Rogue London landlord ordered to pay £226k for flat conversion
Pathfield Estates had previously been ordered to return the property in Bounds Green to its original condition by a 2008 planning enforcement notice after the landlord had converted it into five flats without permission. An investigation carried out in 2020, however, uncovered a new six-flat conversion.
The breach of the enforcement notice led to Pathfield being convicted at Highbury Magistrates Court in 2021.
The magistrates referred the case to the Crown Court for sentencing and the start of confiscation proceedings brought by the council under the Proceedings of Crime Act (POCA).
Pathfield lodged two appeals against the conviction both of which were dismissed.
At its sentencing last month, the company was ordered to pay £226,433 made up of a £50,000 fine for not complying with the enforcement notice, a confiscation order under POCA of £163,258 to reflect its financial benefit from breaching the enforcement notice and a further £13,175 in costs.
Haringey Council’s cabinet member for housing services, private renters and planning, Cllr Sarah Williams, said: “This conviction serves as a warning to disreputable landlords operating in our borough.
“Our residents deserve to live in safe, high-quality homes and we will not hesitate to take strong action if landlords flout planning laws or leave tenants to languish in poor conditions.
“I want to thank our planning enforcement team who worked tirelessly to get this result.”
Legal and General ups LTV and adds pricing options to lifetime mortgage
The new pricing approach from Legal and General Home Finance means that equity release borrowers who commit to servicing their interest by selecting this deal will be offered interest rates based on the age of the youngest borrower, which could be lower than a rate based on the age of the oldest applicant. The interest rate offered will also be based on whether the borrower is a sole or joint applicant.
A higher LTV of up to 74 per cent is extended to sole borrowers, while joint applicants can access an LTV of up to 55.6 per cent.
The change follows Legal and General’s similar individual pricing approach to its Interest Roll Up Lifetime Mortgage and Optional Payment Lifetime Mortgage products, which help advisers provide customers with the best rates for their specific circumstances.
David G Jones (pictured), distribution director at Legal and General Home Finance, said: “Our Payment Term Lifetime Mortgage product offers more choice for homeowners who are sitting on equity in their homes but can’t access this because of their age and borrowing needs.
“The product is designed to provide customers access to higher LTVs as they commit to service their interest. This also means they benefit from a lower cost of borrowing, when compared to Interest Roll Up Lifetime Mortgages.”
Last month, Legal and General Home Finance announced an integration with the Advise Wise platform.
Value of Q4 mortgage approvals slumps to lowest level since 2013 excluding pandemic
Bank of England (BoE) statistics revealed that the value of new mortgage commitments green-lit in Q4 to be released in the coming months decreased by 6.6 per cent from the previous quarter to £46bn and were 21.2 per cent lower than a year earlier.
The value of actual lending in Q4 fell by 13.4 per cent quarter-on-quarter to £54bn, representing a 33.8 per cent reduction on the same period in 2022.
Meanwhile, the value of outstanding mortgage balances with arrears increased by 9.2 per cent from the previous quarter to £20.3bn and was 50.3 per cent higher than a year earlier. The proportion of the total loan balances with arrears, relative to all outstanding mortgage balances, increased on the quarter from 1.12 per cent to 1.23 per cent, the highest since Q4 2016.
Simon Gammon, managing partner at Knight Frank Finance, said: “At 1.23 per cent, the proportion of loan balances in arrears is still very low, but the pace at which it is rising will be a source of concern for policymakers at the BoE.
“The housing market has shown remarkable resilience given the surge in borrowing costs that we’ve seen. Much of that is down to forbearance from lenders, which has kept forced selling very low.
“While borrowing costs have likely peaked and should begin falling meaningfully over the summer, the figures demonstrate that we’re not yet out of the woods, and conditions remain very difficult for many borrowers.”
The proportion of lending to borrowers with a high loan-to-income (LTI) ratio decreased by 2.6 percentage points from the previous quarter to 42.7 per cent and was 6.6 percentage points lower than a year earlier.
