Interest-only options for pre-retirees – Pearson

Interest-only options for pre-retirees – Pearson

People are living and working longer than ever before, with socioeconomic factors such as the average age at which many people now buy a house and have children all playing a major role in this shifting dynamic.

Rising house prices over the last few decades have seen the average age of first-time buyers increase to 34 years old, according to the Office for National Statistics (ONS), with the knock-on effect being that many people are entering their 50s, 60s and 70s still carrying mortgage debt. 

Similarly, a growing number of the population are choosing to start a family later in life, which means many people are now entering what has traditionally been considered their retirement years with ongoing family commitments such as childcare fees. 

This is having a major impact on how consumers plan for, and live through, their retirement years, with the days of working for several decades and retiring at the age of 60 a thing of the past for many. Similarly, advancements in science mean people are now living longer, healthier lives and spending a greater amount of time in retirement and in the workforce.

Yet despite these shifting social dynamics, the mortgage market has been slow to respond to the changing needs of this demographic, with many product offerings failing to take into account the increasing demand for solutions that cater for these changing needs. 

 

Adapting to the times 

This is particularly true for those borrowers in their pre-retirement years, who, despite being healthy and able to work, face difficulty trying to secure a mortgage after the age of 55.

In many of these cases, these borrowers have been declined a mortgage on the high street due to their age. 

However, we continue to experience growing demand for this type of borrowing, with some of these individuals looking to downsize to a smaller property, while others still want or need to continue working to finance their mortgage, lifestyle and family commitments.

As our lending criteria have no upper age limit, these clients have been successful in securing an interest-only mortgage, as this option can be taken out for up to 35 years regardless of the client’s age at the time of application.

For example, this means that pre-retirees looking to downsize can use the sale of their property to secure an interest-only mortgage with a maximum loan to value (LTV) of 60 per cent, provided they have a minimum amount of equity in the mortgaged property. This ranges from £500,000 in London and £350,000 in the South East and South West to £225,000 in the Midlands and Wales and £200,000 in the North.

There is also the opportunity to combine this with a capital repayment option of up to 80 per cent LTV, subject to the client meeting the minimum equity requirements. In this case, the 60 per cent LTV limit will still apply on the interest-only part of the loan.

Income multiples of up to five-and-a-half times income and loan amounts of up to £750,000 are also available on interest-only mortgages, enabling borrowers to tap into a substantial amount of equity that may have been built up in the property over the longer term. 

In cases where the property is the applicant’s main residential home, interest-only is available up to 75 per cent LTV, with any lending above this limit available on a capital and interest repayment basis only.

If the client does not have enough equity in the property, they can use a percentage of their pension fund – for example, 25 per cent of a £300,000 pension fund (£75,000) – as a repayment vehicle, enabling them to take out an interest-only mortgage of up to £75,000. 

All these options demonstrate the growing flexibility required to support this growing demographic who, though approaching the traditional age of retirement, are not in a position to leave the workforce, remain undecided about the future or want to continue working for the foreseeable future.

And being aware of these options could result in more clients being able to continue working towards their retirement goals while simultaneously earning an income that will help to boost their retirement fund when they are ready to leave the workforce. 

Why should you employ a protection-only adviser? – Flavin

Why should you employ a protection-only adviser? – Flavin

It would seem that, nationally, the average case size is quite similar. In the South East, mortgage proc fees are considerably higher due to house prices also being higher, so less protection is sold. The more the average house price reduces, the more protection is sold, thus bringing the average case size similar nationally. 

Not offering a full remit of protection policies, recommending the correct cover at the right time and in a way the client can easily understand not only goes against Consumer Duty but also leaves both the client, you and your company unprotected against unforeseen eventualities.

In your and your company’s case, that’s a claim. 

 

Boosting protection business 

So, how do you increase income whilst also doing what’s right with regards to protection sales? Welcome to the protection-only adviser.

Why is this elusive character such a scarcity in an industry with a requirement worth a monetary figure in its trillions and growing? 

Threaten to take away the ability to sell insurance from an adviser with low protection penetration sales and they’ll kick back like a mule during branding. I’ll lay money on them quoting the last sale they made with a commission of circa £2,000 and how you’re now taking away their ability to earn.

I’ve seen brokers with an eight per cent life to mortgage penetration rate argue their position.

