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FirstFT: New UK lender plans 50-year fixed rate mortgages

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Hello. A new lender has won a license from UK financial regulators to offer fixed-rate mortgages of up to 50 years in a bid to help borrowers weather soaring inflation.

Perenna, a UK-based specialist lender, plans to initially provide fixed-rate home loans for 30 years, before rolling out products with even longer tenors.

His approval comes as the Bank of England raises interest rates to tackle rapid inflation, which has hit a 40-year high of 9.4%.

Longer-term mortgages have been mooted as a way to help young people get onto the housing ladder as house prices remain high. UK house prices hit a record high last month, although data from Rightmove yesterday showed the average value fell 1.3% in August to £365,173.

Banks typically offer fixed-rate mortgages for up to 10 years, with the most popular products lasting two and five years, according to Ray Boulger, senior manager at brokerage John Charcol.

Perenna could offer rates of 4-4.5% on 30-50 year loans, although this would be affected by gilt yields at launch.

Do you have a history of difficulty climbing the housing ladder? Share it with me on [email protected], and it could be featured in a future issue of the newsletter. Thanks for reading FirstFT Europe/Africa — Jennifer

1. Elliott Management drops SoftBank stake The US-based activist hedge fund dumped nearly all of its position in SoftBank, ending its bet on the Japanese tech investor. A person familiar with the trade said Elliott had lost faith in founder Masayoshi Son to bridge the gap between the value of SoftBank’s holdings and its market capitalization.

  • More moves: Elliott also sold its entire stake in Twitter in the second quarter, when shares of the social media company rallied after agreeing to a $44 billion takeover by Tesla chief executive Elon Musk.

2. Andreessen Horowitz backs WeWork co-founder’s real estate business The Silicon Valley venture capital firm has backed Flow, a residential real estate company founded by Adam Neumann since WeWork’s failed IPO attempt. A familiar person says Andreessen Horowitz invested $350 million at a valuation of around $1 billion.

3. William Ruto wins the presidential election in Kenya The vice president was declared the winner after a hard-fought campaign, but supporters of his rival, veteran opposition leader Raila Odinga, and some election commissioners disputed the result over allegations of rigging.

4. Heathrow extends passenger cap until end of October The UK’s largest airport yesterday extended a cap of 100,000 daily departing passengers until October 29 to avoid further disruption and last-minute delays due to staff shortages during the summer aviation season . The cap was originally set to run until 9/11 and sparked a furious row with airlines.

5. Iran denies any link to Salman Rushdie attack Tehran’s foreign ministry spokesman said the Islamic Republic had “definitely and seriously” no connection to the suspect involved in the stabbing attack. satanic verses author, despite a fatwa issued in 1989 by then-Supreme Leader Ayatollah Ruhollah Khomeini that allowed Muslims to kill Rushdie for alleged blasphemy.

Supporters of the Iranian-backed group Hezbollah burn an effigy of Salman Rushdie in 1989 © Nabil Ismail/AFP/Getty Images

The day ahead

Economic data The UK publishes preliminary productivity estimates for the second quarter. The EU releases international trade in goods figures, while Germany has its ZEW economic sentiment survey. In the United States, industrial production for July is over and economists forecast new residential construction fell 3.8 to in a context of record real estate prices. (WSJ)

business profits We are coming to the end of the reporting season with earnings from Genuit Group, Home Depot, Pandora and Walmart.

what else do we read

Can the UK limit energy costs this winter? When a new Prime Minister forms a government on September 6, he will need a quick plan to deal with soaring household energy bills this winter. Conservative leadership candidates and Labor leader Keir Starmer have offered starkly different levels of support. Read about them here.

  • Opinion: What is the point of a consumer energy price cap that does little to cap consumer energy prices? It’s a relic from another era, writes Cat Rutter Pooley.

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Fear of State Failure in South Africa After a wave of riots a year ago, there are fears the country is bracing for further civil unrest, writes Gideon Rachman. This gloomy mood reflects disappointment with the failure of Cyril Ramaphosa’s presidency to end endemic corruption and fix dysfunctional state institutions, such as the police.

Brazil’s other deforestation Deep in the country’s interior, the conversion of swaths of the once inhospitable Cerrado region to pasture in recent decades has helped transform Brazil into an agrarian powerhouse. But the extent of the encroachment worries environmentalists concerned about threats to the region’s role as a carbon dioxide “sink”.

It’s not always the aggressor who pays In the wake of the #MeToo movement, economists are using real-world data to study incidents of everyday sexual harassment in mainstream workplaces. As with the wealthy and celebrities, they find that it’s not always the authors who pay the full price, with women more likely to change jobs, writes Sarah O’Connor.

Why the Fed might already be “neutral” Federal Reserve Chairman Jay Powell has come under fire from critics for saying the federal funds rate is now “neutral” during his July 27 press conference. But there is a conceivable way that Powell is right, writes Edward Yardeni.

Work & leisure

August is the traditional month for getting scarce in the office. So why are so many people still working this month, asks Pilita Clark:

At first I thought I was the only one with an unexpectedly active desktop. But others in the city have the same problem. A friend who had his hopes of a quietly productive August dashed by office activity blames the rise of hybrid working

troubled times — Document the changes in business and the economy between Covid and conflict. Register here

Work – Discover the big ideas shaping today’s workplaces with a weekly newsletter from Editor-in-Chief Isabel Berwick. Register here