Latest news with #StampDuty
Euronews
11-07-2025
- Business
- Euronews
UK economy contracts again in May despite government growth push
The UK economy contracted by 0.1% in May, following a drop of 0.3% in April, the Office for National Statistics said on Friday. The pound fell around 0.2% against the dollar to $1.35 after the announcement. The figures come as an unexpected blow to the UK's Labour government, which has made boosting growth a pillar of its political agenda. Economists had predicted a 0.1% expansion for May. Labour's move to increase payroll taxes earlier this year has been blamed for reduced hiring, while tariff threats from the US administration are also sowing uncertainty and dampening spending appetites. The UK saw an uptick in gross domestic product (GDP) in February and March, although the Bank of England warned that this was down to temporary factors, rather than strength in the underlying economy. For example, a hike in Stamp Duty, a tax on property or land purchased, meant that buyers rushed to make their purchases before the end of March. Exporters also rushed to ship goods in an attempt to prepare for upcoming US tariffs. May's contraction was largely driven by a 0.9% fall in production output. Construction was down 0.6%, while services grew by a meagre 0.1%. In April, production fell by 0.6%, construction grew 0.8%, and services dropped 0.3%. 'Growth is becoming incredibly difficult to achieve for the government, and the plans put in place so far are unlikely to move the needle in the absence of improving business and consumer sentiment in an environment of ongoing cost pressures,' said Lindsay James, investment strategist at Quilter. 'The choices are tough and stark, and until we see an end to the persistent tax rises, inflation returning to target and interest rates falling more meaningfully, improvements will be minimal.' The Bank of England held interest rates at 4.25% last month, although markets are predicting a 25-basis-point cut at its next meeting on 7 August.
Business Times
10-07-2025
- Business
- Business Times
UK homebuyer demand rebounds to a six-month high, index shows
[LONDON] A closely watched gauge of demand from potential British homeowners climbed to its highest level in six months, a signal that the real estate market is starting to stabilising from a tax-increase induced slowdown that's weighed on house prices. The Royal Institution of Chartered Surveyors (RICS) said its index tracking new buyer inquiries rose to +3 in June, indicating the number of estate agents seeing higher demand outnumbered those reporting a drop, figures released on Thursday (Jul 10) showed. It was the first positive reading since December and a sharp jump from -22 in May. Improving demand indicates the property market is steadying from the impact of the increase to the stamp-duty tax, which fuelled a spurt of buying before it kicked in and a steep slowdown afterwards. Even so, the pace of sales remains relatively subdued, in part due to a slowing economy and anxiety about the outlook. 'The earlier distortion caused by transactions being brought forward ahead of the Stamp Duty changes now appears to have largely dissipated, allowing underlying trends to re-emerge,' said Tarrant Parsons, head of market research and analysis at RICS. The RICS house-price indicator was largely unchanged at -7 in June, bucking analyst expectations that it would continue to decline. Other recent reports have sent relatively mixed signals, with Nationwide reporting a drop in prices while Halifax indicated they were little changed. But property agents forecast aggregate prices will continue to trend downwards in the near-term before improving over the next year, according to RICS. 'Encouragingly, near-term sales expectations have begun to edge higher, pointing to a modest shift in sentiment,' Parsons said. 'That said, confidence in the market remains somewhat delicate.' BLOOMBERG
New Straits Times
10-07-2025
- Business
- New Straits Times
UK housing market steadies after tax hike downturn
MANCHESTER: A downturn in Britain's housing market that followed a tax hike on property transactions in April eased off in June, according to chartered surveyors who expect a broadly flat picture in the months ahead. The Royal Institution of Chartered Surveyors said on Thursday its measure of new buyer enquiries turned positive for first time since December and agreed sales also improved. But the change suggested a stable market rather than an upturn. A balance of house prices was steady at -7 per cent, meaning more surveyors reporting prices fell than rose, with London and the south east of England among the regions with the biggest drops. The survey chimed with other signs of a subdued property market after buyers rushed earlier in the year to beat the March 31 expiry of a tax break for some home purchases. Earlier this week, mortgage lender Halifax said house prices were flat last month. An expected further drop in interest rates later this year is likely to help the market, analysts have said. "The UK residential market appears to be entering a more settled phase, with demand showing signs of stabilising following a period of volatility," said Tarrant Parsons, RICS head of market research and analysis. "The earlier distortion caused by transactions being brought forward ahead of the Stamp Duty changes now appears to have largely dissipated, allowing underlying trends to re-emerge." Parsons pointed to a modest increase in expectations for sales in the near term but he said economic uncertainty - at home and globally - could hit activity. (
Business News Wales
10-07-2025
- Business
- Business News Wales
House Prices and Sales Rise in Wales, But Surveyors Remain Cautious
House prices in Wales accelerated at the fastest rate seen since 2022 and there was a firm uplift in the number of newly agreed sales during June, according to the latest Royal Institution of Chartered Surveyors (RICS) residential market survey. A net balance of 27% of surveyors in Wales report that house prices rose through the second quarter of the year. This is the highest this balance has been since August 2022, and the third highest balance seen across all UK regions after Northern Ireland and the North West of England. Newly agreed home sales also rose firmly, with a net balance of 59% of surveyors in Wales reporting that sales increased through June, up from a negative balance in May. On the demand side, a net balance of 4% of survey respondents in Wales reported that new buyer enquiries rose through June. This is compared to the -6% and 5% that were seen in the two surveys previous. However, there was a slowdown in the rate at which properties were are coming onto the market, the report suggests. A net balance of 4% of surveyors in Wales report that new instructions to sell rose in June. Whilst this is the fourth consecutive month that this balance has been in positive territory, it is down from the 48% and 28% that were seen in the May and April surveys. This slowdown in the rate at which new instructions are happening perhaps explains respondents' cautious outlook. A net balance of -20% of Welsh respondents anticipate that prices will ease back over the next three months, down from -3% that was seen in May's survey. And a net balance of -33% of Welsh respondents anticipate that sales will fall through the third quarter of the year. Regarding the rental market, Welsh surveyors report that both tenant demand and landlord instructions fell flat through June. Subsequently, surveyors in Wales expect rents to be flat through the next quarter of the year. Commenting on the UK picture, Tarrant Parsons, RICS Head of Market Research & Analysis, said: 'The UK residential market appears to be entering a more settled phase, with demand showing signs of stabilising following a period of volatility. The earlier distortion caused by transactions being brought forward ahead of the Stamp Duty changes now appears to have largely dissipated, allowing underlying trends to re-emerge. 'Encouragingly, near-term sales expectations have begun to edge higher, pointing to a modest shift in sentiment. That said, confidence in the market remains somewhat delicate, with economic uncertainty at both the domestic and global level still seen as a potential headwind.'
