• House prices are likely to continue rising for at least another ten years, George Osborne suggested yesterday when he attacked “Nimbys” for slowing down planning reforms – reported on the front page of The Times by Sam Coates, Philip Aldrick and Francis Elliott. The Chancellor told peers that the shortage of housing was an historic problem as he stressed that the coalition was trying to boost supply as well as providing cheaper home loans to struggling families. “I imagine if we were to assemble again in ten years’ time, we would still be talking about the challenge of making sure that our housing supply keeps up with demand,” he told the House of Lords Economics Affairs Committee. Mr Osborne defended the Help to Buy policy in the face of criticism from Liberal Democrats such as Vince Cable, who suggested last week reducing the maximum home purchase of £600,000.


Personal Finance

  • While The Sun’s leader is dedicated to energy prices, the Daily Mail looks at miss-selling of superfluous insurance against credit card fraud along with a brief history of miss-selling scandals – from pensions mis-selling scandal, endowment mortgages, and Payment Protection Insurance to interest-rate swap loans and packaged bank accounts. Some 7 million customers of banks such as Barclays, Santander and RBS have been conned into paying up to £1.3billion for policies they don’t need – Lloyds is now implicated as well. The Mail says “though the products mis-sold may have varied, one mystery endures. Why, after this long history of deception and grand larceny, has not a single senior banker been hauled before the courts?…. This fraud won’t cease until the guilty are behind bars.”



  • Prince Charles has waded into the battle for residents of Somerset according to the front page of The Times, The Guardian and the Daily Mail. The Mirror and the Daily Telegraph are unlikely bedfellows but not only do they also put Charles’ criticism of the official response to the crisis on the front page – they also run editorials on it. Although it was not overtly political, the Daily Telegraph compared the Prince’s visit (he was greeted warmly) to that of Owen Paterson, the Environment Secretary, who was met with placards and jeers. The Telegraph says the visit “reminded us in what low regard quangocrats – such as the mysteriously absent Chris Smith, who runs the Environment Agency – are held.” The Mirror’s Leader piece, on the other hand says the Prince of Wales criticising the disastrously slow response… “is a royal seal of disapproval on David Cameron’s Government”.



  • The Daily Express says “Britain’s overstretched public services are nearing breaking point” blaming immigration. “One in four babies born in this country have a mother who comes from outside the UK, while Afghan and Somali women are having four or more children, more than twice the national average. They will… need medical care before, during and after the birth… and that’s before the needs of schooling and housing even enter the equation…. This simply has got to stop. The Prime Minister has talked grandiosely about bringing net migration figures into the tens of thousands (and even that would be too much in this overcrowded little isle) and yet it has been revealed that net migration from the EU rose to 106,000 in the year ending June 2013, up from 72,000 the previous year. And that was before immigration controls on people arriving from Eastern Europe were lifted in January. Labour’s stance on immigration was one of the wickedest policies it pursued in its 13 years of office, a course of action foisted on the electorate for utterly cynical reasons which has changed the face of this country for ever.” The Express concludes, “Mr Cameron must act to stem further damage. And fast.”

Paper Summary – Monday 20th January


  • Mark Field, MP for the Cities of London & Westminster writes in the Daily Telegraph business section that the interest rate has provided UK business and individuals alike with breathing space.  Nevertheless, the real question that should be foremost in the minds of policymakers after five straight years of emergency monetary stimulus, is at what cost to the nation’s long-term economic interests?  Field feels the young and middle-class savers who are being significantly impoverished by Treasury policies.  He says today’s young people grapple with sky-high rents and house prices, a less secure employment market and increasing personal debt.  But, he says, ultra-low interest rates carry a cost – and it’s starting to rack up.


Recruitment & Employment

  • Writing in today’s Daily Mail, Work and Pensions Secretary Iain Duncan Smith and Home Secretary Theresa May announce a crackdown on jobless immigrants seeking to access housing benefit.  In the Mail’s leaders it backs IDS to the hilt: “Any doubts that Iain Duncan Smith’s crusade against welfare dependency is having the desired effect should be dispelled by an extraordinary set of figures published today.  They show that in the last five years of the Labour government the number of British people in work fell by 413,000, while the number of migrants employed soared by 736,000.  Yet since the 2010 election that depressing trend has been completely reversed, with 538,000 Britons finding new jobs compared with 247,000 foreigners.”  In an interview with The Independent, shadow Work and Pensions Secretary Rachel Reeves has said that a Labour government would deny people unemployment benefit if they are unable to demonstrate that they have the basic skills needed to find work after six weeks on the dole.  The Mirror’s leader piece comes out strongly against Reeves’ plans – “Make Jobs, not exams’ is the headline.




