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Daniel Tannenbaum


How Will Second Lockdown Affect Mortgages and Movers?

By Blog, Development Finance, Uncategorized

On the 31st October, Prime Minister Boris Johnson announced the new England lockdown, which was implemented on the 5th November. This is the second national lockdown for England this year, and has left many home movers concerned about what the future holds for their relocation plans.


Thankfully, official guidance has been published surrounding the property sector, with the Financial Conduct Authority (FCA) proposing an extension on mortgage holidays to last until the 31st January 2021, helping those who are behind on their mortgage repayments or with multiple loans outstanding.


The Daily Express report UK Finance’s MD of Personal Finance Eric Leenders comments:


“Lenders are providing unprecedented levels of support to help customers through the Covid-19 crisis and stand ready to deliver ongoing assistance to those in need.”


“The industry is working closely with the Financial Conduct Authority to ensure customers impacted by the new lockdown measures will be able to access the most appropriate support.”


How Does the Second Lockdown Affect Movers?


Concerns have been raised for those currently in the process of moving homes, worried that the lockdown would cause delays to their plans. However, it’s been announced that estate and letting agents can continue to work throughout the new lockdown – provided that they follow the appropriate COVID-related regulations.


Housing Secretary Robert Jenrick tweeted just before the new lockdown that “Yes – the housing market will remain open throughout this period. Everyone should continue to play their part in reducing the spread of the virus by following the current guidance.”


Official guidance from the government regarding the matter of moving home was first published earlier in March this year, and subsequently updated during August. This guidance, it’s reported, still applies throughout this second lockdown England is currently in.


This guidance encourages prospective buyers to make the most out of virtual viewings, and to only visit properties on their shortlist of potentials. The guidance also claims that those visiting agent’s offices or viewing properties should wear an appropriate face covering (unless exempt).


Those selling their properties have also been encouraged to leave them for viewings, and adhere to government guidance around preparing properties for viewings – including cleaning hard surfaces, door handles and floors, and opening internal doors before prospective buyers visit with agents.


Those due to move house over the course of the next month have also been advised to do as much of the packing themselves as is possible, and to speak to removal firms in advance of the moves if they are unable to pack themselves up.


More advice on moving home can be found on the government website guidance page here.


Construction Should Continue Throughout Second Lockdown – PM Announces

By Blog, Development Finance

Prime Minister Boris Johnson has announced that construction sites will be able to remain open over the course of England’s second national lockdown.


Addressing the nation on the 31st October, PM Boris Johnson stated that the construction sector could remain operating throughout the new lockdown, with restrictions in place from the 5th of November until the 2nd December. Johnson claimed:


“The virus is spreading even faster than the reasonable worst-case scenario of our scientific advisers […] so now is the time to take action because there is no alternative. Workplaces should stay open for where people can’t work from home, for example in the construction and manufacturing sectors.”


This clarity on the matter comes as a refreshing change to the sector, after the initial announcement of the March lockdown earlier this year caused confusion with some over whether or not sites should stay open.


In addition to the go-ahead from the PM for construction sites to remain open and operating during this lockdown, Johnson also added that the job retention scheme will be extended until December this year. Johnson said:


“I’m under no illusions about how difficult this will be for businesses which have already had to endure such hardship this year and I am truly sorry for that. That’s why we are going to extend the furlough system through November […] we will not end it, we will extend furlough until December.”


The new restrictions for England’s new lockdown, implemented on the 5th November and remaining in place until the 2nd December, require people to remain in their homes unless for certain purposes, to not mix with households other than your own, and for certain businesses and venues to close.


Build UK stated the following on the matter:


Construction and manufacturing should stay open across all four nations, which is testament to the industry’s response to the pandemic so far. Sites are advised to review their social distancing measures and remind the workforce of the importance of complying with the Site Operating Procedures ‐ Version 6 whilst on site, as well as the new restrictions off site to protect their family and colleagues.”

Tradespeople can also continue to work in people’s homes as long as both the worker and household members have no symptoms of coronavirus. The Work Safe Safe Work Guide can be used to reassure householders.”


