Monthly Archives: April 2017

Weekly Round-up, 28th April 2017

On-line Rise

Close up of credit cards

Internet spending has jumped by more than a quarter in the last two years, a new report analysing how the UK uses payment cards online has revealed. Card spending on the internet totalled £154 billion in the UK in 2016, averaging £422 million a day, figures from The UK Cards Association show. This is a rise of 28 per cent since 2014, when online spending amounted to £120 billion.

Analysis found that one in four card purchases online is on entertainment, with consumers buying cinema and concert tickets, takeaway orders and digital content. The UK now spends online more per household than any other country, at US$5,900 in 2015. This is higher than Norway (US$5,400), the USA (US$4,500) and Australia (US$4,000).

The report also looked at internet spending patterns on debit and credit cards in the UK and found that a quarter (26 per cent) of all card spending was online last year, up from 22 per cent in 2014 with 1.8 billion purchases in 2016, an average of 150 million a month. This is an increase of 38 per cent from 1.3 billion in 2014. Entertainment sales make up the highest proportion of all online purchases (26 per cent); although these only account for 7 per cent of the total value, reflecting the relatively low cost of digital entertainment such as apps and music downloads while 41 per cent of in-store card purchases are on food and drink, the sector only makes up 7 per cent of online transactions. More than a quarter (27 per cent) of all online spending by value is on financial services, the highest share of any sector.

It’s a Sale

Cardboard Houses on Coins

According to the latest figures from HM Revenue and Customs for properties whose value is over £40,000, the provisional seasonally adjusted UK property transaction count for March 2017 was 102,810 residential and 10,390 non-residential transactions.

The seasonally adjusted estimate of the number of residential property transactions increased by 0.5% between February 2017 and March 2017 with this month’s seasonally adjusted figure is 40.9% lower compared with the same month last year.

The large year-on-year drop is due to the unusually high transaction count in March 2016 followed by the substantial reduction in April associated with the introduction of the higher rates on additional properties in April 2016. Non-tax factors may have caused changes in the property market as well, for example the Bank of England’s plans to curb Buy-to-Let mortgages could have resulted in a rush to purchase before April 2016, and the EU Referendum affecting transactions in the following months.

For March 2017 the number of non-adjusted residential transactions was about 20.9% higher compared with February 2017. No direct comparison should be made between March 2016 and March 2017 due to the large peak in March 2016. However, 9% of the annual transactions for 2016-17 were received in March 2017 which is in line with years prior to 2015-16.

In The Know

Medical care icons

Every year protection providers publish claims data to explain the number of claims they have paid out to customers. However, a view from Aegon’s customer and consumer panel has revealed that four out of five (83%) people who purchased protection policies were unaware that providers publish this information.

In addition to this, 81% of people believed that the UK protection industry pays out less than 90% of life protection claims each year. In fact, 52% of people thought this figure was less than 70%. While 92% of consumers thought the industry pays out less than 90% of critical illness protection claims each year, with the majority (58%) of people believing this figure was less than 70%. More than half (52%) of respondents were surprised to find that protection providers in the UK paid 97% of all protection claims in 2015.

Respondents had a good grasp of the most common reasons claims aren’t paid, with not meeting the illness definition, providing inaccurate information on applications and claiming for something that’s not included in the policy listed in the top three.

Slow Growth

House sold sign

According to the latest analysis by Nationwide Building Society, house prices recorded their second consecutive monthly fall in April, while the annual rate of growth slowed to 2.6%, the weakest since June 2013. The Lender expressed surprise that there is a softening in house price growth with key metrics such as the unemployment rate being near to a 40- year low, confidence is still relatively high and mortgage rates have fallen to new all-time lows in recent months.

Nationwide observed that while monthly figures can be volatile, the recent softening in price growth may be a further indication that households are starting to react to the emerging squeeze on real incomes or to affordability pressures in key parts of the country. Various data suggest that the latest slowdown in house prices may be part of a broader trend with retail sales growth slowing markedly in recent months, from a 14-year high of 7.3% in October, to 3.7% in February and 1.7% in March.

The Lender suggested that household budgets may be coming under pressure, as wage growth has moderated and inflation has accelerated. The household saving ratio, which measures how much income goes unspent each quarter, fell to an all-time low of 3.3% in Q4 on data extending back to 1963. The data also suggests there may also be more fundamental reasons for the slowdown. House price growth has been outstripping earnings growth for a sustained period of time, steadily eroding affordability on a number of metrics. For example, according to Nationwide, the typical house price is currently 6.1 times average earnings, well above the long run average of 4.3 times earnings, and close to the all-time high of 6.4 times recorded in 2007. Moreover, even though mortgage interest rates have touched new lows in recent months, the cost of servicing a typical mortgage is only just in line with long run average, and above long run averages in London and parts of the South of England.

