Another Retailer at Risk? Is This a Sign of Things to Come?

UK retail news has been blighted as of late with a near-infinite string of permanent closures. It’s no secret that there are more retail stores closing their doors in the UK than ever before, painting a rather bleak picture for the UK retail sector as a whole.

The most recent casualty to join the apparent downfall is Bon Marché, which is now under threat after more than 35 years on the UK High Street. Currently operating 312 stores across the country, the company is expected to post significant losses of more than £5 million in 2019. Its owner, billionaire Philip Day, has given a reason to suggest stores and jobs in worrying numbers could be under threat.

Reading into the headlines, you begin to wonder: how many retail businesses are there in the UK that can survive long-term? Considering what percentage of retail sales are online in the UK, you can’t help but feel a sense of pessimism for the High Street as we’ve traditionally known it. Right now, an incredible £4 out of every £100 spent in the UK is scooped up by Amazon alone.

This represents just one of many thousands of online businesses making life difficult for the traditional British retailer.

How much is the UK retail industry worth?

With figures like these, you’d expect the total value of the UK retail industry to have plummeted to next to nothing. In reality, this simply isn’t the case. In total, the UK retail industry is valued at in excess of £358 billion annually. Despite the ongoing challenge posed by web retailers, online sales still account for just 17% of overall annual retail sales.

That’s according to the Office for National Statistics, suggesting there’s still plenty of room in our lives for the traditional retailer.

Somewhat less surprisingly, the 21st century retail landscape of the United Kingdom is led by the four biggest supermarkets. Tesco, Sainsbury’s, Asda, and Morrisons account for the lion’s share of the revenues generated on the High Street, attributed largely to their convenience, ease of access and impossibly low prices.

Nevertheless, the web retail industry is accelerating at its fastest-ever pace, growing at a rate of more than 20% annually. As far as economists are concerned, this is set to continue indefinitely and could further increase pressure on the high street.

Avoiding overheads

By eliminating any number of overheads from the equation, online retailers are able to sell products at significantly lower prices than their high-street cousins. From physical premises to vast workforces to general upkeep costs and so on, the reduction of operational expenditures results in huge savings being passed on to the customer.

At the same time, retail property leases, taxation, and general operational costs are increasing for traditional retailers. all compounded by the convenience of 24/7 accessibility, free shipping, and the most enormous range of products now available online at the touch of a button.

But does all of this spell the complete demise of the High Street? Not exactly. It’s simply a case of shifting focus to a different aspect of customer expectations.

Experiences with products

When polled, customers who continue to favour traditional High Street retailers spoke of their preference for the ‘experience’ as a whole. Being able to walk into a welcoming and atmospheric store, speak to a knowledgeable representative, examine products first-hand, and generally make an experience of the whole thing

A sentiment shared by the CEO of Harrows stated that the key to long-term success on the UK high street lies in focusing on the benefits online retail cannot replicate. Challenging perhaps, but achievable by getting to know what exactly any given target audience responds positively to and providing it at the highest possible level.

Selling a Property Through Probate? How Much Tax Do I Have to Pay?

Concerned about how to pay inheritance tax before probate? In need of advice on how to value personal property for probate? Given the importance and sensitivity of such transactions, sourcing independent expert advice should be your first port of call.

What Is a Probate Property?

Dealing with the loss of a loved one is challenging enough without the added complications of handling complex probate and inheritance tax issues. In the simplest terms, a probate property is a property an individual takes ownership of that has been named in the final will and testament of a deceased individual.

Irrespective of whether you intend to sell the property, you may be liable for probate tax, aka inheritance tax, in the United Kingdom. The importance of an accurate probate valuation of property cannot be overstated, nor can securing expert representation help relieve some burden. From obtaining a grant of privilege to dealing with all administrative and taxation requirements, it’s important to have an experienced team behind you.

Do I have to pay inheritance tax?

In England and Wales, you will be liable for an inheritance tax payment if the total estate bequeathed to you has a combined value in excess of £325,000. This is the existing inheritance tax threshold—the limitation of the inheritance you can receive without having to pay tax.

