Starling fined £29m for ‘shockingly lax’ high-risk customer screening: FCA  

Starling Bank has been fined £29 million by the Financial Conduct Authority (FCA) for inadequate screening of high-risk customers, described as “shockingly lax.” Rapid growth from 43,000 customers in 2017 to 3.6 million in 2023 outpaced the bank’s financial crime measures. Despite a 2021 agreement to limit account openings for high-risk customers, Starling opened over 54,000 such accounts between September 2021 and November 2023. The FCA highlighted systemic issues and lapses in compliance, prompting Starling to implement improvements to its financial crime control framework.

New BoE rate stance may lead to ‘low 3%’ home loans by end of year: Brokers 

Brokers suggest that the Bank of England’s shift towards a “more aggressive” stance on interest rate cuts could lead to mortgage rates in the “low 3%” range by year-end. Following central bank governor Andrew Bailey’s remarks indicating potential rate cuts if inflation trends positively, major lenders like Barclays and HSBC have already announced reductions. Money markets predict a 96.5% chance of a cut to 4.75% next month. Analysts believe these changes could significantly boost the property and mortgage markets, benefiting consumers amid increased competition among lenders.

Landlords face £21.5bn bill to meet EPC targets by 2030  

Landlords in the UK are projected to face a £21.5 billion bill to upgrade their properties to meet new energy performance certificate (EPC) standards by 2030. The Department for Energy Security and Net Zero has proposed that all rented homes achieve a minimum EPC rating of C, with 55% of privately rented homes currently rated D or below. The average cost to upgrade a property is estimated at £8,000, with London landlords facing the highest costs. Critics warn these mandatory upgrades could deter landlords from the rental market.

Landlords could see capital gains tax bill jump by £15k: B&R

Rumoured changes to capital gains tax (CGT) in the upcoming Autumn Budget could increase the average landlord’s CGT liability by £15,000, according to Benham and Reeves. If CGT thresholds align with income tax, landlords may face significantly higher rates, with higher rate taxpayers seeing bills rise to £37,460. As property values have increased, the average landlord’s profit stands at £96,651 per property over ten years. Analysts warn that further tax hikes could exacerbate the rental crisis, driving up rents and reducing private rental stock.

Molo adds two-year fixes starting at 2.99%

Molo Finance has launched a new tier of mortgage products, introducing a two-year fixed rate starting at 2.99% for individual and limited company borrowers at 75% loan-to-value (LTV). Additionally, five-year fixed rates now begin at 4.49%. Molo has also reduced rates on specialist products, including multi-unit freehold blocks and holiday lets, with two-year fixed rates starting at 4.14% and five-year options from 4.59%. Molo’s distribution director, Martin Sims, stated that these changes respond to shifts in the mortgage market.

Cover feature: Leasehold reform at last

The Labour government has committed to meaningful leasehold reform, pledging to expedite the Leasehold and Freehold Reform Act 2024 and introduce a new draft Leasehold and Commonhold Reform Bill. This aims to end the “feudal leasehold system” by establishing commonhold as the default tenure and banning new leasehold flats. With around 84% of the electorate supporting reform, campaigners are optimistic about cross-party backing. However, concerns remain for existing leaseholders facing rising ground rents and long-term contracts, underscoring the urgency for reform.

Nationwide completes £2.9bn Virgin Money takeover

Nationwide has successfully completed its £2.9 billion acquisition of Virgin Money, making it the second-largest mortgage lender in the UK. Following the acquisition, Virgin Money will be delisted from the stock market, and CEO David Duffy will step down, succeeded by Nationwide’s former CFO Chris Rhodes. The rebranding of Virgin Money will occur over the next two years, as Nationwide plans to phase out the Virgin brand. The merger was approved by the Competition and Markets Authority, ensuring competition will not be substantially reduced.

Minister sets out ‘seven immediate priorities’ for Homes England  

Housing Minister Matthew Pennycook has outlined seven immediate priorities for Homes England to aid in the government’s goal of building 1.5 million homes over the next five years. The targets set are 50% higher than the previous five years, marking a significant increase in housing delivery. The minister’s priorities include accelerating development, supporting stalled projects, maximizing social rent homes, and ensuring value for taxpayer money. Additionally, Homes England’s strategic plan will be revised to align with the new long-term housing strategy as part of the government’s broader housing agenda.

The Mortgage Works lowers select BTL rates by up to 0.55%

The Mortgage Works has announced reductions of up to 0.55% on selected buy-to-let (BTL) mortgage rates for both new and existing customers. Key changes include a two-year fixed rate of 3.59% for remortgages (with a 3% fee) and a five-year fixed rate at 3.79%, both available up to 75% loan-to-value (LTV). The new rates, effective from 3 October, aim to attract customers nearing the end of their current deals, according to senior manager Joe Avarne.

Bank may become ‘more aggressive’ on rate cuts: BoE’s Bailey  

Bank of England governor Andrew Bailey indicated that the central bank could adopt a “more aggressive” stance on interest rate cuts if inflation trends continue positively. In a recent interview, he acknowledged the importance of geopolitical tensions, particularly in the Middle East, but noted the current stability in oil prices as a positive factor for monetary policy. Money markets are anticipating a rate cut to 4.75% at the next Monetary Policy Committee meeting in November, reflecting a shift from previous expectations of gradual reductions.