The Times - UK (2020-11-14)

the times | Saturday November 14 2020 1GM 69

Money

— is firmly entrenched. The search for

additional space, both indoor and out-

door, within the rental sector is set to

continue as the country goes through

additional periods of lockdown.”

Andrew Montlake from the mort-

gage broker Coreco said there had been

demand from property investors since

the stamp duty cut, but usually from

landlords with equity. “They are prov-

ing more active than ever in what is

increasingly a buyers’ market.”

Some brokers report that landlords

a better position because it is quicker to

find new tenants for houses than flats.

And because first-time buyers are

struggling to get mortgages, there is

less competition for properties. People

are having to rent for longer.

Most first-time buyers cannot secure

a mortgage unless they can stump up a

15 per cent deposit, which is why so

many are forced to carry on renting.

In September the share of homes

purchased by first-time buyers dropped

for the first time in five years. This

Who pays what?

The NHS takes only your healthcare

needs into account when deciding

whether to offer funding — the

continuing healthcare scheme is

not means-tested. This differs from

local councils that offer assistance

with social care, as opposed to

healthcare, and which will take your

finances into consideration before

deciding whether to pay. Councils in

England and Northern Ireland can

contribute towards care if you have

less than £23,250 in savings. The

threshold is £24,000 in Wales and

£28,500 in Scotland.

more than a third of the 150 cases it has

reviewed over the past two years.

The scheme is not means-tested.

While 79,058 people were found eligi-

ble for the scheme in the first half of this

year, it is likely that thousands were

wrongly turned down. Families said

they were not told about the scheme by

healthcare workers or local authorities.

have been remortgaging to raise cash

for buying more properties, while also

taking advantage of low interest rates.

For landlords looking for a 60 per

cent loan-to-value mortgage fixed for

two years the average interest rate is

2.54 per cent, according to the financial

data company Moneyfacts.

The number of buy-to-let deals has

also gone up, from 1,720 in August to

1,813 now.

Landlords who let larger properties

with gardens and office space will be in

The average cost of a residential care

home is £33,852 a year. This increases

to £47,320 when nursing care is

included, according to LaingBuisson, a

healthcare data company.

The CCGs are all meant to use the

same criteria for assessments, but there

are clear differences. North Cumbria

CCG has paid £5.8 million in redress to

a landlord’s dilemma

ALAMY

followed a ten-year high in the propor-

tion of sales to first-time buyers in 2019.

Tommy Hughes from We Buy Prop-

erty, which offers vendors a quick sale

for cash, said: “There has been an enor-

mous amount of legislation put on

landlords over the last few years and

the pandemic has accelerated many

landlords’ desire to offload some or all

of their properties.”

Hughes said he had bought proper-

ties with tenants because buy-to-let

had become unviable for the landlord.

H

olly Smith,

35, has

decided to

sell her rental

property, a

two-bedroom terraced

house in Great

Yarmouth, Norfolk, that

she had rented out for the

past three years

(Katherine Denham

writes).

Her tenants moved out

just before the country

went into lockdown for the

first time in March and she

then struggled to find new

ones so the house has been

sitting vacant for eight

months.

This has left the

mother of three

children without any

rental income (she

charges £600 a

month) while she

has had to pay

£200 a month in

council tax.

Holly,

who runs a

money-

saving

blog

called

Coupon

Queen,

said

that her husband had

recently lost his job as a

sports massage therapist.

“The rental income

helped to support my

family, but I’m now

seeing money come out

of the bank instead of

going in.”

Holly said that even

before the pandemic it

would be hard to make

much of a return from

renting, and sometimes

the costs would outweigh

the rental income.

Lockdown was the last

straw. She has now put

the house up for sale.

Holly plans to keep

anything she gets from

the sale in the bank as

an emergency fund.

“If I find tenants,

there’s a risk they

could be

furloughed or

lose their jobs,”

she said. “It just

doesn’t feel safe

to be a

landlord

at the

moment.

it’s not

worth

the

stress.”

Way out for

mortgage

prisoners

M

ore should be done to help a

quarter of a million mortgage

prisoners in Britain, econo-

mists say.

Academics at the London School of

Economics said that efforts by lenders

and financial regulators had not helped

most mortgage prisoners trapped on

expensive loans. Many are stuck paying

interest-only, cannot qualify for lower

rates and may not have savings to pay

off their debts at the end of the term.