If the total value of the estate exceeds £325,000, a full 40% is payable on the amount that goes beyond this threshold.

What Does Probate Have to Do with Inheritance Tax?

When an individual receives ownership of a property through a final will and testament, they must obtain a Grant of Representation to confirm their legal ownership of and rights to the estate. In order for this to happen, the entire estate must be valued and inheritance tax obligations calculated.

The process cannot be completed until the recipient of the estate is able to prove that they have paid the inheritance tax due in full or provide formal evidence that inheritance tax is not payable. By working with an experienced and reputable probate specialist, the entire process of evaluating the property and establishing inheritance tax liability can be accelerated and simplified significantly.

A typical example

In a working example, an individual is left a property in the final will and testament of a parent. The property has a probate valuation of £475,000, which is also the maximum value the property is likely to sell for in the current market. Assuming this is the total value of the deceased individual’s estate, this amounts to £150,000 above the current inheritance tax exemption threshold.

This would mean that 40% of the £150,000 would be payable to satisfy inheritance tax requirements, amounting to a total of £60,000.

However, there are countless variables that could affect the total tax liability in both directions. From charitable contributions to capital gains tax to the type of property and its intended use, it isn’t quite as simple as establishing basic inheritance tax obligations alone.

The importance of responsible representation

The representation you secure throughout the process could have an enormous impact on the costs incurred. Avoidance of taxation isn’t an option, but there are often avenues to explore to minimise the amount of tax you’re required to pay. all while simplifying a complex legal and legislative process during an incredibly difficult time of life.

At the earliest possible stage, therefore, secure the most capable and experienced representation available. Doing so could save you time, money, and a lot of unnecessary hassle along the way.

Have Banks Recovered from the Recession?

More than a decade has passed since the financial crisis that crippled the UK. In the meantime, banks and lenders across the country have been working tirelessly to regain their strength and positioning. Lloyds Bank recovery and Bank of Scotland debt recovery initiatives have been well publicised, but where exactly do we stand right now?

Have post-recession recovery efforts reached their objectives? Or are the scars of the recession still visible across the UK economy?

The UK’s recovery from recession

The truth is, the answer lies somewhere down the middle. In terms of recession recovery, the UK has experienced an impressive eight years of solid growth since the height of the crisis. In addition, employment levels have repeatedly hit record highs along the way.

Nevertheless, this doesn’t mean the UK’s recovery from the recession is complete. Some facts and figures still make for less than reassuring reading, despite evidence that things are at least heading in the right direction.

Wages

For example, average wages are no higher today (in inflation-adjusted terms) than they were 14 years ago. Promises have been made by the Bank of England to continue improving wages for UK workers, but annual increases of around 2.5% pale in comparison to the 4% annual average prior to the financial crisis. So while progress has been made, there’s still a long way to go.

Productivity

The stagnation of productivity in the UK has proved particularly problematic and stubborn over the past decade. In fact, productivity growth since 2008 has trudged along at its slowest pace in almost two centuries. Economists point the finger at low interest rates, poor management, and a lack of investment. problems that continue to hang over the British economy today.

Housing market

Steady growth in housing market activity has helped many banks and lenders repair at least some damage brought about by the recession. Once again, however, things are still performing at an exponentially lower level than prior to the crisis. For example, mortgage approval volumes are still down around 40% compared to a decade ago, with minimal inventory contributing to average property price increases of 17%.

Government debt

Extensive efforts have been made to bring government debt under control, which exploded wildly in the months and years following the crisis. A decade of frugality and budget cuts have made a dent, but there’s still a glaring gap between government spending and tax revenues.

EU withdrawal

Last but not least, nobody has any real clue as to the possible implications of the UK’s exit from the European Union. an issue that is currently affecting every aspect of the British economy. From house prices to interest rates to personal and business borrowing, people are more cautious about their financial decisions than they’ve been in some time. Some of which is playing into the hands of banks and major lenders, some prolonging the recovery process and prompting fears of another economic crisis.

