The next 12 months will be dominated by global political events that could have a direct impact on UK markets. At the same time, the decision to leave the EU will play a part in increased economic uncertainty and could contribute to a slowdown in growth.
Although the process of exiting the EU may take a while, in order to encourage business investment and boost business confidence, it is vital that the government share details as soon as possible. The longer businesses are left in the dark, the greater the impact could be.
This is a time of tremendous opportunity but also unpredictability. In order to encourage SMEs to invest in their businesses in the year ahead, specialist banks like ourselves need a context of increased certainty over the future political environment both in the UK and abroad.
Support smaller housebuilders
The UK is in the midst of a housing crisis. In 2017 it is vital that we don’t just build more houses, but build the right type of houses, properties that are not only affordable but are in the right locations, near schools, places of work, transport networks. In order to do this the government needs to have a coherent housing policy in place, focusing on increasing the supply over the long term.
We believe experienced SME housebuilders are key in helping to fill the housing gap as they have the specialist local knowledge needed to build the right type of properties. This sector has been let down by the traditional banks and this is where specialist banks, such as Hampshire Trust Bank, play a crucial role in providing finance. We believe that together we can help get Britain building for the future.
Reconsider buy-to-let approach
Earlier this year, buy-to-let investors were impacted by the hike in stamp duty and the changes to the taxation of buy-to-let investments. Next year the sector faces further challenges with the Prudential Regulation Authority announcing new underwriting standards for the buy-to-let market. What remains to be seen is exactly how these new rules will be implemented by lenders, as there is some room for interpretation.
We want clarity from the government to ensure that housing needs are met either through increased construction of houses or ensuring that the rented sector is affordable for future tenants. The government policy in this area seems contradictory.
Support British business
Inflation seems set to rise for businesses in 2017 owing to the weakness in the pound. Businesses that import goods are already finding that items are more expensive, whilst these have been discounted for Christmas, prices will rise in the New Year. In addition, not only are fuel prices on the rise, with a large proportion of cars and vans sold in the UK being imported, many are predicting that vehicle prices could also increase at some point in 2017. This will impact companies and indeed consumers across the UK.
The more challenging outlook for British businesses in 2017 could be helped by fiscal stimulus packages such as by reducing the corporation tax rate.”
We hope that personal and business savers receive increased encouragement in the coming year. Obviously the low interest environment has been challenging but there are plenty of reports emerging that the Bank of England may raise interest rates in 2017, which will be positive news for those looking to maximise the return on their savings.
We welcome plans to increase the deposit protection limit under the Financial Services Compensation Scheme from £75,000 to £85,000 by the end of January, bringing the UK back in line with the rest of Europe. This should give savers increased confidence that their money is protected.