UK mortgages rates to rise further: ‘next 10 days crucial’ as to how high

(qlmbusinessnews.com via theguardian.com – – Tue, 27th Sept 2022) London, Uk – –

Building society chief responds as stock market falls and pound slides after Kwarteng’s mini-budget.

Mortgage rates in the UK will rise further in coming days, and the next 10 days in financial markets will be crucial in determining how high they will go, according to the head of Principality building society.


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Experts are predicting that a typical two-year fix, which has cost borrowers £850 a month, could go up to almost £1,500 a month, after Kwasi Kwarteng’s mini-budget on Friday shocked markets and sent the pound plunging, as well as triggering a government bond sell-off. Sterling hit a record low of about $1.035 on Monday morning and has recovered slightly to $1.08, but is still down 7% this month.

Julie-Ann Haines, the chief executive of the building society, which has 500,000 members, said: “This £6,000-a-year difference [in mortgage costs] is really dependent on whether the markets over the next two weeks continue to think that the Bank of England base rate will get to 6%.”

The pound’s slide, which makes crude oil, priced in dollars, and imported goods more expensive, threatens to push UK inflation, already at 9.9%, even higher and is expected to force the Bank of England to raise interest rates to 5% or 6% by next summer. It lifted its base rate by a half a percentage point to 2.25% the day before the mini-budget.

Haines told BBC Radio 4’s Today programme: “What we do know is over 2022 we’ve seen very significant increases. Even so far, what we’ve seen passed on in mortgage rates is resulting in about an extra £3,000 to £4,000 a year for an average £250,000 mortgage. What the markets do in the next 10 days is really quite important in determining how big the impact is.”

UK government bonds, known as gilts, are on track for their worst month on record, going back to the 1950s. The sell-off has pushed the cost of borrowing for 10 years up to 4.1%, from 3.1% before the mini-budget. The slump in gilt prices has forced several mortgage providers, including Virgin Money and Skipton building society, to pull deals.


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Haines said Principality had a “a slightly smaller range than normal” and, as a small lender, was affected by others pulling mortgage deals, but that the mutual was working hard to help customers. She stressed that building societies and other lenders needed to be able to make a margin to survive as businesses.

“We no doubt see [mortgage] rates increase over the next 10 days,” she said. “If we can start to get a grip on what’s happening in the markets through building confidence from the Bank of England and the government then you are hoping that mortgage lenders will come back into the market.”

By Julia Kollewe

 

J Sainsbury in talks to offload prime retail sites to London-listed real estate investor for about £500m

 

(qlmbusinessnews.com via news.sky.com– Wed, 21st Sept 2022) London, Uk – –

J Sainsbury, the supermarket chain, is in advanced talks to offload a portfolio of prime retail sites to a London-listed real estate investor for about £500m.

Sky News has learnt that LXi REIT, which has a market value of about £2.5bn, is close to agreeing a deal to acquire the freeholds to nearly 20 Sainsbury's stores, which the grocer then intends to lease back.


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A property industry source said on Tuesday evening that LXi was likely to seek to raise hundreds of millions of pounds in equity to fund the acquisition, with part of the consideration also including an unspecified amount of debt.

If confirmed, the deal would come months after it emerged that Sainsbury's was exploring a sale of the portfolio.

A number of other parties are said to have expressed an interest in acquiring it.

Supermarket groups are under pressure from investors to improve the efficiency of their balance sheets, with both Asda and Wm Morrison having been acquired by new owners in the past two years.

LXi REIT has been active this year, agreeing a takeover of peer Secure Income REIT several months ago.


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Among the prominent assets it owns are properties which form part of Merlin Entertainment, the group behind the Alton Towers, Legoland and Thorpe Park theme parks.

It invests in commercial real estate assets which benefit from long leases, typically lasting decades, and is a member of the FTSE-250 index.

LXI and Sainsbury's both declined to comment.

 

China’s largest real estate developer, Country Garden, profits drop 96%

(qlmbusinessnews.com via theguardian.com – – Tue, 30th Aug 2022) London, Uk – –

The company blames the ‘severe depression’ in the property market and says ‘only the fittest will survive’

China’s biggest property developer Country Garden Holdings has reported a 96% drop in profits, blaming a “severe depression” in the country’s crisi-hit property market in which “only the fittest can survive”.

