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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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The budget: giving, taking – but not growing | Editorial

Category : Business

No matter how cunningly Osborne selects who he wants to protect, large parts of the population are going to get hurt

George Osborne’s budgets follow a trajectory. It runs thus: Summer 2010, fiscal pain now, economic gain later. Spring 2011, a call for a March of the Makers, with policies designed to rebalance Britain away from the City and towards other industries. Last year, a bundle of small flashy measures that came apart so quickly it will be remembered as the Omnishambles. At least Wednesday’s budget lacked the fidgetiness and the bombast of old.

The chancellor can no longer claim to spy green shoots or even promise a turnaround before the next election. As he admitted, government borrowing is now forecast to keep rising as a proportion of GDP all the way till 2016. What he offered instead was a budget that manages economic decline in terms designed to appeal to Conservative voters. More state money going towards helping people on and up the housing ladder – on top of all the Bank of England billions to boost lending that have instead gone into cheaper mortgages. Another reduction in fuel prices. And a squeeze on public-sector pay and a raid on their pensions, part of which will fund cheaper childcare for working families. That last item may prove particularly tricky for Ed Miliband to oppose.

Running through all of this is a canny ability to do populism on the cheap. None of these giveaways cost a lot, yet they will certainly make a few headlines (although perhaps rather more timely ones than the Evening Standard front page that divulged much of the Red Book detail before Mr Osborne had even stood up to speak). But it’s unlikely that they will distract attention from the economic mess this government has landed in less than three years after taking office.

Down, down, down

Growth forecasts down – again. Borrowing projections up – again. An economy not likely to go into a triple-dip recession soon, according to the Office for Budget Responsibility, but enjoying the worst recovery in 100 years. The government’s austerity did not cause all this, as this week’s tumult in Cyprus reminds us, but it has exacerbated Britain’s chronic economic weakness. To all intents and purposes, this is a depression – except this time Herbert Hoover is at the controls, rather than Franklin Roosevelt. However big a failure, plan A lives on. The spending cuts will continue, while responsibility for growth will continue to be outsourced to the Bank of England. The Treasury plainly has a lot riding on Mark Carney, soon to take over in Threadneedle Street. Where Mervyn King would push back on some of Number 11′s proposals for new lending schemes, Downing Street’s clear hope is that Mr Carney will be much more enthusiastic.

Yet the monetary activism we have seen to date – £375bn in quantitative easing, £80bn in funding for lending – has not got the economy out of the doldrums. Even so, there is no question of extra government spending. Forget about the immediate £15bn public-works programme called for by Vince Cable; Mr Osborne found £3bn for capital spending, to begin in 2015. And that will come from other parts of the budget, so the boost it provides to the economy will probably be minimal. The same goes for the National Insurance cut for employers, which will provide useful loose change for small businesses and barely be noticed by bigger ones.

Home truths

One of the few clear stabs at a growth strategy was the money for mortgages. This will not come off the public finances, but are loans taken out by the government from the financial markets and lent on to would-be buyers who are short on deposits. Part of Mr Osborne’s charm offensive to an “aspiration nation”, it carries faint echoes of the 1980s: Thatcher’s right to buy reimagined as David Cameron’s even righter to buy. But it is a worse and more muddled policy than that. If the problem with the housing market is that there is not enough of it, then the government should be encouraging the building of more (ideally council) houses. On the other hand, if the problem is that house prices are too high for would-be buyers, then the state should not be helping to push them up. Add to that the prediction by the OBR that by 2015 real wages will be 9% below where they were in 2009 and you have a policy that is encouraging indebted Britons to take on more debt, despite the fact that they’re getting poorer. A very dangerous prospect.

It is also notable that the coalition’s rhetoric about making Britain more productive has been replaced with a return to that age-old British obsession with the property market. Rebalancing is dead: long live the old, busted economic model.

Fighting talk

Even amid a slump, some are still doing very nicely, as demonstrated by Wednesday’s news of the nine Barclays bankers awarded £38.5m in bonuses (including £17.5m for the aptly named Rich Ricci). Just who lost out from the budget was less obvious. And yet we know that any chancellor setting out a “fiscally neutral” budget – as Mr Osborne said he was doing – must take as much with the one hand as he gives with the other, so losers there must have been. Mr Osborne did not exactly deny it. Instead, he wrapped the worst of the news in passages of the speech so technical that casual listeners would have switched off.

