Latest news with #lending
Yahoo
12 hours ago
- Business
- Yahoo
Reeves pledges mortgage shake-up despite risk of surge in repossessions
Rachel Reeves will pave the way for a new era of risky lending in a push for growth that watchdogs fear could end in more people losing their homes. As part of her Mansion House announcement, the Chancellor will hail the biggest mortgage shake-up in a decade to boost homeownership and cut red tape. She is pressing ahead with the changes despite the head of the City watchdog warning just months ago that the push could 'go wrong' by resulting in a surge of repossessions. Under the plans, renters who have a good track record of monthly payments will be able to use this to prove to lenders how much they can afford to borrow, sometimes without the need for a deposit. Ms Reeves will also launch a permanent mortgage guarantee scheme to help more people get on the housing ladder. The proposals will be announced on Tuesday in front of an audience of bankers and City officials, including Bank of England Governor Andrew Bailey. It comes just days after Threadneedle Street announced it would relax lending rules for first-time buyers by changing a cap on the amount people can borrow. The Bank said this would allow 36,000 more mortgages to be issued at high loan-to-income (LTI) levels per year. Nationwide, Britain's biggest building society, has also cut the salary requirements for first-time buyers from £35,000 to £30,000, in a move it hopes will enable 10,000 more people to become homeowners. While the plans promise to bolster homeownership, regulators have argued they are in direct contrast with a pledge by banks to help borrowers meet monthly mortgage payments. Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), warned in January that 'things are going to go wrong' by relaxing regulation. This was on the basis that 'not everybody is going to play completely by the rulebook', adding that more risk would ultimately increase the likelihood of repossessions. 'When the mortgage charter came in last year, pretty much every major party said keep repossessions down, and we did,' Mr Rathi said. 'That is not consistent with relaxing the lending standards.' Ms Reeves, who is widely expected to launch another tax raid in the autumn, will insist on Tuesday that Labour is creating a country that is 'active and more confident' and a 'better-off' economy. She will also claim that financial services is 'at the heart of the Government's growth mission ... recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving'. However, Ms Reeves's annual Mansion House speech will not include details of a highly anticipated review of private sector pensions, which could result in workers and companies being forced to put aside more of their wages for retirement. The review will instead be launched next week, alongside an assessment of the state pension age. A series of reforms will also see the Bank of England review capital rules, while the senior managers regime that has for a decade forced senior executives to take personal responsibility for wrongdoing will also be made less onerous. In addition, the FCA's flagship consumer duty rules will also be reviewed to ensure they are not hampering growth in investment banks and pension funds. The City watchdog will also pare back rules to help companies list more quickly on the stock exchange amid an alarming exodus from the Square Mile. Savers will also be given more information and support to buy shares after the Chancellor backed away from reforming cash Isas amid a backlash from high street banks and building societies. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
15 hours ago
- Business
- Telegraph
Reeves pledges mortgage shake-up despite risk of surge in repossessions
Rachel Reeves will pave the way for a new era of risky lending in a push for growth that watchdogs fear could end in more people losing their homes. As part of her Mansion House announcement, the Chancellor will hail the biggest mortgage shake-up in a decade to boost homeownership and cut red tape. She is pressing ahead with the changes despite the head of the City watchdog warning just months ago that the push could 'go wrong' by resulting in a surge of repossessions. Under the plans, renters who have a good track record of monthly payments will be able to use this to prove to lenders how much they can afford to borrow, sometimes without the need for a deposit. Ms Reeves will also launch a permanent mortgage guarantee scheme to help more people get on the housing ladder. The proposals will be announced on Tuesday in front of an audience of bankers and City officials, including Bank of England Governor Andrew Bailey. It comes just days after Threadneedle Street announced it would relax lending rules for first-time buyers by changing a cap on the amount people can borrow. The Bank said this would allow 36,000 more mortgages to be issued at high loan-to-income (LTI) levels per year. Nationwide, Britain's biggest building society, has also cut the salary requirements for first-time buyers from £35,000 to £30,000, in a move it hopes will enable 10,000 more people to become homeowners. While the plans promise to bolster homeownership, regulators have argued they are in direct contrast with a pledge by banks to help borrowers meet monthly mortgage payments. Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), warned in January that 'things are going to go wrong' by relaxing regulation. This was on the basis that 'not everybody is going to play completely by the rulebook', adding that more risk would ultimately increase the likelihood of repossessions. 'When the mortgage charter came in last year, pretty much every major party said keep repossessions down, and we did,' Mr Rathi said. 'That is not consistent with relaxing the lending standards.' Ms Reeves, who is widely expected to launch another tax raid in the autumn, will insist on Tuesday that Labour is creating a country that is 'active and more confident' and a 'better-off' economy. She will also claim that financial services is 'at the heart of the Government's growth mission ... recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving'. However, Ms Reeves's annual Mansion House speech will not include details of a highly anticipated review of private sector pensions, which could result in workers and companies being forced to put aside more of their wages for retirement. The review will instead be launched next week, alongside an assessment of the state pension age. A series of reforms will also see the Bank of England review capital rules, while the senior managers regime that has for a decade forced senior executives to take personal responsibility for wrongdoing will also be made less onerous. In addition, the FCA's flagship consumer duty rules will also be reviewed to ensure they are not hampering growth in investment banks and pension funds. The City watchdog will also pare back rules to help companies list more quickly on the stock exchange amid an alarming exodus from the Square Mile.
