Landlords are paying an extra £5.5bn a year in mortgage interest because of rate hikes

Landlords are paying an extra £5.5bn a year to their banks following a surge in mortgage interest rates, analysis by Hamptons estate agents shows. Buy-to-let investors are now collectively paying £15bn a year in mortgage interest, 58% more than in November 2021 when the Bank of England began raising interest rates. In August, mortgaged landlords’ borrowing bills consumed 37% of their rental income, up from 28% a year ago, not accounting for tax and maintenance costs. Aneisha Beveridge, head of research at Hamptons, said: “Even if there are no further rate hikes by the BoE we could see the amount of mortgage interest paid by landlords exceed £20bn over the next two years. This has the potential to eat up just over half the amount mortgaged landlords receive in rent. For some investors, this will be unaffordable, and they will likely bow out, keeping upward pressure on rents.” Falling interest rates between 2015 and 2021 meant landlords’ mortgage interest bills fell by only 3%, despite the fact that they took on 43% more debt over the period.

Meanwhile, a group of 30 charities and non-profit organisations have written to Prime Minister Rishi Sunak urging him to pass a bill to ban "no-fault" evictions, something the Conservative Party promised to do in its 2019 General Election Manifesto. The Renters Reform Bill would remove the right of landlords in England to evict tenants for no reason with only two months' notice, something the charities are warning risk causing "more avoidable hardship and suffering" and a "greater cost to the taxpayer". In May, the Bill was introduced to Parliament, but has stuck since at this stage. Housing charity Shelter has co-ordinated a letter, saying its research suggests a tenant is evicted every three minutes in England under the no-fault rule, and that a third of the 1,900 people it surveyed said the last time they moved, it took them longer than two months to find somewhere else to live. "This dire lack of security disproportionately impacts the people we represent," Shelter said, adding that scrapping no-fault evictions should be "at the heart" of the government's plans, as renters "cannot wait any longer". Other signatories include Child Poverty Action Group, Citizens Advice, Liberty, the Centre for Mental Health and Disability Rights UK. A Department for Levelling Up, Housing and Communities spokesperson said: "The government will deliver a fairer private rented sector for tenants and landlords through the Renters Reform Bill, which will have its second reading in Parliament shortly.” They added: "We are also determined to reduce the number of non-decent rented homes by 50% by 2030, as well as introducing the Decent Homes Standard to the private rented sector for the first time."

The Association of British Insurers (ABI) has called on Chancellor Jeremy Hunt to cut taxes levied on insurance premiums. Insurance Premium Tax (IPT) receipts have hit record levels off the back of the soaring cost of cover for mainstream insurance policies on homes, cars, pets, medical care, etc., the industry body says, and a cut to the 12% rate would help both businesses and households cope better with the cost of living crisis. Total IPT receipts for the last complete financial year were £7.3bn, £714m higher than the previous financial year. In the first four months of this year alone, IPT receipts totalled nearly £2.8bn, a 27% increase compared to the same period last year. “Insurance Premium Tax penalises people for being responsible”, the ABI said. The Treasury defended the tax in a statement to City AM, saying: “Revenues from Insurance Premium Tax contributes over £6bn a year which goes towards vital public services, such as the NHS, social care and defence”.

So-called “vulture funds” are reportedly eyeing up around a quarter of the 4,500-strong portfolio of British pubs owned by Stonegate, which is seeking to raise new debt by spinning off pubs it owns outright into a new special purpose vehicle (SPV) to help pay down nearly £4bn of borrowings, half of which needs to be repaid or refinanced by July 2025. US distressed-debt investors Cerberus and Morgan Stanley Real Estate are said by The Times to be among a host of others to have submitted bids for the SPV. Stonegate is Britain’s largest pub operator and its estate includes branded sites such as Popworld, Slug & Lettuce and Be At One.

Some 22% of the shops on London’s Fleet Street are now vacant, with the sector blaming sticky transport links and a slow return to office life for the drab state of the area, City AM reports.