Come on, that’s eight people in 100 that you’ve sold protection to. At that ratio, they’re the customers that begged you to offer cover. 

So, here’s my proposal to make the subject less contentious. 

 

The advantage of a protection-only adviser 

How about you employ someone in an administrative role as a starting point? Let’s face it, there’s always admin work that is either not being completed or the adviser is completing late at night instead of looking for sales opportunities. This administrator is trained to sell life insurance, sits relevant exams and role plays until they are comfortable and confident in the importance of what they are offering.

For me, if you are training objection handling, then the sale hasn’t been made in the correct way and there’s a raised chance of cancellation, but that’s a conversation for another day. 

This new super-administrator can now get to work on all those cases that have already completed with no life sale being made. In addition, any new cases that haven’t had a protection policy sold by the time the offer is issued gets passed across for a conversation. On this point, I’d also include those cases where the adviser has a signed ‘not interested’ letter on file.

Dare I say that these are often used to pacify compliance more than they are a true reflection of the client’s wishes after fully understanding their options and exposure. 

 

The best of both worlds 

After 12 months of selling life, general insurance and understanding the administrative side of mortgages, then, if interested, your super-administrator could take their mortgage exams and move into a full advisory role. One thing I’ll guarantee – those that follow this process will have a far higher penetration rate than your average mortgage broker who went straight into selling mortgages.

The reason being, the former sees life as an effort to do after completing all the mortgage paperwork, the latter sees the mortgage as a way in to sell protection. 

A guide to setting key performance indicators (KPIs) for the super-administrator during this process:

  1. You always need to ensure that the sales are right for the client and correctly documented. 
  2. All life policies (unless against the client’s specific wishes) must be put into trust. 
  3. Wherever possible, a trustee meeting should be held to explain their responsibilities. 

Points 1 and 2 are what’s right and proper, so a high percentage conversion should be set as a KPI. 

Point 3 could have a lower percentage KPI, but if your super-administrator were meeting with trustees to explain that Joe and Sue are placing the policy in trust to ensure the money went to the right people, in a timely manner, and now sits outside their estate, so is not usually liable to inheritance tax, there’s a fair chance they would pick up on the ‘tax’ comment.

A simple explanation followed by the question: “Is your life policy in trust?” may potentially end up in a self-generated protection sale and possibly a new mortgage client that can be passed back to the company. 

Worth considering? With so many product transfers making up your sales figures, incomes are down. Your existing clients already know, like and trust you, so why not offer a more complete service? It’s an easier sale than chasing new clients. 

This is something that I’ve put in place with several of my clients who, within months, have administrators writing £10,000 to £20,000 in protection commission for an average of 15 per cent pay away.

There is no need to lose faith in later life lending – Wilson

There is no need to lose faith in later life lending – Wilson

Early reaction from some quarters has described these latest figures as ‘worrying’, although my view is that they have to be reviewed within a much wider economic context, not least the environment that older borrowers – and indeed all consumers – have been facing in the last 12-18 months.

But, are the figures ‘worrying’? Should all of us sector stakeholders be ‘worried’?

 

Putting it into context 

It may well depend on how you see the later life lending market. Do you see it purely as ‘lifetime mortgages’, which these UK Finance figures refer to? Or do you see it in the context of a much wider marketplace? 

If it’s just the former, then you may well be ‘worried’ by the drop in lending between 2022 and 2023, however I might also suggest that you have probably not been in and around the market for very long. 

Anyone who has spent multiple years active in equity release, for instance, will know full well that there were many, many years when the sector could only dream of £4.1bn of lifetime mortgage lending in a calendar year – the figure for 2023, according to UK Finance. 

They will remember years when £1bn of lending looked like the very height of ambition for the sector during 12 months of activity, let alone an average of this over a quarter. 

And yes, of course, we’re acutely aware that the lifetime mortgage business saw a fairly substantial drop-off between 2022 and 2023. However, name me any specific mortgage sector that didn’t see a similar fall in activity, be that buy-to-let (BTL) or other types of specialist lending, not forgetting residential purchase and remortgaging. 

 

An unsurprising contraction 

When you have a significant increase in rates over the course of any period, it is inevitable you will have a tail-off in both demand and activity.

