No evidence of link between short-term let growth and housing shortages – Airbnb
Speaking to the Built Environment Committee at the House of Lords as part of its inquiry into the sector, Amanda Cupples, general manager for Northern Europe at Airbnb, said the company regularly spoke to local authorities and had heard these concerns.
The committee’s inquiry will consider the impact of short-term lettings on housing markets, in particular their impact on efforts to meet housing demand.
The inquiry will result in a letter to the government which will make recommendations on steps that should be taken to address these issues, including the government’s proposals for a register.
During session, Baroness Neville-Rolfe, chair, said she had spoken with several estate agents and asked what problems exist for those buying a house. She said the estate agents reported that a number of properties were going to people who wanted to let them out.
Merilee Karr, chair of the UK Short Term Accommodation Association (UKSTAA), responded that a large number of people bought properties for buy-to-let, but did not think they were used for short-term lets. She noted that many areas had caps on how many days a property could be let on a short-term basis, and conversely, a minimum number of days a property must be let to be deemed holiday accommodation.
‘A very strong emotional feeling’
Baroness Neville-Rolfe asked the panel if the short-term accommodation sector took properties off the market from first-time buyers and people with less money.
Cupples responded, “There is a very strong emotional feeling that short-term accommodation is a prime contributor to that.
“The reality is, we don’t know very much. There is actually no evidence base that has drawn any link whatsoever between short-term accommodation and housing scarcity.”
She said Airbnb had also asked for a short-term accommodation register so policymakers could have a consistent, robust evidence base to help make decisions about the housing market.
In response to the claim that many short-term accommodation owners had large portfolios, Cupples said eight out of 10 Airbnb hosts had just one accommodation.
Fiona MacConnacher, public affairs manager at Booking.com, said the rise in short-term lets was fuelled by an increase in customer demand.
“Having these alternative forms of accommodation allow for these demands to be met,” she added.
She also noted that short-term lets weren’t just for holidaymakers, but are also used by people who needed a place to stay in between moving, students on internships, and more recently Ukrainian refugees.
Dye and Durham’s buyout of TM Group blocked to avoid higher homebuyer fees
Last year, Connells and LSL announced they had disposed of their shares in property data firm TM Group. Connells Group sold its 64.68 per cent shareholding for £58.7m and LSL sold its 32.34 per cent stake for £29.3m. The two deals, announced on the London Stock Exchange, amounted to 97.02 per cent of TM Group’s shares, for £88m.
Dye and Durham, cloud-based software and technology provider, announced it would purchase the company for £91.5m.
The firms did not initially inform the CMA of the merger but after the regulator identified some concerns, an investigation was launched in October last year. This was then referred for an in-depth, independent review in December.
The CMA found that both firms were “two of the largest players” in the supply of property search services and were in close competition with each other before the merger.
The CMA concluded that the acquisition would make them the biggest firm in the sector with limited competition.
The review said the merger could result in higher prices for property search services or worsen service standards.
Property search reports give buyers and sellers information about a property, such as title deeds and planning restrictions, before a sale goes ahead. Reports are orders by conveyancers, solicitors, estate agents and mortgage brokers on behalf of clients and charges for the services are typically included in conveyancing fees.
CMA said the way to address this would be for Dye and Durham to sell TM Group to a suitable buyer.
Richard Feasey, chair of the group conducting this inquiry, said: “Buying and selling property can be a challenging experience for many people and one of the most significant purchases most of us make.
“We need to ensure that fees for search reports are competitive and that we continue to see innovation in digital services to make the process easier and faster.
“By reducing competition in an already concentrated market, we have found that Dye and Durham’s purchase of TM Group could increase the costs and reduce quality in these services.”
Dye and Durham said in response: “The CMA has provisionally found that Dye and Durham’s acquisition of TMG, which closed in July 2021, would lessen competition in the UK property search services market. The CMA also asserts that the only effective way to address the issues it has identified would be for Dye and Durham to sell TMG to a third party. Lastly, the CMA press release gives the erroneous impression that Dye and Durham failed to notify the CMA regarding the transaction when in fact there was no obligation to do so under applicable UK law, which provides only for voluntary notification.
