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Letters of the month

LETTER OF THE MONTH: Bumper stamp duty revenue causes scratching of heads over the data

Something doesn’t quite stack up. In its August house price index the Nationwide, consistent with one or two other reports of late, says the past 12 months have delivered a bumper stamp duty harvest for the Revenue.

It says stamp duty land tax revenues hit £12.8bn in the 12 months to Q2 2017, well above the £10bn peak recorded in late 2007. In short, the taxman has made a comfortable £2bn extra out of stamp duty over the past 12 months compared to a decade ago.

This is a bit odd given that purchases at the higher end of the market and within buy-to-let have dropped off a cliff since the spate of new tax rules and the progressive SDLT regime came into force.

The Nationwide agrees that something doesn’t seem right. It says the increase in revenues collected “may appear surprising given that the number of residential property transactions in the year to June 2017 was 30 per cent below that recorded in the same period of 2007”.

It certainly is surprising. OK, house prices are up considerably compared to a decade ago and this will certainly have put upward pressure on the tax take – all the more so when you factor in the impact of the abolition of the slab structure of SDLT at the higher end of the market. But, even then, transaction levels in London and the South-east, where prices have risen most (and the impact of the progressive stamp duty regime has been most severe), have dropped off particularly sharply over the past 12 to 18 months.

Many buyers are simply not prepared to take the massive stamp duty hit that comes with buying prime and super-prime properties (many of which are second homes). This explains why so many high-end properties are languishing on the market.

All in all, you’d expect the effect of rising prices to have been mitigated by the lack of transactions. But for whatever reason the numbers just don’t seem to reflect market conditions on the ground. It’s left a lot of people scratching their heads.

And, looking forward, I’m not sure a stagnant market and soaring stamp duty revenues will benefit the market one iota. The Revenue, yes; the market far less so.

Industry defends Nationwide as ‘the wrong target’ of CAB’s attack on SVR loyalty penalties

It’s slightly unfair here for CAB to chastise the lenders stated in the table because all of them offer product switches to borrowers whether direct, via brokers or both.

The lenders that should be chastised are those with high SVRs, which no longer actively seek new lending and therefore have no product offering for any borrower, the biggest culprit being NRAM while it was owned by the state.

I fully agree, Chris. Nationwide makes it crystal clear and it is very easy to switch.

CAB clearly does not understand the market.

This is awful by CAB. Of all the lenders out there, to say the Nationwide is the worst astounds me!

They have one of the lowest [SVRs] around, they offer retention rates lower than new business rates, and they have rates with no tie-in available.

They will also write to the client asking if they want to change it themselves, and soon they will be paying brokers to give advice on the change if the client wants it.

CAB does a great job but reports like this make me question it. As Chris said, let’s shine the spotlight on lenders that will not offer a retention rate; they need pressure, not the likes of Nationwide.

I guess it is the responsibility of the broker — if a client has chosen to use one ­— to ensure that the client does not move on to the lender’s SVR.

Given that a lot more lenders are now giving brokers the opportunity to offer a product transfer and are also paying a proc fee, this should form part of the service offered.

I firmly believe that a mortgage should be reviewed anyway, as a lot of them can be, even over that short period. A client is obviously at liberty to decline a review but it certainly makes sense to have one.

Appointment of Arnie to front PPI deadline campaign fails to impress

Well, that will encourage a raft of spurious claims for us to waste our time on in explaining that mortgage payment protection policies are not PPI.

No doubt Arnie will waive his fee because this is such a worthwhile cause?

At least the PPI gravy train will be terminated in two years’ time.

Talk of strikes at the Bank of England over pay arouse little sympathy from readers

So what? No pay rise for two years is nothing compared to the situation of many people living in the UK. Isn’t this the same group that called for austerity in the first place?

I notice there is no comparison of average salaries within the bank against UK-wide averages, and they are already skewed by the London allowance. I am sure these guys will be well looked after when compared to many other office-based positions but I don’t think the public know enough about what they do on a day-to-day basis to care much — unless they create a catastrophe.

Still, they’ll get another three days off with the kids. I hope they do not get paid for it.

Govt’s proposed leasehold ban ‘will rip the heart out’ of affordable new-build

I have never heard such claptrap in my life!

Yes, let us sell affordable housing to the least educated of us (or not) by stitching them up with leases that will rip the heart out of the ‘sell-on’ value, with lease costs that will increase by inflation year-on-year (revised every 10 years).

What will happen with lease increases when, under Brexit, inflation is totally unpredictable over the next 10 years and could well average 3–4 per cent [per annum]?

There you go, Mr and Mrs Low Paid, your lease has increased by only 30–40 per cent (if you’re lucky) and your new payment will be, well, unaffordable!

Oh and, by the way, your house value has decreased because of this. You may as well sell it on to another sucker!

Better still, ensure the NCLTN [National Community Land Trust Network] becomes regulated with the FCA and, when the ‘proverbial’ hits the fan, it can refund the clients for bad advice.

Oh, what did you say, Mr Ombudsman? “We can’t make the people who provide ‘bad advice’ responsible, nor the Government for approving such tosh, nor the lenders for approving the mortgages. But I’ll tell you what: we’ll pound you advisers into the ground, make you totally responsible, and you can pay your £3K excess per case and watch your premiums go up by tenfold over the next 10 years.”

Disillusioned? Bloody right I am!

An all-out ban will lead to unintended consequences.

Better to impose caps and restrictions on ground rent escalation.



What exactly is a missold mortgage?

There are many breaches that constitute a missold mortgage but the fundamental question is whether people were treated fairly by their adviser or lender. I am looking at complaints that a recommendation was inappropriate for debt consolidation, capital raising, extending the term, affordability, arrears and right-to-buy mortgages. There are many breaches that constitute a missold […]


House price growth at record levels: Your Move

Annual house price growth reached record levels in August, according to the latest Your Move index. The property group says house prices across England and Wales are 2.1 per cent higher than a year ago. The average home is now worth £297,398. The East of England saw the greatest growth, with prices 5.5 per cent […]


More lenders should extend mortgage age limits: BSA

More lenders need to lend to borrowers in their eighties and beyond, according to the Building Societies Association. The BSA welcomes the FCA’s publication of an ‘occasional paper’ earlier today, which suggested firms should take older borrowers into account more with their policies and proposition.  A BSA statement says: “It represents an important first step […]

‘How to…audit your auto-enrolment scheme compliance’

Avoid pension penalties with our auto-enrolment checklist

According to the Pensions Regulator’s annual commentary and analysis report released this month, 785 potential non-compliance cases were referred for investigation, with 23 auto-enrolment compliance notices issued. And they predict that the use of their statutory powers is only going to increase.


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