UTB increases LTVs for self-employed borrowers

UTB increases LTVs for self-employed borrowers


The change applies to all residential mortgage and second charge products.

However, existing restrictions continue to apply for those working within the travel, leisure and entertainment industries.

UTB may also require three months’, rather than one month, business bank statements during underwriting to evidence affordability and sustainability.

All other proof of income requirements remain the same.

Specialist Lending Solutions understands that UTB is likely to be making further changes to its proposition shortly.

United Trust Bank commercial director – mortgages Buster Tolfree (pictured) said: “Brokers have had it tough and we recognise the need to support them through these challenging times.

“This is the first of a raft of mortgage product, criteria and technology enhancements UTB will be implementing throughout the summer, all aimed at helping brokers to write more business.

“Watch this space for the official launch of our summer campaign next week.”



Government considering further measures to protect tenants from eviction

Government considering further measures to protect tenants from eviction


This appears to potentially include specific advice for eviction cases taken to court, but it does not appear there is a plan to extend the possessions ban.

Housing minister Christopher Pincher said ending the ban was “an important step towards transitioning out of emergency measures and allowing the market to operate”.

He noted it was important to ensure all people – landlords and tenants – had access to justice in cases not related to Covid-19, such as anti-social behaviour and longstanding cases pre-dating lockdown.

Responding to a written question from Labour shadow cabinet office minister Helen Hayes asking whether an extension was planned, Pincher added that it was right for the government to consider how measures should adapt to the next stage of the coronavirus crisis.

“We recognise that when possession cases are being heard, further steps may be needed to protect the most vulnerable,” Pincher continued.

“Landlords must follow strict procedures if they want to gain possession of their property, depending on the type of tenancy agreement in place and the terms of it.

“The government has also been working closely with the judiciary, legal representatives, the advice sector and housing sector stakeholders through a working group convened by the Master of the Rolls.

“This group is considering arrangements that will mean that courts are better able to address the need for appropriate protection of all parties in the current legislative framework once the suspension of proceedings ends.”

In another written answer, Pincher revealed that as of 13 July, 13 entries had been added to the rogue landlords and property agents database this year.


UK paid workforce falls by 650,000

UK paid workforce falls by 650,000


Early indicators for June 2020 suggest the number of UK employees on payroll is down 2.2 per cent (649,000) compared to March, though the largest falls were seen at the start of the pandemic and the decline is slowing, the ONS said.

Employment is weakening with data suggesting there were 32.95 million people aged 16+ in work between March and May which is 126,000 fewer than the previous quarter. The employment rate stands at 76.4 per cent.

Self-employment has been hit hard with record decreases noted – down 178,000 on the quarter to 4.85 million.

But the ONS said unemployment is largely unchanged, with an estimated 1.35 million reported in the three months to May. This is 55,000 more than a year earlier, but 17,000 fewer than the previous quarter.

However, the ONS said there are signs of economic inactivity rising, with people out of work not currently looking for work.

Hours worked has fallen to a record low both on the year and on the quarter.


Half a million unpaid

Its analysis also revealed there were around half a million people not in work due to the coronavirus pandemic who are receiving no pay.

Of those who are still being paid, the rate has declined 0.3 per cent on the year, particularly hitting industries where furloughing is prominent such as in accommodation and food services.

When taking inflation into account, the fall actually equates to 1.3 per cent.

However, the claimant count fell slightly in June to reach 2.6 million which includes those working with low income or hours and those who are not working.

Vacancy numbers in the three months to June are at their lowest level since the ONS started collating the data in 2001 – at 333,000. This is 23 per cent lower than the previous record low recorded in 2009.


‘This is just the start’

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the official statistics painted a relatively rosy picture of employment.

“It’s only because employment figures include people who aren’t actually working, and unemployment figures exclude people who are unemployed.

“Look more closely at unofficial measures, and a truer (much more miserable) picture emerges. We’ve seen 650,000 jobs lost, 178,000 self-employed people throwing in the towel, the claimant count more than doubling, and so few jobs being advertised that people have given up looking for work.

