UK house prices grew at the slowest annual rate for nearly six years in January, according to the Nationwide, with prices up by just 0.1% from a year earlier, and down from a rate of 0.5% in December. However, month on month prices grew 0.3% at the start of 2019 compared to a 0.7% slip between November and December. The average property price is now £211,966, just £210 more than a year ago.

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HMRC has calculated that plans to cut corporation tax rates will cost the public finances £6.2bn a year. The current rate of 19% is set to be reduced to 17% in April next year, costing the public purse £5.8bn in foregone revenues in 2020-21 and £6.2bn the following year, according to a “ready reckoner” published by HMRC. The Treasury argues: “Low corporation tax supports the economy by enabling companies to reinvest in their business, create jobs, and increase wages”, but opponents argue that the reduction will not make much difference to investment plans, and only serves to benefit businesses at a time when Whitehall departments and councils are struggling with funding cuts.

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New figures from the Insolvency Service show that the number of people going bust has jumped to at least a six-year high. Accountancy firm RSM believes the figures will show more than 109,000 insolvency cases took place across the whole of last year.

Daily Mirror

The Financial Conduct Authority has warned the endgame for Libor interest rates could be “uncertain” and urged banks and businesses to “rapidly” move to alternatives. Edwin Schooling-Latter, the FCA’s director of markets policy, commented: “One thing I cannot provide to you today is certainty about what the end-game for Libor will look like. That means uncertainty for those who continue to hold or write contracts that reference Libor.”

City AM

Santander is to close 20% of its UK branches, risking the loss of 1,270 jobs, due to “changes in how customers are choosing to carry out their banking”. The number of transactions taking place in branches has fallen by 23% over the past three years, it said, while over the same period transactions online and through its app have grown by 99%. Following the closure of 140 branches, which will begin in April, the bank will have 614 in the UK.

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Bridging loan volumes hit £766.9m in 2018, an increase of £232.8m on the previous year, data from Bridging Trends shows. The average monthly interest rate for bridging fell to 0.81%, only marginally down from the 0.83% average recorded in 2017. Unregulated bridging hit an average of 64% of all transactions in 2018, while regulated bridging business decreased to an average of 36% last year, down on the 46% recorded in 2017 and 44% in 2016. Lastly, the average completion time of a bridging finance application averaged 45 days in 2018, up from 43 days in 2017. G areth Lewis, commercial director at MT Finance, said: “Investor sentiment is resilient and investing in property to add value and improve returns was evidently a long-term trend throughout 2018. With Brexit still uncertain, the first quarter’s data will be interesting reading, but I expect demand for bridging finance will remain strong and the product will continue to provide vital support for property investors.”

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Secure Trust Bank says it is looking to stop taking on new residential mortgages in the face of stiff competition and a cooling housing market in Britain. “During the second half of 2018 market pressures and competition intensified as evidenced by increasing loan to value metrics and lower new net lending margins,” said the company, which plans to pause new originations until “conditions improve”.

Daily Mail

RBS is considering buying back shares from the government as it looks to deploy more capital and speed up its privatisation. The bank has tabled a special resolution seeking permission to make off-market share purchases from the Treasury through a “directed buy-back”. Shareholders in the lender will vote on the proposal next month. At least 75% of shareholders must approve the plan. It would then be up to the Treasury to decide if it wants to sell some of its 62.3% stake to RBS. Chairman Howard Davies said: “The board believes that this is in the best interests of the bank and its shareholders by helping to facilitate the return of the company to full private ownership.”

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The Bank of England’s latest credit conditions survey has found that high street banks are forecasting that borrowing on credit cards will decline in the first quarter of 2019 by the most since records began. The BoE said its measure of demand for credit card lending over the three months to the end of March had dropped to -20.7 from -7.2. The survey on credit card lending will help to calm concerns about excessive borrowing, but economists said there was a risk of too sharp a reverse. Howard Archer, chief economic adviser to the EY Item Club, commented: “While the Bank has been keen to see the rate of consumer borrowing slowing, it will not want to see unsecured lending dry up as it will weigh down on economic activity. The Bank ideally wants to see a more sedate rate of borrowing, which has seemingly been happening up until November.”

