Day: June 6, 2025

Labour’s plan to build 1.5 million new homes by 2030 is being “undermined” by a fall in planning consents, according to a report by Investec.   Just 241,000 housing units received planning permission in England last year, a 3% fall from 2023, reveals the study by the specialist bank. This shortfall is particularly acute in the South East, the study says, with London facing a substantial housing gap, with only 32,160 homes delivered in 2023, “less than half the estimated amount required”.  To hit its target – a 50% uplift on the previous five years — the government aims to build around 300,000 homes a year.  However, the report, called UK Housebuilding: Challenges and Opportunities, points to some signs of progress.   Housebuilding inflation costs slowed to 2% in 2024, compared with 15% in 2022 and 10% in 2023.   It adds: “Coupled with this, urban brownfield and prime central London land prices spiked in 2021 and 2022 before declining sharply in 2023, suggesting that land may become cheaper for builders.”  The report comes as the latest S&P Global UK Construction Purchasing Managers’ Index today showed that housebuilding was the weakest-performing segment in its construction survey, with a 45.1 mark in May. A level above 50.0 indicates growth.  Overall, the S&P building activity survey posted a 47.9 mark in May, up from 46.6 in April, showing an easing of a slowdown that has endured since the start of the year.  The government hopes that its relaxing of planning restrictions and green-lighting previously shelved housing projects will lead to greater building from the middle of this parliament. Chancellor Rachel Reeves’ spending review next Wednesday, is also expected to boost the housing department’s budget over the next five years. Investec building and construction equity analyst Aynsley Lammin says: “While we are currently not seeing the levels of construction needed to achieve the government’s targets, there are some positive signs in the market, with both land prices and cost inflation in construction beginning to normalise to pre-pandemic levels.  “As well as costs, the adoption of a partnership model—where local authorities and developers work together—may accelerate building levels.   Lammin adds: “These collaborations reduce development risks and capital requirements, allowing for a more flexible approach to delivering new homes.   “By leveraging co-investment from housing associations and institutional investors, we can create a capital-light growth model that helps unstick the housebuilding process.”  The post Housebuilding target ‘undermined’ by planning consent slide: Investec   appeared first on Mortgage Strategy.

The National Residential Landlords Association has claimed that government targets to improve the energy efficiency of rental homes are “unachievable”. The landlord group says that under proposed timelines private landlords might have less than two years to upgrade 2.5m homes. Proposals that are currently under consultation state that every privately rented home should have an energy rating of at least C wherever possible. Under the timelines set out, the new energy standards will be confirmed in late 2026, then applied to all new tenancies by 2028 and extended to all existing tenancies by 2030. It could leave landlords with less than two years to upgrade over 2.5 million private rented homes that currently have a rating below C. The NRLA says it supports the government’s objectives but the timelines are “simply unrealistic” due to a chronic and worsening shortage of skills tradespeople. Kingfisher group, the owner of Screwfix, B&Q and Tradepoint, says the shortfall in skilled trades is set to rise to 250,000 by 2030. The NRLA is instead calling for a slower, two stage implementation plan.  It proposes that by 2030, landlords should be required to meet standards related to the fabric of a building, such as installing insulation where possible and required. By 2036, all landlords should then meet further secondary standards related to the installation of smart meters and efficient heating systems. NRLA chief executive Ben Beadle says: “We want all private rented properties to be as energy efficient as possible.  “However, tenants are being sold a pup with timelines that are hopelessly unrealistic. “The idea that millions of homes can be retrofitted in less than two years is detached from all reality, not least given the chronic shortage of tradespeople the sector needs to get the work done. “Noble ambitions mean little without practical and realistic policy to match.” Buy-to-let lender Paragon recently expressed similar concerns. The post Govt energy efficiency plan ‘unachievable’, claims NRLA appeared first on Mortgage Strategy.