“Dye and Durham disagrees with the CMA’s provisional findings and is evaluating its potential options. Dye and Durham complies with all laws and regulations in every market in which it operates. The company has exercised every best effort to help the CMA with its review of the transaction, explain its benefits and offer a remedy proposal and is ready to continue to work collaboratively with the CMA going forward.”
Hampden and Co appoints Hannah Berridge as head of professional partnerships
She joins from private bank C. Hoare and Co where she was a relationship manager, working with legal, accountancy and wealth management firms. Prior to that, she was a private banker at Coutts.
In her role at Hampden and Co, Berridge will build on the bank’s relationships with intermediaries and professional service firms. She will be based in London where she will report to chief commercial officer, Andrew Bell.
In its most recent results for the financial year, 2021, Hampden and Co reported strong growth in lending and deposits which it said was driven, in part, by an increase in referrals from professional intermediaries. Referrals from mortgage brokers rose over 38 per cent year-on-year.
Its deposits rose 39 per cent to £696m in 2021, with loans and advances increasing 29 per cent to £422m.
The bank operates in the residential, buy-to-let, multiple property and self-build markets.
Berridge (pictured) said: “Hampden and Co has experienced growing demand from a broad range of intermediaries in recent years. With our focus exclusively on banking, we work in partnership, rather than compete with other professionals.
“We are well placed to help their clients optimise their borrowing and to safeguard their deposits, whilst providing a highly personalised day-to-day banking service. I very much look forward to strengthening and growing our network of professional partners.”
Bell added: “We are delighted to welcome Hannah to Hampden and Co. She brings an extensive knowledge of the sector and a proven ability to build and maintain strong relationships with clients and professionals.”
TMA Club adds Even to panel
Even’s proposition has been modelled on the Help to Buy scheme and offers borrowers a loan to boost their deposit. It can give loans up to double a borrower’s deposit at a maximum of £100,000.
The loan is interest-free for the entire duration and there are no early repayment charges.
The value of Even’s share in the property increases and decreases depending on how this changes.
There is a cap on how much profit Even can make from its share and the homeowner keeps all increases in value from structural renovations.
Lisa Martin, development director at TMA, said: “Recently, the private sector has had to find creative solutions for those seeking support with their homeownership ambitions.
“Even brings a new and innovative product to the market, and this latest partnership will allow us to continue providing our members with a wide range of products to suit each client’s needs.”
Ben Bailey (pictured), CCO at Even, added: “Even bridges the gap for aspiring first-time buyers who just can’t save enough to get on the property ladder.
“We’re excited to be joining TMA, one of the UK’s leading mortgage clubs, and we can’t wait to help its members help more first-time buyers.”
Virgin Money ups mortgage rates
The largest rate hike has been made to its buy-to-let two-year fix at 60 per cent loan to value (LTV) with a £995 fee, which is now 2.54 per cent, up from 2.33 per cent.
The five-year fixed alternative has risen by 0.17 per cent to 2.68 per cent.
At the 75 per cent LTV tier, the two-year fixed product has increased by 0.06 per cent to 2.61 per cent, while the five-year fixed option has gone up by 0.10 per cent to 2.75 per cent.
For residential borrowers, the broker exclusive product at 85 per cent LTV, fixed for two years with a £1,295 fee, has increased by 0.14 per cent to 2.53 per cent.
At 75 per cent LTV, two- and five-year fixed residential mortgages have increased by as much as 0.15 per cent, while the £995 fee paying and fee-free two-year fixes at 90 per cent LTV have gone up by 0.10 and 0.09 per cent respectively.
There are now finance options for most international investors – MFS video debate
Speaking on a Specialist Lending Solutions TV debate in association with Market Financial Solutions (MFS), when asked how the market had changed towards overseas buyers, James Riley, mortgage consultant at Oriel Finance, said: “The market has significantly improved over the last few years and it’s now at a level where there is an option for most international investors.”