Many mortgage prisoners took out

loans before the financial crisis with

lenders that are no longer active, such

as Bradford & Bingley and Northern

Rock. They have since had their loans

passed on to investors, including US

private equity firms, which are not reg-

ulated by the Financial Conduct

Authority. Loans were easier to get

before tougher restrictions brought in

after the crisis and many of these

people are now deemed not creditwor-

thy enough to move to deals that would

actually involve them paying less.

The LSE’s report, funded by the con-

sumer champion Martin Lewis, the

founder of the Money Saving Expert

website, said the coronavirus meant

mortgage prisoners were even less like-

ly to get new deals. Lenders, they said,

had become more risk-averse because

of fears that a house price crash could

push borrowers with high loan-to-

value mortgages into negative equity.

The regulator has tried to help mort-

gage prisoners by allowing banks and

building societies to lend to them as

long as they are up to date with their re-

payments and would be paying less in-

terest on the new deal. However, the

FCA estimates that only 14,000 bor-

rowers would meet companies’ lending

criteria and make a meaningful saving.

The LSE suggested that the govern-

ment cap the rates charged to mortgage

prisoners. The average rate from inac-

tive lenders was about 4.67 per cent in

June while active lenders offered five-

year fixes of less than 1.5 per cent.

The FCA said in May that it had con-

vinced some companies to reduce in-

terest rates for mortgage prisoners in

line with cuts to the Bank of England’s

base rate, which has been a record low

of 0.1 per cent since March.

LSE called for the government to find

a way for companies to write off part of

people’s loans to allow them to remort-

gage, such as by offering firms some

sort of incentive. It could also offer in-

terest-free loans that would let prison-

ers get a mortgage elsewhere, similar to

the government’s Help to Buy scheme.

A loan would allow someone with no

equity in their home, for example, to get

a mainstream mortgage. Most leading

lenders will only consider people with

15 per cent equity or more.

Some mortgage prisoners are stuck

because they have also taken out unse-

cured loans, to make home improve-

ments or fund moving costs.

Rachel Neale from the Mortgage

Prisoner campaigngroup, said the gov-

ernment should take responsibility for

the problems it created.

The FCA and Treasury said they

were working with lenders and con-

sumer groups to help mortgage prison-

ers who are eligible to switch.

Kate Palmer

250,000

estimated number of mortgage

prisoners stuck with expensive loans

before winning funding for nursing home fees

being reviewed, 15,000 were reimbur-

sed because of wrong decisions, the law

firm Hugh James said. The average

compensation payout was £28,000.

Tony Homewood, 62, bought a

bungalow in Wakefield, West York-

shire, so he and his brother could look

after their mother, Doreen. She had

health issues and was diagnosed with

Alzheimer’s in her seventies. Doreen

lived in a nursing home from 2014, pay-

ing £3,400 a month. During one of

Tony’s visits a nurse mentioned the

NHS scheme. Tony registered a claim

but was repeatedly turned down. After

a review Tony’s family have been reim-

bursed more than £100,000, two years

after Doreen died. “My parents worked

and paid taxes all their lives. When the

state should have been providing for

them, it didn’t,” Tony said.

About 40 per cent of the 440,000 care

home residents are self-funding.

An NHS spokesperson said: “Con-

tinuing healthcare funding is available

to a minority whose eligibility is

assessed on an individual level, while

most people are instead covered by the

rules on social care eligibility.”

174 claimants, while Bedfordshire CCG

has paid £260,000 to 11 claimants.

Barbara Stretch, a former hotelier,

moved to a care home in Morecambe,

Lancashire, in 2003 after being diag-

nosed with dementia. A third of her

£650-a-week care fees were paid by her

private and state pensions. The local

council paid the remaining two thirds.

Barbara, who lived in the nursing home

for eight years, and her daughter Linda

were never told about the NHS scheme.

It was not until 2012 that Linda, a

solicitor, found out that she could

register a retrospective review. It took

four years to get a response to her claim.

Even though Barbara had been unable

to look after herself and was sectioned

under the Mental Health Act, she was

denied any funding.

“They said my mum wasn’t unwell,

which insulted my intelligence,” Linda

said. She lost two appeals before an in-

dependent review ruled that the family

should be paid £43,000, which Linda,

68, said she would give to charity. The

local council also received money for

the fees it paid towards Barbara’s care.

Of 50,000 families whose cases are

Doreen Homewood’s sons were

reimbursed more than £100,000

‘It’s just not worth

the stress any more’

31%

of landlords in

London are

considering selling