Charlotte Street Partners



No place like rented accommodation

Written by Katie Stanton, associate partner 
Edited by Iain Gibson, associate partner
15 September 2020

Good morning,

I had the pleasure of a two-hour call with my bank earlier this month in which they explained to me I’d booked an appointment five hours too late to qualify for a 90% mortgage.
That was nice.
It’s not their fault, I suppose. None of the banks are taking 10% deposits anymore, unless of course you can move quickly enough for a one-day mortgage ‘fire sale’ or jump through some pretty wacky hoops.
“Ooooh, sorry, your mum and dad can’t help you on the deposit! No flats I’m afraid, only detached period properties in the home counties. Oh dear, you’ve not got 750 months’ payslips here, and you can’t prove you’ve done meat-free Mondays for 12 consecutive Mondays? It’s really not looking good,” they wince smugly, tallying your insufficiency against the latest set of arbitrary criteria.
But alas, Britain’s big banks have been inundated over the summer, as the older, wealthier contingent cash in on the stamp duty holiday. At the same time, banks are anticipating a bumpy road ahead, and so have been pulling their riskiest products as a safeguarding mechanism. As one bank withdraws, so do two more, and so on.
Lloyds, Barclays, Santander and HSBC have all axed loans for borrowers with a deposit of 10% or less. According to The Sunday Times, it is the first time since records began that this has happened.
Cut to me, up to my elbow in sofa, trying to sort the pennies from the crumbs for a 15% deposit – or the best part of £50,000 in London. That’s an impossibly huge sum of money.
This is the reality for first-time buyers for the considerable future. Even if the elusive 90% mortgages return, the interest rates are likely to be untenable. And I’m sure that won’t stop some young people being forced into expensive, long-term fixed rate mortgages because there is simply no viable alternative (rent in London being around £1,400 for your average one bed).
Meanwhile, the housing market is booming. Last month, house prices were 3.7% higher than a year earlier, according to Nationwide building society. But, crucially, beneath this headline lies a rift: young and less well-off people are being shut out.
While this might seem like a non-issue to the upper echelons at the moment, it will certainly come to haunt that renovated farmhouse in Buckinghamshire or holiday cottage in the Highlands in the long run.
Because, without us chain-freers fuelling the fire at the bottom of the heap, and without the stamp duty free-for-all, this mini boom will surely bust, and soon.


A lack of coronavirus tests for NHS staff is leading to absences and risking services, according to NHS Providers. The body, which represents hospital trusts in England, said staff are having to self-isolate rather than work because they are struggling to get tested. 
A proposed law giving Boris Johnson’s government the power to override parts of the Brexit agreement with the EU has cleared its first hurdle in the House of Commons. MPs backed the Internal Market Bill by 340 votes to 263. Still, the controversial bill has created a headache for the prime minister, with 18 Tory MPs, including senior figures, and five former prime ministers, publicly opposing the legislation.
President Donald Trump has used a visit to California to question whether climate change is responsible for the wildfires that are currently sweeping across the west of America, causing dozens of deaths, destroying property and polluting the air with smoke. At a meeting with state officials yesterday, Trump reasoned that “it will start getting cooler – just you watch.”

Business and economy

UK payrolls shrank by 695,000 between March and August as employers cut jobs ahead of the winding down of the government’s Job Retention Scheme. According to the Office of National Statistics, the UK’s unemployment rate grew to 4.1% over the period, compared with 3.9% previously.
The UK government is set to extend coronavirus measures which prevent the eviction of commercial property tenants, including restauranteurs and retailers, until the end of the year. The anticipated extension comes as the government faces increased pressure to provide more support for companies struggling with the Covid-19 pandemic. (£)
The taxpayer will have guaranteed nearly £70bn in loans to UK businesses by March 2021, according to new estimates from TheCityUK. The group says that better than expected economic growth has seen cost estimates of government guaranteed loans shrink.
Nvidia’s blockbuster purchase of UK chip designer Arm from SoftBank is facing growing opposition after Downing Street officials announced plans to investigate the deal. The Silicon Valley giant pounced on the Cambridge company, which makes microprocessor technology that appears in billions of smartphones, in a $40bn deal announced on Monday. (£)

Columns of note

Writing in The Atlantic, Tom McTague sees Brexit and the Northern Ireland dilemma as a tortuous finger trap; the more Westminster fights against it, the tighter and more inescapable the bind becomes. This is a fantastic exploration of the complexity of the Brexit conundrum, and how successive prime ministers have burrowed the UK deeper into this game of pride and power for which there are no winners.
This week’s Economist shines a light on the failure of enforceable property rights in poor countries. It was estimated in 2000 that the total value of informally owned land in developing countries was a whopping $9.3trn (or $13.5trn in today’s money). The problem is that small farmers and those living in improvised buildings often don’t have a legal title to their property. If they did, they could borrow money more easily to improve current businesses, start new ones or invest in their land. But, as ever, the solution is not quite as easy as it first may seem.  

