Thursday, 28 May 2015

Mortgages bouncing back

Banks say an increasing number of mortgages are being give the go-ahead, as the housing market appears to be on the move again following a winter in the doldrums.

They approved more than 42,000 mortgages for house purchases in April up 3 per cent compared with the same month last year and 7 per cent more than in March.

So suggestions that house-hunting stalled during the election campaign see wide of the mark.

Approvals had declined since last summer after lenders were forced to apply much stricter affordability tests to applicants.

A British Bankers Association statement said: "There appears to be broad confidence about the economy, which the banks are supporting through affordable credit, leading to rises in borrowing across the board."

Credit card borrowing was up £375m in April and personal loans saw an increase as well, a sign that shoppers could continue to spur on the recovery.

Tuesday, 26 May 2015

Queen's Speech ticklist

Personal allowance to rise to £12,500

Higher rate threshold moving to £50,000

Ban on increases in main income tax, National Insurance and VAT rates

Scotland set own income tax rates and bands, plus VAT and housing benefit powers

Double free childcare to 30 hrs

Confirm tax break on paid-for childcare

Right to Buy for 1.3m housing association tenants

Reduce benefits cap to £23,000

No housing benefit if under 21

Will the government:

*Mention inheritance tax (the promise to let couples pass on a £1m home)  Benefit cuts
*Give further signals about how benefit cuts will be achieved
*Re-confirm triple lock on state pension increases

Friday, 8 May 2015

Will there be a June Budget?

So what does George Osborne do next, now we know he remains Chancellor?

There's been talk of a mini-Budget in June to lay out his plans for the next five years. But does he even need one? Perhaps not.

"There's no need. He doesn't have to bother," says Patrick Stevens, policy director at the Chartered Institute of Taxation.

The fact is that the Chancellor could decide to stage a quick Budget for political reasons, to whip up excitement and mark the launch of the new Tory programme.

He could even provide more detail about the staging posts to raising the personal allowance for income tax to £12,500. He could map out the route to a £50,000 threshold for 40% tax.

And he could toss in more discussion of his £1m inheritance tax allowance for couples passing on their homes.

On the other hand, it might look distinctly odd to start explaining so soon how his £12bn of further benefit cuts will be implemented.

It would only be weeks after the Conservatives had told voters - before the election - that they didn't know what the measures would be.

Chas Roy-Choudhury from the accountancy body, ACCA,  says Mr Osborne should "Hold fire!" and consult about some of the tax changes he is planning.

He argues there is plenty of time to look carefully at some of the plans, for instance the cuts to the tax relief high earners get on their pension contributions, which are complicated.

The fact is, we already have a list of pre-announced moves, from the March Budget or the manifesto:

£12,500 personal allowance, up from £10,600

£50,000 higher rate tax threshold

£1m inheritance tax allowance for couples (£325,000 each plus £175,000 each for family home)

No change to main VAT, income tax or NI rates

Triple lock promise to uprate pensions maintained

£12bn of further benefit savings,

Including freezing most working age benefits until April 2018, reducing benefit cap to £23,000, removing housing benefit from 18-21s on Job Seekers Allowance.

On pensions, reducing the annual allowance for highest earners, maximum contributions down from £40,000 to £10,000 a year.

And raising £4.6bn from further clampdown on tax evasion and avoidance

Wednesday, 6 May 2015

Capital flight from UK?

Is capital fleeing the country as foreign investors anticipate a period of uncertainty after the election?

Crossborder Capital, which monitors current account balances, foreign exchange trades and other money movements said it picked up a $24bn outflow in March.

The firm's chief executive, Mike Howell, says he "has a hunch money is leaving".

On the other hand, there has been a regular outflow over the last 12 months. The drain is partly the result of Russians taking out funds to make sure they aren't affected by sanctions, so it's a big leap to assume any connection with the vote on Thursday.

What is more, Bank of England figures show a completely opposite flow of money in March.

Foreigners spent £28bn buying UK government bonds or gilts in March, after two months of net sales.

The European Central Bank has been busily buying the bonds of Eurozone governments -- part of its QE programme designed to boost economic growth -- and that's made UK investments more attractive.

The Bank of England's stats also show that deposits by non-residents in UK banks increased between February and March.

I am told by people who advise foreign investors in London that they are, nervously, sitting on their hands, waiting see what the election a a June mini-Budget might bring.

Tuesday, 5 May 2015

HSBC move would involve 250 jobs

HSBC has said that moving its headquarters out of the UK would only involve the transfer of only 250 jobs out of 48,000 employed in the UK.

The bank launched a headquarters review, partly because of the UK bank levy which cost HSBC £730m last year and would be much lower if it moved.

There has been widespread speculation that ultimate control would be transferred to Hong Kong.

HSBC said consideration of shifting its headquarters overseas was not a threat but a result of pressure from shareholders worried about their dividends.

While presenting results for the first three months of the year -- from Hong Kong -- its managers were also questioned about rumours that they were planning to sell the UK High Street bank, perhaps reviving its former name Midland Bank.

They said the uncertainty had arisen because banks here were having to separate their retail operations behind a "ring fence" to protect them against a future financial crisis

However, any future action would depend on how much control HSBC's global operation would be left with, which wouldn't be clear for several years.

Friday, 1 May 2015

You have to spend more for Free Amazon delivery

Amazon has confirmed that it is doubling the amount customers will have to spend to qualify for free delivery in the UK - other than for books.
Until today, you had to buy items costing at least £10 in total to be given Free Super Saver Delivery; now the goods will have to add up to £20.
The perk has been a popular aspect of the giant internet retailer's offering.
But Amazon has been trying to convince more customers to sign on for its Prime service, including free one-day delivery but costing £79 a year.

Here's the info from Amazon:

About Changes to FREE Super Saver Delivery
This change relates specifically to FREE Super Saver Delivery. All other delivery services including Amazon Prime and delivery of digital products remain unchanged.
Our FREE Super Saver Delivery service is changing. From 1 May, 2015, orders including £10 or more of books qualify for FREE Super Saver Delivery. All orders of £20 or more across any product category also qualify for FREE Super Saver Delivery. Previously, a £10 threshold applied for all orders to qualify for FREE Super Saver Delivery.
We continue to work hard every day to improve the delivery services that we offer. For example, we added over 10,000 new Amazon Pickup Locations last year to ensure that our customers can collect their deliveries at a time and place that suits them. Also, millions of Amazon customers have already chosen faster delivery by becoming Amazon Prime members. Amazon Prime is £79 a year and offers unlimited One-Day Delivery on over 9 million items, unlimited streaming of more than 15,000 movies and TV episodes with Prime Instant Video, access to thousands of Kindle titles to borrow for free and unlimited photo storage.
Click here to sign up to Amazon Prime or here for full details of our delivery services.
Please note that this change won't affect any pre-orders or orders for items not in stock placed before 1 May, 2015, where you've already selected FREE Super Saver Delivery.