“Hotels can remain open to provide accommodation for workers. We are currently reviewing the implications for construction workers and please let us know if you have difficulty finding accommodation for workers working away from home.”


Build UK have also created an authorisation letter template. This template is for employers in construction to use should their workers be stopped when traveling to and from work, anywhere across the UK.


FCA Proposes Extension on Mortgage Holidays as England’s Second National Lockdown Looms

By Blog, Development Finance

With England’s second national coronavirus lockdown coming into effect this Thursday, the FCA have recently proposed an extension to the mortgage holidays deadline. Under such proposals, borrowers will have until the 31st January next year (2021) to apply for the payment holiday.


The scheme was set to end last Saturday, however, with the FCA’s new proposal, borrowers could now be provided with a little more leeway in light of the current situation, and the new measures due to be implemented.


According to UK Finance, some 2.5 million borrowers have opted for a mortgage payment break since the pandemic first begun.


Last week, a Joseph Rowntree Foundation study found 1.6 million households were concerned about their mortgage payments for the next three months. This new extension to the mortgage holiday scheme could be a welcome relief for some, providing support for borrowers who are financially struggling due to the coronavirus pandemic.


The FCA’s Proposal


On Monday the 2nd of November, the FCA proposed to extend the payment holiday availability, adding to their website a section on “Our proposals to extend support”, stating:


“We announced that we would propose more support for people affected by coronavirus. We’ve set out these proposals below. If these are confirmed, we’ll provide details on how to apply for this support.”


“Remember, don’t contact your lender about this extended support just yet. But if you’re struggling with your finances, get in touch with your lender to discuss your options.”


What Does This Extension Mean for Borrowers? 


This extension could come as a great relief for borrowers struggling with mortgage repayments as a result of the coronavirus pandemic. The FCA’s proposals set out earlier this week included the following measures:


  • Those who haven’t already taken out a payment holiday will be eligible for a maximum of two payment deferrals over a total period of six months.
  • Those who already have a payment holiday will be able to apply for another deferral of three months.
  • Those who had a payment holiday but have now resumed their mortgage repayments can apply for another deferral of three months.


Borrowers who have had two three-month payment holidays already, or alternative support has been agreed with their lender, will not be able to apply for another deferral.


The new proposed deadline for requesting a payment holiday is now the 31st January 2021. It has also been reported that deferrals will not be marked on credit files as missed payments.


While the government has claimed that using the mortgage payment holidays will not impact upon borrowers’ credit files, some have reported that they found it difficult to get other types of loans after informing lenders that they had deferred their mortgage repayments.


Banks currently have until the 5th November (this Thursday) to respond to the FCA’s proposal.


Record High House Prices – Property Market Continues to Boom Amidst COVID-19

By Blog, Development Finance

In spite of the coronavirus pandemic and the subsequent economic crisis that has ensued, findings suggest that the property market is continuing to boom.


Although the global pandemic has effected many peoples’ lives, leading to job losses and a reduction in low-deposit loans, temporary measures put in place by the government have attempted to support the housing market through this turbulent period.


With such temporary measures as the stamp duty cut, introduced earlier on in July this year, buyers have been given a window of opportunity in which to buy a new property and save money on certain costs associated with this process.


Figures from a property website have recently revealed that during October, the average price of a home in Britain hit £323,530 – a record high. Compared to a year ago, prices are now £16,818 (5.5%) higher, this being the largest rate of increase in over four years.


Rightmove director of property data Tim Bannister was reported to comment the following on the matter: Previous records are tumbling in this extraordinary market, and there are still some legs left in the upwards march of property prices.”


Rightmove have announced that their predictions for the annual rate of price growth could peak by December, predicting this to be around 7% higher than it was a year ago.


In spite of an effective market closure that occurred between the end of March and the middle of May, Rightmove claim that so far 2% more sales have been agreed in comparison to this time last year. In addition to this, Rightmove have also said that the average time in which to sell a property has also reached a record-breaking high of 50 days – being a whole 12 days faster in comparison to this time last year.