As for challenges faced, Riley said the process could be more complicated depending on the property being purchased. He said the new-build market was very active, while second hand property purchases were sometimes “restrictive”.
He said the seller was “completely free to pull out of a purchase at any point up until exchange of contracts, which often isn’t until the very end of the process”. He said for this reason, it was important for brokers to hold their client’s hand through the process.
Richard Rinder, associate partner sales manager at Oriel Finance, said that historically there were fewer entrants to the market and the process was not as stringent.
However, as the market had grown, lenders started to realise it was a segment worth paying attention to.
“And with that comes development and more options,” he said.
Zahira Fayyaz, senior business development manager at MFS, said the lender was less restrictive in its own approach and would assess assets on whether they are fit for purpose and generate income.
Watch the video [10:54] hosted by Shekina Tuahene, commercial editor at Mortgage Solutions, featuring Zahira Fayyaz, senior business development manager at MFS, Richard Rinder, associate, sales manager for Oriel Finance and James Riley, mortgage consultant at Oriel Finance.
Sponsored content in association with Market Financial Solutions. For Intermediary Use Only
Recognise Bank completes £8.7m capital raise
So far, COLG has raised almost £65m in investment for the bank.
The capital will be used to support business lending and create a new team with an aim to build on the bank’s digital capabilities. This will include the development of new products and revenue streams.
The latest investment comes from two of COLG’s existing shareholders, PV27, the family office of real estate entrepreneur and digital pioneer, Ruth Parasol, and Max Barney Investment Limited (MBIL), the London based property firm. PV27 and MBIL exercised warrants received during the last fund raise in August 2021.
Recognise Bank recently reached £100m in lending, six months after receiving its full banking licence from the Prudential Regulatory Authority.
Bryce Glover (pictured), chief executive of Recognise Bank, said: “To receive this fresh investment from two of our keystone shareholders shows their continued support for Recognise Bank and commitment to our strategy and vision. Investing in our digital capabilities will help us build a world-class business bank, for today and the future.”
Phil Jenks, chairman of the City of London Group, added: “We have consistently delivered on time and in line with our strategy to create a new bank for Britain’s growing businesses, firms that are the lifeblood of our economy, but are consistently ignored and let down by the mainstream banks.
“The latest investment from Ruth Parasol and Max Barney is an important moment for Recognise, because it means the bank can build on a foundation of £100m in lending and £95m in savings deposits to push its digital capability even further and create a bank that perfectly blends speed, service and innovation.”
Platform raises resi and BTL rates
For new residential customers, two-year fixes have risen by up to 0.16 per cent and now begin from 2.7 per cent for a product at 60 per cent loan to value (LTV) with a £1,499 fee.
Elsewhere, three and five-year fixes at 60 to 90 per cent LTV have gone up by up to 0.17 per cent while at 95 per cent LTV, three and five-year fixes have reduced by 0.04 per cent.
At 95 per cent LTV, the three-year fixed rate with a £1,499 fee is now 3.16 per cent while the five-year equivalent is 3.17 per cent.
Across its professional mortgage range, two and five-year fixed rates have gone up by as much as 0.15 per cent.
Its two and five-year buy-to-let products have risen by up to 0.16 per cent, as have the two-year fixed premier options. Equivalent rate increases have been made to buy-to-let customers making product switches.
Help to Buy mortgages fixed for two and five-years have risen by as much as 0.20 per cent. Equivalent rate hikes have been made to product switching borrowers.
For those switching rates across Platform’s mainstream residential range, rates have increased by up to 0.12 per cent across two, three and five-year fixes.
Changes apply from 17 May.
Nearly half of deposit-ready FTBs lack mortgage knowledge – Nottingham BS
The Nottingham Building Society’s survey of 1,023 adults in the UK, including 160 who expect to buy their homes in the next five years, found 15 per cent knew nothing about mortgages and 31 per cent said they knew very little.
