Pressure grows on Alistair Darling over tax move

Pressure on Alistair Darling to rethink his sweeping changes to capital gains tax (CGT) was growing last night as it emerged that attempts will be made to defeat them in the Commons.

Philip Webster and Gabriel Rozenberg, The Times - 16 Oct 2007

The prospect of a key budgetary change being embarrassingly overturned will be used by MPs to persuade the Chancellor to shift on his plan to end the taper relief that allows a 10 per cent rate of CGT for small businesses.

Mr Darling was looking increasingly isolated on the plan after Britain’s four main business groups joined forces to oppose it and were supported even by some unions worried about its impact on smaller companies and the help that it gives to owners of second homes - full article

Enough humble pie, house prices will fall

The last time I wrote at length about British house prices, you were eating cold turkey and I was eating humble pie. You have long ago moved on from the turkey but I have continued to be force-fed the pie. Bearing in mind my earlier erroneous forecast of house price falls, you may well say “quite right too”. But I am beginning to wonder whether my time of penance may soon be over.

Roger Bootle, The Telegraph - 16/10/2007

Conditions in the housing market look as though they are changing. The RICS survey published last week reported a figure relating to the change in new buyer inquires which was the second-lowest in the survey’s nine-and-a-half-year history. And anecdotal evidence from house builders suggests that they are increasingly having difficulty shifting their stock. Site visits and reservations are all down.

How can this be happening while all the same fundamental supply shortages are still there? As I have long argued, what determines changes in the housing market in the short term is not supply, simply because that cannot change very quickly. What determines short-term movements in the housing market is changes in demand - full article

Pure Property Scoops Top Industry Awards

FAST growing East Anglia based property finders, Pure Property, have swept aside all competition to scoop the top industry accolade in the Daily Mail UK Property Awards 2007. At a glittering awards ceremony held at London’s Royal Lancaster Hotel on Friday 5th October, the dynamic new company was voted “Best East Anglia Property Finder” and then went on to win the national title of “Best UK Property Finder”.

CEO, Nick Gooch, attributes the company’s success to two key elements, “First and foremost is the wonderful team of people that we have working here. Their sheer hard work and determination have been the major contributors to our success. Secondly, we are proud of the level of service that we offer. Right from the start we decided that we would offer something very special for our clients at Pure Property. So, we aim not just to assist clients in finding their ideal property, but to manage the entire process from search and negotiation, through to completion and beyond”.

Continue reading Pure Property Scoops Top Industry Awards…

Buy-to-let lending soars despite warnings

Buy-to-let investors are continuing to dive into property despite warnings the market may have peaked.

Simon Lambert, This is Money - 12 October 2007

Figures released this week for August mortgage lending showed strong property investing was propping up the market with the ‘other lending category’ covering buy-to-let up by almost 40% on the same month last year.

The Council of Mortgage Lenders said £7.8bn worth of loans were taken out under the ‘other lending’ heading in August – making up just under a quarter of the total £34bn borrowed during the month - full article

Distant thunder

The markets in many countries popular with British buyers look wobbly. So it’s not just the British housing market that is in trouble. According to some of the direr predictions of doom and gloom that have been circulating in recent days, the prices of the second homes we have been so avidly buying across Europe – and beyond – could be heading for a fall too.

Peter Conradi, The Times - 7th Octber 2007

Recent drops in the market in Spain and Florida – traditionally the two most popular spots for Britons looking for holiday properties – are warning signs, even if the problems in both countries have been looming for some time, and long predate the current market turbulence - full article

Pre-Budget: Cheer for second homeowners

The nation’s army of buy-to-letters will be cheered by the announcement in today’s Pre-Budget report that capital gains tax is to be cut from 40 per cent to 18 per cent.

Emma Simon, Daily Telepgraph - 09/10/2007

Although no capital gains tax is due on your main residence, this tax is payable on all second properties, whether they are holiday homes or an investment - full article

Removal of Mortgage Interest Tax Relief

Following articles in the Guardian Newspaper on this topic - Patrick Collinson - arguing that investor landlords are enjoying this tax relief at the expense of first time buyers, the Institute of Directors (of all people) reported in the Financial Times - Vanessa Houlder - have now piled in with another agrument: that landlords are enjoying this relief at the expense of other investors.

In fact the UK’s property tax regime is not particulalry generous when compared to some other G7 countries,  and many allowances have not been increased for years - the Rent-a-Room allowance, for example, at £4250 pa has not been increased since 1992 when it was introduced.

Property booms will come and go but serious property investors have also to survive through the bad times.

As far as I’m aware this is not yet on the government’s agenda or in any way policy, and this may be giving the story more credence than it deserves, but the mere though of it is enough to give people in the property world palpitations. And with our present government’s track record on stealth taxation and over-regulation, can we afford to take chances by remaining silent on this very important matter?

What would be the effect on property investment: from the humblest buy-to-let to the vast new office blocks in central London? I fear it would all be brought to a standstill, and the economy with it! Would anyone be prepared to take risks with big borrowings anymore?

What would happen to those many thousands of landlords who are just now beginning to realise that property is not and never was the road to instant riches, who are teetering on the brink - it would push many thousands into bankruptcy! That’s apart from the suffering this would impose on tenants.

Join the campaign on this issue by signing Oliver Romain’s (Publisher of Landlord Magazine) 10 Downing Street petition - “We the undersigned petition the Prime Minister to Say no to the £1.8 billion tenant tax“ Tom Entwistle, Editor, LandlordZONE

2007 Pre-Budget Report and Comprehensive Spending Review

Meeting the Needs of the British People. The report is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page - full resource or read the 18 Page Overview

Inheritance tax threshold raised

Chancellor Alistair Darling has raised the threshold at which inheritance tax is paid to 600,000 pounds for married couples and civil partners, rising to 700,000 pounds by 2010.

LONDON (Reuters) Tue Oct 9, 2007 4:33pm BST

“From today, I can announce the combined tax-free allowance for their estates will not be the current 300,000 pounds but up to 600,000,” he told parliament.

He said in future years the government would take into account both house prices and inflation when setting thresholds on inheritance tax, which is payable be people on their dead relatives’ estates.

The opposition Conservatives said last week they would raise the threshold to one million pounds, funded by a levy on wealthy foreigners living in Britain but non-domiciled for tax purposes - full story

Silver lining for buy-to-let owners

The property market might be slowing, but landlords are finding that they’ve never had it so good as loans become easier to get.

Paul Farrow, The Telegraph - 9th October 2007

The slowdown in the residential property market is providing a fillip to the buy-to-let market. With many would-be buyers holding fire, the rental market is booming.

Rental growth reached record levels in the second quarter of the year — and is expected to have shown a rise in figures for the third quarter due to be published by the Royal Institution of Chartered Surveyors next month.

advertisementDemand from tenants had already been risen, and now the RICS reckons that the credit crunch shenanigans and the continued evidence of a slowdown in the property market will boost the buy-to-let market further - full article