While the Liberal Democrats have been insisting that the downward ratchet to benefit rates that Mr Osborne announced last autumn would have to be the last attack on the needy, the chancellor revealed his desire for fresh cuts to welfare, while discussing a public-spending aggregate called “annually managed expenditure”. Mr Osborne quipped that AME, whose biggest component is social benefits, had been “annually unmanaged” by Labour. He resolved to impose a cap, which would surely be hard to make stick without entirely breaking the link between welfare provision and welfare need. Will his cap mean that if more people claim disability benefits then the rates will be automatically be cut? All-important details won’t emerge till the spending round in June, and that could prove to be a political bloodbath.

The second big group of losers are public sector workers. The big squeeze on their pay will now continue for another year; significantly the chancellor said this would not just be a case of continuing with a 1% limit on general rises, but would also involve cutting back on so-called progression payments which reward teachers, civil servants and others for their experience as they develop their career. Then there were the obscure changes to pensions, which abolish so-called “contracting out”. State employees, as well as the dwindling band of private sector staff who still have access to final salary pensions, are going to face a hike in National Insurance equivalent to a penny and a half on the basic rate. Whereas the coaliton recently boasted of having put public sector pensions on a sustainable footing, after one poisonous row with the unions, Mr Osborne hinted that he expects public sector employers to claw back the extra National Insurance that they are now expected to pay by further reducing the benefits in the years ahead. Stand by for another showdown.

Long, hot summer

The Eastleigh byelection set the coalition’s two wings against one another and Wednesday did little to repair relations. Where Mr Osborne’s budget represented a plausible Conservative strategy for sharing out the pain of a failing economy, there was little here for the Liberal Democrats. They can point to the early fulfilment of their pet project of a £10,000 personal allowance, but voters are unlikely to rate it as a distinctively Lib Dem achievement. Indeed, with the hike in VAT to 20%, tax credit cuts and earnings lagging behind the cost of living the average voter might not notice anything at all. And then, of course, there will be particular spending ministries headed by Lib Dems such as Vince Cable and Ed Davey which can now be expected to put up a fight against the fresh demand for more cuts.

If squabbling with the Liberal Democrats were the end of it, Mr Osborne would probably be well satisfied. But as that spending round in June looms, he is likely to run into resentment from several Tory colleagues too. Ministers charged with administering even protected budgets like schools and hospitals might rage when they discover that they are in for more industrial strife on questions like pensions; others – such as Theresa May in the unprotected Home Office – can be expected to turn up the volume against additional cuts.

Politics is set to get bumpier, but perhaps the politics of parsimony is inescapably so. Where the chancellor effectively gives up on growth, and instead concentrates on how to dole out the pain, then no matter how cunningly he selects who he wants to protect, large parts of the population are going to get hurt. And there is never too much of a gap between financial pain and howls of political anguish.

London housing associations join private market to fund affordable rents

Category : Business

Top 15 social landlords to build 13,000 new affordable homes but also let and sell properties at market rates to fund projects

Housing associations in London are to venture into the private property market on a grand scale for the first time in an attempt to extend their social housing mission to “generation rent” – the growing number of people who can not afford to buy in the capital and are vulnerable to exploitation from unscrupulous landlords.

The 15 biggest social landlords in London are working together to build 13,000 affordable homes by 2015 – but they will also provide an additional 4,000 properties for rent at market prices and at least 1,100 homes for sale at regular London prices. They will use the profits to fund further affordable housing.

Housing associations have traditionally focused solely on affordable housing for low earners and key workers such as teachers and nurses. The new strategy is a widening of their scope to help those in their 20s and 30s who have become known as “generation rent” – those trapped renting at sky-high prices, at the mercy of sometimes exploitative landlords.

The “G15″ group of housing associations – which houses one in 10 London residents – is promising to grant more secure tenancies than those available on the private market. The intention is to allow tenants to settle down for longer with a plan to “kitemark” label these better quality homes for those who rent in an attempt to go head to head with the rest of the private market.

A board paper, seen by the Guardian and approved by the group, sets out the problems: “The average home in London costs more than £400,000 and is 15 times the median income for Londoners – the highest in Britain. And while wages are higher too they are not nearly high enough to allow most people to meet their own housing needs … Younger people are increasingly priced out of home ownership and find renting takes a growing portion of their salaries. Those without access to capital may become lifetime renters.”

