PROPTECH-X ‘Proptech & Property News’ Weekly Roundup: The rising threat of money laundering | National Association of Property Buyers | Canopy launches CanopyGrow

A roundup of the week’s top proptech and property news in association with Estate Agent Networking.

NAPB: “Nothing announced today will help first-time buyers get a foot on the ladder.” 

Commenting on today’s Autumn statement, Jonathan Rolande, spokesman for the National Association of Property Buyers, said today: 

“There was a disappointing lack of focus on the housing market in the statement today. By blanking the housing crisis the Government has, once again, looked away from what is fast becoming one of the biggest socio-economic crises of our times.

“For many, the prospect of owning a home is a pipe dream, and it feels as realistic today as winning the Lottery. Nothing announced today will help first time buyers get a foot on the ladder. And I doubt it will encourage older property owners into downsizing which would help many looking to move.

“Mr Sunak, just 12 months ago, vowed to turn Generation Rent into Generation Buy. Yes, there have been changes in circumstances since then, but we seem further away now than ever from making this a reality. 

“It’s short-sighted that neither Mr Hunt nor Mr Sunak realise that solving our housing crisis isn’t just the way to stimulate growth and prosperity. It could also help ensure they keep hold of the keys to Downing Street.”

On the measures announced Mr Rolande added: “Jeremy Hunt hasn’t delivered any early Christmas presents for home-owners, or for those working in the property sector.  The fact that energy bills are predicted to rise will be of particular concern to many. So to will be the fact the Government is yet to offer reassurances as to what support they will offer in the longer term in this area to bill-payers. 

“A lot of focus will be on the decision to “sunset” Stamp Duty. This was portrayed as being an assistance to the property market and the people employed within it. But it is a potential blow, albeit one that will impact the sector further down the line. 

“The market has so much to get through by then, that the effect of the loss could be insignificant. The decision to cut Capital Gains allowances is a good move, and taxing unearned income is the least painful way to generate money for the treasury.

“The decision to reduce the amount Housing Associations will be able to increase rent by will be popular, and it may lead to pressure on the private sector to follow suit with rent control, although I suspect this would be some time away.  One chink of light is that if the money markets respond well, we could see some of the pain of tax rises offset by cheaper mortgages as the pressure on longer terms loans eases. 

“Mr Hunt hasn’t rolled out any punitive measures that could worsen future prospects. And most importantly we haven’t seen a set of measures which risk causing the chaos of the botched mini Budget which caused so much damage to the property sector. This is damage we are still reeling from.”

Canopy launches renter credit score subscription service

PRESS RELEASE: Canopy has launched CanopyGrow, a subscription service designed specifically to help renters grow their credit score.

71% of renters in the UK are building towards homeownership with 25% of aspiring homeowners having been rejected for a mortgage due to poor credit history. According to industry research, the difference between a ‘good’ and ‘excellent’ score can be £45,672 on the average mortgage.

The CanopyGrow subscription service, which costs £7.99 per month, includes:

  • Rent Tracking – allowing renters to make their biggest expense count by reporting their monthly rental payments to all three of the UKs Credit Reference Agencies (Equifax, Experian and TransUnion), proving they pay on time, in full every single month
  • Clever Credit – turns subscription payments into a risk-free credit agreement that is reported to the bureaus to show regular payments are being met. This in turn will help to boost a renter’s credit score as repayment of credit forms a major part of a credit file
  • Credit Profile – renters will be able to view detailed insights on what is holding them back, what they are doing well and what needs improving. It will also give access to personalised advice on actions to take that will improve a credit score powered by Equifax.

The CanopyGrow subscription service helps identify ways to uncover and provide information of good money habits to Credit Reference Agencies which could improve an individual’s credit score within hours, rather than months – all of which is built into the CanopyGrow credit builder subscription.