The company, which is listed in Hong Kong, said preliminary net profit collapsed from 15bn yuan ($2bn) to 612m yuan ($88m) in the first six months of the year thanks to the housing market crisis that is slowly engulfing the Chinese economy.


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Country Garden, which boasts thousands of property projects and a footprint in nearly 300 municipalities, has seen its shares plunge more than 70% this year and the stock dropped another 2.3% on Tuesday to stand at HK$2.54.

It had warned earlier that profits could fall up to 70% and the even bigger than expected drop came with a grim warning in a statement to the Hong Kong stock market.

“In 2022, the property sector faced myriad challenges, including the market’s weakening expectations, sluggish demand and a fall in property prices,” the company said.

“All these exert mounting pressure on all participants in the property market, which has slid rapidly into severe depression. The harsh business environment in which only the fittest can survive means even higher requirements for businesses’ competitive strength.”

China’s property crisis began to rear its head nearly a year ago when the second biggest developer, Evergrande, said that it might not be able to meet repayments on the offshore, dollar-denominated part of its massive $300bn debt mountain.

At the time, market watchers believed that companies such as Country Garden – which did not have such high borrowings – would not be tainted by the problems.

But the debt contagion has spread from Evergrande throughout the enormous $60tr Chinese property market, bringing a 40% drop in sales, falling prices, and a mortgage strike by homeowners angered by the non-completion of homes for which they have paid upfront.

The bleak outlook has been compounded by the zero-Covid lockdowns that have strangled economic activity all over China in the past 12 months, and Country Garden also blamed the recent extreme weather for upsetting profits.

The company’s problems have also seen its majority shareholder – Yang Huiyan, daughter of the founder – lose half her $24bn fortune.

However, the company still managed to strike an optimistic note and said there was hope for an upturn in fortunes because urbanisation of the population was still progressing.


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“China’s economy has proven resilient and its strong fundamentals for long-term development remain intact,” ti said. “The country’s new type of urbanization still has a long way to go and the desire for a good life will always remain dear to people’s hearts. The real estate industry will always exist.”

“We will persevere and remain hopeful despite adversity. Country Garden keeps its feet on the ground as it works hard to get through a harsh winter and anticipates the arrival of spring.”

By Martin Farrer

Why Rent in New York City is Out of Control Right Now

Source: CNBC

Rents in New York City are at an all-time high. The median asking rent in Manhattan reached $4,100 in June 2022. CNBC Make It spoke to three New Yorkers whose rents increased up to $2,100 a month. But are New Yorkers willing to pay up? One challenge for renters is the requirement that they earn 40 times the rent when applying for an apartment. With the median asking rent in Manhattan around $4,000, that means the minimum income to qualify for an apartment at that price is $160,000. The median household income in New York City is $67,000.

The 10 Industries Minting The Most Billionaires in 2022


Source: Forbes

The 2,668 billionaires on Forbes’ 2022 World’s Billionaires list have established their fortunes in all sorts of ways: building pet food and soy sauce brands, mining copper and zinc, making eyeglasses, developing real estate empires. Some created new riches, some inherited old ones. But many on the list have something in common: They made their fortunes in the world of finance–or inherited such wealth. These are the industries that mint the most billionaires in 2022 as well as the richest person in each sector.

How Transport for London intends to construct 20,000 additional homes

(qlmbusinessnews.com via theguardian.com – – Thur, 18th Aug 2022) London, Uk – –

Taylor Wimpey, homebuilder, provides employees with a £1,000 cost-of-living bonus.

(qlmbusinessnews.com via news.sky.com– Wed, 3rd Aug 2022) London, Uk – –

Rival housebuilder Barratt, Lloyds, Rolls-Royce, and HSBC are also among the big companies to have given workers bonuses to help them handle rising living costs.

Housebuilder Taylor Wimpey will give most of its employees £1,000 on top of their salaries to help them cope with rising fuel costs this winter.

The payments will be given to workers on salaries of up to £70,000, meaning that about 90% of the workforce is eligible.


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Money will be paid in monthly instalments from September to February.

It comes as UK households grapple with 9.4% inflation, rising food and energy costs, high fuel costs, and an increase in national insurance and council tax.