The increased cost of that lending will weigh heavily on a large number of potential borrowers, and they may not be in a position to either afford the loan, or they might simply decide now is not the time to be doing this. 

The point we should all be focused on, of course, is whether the 2023 environment is likely to prevail, and will last year be the norm for years to come? I think we are already seeing signs that this is not going to be the case, particularly if inflation continues to track downwards, if it moves towards, and eventually reaches, the Bank of England’s two per cent target, and if rates can be moved further southwards as a result. 

We’ve seen already this year how lower rates have shifted the market, and later life lending is really no different to the wider mainstream space. Not least because it’s much more of a mainstream offering anyway, with many older borrowers taking out mainstream mortgages, plus of course you have retirement interest-only (RIO) options, plus all those available within the lifetime mortgage sector. 

 

Led by rates 

Rates clearly have an impact – that is a fact we can’t deny – and 2023 felt that more keenly than in the years prior to that when we were fortunate to have ultra-low rates. They, of course, impact loan-to-value (LTV) levels as well – a major consideration for later life lending – and this clearly adds up to the levels of business and lending we saw last year. 

However, as we all-too-readily know, the market can shift (and to some extent, has).

It’s not a linear shift – it never really is – and we will see pricing move up and down, reflecting a whole host of concerns and issues at any one time. However, it’s likely that we will see bank base rate cuts this year, and we already have swaps responding to this greater likelihood, which does mean that average rates have tracked down from the norm last year. 

These are still very early days in 2024, but we should not be worried by the figures as recently revealed. The underlying fundamentals of the later life lending market are strong, as are the greater array of options available to advisers and their later life borrowers.

The important point is to be active in this space, ensure clients are aware of your advice offering, and ensure you are able to cover off all of the growing number of options that are available to you and them.

No worries.

Plan for the future, it’s where you’ll spend the rest of your life – Bell

Plan for the future, it’s where you’ll spend the rest of your life – Bell

Fast-forward to 2023 and the introduction of Consumer Duty to justify actions and prioritise fairness and positive outcomes to mitigate foreseeable harm.

Elon Musk’s saying: “Some people don’t like change, but you need to embrace change if the alternative is disaster,” resonates deeply in this context. Consider a scenario where a client asks for a ‘cheap’ mortgage to provide a home for their family.

Advisers might recommend a short fixed-rate mortgage, like a two- or five-year fix, for its perceived stability and affordability. However, unforeseen events such as divorce, pandemics, rates shooting up or products being withdrawn dramatically alter someone’s ability to manage mortgage changes and may force them onto less favourable standard variable rates (SVRs.) 

 

An alternative solution 

This brings to light the importance of presenting flexible, long-term fixed-rate mortgages – for example, a 20- or 30-year fixed rate – to give borrowers a choice. They allow clients to control when they remortgage, based on improved circumstances or better rates. 

They decide if or when is right for them. Bob Dylan captured this sentiment with: “There is nothing so stable as change.”

Long-term fixed rate products embody this stability through change, offering flexibility and security hand in hand. 

For advisers, networks, and compliance functions, the ask is clear: discuss all options and allow informed choices. Undoubtedly borrowers will request the ‘cheapest’ mortgage, but the stakes of predicting the future incorrectly are high.

This demands a deep understanding of the borrower’s true needs, balancing initial costs against stability, long-term expenses, flexibility, and overall satisfaction, i.e., cheaper does not necessarily equal value for the customer.

 

Thinking of the future 

Predicting interest rates is an uncertain endeavour.

Just as countries shield themselves from interest rate risks, individuals should also have protections in place. Advisers have a duty to present a range of options and enable a genuine discussion about risk appetites.

As Steve Jobs said: “A lot of times, people don’t know what they want until you show it to them.” 

Borrowers won’t know about 30-40 year fixed rate mortgages with five-year early repayment charges (ERCs) unless you tell them.

Borrowers may also wonder why they had not been presented with them as an option, if in five years’ time they face a rate shock, or a lack of suitable products, that they could have been protected from. 

The long-term fixed rate mortgage model still rewards advisers throughout the lifetime of the loan, if they continue to check it is still the right option for the client, and acting if it is not.

With no reversion rate, there is no need to stress about an interest rate risk, so many clients may be able to borrow more money safely, and with the reassurance their payment will never go up. 