For more information on the current state of the UK banking sector or to discuss our services in more detail, contact UK Property Finance for an obligation-free consultation.

How Much Property Does the Royal Family Own?

You wouldn’t expect the British Royal Family to be anything but fabulously wealthy. You’d also expect the Queen to own more than her fair share of prime real estate across the UK.

But what you might not know is how many royal properties there are in Britain or the total value of royal family properties. You’d expect it to be a lot, but how much exactly?

How many properties does the Royal Family own?

Aside from the most obvious properties owned by the Royal Family, there are a handful of other estates you might not have realised were regal. Buckingham Palace, in all its 775-room glory, is perhaps the most famous of all royal properties in the UK. Nevertheless, the official residence of the Queen represents just one entry to her £13 billion property portfolio.

That’s right… £13 billion, enough to put many of the world’s biggest property tycoons to shame!

In terms of specific properties, detailed below, you’ll find a handful of royal properties you may not have realised were under the watch of the world’s most powerful landlady:

The Savoy Estate, London

Next time you take a stroll down one of the most iconic strips in London’s West End, spare a thought for its lucky owner. Yes, the Queen is the official owner of this part of the Strand, which is also home to the world-famous Savoy Hotel and the Savoy Theatre.

Regent Street

Believe it or not, the Queen is the official owner of Regent Street, as in the entire street. One of the most famous streets in London, the UK, and the entire world, Regent Street is renowned for its glamorous stores and for making an appearance in the game of Monopoly. This one street alone employs more than 20,000 people and attracts a whopping 7.5 million tourists each year. It was also the first street in the world designed specifically with shopping in mind.

Balmoral Castle

No surprises here, what with Balmoral being the most treasured place of all for Her Majesty to relax and unwind. It’s been a royal residence since 1852, occupying a massive 20,000-hectare plot in a beautiful open area of Aberdeenshire.

Sandringham House

Measuring in at a comparatively compact 8,000 hectares, the Queen’s Sandringham Estate was purchased back in 1862 by Queen Victoria. Since then, it’s been a favourite among royals of all ages for relaxing and unwinding in an idyllic countryside setting.

Windsor Castle

Boasting more than 1,000 years of rich history and heritage, Windsor Castle is considered by many to be the most important royal residence. It’s certainly the oldest and most imposing, not to mention the place the Queen herself heads most weekends to relax. If the Royal Standard is flying, you know she’s home.

Other Properties….

In addition to the regal residences above, the Queen is also the owner of 263,000 acres of farmland, 11 hectares of forests, and 30 offshore wind farms. Oh, and let’s not forget Royal Ascot—also her rightful property!

All in all, a pretty spectacular property portfolio with a combined value in excess of £13 billion.

 

Why are Specialist Lenders More Open to Lending Than Traditional Banks?

The last decade has seen the ‘rebirth’ of the specialist sector. The current specialist lenders are more conservative than in the past and are governed by tighter legislation, such as increased capital requirements, making them less vulnerable in the event of a downturn. There have been various reasons for this, with more customers struggling to meet the strict lending criteria of high-street banks. Specialist lenders are able to deal with more complex applications that would normally fall outside the main stream lender’s criteria, for example, someone who doesn’t have a regular stream of income, has recently moved jobs, or is purchasing a right to buy or shared ownership property.

Furthermore, self-employment and contracting are growing. Unusual income patterns have become common, such as those of freelancers or people with varying incomes, etc. Lenders who use credit scoring will often turn these clients away. Specialist lenders build themselves around specific customer groups and are therefore able to help these clients. Also, specialist lenders will help clients who have had a small blip in their credit history, which can usually be easily explained, or due to personal circumstances such as bereavement or unemployment. These individuals are not repeat offenders and have a good history before and after such an event. Unfortunately, the mainstream lender will not see it this way.

The mainstream lender has shown no interest in winning business that falls outside their automated underwriting and is designed to help the conventional borrower. This means that the margins for the specialist sector should remain higher or keep growing.