Taylor Wimpey said: “We have been closely monitoring the impact of rising inflation and the predicted increase in fuel bills this winter on the cost of living for our employees.”

The group said it has been reviewing wages to “ensure competitive levels of pay, alongside our excellent benefits package”.

It comes after rival Barratt announced a £1,000 cost-of-living bonus for 6,000 staff below senior management level, following a 5% pay rise from July to 1 April.

Lloyds, Rolls-Royce, and HSBC are also among the big companies to have given workers bonuses to help them cope with the rising cost of living.

Nationwide: House prices continue to rise – up for the 12th month in a row
Inflation at 40-year high of 9.4% as cost of living crisis mounts

Also on Wednesday, Taylor Wimpey announced a 16.3% rise in pre-tax profits to £334.5m for the six months to the end of June.


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Like many businesses, the firm's costs have increased due to the higher cost of materials, but it said this was fully offset by house price growth.

It expects property prices to increase 4% to 5% year-on-year.

Nationwide Building Society data on Tuesday showed that annual UK house price growth was up slightly in July to 11%, compared with 10.7% in June, although it is expected to slow in the months ahead.

15 Ways to Create Generational Wealth

Source: Alux

This Alux video we will be answering the following questions:

How to build generational wealth? What is generational wealth? How to become generationally wealthy? How to build multi-generational wealth? How to create wealth that lasts multiple generations? How does one create multiple-generation wealth? How to make sure your kids are rich? How to create wealth for your grandkids? What is the best generational wealth documentary? What is the best generational wealth motivational video?

Embattled property giant Evergrande faces deadline after bosses quit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 25th July 2022) London, Uk – –

Embattled Chinese real estate giant Evergrande is expected to deliver a preliminary restructuring plan this week, following the exit of two bosses.

The firm says its chief executive and finance head have resigned, after an internal probe found that they misused around $2bn (£1.7bn) in loans.

Evergrande has more than $300bn in liabilities and defaulted on its debts late last year.


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The crisis has spooked traders who fear contagion in China's property sector.

On Friday, Evergrande said it found that chief executive Xia Haijun and chief financial officer Pan Darong were involved in diverting 13.4bn yuan ($2bn; £1.7bn) in loans secured by its property services unit to the wider group.

The firm said in a filing to the Hong Kong Stock Exchange that Mr Xia and Mr Pan had resigned because of their “involvement in the arrangement of the pledges”.

In a separate statement, it said the funds “were transferred and diverted back to the group via third parties and were used for the general operations of the group”.

Evergrande added that it was in talks with its property services unit over a repayment plan.

A $2.6bn deal to sell a majority stake in the unit to a rival developer fell through in October.

Evergrande, which is the world's most indebted property developer, had been struggling to make payments on its over $300bn of liabilities and missed a crucial repayment deadline on its offshore debt in December.

Its shares have fallen by more than 75% over the last year in Hong Kong and have been suspended from trading for months.

The company is scheduled to announce a preliminary plan to restructure its debts before next week.

China's property crisis is estimated to have wiped more than a trillion dollars off the value of the sector last year.

The very serious potential fallout from Evergrande collapsing has led some analysts to suggest that Beijing may step in.

On Monday, Japanese banking giant Nomura said “an increasing number of developers have failed to repay their debt and continue their construction works” since the Evergrande crisis.

Also on Monday, it was reported that China was planning to start a real estate fund to support more than a dozen property developers, including Evergrande.

The fund could be worth up to 300bn yuan, according to reports.

Home sales in China have fallen for 11 consecutive months, official data shows. That is the longest slump since China created a private property market in the late 1990s.

Several Chinese developers have halted the construction of homes that had already been sold, because of concerns over cash flow.

In recent weeks, some home buyers have threatened to stop paying their mortgages until the work restarts.


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More than 200 projects by at least 80 developers have been affected, according to the Shanghai-based E-house China Research and Development Institution.

The China Banking and Insurance Regulatory Commission has pledged to help local governments in “guaranteeing the delivery of homes,” state media reported.