“And this is just the start. The OBR has predicted unemployment will hit three million this year, and as much as four million in 2021.

“It means that those who are lucky enough to still be in work need to plan for the worst. If you don’t have an emergency savings safety net, it’s important to put away anything you can afford, just in case your circumstances change,” she said.


Wales stamp duty cut excludes BTL and second homes

Wales stamp duty cut excludes BTL and second homes


The move does not apply to additional properties including buy-to-let or second home purchases, unlike in England and Northern Ireland, but will end on 31 March.

The rates for higher rate residential or non-residential transactions are unchanged.

Around 80 per cent of homebuyers liable to the main rates of land transaction tax will not pay any tax with an average reduction of £2,450 per transaction, the government said.

It noted that the lower value reflected the nature of the housing market in Wales, where the average house price of £162,000 is considerably lower than the £248,000 in England.

First time buyers typically pay £139,000 in Wales, and £208,000 in England.

The move coincides with the full opening up of the housing market in Wales, which will also take place on 27 July, with viewings of occupied properties allowed to recommence.

A further £30m to support the construction of new social housing was also announced.

Finance Minister Rebecca Evans (pictured) said: “This tax holiday will help first time buyers as well as those selling to move on, but we are taking a different direction to support jobs and house building in Wales.

“While eliminating taxes for those that need extra help, the tax holiday rate also reduces the tax paid on more expensive properties to help the wider housing market.

“Under these changes more than three quarters of homebuyers will pay no tax at all, an increase of 20 per cent under our current measures,” she added.


Summer Statement: Chancellor outlines stamp duty, green homes and furloughed employee measures

Summer Statement: Chancellor outlines stamp duty, green homes and furloughed employee measures


Sunak noted that the 25 per cent collapse in the economy since the lockdown began was in effect the reversal of 18 years’ worth of economic growth.

As a result, he noted that the Plan for Jobs would not be the last action in recovering and rebuilding after coronavirus.

The chancellor confirmed the furlough scheme would end in October.

Sunak then unveiled the jobs retention programme for furloughed workers which will see employers paid a £1,000 bonus for each furloughed employee who is still employed as of 31 January 2021.

If all nine million furloughed jobs were retained, it would cost £9bn on the new scheme.

Measures were also announced to help keep young people in jobs with grants for training and apprenticeships.


Stamp duty

The Stamp Duty Land Tax (SDLT) cut could cost the government as much as £3.8bn in revenue.

“The government will temporarily increase the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000,” HM Treasury said.

“This will apply from 8 July 2020 until 31 March 2021 and cut the tax due for everyone who would have paid SDLT.

“Nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.”

It estimated that the average stamp duty bill will fall by around £4,500.


Greener buildings

The government will fund up to £2bn worth of grants for green home improvements which it hopes will support thousands of jobs and cut energy bills across England.

Homeowners and landlords will be able to claim back up to two-thirds of the cost at up to £5,000, while low income households may receive up to £10,000 to potentially meet the full cost.

A £1bn programme to make public buildings, including schools and hospitals, across England greener and help the country meet its Net Zero ambition by 2050 is also being introduced.


Focus on jobs

Delivering his Plan for Jobs policy speech, Sunak said: “The independent Office for Budget Responsibility and Bank of England are both projecting significant job losses – the most urgent challenge we now face.

“I want every person in this house and in the country to know that I will never accept unemployment as an unavoidable outcome.

“We haven’t done everything we have so far just to step back now and say, ‘job done’. In truth, the job has only just begun.”

He added that house building alone supports nearly three quarters of a million jobs with millions more relying on the availability of housing to find work.

Other measures announced include:


Failed public health

Responding to the statement, Labour shadow chancellor Anneliese Dodds criticised the government’s response, noting that it’s failure to act on supporting public health was a large contributor to falling economic activity.

She highlighted that a lack of a working test and trace system and other instances and lost public trust in the government and meant people were reluctant to go out and resume their normal lives.