The understanding around the need for a sufficient deposit was acknowledged by respondents. Some seven per cent said they wanted to raise a deposit of 30 per cent of more, 21 per cent said they wanted their deposit to cover a fifth of their potential property’s value and 36 per cent aimed to raise a deposit of at least 10 per cent.
Only 13 per cent of respondents said they were aiming for a five per cent deposit.
According to the poll, eight per cent of respondents have at least £50,000 saved while 13 per cent have between £20,000 and £50,000.
Almost a third have saved up to £999 so far and 48 per cent have accumulated between £1,000 and £20,000.
When arranging a mortgage, 18 per cent said they would only consider going to their main bank or building society. Around 38 per cent of respondents said they will use a whole of market mortgage broker and 31 per cent said they planned to use an adviser who was recommended to them.
Iain Kirkpatrick, chief customer officer at The Nottingham, said: “It’s encouraging to see that so many of those planning to buy their first home understand the importance of having a healthy deposit.
“However, it is concerning to see so many admit they don’t know enough about mortgages generally, and how to find the best deal. Seeking independent advice from an expert adviser can be the key to understanding more and could also save thousands of pounds in repayments.”
Financial planning and retirement aspirations motivate equity release use
Standard Life Home Finance’s ‘Lightbulb Moment’ research polled 418 people who had taken out equity release and a further 94 who had enquired about it, but subsequently declined the product.
It found 32 per cent took out an equity release product because they wanted more out of life and realised they would need extra money. A further 17 per cent opted for the product because they always knew their pensions and savings were not enough, while 11 per cent realised their savings were not sufficient after some consideration.
In total, half of the respondents sought equity release either to boost their income or to fulfil aspirations.
Some eight per cent said their choice in equity release was sparked by a life event which had hindered their original retirement plans and 11 per cent said they were inspired by family and friends needing their support. Some five per cent took equity release as they did not want to carry on working, but needed the money.
Of those who eventually chose equity release, two-fifths took the time to consider their options. Some 19 per cent said that before taking equity release, they felt confused as they did not know how to acquire the necessary funds.
Around 18 per cent said prior to getting equity release or another kind of financial product they knew how much money they needed but did not have it.
The decision to take out an equity release product was not immediate for all respondents as a quarter thought about downsizing first before settling on equity release. A fifth considered using their savings.
Some 17 per cent thought about working for longer and 19 per cent considered taking out a personal loan.
Although they did not end up choosing equity release, a fifth of those who declined the product were initially encouraged to enquire because they knew their pensions and savings were not enough. Some 17 per cent asked about the product due to a life-altering event.
The study also found that those who did not take out an equity release mortgage tended to be younger.
Equity release is a ‘financial planning tool’
Kay Westgarth, head of sales at Standard Life Home Finance, said: “While historically some people have been comfortable pigeon-holing equity release as a product of last resort, speaking to customers who have taken out equity release or seriously considered this option, you can clearly see that this is not always the case.
“Instead, it is frequently being used as a financial planning tool, a springboard to achieving retirement ambitions or an opportunity to support the wider family.”
Westgarth added: “While a good adviser will run through all of a customer’s options at their appointment, it is interesting to note that even before they speak to someone many people are aware of the different choices they face. Specialist advice is still vitally important but working with customers who have already started to think about their options makes the advice process smoother.”
Will Hale, CEO of Key Later Life Finance, said: “Despite initiatives such as automatic enrolment, increasing numbers of people are finding that what they have saved into pensions and other investments is simply not enough to allow them to achieve their wants and needs in later life. Therefore, it is not a surprise that the Standard Life Home Finance research released today highlights that the desire for a better quality of life in retirement and the need to manage a funding shortfall is driving customers to explore equity release as an option.
“That said, it is interesting to note that many customers had already started considering options such as downsizing or working longer to make up the shortfall before speaking to a financial adviser. Rather than being a knee-jerk reaction, taking out equity release is a choice which is made after significant consideration and with the support of a qualified, specialist adviser.”