 

Airbnb permanently bans parties and events around the world

(qlmbusinessnews.com via bbc.co.uk – – Wed, 29th June 2022) London, Uk – –

Airbnb has permanently banned parties and events at homes on its platform, after a temporary measure during the pandemic proved popular with hosts.

The firm says the rule has become “much more than a public health measure” since it was introduced in August 2020.

“It developed into a bedrock community policy to support our hosts and their neighbours,” the San Francisco-headquartered firm said.

However, it also removed a limit on how many people can stay at homes.

Airbnb said in a statement that the number of complaints about parties dropped by 44% since the measure was first introduced.


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Exceptions to the global ban may be made for “specialty and traditional hospitality venues” in the future, it added.

Airbnb also said it would remove a limit on the number of people its listings are allowed to accommodate at any one time.

It previously imposed a 16 person limit to occupants because of concerns over the spread of Covid-19.

The firm said “several types of larger homes are capable of comfortably and safely housing more than 16 people – from castles in Europe to vineyards in the US to large beachfront villas in the Caribbean”.

“Removing this cap is meant to allow those hosts to responsibly utilise the space in their homes while still complying with our ban on disruptive parties,” it said.

The company started putting restrictions on parties in 2019. It banned “open-invite” parties and so-called “chronic party houses” that were a nuisance to neighbours.

During the pandemic, Airbnb introduced an indefinite ban on parties “in the best interest of public health”.


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More than 6,600 guests had also been suspended from using the platform last year for breaking the rules.

“This new and long-term policy was enacted to help encourage and support community safety,” Airbnb said.

“We look forward to sharing updates in the coming weeks and months on our efforts to complement our community policies on parties,” it added.

By Annabelle Liang

UK mortgage lenders to drop affordability rules for buyers

(qlmbusinessnews.com via theguardian.com – – Tue, 21st June 2022) London, Uk – –

Bank of England feels other measures will play stronger role in guarding against household debt

Lenders will no longer have to check whether homeowners could afford mortgage payments at higher interest rates after the Bank of England ditched a rule originally designed to avoid another 2007-style credit crunch.

The rule, introduced in 2014, was intended to make sure borrowers did not take on more debt than they could afford, and potentially “amplify” an economic downturn and put financial stability at risk.


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The decision to withdraw the affordability test comes despite the Bank of England having raised interest rates for a fifth time in a row to 1.25% last week as part of efforts to tackle soaring inflation, meaning some mortgage borrowers could be in line for higher repayments.

The Bank of England, which originally consulted on the changes in February, confirmed that it would scrap the affordability test after determining that other rules, including those that cap mortgages based on the income of borrowers, were “likely to play a stronger role” in guarding against an increase in household debt.

The central bank said in a statement that those other rules “ought to deliver the appropriate level of resilience to the UK financial system, but in a simpler, more predictable and more proportionate way”.

Experts said that while some might find the rule changes “baffling” in light of rising interest rates, the risks were relatively low, given the loan-to-income rules would remain in place.

“The timing of today’s announcement that the Bank of England is going to loosen its affordability rules is somewhat baffling and may enrage some who still have the financial crash burned into their memory,” said Gemma Harle, the managing director of Quilter Financial Planning. “With interest rates starting to creep up to meet the damaging impact of inflation and soaring energy and food prices, you would think that people’s ability to afford their mortgage should really be under the spotlight now.”

However, she said: “While it is potentially bad timing for the announcement, the change in the affordability rules may not be as significant as it sounds as the loan to income ‘flow limit’ will not be withdrawn, which has much greater impact on people’s ability to borrow.”

Chris Sykes at the mortgage broker Private Finance added that the change would be positive news for borrowers who may be falling short on other affordability tests put in place by lenders who were taking the cost of living crisis into consideration. “This isn’t a case of the floodgates opening; in fact, whether the changed measures will even give flexibility close to that we saw when rates were 1% is a good question,” he said.


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“Just because the recommendations change it doesn’t mean that banks will automatically change the way they look at things; they still have a duty of care, have to be seen to be lending responsibly and also have their own internal risk committees that they would need to get any changes by.

“What this will allow is for additional discretions or innovations by lenders. Perhaps it could inspire some lower stress rates for those that need it most with low income but with perfect credit and years of experience paying their rent.”