Summer Statement: Sunak announces £2bn homes insulation scheme

Summer Statement: Sunak announces £2bn homes insulation scheme


Announced during today, Rishi Sunak said the measure was part of a “green recovery” for the economy with concern for the UK’s environment at its heart. 

He said: “I’m announcing today a new £2bn green homes grant. From September, homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient and create local jobs. 

“The grant will cover at least two-thirds of the cost, up to £5,000 per household. And for low income households, we’ll go even further with vouchers covering the full cost up to £10,000.” 

When the scheme launches in September, there will be online applications for recommended energy efficient renovations as well as details for accredited local suppliers.  

Once one of these suppliers has provided a quote and the work is approved, the voucher will be issued. 

This measure is expected to support over 100,000 green jobs locally, and help the UK reach its target of net zero greenhouse gas emissions by 2050.

The scheme aims to upgrade over 600,000 homes across England.


Number of furloughed workers hits 9.3 million

Number of furloughed workers hits 9.3 million


As of Sunday 28 June, 9.3 million workers have been furloughed by 1.1 million employers. In total, the value of claims under the government’s Coronavirus Job Retention Scheme (CJRS) stands at £25.5bn.

This is up from 9.2 million furloughed workers reported a week ago with employers claiming a total of £22.9bn to cover staff wages. The government releases weekly furlough figures every Tuesday.


First part of the furlough scheme closes today

The deadline for new applications to the scheme is today.

Only employees who have been furloughed for a minimum of three weeks on or before 30 June 2020 will be eligible for the second part of the scheme which starts on 1 July and runs until the end of October.

From tomorrow, businesses will be able to bring furloughed employees back part-time. Tomorrow also sees the value of the furlough grant being gradually tapered, with businesses making up the shortfall.

Puja Karia, customer finance specialist at Willis Owen, said: “The furlough scheme has been hugely helpful to many employees and employers around the UK during such uncertain times, but the first leg of the scheme is coming to a close. The scheme is due to close to new entrants today and this means we could see a significant impact on jobs.”


Support for the self-employed

Meanwhile, claims made by self-employed workers who are struggling during the pandemic have remained at 2.6 million for the fourth week in a row.

However, the total value of claims made under the Self-Employment Income Support Scheme, which launched in May, has risen from £7.6bn to £7.7bn.

A “second and final” grant will be available for self-employed workers from August.

This second grant will be payable at a level equivalent to 70 per cent of the taxpayer’s annual average profits, capped at £2,190 per month, so the maximum amount payable will be £6,570 to cover three months.


Support for businesses

Separate figures from the Treasury show that nearly £43bn has been given in loans to struggling businesses.

Under the Bounce Back Loan Scheme, more than 967,000 businesses have received £29.51bn in loans. As of 28 June, 1.18 million applications for the scheme had been submitted.

As part of the Coronavirus Business Interruption Loan Scheme, £11.07bn has been approved to help more than 52,000 businesses, with more than 104,000 applications have been made under the scheme.

Turning to the Coronavirus Large Business Interruption Loan Scheme, the Treasury statistics revealed £2.33bn of loans have been approved for 359 businesses, with 745 applications having been received.

Stephen Pegge, managing director of commercial finance at UK Finance, said: “The fact that over one million businesses are receiving support through the coronavirus loan schemes is a credit to bank staff up and down the country who have worked tirelessly to get finance to those who need it.

“Almost £43bn has now been approved through these schemes, in addition to the industry’s broad package of support for businesses including overdraft extensions and capital repayment deferrals.

“Businesses should remember that any lending provided under government-backed schemes is a debt not a grant, and so should carefully consider their ability to repay before applying.”


UK economy suffers largest fall since 1979

UK economy suffers largest fall since 1979


The figure from the Office for National Statistics (ONS) covers January to March – mostly pre-lockdown – and is worse than predicted.

The figure was revised downwards by 0.2 percentage points from the first quarterly estimate. The fall of 2.2 per cent is the largest fall in UK GDP since Q3 1979 when it also fell by 2.2 per cent.