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Weekly Round-up, 23rd April 2017

Neutral Gear

House and Calculator_300x200px

The Council of Mortgage Lenders (CML) estimates that gross mortgage lending reached £21.4 billion in March. This is 19% higher than February’s lending total of £17.9 billion, and 19% lower than the £26.3 billion lent in March last year. The sharp fall in year-on-year lending was expected, as March last year saw significant rises in activity as borrowers rushed to beat the second property stamp duty deadline that came into effect from the beginning of April.

Gross mortgage lending for the first quarter of 2017 was therefore an estimated £59.1 billion. This is a 4% decrease on the fourth quarter of last year and a 6% decrease on the £63.0 billion lent in the first quarter of 2016. The CML feel that mortgage lending appears to be in neutral gear with the gross estimate for March at £21.4 billion being broadly in line with average monthly lending over the past year. Within this aggregate level, the CML has highlighted that there has been a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords.

The CML expect this profile to continue over the short-term, as low mortgage rates encourage existing borrowers to remortgage and government schemes help first-time buyers.

On a Mission

The Financial Conduct Authority (FCA) has published its mission statement this week. The documents the regulator has released represent a big step forward in explaining how the FCA see their role and in our transparency. They explain how and why the FCA regulates financial conduct in the UK and what they want their regulation to achieve. The mission statement highlights a view of the issues and challenges in the sectors the FCA regulates, their plan and priorities for the period ahead and the budget they need to deliver on the promises made.

The FCA’s mission is to serve the public interest, and to add public value through a valuable contribution to society. This sounds obvious to many but the lesson of history is that the financial services industry can’t take it for granted. The FCA remains a young institution and has plenty of work to do to give their mission the impact the regulator feels is necessary in today’s modern world.

The FCA operates on a big landscape – 56,000 firms under their regulation is one indicator. Parliament has given them the overall objective to ensure that the markets they regulate function well. To advance this strategic objective they have three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.

The Mission sets out a framework which underpins a decision-making process, including decisions on how the FCA prioritise within and across the different sectors they regulate; how they respond to specific issues within markets or firms; and decisions on how their individual functions, such as policy, competition, authorisation, supervision and enforcement, operate.

Dog Day

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Pet insurers paid out a record £706 million in pet insurance claims in 2016 – the equivalent of £1.8 million every day – to help the UK’s pet owners cope with the unexpected costs of owning their pet, such as vet’s bills, according to figures published during National Pet Month by the Association of British Insurers (ABI).

The increase in claims and costs reflects the ever increasing range of veterinary treatments now available, as well as increasing vet bills. For example, £366 to treat a cat with lethargy and £3,400 to treat an English springer spaniel who swallowed a grass seed. However, despite rising claims, the vast majority of pet owners are not insuring their pets. The average claim was £757- up from £721 in 2015 – a 5% increase.

Pet insurers dealt with 708,000 claims for dogs, paying out £544m, up 9% from 2015 where insurers paid out £501m. For cats, 193,000 claims were handled, worth £112 million – a rise of 7% from 2015, in which insurers paid out £105m. Owners of dogs are nearly twice as likely to insure their pet than owners of cats: 30% of the 8.5 million dog owners and just 16% of the 7.5 million cat owners are thought to have pet insurance.

Big Footprints

Underhand tactics by the personal loans industry are costing consumers as much as £400 million every year according to TSB Bank. Its research reveals the underhand tactics which could be costing people in the UK as much as £400 million each year.

Consumers are being punished for shopping around – with providers making a hard mark on their credit file just for asking for a loan price or quote. Many providers hide important product features from consumers – which could save, or cost them money and customers can feel trapped with their loan provider – because they are prevented from switching to get a better deal.

Nearly one in 10 people in the UK are thought to have a personal loan and these underhand tactics are costing them as much as £400 million each year. TSB’s investigation reveals that nearly two-thirds (61%) of providers perform unnecessary hard credit checks when a consumer looking for a personal loan just asks for a price or rate. Almost 80% of people say personal loan fees and charges should be clearer and nearly seven in 10 (69%) people want switching their loan to get a better deal to be made simple and straightforward.

