THE BUY-TO-LET boom is expected to continue next year as more people pin their hopes on rising house prices making up for inadequate pension savings, says this morning's Daily Telegraph .
A survey published this week and commissioned by Penrose, the PR consultancy, reveals eight in 10 mortgage brokers expect to see an increase in buy-to-let lending in 2007 from today's record levels.
More than half said their clients admitted to buying property to supplement poor retirement savings, suggesting high levels of complacency about the prospects for house price growth while more than 90% of mortgage brokers believe prices would rise again next year.
But John Postlethwaite, a consultant at Punter Southall Financial Management, is quoted as saying: "The returns on buy-to-let are not as attractive as they were five years ago and you shouldn't have all your eggs in that basket."
BRITISH AND EUROPEAN pension funds are in line for a multi-million pound windfall, according to the Times, after a European court ruling yesterday paved the way for them to claim back taxes charged illegally on foreign dividends.
In a landmark judgment, the European Court of Justice (ECJ) ruled it was illegal for EU member states to charge so-called withholding tax on dividends paid to foreign companies if the countries’ own companies receive the same payments tax-free.
Although the case did not involve payments to pension funds, tax experts said the ruling was directly relevant and would lead to a flood of copycat claims, allowing pension funds across Europe to escape tax costs, and claims from UK funds alone could be worth “hundreds of millions of pounds”.
Guy Brannan, global head of tax at law firm Linklaters, explains how it works: “If a Spanish company pays a dividend to its investors and the Spanish Government takes a slice of that dividend in tax on payments to UK pension schemes but allows Spanish funds to receive it tax-free then, according to yesterday’s ruling, the UK fund is entitled to reclaim.”
F&C ASSET MANAGEMENT has appointed Mike Woodward as head of investment trusts, taking over on 1 January from Michael Wrobel, who is retiring next April, reports the Scotsman.
Woodward was poached as deputy head of investment trusts during the summer from Martin Currie, a move which the Scotsman suggests heralded a return to his roots, having begun his career at Ivory & Sime (F&C) in 1983.
AND SANDY CROMBIE could be staying at Standard Life as chief executive longer than previously suggested as he has now said in an interview he remains totally "committed" to what he is doing and did not feel near to retirement yet.
The Scotsman is this morning highlighting an interview conducted by Reuters which suggests may not step down in two years time when he reaches 60, perhaps in part because SL’s chairman, Brian Stewart, is expected to leave next year.
"I feel fine and healthy - I don't feel near to retirement yet," he told Reuters in an interview.
Crombie said he expected Standard Life's growth momentum to continue into next year, but added it was too soon to say whether provisions made to cover departing customers would be enough, having earlier announced it would set aside £100m to cover the cost to the company of any potential departures.IFAonline
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