Cartoon source: The Telegraph


What happened yesterday?

The FTSE 100 limped to a disappointing finish on Monday, after being boosted earlier in the day by news that AstraZeneca has resumed clinical trials of its Covid-19 vaccine in the UK and global M&A activity. It closed down 0.1% at 6,026.35, while the more representative mid-cap FTSE 250 added 0.7% at 17,677.26.
Meanwhile, Wall Street got the week off to a positive start, as weeks of market volatility for the tech sector settled down. The Dow Jones was up 1.4%, the S&P 500 up 1.8% and the Nasdaq up 2.4%.

In currencies, sterling rose 0.6% against the dollar to $1.287. The pound dropped almost four per cent last week as the UK government revealed legislation overriding big parts of its EU exit agreement, risking a collapse in trade negotiations with Brussels.

In company news: 

Netflix is expected to outspend all its major rivals on entertainment content this year, as the pandemic weighs on ad-funded broadcasters. Research by Ampere Analysis for the Financial Times estimates that the US streaming service’s spending on films and programming will rise by $3bn to $13.6bn in 2020. (£)
Britain’s largest security firm, G4S, is facing a hostile takeover from smaller Canadian rival, Gardaworld. The Canadian multinational, controlled by the private equity firm BC Partners, has made an all-cash offer of £2.96bn for G4S, valuing the firm 23% above where the stock opened today.
BP has backed calls to bring forward the ban on sales of new petrol and diesel cars in the United Kingdom. The government consulted this year on proposals to change the current target of 2040 forward to 2035 or sooner and is preparing to publish its decision. (£)

What’s happening today?

Diurnal Grp

Bonhill Group
Corero Network
Eve Sleep
Good Enrg
Jtc Plc
Octopus Renew
Smart Metering
Simplybiz Grp

Trading announcements

Downing One
First Group
Henderson Div
Wynnstay Props.

UK economic announcements
(07:00) Claimant Count Rate
(07:00) Unemployment Rate

Int. economic announcements
(10:00) ZEW Survey (GER) – Current Situation
(10:00) ZEW Survey (GER) – Economic Sentiment
(10:00) ZEW Survey (EU) – Economic Sentiment
(13:30) Import and Export Price Indices (US)
(14:15) Industrial Production (US)

Source: Financial Times

did you know

A Japanese company, Balloon Kobo, is offering “space funerals”. Cremated ashes are inserted into a biodegradable balloon which is inflated with helium and then released. After three hours, the balloon reaches the outer edges of the stratosphere, at a height of between 40km and 50km, where the reduced air pressure causes the balloon to swell in size and burst, scattering the ashes. (Source: The Times)

Parliamentary highlights

House of Commons

Oral questions
HM Treasury (including topical questions)
Urgent question
To ask the Secretary of State for Health and Social Care if he will make a statement on Coronavirus – Jonathan Ashworth
Ten minute rule motion
Digitally Altered Body Images – Dr Luke Evans
United Kingdom Internal Market Bill: Consideration in Committee (Day 1)
Future of Michelham Priory – Ms Nusrat Ghani

House of Lords 

Baroness Clark of Kilwinning and Lord Walney
Oral questions
Recommendations that the UK should aim to meet two thirds of its electricity needs using renewable energy sources by 2030 – Lord Ravensdale
Government plans for changes to the NHS Long Term plan in the light of the COVID-19 pandemic – Lord Hunt of Kings Heath
Arrangements needed for A Level and GCSE examinations in the 2020/2021 academic year – Lord Storey
Number of COVID-19 Secure Marshals to be in place by 1 October – Lord Scriven
Private Notice Question
The role of the Law Officers – Lord Lexden
Agriculture Bill – Report stage (day 1) – Lord Gardiner of Kimble

Scottish Parliament 

Scottish government debate
Migration and care workers

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