  • In The Times, Deidre Hipwell reports that criticism of the Government’s Help to Buy initiative from a City financiers who has warned that London’s housing market is overheating, as research shows asking prices are rising by record amounts.  Nigel Wilson, the chief executive of Legal & General said house prices in London and the South East had reached “absurd” levels and would soon only be affordable to the wealthy.  He said young people were being encouraged to buy homes in “over- leveraged” situations and warned that the Government should stop stoking demand through its Help to Buy mortgage guarantee scheme.


Personal Finance

  • The Independent reports a fourth capital raise at Metro Bank has brought in £387.5m to aid growth, taking the total equity raised to £641m. Founder and Chairman Vernon W Hill said: ‘The revolution in British banking continues, with strong support from existing and new investors.’  Elsewhere in the sector, Treasury officials are believed to be considering a second sale of Lloyds shares as early as mid-February, following publication of the bank’s annual results on February 13 – that story runs in the Daily Mail.

Paper Summary: Boxing Day


  • There’s a neat summary of house price forecasts for 2014 from Hilary Osborne in The Guardian.  The bulls: Rightmove and RICS (8 per cent).  The bears: “the normally downbeat” Capital Economics (5 per cent).  the consensus appears to be about 6.75 per cent.  There’s also, an analysis of the accuracy of predictions for 2013.  The booby prizes went to Knight Frank (who forecast a fall of 2 per cent and reported an increase of 7 per cent) and arch pessimists Capital Economics, who forecast Nationwide’s index would fall 5 per cent – the Nationwide HPI rose 6.5 per cent over the year.  Closest call was RICS who forecast a rise of 2 per cent then reported a rise of 5 per cent.

A Capital Economics forecaster

Personal Finance

  • In an editorial piece in the Daily Express (beneath an expression of gratitude to our troops and above a rather toadying message to the Queen – “here’s to the next royal baby, Ma’am!) the paper highlights the importance of pensions (sparked by a report on a potential pensions disaster for the next generation).  The Express says, “If half the population aren’t paying enough towards their pensions or are leaving it too late to join then there is a time bomb ticking that will cause immense hardship and worry.  If youngsters won’t listen to the Government or experts then it is the duty of parents and grandparents to put them wise to one of the best investments anyone can make”


  • Leader pieces in the Daily Mirror and the Daily Telegraph focus on flooding.  In “Joy’s at a premium” the Daily Mirror argues that insurance companies should play fair and pay up promptly.  “Instead of quibbling they should help put the lives of those affected back together rather than hindering them.  Firms who happily pocket the monthly premiums have a moral duty to write a big cheque when a legitimate claim is made by a policy holder”.  The Daily Telegraph, on the other hand, says should consider if we are doing all we can to ward against flooding.  Earlier this year, the Coalition announced that it would spend more on flood defences, after cutting back when it came to power.  But MPs warned this would still not keep pace with increasing risks: “a renewed focus on this issue will prevent the wreaking of similar devastation on more homes, and more lives, in the years to come.”

Recruitment and Employment

  • The BBCs reports a survey by the recruitment organisation, Randstad, which shows that while the recession has led to a drop in the number of people commuting as people lost their jobs – there has been an increase in people travelling more three hours a day.  The poll, which looked at the commuting patterns of 2,000 workers between 2008 and 2013, found that almost one in 10 respondents were now travelling for that period a day – compared with one in 20 previously.

News Headlines – Saturday 14th December


The construction industry recorded its highest growth in two years in October, led by a revival in house building. Output increased 2.2% in October, according to the ONS, driven by a 5.5% increase in house-building and a 5.8% increase in infrastructure construction. The government stats came as the Mortgage Advice Bureau found 40% of adults were planning to move house, re-mortgage or buy their first home in 2016, before the end of the Government’s Help to Buy Scheme. More than a quarter of mortgage seekers only afford a 5% deposit, according to MAB, evidence of the demand for the scheme.


