Fleet Mortgages launch revamped website

Fleet Mortgages, the buy-to-let specialist lender, has today launched a revamped and redesigned website including a range of new features and content information.

The new site – www.fleetmortgages.co.uk – launches today and has been redesigned to provide a better user experience, easier access to specific information from the home page, and also includes a new live chat facility allowing advisers to converse with Fleet staff online thus saving them time on the phone.

Other new features on the site include:

  • Find my BDM function – advisers can quickly search for details of both their local field and telephone BDMs.
  • Fleet TV – a range of informative videos from Fleet that provide up-to-date details of the buy-to-let market, Fleet’s proposition and product range and services BDMs can access.
  • Service and turnaround statistics – up-to-date information on the current state of play for submitted documents, DIPs and valuations will be available from the home page.
  • Affordability calculator – provides full information on the amount available to borrow for both individual and limited company borrowers, and includes those purchasing/re-mortgaging a HMO property.

Website users will be able to access all Fleet’s product details across is three core ranges – individual, limited company and HMO/MUB – from the home page, plus it provides full details on all literature, events and news.

And as previously, advisers will be able to submit a case directly onto Fleet’s mortgage origination system via the website.

Steve Cox, Distribution Director of Fleet Mortgages, commented: “We are very pleased to be launching our revamped website to the market today and hope advisers find the redesign and the new additions to the site beneficial. As always, our aim is to make it as simple as possible for advisers to conduct business with us. Our new live chat facility will give brokers a new option of how to contact us and get the information they need efficiently. The website comes complete with further additions in order to provide the information that advisers want to see, and tools like our affordability calculator should also allow them to progress advice with their clients in double-quick time. Fleet is actively looking for feedback on the new site, and we hope that advisers will contact us so that we can continue to develop it and the information it provides.”

Late payment crisis threatens small business growth

Nearly two thirds of small businesses (62%) experience late payment issues and it is the larger ventures that are being hit the hardest – according to new research from Hitachi Capital Business Finance. Three quarters of small businesses with 10-49 employees are dealing with late payment issues (75%), compared to 50% of those who are sole traders.

At a time when an estimated 50,000 businesses collapse due to late payments[1] – and when the Government is considering plans to strengthen the powers of The Small Business Commissioner to support small businesses[2] – Hitachi Capital Business Finance asked 1,162 business owners to comment on how promptly their invoices had been paid. To obtain a detailed picture on how late payment affects the sector during a typical calendar month, a case study month – June 2019 – was adopted as the focus of the study.

With cashflow management (34%) and getting tough on late payment (24%) mentioned as top priorities for small businesses to tackle in order to achieve growth, Hitachi Capital’s data revealed that only 31% of enterprises polled had received all of their payments on time. Whilst 35% of respondents had received some payments early, 47% of respondents had received some payments up to a week late, 44% up to a month late and 32% had been paid over a month late.

Sector highlights

When comparing the figures to summer 2018, there have been variations on late payment becoming a bigger or smaller issue for business owners depending on their industry sector. Overall, small businesses in the legal and manufacturing sectors were those most likely to be hit the hardest by late payment (79% and 77% respectively). On the other end of the spectrum, small businesses in hospitality and leisure were the least likely to be paid late (34%). The legal sector took a particularly big hit with 44% still awaiting payments that were due in June. This was followed by media (36%) and construction (34%).

Looking at payments paid a week late, a month late, more than a month late and still not paid, the transport sector has seen a decrease in all late payments received.

Small businesses with 10-49 employees

The Hitachi Capital Business Finance research also found that this size of small business was the most likely not to have received invoices on time (39%). This compares with only 22% of sole traders. Nearly half of those running larger small businesses were dealing with being paid more than a month late (49%). In comparison, this was an issue for just 18% of sole traders.

Company age

Mature businesses (those trading for more than 35 years) were the most likely to be dealing with late payment issues (76%). This compares with 54% for businesses that had been trading for less than 5 years, suggesting that the latter either keep a tighter handle on their payment terms or are more likely to use modern payment systems.

Regional hotspots

Across the regions, small businesses in the North West were the most likely to be dealing with late payments (76%), followed by business owners in London (68%).

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance, commented: “Late payments are hindering the ability of small businesses to progress – not to mention the precious time wasted trying to chase overdue payments. Our tracking research has shown that the majority of small businesses are working hard, looking at ways to achieve growth in the testing content of political and economic uncertainty. This needs to be supported and we call on the Government to do more to ensure that small businesses are respected in the same way as big businesses – and to ensure that late payment doesn’t rock small business growth at a critical period for the economy at large.

