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Posts Tagged ‘Economy’

Housing crisis in UK – ‘generation-rent’? PRimage comment

Tuesday, August 30th, 2011

PRimage had just been reading a new report released today on the crisis in the UK housing market – which forecasts that home ownership in England will slump to just 63.8% over the next decade.  The National Housing Federation report also forecasts steep rises in the private rental sector and a house price boom. It blames the bleak outlook on an under-supply of homes in the UK.

So, for the UK it looks like we are heading for a ‘generation-rent’ scenario! And market trends will follow those in the US. Certainly many young people now face decades of renting!

PRimage believes the NHF are right to highlight stark statistics which show that last year, the number of new homes built reached the lowest in peacetime since 1923 – and correct in blaming declining home ownership on banks setting too lenient lending criteria and too small deposits.  The Government needs to take immediate action to tackle this crisis and the chronically low supply of homes. From what Judy Viitanen understands, reading the report and comments from industry experts, the difficulties of raising deposits and obtaining mortgages are one side of the problem. The other is housing supply. It is, though, a bit of a catch-22.  The major developers say they are willing and ready to build more homes. But they worry that they won’t be able to sell them, because potential buyers will not be able to raise the finance.  The dilemma for policy makers is how to escape this damaging cycle, of restricted supply leading to high prices, which leads to curtailed demand, resulting in unwillingness to build

  • In England, the proportion of people living in owner-occupied homes will fall from a peak of 72.5% in 2001 to 63.8% in 2021.
  • In London, the majority of people will rent by 2021, with the number of owner-occupiers falling from 51.6% in 2010 to 44% by 2021
  • Average rents for apartments and single family homes in the private sector are forecast to increase by 19.8% over the next five years, fuelled by high demand and a shortage of properties.


Pessimism on both sides of the pond? PRimage comment

Friday, July 15th, 2011

In the UK we are going through tough times, but Americans are deeply pessimistic about the future, according to a new Reuters/Ipsos poll – over 63% believe that their country is on the wrong track.

We found this an interesting article and viewpoint on the dynamics across the pond: This Is No Time for Games – WSJ.com http://t.co/gt6tfTB

PRimage has read that a rule of thumb in presidential polling is that when the “wrong track” number is in the “60s,” the incumbent’s prospects for re-election are sharply diminished.  Watch this space!

Budget 2011 – PRimage Comment: Not bad, given the circumstances!

Wednesday, March 23rd, 2011

Spent time this afternoon trying to assess the Budget announcements …. And overall, our view at PRimage is: ‘not too bad, considering the circumstances’. The eye-catching Budget headlines are, of course, on fuel and corporation tax. Nice to finally see a little bit of light relief for the motorists of this country!

As the owner of a small business, Judy Viitanen was especially interested in the announcements relating to business – noted George Osborne signalling his desire to merge National Insurance and income tax. Osborne is ideologically a fiscal conservative, and this move paves the way for a low-tax future, by convincing Brits they pay too much tax!

Osborne also announced the Government’s Plan for Growthhttp://www.hm-treasury.gov.uk/ukecon_growth_index.htm?dm_i=3QN,E7KN,K8LG6,14ROS,1 – a package of measures aimed at supporting private sector investment, enterprise and innovation. This includes measures to increase the competitiveness of the UK tax system; reduce the burden of regulation; and increase incentives for business investment.

Key measures in the Budget for businesses include:

  • A reduction in the main rate of corporation tax by a further one per cent. From April 2011, the rate will be reduced to 26 per cent with further yearly reductions of one per cent until 2014 when it will reach 23 per cent;
  • New Controlled Foreign Company rules to allow groups based in the UK to compete more effectively with those based overseas;
  • The abolition of 43 tax reliefs whose rationale is no longer valid – following recommendations from the Office of Tax Simplification;
  • Dropping existing proposals for specific regulations which would have cost business over £350m a year;
  • £100m for local authorities to repair potholes caused by the cold winter weather;
  • Increase the rate of R&D tax credits for small and medium-sized enterprises from 175 per cent to 225 per cent by April 2012;
  • 21 new Enterprise Zones, to focus growth in specific parts of the UK;
  • Fuel duty will be cut by one penny per litre from 6pm on March 23. The April 2011 inflation-only increase in fuel duty will be deferred to 1 January 2012; the April 2012 increase will be implemented on 1 August 2012;
  • A further increase to the income tax personal allowance for under 65s of £630 to £8,105 in April 2012;
  • Additional work experience placements and additional apprenticeships for young people;
  • Help for homeowners facing difficulties by extending the temporary changes to the Support for Mortgage Interest Scheme for an additional year and providing £250m to support first time buyers to purchase a new-build property.