Michael Gove, the Education Secretary, has rejected two applications from grammar schools, to open a satellite school in Kent – claiming it is an illegal attempt to open a new grammar school. Under current legislation, selective schools are allowed to expand, but the opening of new grammar schools is forbidden.

Gove also sanctioned the closure of one of the first free schools , after Ofsted inspectors reported that it wasn’t making enough progress, after warnings that pupils at the school were failing to receive a thorough enough education. This is the first free school to be closed down – and was used by critics to argue the coalition’s educations reforms were not working. Tristram Hunt, the Shadow Education Secretary said the government’s free schools policy had led to “a huge waste of public money and poor standards.”


The average price of a ‘prime’ home in London is set to rise above £6m in the next 30 years, according to family wealth manager Fleming Family & Partners (FF&P). Prime areas including Belgravia, South Kensington and Knightsbridge are expected to rise in price from up to £1.5m today to up to £6.4m in 30 years’ time, an estimate based on a ‘modest’ annual rate rise of 5%. The report found property to be the best performing asset class for the ultra-rich individual over the next 30 years.

Personal Finance

In the FT, Josephine Cumbo writes how the government is under pressure to intervene in the £12bn-a-year annuity market, after an influential consumer group warned that millions of people stood to lose out in retirement. This call was inspired by a study published by the Financial Services Consumer Panel (FSCP), which concluded that consumers were exposed to a “complex, confusing marketplace”.

November Best Month for House Purchase Lending since January 2008


The number of loans advanced to homebuyers in November climbed above 70,000 for the first time since January 2008, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.

There were 71,920 house purchase approvals in November, a 6% increase on October, in a sign of growing lender and consumer confidence. Lending to home-buyers was 34% higher than a year ago, when the number of loans approvals came in at just 53,539.

In November, more than an eighth (13%) of all house purchase approvals were to high LTV borrowers, as lenders increased support to borrowers with deposits worth 15% or less of the total value of their property. There were 9,493 high LTV loans in November, 3% higher than in October, and almost double the number of high LTV loans than in November last year (4,872). It was the highest number of LTV loans advanced in a single month since April 2008.

The increase in approvals follows the release of new data from the Bank of England showing that net lending through the Funding for Lending Scheme tripled in the third quarter of this year. Net lending by banks using the scheme climbed to £5.8 billion between July and September, compared to just £1.6 billion between April and June.

Richard Sexton, director of e.surv chartered surveyors, explains: “The mortgage market is making definite strides back to its pre-crisis health. Between the tail-end of the summer and this autumn, lenders tapped the Funding for Lending Scheme for almost £6 billion worth of funds, and that honeypot is now filtering through to homeowners, in the form of more loans and cheaper rates. Despite the changes to FLS, the mortgage market will continue to thrive. Funding for Lending spurred a limping market into action at the beginning this year, but since then Help to Buy has taken the lead in driving the market forwards.

“November is defying expectations with a continued acceleration in house purchase lending. It comes amid good news of growing GDP and falling unemployment. Positivity is sweeping through the economy and encouraging more prospective homebuyers to the market. And lenders are extending more loans using FLS as a safety valve to release the pressure of lending to riskier high LTV borrowers.”

Increased lending in the South

Total lending improved in every region of the UK aside from Northern Ireland and the South West & South Wales in November, with the South showing a strong monthly pick-up in lending. The number of loans advanced to homebuyers in London rose 9% on October. And in neighbouring region the South East, approvals rose 8% on October.

High LTV loans are becoming more available across the country. In London, high LTV lending picked up sharply, rising 30% in a month to 827 high LTV loans. This trend was echoed in the South West & South Wales, where high LTV loans increased by 9% compared to October.

Richard Sexton, director of e.surv chartered surveyors, explains: “Help to Buy is taking up the mantle as Funding for Lending is phased out. It is an essential component in the nationwide recovery in lending. In London and the South East, house prices are rising rapidly, and many borrowers struggle putting together a reasonable sized deposit. Here, Help to Buy helps them access lower rates, with less of a deposit. In the North, there are fewer equity rich buyers, and more people are in need of a hand to get on the first rung of the housing ladder.

