The Money Stats – February 2021 – Significant Budget For Post-Pandemic Financial Recovery Plan

Ongoing falls in employment and the economy show the challenge ahead for the UK’s post-pandemic financial recovery, meaning all eyes turn to next week’s hugely significant budget, according to the February 2021 Money Statistics, produced by The Money Charity.

As the UK continues to quickly move ahead with the rollout of the vaccine programme, bringing the end of pandemic restrictions into sight, attentions inevitably start to shift towards what the post-pandemic landscape will look like. The starting point remains a challenging one though. As of January 2021, 4.5 million employees in the UK were still furloughed. Of those, one-third had been furloughed for ten or more months. Meanwhile the total unemployment rate had risen to 5.1%, with young workers still particularly heavily affected, with a total unemployment rate of 13.4% (507,000) amongst those aged 18-24.

Another struggling area has been for the self-employed, with 14% of pre-pandemic self-employed no longer working as of January 2021. These numbers, alongside many of the others highlighted in this month’s report, have led to the UK economy being 9.9% smaller at the end of 2020 than it was at the beginning of the year.

Clearly without the strong levels of financial support the government have provided, such as via the furlough and other schemes, the UK economy would have fallen into a much deeper recession. Nevertheless, many households are feeling increased levels of financial pressure alongside other fundamental challenges to mental health and children’s education. With the Budget next week, many will be looking to the Government to clearly outline its recovery vision and continue critical support until the economy has had a fuller chance to bounce back from its current restricted condition.

Michelle Highman, Chief Executive of The Money Charity says: “Following the numbers in recent months has often been a sobering experience, as we have seen the struggles of millions of UK households due to the pandemic. However, there have also been other more positive signs, with higher levels of household savings, higher wages for those still in work, lower levels of consumer debt and pent-up demand for goods and services. But this imbalance remains a major issue, and the positive signs alone will need time to rekindle economic growth and employment.

“All eyes turn therefore, towards an especially significant Budget. Our hope is that a programme will be set out that will place Financial Wellbeing front and centre, with continued support for all those who need it until spending and employment has had the fullest chance to recover.”

Other striking numbers from the February Money Statistics:

  • On average, a UK household spends £4.29 a day on water, electricity and gas. (P14.)
  • Borrowers paid £123 million a day in interest in December 2020. (P5.)
  • Government debt increased by £745 million a day in the year to January 2021. (P4.)

Knowledge Bank and Iress team up to provide ground-breaking integrated product and criteria search

Knowledge Bank and Iress have collaborated to provide the UK’s very first, fully-integrated product and criteria sourcing system. Through a single search, brokers will be able to find the exact lender to suit their clients’ needs from both a product and criteria perspective, saving time and effort.

Knowledge Bank, the UK’s largest mortgage criteria search system, teamed up with, Iress, in April 2020 to provide a level of integration, but today’s move takes this to a whole new level. This collaboration between the two independent companies brings together the best of breed with regards to both product and criteria.

For the first time ever, brokers using Iress’ Xplan software, will be able, to input their clients’ requirements only once, via a single login. The system will then display results detailing the lenders who will accept the client based on both the products available and the criteria circumstances. This is dramatically different to other systems where brokers still need either separate logins, or to conduct searches on two separate parts of the system.

The products available are only a part of the information a broker requires when looking for the best outcome to suit their client needs. The product sourcing results alone will not tell you whether a lender will accept a client due to their criteria circumstances. For example, specific property types, or the client’s employment or financial history. This revolutionary integration changes this, by incorporating the lenders’ criteria stance into the product sourcing results, immediately shortlisting a more accurate selection of lenders.

This complements Iress’ ‘Lender Connect’ proposition which enables brokers to then apply from Xplan Mortgage directly to the lender, with all of the data pre-populated, eradicating the need to ever enter the client’s details more than once.

