View more on these topics

Barker gets centre stage but Miles is in shadows

With two key reports on housing and mortgages leading into the Budget, the difference in Gordon Brown&#39s adoption of their proposals is startling.

The Miles report has effectively been sidelined, as many in the industry expected, with a minimal mention by Brown that it will be considered by the FSA and the Treasury.

Read this as meaning that there will be no artificial structures to ease the funding of long-term fixes or legislation forcing lenders to offer their new business rates automatically to all customers.

Barker, by contrast, was everywhere in the detail. Key-note points are a definite adoption of property investment funds and a liberalising of the planning regime. The Pifs consultation paper reveals that residential is a prime target both for expanding institutional investment and increasing the social housing stock.

This looks like the Government&#39s main platform for residential investment as the Budget was silent on previous Treasury statements that direct investment in residential property by Sipps would be allowed.

The bombshell was in the clear intention that a planning gain supplement is to be introduced to tax the development gain on land once planning is granted. It is unclear at present whether this will be levied on grant of planning at the outline stage or on the gain crystallising on a sale to a developer.

To the surprise of many, stamp duty was untouched so another opportunity to help the first-time buyers was lost. Brown again revealed his fundamental lack of understanding of this end of the market.

Pifs will produce more demand, thereby fuelling inflation, and Barker&#39s recommendation on new-build volumes undershoots Shelter&#39s views on new starts by around 70 per cent so supply is unlikely to catch up.


Eagle axes pension bonus

Eagle Star is scrapping the reversionary bonus on conventional with-profits pensions this year to ensure that it can meet its guaranteed benefits. It will pay a reversionary bonus of 0.25 per cent for conventional with-profits life policies. Annual bonus rates for its series 5 unitised with-profits fund are 1 per cent for life policies and […]

Shortfalls down from £11k to £8k

Independent insurance analyst Ned Cazalet is continuing to predict that 90 per cent of mortgage endowment policies will fall short despite the recent upturn in markets. But in his latest report on with-profits and solvency, Cazalet admits that the average shortfall has fallen to £8,000-£9,000 from £11,000 last year and total shortfalls have fallen from […]

Keep mutual choice for consumers

On the back of last week&#39s Penrose report, the Treasury has announced the set-up of yet another review, this time looking at the continuing viability of the mutual life insurance sector. Treasury Financial Secretary Ruth Kelly has asked Paul Myners, a fund manager who already has one Government-commissioned review under his belt, to take a […]

Small firms hit by end to dividends

Gordon Brown has closed the loophole that allowed ownermanagers of small businesses to avoid income tax by paying themselves dividends inst-ead of salary. Many IFAs see this as a “punitive measure” from the Chancellor, with Master Adv-iser managing director Doug Brodie arguing that the move could see many firms return to sole trader status, with […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm