Chancellor seeks to cool housing market

November 30, 2015

London Skyline

The Chancellor’s autumn statement was the big news from last week. The announcements did not have a major effect on markets; however, the good news is that the economy is now expected to grow at a faster rate than was previously anticipated. At an individual level, there were some more significant changes. Notably, the 3% increase in stamp duty on buy to let properties is a further attempt to cool this hot part of the property market. The action is in addition to the removal of part of the mortgage interest relief for higher rate taxpayers previously announced. In contrast, there was the introduction of the new 40% London Help to Buy scheme and Help to Buy ISAs to aid people into the housing market. These policies acted as a boost to house builders last week as they are specifically targeting the building of new homes.

 

In China, there was a resurgence of panic in the stock market as it was revealed that major brokerages disclosed regulatory probes, and more companies announced that they were struggling to pay debt obligations. However, the 5% sell-off in China was contained, without the previous contagion that was experienced in more developed markets during the depths of the rout. The fragile confidence that has been built back up in China has obviously been shaken and only time will tell if the market can withstand further shocks. As it stands, the Chinese stock market stands at over 20% up from the bottom of the market in September.

 

Index Open Close Change % Change
FTSE 100 6334 6375 41 0.65%
S&P 500 2089 2090 1 0.05%
Dax 11119 11293 174 1.56%
Cac 40 4910 4930 20 0.41%
Nikkei 225 19879 19883 4 0.02%
UK 10 Year Gilt Yield 1.874 1.816 -0.058 -3.09%

 

In the US, monthly jobless claims, non-farm payrolls and the unemployment rate will be announced later this week. These have become increasingly important as we approach the December Federal Reserve interest rate decision.