Name: John Walker
Company: Federation of Small Businesses (FSB)
There are major concerns that the coalition Government’s GGT proposals will hurt a new breed of investor and entrepreneur. There are more than one million buy-to-let properties in the UK and the Federation of Small Businesses (FSB) believes that these entrepreneurial landlords, with more than one property to let, should not be exposed to any swingeing CGT changes.
The dreaded emergency Budget will outline the detail of the top-line level of tax and what reliefs will or will not stay. However, should the Government ensure that any relief introduced is increased in proportion with any rise in the top-line and caution that in a mood of tax simplification this does not become a maze of differing top-line rates, mixed reliefs and mass paper-filing. Otherwise, another u-turn is on the horizon. Small businesses are slowly gaining confidence in the economy, but the Government still needs to ensure it puts measures in place so that the lifeblood of the country can help the economy recover.
We welcome comments that the coalition Government will try to better enforce lending agreements struck with the bailed out banks. Credit conditions remain difficult for many small firms and the FSB is concerned not only by the lack of finance available but that the cost of finance is too high.
It would be easier to get banks lending to small and medium sized businesses if those firms which have been rejected unfairly had the right to redress decisions through the planned Small Business Credit Adjudicator, which regrettably the new Government plans to scrap.
Name: Matt Smith
Company: wpb creative
Governments know how much consumer confidence is rooted in how wealthy we feel and that our perception of the value of our homes (not investment properties) is intrinsic to that. Less red tape and some redistribution of the tax burden seem fair enough to me, but, seen in the broader economic context, all these ostensibly sensible initiatives are low level.
The big fiscal news will be in the Budget. I wonder if any of these measures will even be remembered in the face of the imminent death by a thousand cuts. House market confidence will be affected by fears of job losses and huge redundancy programmes and cuts in public services will affect confidence far more than any of the minor fiscal measures grabbing headlines to date.
But, while fiscal policy is going to dominate the headlines, monetary policy is of greater importance. Low interest rates have been the money in borrowers’ pockets during this recession and, if this comfort is withdrawn to control inflation, then many homeowners will find themselves in perilous circumstances or worse, again damaging or destroying confidence. Also fundamental will be our ability to control wage inflation in both the private and public sector to keep interest rates down.
The Budget holds the key. For now the direction of the housing market will be determined by the wider economic story unfolding around it. The Budget’s austerity measures must be accompanied by a timetable and a vision of when and how we will be confident enough to invest again, both as a nation and individuals. As with any debt, without a repayment term, we cannot move on.
Name: Tony Ward
Company: Home Funding
So we have a new Government in power and it is intent on ringing the changes in the mortgage world. Or is it? Yes, we have certainly got off to a promising start; what does it really mean in the great scheme of things to the housing market?
We are already seeing some fluctuations in house prices and the promised return to sustained price increases doesn’t seem to be happening. Consumer confidence has a great impact on how these things pan out in the longer term; however, it is driven by other economic factors such as unemployment and fear of unemployment. With the Government poised to make a series of rather large cuts to the public sector in particular, this will surely have a negative impact on the state of the nation.
The other important factor driving the market and of course consumer confidence is lack of liquidity. It is the one area in which the Government could intervene positively to enable lenders to release more monies back into the system. There are a number of schemes it could use to deliver this. For example, extending and widening some of its current incentives to both bank and non-bank lenders, such as the Discount Window Facility.
This crucial and positive intervention will enable us to move to a fully funded and competitive mortgage market, which will in turn stabilise the economy.
So how does it feel nearly a month on? Well, the Government has its work cut out, but, although I was initially sceptical about how a government would operate in a hung Parliament, I’m encouraged by early signals and intrigued to see how this turns out.