Bannister further commented: “Many buyers seem willing to pay record prices for properties that fit their changed post-lockdown needs, though agents are commenting that some owners’ price expectations are now getting too optimistic, and not all properties fit the ‘must have’ template that buyers are now seeking.”


“Not only is the time left to sell and legally complete before the 31 March stamp duty deadline being eaten away by the calendar, but more time is also needed because the sheer volume of sales is making it take longer for sales that have been agreed to complete the process.”


Government Reveals 95% Mortgages for “Generation Buy” Scheme

By Blog, Development Finance

During last week’s Conservative party conference, Prime Minister Boris Johnson unveiled his proposal for turning “generation rent into generation buy”. Johnson’s proposals involve making long-term, fixed-rate 95% mortgages more accessible for first-time buyers.


Johnson said during the conference that his party needed to “fix our broken housing market”, helping younger generations of people who struggle to afford deposits onto the property ladder.


Johnson continued: “We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95% of the value of the home – vastly reducing the size of the deposit.”


“We believe that this policy could create two million more owner-occupiers – the biggest expansion of home ownership since the 1980s. We will help turn generation rent into generation buy.”


Lending in 2020


Since the coronavirus outbreak and the global pandemic that has arisen from this, low-deposit loans have all but disappeared, many lenders withdrawing their offerings of 90% – 95% mortgages.


PM Johnson claims that out of prospective first-time buyers, two million could afford repayments on a mortgage, however face difficulties getting approved. In light of this, Johnson believes that by making low-deposit loans more accessible to such buyers could create, as previously mentioned, “the biggest expansion of home ownership since the 1980s’”.


So far, the government has yet to go into detail as to how plans for “Generation Buy” would work. However, it’s been speculated existing regulations may need changing in order for this to be feasible – including those established after 2008’s financial crash.


Such rules restrict the amount of high LTV mortgages lenders are able to offer. When applying for a mortgage, the maximum amount borrowers will typically be able to get is four and a half times their annual income. On top of this, Bank of England regulations further limit the attainability of this maximum amount – only allowing lenders to offer 15% of their loans at this amount or higher.


These rules, as well as other measures for affordability that surround lending criteria could, theoretically, be relaxed. However, the chance that mortgage lenders would be on-board for such a change up of regulations, particularly during a time of such economic uncertainty, is unlikely.


A possible way around this would be for the loans to be guaranteed by the government, holding responsibility over any and all borrowers that default on their home loan.


While many have started to predict the feasibility of Johnson’s plans, only time, and further announcements surrounding this plan, will tell just how the government intends to introduce “Generation Buy” to the UK.


UK Construction Sees Sharp Rise in Activity During September

By Blog, Development Finance

While employment continues to fall, the PMI’s latest data suggests a sharp rise in activity for UK construction for the end of the third quarter.


The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index registered 56.8 for last month (September) – this being up from August’s 54.6. The data from August signalled a setback for UK construction’s output recovery, as growth was shown to ease considerably from the high seen in July.


Throughout September the number of staff continued to fall, however the rate at which workforces were contracting slowed the most that has been seen in seven months. Of the explanations given for this significant fall in employment, some reported this to be down to the release of furloughed workers, and a restructuring of business operations.


According to data, the category that performed the strongest was housebuilding, with work done on commercial projects also having risen significantly.


As well as this increase in new work, construction firms also recorded an increase in purchasing activity as the third quarter came to an end.


This data has received some interesting responses from the industry, many reflecting on the positive results whilst thinking forward to the future of UK construction given the country, and indeed the world’s, current situation.


FMB chief executive Brian Berry said: “Growing activity in the construction industry should make this an attractive sector for young people considering their next steps after school, and people leaving other industries looking to retrain.”


“Construction has a key role to play in rebuilding the economy as recognised by the Prime Minister in his ‘build, build, build’ speech earlier this year. However, to ensure high standards, the industry needs to train, train, train.”


“This means the trades need to be prioritised in the Government’s funding allocations for colleges. It also means we need to strengthen colleges’ links with employers so that we join the dots.”


ilke Homes executive chairman Dave Sheridan commented: “It’s great to see housebuilding continue to bounce back strongly since lockdown earlier in the year, which is being buoyed by the release of huge pent-up demand in the housing market.”


