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 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 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.

UK Covid-19: How to apply for government business loan

The government has released more details about the £350bn package of financial support which Chancellor Rishi Sunak has promised to UK business to deal with the effects of the coronavirus pandemic.

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Last week he set out plans to pay employees 80% of their salaries, capped at £2,500 per month, in an attempt to protect jobs.

Two further schemes to help business were announced on Tuesday: a new interest-free Business Interruption Loan Scheme for small and medium-sized firms and a Bank of England finance option for bigger businesses.

How will the Business Interruption Loan Scheme work?

UK-based small and medium-sized businesses (SMEs) with an annual turnover of less than £45m can apply for an interest-free loan of up to £5m to help them through Covid-19 related difficulties.

The government will provide a grant payment to cover the interest and initial fees for the first 12 months, and will guarantee 80% of the loan amount to give banks and financial companies the confidence to lend.

Under the scheme, which will initially run for six months, businesses will be able to borrow for up to six years. They will be liable to repay the money in full – the guarantee is for the lenders, not the borrowers.

Will all small and medium-sized firms be able to borrow money?

Not necessarily, Firms will have to prove that they are viable businesses which have been trading successfully, but just need extra support to deal with short term difficulties caused by the current disruption. Some firms may not be successful.

The money will be provided by more than 40 lenders who have signed up to the scheme, including High Street banks like Barclays, HSBC, Lloyds and NatWest, as well as more specialist finance companies.

Businesses are asked to contact their own bank first (if they are taking part in the scheme) via the company website if possible, and only approach other lenders if they need to.

The British Business Bank, which is running the scheme, told the BBC on 23 March that it expected money to start flowing “this week”.

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You can read more about how the scheme will work here.

Can self-employed people apply to the Business Interruption Loan Scheme?

Yes, The British Business Bank says self-employed people with an annual turnover of up to £45m can apply under the scheme, as long as they operate through a business bank account, and generate more than 50% of their turnover from trading activity.

This includes sole traders, freelancers, and limited partnerships, operating in all sectors.

The government has already said the UK’s five million self-employed people would be allowed to defer self-assessment tax payments, and would benefit from mortgage payment holidays as well as an expansion of welfare support, including universal credit and Local Housing Allowance.

HM Treasury told the BBC the government was “working hard on further measures to support the self-employed”.

What about help for bigger businesses?

Companies that have a yearly turnover of more than £45m may be able to take advantage of the Bank of England’s new Covid Corporate Financing Facility.

The Corporate Financing Facility is effectively a government promise to buy short-term IOUs from companies which are in sound financial health and have a very high credit rating, but which need help to boost their cash flows.

The IOUs can be for any period between one week and 12 months.

The Bank of England says that eligible companies must have a “genuine business” in the UK, and “make a material contribution to the UK economy”.

Generally they will be based in the UK, or have their headquarters here, and employ or provide services to a significant number of people in the country.

How do big companies apply?

Companies must apply through their own bank in the first instance, assuming it is taking part in the scheme, and need to request funding of at least £1m.

The facility will offer finance to companies on similar terms to those available in the markets in the period before the pandemic.

The government will not publish details of which firms have taken advantage of the scheme, which is due to run for at least 12 months.

Source: BBC News

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Finance Management: Knowledge is power

People are living in credibly hectic lifestyles and this lack of spare time means many put off reviewing their finances. Keeping on top of your money matters should be a priority and doesn’t necessarily have to be a labourious, time consuming task.

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The reality is that circumstances change – prices fluctuate, our personal situation change, such as jobs and family affairs. So being equipped with knowledge about the health of your finance is a necessity, so you can react should circumstances in your life change.

Top financial priority

  • Paying down debt – mortgage, credit, loans etc
  • Building savings – financial savings, energy savings, etc
  • Paying bills – rent, energy, utility, tax, etc
  • Essential living expenses – food, clothes, health care, etc
  • Lifestyle expenses – holiday, entertainment, hobby, etc
  • Investment – cash, securities (equities, bonds and derivatives), commodity, etc
  • Retirement – pension, personal plan, annuity, etc

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UK Finance survey shows UK mortgage approvals hit 6 month low

The number of new mortgages approved by British banks hit a six-month low in September, according to a survey that adds to signs the housing market is slowing again ahead of the October Brexit deadline.


Industry body UK Finance said banks approved 42,310 loans for home purchase in September, compared with 42,527 in August, according to seasonally-adjusted data. However, the number of approvals for remortgaging rose to the highest level since November 2017 at 32,649.

UK Finance said annual growth in consumer credit rose to a 19-month high of 4.5%, driven by personal loans and overdrafts rather than credit card lending.