A slight increase of one percentage point quarter-on-quarter took the share of gross mortgage lending for house purchases to 58.7 per cent, a rise of 3.3 percentage points on the previous year.
Of the 58.7 per cent, lending to first-time buyers increased by 1.2 percentage points from the previous quarter to 27.1 per cent of gross advances, the highest since reporting began in 2007, and was three percentage points higher than a year earlier.
The proportion of advances for remortgages decreased by 0.8 percentage points from the previous quarter to 29.7%, but was 2.3 percentage points higher than a year ago.
For buy to let (BTL), covering house purchasing, remortgaging and further advances, the share of mortgage lending decreased by 0.5 percentage points from the previous quarter to 7%, the lowest since Q3 2010, and 4.9 percentage points lower than a year earlier.
At the end of last month, the BoE reported a rise in approvals for January.
Persimmon profits plummet 52 per cent as it says market will remain ‘challenging’ in 2024
In the full-year results from Persimmon for the year ended 31 December, its profit before tax fell from £730.7m to £351.8m.
Underlying profit fell by 65 per cent to £354.5m, which the builder attributed to lower volumes and build cost inflation.
Year-on-year (YOY), new home completions dropped by 33 per cent from 14,868 to 9,922.
In his chairperson’s statement, Roger Devlin wrote: “As expected at the start of the year, the number of new home completions and profit delivery of the group was significantly down on the prior year, reflecting a difficult macroeconomic backdrop.
“While demand remains high, affordability and mortgage availability has been difficult for many of our customers, especially first-time buyers. Thankfully, there has been some stabilisation in recent months, with mortgage rates having fallen from their peak in July 2023.”
Despite the poor full-year results, Devlin said he remained confident of the long-term prospects for Persimmon.
“There is no doubt that the country continues to face a significant housing shortage, with a growing population, continuing migration and household formation as well as a sizeable amount of old housing stock,” he added.
Homebuyer demand remained varied across the country in 2023. Trading in the southern and eastern counties remains more challenging with weaker pricing, while trading in northern regions was more robust.
In areas of sluggish demand, Persimmon is using incentives such as part-exchange schemes to encourage buyers to reserve homes.
The housebuilder said that, with interest rates expected to remain at current levels and a general election looming, it expected market conditions to remain subdued throughout 2024.
In its trading outlook, the group said: “While we are prepared for 2024 to be another challenging year, we are confident of our ability to manage this. The longer-term fundamentals for the housing market remain positive.”
The builder’s forward sales book ended the year at £946m up from £908m at the close of 2022.
Persimmon said it remained on track to open 30 new homes outlets for the spring sales season and it continued to work towards growing its sales outlet base back to over 300 over the medium term.
Uinsure bolsters senior team with two hires
James Pilkington joins Uinsure as head of lettings and will be responsible for launching Uinsure’s tenants’ insurance offering for the first time as well as expanding the landlord proposition. New products will be available later this year.
Uinsure also welcomes chief pricing officer Jamie Thompson (pictured) as it looks to bolster its competitive pricing strategies in both existing and new product categories.
Both new recruits have extensive experience in their respective fields. Pilkington previously held senior pricing and analytical roles for companies including HBOS, Lloyds and Barclays.
Martin Schultheiss, Uinsure Group managing director, said: “We’ve built technology that brings the concept of embedded insurance to life and our strategy is focused on how our increasing number of partners can access this technology and a panel of leading insurers to simplify how they offer cover.
“Our distribution network has grown significantly because of the technology we’ve delivered to the market, and we’re lucky to have a very innovative team who always want to push further.”
Up Rent a Room Relief to reflect real cost of renting, says Homeowners Alliance
Under the current Rent a Room Relief rules, homeowners can earn up to £7,500 per year tax-free from letting out part of their home on a furnished basis.
Homeowners Alliance says it is time the scheme was brought up to date to offer relief that reflects the real cost of renting to make the scheme more appealing.
