Autumn Statement in UK. Further Attacks on Buy To Let Sector

No roll back of the 3% stamp duty on second properties. No mention of the section 24 tax changes. The tax changes is a game changer.

Impact on landlords: Negative
Many buy-to-let landlords will either:

1. older ones to give up investing altogether. Sell up. Increase in supply.
2. Determined and more sophisticated ones will transfer portfolio to SPVs.
3. Novice ones will cap their investments at 3 - 4. They won't expand. Demand remains constant.

Prices of expensive London projects are likely to fall further. Those properties with lower yields in London will also fall in price. The ones with higher yields investors are likely to retain, especially in Birmingham, Manchester and elsewhere north of England.

Impact on First Time Home Buyers: Postitive
If prices fall in London by 10 - 20% in Zones 2 - 4, first time home buyers may feel it is finally within their reach. Home ownership will increase.

North of London, first time home buyers will be the happiest. The houses are cheap to begin with. So a slight fall or even an increase will not matter. They will buy.

But many who cannot yet conjure up a deposit will still be sidelined.

Impact on Renters: Mixed

for renters who have no intention to buy, e.g. migrants, expats, students, retirees who wish to travel the world, there will be fewer properties for rent. They may find their choices narrowed. But this may be compensated by steady rents as first time home buyers who are forced to rent, to step on the ladder.

For renters with intention to buy, they will chance upon the steadying of prices to jump on the ladder.

Impact on developers: positive
Developers are so-called the modern day heroes. they provide housing to the masses. Especially developers of affordable housing catering to first time home buyers. It will be a bonanza.


The overall impact is net negative for landlords as price appreciation slows down, tax liabilities rise. Rents will also not decrease much because some renters will hope on the property ladder. It might be better to be a developer in the UK now for mass housing, if you are able to secure cheap brownfield sites near infrastructure spending.



http://www.ipglobal-ltd.com/en/articles/market/uk-autumn-statement-what-you-need-know/?utm_source=eDM&utm_content=Autumn%20statement

Fees Disclosure in Private Banking. Reforms Finally Trickle In For Singapore

I've been expecting this since 2010. MAS, the governing body, has generally left banks to their own devices in order to create more banking jobs. But it has led to excesses, the same problems as in the west between 2000 - 2008. For important institutions like the financial industry, regulation must be just right. Too little regulations, there will be long periods of excesses, where mortgages of around 110% were granted in Spain, the US and pretty much everywhere in the west from 1995 - 2008. Too much regulation, financial institutions begin to shed jobs. Bankers' services will fall. They will not be motivated to provide any level of service at all. Post 2009, one should try getting a mortgage from RBS. The officers practically could not care less if your application is approved and will not update you.

While disclosure of fees is important, MAS must provide direction and avenues for banks to grow other streams of revenue. Banks must be allowed to charge advisory fee, e.g. 1% of asset under management every year for advice, and performance fees, e.g. 10 - 20% of the profit will accrue to the banks, above a highwater mark like the LIBOR + 1% rate. This will ensure that the better advisers survive, while the pure sales person will go the way of the Dodo bird.

The public needs better quality advice, and remuneration that is in line with clients' needs. The MAS needs to lead the way and regulate.

ABS to private banks: Be upfront about charges in bond sales

Several bonds have defaulted, and investors are estimated to have lost about S$1.1b, or 0.74% of Singdollar bonds

By

Siow Li Senlisen@sph.com.sg@SiowLiSenBT

NOV 23, 20165:50 AM

Singapore

THE Association of Banks in Singapore (ABS) has reminded private banks to disclose all fees, charges and rebates in bond sales, following an outcry by investors who lost money in recent defaults.

Private banks have been under a cloud over their selling tactics, with several bonds having defaulted; investors' losses amount to about S$1.1 billion, representing about 0.74 per cent of the S$149 billion outstanding Singdollar bonds.

The number of bondholders who have lost money is not known, but it could be up to 4,400, based on a S$250,000 minimum; the number could be fewer, given that some investors might have bought more than one lot.

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The ABS said in a statement on Tuesday: "Private banks have enhanced disclosure standards in the Private Banking Code of Conduct (PB Code)."

It noted that these enhanced standards have expanded on previous requirements for private banks to ensure that their clients are informed of the key terms of transactions.

The enhanced-disclosure standards regarding rebates kicked in on Oct 1; those covering fees and other benefits take effect in March 2017.

The statement said: "Private banks will provide clients with a fee schedule at account opening, which sets out fees, charges and other quantifiable benefits (including commissions, rebates and retrocessions) for all investment products and services.

"Private banks will also disclose any rebates received from selling new bond issuances to clients prior to each transaction."

Tan Su Shan, co-chair of the Private Banking Industry Group (PBIG) and group head of Consumer Banking & Wealth Management at DBS Bank, described the PB code as an industry code setting the benchmark of market conduct and staff-competency standards.

"The recent changes to enhance the transparency of fees and disclosure of bond placement fees is welcomed and fully supported by banks here, as this is good practice in light of the growing demand for bonds by private clients," she said.

"For Singapore to continue to build a sustainable and strong wealth management hub here, it is important for industry players and stakeholders to continue to evolve and enhance these standards, so this is a move in the right direction," she added.

In response to media enquiries, the Monetary Authority of Singapore (MAS) said private banks are expected to exercise care and have a reasonable basis for recommending products and leverage to their clients.

It noted that the PBIG was exploring a balanced-scorecard framework that will assess relationship managers on non-financial metrics, in addition to how well they meet their financial targets.

On investors' recourse when a bond defaults, the MAS said that more can be done, in addition to the various efforts of individual bondholders organising themselves. It noted that the Securities Investors' Association (Singapore) has stepped in to facilitate talks between the bondholders and the issuers concerned.

"We have also seen some banks providing support to investors who are their customers, including helping them to obtain the necessary legal and financial advice," said MAS.

"We think this is an area where more can be done, for instance, in terms of enabling bond holders to reach out to other bond holders more efficiently and giving greater clarity to bond holders upfront (for example, at the point of purchase) on their rights in a default situation. We are studying the matter, and will also engage the relevant industry players."

In the last few years, private bank clients here have bought the bulk of high-yield bonds, sometimes accounting for as much as 90 per cent of investors in a deal. This is unlike in the west, where most bonds are sold to institutional investors, who are better organised if defaults happen.