Nicola Firth, CEO of Knowledge Bank said: “The result of this collaboration is a system that will revolutionise the market. It creates the ultimate sourcing tool for brokers to get the best possible outcomes for their clients. It is no longer a viable option to search only for mortgage products and not criteria, not with over 52,000 criteria changes in 2020 alone – that’s 1000 changes to criteria every single week. So by teaming up with Iress we have ensured that brokers can get both the most accurate and up-to-date product and criteria information all in one place.

“Never again will it be necessary for brokers to log into multiple different systems, spending hours cross-referencing and rekeying client data, to find which lender will provide a mortgage for their client. This can now be done in moments, pulling all of the information into one place and providing robust evidence of research for compliance purposes satisfying the FCA’s requirements.

The need for a collaboration such as this has never been greater. Knowledge Bank holds over 125,000 pieces of lending criteria for over 250 lenders across eight different product areas from residential and buy-to-let to bridging and commercial.

NewDay Launches Credit Building Feature Aqua Coach, with Tools and Insights from TransUnion

Consumer credit provider NewDay has launched Aqua Coach, which uses credit information from TransUnion to help its Aqua customers learn how to build their credit score.

Through the Aqua brand, NewDay provides credit to consumers that may not be served by mainstream lenders. Aqua Coach gives these customers access to their credit score, and highlights the key factors affecting it, using the Score Factors tool delivered via TransUnion’s CreditView platform.

By making it easy to identify the biggest influences on their credit score, Aqua customers can understand what they are doing well and what they can improve.

“To help consumers build their credit status, it’s essential they have the tools to regularly view their credit score, alongside the knowledge of how credit scores work and their impact on financial decisions,” said Kelli Fielding, managing director of consumer interactive at TransUnion in the UK. “By incorporating these into Aqua Coach, NewDay is empowering Aqua customers to improve their credit score and manage their financial standing.”

Research from TransUnion highlights that COVID-19 has driven more people to check their credit score, with its most recent survey in December showing that half (50%) of UK consumers are now checking it at least monthly, up from a third (33%) at the start of May.

Fielding continues: “The financial pressures of the COVID-19 pandemic have raised awareness of the importance of monitoring and managing your credit profile. In addition to the increase in frequency that we’ve seen, we also found, in terms of engagement with credit scores, that four million UK consumers checked their credit score for the first time[ii] during the initial national lockdown period.”

Ian Corfield, chief commercial officer at NewDay said: “At NewDay, our purpose is to help people be better with credit across a range of needs. With the launch of our Aqua Coach tool, in partnership with TransUnion, we have the ability to help even more customers build and improve their credit score. The feature gives customers direct access to their score in the Aqua app. They can also see factors impacting their score, so they can take the steps to improve their position. Aqua Coach gives us a platform to continue to innovate and improve the credit building experience for our customers.”

Stamp Duty extension delaying inevitable cliff edge, lawyers say

Reports that the Stamp Duty Land Tax (SDLT) holiday might be extended next week will still leave the housing market on a cliff edge if paperwork deadlines are not put in place, according to property law experts, Adcocks Solicitors.

As it stands, the SDLT holiday is set to expire on 31 March 2021 and anyone looking to take advantage of the savings must have completed the sale by the deadline. However, this is resulting in many buyers taking a high-risk strategy, including finding alternative ways to fund the purchase, skipping essential property searches and not having the house valued or surveyed.

Historically, legal transactions relating to the housing market take between eight and ten weeks to complete but in the current pandemic it is taking up to eighteen weeks and even longer in some cases. However, with the 31 March deadline on the horizon, lawyers are facing pressure to submit transactions quickly, while other standard elements are being avoided completely. While an extension is being reported, Adcocks Solicitors is calling on the Government to incorporate a paperwork deadline to ease pressure and avoid similar circumstances at a later date.

Hedley Adcock, Director of Adcocks Solicitors and member of Birmingham Law Society, said: “The SDLT holiday has had the desired effect across the country, however the deadline is adding great uncertainty on the housing market. With buyers taking high-risk strategies to speed up the process, such as skipping essential property searches and not having the property valued, the rush to complete has never been riskier.

