Financial Times Weekend 22-23Feb2020

2 |FTMoney FINANCIALTIMESSaturday22 February 2020

WEEKEND CATCH-UP

The new polymer £20 notefeaturing

theartistJMW Turnerhasentered

circulation, withahiddendigitaltwist

for 21st century users ofcash.

The Bank ofEngland has worked

withSnapchat, themultimedia

messagingapp, to develop an

augmented reality lens that enables

users ofthe app to bringTurner’s

celebrated painting“The Fighting

Temeraire” to life by viewingit

through their smartphone. The ship

playedakeyrole in Nelson’s victoryat

the Battle ofTrafalgar in 1805.

The note’s securityfeatures include

two see-through windows and a two-

colourfoil. The large window, which

echoes the shape ofthe Trafalgar

Square fountains, depicts the Margate

lighthouse and Turner Contemporary

artgallery.Leke OsoAlabi

BANKNOTES

Turner£20note

enterscirculation

More than 7m Britons are struggling
with debt and at risk ofbeing exploited
by some lenders’ business models,
according to a new assessment by the
UKfinancial watchdog.
The Financial Conduct Authority
listedthetreatmentof over-indebted
borrowers, unsuitable pension transfers,
and the marketing ofhigh-risk
investment products as among the
greatest risks posed by thefinancial
services industry in 2020.
With its latest data showing that 7.4m
adultsareover-indebted—definedas
missing repayments or considering
them a “burden” — the regulator
warnedthat some companies were
taking advantage ofborrowers.
Matthew Vincent

REGULATION

Millionsofindebted

Britonsatrisk

Shareholder revolts over pay at FTSE

2 50 companies rose sharply last year as

investors tried to rein in excessive

executiveremuneration.

The Investment Association,the

trade body whose 250 members

manage £7.7tn in assets, said executive

pay was top ofinvestors’ concerns and

set todominatediscussionsbetween

shareholders and companies in 2020.

According to an analysis ofits public

register, which tracks UK companies

where at least 20 per cent ofinvestors

revolted at an annual meeting, a total of

6 2 companies appeared on the register

in 2019for pay-related resolutions.

This included31 FTSE 250 companies

—an increase ofalmost 30 per cent.

AttractaMooney

EXECUTIVE PAY

Shareholderrevolts

surgeatUKfirms

Financial advisers are beingforced to

turn away clients who want to transfer

out offinal salary-style pensions as

they can no longer obtain adequate

insurance cover, a leading professional

body has claimed.

The Personal Finance Society said

the soaring cost ofpremiums and

restrictions on the level ofcover meant

advisoryfirms could be “pushed into

bankruptcy by a single compensation

claim”fromaclient infuture.

“The number ofadvisers [prepared to

advise on a transfer] are reducing daily,”

said Keith Richards,chiefexecutive of

the Personal Finance Society, adding

that this was “limiting thepublic’s

ability” to transferfrom defined benefit

pensions.Leke OsoAlabi

PENSIONS

Advisersturntheir

backsontransfers

Freelance workers at Thomson Reuters
are threatening to leave the media
group unless it guarantees their pay will
notfall due to agovernment crackdown
on tax avoidance.
Changes to off-payroll working rules,
known as IR35,will come intoforce on
April 6 to tackle what HM Revenue &
Customs calls“disguisedemployment”.
The reforms require all medium and
large companies to assess the
employment status ofcontractors they
hire who use limited companies.
Mark Di Stefano and Emma Agyemang

TAX

Freelancerbacklash

atThomsonReuters

Wagegrowth in the UK dipped to its

slowest rate in more than ayear at the

endof 2019 butthelabour market

remained resilient,with a new record

high employment rate despite the

economy’s stagnation.

