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MS Leader: Budget that’s not for housing

Chancellor George Osborne’s third Budget was lambasted in the mainstream press last week, with accusations of granny bashing quickly eroding the chancellor’s claims that it promoted a fairer and more efficient tax system.

For the housing market there was little to be pleased about, with nothing to add to the NewBuy scheme. Although the government’s clampdown on Stamp Duty avoidance, where companies buy properties, has been welcomed in principle, the National Landlords Association’s fears that it could inadvertently hit buy-to-let investors is of concern.

On page 4 this week we outline BM Solutions’ research on 2011 rents and yields, which shows 4.8% growth in average monthly rents year-on-year. They are now £716, up from £682 in 2010.

In the popular press buy-to-let and landlords have a negative reputation, chiefly for snapping up properties that could be available to first-time buyers. But the reason rents are so high is that many are unwilling or unable to get on the housing ladder, and without a noticeable boost in rental property, rent inflation will only increase. Anything that stops landlords from expanding their property portfolios will hit renters in the most painful place – their wallets.

Meanwhile, this could be a good time for brokers, with lenders increasing SVRs and restricting criteria. Like someone dragging a stick across the bottom of a pond, this has unsettled borrowers who were happy to sit on their SVRs and hope for the best.

Now is the perfect opportunity to get in touch with clients to see if a more affordable deal is out there for them, and for those on interest-only, whether now is the time to finally talk about switching to a repayment mortgage.


China tech and Global Alpha: a new great leap forward

By Robin Geffen, Fund Manager and CEO

Internet giant Alibaba is exactly the type of entrepreneurial company that the high-conviction, top-performing Neptune Global Alpha Fund seeks to invest in. Established just 14 years ago in an apartment in Hangzhou, today Alibaba is larger than Amazon and eBay put together and is challenging some of the most powerful internet companies in the world…

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The value of an investment and any income from it can fall as well as rise and you may not get back the amount originally invested. Forecasts and past performance are not a guide to future performance. Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. These are Neptune’s views and as such this document is deemed to be impartial research. We do not undertake to advise you of any change to our views.


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