“If an extension is announced next week, it is essential that a tapering off period is also granted, such as a paperwork deadline. In other words, buyers who have either exchanged contracts but not completed, or those who can demonstrate they have started a transaction before the deadline and have incurred solicitor costs, for example. This so called ‘grandfathering’ of the SDLT holiday would ease the pressure on the current backlog and ensure searches or valuations are not ignored in order to receive the tax relief. Our worry is that if the deadline is simply extended, we can expect to see buyers continue to take unnecessary risks to aid the moving process in a few months’ time.”

Stamp duty extension is a head in the sand approach to prolong the inevitable – industry reacts to deadline extension

Following the news of a stamp duty holiday extension, Matthew Cooper, Founder & Managing Director of Yes Homebuyers, commented: “You have to question the sanity of a government that deliberately chooses to intensify an already serious issue by repeating the exact cause of the issue in the first place.

“Those looking to purchase the most expensive asset in their life are arguably some of the least in need of financial support in the current climate.

“When you couple this with the angst felt by many current homebuyers due to the huge market delays already caused by the stamp duty holiday, it seems fairly irresponsible to add further fuel to the flames with a deadline extension.

“We know that a large proportion of transactions are in danger of falling through, bringing property values down with them. So reading between the lines, it certainly looks as though the government are taking a head in the sand approach to prolong the inevitable rather than extending a genuine helping hand to homebuyers.”

Director of Benham and Reeves, Marc von Grundherr, commented: “Thousands of homebuyers across the nation will be breathing a huge sigh of relief over the announcement to extend the current stamp duty deadline, having spent months on end waiting to complete with no finish line in sight.

“That said, those currently working in overdrive to clear the backlog of transactions at the legal stages may feel differently, with many more months of long days now on the cards.

“We’ve seen the market pause for breath in recent months as a huge influx of buyer activity has subsided as the deadline approached. With this extension, we can expect yet another mad scramble by homebuyers to secure a saving and while they can continue to expect long delays while doing so, this will ensure that market sentiment remains high and prices continue to climb.”

CEO of Keller Williams UK, Ben Taylor, commented: “The original stamp duty holiday was on course to save homebuyers as much as £1.5bn in tax and so this extension will further boost this figure and ensure that many more benefit as a result.

“Despite the wider economic backdrop, hunger for homeownership remains high and this latest news will further wet the appetite of homebuyers and help keep the market stable until such time that normality has fully returned.”

Managing Director of Barrows and Forrester, James Forrester, commented: “The government has administered yet another adrenaline shot directly to the heart of the property market and this should have the desired impact with regard to maintaining overall market health as we ease out of lockdown.

“The property market has stood tall and weathered the economic uncertainty posed by the pandemic and so it makes sense that the government would want to cling to this as perhaps their only indicator of handling the situation successfully.

“Of course, while a welcome move for many, it is simply another attempt to maintain an overheating housing market by fuelling demand rather than tackling the real issue of building more homes.”

FSB Scotland on Lockdown Roadmap

Scotland’s full stay-at-home lockdown will continue until at least 5 April, the First Minister has announced. Responding to the statement, Andrew McRae, the Federation of Small Businesses’ (FSB) Scotland policy chair said: “This roadmap is an important moment in the country’s battle against Coronavirus, and as such, a critical one to get right. In an ideal world, we’d have had a firmer timetable, but we at least have some indicative, earliest dates being set out.

“But the gaps between these dates – at three weeks – are lengthy. We now need the detail about what economic activity can resume under the different levels, so that businesses can begin to plan.

“While there is some good news, not least the movement on schools and the progress of the vaccine rollout, another six weeks of a mainland stay-at-home lockdown won’t ease the mounting problems facing businesses across the country. Over half of local firms are worried about their business surviving the next few months and over a third fear for their mental health.

“As winter turns to spring and more people are vaccinated, the Scottish Government must continually review whether this timetable can be accelerated, travel restrictions can be lifted and restrictions on local economies can be eased.”