Sky News claims NatWest Group is preparing to cancel millions of pounds in bonuses and share awards earmarked for its former CEO, Dame Alison Rose, who left by mutual consent over the closure of Nigel Farage's bank accounts. City Editor Mark Kleinman says he understands the taxpayer-backed lender's board wants to resolve the issue of Dame Alison's payoff before its Q3 results this month, although the complexity of the process means it could slip into November. Final decisions have yet to be taken. Last week, Farage announced he now has new personal bank accounts with Lloyds Bank.

Credit checking agency Equifax has been fined more than £11.2m by the Financial Conduct Authority as a result of a 2017 cyber breach in which hackers gained access to the personal details of around 148m US consumers of Equifax Inc, the firm's US parent company. Because Equifax had outsourced data to the US for processing, 13.8m British customers were also affected as hackers accessed their names, dates of birth, phone numbers, partially exposed credit card details, addresses and Equifax login details. The FCA said the event was "entirely preventable," saying there had been insufficient oversight of how the data Equifax was sending to the US was managed and protected, despite "known weaknesses" in Equifax Inc's data security systems. The fine would have been £15.95m but was reduced by 30% after Equifax agreed to resolve the matter. It also received a 15% credit for mitigation in acknowledgment of its high level of cooperation. Separately, Equifax has already been fined £500,000 by the Information Commissioner's Office over the breach, in 2018.

Grangemouth, Scotland’s only remaining crude oil refinery and part of Sir Jim Ratcliffe’s Ineos empire, could be at risk of cutbacks or even closure if Labour Leader Sir Keir Starmer pushes ahead with plans to ban new North Sea oil and gas projects if he becomes Prime Minister, it has warned. The Telegraph reports Andrew Gardner, chairman of Petroineos, as saying Labour has failed to understand the importance of Grangemouth to jobs and manufacturing in the region, as it produces most of the petrol, diesel, heating oil and aviation fuel used in Scotland and other markets in northern England and Northern Ireland. It also supplies raw materials to the adjacent petrochemical and plastics plant run by Ineos Olefins and Polymers whose raw plastics and polymers go into UK products ranging from construction materials to clothing. Ineos is planning to build a plant at Grangemouth to turn natural gas into hydrogen, powering the entire complex with minimal emissions and preserving jobs and manufacturing. However, the scheme relies on having long-term supplies of natural gas but, if the current decline in North Sea oil and gas fields is not stemmed as new wells are drilled under a Labour Government, then the project has no future. Gardner said: “Our passion is to keep manufacturing in the UK and Europe. This is a critical time because parts of society want to outsource manufacturing, outsource jobs and import carbon… And what I say is no, the best way is to absolutely turn that on its head… to decarbonise in the UK, while keeping the manufacturing and jobs here.” Grangemouth currently employs more than 2,000 workers.  

Next is buying FatFace for £115.2m.  Once the transaction completes, Next will hold 97% of the equity in FatFace, while the latter's management will hold the rest. FatFace will retain its management autonomy and "creative independence," and its own board of directors. It will continue to be based in Havant, Hampshire and run by current CEO Will Crumbie, who joined FatFace as CFO in 2014.

Tricker, Britain’s oldest shoemaker and one of with a Royal Warrant to supply King Charles, has blamed Rishi Sunak’s controversial “tourist tax” for holding back its post-covid recovery. Auditors said there is “material uncertainty” over Tricker’s “ability to continue as a going concern” after the 194 year-old business posted a pre-tax loss of £311,365 in 2022, despite sales rising by £1.5m to £6.3m. The company’s managing director, Martin Mason, told the Telegraph: “One of the main areas that we lost turnover in 2022, and haven’t recovered our turnover back to where it was, is very much down to retail and the fact that in 2021, the Government stopped the tax-free shopping.” Previously, overseas visitors could claim back the VAT paid on their shopping in the UK, but this was scrapped by Sunak in 2021, when he was Chancellor of the Exchequer. Numerous other luxury goods businesses have made similar complaints, stressing the tax means London is losing out to rival European cities such as Paris, Milan and Madrid, where tax-free shopping is still available. Mason added: “I think those cities probably can’t believe their luck. If the tax-free shopping hadn’t been withdrawn, sales levels in London would have returned to pre-pandemic [levels]. I’m convinced of that.”