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Home ‘flipping’ in the UK reaches 12-year high, despite Covid crisis | Business



The proportion of homes in England and Wales that have been bought, renovated and sold again within a short period has hit a 12-year high, with Burnley in Lancashire topping the list of properties most commonly “flipped”.

So far this year, one in every 40 homes sold were bought and sold within 12 months, according to research from estate agent Hamptons International using Land Registry data, the most since 2008. In Burnley, it was about one in 12.

Despite the coronavirus pandemic, which brought the housing market to a standstill for several weeks, Hamptons predicts that about 23,000 homes will be flipped this year, up from 20,857 last year, and investors are on track to make greater profits.

The housing market has been booming in recent weeks, as pent up demand following the first lockdown was released and after the chancellor, Rishi Sunak, introduced a mortgage holiday on properties up to £500,000 in July.

The average difference between the purchase price and sale price of flipped properties has risen to the highest level since records began in 2007, now standing at £40,995 at the national level. This is more than £10,000 higher than the average profit recorded in 2019.

According to Hamptons International researchers, average profits have been boosted as investors have increasingly switched to houses from flats. Just 5% of the homes bought and sold since the housing market reopened in May have been flats, a large drop from 20% in 2019.

“Flippers play an important role in the housing market, by improving housing stock and taking on projects other buyers often won’t touch,” said Aneisha Beveridge, head of research at Hamptons International.

“Since the market weakened following the financial crash of 2007, the number of flipped houses dwindled. However in recent times their numbers have started to recover.”

Flipping is most common in the north-east and north-west of England, with traders looking to make a quick profit targeting areas where property is more affordable.

So far this year, one in every 12 homes sold in Burnley had been purchased in the previous 12 months, equating to 51 properties. The average difference between the purchase and sale price was £20,643.

Some 80% of the flipped properties in Burnley, the vast majority of which were terraced houses, were purchased for less than £40,000, the level at which investors are usually required to pay a 3% stamp duty surcharge, and below the general threshold for the tax.

After Burnley, the second most popular place for flipping was County Durham, followed by Rutland in the east Midlands, Middlesbrough in fourth place and Stockton-on-Tees in fifth. Merthyr Tydfil, in eighth place, is the only local authority in Wales to feature in the top 10.

It has been two years since anywhere in southern England appeared in the top 10 flipping locations, but that may be about to change, according to Beveridge.

“While the current stamp duty holiday will see flippers across the country save money, its full impact won’t be felt until early next year when these homes are likely to return to the market for sale. Given investors in more expensive areas will see larger stamp duty savings, there is potential for Burnley to be knocked off the top spot before too long,” she said.

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The top 10 local authorities with highest proportions of homes flipped this year

1. Burnley: 8.2% of properties are flipped within 12 months of purchase, with an average increase in sale price of £20,643

2. County Durham: 5.8% and £6,780

3. Rutland: 5.8% and £45,269

4. Middlesbrough: 5.5% and £6,100

5. Stockton-on-Tees: 5.4% and £8,775

6. Wolverhampton: 4.7% an £22,191

7. Hyndburn: 4.6% and £26,410

8. Merthyr Tydfil: 4.5% and £20,417

9. Darlington: 4.5% and £11,549

10. Walsall: 4.4% and £27,536

Source: Land Registry and Hamptons International

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Arcadia on brink of collapse; record month for stock markets – business live | Business




A Topshop branch in Leeds, West Yorkshire, last night

A Topshop branch in Leeds, West Yorkshire, last night Photograph: Christopher Thomond/The Guardian

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Arcadia is on the brink of becoming the biggest corporate casualty of Britain’s Covid-19 crisis. Sir Philip Green’s retail group is expected to filed for administration as soon as today, having failed to agree a rescue deal to keep the company afloat.

The move would put 13,000 staff at risk at Arcadia’s 500 stores, at its Topshop, Burton and Dorothy Perkins chains, and probably end of Green’s career as a retail magnate.

Covid-19 has been a severe blow for Arcadia. Having failed to seize the opportunity of online shipping, it was already struggling to match faster-growing and more nimble rivals like Asos and

The pandemic, which has forced its stores to lock down twice this year, has deepened its plight.

As one insider put it to the BBC:

This is obviously a sad day, we tried to save it a year ago when £200m was put into the business and the pension fund, but it’s impossible to operate now.

“You don’t know when you’ll be open, you don’t know what stock to buy.”

Arcadia’s current and former staff also face uncertainty now – as there’s a black hole up to £350m in its pension fund. Add in the bills owed to suppliers, and Arcadia’s collapse could cause serious damage to the wider UK retail sector.

