average stamp duty bill doubled

The average stamp duty bill for first-time buyers has almost doubled over the last five years, says a report from mortgage lender Halifax.
The average bill in 2007 was £1,751 compared with £960 in 2002.

In the south-east, south-west and east of England almost all first-time buyers paid stamp duty, while in northern regions only 42% were liable, it said.

The Treasury pointed out that half of first-time buyers will pay no stamp duty this year.

The lowest, 1% tax band hits homes worth between £125,000 and £250,000.

‘Raise thresholds’

Homes valued between £250,000 and £500,000 attract a 3% charge and properties worth more than that are taxed at 4%.

Although the government has raised the threshold at which buyers pay 1%, it has not kept pace with the surge in house prices.

“Stamp duty has again become an issue for first-time buyers because the stamp duty thresholds have not kept pace with house price inflation,” said Martin Ellis, Halifax chief economist.

“We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade,” he added.

But the government defended its record.

“Half of all first-time homebuyers and around two-fifths of all homebuyers will pay no Stamp Duty Land Tax this year,” a Treasury spokesman said.

Meanwhile, the latest figures show that the UK housing market is slowing.

According to a monthly survey from the Halifax, prices across the UK fell by 0.3% in February, taking the annual rate of inflation down from 4.5% to 4.2%.

fakes on the increase

According to a report from the BBC money programme, A fifth of Britons have bought counterfeit goods at the cost of £11bn a year to Uk Business.

A third of those people said they had purchased pirated DVDs whilst just under a quater said they purchased “fashion goods” such as Sunglasses or handbags.

Just over half of people surveyed by Ipsos Mori  said that buying fake goods was theft, whilst 10% saw nothing wrong in buying counterfiet goods.

Chances of further interest rates ‘Slim’

The bank of England has hinted that further interest rate cuts are ’slim’. The Bank of England says the room for further rate cuts is limited as it predicts slower growth and rising inflation.

That could mean fewer interest rate cuts than financial markets expect.

Governor Mervyn King said that “it is the outlook for inflation, in the medium term” that the central bank’s Monetary Policy Committee (MPC) will remain focused on.

Mr King said it was likely that the rate of inflation would hit 3% by the middle of this year, which would require him to write a letter of explanation to the government.

The comments come amid increasing signs that problems in global financial markets, a strong pound, and earlier increases in the interest rates are creating problems for the UK economy.

The Bank cut UK interest rates last week to 5.25% from 5.5% in an attempt to prevent a major slowdown in the economy.

UK Royal Mint faces fraud probe

The Royal Mint, a centuries-old byword for financial integrity, has become a target of expanding efforts to combat alleged bribery by British companies overseas.

The Serious Fraud Office is probing claims of corruption relating to Nigeria, where the Mint has won business supplying coins as part of an effort to improve its financial performance.

 

The investigation is a sign of how Britain’s anti-corruption efforts – beefed up since the abortive investigation into BAE Systems – are putting an uncomfortable spotlight even on the behaviour of the government’s own departments.

The Mint, an executive agency overseen by the Treasury, said simply: “The Royal Mint is working with the Serious Fraud Office in its ongoing investigation.” It declined to give details of its contracts with Nigeria, citing commercial confidentiality.

In its latest annual report, the Mint said it had just fulfilled a “substantial” coin order from Nigeria, Africa’s most populous nation. It has a continuing deal to supply it with “overseas blanks”, metal discs that are stamped to form finished coins. The Mint has won the deals even though coins are little used in everyday Nigerian transactions, as the smallest banknote has a value of only about 2p.

Asked why Nigeria needed the coins, the Mint said: “It’s supply and demand. The Royal Mint supplies coins where there is demand.”

Isaac Okorafor, special assistant to the Central Bank of Nigeria governor, said he was not aware of the SFO investigation. He said the Nigerian Mint had put fresh coins into circulation last year, although take-up had been poor because their low value made them impractical.

Mr Okorafor said it was “practically impossible” for corruption to have occurred in contracts struck under procurement safeguards put in place at the Nigerian Mint.

The SFO declined to comment on the investigation, other than to say the Royal Mint was co-operating.

The investigation is not the first time the Mint’s dealings in west Africa have attracted the SFO’s attention.

FSA come under attack

The Financial Services Authority has been heavily criticised for failing to act fast enough in the Northern Rock fiasco, according to a new Government report due to be published tomorrow.

Commissioned by the Treasury and compiled by a select committee of MPs, the report has been examining the reasons behind the collapse of the Newcastle-based bank and is expected to criticise both the FSA and the Bank of England’s roles, including the decision not to inject liquidity into the banking system last summer when the effects of the credit crunch first became apparent.

HMV shares rise

Shares in HMV rose by as much as 17% after it announced it had a “really cracking Christmas” period.

 Unlike some retailers who have seen shares decrease, the music and book firm said sales in the UK rose as much as 14.1% whilst sales at its Waterstone’s books chain increased by 4%.

 HMV now expected full year profits to be at the top of forecasts.

UK Manufacturing slows

 

Growth in the UK manufacturing sector eased in December, as worries about the credit crunch led to new orders hitting a near two-year low, a survey shows.

The data is likely to boost hopes of another interest rate cut to cushion against an economic slowdown this year.

Firms reported that recent turmoil in financial markets had shaken client confidence, said the Chartered Institute of Purchasing and Supply.

New manufacturing orders fell to their lowest level since March 2006.

The Chartered Institute of Purchasing and Supply/NTC said its purchasing managers’ index fell to 52.9 in December, below the 53.6 that analysts forecast and down from the 54.3 recorded in November.

But it remained above the 50.0 mark separating growth from contraction for the 29th successive month.

New orders fall

“Client confidence is still being affected by tight credit market conditions and high cost inflation, leading many to postpone non-essential expenditures,” said NTC economist Rob Dobson.

The new orders index fell sharply to 51.7, its lowest since March 2006, from 55.0 in November.

The survey also indicated that the inflationary pressures facing the sector are easing although prices remain high.

Companies have paid higher prices for food products, fuel, metals, paper products, plastics and oil over recent months.

The Bank of England’s Monetary Policy Committee cut interest rates to 5.5% from 5.75% last month and many economists expect the central bank to lower the cost of borrowing further in coming months.