Big agency boss warns Chancellor against inflationary tax cuts

Chancellor Jeremy Hunt is preparing for his Autumn Statement but Winkworth boss Dominic Agace worries some tax and VAT cuts would be self-defeating.

Chancellor Jeremy Hunt is seen walking along Downing Street with his Ministerial file. tax cuts

The boss of Winkworth has warned Chancellor Jeremy Hunt against making any tax cuts that could ultimately send interest rates soaring while calling for a return of mortgage interest relief for landlords when he makes his Autumn Statement next week.

Hunt (main picture) will deliver his fiscal plans to the House of Commons on November 22 and it is likely to be the last for the Government before the next general election.

And Dominic Agace, Winkworth Chief Executive, is urging the Chancellor to focus on policies to tackle the cost of finance, bring down inflation and increase the number of homes for sale and for rent.


He told The Property Exchange podcast: “Economically, we are at peak stress in terms of interest rates at the top of the cycle.

“With inflation predicted to go below 5%, we can now see the other side. It’s important that things aren’t changed for political gain to alter that trajectory.

Dominic Agace, Winkworth
Dominic Agace, Winkworth

“We have done some of the hard yards now and we don’t want to see tax cuts that might be inflationary – that will just feed back into higher interest rates, which is where the pain in the property market is coming from.”

He goes on to say: “Certain income tax cuts and VAT cuts would be inflationary and that is self-defeating.

“Inheritance tax and stamp duty are being focused on but I feel these are being used as electioneering  promises.

“Families in London are being penalised by aggressive dialling up of the stamp duty tax at a certain level but in terms of next year, I can’t see stamp duty changes boosting the market.”


And he adds: “The real challenge is the cost of finance, which is an income or cash flow challenge rather than a transactional challenge.

“The best thing is to push on with policies that ensure inflation gets down to a target and interest rates can start to move down. The banks and mortgage providers can follow that lead and reduce costs going forward.”

And calling for a return of mortgage interest relief for investors, Agace says: “The Autumn Statement should tackle the problem which is causing landlords to sell – the cost of finance again.

“With costs going up, landlords are underwater with their investments and that hasn’t been offset by rent increases, although there have been dramatic rent increases.

“The loss of mortgage interest rate relief effectively reduces that income further. Where there’s more debt, there is more of a challenge, as we are seeing in London. A return to mortgage interest relief for landlords would be hugely positive, increasing supply and reducing rent pressures.”

Listen to Winkworth’s Property Exchange podcast HERE.

One Comment

  1. Well said sir, I agree with your comments entirely. Reducing Inflation should continue to be the Goverment/BOE’s focus which will hopefully lead to rate drops over time. This morning’s figures are a step forward.

What's your opinion?

Back to top button