“At Hitachi Capital Business Finance, we are adopting a Smart Finance philosophy to our products and services to help small businesses plan ahead and to be more prepared for both the quieter and busier periods of the year. We hope that our flexible repayments plan – which was born out of this very – philosophy will be a helpful tool to help manage cash flow.”

Has the construction industry been affected by Brexit’s “creeping paralysis”?

The value of all construction contract awards in September 2019 was £4.7 billion based on a three-month rolling average, which is a decrease of 2.5% on August, and a decrease of 15.6% when compared to September 2018.

Both the number of contract awards and the values have dropped in August and September. June and July were both positive months, but saw values held up by a few big-ticket projects. The total number of contract awards in September was 706, which is 6.1% lower than August and 30.2% lower than July 2019.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, highlights levels of construction contract values awarded across Great Britain. The recent decline in project awards points towards a cautious industry waiting for the Brexit deadline of the 31st October to determine its future planning.

The two largest project awards in September were both publicly funded road developments awarded by Highways England. In the South West, this was the dualling of the A303 between Sparkford and Ilchester in Somerset and in the East of England, improvements to the A47 including the provision of a dual carriageway between North Tuddenham and Easton in Norwich.

Rebecca Larkin, Senior Economist at the Construction Products Association commented, “The impacts are most striking in privately-financed construction, where a lack of commercial projects in the top ten highlights how the current political and economic uncertainty is stifling business and investor confidence and reducing the pipeline of offices and retail developments across Great Britain.”

Commenting on the figures, Tom Hall, Chief Economist at Barbour ABI and AMA Research said, “This week has seen intense political debate in Parliament following the announcement that the UK Government and the EU have agreed upon a Brexit deal. With no clear decision on Brexit, this is inevitably impacting the construction industry, while uncertainty remains, so will caution.”

Women shunning weddings in favour of home ownership

British women appear to have fallen out of love with getting married – with just four per cent choosing to spend money on a wedding rather than a house deposit.

A new poll by specialist lender Together has revealed nearly 70 per cent of UK adults would use £17,674 – the average cost of a wedding – as a deposit for a new home instead of paying for their big day.

According to the study, women prioritised home ownership more than men, with nearly 10 per cent more females opting to spend the money on a deposit. Just under four per cent of women would use it to foot the bill for their wedding.

Richard Tugwell, a director at Together said: “Home ownership clearly remains a huge priority for the British public, as our latest research demonstrates.

“With the costs of weddings and property rising in comparison to wages over the last few decades, sacrifices inevitably have to be made. The results of our survey show the majority of people are choosing to get on the property ladder rather than pay for their big day.”

Together, which provides residential mortgages and loans, surveyed more than 2,000 UK adults to find out their views.

Women seemed more eager to get on the property ladder, according to the results. The vast majority – 74 per cent – said they’d put the £17,674 towards a deposit, a figure that dropped to 64 per cent of men who took part in the survey.

Only a tiny percentage – 3.9 per cent of women and 6.1 per cent of men – would use the money to fund their big day.

Meanwhile, 14 per cent of all those who took part in the survey said paying for a wedding and a deposit carried equal weight, while just over 11 per cent said neither were a priority.

Wedding facts

  • The rate at which couples are getting married fell from 33.6 (in every thousand people) for men and 28.5 for women in 1996 to 21.9 for men and 20.1 for women a decade later.
  • The average age at which couples were tying the knot stood at 37.9 for men and 35.5 for women in 2016, according to the latest ONS figures. In 1996, however, the average age was 33.6 for men and 31.1 for women – showing an increase of more than four years for both men and women over the past two decades.
  • Couples who are choosing to marry are looking for more cost-effective weddings. For example, the number of weekday weddings has increased hugely over the past few years with the rise of the ‘Thursday Wedding’, significantly reducing the cost of venues, caterers and entertainment.

StepChange welcomes Google’s crackdown on exploitative debt service ads

Following a campaign by StepChange Debt Charity which drew attention to the misleading advertisers impersonating reputable debt charities, Google has today announced new steps to restrict debt services advertising only to firms meeting new accreditation standards. These will be subject to an application and approval process, and will take effect from mid-November. StepChange welcomes this intervention and now urges other digital advertising platforms to adopt a similar approach.

While many debt firms advertise and operate legitimately, an increasing number of unregulated lead generation firms have entered the market. Some of these third party intermediaries, who sell “hot leads”, often to the highest bidder, have been advertising against search terms that would typically be used by people searching online for reputable debt charities. For the unwary, this has proved to be a trap. To protect consumers, debt charities like StepChange have had to compete to ensure that the information surfaced to users in ads leads to their genuine services that can remedy credit or debt problems.

