As consumer debt has continues to grow over recent years the subject has raised concerns with brokers and many others in the lending industry.
Savills director Scottish research Faisal Choudhry told the Association of Short Term Lenders (ASTL) conference this week that he had raised this point directly with the Bank of England agent for Scotland in September.
“In terms of car leasing debt, he said he’s not that concerned anymore and in terms of credit card debt, he termed it as an amber light,” Choudhry said.
“But he did tell me one thing. He said: ‘whenever we make an announcement about these things, immediately there’s a reduction in the debt people take on’.
“So the Bank of England’s initial warning has had an immediate effect and he didn’t seem that concerned about that debt in the short term,” Choudhry added.
Stamp Duty cut
In his conference session Choudhry also suggested that a cut in the Stamp Duty rate was “not a probability”.
He considered the effect Stamp Duty Land Tax (SDLT) changes had had by examining data from HM Revenue and Customs.
“Changes to Stamp Duty introduced in December 2014 have been blamed for a reduction in prime markets, but what hasn’t been proved is whether the tax generated has increased as a result of the changes,” he said.
“From the data, clearly the level of revenue has increased over the last three years and it’s been boosted by the 3% extra supplement introduced in April 2016. But if you take away the surcharge, the basic level of Stamp Duty generated is not that far off what was generated historically. So if the government wanted a tax neutral structure, that seems to be happening.
“So the verdict on SDLT is that however highly taxed the top end of the market is, and whatever the economic inefficiencies it brings with it, in the short-term any chance of a rate cut is a possibility but not a probability.”