Advisers or their clients will never know what the future entails, but with a long-term fixed rate mortgage, they are granted stability and flexibility for potentially their most important financial commitment. 

Self-build mortgage cases: five factors for success – Grimshaw

Self-build mortgage cases: five factors for success – Grimshaw

Although this may seem daunting at first, self-build business is both hugely satisfying and profitable for the brokers who take the time to get to grips with this niche area of lending. 

There are five key aspects brokers should bear in mind when helping their clients apply for self-build mortgages: 

 

Stage payments 

One of the biggest ways brokers can add value is by ensuring their clients are aware that self-build mortgage funds are released in stages, or tranches, as the build progresses. 

Identifiable stages range from the initial digging of the foundations to the final fix. This means the borrower only pays or accrues interest on the monies received, rather than the total amount from the outset. 

There are two types of stage payments – in arrears or in advance. The first is the most common and sees payments released as each stage of the build is completed. Because the lender uses the value of the finished work as security for the monies needed, borrowers are required to fund each build stage upfront. Advance stage payments, on the other hand, see funds given before each stage of building work. As no security for the loan exists, lenders consider this to be a riskier approach, so brokers should be aware that not all offer this as an option. 

Before further funds are released, lenders will need a certified valuer to approve each completed stage (incurring a small cost to the self-builder each time). 

 

Methods of construction 

It pays for brokers to understand the different types of construction methods available for self-build, as not all are accepted by every lender. Each method can affect the timing and cost of the build.

This is significant, as lenders are most at ease when construction is set to begin shortly after an application has been accepted. Indeed, planning permission is usually locked in as soon as the foundations are started. 

 

Understand the project 

Self-build mortgages are not only for brand-new projects, but can also include partially built properties, conversions, renovations and ‘knockdown and rebuilds’. Brokers must judge when a self-build mortgage is necessary, considering factors such as whether the property is uninhabitable or if any structural alterations will impact its stability.

Clients may be surprised to discover that a major renovation project requires a self-build mortgage rather than a standard residential one. If brokers (and lenders) can align their expectations from the outset, it will minimise complications later on. 

 

Contingency planning 

Self-build projects often encounter unforeseen challenges, from weather delays to complications with the groundwork. Brokers can help support their clients in anticipating and mitigating these risks by ensuring they have sufficient contingency plans in place.

Scrutinising schedules and cash flow will help demonstrate to lenders that a self-build project is financially stable. 

 

Effective communication 

A self-build project usually goes through several iterations before everything is agreed. 

Lenders will be reluctant to release funds without a thorough understanding of an entire project, so brokers have a vital role to play. Establishing clear communication channels to bridge the gap between a client and their bank or building society can streamline the process, so any issues are identified and addressed early on. 

Brokers should embrace any self-build opportunities that come their way, safe in the knowledge that lenders are always on hand to assist and ensure the whole process runs smoothly. 

Making sense of the UK base rate and what happens next – Blissett

Making sense of the UK base rate and what happens next – Blissett

Most experts still believe there will be a gradual decrease down to 4.5 per cent by the end of Q4 with some even daring to predict that it could go as low as four per cent – a scenario discussed recently by Walid Koudmani, chief market analyst at XTB, one of the largest stock-exchange-listed CFD brokers in the world.  

After UK inflation remained steady at four per cent in January when economists had expected a small jump in prices, most traders are now betting that UK interest rates will be cut by 0.25 per cent in June.  

UK interest rates are then forecast to fall to around 4.5 per cent by the end of 2024 though, with inflation proving stickier in the US and EU, these forecasts for UK interest rate cuts are far from ‘locked in’. 

The reasoning for this outlook is derived from an easing of inflationary pressures the UK market is currently experiencing, with data showing the state of inflation could have peaked or is peaking – allowing the Bank of England to loosen its cautionary grip on the UK economy. 

 

Predicting the path of mortgage rates 

When looking at how that affects the mortgage market, we can make an assessment by following the trends of lender mortgage rates.  

While some lenders have already begun offering sub-four per cent mortgage rates, mainly for products with lower loan to value (LTV) ratios, others remain cautious.   

