With the election fast-approaching, the Times reported that, once again, the Government is coming under pressure to change the stamp duty system. Recent figures from HMRC revealed a £1 billion increase in the amount raised in 2016/17, to a staggering £11.7 billion. There has also been a 30% in the number of homes sold for over £500,000, and a 15% increase between £250,000 and £500,000. Critics claimed that these figures demonstrate that it is time for the thresholds to be reviewed.
The Financial Times took a look at lender criteria, and in particular the effect of the pension reforms in 2015. Those reforms meant that people were no longer required to take out an annuity when they retired, giving savers more freedom of choice over what to do with their money.
The issue for lenders is that an annuity was a guaranteed income for life, whereas other arrangements – such as holding savings in investment vehicles to be drawn down when needed – are not. This makes it more difficult for a lender to satisfy themselves that a borrower has an acceptable and steady income.
Brokers suggested that smaller building societies are proving more flexible in this area, although the choice of available deals is likely to be much smaller.
What the papers said about stamp duty and pension freedoms