Together lowers its two and five-year fixed mortgage rates

Together has cut rates on its mortgage products to help more borrowers struggling to get finance from mainstream lenders.

The specialist finance group’s new Prime Plus two-year fixed mortgages have been launched at a rate of 4.29% for capital repayments and 4.79% on interest only repayments, while its five-year fixed rate has been re-priced to 4.99% (capital) and 5.49% (interest only).

The lower rate products are available for three months at up to 70% LTV on loan sizes of between £50,000 and £500,000.

Self-employed customers, freelancers and contractors, those on zero-hour contracts, retired people and those on benefits, as well as those in full employment, may also fit Together’s criteria for its new product, subject to an affordability assessment.

The lender will consider applications from customers with County Court Judgments (CCJs) which have been settled for at least two years and those who have paid unsecured arrears up to six months before taking out the new product.

Borrowers who have missed only one mortgage or secured loan payment in the past three years and none in the last year, may also be eligible.

Sundeep Patel director of sales at Together, said: “Our new two-year and re-priced five-year fixed rate mortgages are designed to give customers who may not fit the mainstream mould more options to make their property-owning ambitions a reality.

“Borrowers may be looking for a mortgage on a property of non-standard construction, they may have a non-standard income stream of may have had a minor credit blip in the past – or a combination of all three – which could make it difficult for them to access the finance they need.

“We think that it’s important for lenders to offer flexible criteria to increase the choice available in the market and believe there is a strong market demand from would-be customers who may not be able to access mortgages from mainstream lenders.”

Together’s Prime Plus mortgages are available to network and club brokers through Together’s specialist distributer partners and for direct customers.

United Trust Bank Increases the Maximum LTV on Bridging Loans to 70%

United Trust Bank (UTB) has increased the maximum LTV available across their entire suite of regulated and non-regulated bridging loans to 70%. This includes property improvement loans for heavy refurbishment and conversion projects.

Key features of UTB’s overall bridging offering include:

  • Max 70% LTV
  • Regulated and non-regulated lending
  • 1st Charge Bridging rates from 0.48% pm
  • Loan size from £125k to £15m
  • New Fast Track Bridging process for qualifying loans
  • AVMs & Dual Legal Representation available

Mike Walters, Sales Director – Property Intermediaries, United Trust Bank, commented: “We remained open for business throughout the pandemic, introducing many product, criteria and digital enhancements to help property finance intermediaries write more business. We believe that the time is right to increase our maximum LTV appetite to support the market even further and you can expect to see more positive changes from UTB over the next few months as we respond to the changing environment and increasing confidence.”

Cifas weekly coronavirus scam update – fake vaccines, phishing job adverts and tax rebates

Cifas, the UK’s leading fraud prevention service, is highlighting the latest coronavirus scams from the past week, and warning the public to stay vigilant of the ever-changing tactics that scammers are using to extract money and information.

Warning issued over fake COVID vaccine

The European Anti-Fraud Office (OLAF) has issued a warning this week about fake COVID vaccines. OLAF has heard reports of fraudsters selling fake vaccines in the EU, and is extending its inquiry into fake COVID-19 protection products to tackle the illicit vaccine trade. Since opening its investigation last March, OLAF has helped identify over 1,000 suspicious operations and seize over 14 million items, including faulty face masks and fake test kits.

Remember that the COVID-19 vaccine is free of charge on the NHS, and that the NHS will never ask for:

  • bank account or card details
  • banking passwords or login details
  • copies of personal documents such as a passport, driving licence, bills or payslips

If you think you have been a victim of fraud then you must contact your bank immediately and report it to Action Fraud on 0300 123 2040 or Police Scotland on 101.

Jobseekers warned of fake COVID job adverts

Cifas has heard reports of fake COVID-19 related jobs being advertised on social media. These roles advertise a variety of roles from COVID testers to admin support, and in most cases ask for personal and financial details which are later used to commit identity theft.

