Mortgage lenders are temporarily restricting the products on offer as the impact of coronavirus hits the market.
Borrowers who have lower deposits saved may find themselves particularly affected.
Lloyds Banking Group has temporarily withdrawn new mortgage and re-mortgage products with a loan-to-value (LTV) ratio of over 60% across its broker channels – Halifax Intermediaries, Scottish Widows Bank and BM Solutions.
It said customers can still apply for a mortgage directly online as normal with Halifax and Lloyds Bank.
Product transfer and further advance products remain unchanged and customers with existing mortgage offers have been granted an additional three months to complete their home purchase or re-mortgage at the agreed mortgage rate.
Regrettably it has been necessary to withdraw a further selection of products across our residential and buy-to-let ranges.
Meanwhile, Barclays said it has had to withdraw some products, although it said a number of lower deposit deals remain available.
A statement from Barclays said: “Regrettably it has been necessary to withdraw a further selection of products across our residential and buy-to-let ranges.
“This action has been taken to support us in managing the flow of applications into our UK underwriting teams following the closure of our key offshore sites.
“At the same time it enables our colleagues to provide greater help to those customers requesting mortgage payment holiday arrangements for financial support.”
The Barclays statement added: “We expect to launch a fresh range of residential and buy-to-let products shortly and we apologise for any inconvenience this causes in the interim.”
Mortgage lenders have already pledged to offer three-month payment holidays to borrowers suffering financial hardship due to coronavirus.
A report released by Zoopla on Thursday predicts that house sales volumes could plunge by as much as 60% over the next three months, compared with the second quarter of 2019, as the market reacts to the impact of Covid-19.
But, while property sales are expected to see a sharp drop-off, Zoopla said house prices are not expected to change materially in the next month or two.
Meanwhile, online buy-to-let mortgage broker Property Master warned that landlords generally may face a tougher struggle to get mortgages.
Angus Stewart, Property Master’s chief executive, said: “Landlords are finding that their borrowing options are being drastically reduced.”
Niche Advice director Payam Azadi is concerned that the economic shock caused by coronavirus could force some lenders out of the market.
Azadi is concerned that non-bank lenders and specialist players could struggle with their funding lines in the weeks and months ahead.
The London broker said: “A lot of the lenders that rely on securitisations and the money markets are going to find it hard.
“Will these dry up? We’ve seen a battering of the stock market.
“The more dynamic and entrepreneurial businesses are under pressure because of the way they are funded.
“Institutions like big banks will do alright because they are backed up, well-funded and have strong balance sheets – they will weather the storm and see competition diminish.”
Azadi compared the situation to the outbreak of the global financial crisis of 2008, when some lenders reliant on securitisations went bust and exited the market because they couldn’t access their funds.
Azadi has seen many of his clients put proposed deals on hold due to the virus.
He is seeing a lot of enquiries from people looking to remortgage or consolidate debt – with measures like switching from a repayment mortgage to interest-only – to ensure they have a financial cushion in these difficult times.
However some landlords are looking at the situation as an opportunity to add to their portfolios, by purchasing a property at a competitive price.
Another broker, Aaron Strutt, product and communications manager at Trinity Financial Group, said he is continuing to help those who want to refinance.
He said: “While the main priority for people is their health during these difficult times it is important to reduce costs if possible.
“Mortgages are a big expense so if borrowers are about to switch to an expensive standard variable rate they should take action and swap to a better deal.
“We had a very busy start to the year and the market has slowed but we are still taking new enquires and will be helping our clients to remortgage.”
Despite both brokers speaking positively about borrowers wishing to refinance, they expressed disappointment that fixed rated mortgages haven’t cheapened after the Bank of England cut the base rate by 0.50% to 0.25% last week.
They added that some mortgage lenders are pulling tracker rates rather than reducing them.
Saffron Building Society pulled its buy-to-let range yesterday, though the lender indicated that it would re-enter the market later in the year.
Annual gross mortgage lending dropped marginally by 0.4% to £267,552 billion in 2019, the first annual fall since 2010, according to UK Finance.