By Kalyeena Makortoff

Why Californians Are Fleeing To Mexico

Source: CNBC

In 2021, over 360,000 people left California in what many are calling The California Exodus. But a rising number of them are migrating out of the country all together and instead, heading south to Mexico to escape rising housing prices, traffic and expensive healthcare.


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London’s biggest property companies merge to create $6 bln West End powerhouse

(qlmbusinessnews.com via uk.reuters.com — Thur, 16th June 2022) London, UK —

Two of London's biggest property companies agreed to merge on Thursday to create a 5 billion pound ($6 billion) estate with sites in tourist hotspots including Covent Garden, Carnaby Street and Soho that are battling to recover from the pandemic.

Shaftesbury (SHB.L) and Capital & Counties Properties (CAPCC.L) combined property portfolio will comprises about 2.9 million square feet of lettable space in high-profile destinations in London's West End.


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“The merged business will have an exceptional portfolio, located in popular and busy parts of London's vibrant West End, and an experienced and innovative team drawn from both businesses,” Shaftesbury CEO Brian Bickell said.

London landlords heavily exposed to non-essential retailers and hospitality firms are on a slow recovery path after coronavirus lockdowns.

Under the terms of the all-share deal, Shaftesbury shareholders will get 3.356 new Capital & Counties Properties (Capco) shares for each share held, valuing Shaftesbury at about 1.96 billion pounds ($2.37 billion) including the 25.2% stake Capco already owns.

Reuters calculated the valuation based on Capco's closing price on Wednesday.

For Capco shareholders, the deal is expected to be earnings accretive immediately, while for Shaftesbury shareholders, the merger is expected to be modestly earnings dilutive in the first two years after completion.

Shaftesbury shares fell more than 8% to 534 pence in morning trade, while Capco stock was down 0.1%.

Existing shareholders in Shaftesbury will own 53% of the combined group – Shaftesbury Capital Plc. Capco shareholders will own the rest.


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The newly created group will be led by Shaftesbury's Jonathan Nicholls as non-executive chairman and Capco's Ian Hawksworth as chief executive.

Shaftesbury CEO Bickell and Capco's Chairman Henry Staunton will retire once the deal is completed.

The combined group will retain Capco's listings on the London Stock Exchange as well as the Johannesburg Stock Exchange.

Reporting by Aby Jose Koilparambil

Homebuilders agree to put £2bn towards fixing unsafe cladding on high rises in England

(qlmbusinessnews.com via theguardian.com – – Wed, 13th April 2022) London, Uk – –

Michael Gove announces deal involving 35 firms but further £3bn still needed to fully address fire safety issues

More than 35 homebuilders have agreed to put £2bn towards fixing unsafe cladding on high-rise buildings in England identified in the aftermath of the Grenfell Tower disaster, Michael Gove, the housing secretary, has said.

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The move had been expected after Gove asked 53 homebuilders to contribute towards fixing buildings they have had a role in developing. More than 35 said they would commit £2bn, but that still leaves a further £3bn needed to address fire safety problems in high-rise buildings across the country.

Gove said the further £3bn would be raised by an extension to the building safety levy, forcing industry to pay for the remedial work on buildings where the developer cannot be traced or forced to pay up. This will be paid by developers applying for building control approval for higher-risk residential buildings in England.

Gove called on companies yet to sign up to the voluntary pledge to do so, saying they would face the consequences if they do not.

The government is introducing new powers that would allow the housing secretary to block those who refuse to make the commitment from building and selling new homes. The proposed laws, announced in February under the building safety bill, are also intended to make sure leaseholders have a cap on the costs of historical building safety defects.

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Gove said: “Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause. I welcome the move by many of the largest developers to do the right thing.

“But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

By Rowena Mason 

Taylor Wimpey to buy back shares worth $201 mln after profit rise

(qlmbusinessnews.com via uk.reuters.com — Thur, 3rd Mar 2022) London, UK —

 UK homebuilder Taylor Wimpey Plc (TW.L) on Thursday forecast growth in the number of homes built in 2022 and announced an about 150 million pound ($201.14 million) share buyback after posting a more than two-fold surge in its annual profit.

UK homebuilders have stayed optimistic about demand in the undersupplied housing market even after Britain's January inflation rose at its fastest annual pace in nearly three decades, while the worsening Russia-Ukraine conflict adds further pressure on fuel prices.

