Jump in buy-to-let demand

Demand for buy-to-let lending increased significantly in the three months to Christmas, according to the Bank of England.

Lenders expect more jostling for buy-to-let mortgages in the first quarter of 2016.

Housing experts predict that prospective landlords will move as quickly as possible to complete purchases before stamp duty on second homes goes up in April.

George Osborne is imposing a 3% surcharge on the duty to target buy-to-let investors.

The Bank of England said 22 per cent more lenders reported increases rather than decreases in the demand for loans.

Looking ahead, 30 per cent more lenders expect demand to grow even further over the next few months.

Yesterday the Council of Mortgage Lenders said the number of buy-to-let loans leapt by 35% in the month of November, compared to the same month a year before.

Young lose out on state pension

The government has published figures showing that most people retiring over the next 15 years will be gainers from the new flat rate state pension which is being launched in April.

But the calculations also demonstrate how millions of young people could lose out significantly from the reform.

The Department for Work and Pensions says that 73 per cent of those reaching pension age between April and the year 2030 will be better off than if the existing system had carried on, typically by £10 a week.

By 2040, though, most new retirees will be receiving around £11 less.

The new State Pension will pay a higher rate, £155.65 a week rather than the current £119.30,

Although under transitional arrangements very few people will qualify for the exact new amount in the early years - some will be paid more and some less.

The increase is paid for by throwing in all the extra payments available at the moment, such as means-tested Pension Credit and the earnings-related State Second Pension.

By the time people just starting out in the world of work, in their twenties, come to retire, virtually all will qualify for the full flat rate payment.

But what is most interesting about these figures is that this younger group will do much worse than if the current rules were left alone.

69% of those retiring in 2050, now in their thirties, will lose out compared to staying in the current system, typically by £14 a week.

And 76% of those in the 20s will get less, typically £15 less.

In most cases this is because they would never have had the opportunity to contribute to the State Second Pension, the most generous current top-up.

Tax boss Homer resigned

HM Revenue & Customs tells me:

Lin Homer told the Cabinet Secretary, Sir Jeremy Heywood, in the summer of 2015 that she wanted to leave at the end of the 2015-16 financial year, after completing the 2015 Spending Review.

Like any other employee who hands in their notice, Lin is leaving without any compensation payments.

Savings rates cut to the bone

Savings rates offered to new customers have reached a fresh low, after banks implemented further cuts.

The Bank of England said that the average new instant access savings account was paying just 0.48% in December, while rates being offered for new tax-free cash ISAs had fallen to 0.85%.

It's not long ago that ISA's were paying more than two and a half per cent.

National Savings cut its Direct ISA rate in November and High Street banks have followed its lead.

Financial experts say banks aren't competing to attract savings in. Instead they are concentrating on winning current account customers by paying them better interest instead.

Halifax, Lloyds, and Nationwide were among those cutting ISA rates last month.

Santander and HSBC have given notice that they'll be reducing them too.

Savers have suffered ever since the Bank's base interest rate was cut to a record low of one half of one per cent in 2009, but in recent months returns have been cut to the bone.

Peak Card

Are we approaching peak card?

Figures from the card providers trade group, UK Cards, show that payments by card have more than doubled in a decade to £566bn a year.

Use in pubs has multiplied 5 times. People seem to be happy to use contactless debit or credit cards to buy sandwiches, coffees and papers.

Some carry no cash their wallets or purses. They can be genuinely flummoxed if a shop doesn't accept payment by card.

So much so that commentators never tire of predicting the death of cash, or at least its long term decline.

However, surely it is much more likely that we will see the death of cards before we see the death of cash?

Any user of Apple Pay, Barclays bPay and a host of upcoming rivals will tell you that it is possible to pay electronically while leaving your cards at home.

For a good while, most people will take several methods of payment with them, including cards.

But the writing is on the wall. The card itself is just a way of carrying a chip - and the chip can easily be mounted on something else or replaced by the wireless capabilities of a mobile phone.

Buy to let - extra stamp duty

George Osborne's new 3 per cent stamp duty charge for buy to let landlords will add £5,520 on the price they pay for the average £184,000 buy to let purchase.

The new charge would have hit 160,000 buyers if it had applied last year, or 13 per cent of the total buy to let market.

Commercial property investors, with more than 15 properties, are expected to be exempted from the new charge.

The Chancellor said people snapping up buy to lets and second homes "should not be squeezing out families who can't afford a home to buy".

The 3 per cent charge will be added to each stamp duty rate, so properties costing up to £125,000 -- which are zero-rated at the moment - will incur 3 per cent.

Those costing from £125,000 to £250,000, currently at 2 per cent, will incur 5 per cent duty and so on for the higher rates.

People who buy two homes by mistake, because they are in a chain which breaks apart, will have to pay the extra duty but will be able to claim it back within 18 months if they manage to sell their original home.

Buy to let enthusiasts will not face the charge until April next year, following a consultation on the details.

3% extra stamp duty for buy to let

Osborne:

Frankly, people buying a home to let should not be squeezing out families who can’t afford a home to buy.

So I am introducing new rates of Stamp Duty that will be 3 per cent higher on the purchase of additional properties like buy-to-lets and second homes.

It will be introduced from April next year and we’ll consult on the details so that corporate property development isn’t affected.

This extra stamp duty raises almost a billion pounds by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership.

The funds we raise will help building the new homes.