2018/2019 Annual change in mortgage statistics
Number of house purchase loans
Number of mortgage refinances
Residential – external remortgage
Residential – internal Product Transfers
Buy-to-let – external remortgage
House Prices (UK average, Q4)
Gross mortgage lending (£ billion)
Mortgages in arrears
Source: UK Finance, Nationwide BS, Bank of England
The total number of home purchase loans was down by 1.5% to 764,900 with first-time buyer (FTB) numbers seeing a modest decline of 0.6. This is only 2,000 fewer loans than the ten-year peak of 353,000 seen in 2018.
UK Finance said: “Effectively then, 2019 saw FTB activity stabilise around the ten-year high levels seen in the previous year. Growth rates in FTB lending had in fact been moderating since late 2018, becoming modestly negative from early 2019.”
Shaun Church, director at Private Finance commented: “The fact that first-time buyer numbers fell in all but two English regions last year is a timely reminder for the new Chancellor ahead of his Budget debut next week that the foundations of the property market still need some care and attention.
“The Help to Buy equity loan scheme continues to exist on borrowed time, while homemovers’ struggles to climb up the ladder aren’t doing any favours in terms of freeing up housing stock. Too many people are facing an upwards challenge to upsize, or a downsizing dilemma whereby the sums of money involved can make it difficult to see whether it’s even worth exploring a move.
“After years of watching an increasingly clogged-up market, it’s high time for another round of surgery to stamp duty rules to make moving more practical at both ends of the housing ladder.”
The buy-to-let (BTL) sector has been affected by tax and regulation changes which continue to dampen activity levels, with the value of new BTL purchase lending falling 4.7% last year and numbers down 3.2% to 69,900.
UK Finance stated: “Whilst still significant, this represents an easing in the rates of decline from those seen in 2017 and 2018 and this easing continued throughout last year.”
Scotland and the North are faring better in the BTL space than other regions, especially the south, with strong rental demand and relatively low property prices – and therefore comparatively attractive returns for landlords.
Jonathan Samuels, CEO of the property lender, Octane Capital, commented: “The buy-to-let market is still on the back foot but the rate of decline definitely slowed during 2019. Many landlords have now adjusted to the new fiscal order and are starting to find their feet again.
“It’s no surprise that the buy-to-let market has proved more resilient in the north where prices are lower and yields more attractive.
“As the search for margin continues, there has been a definite shift in buy-to-let activity away from the capital into the regions in recent years. In the south it can be a lot harder for landlords to make the numbers stack up.”
Following a year of strong growth in 2018, remortgaging activity to another lender shrank last year. The 445,900 homeowner remortgages represented a 2.3% decline compared to the ten-year high seen in the previous year.
The only growth area among all product types in terms of numbers last year was residential product transfers which rose by 1.4% to 1,195,200.
UK Finance noted: “Almost three quarters now refinance internally, most commonly as their existing deal rate comes to an end, with lenders proactively offering their customers a new deal.
“Just under 1.2 million customers took out a product transfer last year, a relatively modest increase of 1.3 percent on 2018, but more than enough to offset the decline in the external remortgage market. Overall, 1.6 million homeowners took out a new deal last year, 0.4 per cent up on 2018.”
The downturn in remortgage activity is due to the increasing preference by borrowers for longer-term fixed rate deals – mostly for five years.
The stock of mortgages on standard variable rate has been reducing over recent years. At the end of 2019 there were around 1.3 million homeowner loans on SVR, over 1.1 million fewer than the number four years previously.
SVR mortgages now make up 16% of the outstanding stock, compared to 30% in 2015.
Andrew Montlake, managing director of mortgage broker, Coreco, commented: “The number of people on standard variable rates has been falling steadily for several years now as more and more borrowers get wise to how punitive they can be.
“Clearly there’s still a lot of work to be done in educating people around the perils of inertia and lenders need to be more proactive in helping mortgage prisoners off SVRs onto more competitive rates.
“The industry has started to address the issue of mortgage prisoners in earnest and the hope is that we see concerted action soon.”
Arrears and possessions
Last year ended with 75,000 mortgages in arrears – the lowest on record, both in absolute terms and as a proportion of the total stock.
UK Finance said: “The combination of the low interest rate environment and equally benign unemployment figures have continued to drive down the incidence of payment problems, even for those mortgages taken out in the pre-crash years.”
However, 8,000 homes were repossessed in 2019, up from 6,900 the year before – a rise of 15.9%.
Eric Leenders, managing director, personal finance at UK Finance, commented: “Last year saw a slight fall in levels of mortgage activity for home purchases, largely driven by increasing affordability pressures.