“However, if the construction industry is going to continue on this positive trajectory it’s going to be crucial that we scale-up innovative methods to housebuilding because, at present, the sector does not have anywhere near the capacity to deliver on the government’s 300,000 home a year target.”


“Increasing housebuilding output must not come at the expense of the UK economy meeting its net-zero targets by 2050.


“That’s why as we look ahead to a more carbon-conscious climate, factory-built homes must sit at the heart of the solution.”


Magnet Capital continues expansion with second new hire this year

By Blog, Development Finance, Opinion

Magnet Capital has today announced the expansion of its Underwriting and Operations team with the appointment of Rachel Taylor as Operations Executive.


The development finance lender’s recent strong performance and ambitious future plans has led Magnet Capital to expand its team to meet the increasing workload.


Rachel brings considerable industry expertise and experience; joining from the Glass Property Group, a residential property developer specialising in London and the Home Counties; where she was responsible for managing the due diligence on potential development sites.


Magnet Capital has seen stellar growth since the property market reopened in May 2020, recording its best month since launching in 2018. The level of new business written has risen by 33% with enquiries also up significantly year-on-year. The development finance lender has attributed this growth to its consistent approach to lending through the pandemic.


Sam Howard, Managing Director at Magnet Capital, said: We are delighted to be able to hire someone of Rachel’s calibre. Coming from a property developer, Rachel brings invaluable insight into the developer’s perspective.


We understand how much value our borrower and broker partners place on Magnet Capital’s deep industry knowhow and the team’s ability to act as a finance partner. Rachel’s experience will bring an additional skill set and complement the existing operations team.”


Government Announces £30m Funding Boost to Acquire Land for New Homes

By Blog, Development Finance

The UK government has recently announced that a funding boost of £30 million will be used to unlock surplus public sector land. This land will be used to build new homes whilst also supporting local economies during this turbulent period of the coronavirus pandemic.


This announcement was made at the annual conference for the Chartered Institute of Housing, Lord Agnew – cabinet office minister – stating that the government will be boosting its One Public Estate (OPE) programme as well as its Land Release Fund (LRF).


Those in the industry, have provided interesting responses to this new announcement,  including the likes of ilke Homes executive chairman David Sheridan, who has stated: “I welcome the government’s efforts to release surplus land for housing as part of a boost to its Land Release Fund and One Public Estate Programme.”


“However, to really kickstart a housing boom, government policy should be more ambitious. Ministers must be proactive in bringing land forward and designating parcels exclusively for factory- built homes.”


“This will help accelerate the pace of housing procurement and delivery in the UK – cutting construction programmes by almost half – which will be pivotal to any post-Covid-19 recovery plans.”


“Housing associations have a key role to play in using their own funds and their own land to boost the supply of affordable housing and should be encouraged to collaborate closely with Homes England and other stakeholders.”


One Public Estate – £10 million will be provided through this programme, helping to support early stages of development.


Through this programme, partnerships both new and already existing will have the opportunity to bid for support in delivering ambitious programmes – these programmes concerned around the deliverance of homes, jobs and improved public services.


The Land Release Fund – £20 million will be provided through the LRF, of which councils will have the opportunity to bid for to develop their surplus sites for housing.


The LRF targets specifically small sites, its support focused around SME builders.


Chairman of the Local Government Association, Councillor James Jamieson, has stated the following on the matter:


“Councils continue to lead their communities through the coronavirus crisis, working closely with other local partners including health and emergency services.”


“One Public Estate will play a crucial role as we move into the next phase and help with the local and national economic recovery.”


“This additional funding will support councils to make better use of their assets, including their spare land and property, to help join up local services.”


“This in turn will create new savings and efficiencies, as we look towards the future of local public services after the pandemic.”


Net-Zero Building Standards Don’t Have to Be Costly – Study Reveals

By Blog, Development Finance

A new report published by the UK Green Building Council (UKGBC) reveals that building to net-zero targets doesn’t have to be costly, and could likely enhance a project’s value.


