Barely a week passes without a call for action by Chancellor Gordon Brown to change the way in which stamp duty is charged and rightly so. The banding system and, more importantly, the lack of amendment to these bandings over the years means that stamp duty has become a bigger burden for more borrowers.Hopefully, we will see some changes but in the meantime, Alliance & Leicester has decided to help with its new first step mortgage. Basically, the deal offers a three-year fixed rate at 5.99 per cent for up to 95 per cent LTV, with no arrangement fee. The link to stamp duty comes with the addition of a cashback which varies depending upon the loan size – £1500 for loans up to £100,000 and then £2,500 up to £250,000. This is clearly aimed at covering most, if not all, the borrower’s stamp duty bill. As the cashback depends on the loan size rather than being calculated as a straight percentage of the loan, the value of the cashback varies so on a loan of just over £100,000, it equates to almost 2.5 per cent of the loan but drops to 1 per cent at the maximum of £250,000. With three-year fixed rates currently available at 1 per cent or more below the pay rate of this deal, better overall value could be had by going for a lower rate. Another downside to the product is that although clearly targeted at first-time buyers, a higher lending charge still applies above 90 per cent LTV, a crippling fee in its own right. This is a nice idea but I am not sure that the product delivers the best value in the majority of cases. David Hollingworth is mortgage specialist at London & Country
FTBs are an endangered species and need help to survive.
Arc Fund Management
Arc Growth Company VCT
I had to write to congratulate Ian Lowes for his article in Money Marketing (February 10). I agree 100 per cent with his response to the contracting-out issue. I have been making similar remarks to clients for many years.
Charcol is urging the Chancellor to amend the “antiquated” rules governing stamp duty in his Budget statement on March 16. The broker also claims that the misery caused by inheritance tax limit is unacceptable, given that property prices have soared over the last few years, leaving many homeowners, particularly in the south of England, beyond […]
Capital Market Notes, December 2016 Dave Lafferty, chief market strategist at Natixis Global Asset Management, assesses the accuracy of his 2016 outlook and provides his thoughts and outlook for 2017. Click here to read the full article
- Top trends
- Top trends
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
A former IFA who pocketed clients’ Sipp money has been given a six-year jail sentence. Darren Say, who ran advice firm Wealth Connection, was found guilty of fraud by abuse of position and of fraudulent trading after creating a pension scheme that loaned money to clients’ Sipps before investing funds in a property company where […]
Consumer champion Martin Lewis has published a passionate warning about scam advertisements using his identity to endorse investment and insurance schemes. Lewis, founder of Money Saving Expert, has posted a video denouncing a cloud-based trading scheme that claims he invested £500,000 in it. He says in the video: “It is a con, it is a […]
The FCA cancelled the authorisations of more than 200 firms last year for failing to meet “basic regulatory requirements” like paying their fees or filling out regulatory returns. The regulator revealed the figure in an update today, that its Threshold Conditions Team took enforcement action against at least 207 firms for failing such compliance failings […]