PRESS DIGEST - Financial Times - April 8

Financial Times

LENDERS WITHDRAW NO DEPOSIT MORTGAGES

Abbey (ANL_p.L: Quote, Profile, Research, Stock Buzz) became the last mainstream lender to stop offering 100 percent mortgages on Monday, shutting out first-time buyers with no cash savings from the housing market. Borrowers will now need a deposit of at least five percent, a parental guarantee or will have to enter a shared equity scheme. Some lenders, such as Cheltenham & Gloucester (CAGp.L: Quote, Profile, Research, Stock Buzz), Britannia and Alliance & Leicester (ALLL.L: Quote, Profile, Research, Stock Buzz), are asking for a minimum deposit of 10 percent. More than 20 lenders offered 100 percent mortgages at the start of last month but they have pulled out one by one in order to distance themselves from riskier lending. Abbey also announced increases to a large proportion of its fixed-rate and tracker mortgages. Woolwich withdrew its range of two-year and 10-year fixed rate mortgages and some five-year fixed rates.

FSA SETS UP ROCK TEAM AS MORALE FALLS

As it wrestles with a crisis of morale over the collapse of Northern Rock (NRKx.L: Quote, Profile, Research, Stock Buzz), the Financial Services Authority has set up a specialist team to supervise the bank. The nine-strong team is tasked with implementing the recommendations of the regulator's own investigation, which revealed a catalogue of errors in supervising the bank. In an unprecedented move, the FSA has relieved all the chosen personnel of their normal duties and the team has a month in which to develop plans and just a year to implement them. Recommendations from the audit include improving information flow within the regulator and boosting staff levels, with the FSA now expected to hire about 100 new supervisors and risk analysts this year.

CEOS ARE WORLD'S GLOOMIEST ABOUT RED TAPE

According to a survey conducted by the professional services firm PwC, chief executives are less impressed by their own government's efforts to cut red tape in Britain than their counterparts elsewhere in the world. More than nine out of 10 UK chief executives disagree that the government has reduced regulatory burdens, a higher proportion than for any other country polled. The findings come as the Federation of Small Businesses says the government's "regulatory splurge" has introduced no fewer than 82 new pieces of business legislation this month. But PwC partner Andrew Ratcliffe said criticism of over-regulation in Britain was not fully justified, and that the media's preoccupation with red tape and the perception that the UK "goldplates" EU regulations might have coloured the findings.

MORE WINNERS THAN LOSERS AS BUDGET CHANGES KICK IN

Prime Minister Gordon Brown's decision to scrap the 10 percent tax band for lower-earning workers means about 20 percent of UK households will be worse off than before the tax change took place this week. But twice as many households are better off due to changes announced at the same time. This group is mainly comprised of families on lower wages with dependent children or pensioners. Stuart Adam, senior research analyst at the Institute for Fiscal Studies, says that for a further 40 percent of households, changes made to the tax regime were neutral.