In its recently published report, Consumers Matter, TSB has identified three simple changes that will go a long way to making the loans market work for consumers: to start with consumers must be able to shop around for a good deal – with loans providers never making a hard mark on a consumer’s credit file until they choose to actually purchase. Secondly providers must come clean on hidden product features upfront and be clear on how the loan works – to enable customers to find the right loan for their needs. And finally the industry must stop locking in customers and create a new switching service – to free customers who feel trapped with their current provider.

Fishing For Votes

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The General Election has started in earnest with a crowdfunding project for a potential candidate known as Mr Fish Finger to take on Tim Farron in June’s General Election reaching its financial target.

The political outsider vowed to conduct any related business in their campaign to become MP for Westmorland and Lonsdale dressed as a fish finger if they reached funds of at least £500 – and a total of £665 has been raised so far.

On the crowdfunding page, it says: “Let’s make Fish Finger vs. Tim Farron for MP for Westmorland and Lonsdale in June’s General Election a reality. #VoteFishFinger”. The crowdfunding page comes after a poll on Twitter reportedly found that people would trust a fish finger to run the country ahead of Farron. In the description of the crowdfunding project, it says: “This seat has been held since 2005 by Tim Farron, who lost to a fish finger – by a margin of around 99% – in a poll of over 1,000 people, when asked ‘Who would you trust to lead you more?’”

Compliance update: Buy to Let Mortgages – Record Keeping Requirements

As we enter the bank holiday weekend I am into the final stages of preparation for running the London Marathon. Since embarking on my first training run back on 27th December I have completed a total of 401 miles and have just 30 more to do before the big event on 23rd April. It has been a huge undertaking. Over 50 hours on my feet in all kinds of weather – mainly cold and dark – but I am running for a great cause and the support I have had (£750+ in donations at the time of writing) has been fantastic. The thought of that and some serious carb loading over the next week is spurring me on. If you could spare a few pounds for the Heads Together charity then I (and they) would be really grateful. Please visit my giving page: http://uk.virginmoneygiving.com/GavinEarnshaw

Heads Together aims to change the national conversation on mental health and wellbeing, and is a partnership with inspiring charities with decades of experience in tackling stigma, raising awareness, and providing vital help for people with mental health challenges. Mental health is an important issue of our time. We all suffer moments of self-doubt, stress or general sadness. This can sometimes run into a couple of days. But when days lead to weeks and weeks to months then this is a serious problem. One of the best ways to alleviate the problem is to talk about it. Through awareness and education they believe they can finally, one day soon, end the stigma. Please help if you can, in any way you can. Talk to a colleague, a friend a partner if you are feeling low. If you are able to, please donate.

Buy to Let Mortgages – Record Keeping Requirements

With the recent changes to lender assessments on Buy to Let mortgage it’s a good time for a reminder of the network’s requirements when it comes to income proof.

HLP record keeping expectations often mean that we ask for more than a specific lender may need as part of the application process. We understand this can seem to be confusing or unnecessary but I can assure you that we do this to help keep you safe and help in the event of subsequent file reviews by lenders. Many lender’s will do retrospective checks on cases and often ask for a copy of ‘evidence of income’ at a later stage.

It’s therefore very important that you take care to read the lenders criteria before submitting the application; BM Solutions, for example, require rental profit to be evidenced by SA302’s – even for employed applicants! Although they may not require it at application they reserve the right to view it later on, and as the biggest mortgage lender in the UK, it’s vital that you are following their guidelines.

Replacement Policies

The protection gap in the UK is believed to be as high as £2.6 trillion and our partners do a fantastic job in trying to get this down. As a network we are consistently making changes to our procedures to make sure you are able to do this in a compliant way and this is why we decided to remove the Discontinued Plan Form and to integrate this into the suitability letter, produced through HLP CRM. This has raised some concerns with the information that is being gathered on the existing policy to enable you to make the recommendation to cancel the policy. With the size of possible complaints from protection cases it’s imperative that you take all reasonable steps to review the clients existing policy and document not only the pros of cancelling it but also the cons. There will be times when, despite impassioned requests, the client won’t or can’t give you the details. In these situations you should take care to document this and to make clear that you have made your recommendation in the absence of the full details. When reviewing files we do take a wider look at how often this might happen. The best approach is to try and obtain the policy certificate in every case and upload to the record. If the client cannot provide this a good description of what they have will help. If all else fails then your advice will be impaired, but remain relevant, but you must make it clear on the file and through the suitability letter that you requested the policy details and that the customer was unable to provide them to you, for your own protection.