Richard Tugwell at Together says, ‘In many ways, the specialist market acts as a complement to the mainstream lenders and ensures that the customers have a choice. I think that the challenge for the specialist market is ensuring more consumers are aware of this offering, and that’s something that the lenders and brokers need to work together on.’

Specialist lending is now more regulated, and we should see less volatility than before as the focus is on affordability. This type of lending is set up to cater to complexity, not poor quality or irresponsible lending. Brokers who keep a closed mind to this sector are losing out on a big share of the growing specialist/subprime sector.

Specialised lenders are more suited to adapting to changing criteria compared to high-street lenders. Mainstream lenders take longer to change their criteria due to the legacy systems. Mainstream lenders need to adopt a manual underwriting approach instead of credit scoring. Brokers need to ask or determine what type of lender the client needs. Brokers need to do their own research to get an understanding of this market and take advantage of these opportunities so that they can help every single customer find the best solution for them, whatever their circumstances.

Research has also suggested that people are not fully aware of the options available to them. As traditionally, the market has focused on mortgages for house purchases or cash. It is important that the buyers are made aware of all the options available to them in the market so that they can make informed choices.

10 Things To Do To Protect Yourself Against Fraud

Everybody thinks that fraud is the kind of thing that happens to other people rather than themselves. That is, until it takes them well and truly by surprise.

On the plus side, there’s plenty we can all do to significantly reduce the likelihood of being targeted by fraudsters. Or at least, prevent significant damage from being done if you are targeted.

Here are 10 simple yet effective things to start doing right now to protect yourself:

  1. Identify scams
    First up, it’s worth reading up on and remaining up-to-date with the latest scams. From e-mail phishing to telephone scams to various types of data theft, it’s worth checking online resources to learn exactly how to identify a scam when you see it.
  2. Keep personal information secret.
    Under no circumstances should your personal information ever be given to anyone other than yourself. Be suspicious of any ‘company’ that gets in touch with you and asks for your personal information.
  3. Change your passwords and PINs.
    Along with ensuring your passwords and PINs are as strong as possible, it’s also important to ensure that they are changed on a regular basis. Never use anything that could be easily guessed or gradually worked out.
  4. Check out your credit report.
    Check your credit report from time to time for any signs of suspicious activity. Should you come across anything suspicious, report it to the relevant authority or service provider immediately.
  5. Shred sensitive documents.
    Never make the mistake of throwing away our documents that contain any potentially sensitive personal information. Shred or burn such documents to prevent your personal data from falling into the wrong hands.
  6. Watch for unusual activity.
    It’s also important to keep an eye on things like bank statements, credit card bills, and all your online accounts in general for signs of unusual activity. Always take anything, even slightly out of the ordinary, seriously.
  7. Share your knowledge.
    Try to ensure that your friends and family members take an equally proactive approach to fraud prevention. Criminals typically have absolutely no shame when it comes to targeting those who are most vulnerable, i.e., those who do least to protect themselves.
  8. Be suspicious of everything.
    From phone calls to emails to promotional information, be suspicious of anything and everything that comes your way. Unless you are 100% convinced of the legitimacy of the communication and its source, treat it as suspicious and stay away.
  9. Avoid public Wi-Fi.
    Always remember that it only takes a matter of seconds for your device and your personal information to be hacked when using public Wi-Fi connections. which means that if you are going to use a public Wi-Fi connection, avoid accessing any of your accounts or entering any sensitive information or credentials whatsoever.
  10. Report it
    Last but not least, each and every time you come across anything that is even remotely suspicious, it needs to be reported. Even if it turns out to be nothing, it is better to be safe than sorry. The problem is that each time suspicious activity is not brought to the attention of the authorities, somebody somewhere is getting away with scamming members of the public like you.

House Prices Falling: Good News or Bad?

Whatever looms on the economic horizon for the UK, it will inherently spell outright disaster for some and rich pickings for others. In various corners of Europe, political and economic unease is prompting the kinds of headlines that are making investors on a global basis more than a little nervous. But as far as the UK is concerned, Brexit really is the be-all and end-all of things for the time being.

The effect the furore has had on property marketing is no laughing matter. Depending on which side of the fence you’re on, of course.