In the three months to December,

annual growth in average weekly

earnings slowed to 2.9 per centfor total

pay, which includes bonuses, downfrom

3.7per cent in thepreviousquarter, the

slowest rise since summer 2018,

accordingto datafrom the Officefor

NationalStatistics.Valentina Romei

ECONOMY

AnnualUKwage

growthslows

University lecturers and staffbegana

secondroundofstrikesaftertheir

employers refused to bow to union

demands overpayandpensions.

The University and College Union

saidits members would proceedwith 14

days of industrial action, which will

include cancelling lectures at 74

universities.

The UCU is demandingthat

universities cover the costs ofrecent

rises inpension contributions and

increase wages.AndrewJackand

Josephine Cumbo

PENSIONS

Universitieshitby

freshroundofstrikes

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YourMoney

Private landlords fall to 7-year low

UK (m)

Sources: EHS; Gov.Scot; Stats Wales & Hamptons International

1

2

3

4

5

6

2005 07 09 11 13 15 17 19

Private rented homes

Private landlords

What does the chart show?

That thenumberof

landlords in the private rented

sectorhasfallentoaseven-

yearlow,withthe number

dropping by 223,000 over the

pasttwo years.

Researchby Hamptons

International, an estate agent,

foundtherewere2.66m

landlordsacross Great Britain

in 2019, down 8 per centfrom

its 2017 peak. The number of

rented householdswasalso

down slightly on 2017, with

5,134,000 privately rented

homes in 2019, though the total

hasgrown sharply over the

past decade: in 2009 there

were 3, 476 ,000 rented homes.

Where have the landlords

gone?

Thegovernment and

regulators sought to damp

rapidgrowth in the sector in

the middleyears of the decade,

as theysurmised that landlord

investors were more likelyto

sell up quickly in any housing

crisis, worseningthe impact on

prices.

Amongthe tax and

regulatory changes they

broughtinwasa3percent

charge on stamp duty land tax

for second homes and buy-to-

let; tighter affordability checks

for landlordswithfourormore

properties; and the withdrawal

of higher rate tax relief on

mortgage interest.

However, thefigures also

point to a rise in the number of

properties held byeach

landlord. In 2019, theyowned

an average 1.93homes, the

highest level since 2009 when

the average was 2.0 2

propertiesperlandlord.

Lastyear theproportion of

landlords owning more than

onehome was 30per cent, a

record level. This is a big

increase on 2009,when it was

15 per cent.

So bigger landlords are

picking up more properties?

Yes. Thefigures reinforce

claimsfrom market experts

that the so-called“amateur

landlord” withonerental

property has been in retreat in

theface ofthe tax onslaught,

while professional landlords

whoserentalbusinessis

typically their main source of

income have been adding to

theirstock.

Thelatteroftenholdtheir

properties in limited company

structuresthatcan retain more

ofthe benefits ofmortgage

interesttaxreliefthan

individual buy-to-let

ownership.

Aneisha Beveridge, head of

research at Hamptons

International,said: “While

222 ,570 landlords have left the

sectorsince 2017 duetotax

and regulatory changes, those

who stayed tend to have

bigger portfolios.”

What’s happening to rents?

They’regoingup. Hamptons

recordsthelevelofrent

charged by landlords when

properties are newly let, using

datafrom 90,000 homes let

and managed by Countrywide

each year, and basingits

results on rents that are agreed

rather than thoseadvertised.

It found that in January

2 020, rents averagedat £998

per calendar month, 3.6per

cent higher than the same

monthlast year. Thehighest

growth, of6 per cent, was in

the Southwest,but the East

andGreaterLondonalso

posted strongrises of4.1 per

centfrom January2019 to

January 2020, withaverage

rent in the capital of £1,783per

calendar month.

Ms Beveridge said: “Rents

rose in every region across

Great Britain in January...

Thenumberofnewhomes

purchased bylandlords

remains low, which isfeeding

through tofewer homes

availabletorent. Thisis

particularlytrue in the South,

where rents are rising the

most.”JamesPickford

Thousands of landlords sell up

CHART THAT TELLS A STORY

Reuters