Housing associations insist moving into the private market to capitalise on the increasing rental and sale prices in London will not undermine the social purpose of its members – to provide affordable housing for those who can not meet their own housing needs.

Keith Exford, chief executive of the Affinity Sutton housing association and chair of the G15, said it was not true private renting would make a vast profit for social landlords.

“The yields in private rent are insufficient to do much more than cover the running costs,” he said. “The only profit to be made is from the sale of stock at a later stage as values rise. A well-managed, reputable private rented sector is an important part of our offer to London.”

Homes built for private rent can also be turned into affordable housing or shared ownership properties by housing associations, or sold for profit according to changing business plans, he said.

The move is being welcomed by some tenants and staff working to tackle rogue landlords in the capital. Ben Reeve-Lewis, a tenant liaison officer in south London who also rents privately, said he would be interested in one of the properties himself. “Housing associations don’t have a great record for speed of repairs, but that pales in comparison against the security they provide. In private rent you never know if you’re going to get home and find a note on the doorstep because the landlord is likely to sell.”

Vincenzo Rampulla, a policy officer in his early 30s who rents in west London, said the exorbitant cost of market rent was tied up in letting and management agency fees which could be cut out by social landlords. “A lot of the skills that they have developed in managing housing association stock are really needed in the private rented sector,” he said.

The G15 will also for the first time set up a cross-London allocations agency to help find homes for families qualifying for social housing in London, with each local authority invited to join. This could help councils and housing associations manage the impact of welfare reform and house homeless families more quickly.

To date, those looking for social housing only qualify for tenancies in their local area, even if a suitable property is available elsewhere in the capital.

“We’re going to have to manage mutual exchanges and more movement than we have before,” said David Montague, chief executive of L&Q, another G15 member. “We have people who are under-occupying and will have to pay a penalty [through the bedroom tax] and we have people who are overcrowded. We need to work together more creatively.

“There aren’t many good things to be said about austerity, but one of the good things is that housing associations are working together more than ever before.”

Savills allows staff to defer bonuses to avoid 50% tax

Category : Business

Executives at the Mayfair estate agency could delay taking bonuses until lower 45p rate is in place

Savills, the Mayfair estate agency behind some of London’s most expensive property sales, has given its top staff the opportunity to defer bonuses until the start of the next tax year to avoid the soon-to-be-abolished 50% top rate of tax.

Executives at the firm, some of whom earn more than £1m a year, could delay taking bonuses until the lower 45p rate is in place.

The chancellor, George Osborne, announced in December that the top rate of income tax would be cut from 50% to 45% from 6 April. He said: “We’re going to have a top rate of tax that supports enterprise,” and promised that it would “raise more money from the rich”. The top rate is levied on incomes of more than £150,000.

The estate agency is not the first firm to allow high earners to defer bonuses for tax reasons. The Guardian reported in January that London-based insurer Aon was helping 250 of its best-paid staff avoid the 50% rate by deferring bonus payouts.

These are thought likely to be just two examples of a popular remuneration strategy among Britain’s biggest bonus-paying firms. Many large businesses are expected to be quietly pursuing a similar strategy in the hope of avoiding the ire that Goldman Sachs attracted from Bank of England governor Sir Mervyn King at the start of the year.

The US investment bank abandoned its plan to defer London bonuses after it was attacked by King. He told parliament’s Treasury select committee: “I find it a bit depressing that people who earn so much seem to think that it’s even more exciting to adjust the timing of it to get the benefit of the lower tax rate … which they will benefit from in the long run to a very great extent knowing this must have an impact on the rest of society, when even now it is the rest of society which is suffering most from the consequences of the financial crisis.”

Savills, which is listed on the London Stock Exchange, declined to answer questions from the Guardian on the timing of bonus payouts to directors and other top earners. However, one source close to the company denied that in previous years bonuses and profit-share rewards had been routinely paid in March. Savills offers flexible arrangements every year, with staff able to take payouts at any time between the company’s year-end in December and its annual shareholder meeting in May, the source said.

