Posts From December, 2012

Confidence low for first-time buyers 

Monday, December 17, 2012 11:39:00 AM Categories: Mortgages

One in four prospective first-time buyers believe it will take them at least 10 years to have a deposit in place, a survey has suggested. The report from the Building Societies Association (BSA) said that pessimism in the market remained.

The quarterly property tracker conducted by the BSA found one in five first-time buyers believed they would still be renting or living with family in 2022. It said that before the financial crisis of 2008 hit, 88% of first-time buyers were able to raise a deposit in five years of less, but at the end of 2012 just 62% felt they would be able to save for a deposit in five years.

However, while it said raising a deposit was still the biggest barrier for all UK home buyers, the survey also pointed towards a small improvement in sentiment.

Around 59% of respondents said saving for a deposit was a barrier to buying a property in December, down from 62% in September and 64% in December 2011.

The Autumn statement 

Friday, December 07, 2012 10:42:00 AM Categories: Budget Economy

A summary of the key points

• The Office for Budget Responsibility cut growth forecasts for 2012 down from 0.8% to -0.1%. Next year’s estimate was revised down to 1.2% from 2%.

• Borrowing in the current financial year has been revised lower to around £80bn, thanks mainly to the coupon transfer from the Bank of England’s gilt holdings. It is expected to rise to £99bn in 2013-2014.

• The DMO has announced a cut in the number of Treasury bill auctions of £15bn in the current financial year following the downward revision to borrowing. This has benefitted the short-end of the yield curve, but 30 year yields have risen. This afternoon, 10 year yields are at 1.76%.

• The Chancellor announced a number of fairly significant tax changes: the 3p rise in fuel duty planned for January has been scrapped while corporation tax will be cut in April 2014 from 22% to 21%.

• Mixed news on pensions - the annual tax free allowance will be cut to £40,000 from £50,000 in 2014 while the lifetime allowance will be reduced to £1.25m from £1.5m. However, the capped drawdown limit for pensioners is being increased from 100% to 120%.

• For higher earners, the threshold for paying 40% income tax is being increased by 1% in both 2014 and 2015 but still at a slower pace than inflation. Capital Gains Tax and Inheritance tax exemptions will also be increased by 1%. The basic income tax threshold is to be raised by more than previously announced, to £9,440.

• The Chancellor hopes to raise £5bn over the next six years in tax from undisclosed Swiss bank accounts through a treaty with Switzerland. There were also a number of measures announced designed to combat tax evasion including 2,500 more inspectors.

• The ISA limit will be increased in April to £11,520 while the government plans to consult on allowing investments in small and medium scale enterprises equity markets like AIM to be held directly in ISAs.

• A number of infrastructure investments were announced for road, rail and broadband services.

If you would like to discuss any of these changes please get in touch

UK economic contraction 'less than thought' for 2012 

Tuesday, December 04, 2012 12:58:00 PM Categories: Economy

The British Chambers of Commerce (BCC) has increased its forecast for UK growth for 2012, but still expects the economy to shrink. The UK will shrink by 0.1% this year, less than the 0.4% contraction it had predicted previously, the BCC said. That is "entirely due to the stronger-than-expected" growth in the last quarter, helped by the Olympic Games.

But it now sees growth of 1% for the whole of 2013, down from the 1.2% it had forecast in September.

"As we wait in anticipation for the chancellor to deliver his Autumn Statement tomorrow, our new forecast highlights the challenges still facing the UK economy over the months and years ahead," said John Longworth, director-general of the BCC.