Markets round off record month

Arcadia’s plight is the climax to a particularly dramatic November. There’s been plenty of bad news this month, with Covid-19 deaths approaching 1.5 million, and cases surging at a record rate in America.

In Europe, the second set of lockdowns are threatening to push the eurozone and the UK towards double-dip recessions.

But November has also brought uplifting news – encouraging vaccine trial results, and the prospect that president-elect Biden will attempt to tackle the pandemic while also pushing through a new stimulus package.

And for those reasons, this has been a staggeringly successful month for share prices.

MSCI’s All Country index of stocks has surged by over 13% this month, hitting fresh all-time highs, and on track for its best month since it was created in 1990.


(global equities) MSCI all-country Index is on track for the biggest monthly gain since 1990 inception, chart @BloombergTV

November 27, 2020

The UK’s FTSE 100 has also had a stellar month, having underperformed for most of the year. With one day to go, it’s gained over 14% during November, close to the record month – January 1989, when it jumped 14.4%.

Chris Weston of Pepperstone says November has been “a breathtaking month for equities, and a poor month for the US dollar and gold”.

Why? Because investors are anticipating a return to normality in 2021 as vaccines are rolled out, and – crucially – as central banks continue to provide unprecedented support (through record low interest rates, quantitative easing, and cheap credit).

European markets are expected to dip back this morning, though.


European Opening Calls:#FTSE 6330 -0.60%#DAX 13251 -0.64%#CAC 5567 -0.56%#AEX 608 -0.62%#MIB 22230 -0.55%#IBEX 8144 -0.57%#OMX 1921 -0.84%#STOXX 3502 -0.73%#IGOpeningCall

November 30, 2020

The agenda

  • 9.30am GMT: UK mortgage approvals figures for October
  • 1pm GMT: German inflation figures for November
  • 2.30pm GMT: Bank of England policymaker Silvana Tenreyro speaks at a Resolution Foundation event
  • 3pm GMT: US pending home sales figures for October

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California’s Dysfunctional Unemployment Department Is Worsening Its Looming Eviction Crisis




Tommaso Boddi / Getty Images

People hold up signs as protesters supporting the rent freeze gather in Chinatown in Los Angeles, Aug. 10.

As Paulie Rodriguez looks out from his girlfriend’s family trailer home perched on dry, uneven ground on Native land in Pojoaque, New Mexico — their temporary residence since the pandemic uprooted their lives in the Bay Area — he wonders how things ended up this way.

He was the first in his immediate family to graduate high school. He went on to coding school in Washington state, hopeful he would join the country’s tech workforce. As he looked for jobs, he worked as a barista at a café. He carefully played his hand, but none of it mattered when the coronavirus pandemic swept across the country and brought much of the US economy to a grinding halt. This spring, he found himself unemployed, evicted, and left behind by the US’s few remaining safety nets.

By July, 23-year-old Rodriguez had been waiting for months for the unemployment benefits that the state’s Employment Development Department, had yet to pay out. He’s one of 1.1 million Californian residents who have fallen through the cracks. The state’s unemployment system, progressive in many ways compared to other states, has been a bureaucratic black hole through the pandemic, understaffed and reliant on outdated technology unfit for a crisis of this scale. It has compounded an already devastating crisis for people like Rodriguez. Now — with the nation’s most populous state poised to resume evictions and foreclosures on Sept. 1 — some 30,000 people in California, unable to work or collect unemployment benefits, are in danger of being put out on the streets.

For Rodriguez, that reckoning has already come. On June 30, as he approached his fourth month without financial relief, he and his girlfriend packed up their things, rented a U-Haul trailer that they hitched to their car, and drove three days to find shelter. They crossed into New Mexico on Independence Day, where they would settle into a three-room trailer that his girlfriend’s mother shares with three other family members.

Courtesy Paulie Rodriguez

Paulie Rodriguez stands with his girlfriend and a U-Haul as they prepare to move in with family.

Now he has $70 left in his checking account. He earns grocery money making websites for clients he finds online, coding from the kitchen table of this trailer home near Santa Fe.

“It’s upsetting because right now it feels like I was doing everything right and was trying my absolute hardest,” Rodriguez told BuzzFeed News. “And even then, I have everything taken from me. It was still not enough.”

Millions of Americans like Rodriguez face unemployment, homelessness, and debt as governmental safeguards crumble under the weight of this pandemic. In California, outdated technology has largely rendered the labor department ineffective and overwhelmed since March, when a flood of unemployment insurance applications began rolling in. Meanwhile, families waiting for financial relief have been forced out of their homes despite federal and local eviction moratoriums. It has disproportionately affected people like Rodriguez who are nonwhite and have low incomes.

