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In the news Rise in young borrowers using data sharing like Open Banking Credit Kudos has released

Decline of cash fuelled by the pandemic

Stamp duty holiday comes to an end The stamp duty holiday introduced by the Chancellor of the Exchequer was welcomed with open arms when the pandemic hit, and successfully kept the property market afloat over the past year and a half. The tax break led to a rise in house prices - supposedly of around £20,000 on average - and prices have further soared in the past couple of months as many rushed to make the most of the holiday. The Rightmove property index, for example, showed a huge asking price increase of 1.8% from April to May this year. Now, with the tax break coming to an end, the growth is expected to slow, which is good news for First Time Buyers who will still benefit from no stamp duty on properties under £300k. The increased amount of low LTV mort- gages is also a plus, as 95% mortgages make a return to the market en mass, supported by the Government's mort- gage guarantee scheme. The scheme was another initiative brought in by Rishi Sunak to encourage mortgage lenders to re-launch their low-deposit mortgages, and has been successful in rebuilding providers' confidence in the industry, with the assurance that a large portion of any net losses will be covered by the Government.

As a result of the pandemic, many bor- rowers have a less than perfect credit file, but due to circumstances out of their control. Lenders without a clear enough picture of their credit file, then, are simply rejecting applications for people who could in fact be good loan

candidates. By using Open Banking, lenders can paint a better affordability profile for these people, seeing exactly what they earn and spend, thus making them more likely to lend to those who can afford to repay even if they've had a rocky year.

interesting survey results that show people aged under 35 are 21% more likely to securely share their bank transaction data if it will help them be accepted for credit, compared to April 2020. The research showed that 18% of adults aged 18 to 34 have been turned down for credit during the pandemic, with over half of these believing it was due to a lack of information on their credit report. As a result, many of these people are now more open to using data sharing, such as Open Banking, if it increases their likelihood of being accepted for a loan.

or those without internet access, will be most affected, especially as the number of free-to-use ATMs contin- ues to decline. In an effort to safeguard access to cash, Chancellor Rishi Sunak prom- ised to instigate new laws to protect access to cash in his Spring 2020 budget, but these new figures suggest things haven't been going to plan. In this most recent quarter, the Govern- ment took this one step further and made an amendment to the Financial Services Bill to allow consumers to request cash back without having to make a purchase in stores. Whether this is enough to prevent the collapse of the cash system in the UK is unknown, as digital payment methods continue to offer many advantages, and initiatives such as Open Banking create a clearer digital landscape of a person's finances.

Recent figures from Worldpay show that cash payments fell from 27% of in-store transactions in 2019 to just 13% last year. The processing company predicted usage to continue to drop over the next three years, with an estimated 7% of purchases expected to be made by cash in 2024. Consumers were already moving towards cashless payments prior to the pandemic, but this was vastly accelerated when many vendors encouraged buyers to use contact- less in an effort to reduce the risk of spreading Covid-19 through cash and chip & pin. Whilst many people have embraced the change, the shift away from cash could result in those people that rely on the payment method being left in the lurch. Vulnerable members of society,

Lockdown extension leads to changes in the financial sector This month brought the news that the current lockdown measures in the UK will continue as they are until at least July 19 th , rather than being east com- pletely on June 21 st as expected. Whilst the news was frustrating for many, it was understandable, as the Delta variant continues to pose a threat, and a large number of young people are not yet vaccinated. no business rates, but from next month this will change to a 67% discount (with a £2m cap) until the end of the financial year. Without an adjustment to match the extended restrictions, and a delayed boom in business, hospitality and enter- tainment companies may face tough decisions in the coming months.

again face hardships. It's not all doom and gloom however; one of the biggest concerns of an extension of the restrictions was for weddings and funerals, but the Govern- ment have made an exception for these events, with capacity limits removed. The previous limits of 30 people will be removed on 21 st June, meaning that these events can go ahead with unlim- ited numbers, provided that social dis- tancing measures remain in place. This means that any spending - or borrow- ing - tied to having a larger wedding will still go ahead, as couples who had their weddings postponed during the pan- demic can finally tie the knot. Whilst this is good news for newly- weds-to-be, the hospitality and enter- tainment industry faces another blow as their hopes for maxed out venues get shattered. Currently these firms can pay

All of this will likely lead to an increase in borrowing, both as pent-up spend- ing - on weddings and holidays - is unleashed, and as the hospitality indus- try faces difficulty, with more jobs on the line. What will come next, then, depends on how quickly these sectors are able to bounce-back when lockdown restric- tion eventually do ease completely, and whether this predicted increased spend- ing will reboot the economy enough to prevent a recession.

But what does this extension mean for the economy and the financial sector? Despite the extension, the end of financial support measures will not be adjusted accordingly, with Furlough support currently available to subsidise wages at 80%, and moving to 70% in July, with a 10% employer contribution needed. The full scheme is likely to end completely in September, meaning job uncertainty will be back on the agenda and people in restricted industries once

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