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Phoenixing’ bosses face bans

Directors who allow companies to go bust to avoid debts could be disqualified and fined under new powers for the Insolvency Service. Ministers want to curb so-called “phoenixing”, where liabilities such as pension deficits and supplier payments are left behind by companies who then re-emerge under a different name with a clean bill of health. The proposals will enable the Insolvency Service to take enforcement action against directors of dissolved companies for the first time.
The Sunday Telegraph

HMRC’s late payment fee increases

HMRC has increased the rate charged to businesses and individuals who pay their tax late. Following the Bank of England’s latest quarter-point rate rise to 0.75%, HMRC lifted its fee by 0.25 percentage points to 3.25%. However, the department has been criticised for having kept the repayment interest rate – the rate HMRC levies on top of sums it owes to taxpayers – at 0.5% since 2009.
The Times

Brokers wary of 1% base rate’s impact

A survey by United Trust Bank shows that 70% of 108 brokers questioned felt that a further base rate increase to 1% will negatively impact the residential property market. Some 61% of respondents operating in the fields of property and asset finance also felt a base rate increase would stifle SME investment.
Bridging and Commercial

Housing transactions remain stagnant

The number of houses being bought and sold edged further down last month, with residential transactions 3.2% lower in July 2018 compared with the same month last year, according to the latest HMRC data. Deals also fell 0.8% from June to July, with 99,270 residential transactions reached. Kevin Roberts, director of Legal & General Mortgage Club, said: “A fundamental imbalance between supply and demand continues to stifle the market, and until this issue is properly addressed, homeowners will find it difficult to downsize or upsize.”
Daily Mail

Lender releases inaugural Buy-to-Let Report

Following Shawbrook Bank’s previous reports on the HMO market and the Private Rented Sector the NACFB Patron has released their latest research on the Buy-to-Let (BTL) market. The findings explore the impact of several recent government and regulatory changes. Set against the shifting sands of national policy, the issues discussed are vital for brokers, and the professional investor and landlord community. The 2018 Shawbrook BTL Report delivers clarity on what this means for a sector that remains a critical component of the UK housing landscape.
Shawbrook Bank

Bridging lending down 6.6% in second quarter

The Association of Short Term Lenders has revealed that the value of bridging loans written by its members has fallen by 6.6% in Q2 2018 on the previous quarter, although it was still up 10.3% year-on-year. Annual completions have risen by 27.2% compared with the year ending 30th June 2017, totalling £3.87bn. ASTL’s CEO, Benson Hersch, said that the “property market may be difficult at the moment, but responsible bridging lenders continue to prosper.”
Bridging & Commercial

Buy-to-let lending slumps

The number of new home loans taken out by buy-to-let landlords fell by nearly one-fifth following a series of tax changes and new regulations. UK Finance said that 5,400 buy-to-let mortgages completed in June, a 19.4% fall from June 2017, when 6,700 were completed. There was also dip in mortgages for home movers and first-time buyers, with 34,900 new first-time buyer mortgages completed in June – a fall of 3.6% on the same month a year earlier.
Financial Times

Specialist lending softens in June

Specialist lending market activity softened in June, driven by a weaker appetite for business investment. Lending volumes declined 3% year-on-year in the asset finance sector, according to the Finance & Leasing Association, although for the second quarter as a whole they were up 5%. The total follows on from a 10% increase in asset finance new business in May, driven by new finance for equipment in the construction, manufacturing and agricultural sectors. John Cronin, financials analyst at stockbroker Goodbody, said the slowing growth is reflective of the weaker appetite for business investment.
P2P Finance News

Slight decline in asset finance

Asset finance new business, primarily leasing and hire purchase, grew by 5% in the second quarter of 2018, according to data from the Finance & Leasing Association (FLA), though fell 3% in June compared with the same month in 2017. By channel, direct finance came in at £1.4bn, down 7% year-on-year, while broker introduced finance was up 14% to £519m and sales finance was down 6% to £922m.
Leasing Life

UK’s house price growth sluggish

Data from the Office for National Statistics (ONS) show that house prices in London dropped 0.7% in the year to June, the lowest annual growth rate since September 2009 when they fell 3.2%. Annual house-price growth across the country slowed to its lowest level in nearly five years with average property values increasing by 3%, down from 3.5% in May. Slow wage growth, rising mortgage rates and tougher rules on borrowing are constraining buyers, experts say. Chief economic adviser to the EY Item Club, Howard Archer, said: “Housing market activity is still relatively lacklustre, and we expect it to remain so as the extended squeeze on consumer purchasing power only gradually eases, consumer confidence is relatively fragile and appreciable caution persists over engaging in major transactions.”
City AM

Interest rate will remain low for 20 years

Ian McCafferty, a Bank of England policymaker, has said that the era of low interest rates will last for at least another 20 years, despite official borrowing costs rising gently in the coming years. Mr McCafferty, who is leaving the MPC at the end of the month, said structural changes in the global economy meant UK borrowers and savers should get used to interest rates being “significantly” below the 5% they averaged in the 10 years leading up to the financial crisis in 2008.
The Guardian

