Weekly Round-Up: 16th February 2018
Love is all at home
The majority of Brits will have opted to have had a cosy night in at home with their loved one on Valentine’s Day, spending an average £45 to rustle up a meal for two, according to research by MBNA. A further 23% will have stayed in and didn’t cook anything special, whilst many couples may switch between going out and staying in from year to year, as a quarter didn’t have a preference.
The research and credit card transaction data from MBNA shows that supermarkets fuel the food of love, with sales for certain stores on Valentine’s day last year soaring by over half (54%), compared with sales on a standard Tuesday. More than one in three of those eating at home will have opted for a juicy steak for their romantic evening in, with 39% saying a prime cut of beef would be their meal of choice.
Of the 10% who do dine out on Valentine’s night, it’s young people aged 18-24 who are most likely to have pushed the boat out, spending an average £65 on a romantic dinner for two. More than a fifth will have chosen to dine in Italian restaurants on Valentine’s Day, with steakhouses finishing second at 12%. For those who chose to dine in, 44% say it’s because they’re just too busy to celebrate and more than a quarter (27%) see Valentines as ‘just another day’. Saving money is the most popular reason for not going out on Valentine’s Day, with 58% of women and 41% of men saying it’s why they stay in.
FTB the highest in a decade
UK Finance’s latest Mortgage Trend Update released this week revealed that 2017 saw the highest number of first -time buyers (365,000) in a decade. The data also showed mortgage lending for first-time buyers, home movers and buy-to-let purchases all fell in December 2017 compared to the previous year.
There were 30,800 new first-time buyer mortgages completed in December, 5.2 per cent fewer than in the same month a year earlier. The £5.1bn of new lending in the month was 1.9 per cent down year-on-year. The average first-time buyer is 30 and has an income of £41,000.
Data suggested that 30,700 new home mover mortgages completed in December, which was 4.7 per cent fewer than in the same month a year earlier. The £6.5bn of new lending in the month was 3 per cent down year-on-year with the average home mover now 39 and has an income of £55,000. 30,500 new homeowner remortgages completed in December, some 7.4 per cent more than in the same month a year earlier. The £5.2bn of remortgaging in the month was 8.3 per cent more year-on-year.
17.2 per cent fewer Buy to Let Mortgages were completed in December than in the same month a year earlier. By value this was £0.8bn of lending in the month, 11.1 per cent down year-on-year. There were 9,900 new BTL remortgages completed in December, some 11.6 per cent fewer than in the same month a year earlier.
The big 5
Average house prices in the UK have increased by 5.2% in the year to December 2017 (up from 5.0% in November 2017) according to the latest analysis by the Office for National Statistics. The annual growth rate has slowed since mid-2016 but has remained broadly around 5% during 2017 with the average UK house price now £227,000 in December 2017. This is £12,000 higher than in December 2016 and £1,000 higher than last month.
The main contribution to the increase in UK house prices came from England, where house prices increased by 5.0% over the year to December 2017, with the average price in England now £244,000. Wales saw house prices increase by 5.4% over the last 12 months to stand at £154,000. In Scotland, the average price increased by 7.7% over the year to stand at £149,000. The average price in Northern Ireland currently stands at £130,000, an increase of 4.3% over the year to Quarter 4 (Oct to Dec) 2017.
The local authority showing the largest annual growth in the year to December 2017 was Orkney Islands, where prices increased by 18.2% to stand at £147,000. The lowest annual growth was recorded in Kensington and Chelsea, where prices fell by 10.7% to stand at £1,212,000 but despite this it is still the most expensive place to live where the cost of an average house was £1.2 million. In contrast, the cheapest area to purchase a property was Burnley, where an average house cost £78,000.
More than two thirds of wealthy people do not know their estate may be liable for an inheritance tax bill, according to Canada Life’s Annual IHT Monitor research. Among adults over the age of 45 with assets in excess of £325,000, 70% of people do not know the threshold for the standard nil rate band (£325,000), up from 61% in 2016. In addition 55% of people do not know the rate at which assets above their available nil rate band are taxed, up from 52% in 2016. As a result of this confusion, families up and down the country could potentially be faced with unexpectedly high tax bills.
The results underline the increasing revenue the Government is receiving from inheritance tax. Latest figures from Canada Life’s analysis show receipts from IHT have hit a record high, with families paying £4.84 billion of IHT in the 2016/17 tax year, double what it was just seven years earlier (£2.4 billion in the 2009/10 tax year).
Nearly two in five respondents (38%) do not think their main home is liable for inheritance tax – a large increase from under a quarter (24%) who said the same in 2016. This will come as a shock to a significant proportion of homeowners who are planning to pass their wealth on to family members. Meanwhile, under a third (32%) know the annual exemption amount they are entitled to (up to £3,000) – but an additional third (35%) currently believe they can give away more than £3,000 without being charged, bringing with it the possibility of unexpected bills.
Worryingly just four in ten are aware that the following are liable for inheritance tax as part of an estate on death: pension savings, vehicles, life insurance policies not held under trust, agricultural land, business assets and non-exempt gifts in the last seven years.