Homebuyers have forked out £31.5bn in stamp duty over the past ten years. Last year alone, the figure reached £6.5bn - a staggering 675% increase since Labour came to power. In 1997-1998, just £830m in stamp duty was paid. Increases introduced by Gordon Brown when he was Chancellor, which were widely criticised at the time, are forcing record numbers of homebuyers to pay stamp duty. Before Labour came to power, the tax was charged at just one per cent on all properties sold for £60,000 or more. Today, it is charged at 1% on houses costing between £125,000 and £250,000, 3% on those worth from £250,000 to £500,000 and 4% for those sold for more than £500,000. In London, the average asking price for a home is £402,000, which would mean stamp duty of more than £12,000. The majority of first-time buyers are now forced to pay the tax, which - coupled with the recent property boom - makes finding enough money to buy a home even harder.
Archive for the ‘Consumer’ Category
Government rakes in £31bn in stamp duty
Thursday, February 21st, 2008Just how safe are overseas banks?
Thursday, February 21st, 2008New banks from foreign shores are tempting savers with top rates of interest on internet accounts. Kaupthing Edge is owned by Icelandic Bank Kaupthing and its UK subsidiary Kaupthing Singer & Friedlander. ICICI Bank UK, a subsidiary of the huge Indian ICICI Bank, operates in 18 countries and has 24m customers worldwide. FBN (UK) Ltd, whose account, under the brand name FirstSave, is also in the best buy tables, is a subsidiary of First Bank of Nigeria. With all three banks the money in your savings account always stays in the UK and is invested mainly in cash and short-term bonds - or near cash - to finance the bank’s UK business. Your money will not end up in Nigeria, India or Iceland. Given the distinctly dodgy reputation of some Nigerian operations - it is the home of internet fraud and corruption is rife - this should provide reassurance to anyone considering FBN’s account. Savings in any of these three banks are covered by the UK’s Financial Services Compensation Scheme (FSCS). If any of these banks go bust then you can claim up to £35,000 per person per bank as they are all fully authorised by the FSA.
Porsche challenges London gas guzzler tax
Tuesday, February 19th, 2008Luxury carmaker Porsche said on today it planned to legally challenge London mayor Ken Livingstone’s decision to help fight global warming by taxing gas guzzling cars driving in the city centre. Porsche said the £25 daily charge was unfair, would not cut emissions of carbon dioxide and would deter businesses from moving to the city. Environmentalists lashed out at the Porsche move and called for even tougher measures against the most polluting cars in next month’s budget. Announcing the plan last week Livingstone admitted that it would have little immediate effect on carbon emissions but said it would discourage people from driving polluting cars in the city centre and encourage manufacturers to make cleaner engines. He said the new scheme would raise £30 million to £50 million a year and cover most of the cost of a major cycling initiative that will include a Paris-style roadside bicycle hire scheme in the city centre.
Northern Rock nationalised
Sunday, February 17th, 2008The government decided to nationalise Northern Rock today, abandoning a five-month attempt to find a private sector buyer for the ailing bank. “In the current market conditions we do not believe the two proposals deliver sufficient value for money for the taxpayer,” Finance minister Alistair Darling told a news conference. “So the government has decided to bring forward legislation to bring Northern Rock into a temporary period of public ownership.” The government will put forward legislation on tomorrow to take the bank into public hands — the first major nationalisation in Britain since the 1970s — and trading in Northern Rock shares was suspended.
Egg slashes savings rate by 0.5%
Wednesday, February 13th, 2008Following last week’s rate cut by the Bank of England, Egg has slashed the rate on its internet savings account by 0.5% - double the cut in the base rate. Until the end of last year Egg’s Internet Account came with a promise that its before-tax rate would at least match base rate – 5.25% from last week. But now that the guarantee has run out, the bank has taken a heavy hand to the account. Its loyal savers now earn 4% after savings tax (5% before tax) down from 4.4% (5.5%). Customers looking for a higher rate may want to switch to newcomer Kaupthing Edge which has said it will not be reducing the 6.50% it pays to online savers, despite the change to the base rate.
Directory enquiries free but with 20 seconds of ads
Tuesday, February 12th, 2008The launch of the new 0800 100 100 service signals the end of what many have called the rip-off of the 118 system which replaced the old BT 192 number. It will not charge callers from landlines, mobiles or cable networks, will be answered by real people rather than machines, and its operators will be based in UK call centres. It will be sustained through advertising. Callers will be asked to listen to a 20-second advertising pitch before they receive their number. The majority of the advertising will be relevant to the individual query. It could save callers £300 million a year, the amount currently spent on costly 118 calls. There are more than 378m calls to directory enquiries annually with an average cost of 78p.
Bank charges court case opens
Monday, January 14th, 2008The court case into unauthorised bank overdraft charges began today. The Office of Fair Trading has brought the test case to determine whether the penalties, which can cost customers up to £39 a time for exceeding their borrowing limits and for bounced direct debits and cheques, are legal and fair. If the High Court judge agrees with the OFT, this should open the floodgates for compensation on a large scale for victims of unauthorised overdraft charges. On the flip side, the banks may start to charge all customers for everyday banking, for example by levying a monthly fee, to recoup their lost income.
How will banks recoup their dented profit margins?
Tuesday, December 18th, 2007The banks always find various ways to recoup losses through their customers. When credit card charges had to be reduced from as high as £39 to £12, some responded by tagging on an annual fee, some have already started fining customers who are in credit and other like RBS reduced the interest free period their customers have before payments are due. And there have been many others setbacks; mortgage exit fees, miss-sold Payment Protection Insurance (PPI), various bank account charges, and now the US sub-prime mortgage crisis. They have already started by increasing mortgage arrangement fees to as high as 4% of the loan. The banks are very shrewd in finding various ways to pass the buck!
Northern Rock entices savers and puts off borrowers
Friday, December 14th, 2007For the past two weeks, the bank has been offering loyalty bonuses to savers and increased rates to a range of savings accounts. But on the other hand, it has withdrawn mortgages, loans, credit card, and increased borrowing rates to rediculous highs with huge arrangement fees. Obvious signs that its trying to recoupe some of its loses after its savers decided to match away with their money in toe back in October. It has since then borrowed more money from the Bank of England to the tune of £29bn. The move has pushed some of its savings products up the best buy tables and deterred mortgage brokers with fixed rates starting from 6.79% on 90% LTV with arrangement fee of £1,995. As a good loyal Northern Rock mortgage customer, I will have to match off too unless they sort this out.
Central banks try to regain control
Friday, December 14th, 2007Five of the world’s leading central banks including the Bank of England plan to inject £54bn of cash loans into the money markets. They hope this would ease the interbank rates (the rate used by banks to lend each other money) which has remained stubbornly high despite the quarter rate cut last week. Although some analysts believe this will result in an immediate reduction in the interbank rates (and filtering through to mortgages/loans) others however, warn that it would take time for lender to trust each other again. Probably not while there are still huge bank losses still to be realised from the subprime crisis for some months to come. So will this gesture make a difference or has it come too late? We’ll have to wait and see.