“Meanwhile the remortgage market remains competitive, although the shrinking number of customers coming to the end of their fixed rate deals will start to impact volumes in this segment.”
“While borrowers are benefitting from relatively low rates on unsecured credit, levels of borrowing remain somewhat muted with some people instead opting to increase their mortgage borrowing as a more cost-effective way of managing their finances.”
John Goodall, CEO and co-founder of buy-to-let specialist Landbay, said: “A fall in new mortgage lending is disappointing news for the housing market, but those hoping to see the much-anticipated ‘Boris Bounce’ must wait a little longer.
“We won’t see the impact of any change in decision-making in January until around April, when purchases complete; all eyes will be on the lending levels in Q2 to see whether the decisive election victory has actually impacted sentiment.
Jonathan Sealey, Hope Capital’s CEO, noted: “Over the past few months it has felt as though we were experiencing a real sea change in the market as the political arena became less of a focus.
“We have definitely seen the busiest start to any year so far as people started looking forward to a more stable environment. Unfortunately, that may well be up in the air again as nervousness surrounding the COVID-19 outbreak takes hold.
“Nonetheless, the country has shown that despite everything we are a resilient lot. The market held it’s own in 2019 and that’s not something that many would have predicted at the beginning of the year.”
Alan Cleary, group managing director at OneSavings Bank, commented: “For activity to continue at any significant rate, a lot will depend on Chris Pincher, the 10th UK housing minister in 10 years, and Rishi Sunak, as the new chancellor delivers his first budget on March 11th.
“Personally I hope he takes the opportunity to re-assess the 3% surcharge on buy-to-let purchases which has seen rents rise as landlords look to recoup their investment. This of course has had a knock on effect on those renting who are trying hard to save for a deposit.
“When more houses are built, the market will hopefully see a genuine adjustment to average mortgage deposits and the age of first-time buyers.”
There are 28 million residential properties in the UK and over a million sales a year. Mortgages support nine million homeowners and a further 200,000 landlords in the private rented sector.
The mortgage lending criteria that brokers searched for in January has been released by Knowledge Bank.
In some sectors brokers are searching for completely new criteria on behalf of their clients whereas in others, search topics remained stable and consistent.
The top five most popular searches for equity release were all new and this is the first time that has happened in any category for over a year. Early repayment charges were the top search followed closely by brokers searching for lenders who would accept clients with adverse credit.
Making up the rest of the equity release top five most popular searches were for lenders who would accept an application from a married couple in a single name, applications from those in sheltered accommodation and lenders who would offer the maximum loan amount.
The self-build sector was another that started 2020 with a shake up as four of the top five most searched for categories by brokers were new. The search for the maximum LTV retained the top spot while the second most searched for criteria was the maximum loan amount that can be secured.
Things remained slightly more consistent in the residential market with the most searched for criteria once again being the maximum age lenders will allow at the end of the mortgage term. This suggests that borrowers in 2020 are continuing to look at extending their mortgages into retirement.
The search for ‘capital raising for debt consolidation’ highlights an area, or time of year, when historically borrowers look to get on top of their finances, especially if they overspent at Christmas. This search also came into the top five in the second charge category, which further indicates a desire by homeowners to get their financial ducks in a row in the new year.
Secured loans and bridging
Criteria searches in the secured loan and bridging markets remained relatively consistent from December 2019 with brokers using the criteria search system to find the maximum loan amount possible for their clients.
Of particular interest in the buy-to-let category was the search for lenders that will lend to expatriates. With Brexit negotiations fully underway, there appears to still be some doubt for expats living in the EU as to their futures.
The fact that these people are looking at BTL properties in the UK shows that some are already hedging their bets by investing in property ‘back home’.
Matthew Corker, lender relationship manager from Knowledge Bank, said: “While some sectors witnessed a radical shake up of client needs some are notably more consistent and predictable.
“What this does highlight is how difficult it continues to be for brokers to balance the changing needs of their clients with lenders ever-changing criteria.”
Criteria Activity Tracker
Top five searches performed by brokers on Knowledge Bank during January 2020
Net mortgage borrowing reached £4.6bn in December, above the £4.2bn average seen over the previous six months, the Bank of England’s Money and Credit statistics found.