The law firm representing the borrower in yesterday’s appeal ruling against One Savings Bank has spoken out about the impact of the Supreme Court’s decision for victims of economic abuse. Solicitors Howard Kennedy, which represented Catherine Waller-Edwards in her successful appeal against the lender, says it is “landmark development” in protecting individuals who are vulnerable to “undue influence” in financial decisions. The crux of the case was whether or not OSB should have followed a specific procedure – known as the Etridge protocol – to ensure Waller-Edwards understood the full implications of remortgaging the property she owned with her then partner Nicholas Bishop. The protocol requires that lenders confirm a borrower has received independent legal advice if they are taking out a mortgage with another person that is for that person’s benefit. Waller-Edwards’ case was especially complex because the money raised from the remortgage was used for several different purposes and was therefore a “hybrid” loan. Part of the mortgage was to be used to repay Bishop’s sole debts, but part was meant to be for the couple’s joint benefit. Background to the case The situation leading up to the remortgage was also complicated. Waller-Edwards owned a £600,000 home with no mortgage and had £150,000 in savings as well as a £7,000-a-year pension before she entered into a relationship with Bishop in 2011. But she agreed to exchange the home and her savings for a property that Bishop was building, which already had a charge against it from another lender. The couple later took out a £384,000 remortgage from One Savings Bank against the new property, with Bishop stating this was to repay the first mortgage, clear £39,000 of debt and invest in another buy-to-let property together. In reality and without OSB’s knowledge, Bishop also used £142,000 from the mortgage to pay a divorce settlement to his ex-wife. After the remortgage was granted by OSB, the relationship between Bishop and Waller-Edwards broke down, he moved out and the mortgage on the home went into arrears. OSB launched possession proceedings in 2021, which Waller-Edwards appealed, but this was overturned and ultimately the case ended up at the Supreme Court for yesterday’s ruling. The key issues at stake in this case were the fact that the remortgage was a “hybrid” transaction, because the money was used for different purposes rather than all of the sum being used for the benefit of both parties. Although the bank did not know about the sum paid to Bishop’s ex-wife, which was for his benefit and not that of Waller-Edwards, the lender was aware of the £39,000 used to clear his debts. Because of this, Waller-Edwards’ legal team was able to successfully argue that she was effectively acting as a kind of guarantor on that element, making it what’s known as a “surety” transaction rather than a joint mortgage. The other aspect of the legal argument was whether the £39,000 element was a large enough sum to trigger the lender to need to follow the protocol and check the borrower was not acting under “undue influence”. Yesterday’s ruling clarifies that lenders should be following the protocol in any case where one borrower is assuming liability for the other borrower’s debts without any clear advantage to themselves. A landmark ruling for victims of economic abuse Howard Kennedy partner Joel Leigh, the lead solicitor for Waller-Edwards, says: “The Supreme Court’s decision is a landmark development in the law of undue influence, the most significant since Etridge. “It is remarkable that hybrid transactions have gone unrecognised for so long, and that a workable test has only now been confirmed. “While some lenders may have already adopted a cautious approach, the absence of formal recognition likely left many vulnerable individuals without recourse. “These were people who, dependent on a partner who abused their trust, were drawn into transactions that left them financially exposed. “Many will have lost homes, creditworthiness, and stability and lacked the means or confidence to challenge it. “Even those prepared to challenge such contracts would have faced an uphill battle, because without any legal recognition of hybrid transactions, claims were doomed to fail unless (as in Catherine’s case) taken to the highest court in the land. “The Supreme Court’s judgment delivers long-overdue clarity and a vital safeguard: from now on, in any non-commercial hybrid transaction, a more than de minimis [trivial] surety element is enough to put a lender on inquiry and require compliance with the Etridge protocol. “Catherine’s fight has not only secured justice for her but has reshaped the legal landscape, extending meaningful protection to both men and women at risk of economic abuse within their personal relationships.” The lender’s response OSB says: “We note the judgement of the Supreme Court. “We are naturally disappointed by the decision, which was based on a very particular set of facts. “This is a complex case arising from a loan in 2013 and we are assessing the implications of the ruling, although we note that cases involving undue influence are rare. “At the same time, we will review our current procedures.” The post Law firm hails ‘landmark’ win for victims of financial abuse appeared first on Mortgage Strategy.

The Bank of England is testing how artificial intelligence can help forecast inflation and improve its communications, according to rate-setter Megan Greene.   The Monetary Policy Committee member said the central bank was experimenting with several uses for the technology, including providing early warning signs of a financial crisis, analysing the labour market, and short-term predictions about the direction of consumer prices.  Greene said there were “massive” opportunities to use AI to help track the economy but added that central banks should use the technology judiciously.  The Brown University economist was speaking was speaking at a conference at King’s College, London.  Greene said the Bank has used “machine learning techniques” to help produce inflation forecasts.   She added that staff found these models are “more accurate at forecasting consumer price inflation at shorter time horizons so it can be useful there, particularly as cross checks to more traditional models.”  However, Greene was reserved about the effect AI might have on the wider economy.  She said: “There is an argument that AI should boost productivity growth and quite quickly.   “This could happen through income effects, so workers will earn more and will either work less and have more leisure time or will work the same and just consume more.”  “I have my doubts that we’ll see real productivity gains over my forecast horizon, which again is two to three years.”  Her comments come as the Office for National Statistics admitted today that inflation was overstated in April by 0.1%, due to an error in the vehicle excise duty data provided by the Department for Transport, which is used to calculate consumer price inflation.  The cost of living jumped to 3.5% in April from 2.6%, which was higher than expected.  The government’s data body does not plan to revise its inflation data, but will use the correctly weighted data from now on, meaning no further statistics will be affected.  Greene’s comments also come after the Bank said in November it had begun the biggest “root-and-branch” reforms to the way it makes and communicates rate-setting policy in almost 30 years.  These reforms follow a review last April by former US Federal Reserve chair Ben Bernanke review, commissioned after the Bank failed to predict inflation would hit a four-decade high of 11.1% in 2022, sparked by energy price rises and post-pandemic supply chain shocks.  The Bank has promised to change: Its data infrastructure and our modelling framework  The inputs into policymaking, including “the role of the forecast and scenarios, and their underlying assumptions”  The way MPC discussions are structured  How data is used to inform the MPC’s policy decisions  How the Bank communicates its “monetary policy decisions, outlook and risks to both financial markets and the general public”  The overhaul sparked by the Bernanke review is being overseen by Bank deputy governor Clare Lombardelli.  The post Bank of England tests AI to help with inflation forecasts   appeared first on Mortgage Strategy.

Clydesdale Bank will offer brokers direct access to its underwriting team for large loans over £500,000.  The high street lender says intermediaries now have the chance to speak to an underwriter before they submit a case “to confirm that we can help you and your client”. It says, in a broker’s note, that these calls may be able to resolve cases such as: Where non-standard income is required, such as investment income Self-employed applicants where there may have been one-off extraordinary costs When a higher than standard percentage of variable income is needed The bank’s underwriting team is available for calls between 9am and 5pm Monday to Friday, with brokers able to contact their business development managers for more information. Last week, Clydesdale Bank and Virgin Money became the latest lenders to ease their home loan stress rates, allowing customers to borrow around an extra £40,000.   The banks say the new rules apply to variable or fixed-rate residential mortgages for terms under five years. They explain that a typical example of joint borrowers with a combined income of £85,000, can expect to see their maximum borrowing rise to up to £40,000. The post Clydesdale Bank offers brokers access to large loan underwriting team   appeared first on Mortgage Strategy.