COVID-19 fraud continues to be a serious problem, with Action Fraud recently reporting that it had been alerted to 4,540 COVID-19 related fraud and cybercrimes, resulting in total losses of £21.8m.

Jobseekers can research whether a company is legitimate by checking the Companies House website. Anyone who has been offered a job and thinks it might be scam should contact the organisation directly using officially listed contact details to confirm the offer is genuine. For more advice or to report an incident go to the Safer Jobs website.

Fraudsters target taxpayers with phishing scam

Taxpayers have reported a new SMS phishing scam specifically targeting anyone filing a tax return for the 2019/2020 financial year. This email informs the recipient that they are due a rebate, and asks them to click on a link which takes them through to a fake site that looks similar to the official HMRC website. Victims are then asked for personal details in order to claim their ‘rebate’.

Cifas is reminding taxpayers that if someone calls, emails or texts claiming to be from HMRC, saying that you can claim financial help, are due a tax refund or owe tax, or asks for bank or other personal details, it might be a scam. Suspicious emails claiming to be from HMRC can be forwarded to phishing@hmrc.gov.uk and texts to 60599.

Royal Mail issues ‘depot scam’ warning

Royal Mail has warned of a new ‘depot scam’ currently doing the rounds in the UK. This scam involves a fake email informing customers that they have missed a delivery and asks them to pay additional potage charges. The email also includes a link to a webpage where people are asked to upload their personal and financial details in order to rearrange delivery.

Cifas is reminding people never to click on links in emails, or provide personal or financial details as this makes it easy for fraudsters to commit identity theft. Anyone that believes they have been the victim of a scam must contact their bank immediately, and report it to Action Fraud on 0300 123 2040 or Police Scotland on 101.

Amber Burridge, Head of Fraud Intelligence for Cifas, said: ‘As the government begins to outline how the nation will come out of lockdown and recover from the pandemic, it’s important we all remain vigilant to any final attempts by criminals to exploit the situation over the next few months.

‘When being asked to click on links and share your personal details, take your time to assess the situation and consider the impact of handing over your details. Cifas members reported a 195% increase in account takeover fraud in the retail sector in 2020, and it’s believed phishing attacks by criminals to harvest personal information was a key enabler of this fraud. Your personal details could also be used to facilitate identity fraud should they end up in the wrong hands.

‘Be wary if you’re contacted out of the blue requesting your details, and if you believe you have fallen for a scam, report this to Action Fraud or Police Scotland immediately.’

Comments – Government roadmap to lockdown

As the UK Government announces the UK’s roadmap to exit lockdown and begin economic recovery this year, Tim Vine, Head of Finance & Risk Solutions at Dun & Bradstreet has shared his thoughts on what this means for the UK’s industry’s – most notably the hospitality industry.

He said: “While businesses across the UK will welcome government plans to ease lockdown restrictions over the coming weeks, the re-opening timeline for the hospitality sector is likely to cause concern for the industry. The latest analysis from Dun & Bradstreet’s Covid Impact Index reveals that food and accommodation businesses continue to be the most significantly impacted industry in the UK, with a rating of 9 on a 1 (most impacted) to 100 (least impacted) scale, compared to an average across all industries of 51. With businesses in the hospitality sector now facing a further seven weeks of closure at least, many companies will face a challenging and uncertain start to 2021.

“A year of lockdown restrictions has taken its toll on UK business, and although our latest trade data shows business failures and liquidations have dropped by 34% from 2019 to 2020 due to government loans and support schemes, our trade payment performance data paints a different picture – highlighting a significant decrease in the number of businesses paying bills on time. The latest data shows that overall payment performance fell from 47.3% in March 2020 to 41.8% in December 2020.

“Having access to data and analysis to inform business decisions is even more critical in an uncertain environment, and businesses can use information such as payment performance and credit history to predict the likely impact of continued disruption on their cash flow. Data is essential to both mitigate risk to protect the future financial health of a business, but can also be used to identify opportunities for growth that will be so important to the recovery of the UK, and global, economy.”