Google is now introducing a system under which only certain types of organisations will be allowed to advertise debt services on its platform. In essence, if an organisation does not have relevant FCA authorisation or does not have regulated Insolvency Practitioner status, it will no longer be allowed to advertise in this way.

Matthew Lavine, product policy specialist, Google, said: “We are delighted to be able to implement this global policy which we believe will provide further protections for vulnerable users who come to Google for information on how to remedy their debt or credit problems. This is the culmination of extensive work by our policy teams globally and we have listened to and consulted with debt advice charities and other organisations whose users will benefit from this policy.”

Since the beginning of 2019, StepChange had reported 83 instances of misleading advertising to search engines, on top of the 46 reported in 2018. While these complaints were all upheld and the offending advertising removed, all too often the firms involved simply tweaked and reworked their advertising and were able to continue targeting people in debt. Under the new system, this should become much more difficult for them to do.

Over the past few months, StepChange has been at the forefront of a campaign to stamp out the impersonators. As BBC Radio 4 You and Yours and a number of national newspapers reported, people were actively misled – believing that they were dealing with a reputable debt charity when, in fact, their details were being harvested by lead generator firms receiving payments from commercial firms often seeking to sell insolvency debt solutions or other financial products. StepChange has gathered evidence from scores of people who have reported that they thought they were dealing with the charity as a result of inadvertently sharing their details with such firms.

StepChange Director of External Affairs Richard Lane said: “The rise in misleading advertisers targeting financially vulnerable people has resulted in numerous cases of people thinking they have been dealing with StepChange or other reputable debt charities when they have not. Action to restrict these advertising activities is very welcome.

“Now that Google has taken the first step, we would urge all digital platforms who accept advertising for debt services to consider their own approach. These impersonator firms tend to be highly opportunistic and adaptable and it would be very unfortunate if they were displaced from Google only to exploit other alternative channels instead.

“It’s still important for the financial and advertising regulators to take action, and for people needing help to be aware and to be vigilant about the risk of impersonators. Our Make Sure It’s Us webpage gives useful information and reassurance on how to do this.”

Businesses urged to capitalise on exceptional lending rates for asset finance

Lenders battling for the custom of Brexit-wary SMEs are offering some amazingly competitive deals, a leading financial broker has said.

Karina Gallagher says there has been a huge shift in the landscape in recent weeks, with lenders aggressively pricing funding to win business.

It comes against the backdrop of many businesses holding back on accessing funding to invest in assets as they await the outcome of Brexit.

But now may be the best time to act, says Karina, especially for companies operating in sectors where vehicles are a core part of the operation.

“For strong businesses, I am seeing some extremely attractive rates as the lenders compete for these deals” said Karina, the managing director of Cumbria-based Hornby Commercial.

“Lending at the moment, particularly in the transport sector is incredibly cheap, so for a business looking to buy, say a coach, a HGV or something similar, now is a very good time to take action.”

SME borrowing reached a two year high in June, increasing by £375m, a growth rate of 0.8 per cent, figures from the Bank of England revealed. Borrowing by firms increased overall by £2.5bn in June and during the first half of 2019, borrowing was stronger than the same period in 2018.

But Karina, who has more than 30 years of experience in the banking sector, says there has been a marked slowdown in SME lending in the last quarter, attributing much of it to a lack of certainty over the UK’s exit from the European Union.

And she says a lack of confidence is leading a majority of businesses to postpone the implementation of growth or investment plans.

But that, she believes, presents an opportunity for the bold to capitalise by investing while their peers and competitors do not.

“It is understandable that many businesses have Brexit-induced jitters,” she said. “But what that means is there is a real chance here for those companies who have the courage of their convictions to really thrive.

“Putting investment off until such a time that everyone decides the climate is right only means you follow the pack.

“Any decision to invest must, of course, be backed by a sound financial plan and projections. And if it is not right for the business for any reason, I see a part of my job as communicating that.

“But with rates this low, if the time is right, it is right regardless of the hand played by the Prime Minister in Europe.”

Business owners are also being encouraged to consider that the Government’s Annual Investment Allowance (AIA) is currently under a temporary uplift to £1M until 31 Dec 2020.

This means that there can be significant additional tax benefits of investment during this period that will not be available when the AIA limit reverts to its usual £200k on 1st January 2021.