Weekly Round-up, 13th April 2017

Taking Stock

Cardboard Houses on CoinsAccording to the Royal Chartered Institute for Surveyors (RICS), new buyer enquiries in the UK were reported to be flat for a third successive month in March, and although the picture remains mixed across the UK, the areas with declining buyer interest outweigh those with increasing demand. The strongest growth in new buyer enquiries was seen in Northern Ireland and the South West (+34 and +22 net balances respectively); and, on a bright note for London, buyer interest has been increasing modestly over the last four months (+9 net balance in March).

New instructions to sell fell noticeably with 13% more respondents to their survey seeing a fall in fresh listing rather than a rise over the month. Stock on estate agents books has consequently dipped to a new record low with branches (on average) now holding only 43 unsold properties. Consequently, there has been an impact on sales activity with transaction volumes failing to rise across the UK in each of the last four surveys. In March, 3% more respondents saw a fall in agreed sales rather than a rise; that said, sales did rise relatively firmly in Wales, Scotland and Northern Ireland. Going forward, the national near-term sales outlook also appears somewhat subdued (+16% to +12% in March).

RICS suggest that the lack of supply in the market continues to underpin prices, with 22% more respondents seeing a rise over the last month across the UK, however, the difference between central London and the rest of the UK continues to widen. If figures from the capital are excluded from the headline figure, price growth in the UK has accelerated since December and price rises in the North West are particularly strong.

In the lettings market, RICS has highlighted that tenant demand continued to rise as 11% more respondents to their survey noted an increase (rather than a fall) on a non-seasonally adjusted basis. Even so, demand growth remains more modest than in March 2016. New landlord instructions also remain in negative territory for a sixth straight month, and the imbalance between supply and demand continues to drive rents upwards. Contributors anticipate further growth in rents in virtually all areas over the next twelve months with the exception of the capital, where rents are anticipated to continue to decline over the near term.

Million Pound Sky High

Man being given the keys to a houseThe number of million pound apartment sales in England & Wales has grown nearly threefold (196%) since 2006, from 1,002 to 2,967 in 2016, according to the latest research by Lloyds Private Banking. The rate of growth in transactions for apartments has far outpaced other prime market property types with sales of million pound terraces rising by 165%, followed by semi-detached properties (154%) and detached (88%) in the past decade.

Apartments represented 22% of all million pound property sales in England & Wales in 2016 compared with 17% in 2006. Apartments accounted for 26% of the increase of all million pound property sales between 2006 and 2016 in England & Wales.

Unsurprisingly, the overwhelming majority of million pound plus apartments are in London with 96% of sales in the capital. The number of apartment sales in the capital has increased nearly threefold (193%) from 973 in 2006 to 2,853 in 2016, representing 35% of all million pound property sales in Greater London in 2016.

The South East had the highest percentage increase of apartment sales in the past decade with a nearly fivefold (389%) rise from 9 sales in 2006 to 44 in 2016, followed by the East of England (283%) and South West (150%). These large percentage increases, however, were from very low bases with these three regions combined accounting for only 3% of total apartment transactions above £1 million in 2016. The only other regions to record sales of million pound apartments in 2016 were the North East and North West, both with just one sale.

High On Purchase

Statistics released by the Council of Mortgage Lenders indicate that there were more loans advanced for house purchase in the February month than any February since 2007, although due to the seasonal dip in activity, borrowing was relatively low compared to monthly activity the past twelve months. The proportion of household income used to service capital and interest rates continued to be near historic lows this month for both first-time buyers and home movers at 17.4% and 17.6% respectively.

Affordability metrics for first-time buyers saw the typical loan size decrease slightly from £132,300 in January to £132,100 in February. The average household income also decreased to £40,000 from £40,200. This meant the income multiple went from 3.53 to 3.54. The average amount borrowed by home movers in the UK increased to £176,000 from £175,300 the previous month, while the average home mover household income increased slightly month-on-month from £54,900 to £55,000. The income multiple for the average home mover was unchanged at 3.34.

Buy-to-let activity was driven by buy-to-let remortgage lending which accounted for over two thirds of total lending. The number of loans for buy-to-let house purchase advanced in February was at a ten month low in part due to the traditional seasonal dip in activity in the winter months.