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“We continue to expect to deliver low single digit year-on-year completions growth in 2022 and to make further progress towards our 21-22% operating margin target,” the company said in a statement.

Britain's third-largest homebuilder last month said insider Jennie Daly would take over as its next CEO from the end of April, after activist shareholder Elliott criticised the homebuilder's strategy and called for the appointment of an outsider to the role.

The FTSE 100 firm declared a final dividend of 4.44 pence per share and said it has instructed Citigroup Global Markets to buy up to 75 million pounds of shares as first tranche of the buyback programme.

The homebuilder said it expected sales price growth to continue to offset build cost inflation in 2022, which was currently running at about 6%.

Taylor Wimpey's bigger rivals Barratt Developments (BDEV.L) and Persimmon (PSN.L) too have forecast strong market activity this year.

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Pre-tax profit for the year ended Dec. 31 came in at 679.6 million pounds, compared with 264.4 million pounds a year earlier and 835.9 million pounds in the 2019 fiscal.

Reporting by Aby Jose Koilparambil

Developers in England maybe forced to shoulder the cost of dangerous cladding under new laws

(qlmbusinessnews.com via theguardian.com – – Tue, 15th Feb 2022) London, Uk – –

Firms could in effect be blocked from housing market if they do not fix cladding safety issues

Ministers have outlined further details on how the government intends to make developers and manufacturers in the housing industry in England shoulder the costs of replacing dangerous cladding in an effort to protect leaseholders.

The Department for Levelling Up, Housing and Communities said under the plans developers and manufacturers could in effect be blocked from the housing market if they did not help fix cladding safety issues.

It said the changes would put into law a commitment to protect leaseholders living in medium- or high-rise buildings from having to pay anything for the removal of unsafe cladding.

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The government said that if the changes became law it would hugely reduce invoices sent to leaseholders for taking down cladding, which in some cases have exceeded £100,000.

Outlining the plans on Monday, the government said it would go further to protect leaseholders by limiting how much they can be asked to pay for non-cladding costs, such as charges for “waking watches” to patrol sites – with some building owners and developers expected to pick up the bill.

The proposed changes, to be introduced through amendments to the building safety bill making its way through parliament, would also allow building owners and landlords to take legal action against manufacturers who used defective products on a home that had since been found unfit for habitation, the government said, adding the power would stretch back 30 years and allow recovery where costs have already been paid out.

In an effort to ensure that manufacturers found guilty of misconduct are also charged to fix the problems they cause, the government said cost contribution orders would be able to be placed on manufacturers who have been successfully prosecuted under construction products regulations, requiring them to contribute financially to buildings requiring remediation.

The government said the proposed changes to the bill would also allow it to apply a proposed building safety levy – paid by developers applying for building control approval for higher-risk residential buildings in England – to more developments.

Ministers hope they will not have to use the powers and want responsible developers and manufacturers to operate freely.

The courts would also be given fresh powers to stop developers using shell companies that make it difficult to trace or identify who they are run by and so avoid responsibility, the government said.

Discussions with industry leaders on the issue of dangerous cladding are ongoing, the government said, but added that progress was being made.

The levelling up secretary, Michael Gove, said: “It is time to bring this scandal to an end, protect leaseholders and see the industry work together to deliver a solution.

“These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety. All industry must play a part instead of continuing to profit whilst hard-working families struggle.

“We cannot allow those who do not take building safety seriously to build homes in the future, and for those not willing to play their part they must face consequences.”

Under the plans to reduce non-cladding costs for leaseholders, the government said developers that still owned a building over 11 metres that they had built or refurbished – or landlords linked to an original developer – would be required to pay in full to fix historical building safety issues in their property. Building owners who were not linked to the developer but could afford to pay in full could also be required to put up the money, the government said.

A cap on leaseholder costs would then be in place for what the government described as the small number of cases where building owners did not have the resources to pay.

It said the cap would be set at similar levels to what is known as Florrie’s Law, which applies to some repairs to social housing – £10,000 for homes outside London and £15,000 for homes in the capital.

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The government said this would limit how much leaseholders could be asked to pay for non-cladding costs, including waking watch charges.