Spectator
23-06-2025
- Business
- Spectator
Reform's ‘Britannia cards' will cost £34 billion
Speaking today at Church House in Westminster, Nigel Farage announced that Reform will introduce a 'Britannia card' that will let wealthy foreigners pay a £250,000 fee to move to the UK, and live here exempt from all tax on their foreign assets. The move is an attempt to win over 'non-doms' alienated by Labour and Conservative governments and bring their wealth back into the country. Farage may think his policy will attract 'talented people' from around the world, in reality it is more likely to deter them. Farage forgot about the Laffer curve The party says the policy will raise between £1.5 and £2.5 billion annually. Our analysis of the data suggests it is more likely to cost around £34 billion over five years. To understand why the policy will cost so much, it is important to look at the recent history of 'non-doms'. For many years, anyone moving here paid tax on their UK income and assets but were exempt from tax on foreign income and assets (unless they brought them into the country). There were then a number of reforms which introduced a £30,000 fee to keep this benefit – a fee which increased over time. Finally, in 2024 the Tories scrapped the non-dom regime and replaced it with a four-year exemption from tax on foreign earnings. Labour slightly tightened that exemption this year. Reform is proposing to go back to the pre-2017 position for the very wealthy, with a new fee structure. Non-doms will be able to pay a one-off £250,000 for a 'Britannia card' and become tax-exempt on foreign earnings and assets forever. There's then a cute bit of populist politics: the £250,000 payments will be redistributed Robin-Hood style as a cash payment to the approximately 2.5 million workers earning a full-time salary of less than £23,000. The party's 'low end' estimate is that 6,000 people will buy a 'Britannia card' each year – and on that basis the policy will generate £1.6 billion, meaning a £600 payment to each low-paid worker. Farage went further when he introduced the policy, saying 'tens of thousands' would be tempted to move to the UK and the payment would be 'just the tip of the iceberg of what these people will pay if they come back' because of the likes of VAT and Stamp Duty. There are several big problems with this. First, whilst the proposal makes the UK more attractive to the very wealthy who can afford £250,000, it makes the UK much less attractive to the highly skilled and highly paid professionals we want to attract from abroad – such as doctors, coders, senior scientists and entrepreneurs. Many other countries have special tax arrangements to attract these kinds of expats. Under Reform's proposal, the UK would be very uncompetitive by comparison. Those unable or unwilling to pay the £250,000 upfront cost would suddenly have to pay full UK tax, and also any tax in their home country. Often these expats will have savings in their home country which benefit from a favoured tax treatment – much like an ISA. The prospect of those savings suddenly being subject to UK tax will not be appetising for them. Farage may think his policy will attract 'talented people' from around the world, in reality it is more likely to deter them. Farage forgot about the Laffer curve. Second, Reform is planning to hand a windfall to a relatively small number of very wealthy people who were already planning to stay here and pay tax. They will now just have to pay a one-off £250,000, with the rest of their tax revenue disappearing. The amounts involved are very large. The Office for Budget Responsibility suggests recent Conservative and Labour non-dom reforms will raise £33.9 billion from 2026-30, with most of this revenue coming from the Conservative's 2024 reforms. When wealthy individuals stop paying tax after they buy a Britannia card, this money will be lost – and will have to be funded by tax cuts or spending rises, especially as any Britannia card revenue will be given directly to those on low incomes. The OBR figure takes 'behavioural response' into account, and the OBR's record of tax projections is solid (their 2023 projection was just 4 per cent out). Could this cost be overcome by attracting lots of very wealthy people to the UK? That seems pretty unlikely. When the £30,000 annual non-dom fee was first introduced in 2008, only 5,000 people were willing to pay it. The idea that more than 6,000 people will pay £250,000 upfront is very optimistic. The idea that 6,000 will pay every year is almost inconceivable. There's another problem here for Reform. Because the rules around non-doms have changed so much in recent years, few billionaires will truly believe they will be forever exempt from tax if they purchase a Britannia card. After all, no parliament can bind its successors. Unless you think Reform are going to win two or more elections in a row, you're unlikely to move here to benefit from the tax regime. That's particular the case after other countries have rescinded their previously generous tax offers for expats. Spain lured highly paid foreigners with its 'Beckham's law', but in the 2020s began to aggressively target people who'd used it. Portugal recently restricted its generous non-habitual residence regime. High-net-worth individuals crave stability and predictability when making long-term decisions about where they are going to live. It's unlikely many will be attracted by a 'Britannia card' that could be cancelled in a few years anyway.