Among the senior staff at Savills who could benefit from receiving their cash bonus after 6 April include chief executive Jeremy Helsby and finance director Simon Shaw, who received £1.27m and £891,390 respectively in salary, bonuses and perks for 2011. Savills’ head of residential property, Rupert Sebag-Montefiore, is also thought to be among the top earners, though his earnings are not disclosed by the company as he is not a board director. Savills declined to say whether any of these three intended to delay taking their 2012 bonuses.

While widespread attempts to exploit the timing of the tax changes have “depressed” King, the expected clustering of bonus payouts within the 2013/14 tax year may eventually be seized upon by Osborne as evidence of the apparent success of his controversial top-earner tax cut.

The chancellor has already suggested that Labour’s decision to raise the rate to 50% was “a con” because it had raised “almost no money”. A large part of the explanation for the seemingly disappointing tax take from the 50% was that many top earners timed their take-home income to minimise their tax bills.

Buy-to-let landlords’ buying spree will keep more families in rental trap

Category : Business

Rightmove predicts three-quarters of professional landlords will buy more homes in 2013, as MPs begin to look at the issue

Buy-to-let landlords will embark on a home buying spree in 2013 while young adults and families remain trapped in rental properties, according to a forecast by Britain’s biggest property website.

Three out of four professional landlords will buy more homes in 2013, while the number of “virgin landlords” looking to buy for the first time is running at the highest level for a year, the research from Rightmove found. Meanwhile, 53% of tenants say they are trapped in renting, wanting to buy a home but unable to afford to do so.

The research is published as a committee of MPs begins a formal investigation into the problems facing Britain’s “Generation Rent”. The Commons communities and local government committee will examine the potential need for rent controls, regulation of landlords and letting agents, and a revision to tenancy contracts.

Urgent action is needed to tackle rogue landlords and rip-off letting agent fees, according to the Local Government Association (LGA), which represents 370 councils across England and Wales. It found that tenants are being asked to pay as much as £500 in non-refundable administration fees to letting agents on top of the rent and deposit.

Tony Newman of the LGA will give evidence to the committee on Monday. Before his appearance, he said: “With the housing market stagnant and a shortage of mortgages available to help first-time buyers, people are increasingly turning to the private rented sector to find a home.

“For many people looking to rent, the up-front costs of a deposit and agency fees can be huge. We’ve heard stories of some letting agents charging hundreds of pounds just to carry out basic credit and reference checks.”

Bank lending to landlords fell sharply during the financial crisis but has surged in recent months, boosted by the funding for lending scheme designed to help small businesses and first time buyers. Interest rates on buy-to-let loans have tumbled – Skipton, Coventry and Birmingham Midshires all cut rates for landlords last month – and lending volumes are rising. In the last quarter of 2012, loans to landlords were up 8% to £4.2bn, with new entrants such as Interbay Commercial jostling to offer mortgages of up to £1m spread over 30 years.

Rising rents (yields average 5.7%) and low-cost mortgages (now below 4%) will spur small landlords to buy more properties in 2013, said Rightmove, even if the long-anticipated investment from institutions such as pension funds has failed to materialise.

Rightmove director Miles Shipside said: “While the cavalry charge from major institutions seeking to invest in the private rented sector has so far failed to materialise, private landlords, whether accidental, virgin or professional, are seizing the opportunities that come with having the battlefield to themselves.”

But campaigners at Priced Out, a group representing tenants unable to afford to buy, said without new building, landlords are simply displacing first-time buyers.

Estate agents upbeat about property prospects for 2013

Category : Business

Survey reveals housing market optimism for sales in new year despite sellers having to drop asking prices in January

The housing market has kicked off the year in better shape than it did in either of the previous two years, despite more sellers being forced to drop their asking prices in January, according to a new survey.

A large majority of estate agents are optimistic that 2013 will see a steady rise in the number of home sales and the improving situation will put a floor under prices, which have fallen on average for the last two years.

The survey, by online property agent Hometrack, found that 79% of estate agents are more upbeat about the market this spring than they were a year ago.

The return of the feelgood factor to the property industry will cheer the Treasury, which is keen for consumers to regain their confidence and start spending. A bigger turnover in home sales could also spur the sale of furniture and housewares, which have suffered in the downturn.

The housing market has been a key driver of activity in the wider economy and boosts taxes for the government through stamp duty and capital gains tax.

While many economists have urged ministers to shift the economy away from property and finance to manufacturing, any signs of growth are likely to be welcomed, at least in the short term.