Any costs paid out by leaseholders over the past five years would count towards the cap, which would protect leaseholders from paying any more, the government said, but added it would carry out further consultation before finalising the details.

The amendments to the bill are due to be debated in the House of Lords next week.

By PA Media

Energy firms call for green levies on bills to be scrapped

(qlmbusinessnews.com via bbc.co.uk – – Fri, 7th Jan 2022) London, Uk – –

The bosses of two energy firms are calling for green levies on bills to be scrapped to help customers facing higher prices.

The founder of Ecotricity described the levies on energy bills as a “stealth tax” of hundreds of pounds a year.

Centrica's boss is also urging government to fund green programmes through general taxation instead.

Thousands of households have seen their energy bills rise in recent months.

Spiralling wholesale gas prices, increased demand for energy in Asia and a summer with little wind have all contributed to soaring costs faced by suppliers and consumers.

Dale Vince, the chief executive of green energy firm Ecotricity, told the BBC's Wake up to Money programme: “The government talk about high energy prices and bemoan them… but what they don't talk about is the fact they take £9bn a year from our energy bills in a combination of VAT and about five social and environmental policies.”

Currently, about 12% of an energy bill set at the level of the Energy Price Cap of £1,277 goes towards funding green energy programmes, such as support for low-carbon electricity generation.

The price cap, which sets the maximum a supplier can charge annually on a dual fuel tariff in England, Scotland and Wales, will go up again in April after a review by the regulator Ofgem.

Mr Vince suggested that prices could jump because of green levies applied to bills.

“That's about half of the rise that's coming through the price cap. [The government] could take that away in a flash,” he said.

Writing in the Sun on Friday, Centrica's chief executive Chris O'Shea suggested one way forward would be to strip the environmental and social levies out of energy bills and “fund ‘green' programmes through general taxation instead”.

Mr O'Shea argued the move would reduce annual bills by £170 and spread the cost more fairly.

He also called on the government to consider suspending VAT on energy bills to help struggling households.

Torsten Bell, chief executive of the Resolution Foundation think tank, suggested suspending VAT would make a “small dent” to higher costs, but that it might not be as effective as it would benefit higher-earners as well.

“The important thing is that we have a much larger intervention aimed at lower-income households,” he said.

Windfall tax

Ecotricity boss Mr Vince also suggested that North Sea gas suppliers should face a windfall tax as some have seen profits increase as wholesale prices have surged.

According to experts at energy consultancy Wood MacKenzie, UK North Sea oil and gas companies are set to report near-record cashflows of nearly £14.9bn for the current financial year.

“The North Sea operators have been making a killing this winter,” Mr Vince told the BBC.

“A windfall tax would be a fair thing to do, the North Sea operators don't need that money, weren't planning to have that money and it's a hole we've got in the economy somewhere else.”

Last month, other energy bosses, such as Ovo Energy's chief executive Stephen Fitzpatrick, predicted that the rise in wholesale gas prices and its impact on people would be “an enormous crisis for 2022”.

Energy UK, the industry's trade body, has warned bills could soar by another 50% unless the government intervenes.

The idea of targeted financial support for fuel bills – along the lines of the current Warm Home Discount scheme – is emerging as a frontrunner in the race to tackle rising costs, although a number of options are being considered by government officials.

The current scheme offers those receiving certain state benefits the option to apply for a one-off £140 payment every winter.

This could be increased and the number of people eligible could be expanded more broadly.

Small Business Minister Paul Scully told the BBC's Today programme: “We'll always look at what we can do, especially for targeted approaches, to support the lowest-paid because there is a wider cost-of-living issue.”

A spokesperson for the Department for Business said that the current energy price cap was “insulating millions of consumers from high global gas prices”.

“We'll continue to listen to consumers and businesses on how to manage the costs of energy.”

The department also pointed to schemes currently in place to help those facing high bills, such as the Warm Home Discount scheme, as well as the £500m Household Support Fund, which sees local councils distribute grants to struggling households in England.

UK house prices cap strong year with another jump – Nationwide

(qlmbusinessnews.com via uk.reuters.com — Thur, 30th Dec 2021) London, UK —

British house prices rose by a stronger-than-expected 1.0% in December from November, capping the biggest full-year rise in prices since 2006, figures from mortgage lender Nationwide showed on Thursday.

