This week’s comment is in response to the article: Seven things we learned from the mini Budget
very deceptive said: “These are certainly some positive announcements especially for stamp duty and why shouldn’t first-time buyers be helped.
“The worst recessions are typically much deeper when new property ownership is curtailed whereas the periods of greatest growth are usually matched by a surge in property buying. If you want growth, you target home ownership and allow the market to facilitate buying and selling.”
They added: “Massive spending to help the lower paid half of the population appears to be worth the risk as they are the most vulnerable to the spike in living expenses.
“However, cancelling the top rate of tax is an excessive giveaway. Whilst a lower paid person on say £25,000 will enjoy an income tax cut of about £125 over the year, someone on £200,000 will be around £3,875 better off and someone on £500,000 will enjoy a whopping £18,875 income tax cut, mostly due to removing the additional five per cent for the highest tax rate.”
They continued: “Attracting talent from around the globe by gifting all of our UK higher rate taxpayers is not something that should be afforded at this time. This is a huge gamble when we are already so indebted due to surprise events such as Covid, the Ukraine war and the cost of fuel crisis.
“By all means, devise some other gifts to attract talent from other shores, but target something that costs far less and doesn’t include every higher taxpayer in the UK earning over £150,000.
“A yearly gift equating to the value of a huge property deposit that would take most first-time buyers half their adult lives to save is extravagant in the extreme, but being so generous at a time of colossal UK debt, skyrocketing bills and searing inflation, I find this quite repugnant. This part of the plan is completely wrong.”
More articles providing ‘insight into the bigger picture’ would be ‘welcome’
The second comment is in response to the article titled: More rate hikes on the way – Maddox
Stuart Phillips said: “Hopefully I’m not alone in saying that I don’t fully understand all of this. Whilst I understand broadly the role of the Bank of England, the mechanisms that allow banks to create money to lend and how swaps are the key metric, I don’t understand enough to give advice based on this and feel that I really should.
“If I’m not mistaken the predictions above indicate that clients might fare better on three-year rates that get them through the hump, but leave them able to refinance onto longer-term fixeds at better rates than they would get now?
“The rationale being that you pay about the same but can get back to something almost one per cent cheaper two years sooner.
“I think more articles providing economic knowledge and opinion pieces with insight into the bigger picture would be most welcome, certainly from lenders using this information to make policy and rate decisions.”
With Stuart’s letter in mind, this week Mortgage Solutions has published a raft of broader economic stories including pieces on the Bank of England bond buying programme, the IMF’s response to the mini Budget, the tumbling pound and the overall state of the UK economy as well as providing links to useful guides such as this one on swap rates. We will continue to publish macroeconomic and advisory pieces alongside our core mortgage industry content.