“Under the current scheme, homeowners can rent a room in their home, helping them to afford soaring mortgage payments,” said Paula Higgins (pictured), chief executive of Homeowners Alliance. “We successfully campaigned in 2015 to get the Rent a Room Relief increased so that £7,500 of any income is tax free. But this figure hasn’t been revised since. We think there is no better time – when the UK is buckling under a cost-of-living and housing crisis – to extend the tax-free earnings.”
The average cost to rent a room in the UK stands at £8,868 per year or £12,168 per year in London, according to flat-sharing website Spareroom.com.
Homeowners Alliance wants to see the tax-free allowance rise to £10,000 and increased annually.
The group also wants the Chancellor to update the rules of the Lifetime ISA (LISA) by removing the withdrawal fine for those who buy a home above the current £450,000 price limit. Furthermore, it wants to see an end to stamp duty for everyone except investors and second homeowners.
Higgins added: “The financial penalty is so great, it stops people moving home. Stamp duty stops elderly people from downsizing, it stops families stepping up the ladder and stops homeowners making a sideways move, perhaps for work or family reasons. The ensuing inactivity limits the number of properties to choose from when buying, at a time when housing is in short supply.”
Hanley Economic adds to buy-to-let range
The two-year fixed rate, available at 5.35 per cent, comes with a free valuation and a £700 arrangement fee.
The variable discount ex-pat BTL mortgage is priced at 5.89 per cent, representing a 2.6 per cent discount from the society’s standard variable rate (SVR) of 8.49 per cent. The deal is available for purchases and remortgages.
Both deals are available up to 80 per cent loan to value (LTV), on an interest-only basis and with a minimum loan size of £30,000 and maximum loan size of £500,000.
Borrowers are assessed on a case-by-case basis.
David Lownds (pictured), head of products and marketing at Hanley Economic Building Society, said: “We fully appreciate that the BTL lending landscape remains challenging for sections of the landlord community, but it will also continue to provide a wealth of opportunities along the way, provided they have access to a range of options that can help meet their changing needs.
“Our ex-pat offering was first introduced back in 2020 following substantial due diligence and extensive intermediary feedback and, with UK investment opportunities proving to be increasingly attractive, we hope this new offering will prove to be a popular option in what is a somewhat underserved area of the BTL market.”
Earlier this year, the building society brought out a retirement interest-only (RIO) mortgage offering.
BSA calls for regulation review to support first-time buyer mortgages
The association says significant changes in regulation are required to help those struggling to afford a mortgage to get on the property ladder.
The report’s findings, due to be published in April, will suggest that, since the financial crisis, the balance between maintaining financial stability and growing the number of first-time buyers has tilted too far in favour of stability. The imbalance, it says, has led to the exclusion of many would-be homebuyers from the market.
As part of a long-term strategy to make homes more affordable and available, the BSA is calling for a review of the 15 per cent cap on the volume of lending that banks and building societies can extend to borrowers using a four-and-a-half times income multiple.
In the report, which has the support of major societies Nationwide, Coventry, Leeds, Skipton and Yorkshire, the association notes that the cap on high-income lending may be less relevant in a higher-mortgage-rate environment.
However, it wants an immediate review to assess whether it would be better to target mortgages above the cap solely at first-time buyers.
First-time buyers should also be able to take a mortgage out on a part-repayment, part-interest-only basis, says the BSA, giving them the flexibility to shift between the options over the life of the loan. It also wants regulators to review the current constraints for borrowers heading towards and into retirement, allowing them to borrow flexibly beyond retirement age.
Furthermore, the BSA wants a review of the relative costs and benefits of a stricter regulatory environment versus those of higher homeownership rates. It says that, by striking the right balance between financial stability and enabling access to homeownership, there would be no need for short-term government-backed mortgage schemes to stimulate the market.
