It is two decades since the great British property boom began. Since 1996, average house prices have risen by an extraordinary 281% across the UK, while in London the figure is 501%, according to the Nationwide house price index. Buy-to-let landlords have benefited the most, typically earning returns of £14,987 for each £1,000 they invested 20 years ago.
A new cloud-based credit scoring service has launched in UK, aiming to improve loan quality and acceptance rates through the use of big data. Founded in Scandinavia three years ago, Big Data Scoring enables banks and financial institutions to determine the creditworthiness of individuals based on data available online. The firm says it aims to bring lending into the digital information age, allowing lenders to make informed and more responsible credit decisions, particularly concerning millennials and non-UK nationals. There are over seven-and-a-half million foreign nationals living in Britain and that number is increasing. This is a sizeable market that financial institutions have difficulty in tapping into according to Big Data Scoring – despite the majority being in full-time work. Their solution is to do 'intelligent research' of a loan applicant online, to help build a clearer profile which helps assess their creditworthiness. Used in conjunction with existing scoring methods, this claims to result in more accurate scores, meaning greater opportunity to lend and a reduction in risk.
Bank of England governor Mark Carney has admitted that "progress has been insufficient" to warrant a tightening of monetary policy in the near future.Speaking at Queen Mary University of London, he said that despite previously anticipating a rate rise around the turn of this year, "the decision proved straightforward: now is not yet the time to raise interest rates".Reasons included the renewed collapse in oil prices, the volatility in China, and the moderation in growth and wages in the UK since the summer.
The Treasury are rumoured to be considering the abolition of pension tax relief linked to each individuals' rate of income tax in its upcoming review of pension taxation. On the 16 March, many industry experts believe the government will announce that no new pension contributions would be eligible for higher rate relief. Anyone who made a contribution after that date would be ineligible to claim extra relief through their tax return. Higher and additional rate taxpayers contributing to certain company pension schemes would suffer additional tax charges of 20% and 25% on each contribution respectively. However a move towards a universal flat rate incentive would prove unpopular with employers, according to a survey. Only 30% of employers are in favour of changing the tax relief available on pensions. Of these employers, 53% favoured a flat rate of tax relief, with 41% wanting that flat rate at a higher level than the basic rate of tax relief. 79% of employers that offer salary sacrifice are concerned it will be withdrawn. A reduction to the Annual Allowance is also highly likely, possibly down to as low as £25,000, and added that we could see the abolition of the Lifetime Allowance.
The new EU Mortgage Credit Directive (EU MCD) comes into effect on 21 March 2016. The directive (MCD) introduces an EU-wide framework of conduct rules for mortgage activities. It creates minimum regulatory requirements that all member states must comply with to provide consistency in protecting consumers taking out credit agreements for residential property.