Chris Hutchinson, CEO of Canopy, said: “It is astonishing that renters spend so much of their monthly income on rent, yet that is virtually invisible when a credit score is created. It’s just not right.

“A core part of our mission at Canopy has always been simple: to support renters in building their financial health. And our innovative new subscription, CanopyGrow, not only helps renters build their credit score, but it helps them to do it fast. One of the innovations that is being worked into CanopyGrow helps nearly two third (63%) of renters improve their score immediately by an average of 24 points. There is a common misconception that a credit score takes years to build, this is simply not true anymore.

“We have identified ways to uncover and provide additional information to credit reference agencies that allow people to prove that they are trustworthy borrowers who deserve a higher score. Via the Rent Tracking, Clever Credit and Credit Profile services within Canopy Grow, we are boosting scores from day one and actively nudging people to do more to grow their credit score, while providing details of things that could impact their score.

“Our ethos has always been to innovate for renters, but through our work we are also bringing benefit more widely to the housing market, whether that be for landlords or letting agents too. Rewarding a renters’ positive behaviours means they are more likely to be great tenants, so everyone benefits from CanopyGrow.”

Mark Bratley, sales director at Equifax, added: “Now more than ever, renters in the UK are feeling the effects of the cost of living crisis. Canopy has smartly identified a way for tenants to take positive steps in improving their credit scores and their financial wellbeing as a result, something that Equifax shares a strong focus on. Through the key pillars of Canopy’s new subscription CanopyGrow, tenants can see the improvements that such positive behavioural changes can make to their credit scores and in turn, potentially save in interest payments when applying for credit in the future.”

43% of property professionals ignore rising threat of money laundering fines

  • Over a third (36%) haven’t reviewed the sanction list in the last month
  • Training staff on the latest regulations identified as weakest part of anti-money laundering process

PRESS RELEASE: Almost half (43%) of property professionals are not improving their anti-money laundering (AML) processes because they either don’t care or don’t think they will get fined. That’s according to a survey from anti-money laundering tech scaleup, First AML, which surveyed 250 real estate professionals across the UK.

Britain has been named a ‘global hub for money laundering’ with new figures revealing that property worth £1.5billion has been bought by Russians with Kremlin links or facing corruption allegations. Despite this, First AML’s survey revealed that over a third (36%) of real estate professionals haven’t reviewed the sanction list in the last month.

Worryingly, the research found that nearly half (48%) have identified an instance of suspected money laundering in the past three years. Alongside this, 59% of respondents are not completely confident in their AML procedures.

Despite the growing threat, 42% of respondents said they are considering cutting their compliance budget in light of the expected recession. However, this is unsurprising when maximising profitability was ranked as the highest business priority, while protecting their reputation was identified as the lowest priority.

Simon Luke, UK Country Manager at First AML, commented: “Property professionals need to be more vigilant when it comes to their anti-money laundering processes. Turning a blind eye because they believe the severity of fines is small or inconsequential is a very dangerous mindset. It’s time for the real estate sector to ensure they have a robust process in place in order to prevent dirty money from passing through their systems.”

When asked what they believed was the weakest part of their AML process, the majority of property professionals surveyed said training staff on the latest regulations (29%). This was closely followed by document collection for individuals and companies (24%) and getting staff to actually follow procedures (23%).

To become more compliant, 78% are implementing technology. Alongside this, 60% are looking to increase budgets for emerging tech and implement AML software in 2023 to avoid AML non-compliance fines.

“The sector needs to reassess its priorities. And that means implementing innovative technology solutions that can not only reduce costs and the administrative burden of compliance, but also ensure businesses are doing the right thing,” Simon continued.

On a positive note, 82% of real estate professionals say money laundering has become a greater focus in 2022, with the majority saying this is because of an increased focus on customer transparency and ethical customer onboarding (60%).

The Proptech-X Weekly Roundup in association with Estate Agent Networking.

Andrew Stanton is the founder and CEO of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder and editor of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.

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