We have seen a steady decline since the start of the year with averages coming in at just above five per cent for 85 per cent LTV and lower. With some lenders increasing rates in recent weeks with no real explanation based on the Bank of England base rate continuing to stay at 5.25 per cent, this mixed response reflects the ongoing uncertainty surrounding the future economic landscape. 

Lenders will always play on the cautious side when issuing rates to potential borrowers, so they will be the first to pre-empt or react to news of uncertainty and change in the market.  

I would expect a small increase over the next month as an artificial buffer for lenders to protect themselves from the market changing over Q2 or Q3 of this year.  

This would allow them breathing room to navigate exactly where they want to place themselves on the market. 

Portfolio landlords are keeping their foothold in the rental sector – Hendry

Portfolio landlords are keeping their foothold in the rental sector – Hendry

Now, of course, it’s fair to say those points mentioned above continue to prey heavily on landlords, and that for some, the culmination of these measures has meant they have sold up and are no longer active. 

However, at the same time, we have to recognise it is far more likely to be those landlords who had one, possibly two, properties who have made their exit from the PRS over the last few years, compared to those we might deem to be portfolio players. 

And, of course, it is far more likely that the properties they have divested will not have left the PRS at all, with other landlords being the ones most likely to have purchased those properties and put them back into ‘circulation’. 

Our recent BVA BDRC research of landlord intentions, when it comes to their portfolios, revealed that, in the last quarter of 2024, the number of landlords planning to purchase had actually increased by three per cent to 11 per cent. 

And it is portfolio and professional landlords who are much more likely to be looking at expansion or acquisition opportunities – not just in terms of property numbers, but also in terms of diversification of that portfolio.

Some 19 per cent of those with larger portfolios said they planned to acquire over the course of this year.

They recognise, more than most, that having large numbers of very similar properties in very similar areas might provide them with the bedrock of their portfolios, but that they also have the opportunity to move into different, potentially larger, opportunities, utilising their existing stock in order to provide finance options.

 

Moving with market demands 

There is a fundamental here that seasoned portfolio landlords will be acutely aware of, and it comes in the form of ongoing demand for tenancies, against the backdrop of a rising population who might wish to own their own homes, but are having to wait longer to do so, due to a combination of property supply shortages, high house prices, mortgage costs, income levels, etc. 

That will lead many landlords to acknowledge that long-term property investment in the PRS is unlikely to lead to too many void periods, poor rental returns – even with higher mortgage costs – or a drop in the number of tenants seeking properties. Add these together and you have a compelling argument for further investment. 

Especially in areas which can deliver a bigger, better return. It’s why we see portfolio landlords much more interested in house of multiple occupancy (HMO) properties, or multi-unit blocks (MUBs), because they are able to see the larger yield achievable and, of course, over the long term the level of capital appreciation that can make such opportunities too good to turn down. 

Of course, that can be easier said than done, particularly if you’re a landlord that – up until now – has tended to stay within ‘normal’ residential property, two-up/two-downs, etc.

Specialist knowledge, as both an adviser and a lender, can be crucial here because, for the HMO/MUB ‘newbie’, there are a lot of different things to think about, in terms of licensing, room size, exits, shared communal areas, and everything else.

Overall, we anticipate portfolio and professional landlords who are in this for the long term are not going to be put off by the greater complexity of these opportunities and will recognise the demand that’s there in the market and how they can meet it.

They will need help, and having a specialist adviser and lender available to them will get them to where they need to be in a much quicker time-frame and with the right finance behind them.

The govt has confirmed its disinterest in improving homeownership – JLM

The govt has confirmed its disinterest in improving homeownership – JLM

While we had all seen this policy kite-flying a number of times prior to recent Budgets, it looked like it had secured enough industry and public support to be deemed worthy of launching, and – we were told – HM Treasury was busy drawing up the details of the plans for launch.

The industry was split on whether it was the right move, with many torn between welcoming anything that helps first-time buyers get a foot on the ladder, while others were concerned about what such a scheme might mean for house prices, demand levels – especially compared to supply – and of course wider worries about the use of taxpayers’ money to support those wanting to get into a first home. 

In the end, of course, we had nothing to worry about. Literally nothing.

Because by the time Jeremy Hunt did make his Budget speech, we had not only been told the 99 per cent LTV scheme was already history, but that pretty much anything else that had been discussed in recent weeks for the housing market – stamp duty changes for downsizers, etc – had also been jettisoned.