A new report published by Nationwide found that the past month brought about yet another drop in UK house prices, this time by an average of 0.4%. This is not only the second consecutive month to bring about a fall in property values, but also the largest monthly fall in over five years. As it stands, the average price of a home in the UK now sits at £207,699.

The noted cutback in consumer spending combined with higher inflation and the prospect of Brexit are all having an impact on the housing market. There’s also been a rather dramatic fall in GDP, having fallen to 0.3%. Not the kind of thing that makes for positive reading on the campaign trail.

A two-sided story?

Given the fact that mortgage rates have been hovering around record lows for some time now, the fact that the property market is showing signs of weakness is all the more troubling. This, combined with the fact that unemployment is also at an impressive low, is another factor that should be boosting the strength of the housing market.

But it isn’t, which means for the time being, at least there are a lot of homeowners and investors being forced to watch their properties lose money like there’s no tomorrow. As already mentioned, bad news for some is good news for others.

Obvious, first-time buyers aren’t going to be too upset about the prospect of house prices falling at least a bit. But at the same time, neither are those looking to play the long game. As far as most analysts and economists are concerned, the current doom and gloom will prove to be temporary at best.

For example, if the upcoming general election brings about a strong and trusted new government, things are expected to perk up significantly. Likewise, if Brexit doesn’t turn out to be as disastrous as many expect, it could result in a rapid acceleration of property values. The slight caveat is that by this time, record-low mortgage rates will have no doubt been wiped off the map for good.

So it remains a bit of a catch-22 situation: As is always the case where investments are concerned, Rock-bottom mortgage rates coupled with falling property prices should represent a no-brainer. But given what’s occurred over the last 12 months alone, taking for granted anything that might happen over the next year or so really isn’t the smartest idea.

Banks Tighten Up On Credit Card Lending Restrictions

Any increase in activity Consumer spending can only be considered a positive thing in terms of getting the economy back on its feet. It stands to reason that the more UK products and services the average British consumer decides to invest in, the better the economy will perform as a whole. However, when an increase in public spending leads to excessive levels of personal debt, the situation stops being beneficial and becomes something of a serious economic problem.

According to recent reports, it seems that a large percentage of consumer spending over the last 12 months has been a direct result of increased personal borrowing. In fact, a recent report published by the Bank of England suggests that UK borrowing has gone somewhat out of control during the past year, with borrowing growth exceeding 10% within the past 12 months alone. With most of this figure being attributed to credit card borrowing, the UK banking sector has decided to tighten up on credit card lending across the board in order to help rectify the situation.

The official Bank of England warning states that banks could face an even bigger problem from consumer debt than mortgage lending. However, is this really the fault of the British public? The recent uncertainty following the Brexit vote saw many banks trying to tease consumers back into borrowing by offering some of the lowest credit card rates that the UK has ever seen. With more and more people applying for new credit cards and a similar increase in the rate of approval, almost a third of all credit card lenders have decided that the time has come to reverse the current trend by taking a much more restrictive approach when processing new applications.
Many leading experts are pleased with this decision, claiming that a lack of tighter restrictions could prove to be a serious threat to borrowers and lending facilities.

“The Bank of England will be pleased to see lenders tighten credit scoring criteria for unsecured lending in the first quarter and expect to tighten them significantly further in the second quarter (particularly for credit cards),” said Howard Archer, chief UK and European economist at IHS.

“If the fundamentals for consumers do weaken further as expected over the coming months, it is vital that banks adopt tight lending standards in granting unsecured consumer credit, or it risks causing serious debt problems for the economy. This would be reinforced if the Bank of England felt compelled to raise interest rates due to mounting concern over the potential inflation overshoot.”

With the short- and long-term effects of Britain leaving the EU remaining something of an unknown quantity, credit consumers are now being advised to take extra caution before deciding to borrow beyond their means. Although unemployment and interest rates are both at the lowest levels they have ever been, it is impossible to foresee how the situation will change over the next few years. It is therefore essential that borrowers do not get into excessive amounts of unnecessary debt in the meantime.