The number of approvals rose to 67,200, above the six-month average of 65,900, highlighting that the market still performed steadily amidst the uncertainty of the general election.
Kevin Roberts, director, Legal & General Mortgage Club, said: “These lending figures from the Bank of England provide further indication that the mortgage market remained steady and resilient in the final months of 2019, even in the lead up to a General Election.
“At Legal & General Mortgage Club, we also saw a strong end to the year with a record number of completions for December, and with a reduction in political uncertainty we anticipate the wider mortgage market will enjoy further growth in the early part of 2020.
“Consumers across the country are still clearly reaping the benefits of a highly competitive mortgage market, whether they are taking their first step onto the ladder or locking into a competitive fixed rate when remortgaging.
“In many instances, these borrowers are drawing on the expertise of an independent adviser to help them find the right mortgage to make their housing plans a reality.”
The number of mortgage approvals fluctuated throughout 2019, plummeting as low as 62,000 but also going beyond forecast, reaching as many as 67,000. Towards the end of the year, the housing market saw a definite increase in mortgage approvals – reaching 64,994 between November and December – and although the December data* is yet to be confirmed, it’s likely to show a similar result.
So if you’re thinking of getting a new home in 2020 and need to find the best mortgage deal, what do these figures really say about your chances of getting on the property ladder this year?
The current figures show that getting a mortgage still isn’t plain sailing. The housing market has come a long way since the financial crash of 2008, which saw historically low mortgage approval rates of around 26,000 in the November of that year. And although there has been an improvement, it’s still clear that mortgage approval rates haven’t fully recovered to anywhere near pre-crash levels, and they certainly aren’t close to the mortgage boom years of the 1980s where May 1988 saw over 150,000 mortgages approvals (the largest number recorded for the UK).
If we look at home ownership rates, these numbers have not fully recovered from the financial crisis of 2008 either. In 2007, we saw an all-time increase in home ownership rates, sitting at 73.3 per cent, but that number was then at a historic low in 2016, at just 63.4 per cent.
So what is the current rate of home ownership?
Just over 65 per cent – only two per cent over the historic low.
So given the relatively auspicious economic climate, low unemployment, and low interest rates, what’s the underlying reason behind such low home ownership rates?
If we take a closer look at mortgage approvals, there is a downward tendency on remortgage approvals, while net mortgage lending keeps going up – by billions.
People are finding it more difficult to move up the property ladder – a well recorded problem since 2016 – and they are borrowing ever larger amounts to use on housing due to hefty deposits that are unaffordable for most. Mortgage approval rates would go up significantly, if first-time buyers had access to more low-deposit mortgage options that are not guarantor mortgages or Help to Buy.
Want to maximise your chances of getting approved for a mortgage in 2020? Read out guide to mortgages for first-time buyers, which covers deposits and much more.
As the new year and new decade roll in to play, we ask three mortgage and property experts about what homebuyers can expect to see in 2020.
Looking ahead to 2020 in the mortgage market, we’ve got to consider how Brexit will continue to impact interest rates and buyer‘s confidence. The UK is due to leave the European Union on 31 January 2020, after Boris Johnson’s Brexit deal was passed by MPs.
Following this, we may see some recovery in the economy and rates might start to rise steadily to maintain inflation. Political uncertainty has gripped the housing market for the past three years with many holding off buying and selling. As a result, there’s been a recent fall in mortgage lending.
However, the reassurance that comes with a five-year administration following the latest general election may encourage those prospective and current homeowners who had previously adopted a ‘wait and see’ approach to commence buying and selling. We’re hopeful we’ll see activity in the housing market increase.
With 35,010 new first-time buyer mortgages completed in the summer of 2019 we’re also hoping that the level of first-time buyers entering the market will continue to grow. It’s clear that despite Brexit, first-time buyers still aspire to get on the property ladder.
However, while the Help to Buy ISA has assisted more than 225,000 home buyers since 2013, this was withdrawn by the government in November. The government also plans to end the Help to Buy equity scheme by 2023.
For those who do want to protect themselves against Brexit-linked uncertainty, it’s worth considering a fixed-rate deal. Knowing how much repayments will cost each month will give some peace of mind. However, it’s always important to take any personal and future circumstances into account when securing a mortgage and seek advice from a broker to ensure you’re aware of the options.
