A large number of “Challenger Banks” have emerged taking advantage of the post Credit Crunch shake up in banking regulations. The FinTech world has been in a frenzy of activity to establish new banking applications, software platforms, “smart” payment cards and mobile banks, whilst the existing big four (Lloyds, Barclays, RBS and HSBC) have spent time grappling with creaking IT systems and a string of mis-selling scandals.

The government are looking at challenger banks to drive greater competition in Britain’s business banking marketplace. As part of its state aid settlement, Royal Bank of Scotland’s Incentivised Switching Scheme will see £700 Million of grants handed to challenger banks to help them increase their market share and promote their services to small business owners.

A string of digital business banking start-ups like Tide and Cashplus have been making their presence felt with their current account services. Analysts say entrepreneurs are opting for these new digital options as their modern IT systems mean they can open accounts speedily. Tide’s quickest account opening time is two minutes and 14 seconds, a stark contrast with Lloyds or Barclays, which can take weeks handling paperwork.

Tide says it now gets one in twelve new business current accounts opened in the UK. It has passed 35,000 customers and served £1 billion of transactions.

But a digital current account is not suited to every business as they have no way to deposit cash or cheques, which means any trader that accepts cash needs another deposit facility.

Price comparison sites show that challengers typically offer the cheapest mortgages and highest interest rates to savers. Oak North, another new bank specialises in business loans to buy-to-let property management companies and property developers and this year is on course to lend a total of £1 billion.  Again, part of its attraction is the speed with which it can make a decision on a loan.

Latest deals for Oak North include a £10 million loan to developers for a four-storey apartment building project in Hackney and a £20 million loan to Brasserie Bar, the French brasserie business inspired by Raymond Blanc, so that it can develop 24 new sites.

Tide is now available when you form a company online with a £40 cash back offer

What is Tide?

Tide is an alternative ‘bank’ account aimed at small businesses, freelancers, and independents. We usually refer to these accounts as being card-based due to the way they work, but in the case of Tide, mobile first, or app-based might be more correct.

In true challenger bank style, the Tide account is based around a smartphone app. And while other popular alternative business accounts also enjoy banking apps they aren’t necessarily as central to their proposition. You won’t find any traditional online banking, costly customer service numbers, or frustrating login procedures. The account is run and managed solely within the app. Customer service also comes via the app, though you can of course email too if needed.

Payments to and from the account can be made immediately, but direct debits can take a few days to setup. Unlike some other card-based accounts, there are no split pools. The money in your account, is in your account. There’s no need to split funds between the account and the card, they are one and the same.

How much does it cost?

Here’s the real boon. The Tide account costs just 20p per transaction. That’s it. Well almost it. There’s a £1 ATM fee, but that’s all.  No monthly cover charges, no hidden fees, just 20p per transaction, and not even on all transactions. If you can receive payments via BACS rather than Faster Payments, then there’s no fee at all.

What can you do?	What can’t you do?
Cost effective	No international payment
Instant sign-up	Totally app based, not so good for those not skilled with technology
No credit checks	No cash payments
No foreign exchanges fees, commission or loading	Cannot accept cheques
App-based	No account access if you lose your phone
Integration with Accounting app Xero is available right out of the box	Faster payments seem slow to show up in the account
Use the account to make and receive electronic payments, to setup direct debits, and standing orders, make card payments and transfer money	No integration with Freeagent
Send and manage invoices directly from the app
Use the card abroad at point of sale, or online, without incurring any foreign exchange fees

 

How will EPC April changes affect the Property market?

From April 2018 there were some important changes made to the minimum EPC rating requirements for rental properties in the UK. Any property rented out in the private rented sector must have a minimum energy performance rating of E on an Energy Performance Certificate (EPC).

This new rating will be based on C02 emissions for commercial and residential properties. This is the EPC graph displayed on the first page of the commercial energy efficiency certificate.

Landlords are required to commission an assessment of their rental property every 10 years, if it continues to be rented out beyond the 10-year mark. A civil penalty will be imposed for breaches.

For most landlords this will mean that they will no longer be able to rent out a property with a rating of F or G after April 1^st 2018.

Who is affected?

Both residential and commercial property in the Private Rental Sector (PRS) will be affected by these EPC changes. Thus, whether a landlord is letting out a commercial property or an apartment to a tenant, it could be unlawful to do so if the property does not meet the new MEES (Minimum Energy Efficiency Standards)

What is MEES?

MEES (Minimum Energy Efficiency Standards) standards were introduced not only to ensure that tenants live or work in an energy efficient building, but also to move few steps closer to UK’s targets of reducing C02 emissions for all buildings. In order to grant new tenancies or leases on residential or commercial properties with an energy performance certificate (EPC) rating below E, will be unlawful, unless the property is registered as an exemption. A failure to meet this will result in the fine up to £5,000.

How to improve your property energy rating?

In order for homeowners to improve their EPC rating above E they should:

• Make sure any cavity walls are filled with insulation materials, such as foam or beads
• Replace an old boiler for a newer, more efficient model
• Ensure the loft insulation is at least 270mm deep to keep the heat inside the property

What will happen if energy rating is below E?

Local authorities will be responsible for ensuring that properties have a minimum energy rating of E. If they conclude that the property performs below this standard, they may issue a fine and stop the Landlord from renting the property.

Exemptions to the legislation change are:

• The improvement works will devalue the property by 5% or more
• The landlord cannot get consent to carry out the works either from the tenant, mortgage lender or superior landlord
• If the landlord cannot afford to carry out any improvement works
• If the relevant improvement works have been carried out but the energy rating remains under a rating of E