Instead, tax-raising had become more important than tax ‘giveaways’ – even those that might act as a considerable catalyst to activity in one of the most important parts of the UK economy, namely the property and mortgage markets.

 

Shifting the responsibility 

So, where does that leave us?

Well, if you’re a first-time buyer, it would appear the government feels, at least to some extent, that it can only improve your lot and your access to properties if landlords and additional homeowners sell up. 

It certainly doesn’t appear willing to use its considerable resources to support homeownership. While it appears to recognise there is a huge shortage of homes to both rent and buy, it’s also not in a position to actually improve this situation, almost completely reliant as it is on the major housebuilders and developers to help improve numbers. 

Let’s be frank, we have a totally unfair situation following the push of a consistent message over the past 40 years or so, which has told the UK public it is their unalienable right to be a homeowner. 

When you consider the alternative – renting – then it’s not surprising the heartbeat of many people is quickened by a great desire to want to own their own home. Not just because of the increased security of the shelter it provides, but moreover in terms of the cost, which right now is likely to be far less than renting for many people. 

It seems a rather moot point, given no such announcement was made or indeed any scheme to support first-timers, but this is fundamentally why there was interest in a 99 per cent LTV scheme and why we continue to be supportive of schemes that might, for example, replace Help to Buy.

 

How to truly help potential homeowners

So, while this isn’t something we suspect this current Conservative government is going to worry themselves about, we have some advice for any future government. We sense they will be more likely to look at such schemes. 

When they do, they need to draw a line in terms of who can access them and what they can be used to purchase. That is, they should be purely for first-timers and only available on new-build properties. 

Broaden it to the secondhand market and you are asking for trouble and a repeat of the MyChoice HomeBuy Scheme of yesteryear, which was not so tightly controlled. That resulted in those who own already benefitting the most, not just in their ability to secure large sums of money to support their purchases, but also in the huge spike to house prices that followed the introduction of the scheme.

It’s widely understood those who benefitted most from that incarnation were existing homeowners who saw the value of their properties rise quickly and steeply, as those accessing the scheme used the money to put in larger offers for properties. 

After that, we had the much more popular and successful Help to Buy. When it ended – another irony that will not be lost on anyone – it was in the right shape and format; only available to first-timers, with regional price variations, on new-build property.

It allowed many younger people to get into a new home, who would have struggled to buy otherwise, and into the areas where they wanted to live. And from that, a large number have been able to ‘caterpillar’ into a more traditional form of ownership. 

 

A targeted homeownership policy 

Any future scheme needs the parameters to be just as tight and clearly lenders are going to have to be comfortable with borrowers meeting affordability – even if it’s government-backed. 

Plus of course there will be other considerations, not least setting aside enough capital to satisfy the Prudential Regulation Authority (PRA), and the still incredibly large elephant in the room, supply. 

Yes, any new scheme will also need a housing developer sector willing to ‘go there’ in terms of building the homes required for the people who are going to be using it. And that, in itself, will be easier said than done.

Square those circles and have a government committed to building more affordable homes, and helping more people into them, then we have a chance. That has seemed very unlikely with the current government, and the Budget only confirmed that.

The Chancellor only tinkered at the edges of the housing market’s problems – Bamford

The Chancellor only tinkered at the edges of the housing market’s problems – Bamford

That wasn’t supposed to be an assessment on the content of his speech as it related to the housing and property market, but it might well have been. 

Which is not to say that there were not references and measures aimed at the housing market sector, but one wonders how they might well impact the (very serious) issues we are confronting, particularly in terms of housing supply, but also in terms of providing greater access for first-time buyers to secure affordable homes.

 

A domino effect 

To be fair, some of the measures announced might well have an indirect, and potentially positive, impact for first-time buyers but they are certainly not explicit, big-ticket in their nature, such as a commitment to build more homes, or the 99 per cent loan to value (LTV) mortgage scheme that was mentioned in dispatches and rejected.

However, you might well argue that abolishing the furnished holiday letting regime means these properties move back into being used for long-term tenancies, which increases supply of private rented sector (PRS) homes in these areas, which gives more options for renters, keeps rents down, and gives those within these properties a better chance to save for a first home. 