“We always encourage discussing any investment plans with your accountant to make sure you have considered all the benefits and risks ahead of any purchase,” said Karina.

Consumer car finance market falls by 2% in August

New figures released today by the Finance & Leasing Association (FLA) show that new business volumes in the point of sale (POS) consumer new car finance market fell by 2% in August, compared with the same month in 2018, while the value of new business grew by 2% over the same period.

The percentage of private new car sales financed by FLA members through the POS remained at 91.2% in the twelve months to August 2019.

The POS consumer used car finance market reported that new business fell 2% by volume and 1% by value in August, compared with the same month last year.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The POS consumer new car finance market reported a modest fall in new business volumes in August, as the market continued to track private new car sales.

“New business volumes in the POS consumer car finance market overall fell by 1% in the eight months to August, in line with expectations.”

Third of British businesses concerned about Brexit supply chain impact, R3 research finds

One third (33%) of UK businesses are concerned about the potential impact Brexit will have on their suppliers and customers, according to new research from R3, the insolvency and restructuring body.

The research, a survey of 1,200 senior business financial decision-makers, carried out for R3 by BVA BDRC, found that 11% of businesses have reviewed the potential impact of Brexit on their suppliers and customers and are ‘very concerned’ by what they had found; another 22% were ‘somewhat’ concerned.

Duncan Swift, R3 President, says: “It’s a serious worry that a third of UK businesses feel they are exposed to a supply chain risk as a result of Brexit.

“A key part of preparing for Brexit is looking at how it affects your supply chain and customers. It’s all very well making sure your own business has put adaptation plans in place, but these plans might not help if the businesses you depend on – customers and suppliers – are unprepared.

A further 16% of businesses said they had yet to review the potential impact of Brexit on their supplier and customer network.

Swift says: “Businesses which don’t understand how Brexit will affect their supply chains are at risk of sleepwalking into trouble.”

“If your customers and suppliers aren’t prepared, you need to plan for how to deal with that. Businesses need to think about the alternative suppliers they can you use, or how they can diversify their customer base. Businesses should also consider if they can work together with suppliers and customers to find shared solutions to what will ultimately be shared problems.”

More positively, 38% of businesses have reviewed the impact of Brexit on their suppliers and are either ‘somewhat reassured’ (23%) or ‘very reassured’ (15%).

Duncan Swift comments: “It’s encouraging that a solid proportion of businesses have checked how their suppliers and customers are preparing for Brexit, and that they are reassured by what they’ve found. It’s still a minority of businesses which are in this position, however.

“It’s all too common for an otherwise successful business’s financial health to be undermined by customers or suppliers running into trouble. Previous research we have carried out showed that more than a quarter (26%) of UK companies suffered a hit to their finances following the insolvency of a customer, supplier or debtor in the previous six months.”

“It’s really important that businesses seek qualified, impartial expert advice if they are unsure about how Brexit will affect them or their supply chain.”

Small businesses most unprepared; manufacturers most concerned

Over a fifth (23%) of businesses employing up to 49 people said that they hadn’t reviewed the potential impact of Brexit on their suppliers or customers, compared to just 3% of companies employing over 250 people who were in the same situation.

Of the four sectors covered by the research (manufacturing, construction, retail, and services), the least likely sector to have reviewed the potential impact of Brexit on their suppliers or customers was the construction sector (18% of businesses had not carried out a review). By contrast, only 11% of manufacturing companies had not carried out a review.

Of the businesses surveyed, those in the manufacturing sector were most concerned by what they found; 37% were either ‘somewhat’ or ‘very’ concerned, compared to 40% who were ‘somewhat’ or ‘very’ reassured. Companies in the retail sector were most likely to be reassured by their review (46% were in this position, compared to 28% who had concerns).

Comment – This time is different

Feels familiar, doesn’t it? Seven months down the line and approaching another Brexit deadline with little to show for the delay. But while politics might seem static, the economic backdrop has moved on. The question is, will this time be different?

GDP growth

Casting our minds back to March, the situation looked reasonably good. Economic growth was holding up. Manufacturers were weathering the slowdown in global trade. Retail sales were robust. Even investment volumes were growing.

In Q2, the wheels fell off, and this morning’s Blue Book figures from the ONS confirmed the slowdown.

Revised growth numbers showed the UK economy contracted by 0.2% in the three months to the end of June 2019 as the effects of stockpiling waned and global trade concerns began to bite. Q1 growth was revised up slightly at the same time, from +0.5% to +0.6%, suggesting companies brought forward more activity than previously thought.

