PPI, poor service and mortgage lending down

The Financial Conduct Authority has caved in to banks over payment protection insurance compensation by backing their call for a two-year deadline for new claims, according to internal documents published in The Times. The paper says this is the latest example of the city watchdog softening its stance with banks and comes after a public row over its decision to scrap a review of banks’ conduct.

After intense lobbying by lenders for a cut-off to be introduced for new claims over PPI — the mis-selling scandal that so far has cost £24 billion — the FCA said in November that a deadline accompanied by a marketing campaign to raise awareness would draw the affair to a close. It has yet to make a final decision. Bad service A study out today suggests that utility companies and local authority services are among some of the worst ranking sectors in the UK for online customer service. The new report from social media experts, myclever™ Agency, found that consumers put utility companies (water, gas, electricity, phone and broadband) as the most frustrating sector for online customer service and local authorities fell close behind. However, retailers and professional services came out as the least frustrating sectors. The research found that the biggest online service frustrations across all sectors was a lack of basic information contained on everyday commercial websites such as retailers, utilities, banks and local government services. Close behind was the inability to ask simple questions. And a third of the sample said that, even when the option to ask questions existed, the tools they had used in the last month were of poor quality and didn’t provide a timely response. Mortgages According to the Council of Mortgage Lenders, homeowners borrowed £8.1 billion for house purchases in April, down 40 per cent month-on-month and 4 per cent year-on-year. They took out 47,300 loans, down 31 per cent on March and 5 per cent on April 2015.

Andrew McPhillips, chief economist at Yorkshire Building Society, said: ‘This dip in lending represents a correction in market activity following the spike in demand as landlords rushed to beat the new stamp duty rate. The fact that house prices still rose in April despite such a marked drop in demand shows that the landlord rush caused supply to dry up which in turn drove up competition for the limited number of available properties.’

In other housing news, Berkeley Homes has reported a 20 per cent drop in reservations for new homes in the run-up to the EU referendum and has not launched any new schemes in London this year. According to The Guardian, aside from next week’s vote, the housebuilder blamed global economic uncertainty, higher UK stamp duty and the ‘policy shift against buy-to-let investors‘ for the sharp drop in reservations between January and May. Berkeley specialises in upmarket homes in the capital and the south-east, and currently has 77 developments, including 55 in London.

Brexit

Leaving the EU would be ‘a grave threat’ to local economies, according to the Labour leaders of 10 of the UK’s biggest cities outside London. A letter signed by leaders from cities including Birmingham, Cardiff and Glasgow said a vote to leave would put cities in ‘serious economic danger’.

The letter said: ‘If we vote for Brexit, it will be those at the sharp end – working people, not the leaders of the leave campaign, who will pay the price. A vote for Remain is a vote for prosperity and progress for Britain’s cities. A vote to leave is a vote for serious economic danger. It is simply not worth the risk.’ But Vote Leave said the cities had prospered ‘in spite of’ EU membership.

BHS

Former BHS owner Sir Philip Green has vowed to sort out the pensions ‘mess’ that followed the collapse of the retailer last month. The billionaire told MPs yesterday that his advisers were working on a ‘resolvable and sortable’ solution for 20,000 members of the BHS scheme. He said he would sit down as soon as possible with the regulator and would give it his ‘best shot’.

The ‘magic number’ Sir Philip would need to pay to bring the BHS pension scheme out of a rescue fund is £275 million, John Ralfe, a pensions consultant who advised the BHS inquiry, told the Today programme this morning. Storm damage The Association of British Insurers has reported further progress with the clean-up in the wake of the winter storms. Of the 15,000 property claims received after Storms Desmond, Eva and Frank, 90 per cent are now either fully or partly settled. For the first time the ABI has been able to break down the figure for different types of property, which show that 94 per cent of domestic customers have had their claims fully or partly settled and 83 per cent of commercial customers have had their claims fully or partly settled Commercial claims can take longer to settle because some of them are for very large values and because claims for business interruption cover can often only be finally settled once accounts have been provided so the impact on loss of profits can be accurately calculated. The final bill for all repairs is expected to reach £1.3 billion. Travel insurance

Millions are missing out on valuable cover by arranging their travel policies at the last minute. That’s according to Gocompare.com travel insurance who are warning holidaymakers not to leave arranging their travel insurance to the last minute or risk losing their holiday costs if they have to cancel their trip.

Finally…

National Grid is forecasting that demand for electricity will soar across the UK this afternoon, when England take on Wales in their second group stage game of the European Championships. Known as a ‘TV pick-up’, this spike in demand occurs when people boil kettles, open fridge doors or turn the lights on at the same time, often when a television programme has ended or during an ad break.

Analysts have identified that games featuring each of the home nations, including England, Wales, Northern Ireland, as well as the Republic of Ireland, will create the biggest increase in electricity demand throughout the tournament.

The biggest TV pick-up predicted during the group stage is England’s match against Wales, as experts forecast an increase in demand of 1,100 megawatts at half-time. This is the equivalent of 73 million fridge doors opening at once, or 440,000 kettles boiling.