This page contains a Flash digital edition of a book.
The Bigger Issue


A budget Budget for m Last month’s Budget revealed little in the way of help for homeowners but will


Working families are already being helped by historic low mortgage rates and the NewBuy Scheme that we introduced last [month] uses the government’s balance sheet to help those who cannot afford the larger deposits that some mortgage companies are now demanding. It comes alongside a new, reinvigorated right to buy.


It is fair when money is tight and so many families could do with help, that those buying the most expensive homes contribute more. We have introduced a new Stamp Duty Land Tax rate of 7% on properties worth more than £2m. I am increasing the Stamp Duty Land Tax charge applied to residential properties over £2m bought into a corporate envelope. The charge will be 15%. We will also consult on the introduction of a large annual charge on those £2m residential properties which are already contained in corporate envelopes. Most wealthy people pay their taxes - and without them we could not begin to afford the public services on which the country depends. But under the last government, it was the boast of some high earners that, with the help of their accountants, they were paying less in tax than their cleaners. I regard tax evasion and - indeed aggressive tax avoidance - as morally repugnant. On coming to office, I asked Graham Aaronson QC to establish whether a General Anti-Avoidance Rule could work in the UK tax system. He recommended that such a rule would improve our ability to tackle tax avoidance without damaging the competitiveness of the UK as a place to do business. We agree. So we will introduce one. We will consult on the details of the new rule and legislate for it in next year’s Finance Bill.


A 50p tax rate, with all the damage it does to Britain’s competitiveness, can only be justified if it raises significant sums of money. The increase from 40p to 50p raised just a third of the £3bn we were told it would raise. In other words, it raises at most a fraction of what we were told - and may raise nothing at all. So from April next year, the top rate of tax will be 45p.


George Osborne, Chancellor of the Exchequer


So what to make of the Budget? Not very inspiring on the face of it, and the details had been so well trailed beforehand there was very little surprise apart from the adjustment to age-related allowances (or the Granny Tax) which the opposition and the press have picked up on with some relish. Not what the Chancellor would have hoped for. As for the housing market, it was a bit of a damp squib.


There’s very little to get excited about. There were some adjustments to stamp duty at the high end of the market with properties sold for more than £2m facing a new 7% stamp duty charge. However, according to recent figures from the Land Registry, this only affects something like 0.2% of the market. This will have a huge impact on the likes of estate agencies operating at the high end of the market but it is a niche area.


Of course it was hoped that the Chancellor would do a


lot more – perhaps even extend the stamp duty holiday on properties between £125,000 and £250,000 which ended on 24 March. However, with little room for Mr Osborne to manoeuvre in terms of fiscal policy and having to deliver a neutral Budget, this was always unlikely to happen. And I’m not sure if even this would have helped in the mortgage market in a meaningful way.For me then it was Budget Neutral – neither helping nor hindering our sector. Maybe the Chancellor felt there was no need to do anything. However, although mortgage activity has recently picked up we are still a long way from market norm. And even the Office for Budget Responsibility is predicting that house prices will drop 0.4% this year which isn’t going to inspire confidence in the mortgage market. That’s what is needed: a return to consumer confidence. A little more money in the pocket from Budget changes to personal income tax allowances isn’t really going to do it. What will do it is sustained economic growth, falling unemployment and a drop in inflation, plus confidence that the eurozone crisis is over.


Tony Ward,


chief executive, Home Funding


Let’s hope it all goes to plan.


26 MORTGAGE INTRODUCER APRIL 2012


Our experts have had their say, now it’s your turn to have yours. Visit www.mortgageintroducer.com and vote for the expert you think makes most s www.mortgageintroducer.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52