Still Dependent

More than half of first time buyers are dependent on family money to raise the deposit on a home of their own, new research from Nationwide Mortgages has revealed.

Almost a third (31%) said that they would be calling on the Bank of Mum and Dad, while eight per cent were reliant on other relatives such as grandparents, according to the research, which asked would-be and recent first time buyers about their home buying plans. Another 15 per cent said that funds from an inheritance would be used for a deposit on a property. There are also potentially damaging misconceptions about what can be used as a home deposit. While two thirds (63%) said they were active savers into savings accounts, with a quarter (26%) specifically identifying the Help to Buy ISA as their savings vehicle of choice, a significant proportion thought they could use a personal loan (10%) or credit cards (5%) to fund a deposit. This is despite the fact that unsecured borrowing for this purpose could potentially damage their chances of securing a mortgage.

Those questioned were, however, prepared to make sacrifices to achieve the home buying dream. When asked what they would give up in order to buy a home, more than half said they would give up nights out (55%) and restaurant meals (51%), although they were least likely to give up extra TV services and entertainment (28%).
However, seven per cent said they’d even consider giving up a partner or spouse if it meant they could get a foot on the housing ladder. This rose to 11 per cent of the 45-54 age group who would forego a relationship if it meant they could buy a home.

Raising a deposit clearly represents the biggest hurdle for first time buyers. Those surveyed identified their biggest home-buying challenge as being able to pull together enough for a deposit on a home (30%), with the price of the house (21%) and cost of the mortgage (14%) some way behind.

Knot What You Want To Hear

Engineering researchers say they have solved the riddle of why shoelaces come undone.

After a detailed study, they discovered that two forces act like invisible fingers, first loosening the knot and then tugging until laces are left trailing on the ground. They used a slow motion camera filming a person running on a treadmill to figure out how the failure of the knot occurs in seconds after it is triggered by an interaction of complex forces.

It was found that the running foot exerts a force seven times greater when landing on the ground than the one exerted while standing, forcing the knot tying the laces to stretch and relax, loosening it slightly. At the same time, as the knot loosens, the swinging of the laces that occurs as the leg moves forwards and backwards causes an inertial force to be applied on the free ends of the laces, pulling the already-loosened knot apart. The researchers say the finding could have knock-on uses when applied to other intertwined structures, like DNA.

Adding weights to the loose ends of a swinging laces showed that they untied themselves more often, as the inertial forces on their ends were greater. The study also found that, while some laces might be better than others for tying knots, they all suffered from the same fundamental cause of knot failure.

Weekly Round-up, 7th April 2017

Coupon Cutting

Social media icons on a laptopThe latest Lloyds Bank UK Consumer Digital Index shows the benefits of being digitally savvy, with people saving hundreds of pounds a year by using online discounts, cashback and vouchers.

The 2016 Index showed that people could save an average of £744 per year by being online. The 2017 Index now focuses on how people can benefit from cashback and discount sites to save money. Half of those that are online use discount, cashback and voucher websites, but it is the younger generations seeing the most benefit. Those aged 30-39 lead the way, with just under three in five (59%) using these sites to save money. The research suggests digitally capable people have a greater ability to deal with a change in financial circumstances, save money, and make money go further. Around 85% of the UK population is highly digitally capable, equating to around 42 million people. On average, they save nearly twice as often each year, save more than twice as much, and check their balance more than twice as often.

Beyond voucher sites, people continue to make savings when buying products or services online. Nearly two-thirds (62%) save money on holidays and over half save on insurance (57%) and clothes (54%). Holidays are the most popular saving and interestingly, the Index shows that this is regardless of income. For example, over half (53%) of those with a household income of less than £20,000 a year are saving money on holidays.

There are some unsurprising trends in certain categories. For example, more young people (66%) save on clothing whereas more of those between the age of 30 and 49 save money on insurance (62%). With 9% of the UK not yet adopting digital, the clear benefits of being online are not being realised by all. Despite the significant savings that can be made, 68% of those that are ‘offline’ say nothing will tempt them to go online.

Feeling The Effects

Cardboard Houses on CoinsFrom this week buy-to-let landlords will begin to feel the direct effects of the next tightening of taxation of the sector. Tax relief on landlords’ mortgage costs will now be restricted to the basic rate of income tax. And, over the next three years, the proportion of their borrowing costs that landlords can offset against tax will taper down to zero.