Yahoo
a day ago
- Business
- Yahoo
China's 4.2 Trillion Yuan Lending Spike: Stimulus Firepower or Economic Red Flag?
China's credit engine just kicked into high gearbut it's not the full story. Total social financing hit 4.2 trillion yuan ($585.7 billion) in June, coming in well above economists' expectations. Banks extended 2.2 trillion yuan in new loans, thanks to a seasonal lending push and a wave of government bond issuance. The People's Bank of China doubled down on its moderately loose stance, signaling it will maintain ample liquidity while monitoring the impact of existing measures. Officials say the goal is to stimulate demand and stabilize investor sentimentbut so far, private sector appetite still looks soft. Warning! GuruFocus has detected 3 Warning Sign with MRK. Take a closer look and cracks start to show. ING's Lynn Song noted that the credit bump was heavily propped up by government bond sales, not organic business borrowing. Property remains a key drag: new-home sales from China's top 100 developers dropped 23% in June year-over-year, steeper than May's 8.6% decline. While interbank borrowing costs have eased, and liquidity is flowing, the real economy hasn't caught uplending growth in the first half of 2025 still paints a picture of weak confidence and subdued risk-taking. So what does it mean for global investors? For companies tethered to Chinese demandlike Tesla (NASDAQ:TSLA)this rebound in headline credit may look promising, but the story underneath remains complex. Unless wage growth stabilizes and consumer confidence picks up, the credit tap alone may not be enough to drive a lasting recovery. Eyes now turn to whether China's next round of stimulus can translate into real-world spendingand whether the private sector is ready to step off the sidelines. This article first appeared on GuruFocus.
Yahoo
a day ago
- Business
- Yahoo
China's 4.2 Trillion Yuan Lending Spike: Stimulus Firepower or Economic Red Flag?
China's credit engine just kicked into high gearbut it's not the full story. Total social financing hit 4.2 trillion yuan ($585.7 billion) in June, coming in well above economists' expectations. Banks extended 2.2 trillion yuan in new loans, thanks to a seasonal lending push and a wave of government bond issuance. The People's Bank of China doubled down on its moderately loose stance, signaling it will maintain ample liquidity while monitoring the impact of existing measures. Officials say the goal is to stimulate demand and stabilize investor sentimentbut so far, private sector appetite still looks soft. Warning! GuruFocus has detected 3 Warning Sign with MRK. Take a closer look and cracks start to show. ING's Lynn Song noted that the credit bump was heavily propped up by government bond sales, not organic business borrowing. Property remains a key drag: new-home sales from China's top 100 developers dropped 23% in June year-over-year, steeper than May's 8.6% decline. While interbank borrowing costs have eased, and liquidity is flowing, the real economy hasn't caught uplending growth in the first half of 2025 still paints a picture of weak confidence and subdued risk-taking. So what does it mean for global investors? For companies tethered to Chinese demandlike Tesla (NASDAQ:TSLA)this rebound in headline credit may look promising, but the story underneath remains complex. Unless wage growth stabilizes and consumer confidence picks up, the credit tap alone may not be enough to drive a lasting recovery. Eyes now turn to whether China's next round of stimulus can translate into real-world spendingand whether the private sector is ready to step off the sidelines. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Ultimate Finance reports 15% increase in H1 2025 new lending
Ultimate Finance has reported its 'highest ever' half-year origination results, with £126m ($170m) in new business lending, marking a 15% increase from the same period in 2024. The UK-based asset-based lender said it achieved positive outcomes across all business areas. In the first six months, the company's lending book reached £357m. Ultimate Finance CEO Josh Levy said: 'Our performance in the first half of 2025 is a clear demonstration of the success of our business strategy and represents another step towards realising our growth ambitions. Having all three areas of the business – working capital, asset finance, and bridging finance – working in unison is delivering real strategic value. 'We have built strong momentum, and our results reflect the strength of our team, the resilience of our local relationship-based model, and the increasing demand for our tailored finance solutions. 'Looking ahead, we are set to launch further developments in our structured finance product to address growing demand in the ABL space. We remain as committed as ever to delivering tailored funding solutions through our growing network of introducers.' During the period under review, Ultimate Finance increased its maximum invoice finance facility size from £7m to £10m, accommodating larger funding requirements and aligning with recent product improvements. It also made enhancements in bridging finance, including reduced pricing on development exit facilities and a new light-touch refurbishment offering up to an 85% day one loan-to-value ratio. Additionally, more flexibility was introduced in the release of net sales proceeds on multi-unit loans and on personal guarantee terms. Ultimate Finance also expanded its asset finance team, moved into a larger office, and increased its securitisation facility to support growing demand. Last month, the company launched its updated brand identity as part of its growth strategy. "Ultimate Finance reports 15% increase in H1 2025 new lending" was originally created and published by Leasing Life, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
