BSA comments on Budget 2008

BSA comments on Budget 2008

BSA comments on Budget 2008

Stamp Duty / Shared Ownership, Long-Term Fixed Rate Mortgages, Saving Gateway and ISAs

Commenting on the measures announced by the Chancellor in today’s Budget, Adrian Coles, Director-General of the Building Societies Association, said:

Stamp Duty / Shared Ownership
“While exempting some shared ownership properties from stamp duty is welcomed, the announcement will do little to help those who are unable to take advantage of the shared ownership schemes. Allowing eligible buyers to purchase only 50% of their property is welcome recognition of the challenges first time buyers face but we still expect demand to remain low, not least due to the problems associated with saving for a deposit.”

Long-Term Fixed Rate Mortgages
“The Chancellor’s interest in long-term fixed rate mortgages is to be welcomed. What is required now is to generate customer interest in them. They are a useful option but a significant change in the public’s perception of the benefits of long-term fixed rate mortgages will be necessary for these products to really take off. “

Saving Gateway
“The Saving Gateway is to be rolled out nationally and the BSA looks forward to working with HM Treasury and HMRC and will participate in the consultation. We believe the scheme should be as simple as possible, minimising the administrative burden and reporting requirements. We hope the Government can be persuaded to increase the size of the market by allowing as many people as possible to participate, not just those on benefits or tax credits. A high match rate will also be needed to maximise saver participation.”

ISAs
“Whilst we welcome the forthcoming changes to ISAs, it is disappointing that the Chancellor did not address some of the inconsistencies between cash and stocks and shares ISAs.

“The BSA would like to see transfers from stocks and shares ISAs to cash ISAs to be permitted. The one-way-only transfer means consumers cannot rectify errors of bad judgment or advice and still retain their tax exemption. Also, as people near retirement, they increasingly seek to reduce the risk to which their retirement savings are exposed. It makes sense for them to increase the balance of cash in their portfolios so as to more closely match their assets and liabilities – allowing transfers from stocks and shares ISAs to cash ISAs would facilitate this.”

~ Ends~

Notes to Editor

1. The Building Societies Association (BSA) represents all 59 building societies in the United Kingdom. Building societies have total assets of just under £350 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, more than 20% of the total outstanding in the UK. Societies hold about £215 billion of retail deposits, accounting for more than 20% of all such deposits in the UK.
Building societies also account for over 38% of all cash ISA balances.
Building societies employ over 50,000 full and part-time staff and operate through more than 2,100 branches.

2. Photographs of Adrian Coles are available from the BSA press office, from the Association’s website at www.bsa.org.uk or from Headlinemoney www.headlinemoney.co.uk

3. A list of all building societies can be found on the BSA website at http://www.bsa.org.uk/aboutus/buildsocmember.htm and demutualised institutions at http://www.bsa.org.uk/consumer/factsheets/100010.htm

CONTACT: Rachel Le Brocq
DIRECT LINE: 020 7520 5905
NIGHT/WEEKEND: 07773 489644
EMAIL: rachel.lebrocq@bsa.org.uk

CONTACT: Neil Johnson
DIRECT LINE: 020 7520 5903
NIGHT/WEEKEND: 07908 764549
EMAIL: neil.johnson@bsa.org.uk