Economists polled by Reuters had expected prices to rise by a monthly 0.5%.

House prices this month were 10.4% higher than in December 2020 and the average price of a property stood at record high of 254,822 pounds ($343,296.20).

Britain's housing market rebounded strongly after the first coronavirus lockdown in 2020 and has powered ahead since then, helped by a now-lapsed tax break for buyers and by ongoing demand for bigger properties as more people work from home.

“It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax,” Robert Gardner, Nationwide's chief economist, said.

But the outlook remained extremely uncertain, he said.

“The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth,” Gardner said.

“Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term.”

Reporting by William Schomberg

Purplebricks to set aside millions to cover historic failure over deposit registrations

(qlmbusinessnews.com via news.sky.com– Mon, 13th Dec 2021) London, Uk – –
The company's shares face further pressure as it warns that its lettings management business may face claims for a historic failure over deposit registrations.

Purplebricks, the online estate agency, has revealed that it expects to make a provision of millions of pounds to cover an apparent blunder in its lettings management business.

The company said on Monday that it was finalising the amount it was to set aside to cover tenant claims, though its early estimates suggested a potential financial risk in the range of £2m-£9m.

That sum was reported to be based on the assumption that everyone eligible to make a claim did so.

The blunder, it said, concerned an alleged failure to properly serve legally required documents to tenants explaining that their deposits had been put into a national protection scheme.

The company said on Monday morning: “During an internal review the company recently became aware of a process issue in how it has been communicating with tenants on behalf of its landlords in relation to deposit registrations.

“Further enquiries into this matter are currently being conducted and the communications process is now being corrected.

“In light of the above, the company believes that it is prudent to provide for any potential future claims which could arise under the Housing Act in relation to this regulatory process issue.”

Its statement added: “Purplebricks is now in the process of finalising the level of provision required and associated disclosures and has therefore taken the decision to delay its results for the half year ended 31 October 2021, which were due to be published on 14 December 2021.”

Shares – down 70% in the year to date – opened 20% lower on Monday morning.

Much of the earlier slide followed a trading update in November which warned: “After an exceptionally strong period for the UK housing market in FY (full year) 2021, buoyed by the stamp duty holiday, the six-month period to 31 October 2021 has been more challenging.

“New instructions have slowed significantly in recent months, given continued strong demand across the housing market is not being met by sufficient supply of instructions.

“This imbalance has resulted in new instructions coming to market being approximately 23% below the comparative period last year.”

By James Sillars

EV charging stations required in new homes from 2022, Boris Johnson to announce

(qlmbusinessnews.com via news.sky.com– Mon, 22nd Nov, 2021) London, Uk – –

unite and level up across the country.”

The new measures will apply to both homes and non-residential buildings, and also renovations on properties with more than 10 parking spaces.

Using a normal wall plug at home to charge an electric vehicle is a time-consuming process, with the RAC saying it is “by far” a better option to have a dedicated charger.

The company says the average cost for installing a dedicated charger at home is around £800 – but financial support is available from the government.

In response to the announcement, Labour said it does nothing to address the “appalling divide” in charging ports between northern and southern parts of the country.

Ed Miliband, the shadow business secretary, said: “The government is failing Britain's automotive companies and workers.

“Rather than step up to support the car industry in the global race for green technologies, ministers have stepped back and left manufacturers, workers and the public on their own, failing to take the action necessary to make the switch affordable for families hit by a cost of living crisis.

“To back the car industry and create jobs, Labour would bring forward ambitious proposals to spark an electric vehicle revolution in every part of the country.

“By extending the help to buy an electric car for those on lower and middle incomes and accelerating the roll-out of charging points in areas that have been left out, we would ensure that everyone could benefit and make the green transition fair.”

Mr Johnson is expected to tell the CBE the UK will gain advantages from being first to change its economy and transition to net zero.

He is expected to say: “This is a pivotal moment, we cannot go on as we are.

“We have to adapt our economy to the green industrial revolution.

“We have to use our massive investment in science and technology and we have to raise our productivity and then we have to get out your way.

“We must regulate less or better and take advantage of new freedoms.”

Reporting by Tim Baker