Some analysts have argued that prices are likely to strengthen over the coming year due to the continued shortage of new homes, the UK’s rising population and easier borrowing following the Bank of England’s funding-for-lending scheme. The scheme, which launched last summer, offers high street lenders £80bn in cheap loans. It has largely helped existing homeowners raise cheap mortgages, but Threadneedle Street expects cut-price loans to eventually trickle down to first-time buyers and small businesses.

Hometrack said this spring will be a “key test” of whether households are able to act on the signs of improvement.

Its latest study found that house prices were flat month on month across England and Wales in January following six months of falls. Around 16% of postcodes saw prices fall in January, representing a big slowdown in falls compared with the previous two months, when around 27% of districts recorded decreases.

London, which has consistently outperformed other areas, was the only region to see an uplift in prices, with a 0.3% increase. They fell by 0.1% in Wales, Yorkshire and Humberside and the North East and by 0.2% in East Anglia.

A growing divide has opened up between the property market inside the M25 and the rest of the country, causing concerns that Britain’s economy is increasingly driven by the capital as it emerges from the financial crisis.

Cranes are shooting up across London as plans mothballed after the banking crash, many of them for residential flats, get under way.

Prices were unchanged over the month in the west Midlands, the east Midlands, the north-west, the south-east and the south-west.

Of the estate agents who feel more optimistic about the housing market, most cited improvements to the mortgage situation and a “growing realism” among sellers about pricing as a factor.

Across the country, the typical percentage of the asking price achieved in January was 93.1%.

Richard Donnell, director of research at Hometrack, said: “Despite the slow start, the housing market looks to be in slightly better shape than at the start of the previous two years.

“After the initial downturn in 2008 and the modest bounce-back in 2009/10, the housing market has been struggling to arrive at a point where pricing appears stable and there is broad alignment between what buyers are prepared to pay and sellers are prepared to accept for their home.”

The study regularly asks around 6,000 estate agents and surveyors about achievable selling prices in their area.

But Halifax, part of the Lloyds Banking Group, was more circumspect after it found that activity “picked up a little”. Martin Ellis, the bank’s housing economist, said: “There was evidence of a firming in the housing market in the final few months of 2012. We expect continuing broad stability in house prices nationally in 2013, with prices likely to end the year at levels close to where they begin.”

Green belt housing gamble – a bet too far?

Category : Business

When work does not pay and savings are threatened by low interest rates, it seems logical to see property as the prime asset

Watching two of the better-known rightwing thinktanks prime their intellectual cannons and bombard the same target is an impressive, if stomach-churning, sight. In the past week the Institute of Economic Affairs (IEA) and Policy Exchange, both of which have the ear of No 10 and No 11 Downing Street, have taken aim at the UK’s planning laws.

The IEA opted for a straightforward bombardment of the green belt. It argued that property developers should be allowed to give incentives to local communities to free up otherwise sacred ground. In other words, if developers see a profit in building on certain land, most likely in the London commuter belt, and the local parishioners can be successfully bought off, then what right does anyone have to intervene?

It is the latest salvo in a sustained campaign that has won over the housing minister, Nick Boles, though not yet MPs representing home counties constituencies and electorates, who appreciate the status quo.

Policy Exchange adopted a more politically sophisticated approach in its policy paper Planning for Less, the Impact of Abolishing Regional Planning. It did the job of demolishing the government’s attempt at laissez faire, which was to strip local authorities of meeting targets for building homes. The targets were established by the previous government. The communities minister, Eric Pickles, said in opposition the targets were routinely missed, so what better than to get rid of them and let free-market forces take over?

The thinktank, which has just seen its director, Neil O’Brien join George Osborne’s team as a special adviser, commissioned a report that found abolishing targets, rather than unleashing a previously shackled industry, meant local authorities in England simply cut by 270,000 the number of new homes planned.

When Britain is supposed to be enjoying a house-building renaissance akin to the 1930s, when much of today’s suburbia was constructed, research that finds planners taking the opposite path should be deeply wounding.

Like the IEA, Policy Exchange rejects re-establishing targets in favour of incentives for home building. However, it says the incentives should be focused on bringing back brownfield land which has already been used, often for industrial or commercial purposes.

