Latest news with #Simon Shaw
Yahoo
3 days ago
- Business
- Yahoo
Inheritance tax raid fears ‘are damaging house sales'
Fears of a fresh inheritance tax (IHT) raid by Rachel Reeves have sent a chill through Britain's housing market, a leading estate agent warned. Bosses at Savills, one of Britain's largest property agents, said a 'vacuum' of information on IHT changes from the Government was forcing prospective house buyers to hold fire on purchases. The Treasury has reportedly been exploring plans to rework IHT to fill a gap in the public finances of between £20bn and £70bn. Simon Shaw, Savills' finance chief, said speculation over Ms Reeves's next round of wealth taxes was increasing uncertainty among prospective buyers, especially across middle England where IHT changes bite the most. 'The rhetoric changing towards IHT does not help. It certainly doesn't help in the rural arena,' he said. 'I suspect a lot of things are being market tested through that rhetoric. None of us know what will really happen and what the market will have to contend with. 'What that does mean is, in the interim period, it creates a level of uncertainty in the residential market particularly. It's classic uncertainty. People fill the vacuum with their own fears about what might happen.' The Chancellor is thought to be considering a lifetime cap on the value of gifts that can be passed on before death. At the moment, gifts made seven years before someone's death are not subject to IHT, while a sliding-scale tax rate of between 8pc and 32pc, known as 'taper relief', is applied to gifts given between seven and three years before death. Savills is particularly exposed to UK tax changes, and it blamed a 'difficult' six months of trading on 'the rhetoric around taxation changes in the future'. The property agent saw half-year revenues from housing sales decline by 8pc, blaming the impact of 'actual and potential tax changes on sentiment'. Savills also described a 'dampening effect' on corporate and private investor activity through the second quarter as a result of tax changes and Budget uncertainty, leading to a 13pc reduction in property investment volumes to £21.5bn. The FTSE 250 group is the latest to sound the alarm over Budget tax fears dampening house buyer interest. Marshalls, a building materials supplier, last week said there was growing reluctance from homeowners to spend their savings on renovation projects and a lack of confidence from first-time buyers and employers. Housebuilders Persimmon and Bellway have also flagged weakening demand, pointing to 'affordability constraints' for buyers. A government spokesman said: 'We are delivering the biggest boost to social and affordable housing in a generation, and our landmark planning reforms will help to drive UK housebuilding to its highest level in over 40 years while growing the economy by £6.8bn. 'Thanks to measures taken at the Budget, there will also be an additional 130,000 transactions over the next five years by first-time buyers and others buying a primary residence.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
3 days ago
- Business
- Telegraph
Inheritance tax raid fears ‘are damaging house sales'
Fears of a fresh inheritance tax (IHT) raid by Rachel Reeves have sent a chill through Britain's housing market, a leading estate agent warned. Bosses at Savills, one of Britain's largest property agents, said a 'vacuum' of information on IHT changes from the Government was forcing prospective house buyers to hold fire on purchases. The Treasury has reportedly been exploring plans to rework IHT to fill a gap in the public finances of between £20bn and £70bn. Simon Shaw, Savills' finance chief, said speculation over Ms Reeves's next round of wealth taxes was increasing uncertainty among prospective buyers, especially across middle England where IHT changes bite the most. 'The rhetoric changing towards IHT does not help. It certainly doesn't help in the rural arena,' he said. 'I suspect a lot of things are being market tested through that rhetoric. None of us know what will really happen and what the market will have to contend with. 'What that does mean is, in the interim period, it creates a level of uncertainty in the residential market particularly. It's classic uncertainty. People fill the vacuum with their own fears about what might happen.' The Chancellor is thought to be considering a lifetime cap on the value of gifts that can be passed on before death. At the moment, gifts made seven years before someone's death are not subject to IHT, while a sliding-scale tax rate of between 8pc and 32pc, known as 'taper relief', is applied to gifts given between seven and three years before death. Savills is particularly exposed to UK tax changes, and it blamed a 'difficult' six months of trading on 'the rhetoric around taxation changes in the future'. The property agent saw half-year revenues from housing sales decline by 8pc, blaming the impact of 'actual and potential tax changes on sentiment'. Savills also described a 'dampening effect' on corporate and private investor activity through the second quarter as a result of tax changes and Budget uncertainty, leading to a 13pc reduction in property investment volumes to £21.5bn. The FTSE 250 group is the latest to sound the alarm over Budget tax fears dampening house buyer interest. Marshalls, a building materials supplier, last week said there was growing reluctance from homeowners to spend their savings on renovation projects and a lack of confidence from first-time buyers and employers. Housebuilders Persimmon and Bellway have also flagged weakening demand, pointing to 'affordability constraints' for buyers. A government spokesman said: 'We are delivering the biggest boost to social and affordable housing in a generation, and our landmark planning reforms will help to drive UK housebuilding to its highest level in over 40 years while growing the economy by £6.8bn. 'Thanks to measures taken at the Budget, there will also be an additional 130,000 transactions over the next five years by first-time buyers and others buying a primary residence.'