You might well argue that abolishing multiple dwellings stamp duty relief makes property investors think again about buying a number of homes at one time, which could provide further supply to other potential purchasers, such as first-time buyers. 

And you might well argue – indeed the government does this itself – that dropping the higher rate of capital gains tax (CGT) from 28 per cent to 24 per cent on selling residential property will, and I quote, “encourage landlords and second homeowners to sell their properties, making more available for a variety of buyers including those looking to get on the housing ladder for the first time…”

It may well do this, but not in the numbers that the government is likely to want, plus of course this ‘Peter versus Paul/buy-to-let (BTL) landlord versus first-time buyer’ argument has been played out for many years. 

We all know that taking supply out of the PRS, particularly at a time of great tenant demand, doesn’t necessarily work well for tenants. Far from it – as we’ve seen, with rents rising rapidly over the past few years. 

 

Going further with stamp duty 

The Treasury says it anticipates an extra £600m in a year to be generated by these three measures. One has to wonder why, if the government has accepted the argument that lowering CGT on residential property sales actually increases transactions and revenue, then it doesn’t accept the same argument when it comes to stamp duty? 

It’s not as if it doesn’t have recent precedent to back up this argument, given how often it has cut stamp duty or provided a holiday and seen activity – and tax revenues – rise as a result.

But, apart from abolishing multiple dwellings relief, there was no mention of stamp duty in a wider context, certainly nothing about cuts for downsizers, or even as some were led to believe, abolishing it all together.

It leaves first-timers relying on some tinkering around the margin, which may or may not convince landlords or second-home owners to part company with their properties, which may or may not be the type of homes first-timers actually want, with nothing to suggest they do, or that they can afford these homes, or they can save for the deposits, or they might also access larger numbers of new affordable homes, particularly new build.

I could go on. 

 

A lacklustre announcement for housing 

Overall, even though we were not anticipating much from this Budget, it is always disappointing not to see a concerted effort to look and provide solutions to major problems, particularly in terms of housing supply, which is where we clearly have an ongoing and fundamental problem that requires real action.

Incentivising those with multiple properties to sell can’t really be the answer to this, can it? 

On that note, consider the dial barely moved at all. It will be the industry that has to produce the solutions on finance and affordability, and support for potential first-timers with schemes like Deposit Unlock, and we’re probably going to have to wait for a new Parliament before we see any movement on supply.

That message was loud and clear, if not actually stated, in a Budget that is unlikely to live long in the memory, particularly if you’d like to own your own home. 

International Women’s Day: The power of allyship – Wager

International Women’s Day: The power of allyship – Wager

Within this, International Women’s Day is a global celebration of the social, economic, cultural, and political achievements of women.

This year’s theme is Inspire Inclusion, emphasising the importance of diversity and empowerment through all aspects of society.

This will result in a huge number and variety of female voices being raised and heard across the world, but this is not only a platform for women. In order to successfully accelerate this conversation and actions, all voices need to be raised – especially male voices – when it comes to harnessing the power of allyship. 

 

What is allyship? 

Allyship is being consciously inclusive. It helps colleagues to feel respected, involved and connected every day. It means: 

In order to make a real difference, allyship needs to be active, not passive. It can be all too easy to pay lip service, but change-makers act to call things out and use their own platform to try and make a difference.

Being an ally to women means putting the mirror up to yourself, being aware of unconscious biases and remaining curious. We might not ever fully understand the journey, obstacles or prejudices women face, but this only emphasises how well we need to listen. 

This isn’t always easy, and we constantly need to educate ourselves along the way. Here at Barclays, we are fortunate to have a great gender resource group called Win, which exists to encourage, inspire and support women in achieving their career goals and potential through a range of initiatives to increase the representation and decrease the turnover of women at every level of our business. Importantly, both men and women can join Win. 

Such accelerator and development programmes help deliver different learning styles to meet individual requirements, and it’s crucial that all organisations provide the platform for women to receive targeted career and personal development opportunities.

It’s all about achieving equity and providing opportunities to ensure everybody has the same access, the same vision, and the same privileges. However, even though this is improving throughout our industry, this remains an ongoing battle we must all fight.

Going forward, it’s not about lowering the bar but widening the gate, and active allies can play a key role in prising all these gates open, rather than being limited to a select few.