“It’s upsetting, and it’s not like there is one figure I can blame for it,” he said. “It’s this domino effect of neglect of the [United] States never caring about their social safety nets because they don’t care about the lower class.”

Atrophied Systems

Rodriguez can tell you tricks he’s learned to try to get through to an agent to resolve his unemployment benefits claims in California. If you hear one recorded message, hang up; you’re stuck on hold and you’ll never get through. But if you hear a long pause and then a different message, you’re in luck, he said.

He’s called the labor department as many as 80 times in one day, looking for answers. There were none.

Courtesy Paulie Rodriguez

The desk where Paulie works on freelance websites to try and make grocery money.

As of early August, 1.1 million unemployment claims in the state had yet to be paid and could require months to clear. If Congress approves any new unemployment benefits, the head of the EDD has told reporters it could take up to 20 weeks to process those.

The EDD’s website, where people can file for unemployment, is no better. The agency is the last in the state to rely on COBOL, a 60-year-old computer language “so old that most of its programmers have retired,” according to state lawmakers. EDD’s mainframe-based computer systems are 30 years old.

That this antiquated infrastructure would buckle under high levels of employment is no surprise. California’s unemployment system caused delays in paying benefits to 117,000 people in 2009 during the Great Recession as well, when more than 12% of the state’s workers became unemployed. A decade ago, EDD entered into a contract with the consulting agency Deloitte, but the project ran over budget and overtime. Lawmakers said it required $94 million and six years, compared to the original $47 million and four years the agency expected — and it remains inadequate as the need for a functioning portal soars far beyond anything seen in the recession.

Of the roughly 11 million calls EDD received each week, only 5% are answered.

“For too long, EDD has been run by an insular group of bureaucrats rooted in the status quo and unable to drive reform. Many of the problems we are seeing today existed during the Great Recession. Back then, EDD told lawmakers these problems would be fixed, but they never were,” said David Chiu, a member of the California State Assembly.

Just in the last week of July, the EDD paid an average of $792 million a day in unemployment benefits, a 1,033% increase over average daily benefits paid at the height of the Great Recession. And that’s only going to a portion of the people who need help, as others — who have errors on their applications or need to verify their identities and wage information, as Rodriguez did — are captives on an endless hold over the phone.

As of the end of July, all of California — a state of about 40 million people — was served by just 100 EDD claims specialists who only resolve issues during a narrow window from 8 a.m. to noon, according to state lawmakers. Getting through to one of them, when 1 million other claims remain unpaid, requires not only superhuman effort but also a great deal of luck. There are an additional 1,000 or so call center agents on EDD’s main phone line for unemployment insurance, but they can do little more for callers than provide information similar to what is found on EDD’s website. Of the roughly 11 million calls EDD received each week, only 5% are answered, the agency’s director recently said.

Brian Van Der Brug / Los Angeles Times via Getty Imag

Brenda Bermudez came looking for information about her unemployment claim but found the California State Employment Development Department closed in Canoga Park, California, May 14.

“A few people slipping through the cracks is one thing, but when well over a million Californians haven’t received income for months, that suggests the entire system is broken. I don’t think our existing safety nets are adequate to help people get through this crisis, and EDD’s failures have made the situation even worse,” said Chiu.

EDD’s problems have become so severe that in early August, more than 60 state lawmakers signed a letter to Gov. Gavin Newsom demanding the agency get its act together:

Millions of our constituents have had no income for months. As Californians wait for answers from EDD, they have depleted their life savings, have gone into extreme debt, and are in deep panic as they figure out how to put food on the table and a roof over their heads. Every hour, we field countless calls from constituents reaching out to us as a last resort, after weeks of dead ends and misinformation from EDD. As legislators, we have exhausted all avenues at our disposal to get resolution for the people we serve. We’ve waited months for EDD to provide a roadmap out of this crisis, but none has been forthcoming.

Newsom later said in a press conference that he recognizes “the magnitude of the challenges with IT here in this state that are going to require a stubborn, long-term grinding of effort.” He added, “It took us decades, quite literally decades, to get into this place, but we’re now accountable.”

In a statement to BuzzFeed News, the EDD said it has been working to update its call center service “to be more customer friendly.”

The agency added, “The modernized virtual platform will help route callers to the appropriate staff for response. … The EDD is in the midst of an expedited mass hiring effort to add 5,300 staff while at the same time enhancing technology systems to gain efficiencies and developing more communication methods.”