“But as lending to borrowers with smaller deposits increases, so does the risk of them defaulting on their mortgages, as rates rise. And with unemployment falling, a base rate rise could happen sooner than expected. A base rate rise of up to 1% at the tail-end of 2014 could be very realistic if the economy keeps recovering.  To combat this, lenders will inevitably increase stress testing, to ensure that loans are only issued to borrowers that can really afford them. Credit should be more accessible, but lending must be increased in a responsible manner to avoid revisiting the mistakes of the past.”

LOANS FOR HOUSE PURCHASE – seasonally adjusted



Monthly change

Annual change

























UK Paper Summary: 25th November 2013

The front page of the Daily Mail says Britain’s two state-backed banks have been accused of running thousands of small firms by using “disgraceful” business practices.  RBS and Lloyds “harmed their customers through their decisions and caused their financial downfall” according to a bombshell report released today by Laurence Tomlinson.  The report claims RBS acted like a “hit squad” by deliberately causing healthy businesses to go bust for its own gain.


Personal Finance
Immigrants and the seriously ill are in line for “a fresh Tory welfare raid” according to Tom McTague, in the Daily Mirror.  More than 500,000 sufferers of long-term conditions such as cancer face losing benefits currently paid to them as they train for a return to work.


In the Daily Express, Sarah O’Grady reports that house prices jumped by £7430 last month – and are up £1,300 a week according to estate agency Sequence.  Richard Sexton, director of e.surv chartered surveyors said, “Help to Buy has opened a flood of new buyers, causing prices to surge upwards.”  The second phase of the Government’s Help to Buy scheme was launched in October and offers lenders a taxpayer-backed guarantee on 95 per cent mortgages on homes costing up to £600,000. In the first month, 2,000 sales were arranged.


Employment & Recruitment
The FT’s editorial looks at university degrees pointing out that, since the 1963 Robbins report, widening access to university has been a central aim of UK education policy.  Roughly half of young people now study for a degree, against 4 per cent when the report was written.  


But the FT’s stance is that rising participation is welcome only if the benefits justify the cost: “young people’s horizons will not be widened by pushing university for its own sake.”

Today’s Paper Summary: Monday 18th November

Personal Finance

“The fall in family finances will herald a bleak midwinter” according to the Times, reporting the latest Markit index, which shows household finances have dwindled as pay rises are outpaced by inflation in the run up to Christmas. In November, the index – which looks at perception of financial wellbeing – hit its lowest since April, as families left ill-spirited by diminishing household finance outnumbered those seeing an improvement by four to one. (The Times p.41, FT p.3)


In the Express, Sarah O Grady writes that house hunters can ‘snap up a bargain’ in the run up to Christmas, as the market is  set to continue ‘booming’ in 2014. A report from Property analysts Rightmove shows that asking prices have fallen 2.4% so far in November, in line with a seasonal dip. But Rightmove director Miles Shipside said that their survey showed “widespread confusion among those who stand to benefit the most from Help to Buy.” David Whittaker of Mortgages For Business, said: “Buyers might find they can sneak in a good deal before Help to Buy stokes the property furnace in the New Year.” (The Daily Express p.7, The Times p.21)


Since the start of quantitative easing in 2009, British employers have pumped £182bn into defined-benefit pension schemes. Figures from the Pension Protection Fund reveal that in the financial year 2012-13, employers contributed £29bn worth of deficit reductions, and a further £18bn worth of ‘special’ payments. The Telegraph reports that ‘special payments in particular, are growing, to help tackle the deficit, with these payments consistently growing since quantitative easing was introduced. (The Daily Telegraph B1)


In his autumn statement on the 5th December, the chancellor is expected to endorse a shake-up in the government’s attitude to apprenticeships. In a move aiming to raise Britain’s productivity levels, and bridge the skills gap with countries like Germany, companies will be able to procure training for apprentices themselves, and they will be able to recover government subsidies through their tax return. It will put them in the driving seat and enable them to choose the apprenticeship schemes that best suit their staff, and their preferred training provider or college. But the Association of Employment and Learning Providers has warned that small companies with only one or two trainees could struggle with the new system.  (FT p.2)