The Guardian

Business volumes were flat for specialist lenders in the last quarter of 2018, according to the latest CBI/PwC financial services survey, as demand for financial services fell. Profits in the financial services sector as a whole remained flat for a third successive quarter, with investment managers and general insurers reporting declining profitability. Looking to this year, declines are expected to continue at a similar pace over the quarter to March, which is the first time that growth expectations have turned negative since 2009. Overall profitability is also expected to fall for the first time in over three years.

Sixty-six per cent of accountants are referring their clients to external lenders, as alternative finance options such as peer-to-peer lending become more mainstream, according to a new survey commissioned by MarketInvoice. Banks are still the most popular lenders among accountants, but 36.3% would first recommend an invoice finance provider to clients seeking loans, while 33.66% would suggest a business loan provider. “This research reveals that accountants are stepping up and advising their clients about funding opportunities,” said Tom Davenport, head of strategic partnerships at MarketInvoice. Additionally, we have observed that forward-looking strategic accountancy practices also have in-house business finance specialists advising clients on funding options.

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The quarterly financial services survey by the CBI and PwC reveals that the sector saw volumes shrink in the last quarter of 2018 for the first time in five years. And for the first time since December 2009 growth expectations have turned negative amid concerns about a no-deal Brexit which could cost financial services firms access to EU markets. The survey of 84 firms indicated that business was “flat or falling” for banks, building societies and specialist lenders, but holding up among insurers.

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Figures due to be released this week will show the number of companies being formed in Britain bounced back last year and while London was still by far the most popular place to form a business, Birmingham, Manchester, Leeds and Bristol saw sharp increases in new ventures. The total number of new businesses started in Britain increased by 5.2% to 645,774 last year – an annual record and a return to growth following a decline in 2017. “These figures demonstrate the resilience and confidence of entrepreneurs,” said Matt Smith, the director of the Centre for Entrepreneurs. “The achievement is especially noteworthy as contractor accounting firms . . . seem to have been replaced by genuine local business activity.” However, although the UK was ranked third by the OECD for start-ups, it fell to thirteenth in the world for scale-ups in 2017. An early-stage investor, Malcolm Evans, says: “Scale-ups, which are what matter, requir e changing the shape of the commercial world around you by showing precision and human flair. It’s quality over quantity.”

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The FT says post-financial crisis reform of UK retail banking has been modest, with claims of a “glass ceiling” that challenger banks struggle to grow beyond.

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A change in the rules for tax-efficient investment schemes – barring low-risk investments in favour of innovative, growth-pursuing businesses – led to a 17% fall in schemes open to investment in November 2018.

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Maximum LTV featured in Knowledge Bank’s five most searched criteria for both bridging and commercial in December. Regulated bridging topped the most searched criteria in the bridging category, followed by maximum LTV for bridging, and development bridging – max LTV on acquisition, according to the platform’s criteria activity tracker. Nicola Firth, CEO at Knowledge Bank, said that the year ended largely as it had started with a huge number of searches across the different product areas. “During 2018, new lenders entered the market, but it was product innovation that really was the stand-out change,” she added.

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Premier League football clubs have paid just £87m in tax between them over nearly a decade, according to new figures. Football finance expert Swiss Ramble found that in the period between 2008 and 2017, Arsenal paid £30m to HMRC, with Tottenham Hotspur handing over £24m and Manchester United paying £14m. The rest of the top tier sides paid less than £19m between them, with Liverpool, Manchester City and Chelsea not paying anything.

The Sun

The Times reports that Google moved nearly €19.9bn to a subsidiary in Bermuda in 2017 as part of its “Dutch sandwich” tax avoidance manoeuvre. The amount of cash channelled to the Caribbean haven through a Dutch subsidiary increased by about €4bn that year, according to accounts filed in the Netherlands. This helped Google to pay a corporation tax rate of just over 6% on its foreign earnings, compared with the 35% headline rate in effect in the US at the time.

The Times

Secure Trust Bank (STB) has entered into consultation on a proposal to cease origination of new mortgage lending. STB said action is being taken in light of the current economic climate, increased competition and pressures on the housing market. The bank said its mortgage business will continue to operate as normal through the consultation period and there will be no impact on existing mortgage customers or new applications in progress.

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Secure Trust Bank and Fleet Mortgages have said they will halt property lending, as competition has made it harder to turn a profit. A consultation has been launched at Secure Trust on whether to axe its entire range of mortgages for the general public, which is focused on the self-employed, older people and customers who have limited options. Meanwhile, Fleet Mortgages has withdrawn all its products while it seeks extra funding.

Daily Mail