The report by the UK Green Building Council, titled “Building the case for net-zero: A feasibility study into the design, delivery and cost of new net-zero carbon buildings”, explores implications of following net-zero standards throughout building development projects.


To help with this exploration, the report enlisted the help of designers, cost consultants and engineers, whose expert inputs have helped to create a clear look into applying net-zero targets to building projects.


The UKGBC Study

Throughout the study, two real-life building projects were examined, both at the design stages of their development, with one being a residential block, and the other being an office building.


Taking these two projects, the team then created two additional iterations to each of their designs, one aiming to meet the net-zero targets for 2025, and the other shaped by the targets for 2030. These two iterations were labelled the “intermediate” and “stretch” scenario respectively.


For the “intermediate” scenario of the residential block’s design, traditional gas boilers were replaced with air source heat pumps, in addition to other tactics to improve insulation and minimise heat loss.


In the same scenario, the office building design was altered by trading in the conventional structure of steel and concrete for a hybrid of steel and cross-laminated timber, as well as introducing active chilled beams and removing certain fitout finishes.


The Findings


For the “intermediate” scenario, aiming to meet the net-zero 2025 targets, analysis found that the cost only went up by 3.5% for the residential design, and 6.2% for the office building. It was also suggested that these costs were likely to be offset by the increased value and reduced costs for operating.


For the “stretch” scenario, analysis found that the cost for the residential building would be up by 5.3%, whilst the office building could range from between 8% and 17%.


Chief executive of the UKGBC Julie Hirigoyen commented: “We’ve known for some time that taking action to make buildings greener today will add value and save costs in the longer term. But the precise cost benefit analysis of achieving net-zero carbon standards on new buildings today has remained elusive.”


“This study provides long-awaited evidence that building today to the standards of energy and carbon efficiency required by 2025 doesn’t have to cost a fortune and is likely to be offset by enhanced value (e.g. higher rents, reduced running costs, higher sale price, reduced offsetting costs etc) in due course.”


CHAS and NFB Help to Raise UK Construction Standards With Renewed Partnership

By Blog, Development Finance

The Contractors Health and Safety Assessment Scheme (CHAS) and the National Federation of Builders (NFB) have recently renewed their partnership, committing to the promotion of high operating standards throughout the industry.


The NFB represents builders and regional contractors throughout both England and Wales. It is one of the country’s longest standing trade bodies, created to not only represent professions in building, but furthermore to improve the conditions NFB members need to contribute to a successful UK economy.


CHAS managing director Ian McKinnon has made the following comments on the partnership:


“We are delighted to be renewing this important partnership which will help construction firms of all sizes demonstrate compliance and build their businesses.”


“Both CHAS and the NFB have gone from strength to strength since we first joined forces in 2018 so it is exciting to be able to bring an even greater range of benefits to our respective memberships.”


What Does the Renewed Partnership Include?


Through the NFB’s membership with CHAS, they will be eligible for assessment to the new Common Assessment Standard.


The Common Assessment Standard has been built with the aim of standardising the prequalification process, enabling both contractors and their clients to improve the efficiency of supply chains and find business opportunities that are reliable.


This standard helps companies to attain compliance and accreditation easier than before. These standards streamline the supply chain of construction, and is known as the “gold standard” throughout the industry.


CHAS will also enable NFB members to demonstrate their commitment of operating with high ethical, safe and sustainable standards. This opportunity will be provided to the NFB by CHAS through third party accreditation packages.


As part of the partnership agreement, CHAS will also offer all valid members of the NFB a discount of 20%. Contractors part of the NFB will be visible to CHAS’s 1,500+ clients via their client portal upon order purchase/accreditation.


In return for this, the NFB will offer CHAS contractors a discount of up to 10% when joining. This discount will also be offered for renewals following their joining, providing contractors with a range of benefits such as business services and training support.


The NFB’s chief executive Richard Beresford has been reported to comment: “We are very happy to be renewing this agreement with CHAS which will help our members’ businesses prosper while opening up a range of benefits to CHAS members.”