For Rodriguez, the holdup started when the EDD sent him a letter that stated his benefit amount was $0. That’s when he started to reach out to agents from the department who told him they had trouble verifying his identity and wages. So he mailed copies of his ID and pay stubs; a tracking receipt showed they were delivered in early June. But EDD said it still did not have them. He sent them again, via fax this time, but still received no response. There was no option to email them. Weeks went by, and there was still no response. Then in July, four months into the process, he was told via a message on EDD’s online portal to speak with an agent and file a new claim, he said. He had to call about 40 times to get in touch with an agent to restart the process.

“This is money I created through my capital that my family created through their work through their labor.”

Rodriguez reached out to a number of state assembly members for help early on in April, but he was told the average time it was taking for a response was 45 days. As he waited day after day to get through to EDD, he watched his savings run down. So he packed up his apartment and left the state.

“I’m supposed to get unemployment,” he said. “That’s money that I’ve paid over my entire life, in taxes and every bit of money that I’ve given out to a business. It’s money that my parents or my siblings, aunts and uncles, across generations have been paying their entire lives. And so this isn’t a handout from the government,” Rodriguez told BuzzFeed News. “This is money I created through my capital that my family created through their work through their labor.”

While the federal government expanded unemployment benefits due to COVID-19, California’s program “is funded from UI taxes paid by employers annually on the first $7,000 of each employee’s wages,” according to EDD.

There is little relief in sight — and for the many people like Rodriguez who are waiting to receive unemployment benefits, options are quickly dwindling.

Courtesy Paulie Rodriguez

Rodriguez and his girlfriend

Unprotected From Evictions

Rodriguez and his girlfriend moved in with a roommate in February to save money; they didn’t expect to have to move again so soon. Going into four months without stable income, he felt like his options were running out. Their landlord continued to demand rent, threatening to evict them (despite the eviction moratorium) and repossess their roommate’s car, which she needed to continue working as a nanny.

“With us struggling to get by on rent and everything like that, we decided it would be better if we just fell back on family,” he said. They packed up for the second time this year and left the apartment before their landlord could start an eviction process in court.

His situation is not unique. People are losing their homes across the state and nation despite federal and local eviction bans passed to keep people housed during the coronavirus pandemic. In some cases, this is due to landlords locking renters out; in others, it’s due to intimidation tactics.

The share of California renters who amassed unpaid rent going into August, about 32%, is slightly higher than the 30% share nationally; due to high housing costs in the state, California renters tend to owe more, according to data provided to BuzzFeed News from Apartment List. Nationwide, 37% of renters told Apartment List in August they were at least somewhat concerned about eviction; 8% were extremely concerned.

The protections that have been put in place in various cities and states around the country have mostly put a halt to evictions though there have not been any significant debt forgiveness programs for renters, leaving those unable to pay their rent with debt waiting for them at the end of the pandemic.

Carroll Fife, the director of the Alliance of Californians for Community Empowerment and cofounder of the Moms 4 Housing activist group, told BuzzFeed News that these policies are mostly delaying evictions and that politicians and advocates alike are looking at a major crisis once moratoriums are lifted, especially now that the additional federal unemployment insurance of $600 a week has run out.

Fife, who is also running for city council in Oakland, said that the number of people reaching out to her to take part in a rent strike has tripled since the pandemic started, now totaling about $400,000 of withheld rent per month in Oakland alone. She has also said her members have also experienced aggressive evictions attempts, with senior citizens being intimidated, landlords removing furniture without tenants’ knowledge, and immigrant renters being threatened with calls to ICE.

“They are calling it an eviction tsunami,” said Fife about the impending problems renters will face. “[Politicians] are just twiddling their thumbs. … There’s been no significant legislation.”

On July 24, Newsom addressed the unequal impact of the pandemic in California: “When people ask, as they often do, “where are we seeing the spread?” This is where we’re seeing the spread: the essential workforce, disproportionately represented by the Latino, Latinx community.”

People of color are not only more likely to be impacted by the coronavirus health crisis, they are also more likely to be unemployed due to the resulting economic crisis. In July, the unemployment rate for Latinos in the US was 12.9%, compared to 9.2% for whites and 10.2% overall.

Just like in the Great Recession, Rodriguez and his peers fear that many of the effects of this crisis will leave lasting scars for generations. Rodriguez — the child of an immigrant, whose father was a letter carrier and union shop steward for the US Postal Service — had planned to secure his future through hard work and ambition — the American dream. But in just a few weeks, it all became ash.

He needed a silver lining, and in August it came: word that he would start a three-month, paid apprenticeship program with Pokémon Go developer Niantic next month.

“I see a lot of politicians who are worried about impending evictions and trying to extend the CARES Act benefits, and that’s all great stuff. But it’s alarming because I feel like a lot of people were getting left behind. And there’s a lot of people who have already been displaced, who’ve already been evicted,” Rodriguez said. “And so it just seems like screaming into the void right now.”

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