It is easy to see a political conspiracy in all this. The Tory party remains deeply in hock to the industry for donations. But it does not explain why there is a growing agreement that the only way to resolve the housing crisis is to buy off neighbourhoods in the green belt or inner city. After all, Gordon Brown was the first chancellor to commission a report, from the former Bank of England policymaker Kate Barker, which argued for extensive building on the green belts around major cities, especially London. Admittedly, he preferred a top-down approach, one that gave birth to the original targets, but there were plenty of incentives in the policy too.

So a political deal is only part of the picture. A much more fundamental issue is the increasing reliance on property wealth for the UK’s short-term sense of financial wellbeing, and the major part it plays in its medium-term financial destruction. When work does not pay, except for the lucky few, and savings are constantly in danger of being undermined by low interest rates or, worse, destroyed by the stock market, it seems logical to focus on property as the prime asset. It is the best pension around, isn’t it?

The latest Halifax survey of homeowners shows they remain optimistic about the value of their assets, with a majority expecting prices to rise in 2013.

Why, when the UK economy is in a dreadful state, with its core lending banks strapped for cash, would anyone in their right mind think property prices could rise? But as Fred Harrison, research director of the London-based Land Research Trust, points out in his new book, The Traumatised Society, rent-seeking by a wealthy class of people hooked on accumulating even greater wealth is the cancer that has brought down many more civilisations than the present one.

Free-market thinkers understand that the accumulation of property wealth by a wealthy middle class and corporate sector and placing a sky-high charge on it – either to rent or buy – will undermine the capitalism they seek to promote. It undermines the incentive for work and, more importantly, the incentive to innovate, both for themselves and the people who must commit a large part of their meagre income to paying the rent (or mortgage).

The IEA reckons prices could fall 40% if millions of homes are built on green belt land. In this way, the landlord’s power is undermined, workers have bigger disposable incomes, and innovation can begin again. But the price fall only happens at the expense of the countryside.

Policy Exchange confronts this issue, but refuses to take away the incentive to gamble on property, something decried by one of its heroes, Adam Smith, and many contemporary pro-capitalist bodies that have thought more broadly about the subject.

The Organisation for Economic Co-operation and Development, the International Monetary Fund and the Institute for Fiscal Studies have in the past couple of years concluded that only an annual tax on land can end the obsession with property. Once landowners face a tax, they will free up land they are sitting on, rather than wait for a rising market to make a killing.

In London, that is what we are seeing now. It is the crazy, financially engineered boom of 2007 beginning all over again.

First-time house buyers at five-year high in 2012

Category : Business

Nearly 216,000 people bought their first house this year, the highest since 2007 but half the 402,800 in 2006

First-time home buyer numbers reached a five-year high in 2012, helped by improvements in affordability, a study has found.

However, the average age of a first-time buyer has increased to 30, from 29 a year ago, and the typical deposit required is 20%, compared with the deposits of about 10% in 2007, Halifax found.

Nearly 216,000 people took their first step on the property ladder in 2012, showing a 12% year-on-year increase and making up two fifths of all house purchase loans. While this is the highest number since 2007, it is still half the 402,800 first-time buyers in 2006.

Halifax said that improved mortgage affordability was a factor behind the recent increase. At present a typical first-time buyer spends about 27% of their disposable income on mortgage repayments below the long-term average of 34%.

However, the average house price paid by a first-time buyer increased slightly to £139,921 in 2012 – representing a 3% rise from 2011.

Halifax found that the average price paid by a first-time buyer in November was affordable for someone on average earnings in 39% of local authority districts in the UK, against 5% in 2007. Homes were classed as affordable if they cost less than four times typical local earnings.

Stirling in Scotland was named as the most affordable district, where house prices are averaging two and-a-half times earnings. At the other end of the scale, first-time buyers in Camden, London, face buying a home that costs nine times the average wage.

The vast majority of local authority districts which were deemed affordable in the UK were outside the south of England.

Just 5% of the affordable districts were located in the south, where house prices tend to have held up to a greater extent, and 95% were spread elsewhere in England or in Scotland, Wales or Northern Ireland.

The north-west was found to be the most affordable region in Britain, with 88% of local authority districts were ranked as affordable.

London was the area most out of first-time buyers’ reach, with 100% of districts there deemed unaffordable.

A typical first-time buyer in London, where the market has remained relatively strong, is two years older than the national average, at 32 years old, Halifax said.

