George Osborne’s immediate budget predictions looked rather foolish after a week of frantic backpedalling.

The chancellor had declared this was a budget for “the next generation” on his day of delivery – yet the following week was spent fighting for its and his political survival!

His welfare spending cuts were eventually removed from the calculations with a promise of no more after the resignation of welfare secretary, Ian Duncan Smith, and only then was the budget approved.

Osborne’s own chances of succeeding David Cameron as prime minister have certainly taken a knock.

Normally it is you and me and our financial advisers who are eagerly going through the small print after the chancellor’s announcements to discover the stings in the various tails.

This time it was the chancellor’s political allies and enemies that were scrutinizing every detail; very soon it had become apparent that his budget would not get voted through in its original form.

That signaled trouble for the chancellor; and also meant that our Independent Financial Advisers (IFAs) would have to wait a little longer to see exactly how to proceed with future advice on investments.

Even the Treasury’s assurance that the long-awaited budget announcements on the future of pensions would be put on hold was not entirely accurate.

The introduction of the Lifetime ISA (Individual Savings Account) for those aged 18-40, which comes with a 20% government top-up for savings up to £4,000, seems to be the way pensions are going to go, according to most financial experts.

The ISA world, as seemingly happens with all areas of finance, is getting more and more complicated with more and more choice. With interest rates at record lows for borrowers and savers, it is the saver who has struggled since the 2008 bank crisis and recession.

Fortunately, for many of the elder generation at least, those savers have also owned property and this has allowed them to survive financially, if not flourish.

The property website Rightmove has revealed that the average house price in England and Wales has broken through the £300,000 mark – although the Office for National Statistics (ONS) put the figure at £292,000, mainly because it also includes Scotland, Wales and Northern Ireland.                       

House inflation in the UK on average was 7.6% according to the ONS, but this is a long way short of reflecting the real picture throughout the land.

Even the figure of 8.6% in England only tells half the story – outside London and the South East the increase was 5.1%; the South East went up by 11.7% and London by 10.8%.       

Those living in Scotland (up 0.1%), Wales (down by 0.3%) and Ireland (up 0.8%) can only shake their heads in wonder at such increases.                                              

The lack of affordable and available housing in the UK, especially in the big cities, has long been on the political agenda, but there was little sign of it in Osborne’s budget.

Most experts believe that tinkering around the edges will make little difference, and that only major initiatives by the chancellor and Treasury will have an impact and free up homes.

“Last week’s budget,” insisted the chief executive of the housing charity Shelter, Campbell Robb, “brought no hope for ordinary people looking for a place to rent or buy, to call home that they can actually afford.

It’s time for the government to get serious, and invest in the genuinely affordable homers that we desperately need.”               

The hope that the reduction in Capital Gains Tax from 28% to 20% for high rate taxpayers and 18% to 10% for basic payers might help landlords leaving the sector was immediately dashed when property was excluded from this reduction.

It had been expected that big-time individual landlords would escape some of the recent legislation reducing the amounts of interest relief that could be claimed. When the changes were unveiled last year, the Treasury’s original consultation document suggested those with 15-plus properties could carry on as before.

Now, as part of his budget document this year, Osborne confirmed that all landlords would be subject to the new chances – whether they owned one, 15 or 150 properties.   

That has surprised people because those owning a large number of properties will claim that they are running business rather than making an investment – in which case, they can claim all their costs.

There was one relaxation of the original announcement that gave a little respite to those buying second homes without selling their current property.

Instead of 18 months, those selling their main residence will have a 36-month window before the higher rate (an extras 3% stamp duty) is charged. Well, it will be charged on the sale, but will be refunded provided that original home is sold within the 36 months.

It is a very small concession, according to the Homeowners Alliance Advice site.

“The government has not listened to the concerns of both existing and aspiring homeowners and is pushing ahead with introducing an overly complicated system that can harm many of the very homeowners that they are trying to help.

“It is crazy for the government to insist the extras three percentage points is paid up front. This will hit those thinking of downsizing as they will need to find thousands of pounds more to complete the move.” 

For a free, no obligation initial chat about your individual finances, call us on 0800 0112825, e-mail info@wwfp.net or take a look at our website www.wwfp.net.

The value of shares and investments can go down as well as up. Your home may be repossessed if you do not keep up repayments on your mortgage. 

Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Conduct Authority.  'The FCA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

All information is based on our understanding of current tax practices, which are subject to change.
The value of shares and investments can go down as well as up. Your home may be repossessed if you do not keep up repayments on your mortgage. For the purposes of mortgage Worldwide Financial Planning is a credit broker and not a lender.

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