On top of this, landlords are affected by new rules restricting other deductible expenses that they incur from renting property, including reforms limiting tax relief for wear and tear in fully furnished properties. A new raft of restrictions limiting what landlords can offset against tax follows the introduction of higher rates of stamp duty on property purchases by landlords. Since April last year, anyone buying a second home has had to pay 3% on top of the normal rate of stamp duty applying to the property. So, each investment by a landlord will have a stamp duty bill of at least 3% and as much as 15% of the purchase price, depending on its cost.

The increasing tax burden on landlords coincides with a tightening of regulatory requirements on the buy-to-let sector. This requires Lenders to consider likely future interest rates over a five-year period (unless the loan rate is fixed or capped for five years or more). More specifically lenders have to stress test their lending against an expectation of an increase in buy-to-let mortgage rates of at least two percentage points; and assume a minimum rate of 5.5% even if the stress test of a two-percentage point increase would actually produce a lower rate than that.

In a further tightening of regulatory requirements, firms will, from the end of September this year, also have to apply special underwriting rules to landlords with a portfolio of four or more mortgaged. The regulator is suggesting that lending to these landlords is inherently more complex because of the potential problems associated with higher debt totals, more complex cash flows, multiple tenancies and risks of property or geographical concentration.

Slowly Does It

House sold signAccording to Nationwide’s Chief Economist Robert Gardner, the annual rate of house price growth slowed in March to 3.5%, from 4.5% in February. House prices fell by 0.3% in the month, after taking account of seasonal effects.

The research shows that there was a mixed picture across the UK in Q1. Six regions saw the pace of house price growth accelerate, six saw a deceleration and one (East Midlands) recorded the same rate as the previous quarter. Interestingly, the spread in the annual rate of change between the weakest and strongest performing regions was at its narrowest since 1978 at 6.8 percentage points – the second smallest gap on record.

The South of England continued to see slightly stronger price growth than the North of England, but there was a further narrowing in the differential. Northern Ireland saw a slight pickup in annual house price growth, while conditions remained relatively subdued in Scotland and Wales.

On Credit

Close up of credit cardsThe Financial Conduct Authority (FCA) has proposed new rules to help customers who are in persistent credit card debt. This follows the FCA’s study of the UK credit card market, which found significant concerns about the scale, extent and nature of problem credit card debt.

Under the FCA’s definition, credit card customers are in persistent debt if they have paid more in interest and charges than they have repaid of their borrowing, over an eighteen month period. Customers in persistent debt are profitable for credit card firms, who do not routinely intervene to help them.

The FCA estimates that around 3.3 million people are in persistent debt, with over half (1.8 million) for two consecutive periods of eighteen months. Today’s proposals require firms to take steps to help customers repay their balances more quickly and to offer further assistance to those who can’t.

Under the new rules, firms will have to take a series of steps to help customers in persistent debt. When a customer has been in persistent debt for eighteen months, firms will be required to prompt them to make faster repayments if they can afford to do so. If a customer is still in persistent debt after a further consecutive eighteen month period, firms must take steps, such as proposing a repayment plan, to help them to repay their outstanding balances more quickly. Customers who do not respond, or who confirm that they can afford to repay faster but decline to do so, would have their ability to use the card suspended.

The FCA also proposes that where a customer cannot afford any of the options proposed to repay their balance more quickly, firms must take further steps to assist them to repay the balance in a reasonable period, for example by reducing, waiving or cancelling any interest or charges. It is expected that firms would normally suspend use of the customer’s card during this period.

The Ultimate Question

Marmite on toastLove Marmite? Then you’ll probably be pleased to hear that a new study suggests spreading this yeast extract on your toast could be good for your brain.

Researchers at the University of York say they have identified a potential link between consuming Marmite and the apparent increase of gamma-amino butyric acid (GABA) – a chemical messenger associated with healthy brain function. They believe this is because Marmite is rich in vitamin B12, which encourages the body to produce the neurotransmitter that “regulates the delicate balance of activity needed to maintain a healthy brain”.

Researchers tested 28 healthy volunteers, half of which were assigned to the active Marmite group while the rest were placed in a control group who consumed peanut butter. They measured each participants’ response to visual stimuli and recorded electrical activity in the brain using electroencephalography (EEG). Those who ate a teaspoon of Marmite every day for a month showed a 30% decrease in their brain’s response to visual patterns.

GABA functions as an inhibitory neurotransmitter, sending chemical messages through the brain and the nervous system while blocking nerve impulses. Its role is to reduce the excitability of the neurons or nerve cells and help maintain a healthy brain.