Source: Reuters

The A to Z of Mortgage in UK

Things you must know before getting a mortgage in the UK. Explained in alphabetical order are some key words and phrases you should be aware of before taking out a mortgage loan to buy a property in the UK.


  • Agreement in principle –  A certificate or document that some lenders give you, showing the amount they will probably be willing to lend you. This isn’t a guarantee, but can be helpful when dealing with estate agents.
  • APR (Annual Percentage Rate) –  This shows the overall cost of a loan, taking into account the term, interest rate and other costs.
  • Bank or Base rate –  The rate at which the Bank of England lends to other financial institution.
  • Buy to let mortgage –  A loan you take out to buy a property that you intend to rent to tenants.
  • Capital – The amount you borrow to help buy your home.
  • Capped mortgage –  A mortgage with a maximum limit on the interest rate you’ll pay during the deal period.
  • Cashback mortgage –  A mortgage that comes with a cash sum which often is a percentage of the amount you’re borrowing.
  • Collared mortgage –  A mortgage with a minimum interest rate you’ll pay during the deal period.
  • Conveyance –  The transfer of rights and legal ownership of property which is carried out by a conveyance solicitor.
  • Credit Score –  A credit score is a tool used by lenders to help determine whether you qualify for a particular credit card, loan, mortgage or service.. Using the information on your credit report and any additional information you supplied as part of your application, lenders use a mathematical model to calculate a numerical score that represents your credit history.
  • Deposit –  The amount of money you put into buying a home which is not included in the mortgage money you’re borrowing.
  • Discounted mortgage –  This has a lower variable rate of interest for a set period, after this the rate increases.
  • Early repayment charge –  A charge you may have to pay if you pay back a mortgage early which includes if you move to another lender.
  • Energy Performance Certificate –  The government legally requires sellers and renters of all homes in England, Wales and Scotland to provide this. It gives a rating of how efficiently the property uses energy.

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  • Fixed rate –  An interest rate that is fixed, in order words it doesn’t move up or down for a set time.
  • FCA Register – This is a Financial Services Register  which is a public record that shows details of firms, individuals and other bodies that are, or have been, regulated by the Prudential Regulation Authority (PRA) and/or the Financial Conduct Authority (FCA). You can check online to see whether a firm is on the FCA Register @
  • Freehold –  A property in fee simple absolute in possession with no limits on ownership
  • Home Reports (Scotland) –  The Scottish government requires sellers of most properties in Scotland to provide this pack. It must contain a single survey, an energy report and a completed property questionnaire for the property for sale.
  • Income multiples –  The number by which a lender multiplies your earnings to find out how much you can borrow.
  • Individual Voluntary Arrangement (IVR) –  A formal agreement between a debtor and their creditors to make reduced payments towards their total debt over an agreed period, typically five years, after which the debt is deemed to be settled.
  • Interest – The charge that lenders make when you borrow their money.
  • Interest-only mortgage –  A mortgage in which you pay only the interest charges of the loan each month. You are not reducing the loan amount (the capital), and you must repay this in some other way.
  • Interest rate –  The figure that determines how much interest you pay. Usually linked to the Bank of England’s rates and move up or down.
  • ‘Key Facts’ Documents –  Standard documents that all regulated lenders and advisers must give you. They explain their services and detail the mortgage you’re interested in.
  • Leasehold –  A property for a term of years absolute (ownership) which has a limited duration that must be fixed and certain.
  • Loan-to-value (LTV) – The amount of money you want to borrow compared (as a percentage) to the value of the property.
  • Mortgage –  A loan secured on your property.


  • Mortgage Adviser or broker –  A mortgage adviser or broker helps you get a mortgage from their available range. They may recommend a mortgage or give you information to help you choose.
  • Prime lending – Lending to borrowers who meet the lender’s standard criteria and present a normal risk.
  • Remortgaging –  Changing your mortgage from a different one, without moving home.
  • Repayment mortgage –  A mortgage in which you pay off both the loan (capital) and interest at the same time.
  • Secured –  If you do not repay your loan, the lender can sell your home to get its money back.
  • Stamp duty land tax –  A government tax that home buyers must pay on properties above a set amount.
  • Standard variable rate mortgage –  The lender’s normal interest rate, ie without any discounts or deals.
  • Sub-prime lending –  Lending to borrowers who represent a higher risk than normal.
  • Survey –  A report on the condition of the property you are planning to buy.
  • Tracker mortgage –  A mortgage with an interest rate linked to a particular base rate and moves up and down with it.
  • Tenure –  Denotes the way in which title to a property is held; it is taken from the French tenir, meaning ‘to hold’.
  • Term – The length of your mortgage, normally expressed in years.
  • Valuation –  A brief inspection of the home you hope to buy, so the lender can ensure it is suitable security for the mortgage.
  • Vendor –  The seller of the property.

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