Prospective home-owners may find it easier to get onto the property ladder after the Bank of England scrapped its mortgage affordability test.
Previously, lenders would use the ‘stress test’ to calculate whether customers hoping to borrow money would be able to cope with their repayments if interest rates climbed by up to 3%.
The test was introduced in 2014 after the 2007-08 financial crisis as part of a package of measures designed to prevent a repeat of the reckless lending seen in the run-up to the crash.
But now, the stress test is no more, with lenders no longer being required to use it as of this week (August 1st).
This is good news for hopeful buyers, with the Bank of England having previously indicated that about 6% of mortgage borrowers – approximately 35,000 people – would have been able to secure a bigger home loan if the stress test had not been in place.
The withdrawal of the test could also help those who have been refused mortgages despite keeping up rental payments for higher amounts.
However, the bank has said the change should not be viewed as ‘a relaxation of the rules’, with the rule that limits most new mortgage lending to a maximum of 4.5 times a borrower’s income staying in place.
The Bank said this rule ‘ought to deliver the appropriate level of resilience to the UK financial system, but in a simpler, more predictable and more proportionate way’.
Claire Flynn, a mortgages expert at the comparison website Money.co.uk, said given the cost of living crisis, the removal of the affordability test was likely to be viewed by many as good news.
She told the Guardian: “That’s because it could allow more people to get on the ladder as they can take out larger mortgages.
“However, borrowers will still need to meet the loan-to-income ratio, which could still prevent some from getting the mortgage they require to buy a home.
“There is also a risk that with fewer restrictions, some buyers will take out loans that they are unable to afford.”
Rishi Sunak ‘blames people on benefits’ for high inflation in ‘shocking’ footage
Sunak said the government needs to be ‘tougher on benefit claimants’ in order to bring inflation down
Conservative leader candidate Rishi Sunak has been criticised after he appeared to blame benefit claimants for high inflation and labour shortages.
In his leadership speech to Conservative members last night, the former chancellor said the country’s main challenge other than soaring energy costs is ‘getting people to actually work’.
He said: “I strongly believe that part of the answer to this problem is being much tougher on our welfare system.
“Right now, there are more people claiming unemployment benefit than there are job vacancies in the economy.
“If there are hours to do, and if there’s a job going, people should have to take the job as opposed to just being able to stay on benefits.
“That’s the change I want to bring… and it’s good for the economy because it’ll ease inflation.”
He went on to say that in order to bring inflation down, the country needs to ‘increase the supply of things’, adding that because inflation is in the labour market, the government must become ‘much tougher’ on welfare claimants.
Peter Stefanovic, a lawyer from The Communications Union, slammed Sunak’s comments as ‘beyond shocking’, and pointed out that the majority of benefit claimants are either in work or seeking work.
He said: “40% of people on Universal Credit are actually in work. 56% of people in poverty are in a working family. Seven in ten children in poverty have at least one parent that works.
“Those claiming benefits, contrary to what they appear to be suggesting, are not lazy skivers. Needing benefits is not a shameful thing.
“All of this says much more about those running the country than it does about those claiming benefits.”
This comes just weeks after leaked footage showed Sunak boasting about taking money from ‘deprived urban areas’ to benefit affluent conservative areas.
Andy Burnham urges people to use buses as price drop confirmed
He admitted that the region’s buses still need a lot of improvement, however…
Andy Burnham has urged people to start using buses more often as cheaper fares are set to be rolled out across the region.
Yesterday, the mayor announced that bus fares across Greater Manchester will be capped at £2 a journey and £5 a day from the first week of September.
Describing the price drop as ‘a glimmer of light in tough times’, Burnham also revealed that fares will be capped at £1 for under sixteens, and that passengers aged between sixteen and eighteen will travel for free.
Burnham added that the cheaper fares will be paid for by ‘more people using buses’, before pointing out that many are ‘a third or half full at the moment’.
In the wake of his announcement, Burnham then launched a campaign calling on the public to ‘Get On Board’ and use buses when the lower fares come into force.
However, he admitted that Greater Manchester’s bus system still needs improvement, pointing out that he won’t be using the buses because they wouldn’t get him to work on time.
He said, as per the Manchester Evening News: “I do get public transport all of the time. I just live in an area where I have to get the train because I wouldn’t get into the office on time.
“It’s just a reflection, I’m afraid, of where the bus system is at at the moment. It isn’t the easiest to use, the routes don’t always go where you want them to go and as quickly as people want them to go.
“So I’m a bit of a victim of that at the moment. But I do use public transport all of the time – I use the tram all the time, I use the bus – and I’m not asking anybody to do anything that I’m not doing myself.”
He went on to acknowledge the financial pressures people are under at the moment, which is a contributing factor to why local leaders agreed to subsidise bus fares.
This comes as all buses in the city-region prepare to be brought back under public control for the first time in decades following a series of legal battles with bus firms.
But back in June, Burnham announced plans to fast-track the new fare structure from September to help passengers with the ongoing cost of living crisis.
Half of Brits want Woolworths to return to the high street, survey finds
Is this a sign for Woolies to finally make its comeback?
Half of Britons wish they could bring Woolworths back from the dead, a YouGov survey has revealed this week.
The retailer, lovingly nicknamed Woolies, championed the high street for decades before its demise in 2009 – so it is unsurprisingly one of the most missed out of all the lost shops from the noughties.
And a recent YouGov survey quizzing Brits on which shops they’d most like to see back on the high street found that, out of all the lost high street icons, Woolies is the most requested.
The shop made an impact across all generations, too, with those aged between fifty and sixty-four the most likely to want to see it back, at 60%.
Even a third of eighteen to twenty-four year olds – who were aged between four and ten years old when the chain closed in 2009 – want to see the store open its doors once again.
In second place is the recently closed department store Debenhams, with one in eight Britons (13%) saying they would like to see its grand return the most.
Rival chain British Home Store, which closed its stores in 2016, is also a popular choice for resurrection, with 10% of Brits wanting to see its return.
And clothing retailer C&A – which exited the UK market in 2001 but still operates internationally – came in fourth place, with 7% of shoppers wanting it to make a comeback on the high street.
There were a few other defunct brands that were listed among those surveyed, though they didn’t managed to get more than a couple of percentage points.
These included stragglers such as Toys R Us, Blockbuster, Comet, Littlewoods and Maplin.
And 1% of Brits said they wanted to see the return of department store chain House of Fraser which, insultingly enough, is still alive and (kind of) well, with thirty-three branches still operating in the UK, as well as five further stores converted to the ‘Frasers’ format.
And funnily enough, a massive one in four Britons (23%) said there weren’t any stores they’d like to bring back from the dead at all – a true pointer to the eventual death of the high street.
See the survey’s full results here.