First-time buyers in London put down the largest average deposit, at £62,356, while those in the north put down the smallest, at £14,936. The average deposit needed across the UK is £27,984.

The number of mortgages on the market has increased by a fifth since a funding for lending government scheme was launched in August to kickstart lending to firms and households. The scheme has also led to mortgage lenders cutting their rates, although much of the strongest competition so far has been aimed at borrowers with larger deposits.

The government also recently introduced the NewBuy scheme, which helps people to buy a new-build home with a fraction of the usual deposit.

Martin Ellis, housing economist at Halifax, said: “The number of first-time buyers has risen to a five-year high, boosted by the improvement in affordability resulting from the reductions in both house prices and mortgage rates in recent years.

“Conditions for potential first-time buyers, however, remain very difficult with problems raising the necessary deposit and concerns over the economic climate continuing to prevent many from entering the market.

“Despite some positive steps with schemes such as NewBuy, the numbers of those buying their first home remain low by recent historical standards.”

Halifax also highlighted evidence that first-time buyers have become increasingly reliant on extra help to give them a push onto the ladder.

The Council of Mortgage Lenders (CML) recently estimated that 65% of this sector of the market had financial assistance in mid-2012, compared with 31% seven years earlier.

The most affordable local authority districts for first-time buyers

1. Stirling, Scotland, 2.57 (house price to earnings ratio)

2. Renfrewshire, Scotland, 2.75

3. South Ayrshire, Scotland, 2.75

4. East Ayrshire, Scotland, 2.78

5. South Lanarkshire, Scotland, 2.83

6. Falkirk, Scotland, 2.86

7. West Lothian, Scotland, 2.86

8. North Ayrshire, Scotland, 2.89

9. Hartlepool, north-east, 2.91

10. Rossendale, north-west, 2.92

The least affordable districts for first-time buyers

1. Camden, London, 9.02 (house price to earnings ratio)

2. Oxford, south-east, 7.93

3. Brent, London, 7.90

4. Harrow, London, 7.89

5. Hackney, London, 7.72

6. Lambeth, London, 7.18

7. Ealing, London, 7.04

8. Haringey, London, 6.90

9. Wandsworth, London, 6.87

10. Newham, London, 6.86

Barclay brothers’ £1bn VAT windfall bid puts tactics in spotlight

Category : Business

Lengthy legal battle to obtain refund leads to criticism as Panorama programme into tax affairs set for broadcast

Attempts by the Barclay brothers, owners of the Daily Telegraph, to obtain a £1bn VAT windfall from the British taxpayer, are leading to criticism of the way their offshore commercial empire is structured.

The much-delayed broadcast of an investigation by the BBC’s Panorama programme into the Barclays’ tax affairs focuses on the Ritz hotel, another of their assets. The hotel in London has paid no corporation tax for the past 17 years by legally claiming reliefs.

Yet the Barclays are engaged in a lengthy legal battle to obtain a £1bn VAT refund. They claim they are entitled to compound interest on a tax rebate stretching back 30 years, on behalf of the Littlewoods catalogue group which they took over in 2002.

The original refund of £204m has long been paid to them, along with a cheque for £268m in simple interest. But the twins have taken their claim for a huge extra payoff as far as the European court of justice.

Richard Murphy, from the Tax Justice Network, told the BBC that trusts set up by the Barclays met offshore: “These meetings are taking place in Monaco, but there is no doubt that sitting right in the middle of the meetings are the Barclay brothers who are therefore able to exercise control of these companies.”

The MP Nadine Dorries told Panorama: “They’re incredibly wealthy men who don’t pay British tax. I think it is just utterly appalling.”

The family is also behind anonymous offshore firms that recently bought up the London headquarters of the financially ailing Spiritualist Association of Great Britain (SAGB), the Guardian has learned. The Barclays are now trying to sell the Belgravia mansion for £26m, making a substantial capital gain.

Another mansion, Forbes House, in Knightsbridge, has similarly been purchased through offshore entities in Jersey and the British Virgin Islands (BVI). The £48m investment is reportedly intended to provide an opulent home in London for Sir David Barclay’s son, Aidan.