When compared with the same quarter a year ago, UK GDP decreased by 1.7 per cent in Q1 2020, a downward revision of 0.1 percentage points from the previous estimate.

Jonathan Athow, deputy national statistician at the ONS, said: “Our more detailed picture of the economy in the first quarter showed GDP shrank a little more than first estimated.

“This is now the largest quarterly fall since 1979. Information from government showed health activities declined more than we previously showed.”

“All main sectors of the economy shrank significantly in March as the effects of the pandemic hit. The sharp fall in consumer spending at the end of March led to a notable increase in households’ savings,” he added.

The latest ONS statistics capture the first direct effects of the coronavirus pandemic, and the government measures taken to reduce transmission of the virus.

David Millar, head of multi asset at Invesco, added: “The final Q1 GDP number is just as bad as feared and with later release from lockdowns around the UK than Europe and the US, the chances of as strong a bounceback as them is far reduced. All eyes are now on the PM and Chancellor and their plans for a post-Covid economic boost – fiscal conservatism is being put on the back-burner for now.”

The data was released as prime minister Boris Johnson made a major speech about the future of the economy.

Johnson announced a £5bn “New Deal” which puts jobs and infrastructure at the centre of the government’s economic growth strategy. This included an overhaul of the planning system to allow for an easier construction of new homes.

In a speech in the West Midlands, the prime minister underlined his commitment to “build, build, build” in order to upgrade Britain’s infrastructure and skills to fuel economic recovery across the UK.

Rent increases hit lowest ever levels – ARLA

Rent increases hit lowest ever levels – ARLA


ARLA said this was because many landlords had chosen not to increase rent due to financial difficulties faced by tenants during the coronavirus pandemic. 

This is down from the 41 per cent of agents who said they were noticing rent increases in February, the last time ARLA conducted its PRS report and before the lockdown began. 

The year-on-year difference is also stark, as in May 2019 45 per cent of agents reported rises in rent. 

Furthermore, tenants have been more successful in asking for rental reductions with the number of tenants negotiating reductions increasing to 2.5 per cent in May – the highest since March 2019 when the success rate was 2.9 per cent. 


Tenant demand 

As landlords were unable to conduct viewings during the lockdown, the average time properties were empty between tenancies increased to five weeks in May.  

This is the longest time properties have remained void between tenancies since records began.  

The number of new prospective tenants fell to 70 per branch in May, compared to 82 in February.

However, the level of pent-up demand during lockdown meant that despite the fall, this is still the highest level on record for the month of May since records began, compared with 60 new tenants registered in May 2018, and 69 in May 2019. 


Rental stock supply 

Following the reopening of the housing market, the number of properties managed per branch rose to 208 in May. This is an increase from pre-lockdown when the average number of properties managed per member branch stood at 201. This figure is the same year-on-year.  

David Cox, ARLA Propertymark chief executive, said: “Our latest figures show that landlords and agents have been taking the brunt of the pandemic. They are aware of the financial difficulties facing tenants and have shown empathy, with many landlords not increasing rents where they otherwise might have needed to.  

As we continue to move forward, it’s important that everyone aims to keep the rent flowing in order to sustain the market and help boost the economy following several months of uncertainty.”  


Clydesdale and Virgin Money remind brokers to notify them of borrower changes

Clydesdale and Virgin Money remind brokers to notify them of borrower changes


The lenders, which are part of the same group, told Mortgage Solutions they had sent a reminder to brokers of its policy to update it if borrower circumstances changed as part of their commitment to responsible lending.

This could include being furloughed, loss of overtime or commission payments, or being made unemployed, the lender said.

“We understand that many peoples’ lives have changed in recent months,” it in a message to brokers.

“As we continue to assess mortgage applications, it’s important that we take into account your customers’ current circumstances.”

It continued: “You must let us know if there have been any changes to a customer’s circumstances since you submitted an application to us.

“Examples of changes could include unemployment, furlough, loss of overtime or commission.

“If things have changed after you have submitted an application, please tell us and we will assess your customer’s current circumstances against our policy at the time of the original application.”