Our Weekly Newsletter
Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.
News you can use
The bleakest of ironies: pandemic may spell the end for newspapers
While the pandemic is arguably the biggest news story of a lifetime, it seems to be dissolving the very industry that exists to report it. Publishers across the UK have suspended publication of a vast number of local and regional titles, while nationals and magazines have drastically reduced distribution, scaled back edition sizes due to a drop-off in advertising and opted for digital-only publications. Although many publishers maintain the measures are temporary, there is reason to believe some may prove permanent. (From The Guardian, 12 April 2020)
Investors trapped in UK property funds charged £10m a month
Nearly ten daily traded property funds managing over £12.8bn in assets have been suspended after the economic downturn created uncertainty over the value of their underlying properties. Retail investors trapped in UK property funds have since paid close to £10m in fees as most property fund managers have continued charging during this suspension period – raising questions about whether investors are being treated fairly, given the underperformance of several funds. (From Financial Times, 11 April 2020)
FCA issues ‘Dear CEO’ letter warning that SMEs will not qualify for Covid-19 insurance
The FCA has written to insurance bosses warning that business interruption claims for SMEs should be “assessed and settled quickly” in cases where there is an obligation to pay out. The letter also calls for interim payments if there are reasonable grounds for an insurer to only pay a portion of the claim. Despite this warning, the FCA admitted the majority of business interruption policies do not cover pandemics, adding that “while this may be disappointing for the policyholder, we see no reasonable grounds to intervene in such circumstances”. (From Insurance Times, 15 April 2020)
UK lenders grant 1.2m mortgage repayment holidays – but is there a sting in the tail?
UK lenders have allowed more than 1.2m borrowers to defer mortgage and interest payments in a bid to alleviate the financial strain put on households by the spread of coronavirus. While the government, the Financial Conduct Authority (FCA) and lenders all stress that payment holidays have no effect on an individual’s credit rating, brokers have questioned whether there may be other unfavourable consequences of seeking short-term support. (From The Guardian, 14 April 2020)
Building site closures to undermine key housing targets
Leading property developers warn that the national housing shortage may be exacerbated by several months of site closures. The warning comes as building sites across the UK have closed, leaving 220,000 new homes unfinished. Many house builders believe that the government could delay its curtailing of the Help to Buy scheme in a bid to kick-start construction. (From Financial Times, 12 April 2020)