A recent Guardian investigation, Offshore Secrets, showed how thousands of offshore entities in the BVI are being used to purchase expensive property in London. This keeps ownership secret, and opens the way to a series of tax advantages. The government is promising to end some loopholes which

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Barclay brothers’ £1bn VAT windfall bid puts tactics in spotlight

Category : Business

Lengthy legal battle to obtain refund leads to criticism as Panorama programme into tax affairs set for broadcast

Attempts by the Barclay brothers, owners of the Daily Telegraph, to obtain a £1bn VAT windfall from the British taxpayer, are leading to criticism of the way their offshore commercial empire is structured.

The much-delayed broadcast of an investigation by the BBC’s Panorama programme into the Barclays’ tax affairs focuses on the Ritz hotel, another of their assets. The hotel in London has paid no corporation tax for the past 17 years by legally claiming reliefs.

Yet the Barclays are engaged in a lengthy legal battle to obtain a £1bn VAT refund. They claim they are entitled to compound interest on a tax rebate stretching back 30 years, on behalf of the Littlewoods catalogue group which they took over in 2002.

The original refund of £204m has long been paid to them, along with a cheque for £268m in simple interest. But the twins have taken their claim for a huge extra payoff as far as the European court of justice.

Richard Murphy, from the Tax Justice Network, told the BBC that trusts set up by the Barclays met offshore: “These meetings are taking place in Monaco, but there is no doubt that sitting right in the middle of the meetings are the Barclay brothers who are therefore able to exercise control of these companies.”

The MP Nadine Dorries told Panorama: “They’re incredibly wealthy men who don’t pay British tax. I think it is just utterly appalling.”

The family is also behind anonymous offshore firms that recently bought up the London headquarters of the financially ailing Spiritualist Association of Great Britain (SAGB), the Guardian has learned. The Barclays are now trying to sell the Belgravia mansion for £26m, making a substantial capital gain.

Another mansion, Forbes House, in Knightsbridge, has similarly been purchased through offshore entities in Jersey and the British Virgin Islands (BVI). The £48m investment is reportedly intended to provide an opulent home in London for Sir David Barclay’s son, Aidan.

A recent Guardian investigation, Offshore Secrets, showed how thousands of offshore entities in the BVI are being used to purchase expensive property in London. This keeps ownership secret, and opens the way to a series of tax advantages. The government is promising to end some loopholes which

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Barclay brothers’ £1bn VAT windfall bid puts tactics in spotlight

Category : Business

Lengthy legal battle to obtain refund leads to criticism as Panorama programme into tax affairs set for broadcast

Attempts by the Barclay brothers, owners of the Daily Telegraph, to obtain a £1bn VAT windfall from the British taxpayer, are leading to criticism of the way their offshore commercial empire is structured.

The much-delayed broadcast of an investigation by the BBC’s Panorama programme into the Barclays’ tax affairs focuses on the Ritz hotel, another of their assets. The hotel in London has paid no corporation tax for the past 17 years by legally claiming reliefs.

Yet the Barclays are engaged in a lengthy legal battle to obtain a £1bn VAT refund. They claim they are entitled to compound interest on a tax rebate stretching back 30 years, on behalf of the Littlewoods catalogue group which they took over in 2002.

The original refund of £204m has long been paid to them, along with a cheque for £268m in simple interest. But the twins have taken their claim for a huge extra payoff as far as the European court of justice.

Richard Murphy, from the Tax Justice Network, told the BBC that trusts set up by the Barclays met offshore: “These meetings are taking place in Monaco, but there is no doubt that sitting right in the middle of the meetings are the Barclay brothers who are therefore able to exercise control of these companies.”

The MP Nadine Dorries told Panorama: “They’re incredibly wealthy men who don’t pay British tax. I think it is just utterly appalling.”

The family is also behind anonymous offshore firms that recently bought up the London headquarters of the financially ailing Spiritualist Association of Great Britain (SAGB), the Guardian has learned. The Barclays are now trying to sell the Belgravia mansion for £26m, making a substantial capital gain.

Another mansion, Forbes House, in Knightsbridge, has similarly been purchased through offshore entities in Jersey and the British Virgin Islands (BVI). The £48m investment is reportedly intended to provide an opulent home in London for Sir David Barclay’s son, Aidan.

A recent Guardian investigation, Offshore Secrets, showed how thousands of offshore entities in the BVI are being used to purchase expensive property in London. This keeps ownership secret, and opens the way to a series of tax advantages. The government is promising to end some loopholes which

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