propertyLRG chief executive Peter Kavanagh says: “This is a fantastic acquisition for LRG, which will further enhance the range of expert property services we can offer our clients. Dunlop Heywood has a very well established market reputation for providing expert rating advice, and I am confident … we will be able to grow the business in the coming years.”

Breakdown of Trafford Council property investment of over £200m in 2019

Trafford Council in Greater Manchester, UK spent £103.4 million on purchasing and investing in property in 2019 as part of its finance strategy.

The authority has spent the cash in the hope of bringing in greater returns for council tax payers through interest on loans and from profits on any future sales of property assets, as well as supporting ongoing regeneration across Trafford.

CIS Tower part of Trafford Council property investment

Some of the money used to make these investments has come from a central government borrowing fund which offers low interest rates for local authorities and encourages them to invest in property.

The rest has come from within the council’s budget using council tax.

In total, Trafford has purchased five properties this year for a total of £50.8 million and made loans as part of its property investment strategy totalling £102.6 million.

The council bought the following properties in 2019:

  • Lacey Street Royal Mail depot, Stretford (bought for £800,000)
  • Stretford Mall (bought as part of £50 million deal with developers Bruntwood: £25 million to cover the council’s half of the purchase, a further £25 million was loaned to Bruntwood to cover their half of the costs)
  • Stamford Quarter shopping centre, Altrincham (bought as part of above £50 million Bruntwood deal)
  • Clarendon House (bought as part of above £50 million Bruntwood deal)
  • Sainsbury’s Altrincham (bought for £25million)
The old Kellogg’s site in Stretford – Trafford council property development 

 

The council loaned money to owners or developers for the following properties:

  • CIS Tower, Miller Street, Manchester city centre (loan of £60 million to owners for refinancing and refurbishing the building)
  • Four office buildings off Albert Square, Manchester city centre (loan of £17.6 million as property investment)
  • Stamford Quarter, Altrincham (£50 million loaned to Bruntwood developers as part of £100million purchase deal)
  • Stretford Mall (£50 million loaned to Bruntwood developers as part of above deal)
  • Clarendon House (£50 million loaned to Bruntwood developers as part of above deal)

The grand total of more than £203 million spent this year doesn’t include a further £2.5 million loaned to Trafford Leisure to support two leisure centres in Altrincham and Urmston.

The council made clear that the loan wasn’t part of the council’s investment strategy, but to support the centres and give staff their first pay increase in years.

Other ongoing development projects that the council has on its books include the former Kellogg’s factory site in Stretford that was bought for £12 million back in September 2017.

The site is expected to include 750 homes, an 100-bedroom hotel and a primary school once development work is finished.

Plans to merge two primary schools, knock down their 100-year-old building and replace it with a brand new 21-classroom school in Altrincham are also on the cards.

The council is still in talks with Stamford Park Infants and Junior Schools after an offer of £8 million to build a new school on the site was turned down twice.

Source: Manchester Evening News

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