House sales held back by Brexit- Plus all the latest property news
Posted by The Oracle Group on 24th July 2019 -
INDUSTRY
House sales held back by Brexit
Monthly HMRC statistics have shown that British residential property sales fell to 84,490 in June, over one-sixth down on the same period last year and a 9.6% monthly drop between May and June this year. With the property market apparently taking a “wait-and-see” attitude as Brexit-related uncertainty continues, house sales were down 16.5% last month year-on-year. Springbok Properties founder Shepherd Ncube stated: “A lull in transactions will come as a cause for concern in what is currently a rather fragile market landscape, however, the broader picture simply doesn’t suggest a market that is on its knees.”
Sir Roger Scruton returns to government role
Sir Roger Scruton has been reappointed as a government housing adviser months after being sacked. The academic lost the post as head of the government’s Building Better, Building Beautiful Commission in April after an interview published by the New Statesman magazine took his comments out of context and made them appear to be racist. The magazine later apologised. Now housing secretary James Brokenshire has reinstated Sir Roger, and apologised. Sir Roger has agreed to rejoin the commission as co-chairman.
HOUSING
Government accused of prolonging UK housing crisis
The government has been accused of prolonging the national housing crisis by failing to sell enough land for affordable and social housing. The Public Accounts Committee said the UK would miss its 2020 target of public land sales "by a wide margin". It calculated the government's land sale failure would result in 91,000 fewer homes in 2020 than anticipated, equivalent to 57% of its overall target. "This failure is largely because of the unrealistic targets the centre of government imposed on departments without enough thought about the issues that would need to be overcome to make sales happen," the committee said. In addition, the government did not look at what type of houses were needed, and where, in deciding whether to sell land, it added. The report said it was “unacceptable” that the Ministry for Housing, Communities and Local Government paid "so little attention" to how the release of public land could be used to deliver affordable homes.
1m homes face energy bill cuts amid effort to tackle fuel poverty
The Government is planning to alter how it calculates whether a household is fuel poor, meaning more than 1m homes in England could be in line for help to cut their energy bill. Under the new definition about 3.66m households will be considered fuel poor because they meet the existing criteria of low income relative to high energy bills, and also live in draughty homes with low energy efficiency ratings.
TAX
Johnson’s stamp duty reforms to cut revenue
New prime minister Boris Johnson has proposed a plan to overhaul the whole stamp duty system yet again. Reports suggest that he plans to drastically raise the threshold for paying stamp duty from its current level of £125,000 to £500,000 at the same time as lowering the top rate from 12% to 7%. According to analysis by Savills, it would free over 300,000 property buyers from stamp duty. Added to the number of properties sold that are already exempt from the tax, this means that a total of 651,500 transactions from last year wouldn’t have paid stamp duty – equalling 71% of residential transactions in England and Northern Ireland. Savills also estimated that raising the stamp duty threshold would cut out around a quarter of stamp duty revenue for the Treasury's coffers, at £2.158bn.
HMRC investigates 23% of IHT estates
A Freedom of Information request by financial planners Quilter shows that HMRC opens more than 5,000 IHT investigations a year, a figure representing 23% of the 22,000 estates that are hit by the tax. The Mail says “notoriously complicated rules” over IHT mean those liable for the levy have a one in four chance of being investigated. Gordon Andrews, tax and financial planning expert at Quilter, said that more often than not, people are not deliberately trying to defraud HMRC, adding that the complexity of the system means the fact there are errors is no surprise.
MORTGAGES
Metro portfolio sale could create mortgage prisoners
MPs have urged Metro Bank not to sell its customers' loans to a “vulture” US hedge fund. The bank is reportedly exploring the sale of a mortgage portfolio to US hedge fund Cerberus Capital Management, which does not have permission to sell mortgage products in the UK, meaning mortgage holders whose debt is held by the firm cannot be offered new deals – and could leave buy-to-let investors and homeowners owing money to an unregulated lender and stuck on relatively high standard variable rates. Seema Malhotra MP, co-chair of the all-party parliamentary group on mortgage prisoners, said: “The cross-party APPG has recommended that there should be a ban on mortgage sales to unregulated and inactive lenders.”
Mortgage war hits Santander UK’s profits
Profits at Santander's UK division fell by more than a third as the mortgage price war dragged down its income. The Spanish-owned lender saw its profits continue to be weighed down by intense pressure in the UK mortgage market, resulting in a 35% slump in earnings to £575m in the first quarter of the year. Income slipped by 8.4% to £2.1bn during the period. Nathan Bostock, chief executive of Santander's British arm, said the bank was operating in "uncertain times", as it wrestled with squeezed profit margins in the mortgage market.
Paragon sees lending climb
Figures from Paragon Banking Group show that it has seen commercial lending increase 58% to £710m from £450m. In the nine months to June 30 it saw £1.9bn of new lending across all business lines, up from £1.58bn a year ago, with mortgages rising to £1.19bn from £1.13bn. Richard Doe, of Paragon, said: “While the economic backdrop continues to be uncertain, we also see a great deal of opportunity in specialist markets.”
PLANNING
Billionaire embroiled in planning row
Britain’s third-richest man has sparked a new planning row with neighbours over plans for a caretaker's cottage. Sir Jim Ratcliffe overcame a six-year battle against neighbours, officials and conservationists over his plans for a £6m New Forest holiday home, currently under construction, which were rejected five times. He now wants to transform a derelict tin cottage into a three-bedroom '’property guardian's residence', but the proposal is opposed by the Environment Agency, which said it posed an “unacceptable risk to life and property from flooding”.
City gardens more grey than green
Using aerial photographs, the ONS has revealed that there is more concrete than greenery in the average garden of some cities because homeowners have sacrificed lawns and flowerbeds for patios. Some 62% of garden space in Britain's towns and cities is occupied by plants, lawns and trees, but in Bristol the figure is just 45%.
ECONOMY
Global growth forecast cut by IMF
The IMF has cut its growth forecasts for the global economy for this year and next. It predicts growth of 3.2% in 2019, down from its April forecast of 3.3%. Growth next year is set to pick up to 3.5% next year, although that is below its earlier forecast of 3.6%. The Fund has raised its growth forecast for the UK this year to 1.3% from 1.2%. The revision for the UK reflects what the report calls a stronger-than-expected first three months of the year, boosted by pre-Brexit stockpiling.
Haldane warns against cutting rates
Andy Haldane, the Bank of England’s chief economist, has said that Britain needs to end its cheap money “dependency culture”, but ruled out interest rate cuts unless there was a sharp downturn after a no-deal Brexit. He said that monetary policy was no longer the right medicine because the economy was almost at potential, inflation was at target, unemployment was at an historic low and real wage growth was returning.
OTHER
Johnson becomes new PM
Boris Johnson has been voted as the new leader of the Conservatives, and as he takes up the position of Prime Minister Brexit hardliner Priti Patel is expected to be handed a return to the Cabinet. Mr Johnson will call a halt to domestic legislation for his first 100 days in office as he tells his ministers to focus on leaving the EU. Labour leader Jeremy Corbyn urged Mr Johnson to call a general election and promised to table a motion of no confidence in him “when it is appropriate to do so.”
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