‘Growing feeling that the London market has now bottomed out’
Andrew Montlake, managing director of UK mortgage broker Coreco:
With the General Election result finally delivering political clarity in relation to our exit from the EU, transaction levels look set to pick up in 2020.
Clearly a lot of the hard work around Brexit has yet to be done, but the political stability provided by a strong Conservative majority will give a lot of people the confidence to finally move home.
There’s a huge amount of pent-up demand for property and that will start to show through quite early in the New Year. In 2020, Spring for the property market is likely to start in mid-January.
With competition among lenders reaching feverish new heights, mortgage rates will remain highly attractive during 2020, giving people even more reason to buy and sell.
In recent years, the regions have outperformed the capital and while this trend may continue in 2020, there is a growing feeling that the London market has now bottomed out.
Affordability will remain a key issue for many borrowers, especially in London and the South East, and so the Bank of Mum and Dad, or Gran and Grandad, will play as critical a role as ever.
The first half of the year may see more activity than the second, as the feel-good factor caused by the General Election result slowly fades and the complexity of the trade negotiations ahead becomes clearer.
Overall, we expect average prices to rise by 2–3% during 2020, conservative growth in historical terms but significantly up on the sub-1% growth of recent years.
‘Degree of certainty may trigger flurry of activity’
More than a quarter (28%) of estate agents expect house prices to fall next year, down from 43% last year when agents were asked the same question. Over half (56%) of agents expect house prices to stay the same, according to NAEA Propertymark (National Association of Estate Agents).
A quarter think the number of sales made to first-time buyers will increase and over half (58%) expect it to stay the same. A third expect demand to decrease and a further quarter (28%) think supply will increase.
Mark Hayward, chief executive, NAEA Propertymark:
The changing political landscape throughout 2019 has undoubtedly caused uncertainty in the housing market, which in turn has affected sentiment and decision-making. Once the current political impasse is resolved and it’s clear how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity.
Regardless of the colour of the new government, housing must be a priority. A clear strategy is needed to tackle key issues such as stamp duty costs.
Additionally, we’d like to see the government commit to bringing regulation into the sector as soon as they can in the New Year and to consider the introduction of digital logbooks to allow for a more interactive, streamlined and transparent process for home buyers and sellers.
The housing market needs reassurance from the government, which will in turn inject some confidence in the market for both buyers and sellers.
Despite the difficult year, the UK property market remains a strong sector overall, and has demonstrated a huge amount of resilience in the face of political turmoil. We hope for a more certain outlook and some stability in 2020, which is hopefully provided sooner rather than later.
Despite a backdrop of uncertainty, the mortgage market is still strong and competitive, UK finance chief executive Stephen Jones said at the regulator’s annual mortgage dinner.
He pointed to figures showing that gross mortgage lending will reach around £265bn in 2019, almost the same as in 2018.
Jones (pictured) said: “Our industry wants to focus on competitiveness, innovation, talent, tax, regulatory proportionality and coordination, and regulation fit for the future, all themes that underpin UK Finance’s work for our members.
“At UK Finance we seek to help our members, large and small, navigate change.
“A growing number of first-time buyers are entering the housing market, while existing homeowners are taking advantage of competitive products available in a low interest rate environment.
“The potential end of Help to Buy in 2023 presents a major challenge to growth in new housing delivery.
“We will continue to engage with governments across the UK on initiatives to support low cost home ownership and increase the new supply of affordable and social housing, and to ensure that housing association lending and investment continues to be attractive.”
He warned about the challenges that remain, for example 5-year fixed mortgages now account for nearly half of all fixed rate sales, a market where 2-year deals once dominated.
Jones added: “Longer terms will inevitably mean fewer remortgages in the coming years, which the industry must deal with.
“Our figures show that, despite challenging conditions in the buy-to-let market, lenders are continuing to support and work with landlords, to ensure sustainable and affordable finance is available for the private rented sector.”
The mortgage market is booming in the North of England with the number of first-time buyers soaring to a pre-financial crisis high.
Figures released today by UK Finance revealed, in 2018, the mortgage industry helped nearly 85,000 households buy their first home in the region – which is made up of the North West, North East and Yorkshire and Humber.
This is an increase of 3% on the previous year and is the highest level since 2006, according to UK Finance which is publishing the data to coincide with its ‘Northern Powerhouse’ dinner to discuss how financial services can support the region’s economy.