Consensus suggests this will be a blip and the economy will return to growth in Q3, avoiding a technical recession (defined as two consecutive quarters of negative growth). However, the reasoning is shaky.

Jam today, jam tomorrow

According to the latest inventories data, companies have run down their stockpiles over the course of Q2. Manufacturers have been particularly good at reducing the overhang, retail and wholesale firms less so. A narrowing of the current account deficit seems to confirm this, with imports falling following the Brexit delay earlier this year.

This should have created headroom for renewed no-deal preparations over the course of Q3 and the inventory cycle can begin again, albeit probably to a lesser degree this time around.

While helpful in avoiding another soft quarter, it’s hardly an attractive growth driver and risks introducing an unwanted degree of volatility, just at a time when businesses and investors crave consistency.

Consumers to the rescue, yet again

Labour market strength and generous pay growth should offer more concrete hope.

We’ve become accustomed to low unemployment, high vacancy rates and comfortably consistent growth in real incomes for some time now. But the worry has always been that stretched consumers can only do so much to prop up weakness elsewhere.

In that context, a sizable two percentage point upwards revision to household savings rates is encouraging, suggesting capacity to better absorb any future shocks to income without cutting spending. Encouragingly, spending was also up 0.4% over the period, showing that it’s not a direct trade-off, and that gains in real wages are beginning to be felt in the wider economy.

Broader concerns remain

Much work has clearly been done in the last three years to better diversify the sources of UK economic growth. It’s been a stated objective of both Mrs May’s government and Mr Johnson’s to encourage growth outside of the services sector and wean the economy off its reliance on consumer spending.

Recent weakness, however, has revealed a return to type. A lot done therefore, but plenty left to do if the government wants to build a broader base for GDP.

By Richard Conway, Director at JCRA

Domestic agenda should be built around giving people more control of their lives, argues CPS

‘Take Back Control’ was the slogan that swung Britain behind Leave. But after Brexit, argues Robert Colvile, politicians should make giving back control the focal point of their efforts – via a policy agenda built around spreading ownership and opportunity.

In his new report ‘Popular Capitalism’, the Director of the Centre for Policy Studies – the most influential think tank among Conservative MPs, according to ComRes polling – explains how an updated version of the popular capitalism pioneered by Margaret Thatcher can show people how the free market can work in their best interests.

The report warns that the Conservatives – the party that has traditionally been the standard bearers for capitalism – have failed under previous leaders to develop policies that embody the voters’ values. Polling during the Theresa May era, cited in the report, shows that the Tories are no longer considered to support low taxes, home ownership, small businesses, pensioners or ordinary people who are working hard to get on, to the point where the only group they are viewed as being on the side of are “international bankers and billionaires”.

Colvile argues that it is capitalism which genuinely acts in the interests of the many not the few, by generating and spreading wealth – but warns that concerns about inequality and corporate concentration need to be met with a policy agenda that gives people more control of their own lives, and more of a stake in the economy.

This would include:

  • Reforming the tax system to ensure that work always pays, for example by raising the National Insurance threshold to let people keep the first £1,000 they earn tax-free (a policy proposed by the CPS and adopted by Boris Johnson)
  • Easing the burden on small businesses by offering them the chance to pay a flat tax on turnover in place of existing taxes and administration (subject of a CPS report launched by Sajid Javid in May)
  • Helping tenants into home ownership by offering them the opportunity to buy from their landlords (as championed in the CPS report ‘From Rent to Own’)
  • Addressing public concerns about the fairness of the welfare system by re-establishing the principle that those who have put in for significant periods should be treated more kindly by the system (the subject of an imminent CPS report)

Colvile also highlights alarming CPS polling to illustrate why any new policy agenda must include delivering on the Brexit vote.

Between 2018 and 2019, the number of English voters saying they would have “no trust at all” in MPs if they had a reason to contact them with a problem rose from 40% to 54%. However, among Leave voters the figure rose from 43% to 69% – a hugely alarming sign of corroding faith in democracy. There were similar but slightly smaller rises in the proportion saying they would not trust their parish or district councils (or equivalent), showing that voters are increasingly distrusting not just of MPs individually but of every layer of government. The polling was carried out in the wake of the original extension to the Brexit process.

Robert Colvile said: “Many on the Left appear to believe – and are eager to tell the world – that they have a monopoly not just on compassion, but basic humanity. To be a capitalist, in their view, is to hate the poor and love the rich.

“This report argues that a popular capitalist agenda is not just rational, but deeply moral – not just because it generates and shares prosperity, but because it is about trusting people as well as helping them, by giving them more control of their lives.”