Paul Broadhead, head of mortgage and housing policy at the BSA, said: “A properly functioning housing market is dependent on first-time buyers being able to afford their first home. Whilst building societies are creating bespoke, targeted innovations within the current regulatory framework, new thinking and radical changes are needed.
“Many things can be done to fix the broken housing market. But we need to ensure that changes to regulations and support schemes not only help today’s first-time buyers, but don’t fail future generations.”
Foxtons’ financial services revenue down 14 per cent
Foxtons, which sells mortgages under the Alexander Hall brand, said a combination of lower average loan sizes, weaker volumes of new purchase mortgages and an increase in lower-value product transfers within its refinance business were behind the fall in revenue.
In its full-year results to 31 December, 51 per cent of its financial services revenue came from non-cyclical refinancing activity, while 49 per cent came from purchase mortgages.
Revenue from home sales was also down 14 per cent from £43.2m to £37.2m, due to the higher interest rate environment and its impact on the mortgage market.
However, the estate agent said its sales volumes outperformed the market, which saw a 22 per cent reduction, according to figures from Twentyci.
Sales transaction volumes in London were down 22 per cent compared to 2022.
High tenant demand and a shortage of rental stock led to a rise in Foxtons’ lettings revenue, up 16 per cent from £86.9m to £101.2m – surpassing the £100m mark for the first time.
The estate agent reported a five per cent rise in total revenue to £147.1m and a 34 per cent fall in profit before tax to £7.9m, which it said was primarily down to the integration of Ludlow Thompson and branch network consolidation.
Looking forward, recovery in buyer demand as mortgage rates began to reduce in the opening months of the year has caused a 31 per cent YOY increase in the value of the under-offer sales transactions in the pipeline at the end of February.
The growth in the value of the under-offer pipeline is expected to deliver good YOY revenue growth in the first half of the year, with further growth expected in the second half if mortgage rates continue to stabilise and pent-up demand is released.
In financial services, improved new buyer demand alongside good levels of non-cyclical refinance activity has supported 16 per cent growth in the value of the pipeline.
Guy Gittins, chief executive, said: “2023 was a year in which Foxtons has been fundamentally transformed. We have achieved a lot in a short space of time by making improvements across the business, and Foxtons is now in much better shape than the company I inherited 18 months ago.
“Our strategy to deliver growth through sales market cycles by delivering lettings growth is working, delivering resilient earnings for the year despite a weak sales market and the investment we made in fee earners. We are on track against our medium-term target of delivering £25m to £30m of adjusted operating profit, through organic and acquisitive growth and supported by improving market conditions.”
Tenants face a ‘winter of evictions’ as rents rocket and bills bite
Research from Shelter found that 474,000 tenants had received or been threatened by with an eviction notice in the last month and 411,000 private renters were behind on their rent which puts their tenancy at risk.
This combined figure rises to 1.1 million when children who live in the household are included.
Private rental prices paid by tenants in the UK rose by 6.1 per cent in the 12 months to October, according to the Office for National Statistics, the largest annual percentage change since record began in January 2016. One in seven tenants, equivalent to 1.1 million adults – have had their rent put up in the last month.
The steep rise in housing costs has left 3.5 million tenants worried that they may become homeless.
More than two in five private renters who are struggling or behind with their rent say this is due to the increase in payments, and more than three in 10 have borrowed money in order to pay their rent.
Polly Neate, chief executive of Shelter, said: “A terrible winter of evictions lies ahead as millions of renters’ grapple with runaway rents and the enduring cost of living crisis. Every day our frontline teams take more calls from families living the nightmare of rent rises they cannot afford. And every day we speak to more families facing the horror of losing their home.”
The lack of affordable social homes is pushing millions of households into private rental accommodation leaving them struggling to cope with record high rents, the charity said.
The government’s freeze of housing benefit for almost four years is exacerbating the plight of tenants, it added, as financial support is falling far short of the real cost of renting.
Shelter is calling on the government to end its freeze on housing support.