These strong figures, it suggested, were down better affordability in regions of the North, where the average deposits and income multiples were lower than anywhere else in England. It said there was an increase of 1.1% in the number of home movers.
It wasn’t just residential mortgages which were helping to drive the boom. Newcastle, Liverpool and Hull bucked the national trend and experienced strong growth in buy-to-let lending, UK Finance revealed.
It said this had been driven by lower house prices and a healthy labour market as well as strong rental demand. This allowed landlords to achieve higher yields than the UK average.
The growth in Hull was particularly strong – with buy-to-let lending soaring by 12.8%.
Jackie Bennett, director of mortgages at UK Finance, said: “These figures show the North of England has a strong and dynamic mortgage market, with lenders helping thousands of first-time buyers onto the housing ladder.
“This has been combined with a steady increase in home movers, making it easier for buyers to find a property that suits their needs.
She added: “The mortgage industry stands ready to work with the UK government and local authorities to capitalise on these strengths and help deliver on the full economic potential of the Northern Powerhouse.”
Strong regional disparities
While the figures were good news for the North of England, they also exposed weaknesses in other parts of the UK, particularly in London.
Shaun Church, director of Private Finance, said they highlighted the strong regional disparities in both housing demand and activity.
“Comparatively low property prices and strong rental demand makes the North an attractive prospect for landlords,” he said.
“After years of being slammed by regulatory changes making it harder to turn a profit, investment location has never been more important. Northern regions are still enjoying decent house price growth, meaning landlords can also enjoy an increase in the value of their asset.”
Britain’s housing market appeared to benefit from a brief lull in Brexit worries last month, Bank of England data showed on Monday, but consumer lending growth was the weakest in over five years, adding to the mixed signals coming from the economy.
Uncertainty about Brexit has weighed on house prices, especially in London and southeastern England, since voters decided in June 2016 to leave the European Union.
But there have been signs of a stabilization coinciding with the decision to extend the original March 29 deadline for Britain’s EU departure until the end of October, and the closely watched RICS poll of surveyors has recovered in recent months.
The BoE said the number of mortgages approved for house purchase rose to 66,440 in June from 65,647 in May.
That was the highest since January and above the average forecast from economists in a Reuters poll.
Net mortgage lending, which typically lags behind approvals, also rose more than expected, up by 3.7 billion pounds ($4.6 billion) in June.
“June’s mortgage data ties in with the view that housing market activity has got some help from the avoidance of a disruptive Brexit at the end of March,” Howard Archer, economist at EY ITEM Club, said.
Faster wage growth and a jobs boom are also supporting house prices but Archer said he expected them to rise by no more than 1.5% this year, roughly their current growth rate.
If Britain leaves the EU without a deal on Oct. 31 – something Prime Minister Boris Johnson says his government is actively preparing for – then house prices could quickly fall by around 5%, Archer added.
Last week industry body UK Finance reported the number of approvals for house purchase near a two-year high in June, while its measure of consumer lending growth picked up slightly.
The BoE said net lending to consumers in June alone rose by 1.046 billion pounds, again faster than forecast and stronger than in recent months.
However, it is lower than the average monthly increase of around 1.5 billion pounds chalked up in the 12 months to June 2018 and the annual rate of lending growth slowed to 5.5% from May’s 5.7%, the weakest since April 2014.
British consumer spending has been a driving force of growth since the Brexit referendum, helping to offset a drying up of business investment. But in recent months it has lost momentum.
The slowdown partly reflects strong spending a year ago, boosted by major sporting events, such as the men’s soccer World Cup, and better weather.
By contrast, business lending rose by 2.6 billion pounds in June – above its post-referendum average – to give an annual growth rate of 4.4%, the highest since the series started in 2012.
“Firms haven’t suddenly adopted a defensive mindset, despite the risk of a no-deal Brexit,” Samuel Tombs, an economist at Pantheon Macroeconomics, said.
Increased borrowing was concentrated in larger firms, however, and borrowing by small businesses was almost flat.
A separate survey by Bibby Financial Services, which offers trade finance, reported that half of small businesses feared a recession this year and 44% were struggling with cashflow, in part due to pre-Brexit stockpiling of raw materials.
Reporting by David Milliken; Editing by Raissa Kasolowsky