Banks refusing to raise rates for savers

The Times reports that only one of 100 banks and building societies has passed on last week’s interest rate rise in full to all its savers, leading MPs and campaigners to express criticism. Nicky Morgan, chairwoman of the Treasury select committee, commented: “It’s no wonder that our banks have such a lot of work to do to rebuild trust among customers when they ignore the first opportunity to give a little something back to savers, while moving speedily to increase costs for borrowers.” Meanwhile, James Daley, the managing director of Fairer Finance, said that the FCA should focus on the issue as part of its review of the savings industry.
The Times

Shawbrook loan book hits £5.3bn

Shawbrook Group’s loan book increased by 21% to £5.3bn in the six months to 30th June 2018, while underlying profit before tax was up 23% on the same period in 2017 to £63.1m. Shawbrook said new lending had increased compared with the first half of last year as it looked to continue to expand its customer base into new and adjacent markets.
Specialist Banking

Lenders encouraged to embrace innovation

Martin Greenwood looks at some of the barriers facing property developers and housebuilders looking to solve the UK’s housing crisis, including a lack of available small sites, and securing access to finance. Alex Michelin, co-founder of CapitalRise, said: “With funding hard to obtain in today’s market and buyers less prevalent than they once were, developers are having to be increasingly creative to be successful”, using preferred equity and mezzanine loans to ensure the success of a project. Terry Pritchard, head of origination at Lendy, said that lenders are increasingly risk averse, creating a space for smaller firms to move into with new products.
Development Finance Today

Bank of England raises UK interest rates to 0.75%

The Bank of England has raised the interest rate a quarter of a percentage point, from 0.5% to 0.75% – the highest level since March 2009. BoE Governor Mark Carney said there would be further “gradual” and “limited” rate rises to come, but if certain Brexit scenarios materialised the Bank would cut again if necessary. The Bank said that it did not expect interest rates to return to their long-term average of 5% “for many years” because the fundamental structure of the economy had significantly changed since the financial crash. Andrew Sentance, senior economic adviser at PwC, said: “Businesses and consumers should be able to adapt to a well-communicated and gradual series of interest rate rises, after nearly a decade of exceptionally low borrowing costs. Higher interest rates should also provide some much-needed relief to savers who have seen their investment returns eroded significantly since the financial crisis.” Meanwhile, high street banks including Lloyds, Nationwide, RBS, Barclays and HSBC, are under fire after announcing plans to hit homeowners with interest rate hikes from today while failing to pass on higher rates to savers.
BBC News

UK business borrowing falls by 1.8%

Outstanding lending to UK businesses has fallen by 1.8% since June 2017, according to research by UK Finance. Loan and overdraft lending from high street banks to non-financial business accounts has decreased to £263.8bn, but was up 9.2% to manufacturers. Stephen Pegge, managing director of commercial finance at UK Finance, said: “Monthly net lending to businesses returned to positive levels in June, driven by continued growth in borrowing in the manufacturing sector.
Bridging and Commercial

FCA sets out crackdown on peer-to-peer lending

The Financial Conduct Authority is planning to crack down on peer-to-peer lenders and crowdfunding platforms amid concerns that investors could be taking on more risk than they realise. The regulator called for the publication of more detailed standardised information about investments, charges and risks lenders faced. The FCA said: “When a platform advertises a target rate of return, we want that target rate to be achievable and for investors to understand and be fairly remunerated for the risks they are exposed to.” James Hurley in the Times looks at how the growth of online finance platforms has forced the FCA to scrutinise the sector more. Meanwhile, equity crowdfunding sites have welcomed the review. Crowdcube said that “this vote of confidence for the sector highlights that existing regulations are striking the balance of effectively safeguarding investors while continuing to facilitate the growth of a vital source of finance&rdqu o; for small businesses.
Financial Times

Personal insolvencies at six-year high

The number of personal insolvencies in England and Wales has hit a six-year high. Figures from the Insolvency Service show there were 28,951 people declared insolvent in the past three months, a rise of 27% on the same period last year and up 4.4% on the first quarter of this year. It said the increase was driven by a record number of people taking out IVAs.
The Times

BoE tipped to raise rates

The Bank of England is expected to raise interest rates this week, pushing them to their highest level since 2009. The Monetary Policy Committee is widely expected to increase rates from 0.5% to 0.75%. Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said: “The committee likely won’t vote unanimously to hike rates – we look for a 7-2 split – but most members still believe that inflation will exceed the 2% target in the medium term if they don’t start to withdraw some monetary stimulus now.”
The Sunday Times

Tax change could leave commercial property owners with £8bn bill

Catax has warned that commercial property owners could be forced to pay more than £8.6bn if they fail to revalue ahead of a major tax change. From April 2019, UK commercial property held offshore will be subject to capital gains when it is sold.
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