In the news this week, the latest round up
In the news this week, could there be a "Boris bounce" on property prices, the fears over end of Help to Buy Scheme and how the government is cracking down on inheritance tax.
July 24, 2019
Research suggests home owners do not know enough about mortgage protection – Property Wire
Property Wire has reported that over a third, some 34%, of home owners who didn’t use an adviser when they took out their mortgage ended up having no protection policy in place.
A further 5% didn’t know if they had a policy and only just over half had taken out life insurance, with thousands leaving their families facing financial difficulties if the worst were to happen.
The research, which included a survey of over 2,000 UK home owners, highlighted that many consumers are stepping onto and up the housing ladder without having a safety net in place should a long term sickness, critical illness or death of a loved one render them unable to meet monthly repayments on their mortgage.
Mounting calls for stamp duty overhaul as Johnson becomes PM – Mortgage Strategy
Mortgage Strategy reports that calls for an overhaul of the stamp duty system have been mounting today as Boris Johnson is confirmed as UK Prime Minister.
Johnson is believed to be considering scrapping stamp duty on homes up to £500,000 and halving the tax charged on homes over this threshold in a bid to stimulate the market.
The new Prime Minister is also thought to be planning to cut the rate for properties over £1.5m from 12 per cent to 7 per cent.
Industry experts have today intensified calls for the new Prime Minister to push ahead with his plans to revamp the tax as HM Revenue & Customs data shows residential property sales slumped 16.5 per cent to 84,444 in June compared to the same month last year.
House sales fall in June as a result of Brexit stall…but could there be a ‘Boris Bounce’? – The Express
According to the Express yesterday the latest figures suggest that the number of residential property sales completed in June dropped by a considerable 9.6 per cent on the previous month, and a significant 16.5 per cent on the same time last year.
But could new PM Boris Johnson turn the fortunes of the UK property market around in time for a late summer surge?
The data, released by HMRC yesterday, suggests that completed transaction levels dropped off considerably over the last month, despite lending figures recently suggesting that the number of mortgage approvals for property purchases remained steady. This has led some in the industry to suggest that buyers who are purchasing without a mortgage, potentially those downsizing, for example, decided to put a hold on their plans after the delay of the UK’s withdrawal from the EU was announced in March.
Inheritance tax crackdown as HMRC investigates one in four claims – The Telegraph
The Telegraph claims this week that Innocent taxpayers could be caught out by an inheritance tax (IHT) crackdown after it emerged HM Revenue & Customs investigates one in four estates for suspected avoidance every year.
More than 20,000 estates typically fall into the IHT net each year, losing out £5.4bn to the taxman in 2018-19 alone. Of these, 5,000-plus are investigated by HMRC, a freedom of information request has revealed.
Last year 22,000 estates paid the death tax. More than 5,530 of these were investigated. Innocent taxpayers could easily find themselves subjected to an HMRC probe due to an increasingly complex tax system that is universally disliked and widely misunderstood, experts have said.
Fears over slowdown when Help to Buy ends – The Times
Fears that the end of the government’s Help to Buy scheme will cause a slowdown in the housing market in parts of the country have led to calls for the next prime minister to extend it.
The equity loan scheme, which is due to end in March 2023, has accounted for more than 80 per cent of home sales in the past 18 months in 22 local authorities, according to Cushman & Wakefield, a property advisory firm. Oxford is the most dependent, followed by Gravesham in Kent, Warrington in Cheshire and Waltham Forest in northeast London, the firm found.
From April 2021, Help to Buy will be restricted to first-time buyers and regional price caps will be imposed. Cushman & Wakefield said this could hamper the market in some areas.