The coalition government has said it wants to increase the rate of capital gains tax from its current 18 per cent level to bring it more in line with income tax. That could mean an increase towards 40 or even 50 per cent.The tax has to be paid on profits made from selling assets such as second homes, buy-to-let properties and shares.The government says a tax rise is necessary to help pay for income tax cuts for low earners and details are expected to be announced in the emergency budget later this month.But experts fear too high an increase will either stop many investors from selling up, which will cause the housing market to slow down once again, or force them to dump properties on to the market before the tax comes into effect.Gareth Targett, sales director of property management company Orchard & Shipman Residential, says: ‘The 18 per cent level was set to respond to property price deflation and is relatively recent. The tax was 40 per cent three to four years ago, so a return towards that level may not be too traumatic for property owners but a rise closer to 50 per cent could have a serious knock-on effect on the market.It could panic investors into getting out of their property investments before the tax comes in, which will reduce the number of good quality rental properties available – especially in London.‘New-build property development is still slow and many first-time buyers are relying on the rental sector for affordable homes. Tighter lending criteria on mortgages presents a further obstacle because it means they typically have to find 20 or 25 per cent of the property value as a deposit, which adds up to £40,000 or £50,000 in London and out of the range of most first-time buyers.’‘Local authorities also rely on the private rental sector to fill housing gaps.’Capital gains tax becomes liable when a qualifying asset is sold on. The tax is paid on any rise in its value. For example, if an investor bought a flat for £100,000 ten years ago which is now worth £170,000, the tax has to be paid on the £70,000 profit, less allowances.And there is further ‘tapering’ relief if someone has used the property for a time as their main residence before letting it out as a second home, for example.Targett adds: ‘An alternative would be not to impose a blanket tax on all CGT assets and instead make property exempt from any rise which would recognise the importance of the housing market to the economy.‘Any landlords who are fearful of what it will mean to their investments need to get some good advice. A good lettings agent or accountant will know about the relief available to offset any hit.’But some in the housing industry believe a steep rise in the tax could also offer opportunities for first-time buyers who have to compete with investors for typical starter homes.Helen Adams, MD of first-time buyers website FirstRungNow.com, said: ‘First-time buyers have had to compete with opportunistic landlords snapping up one- and two-bedroom properties, which should by rights be theirs, for too long.‘The trend over the past few years for these amateur landlords to target these more affordable properties has meant that demand for them has caused their prices to increase, keeping them out of reach of many aspiring homeowners.‘Anything that might mean that more of these entry-level properties can be left for first-time buyers is a positive move.‘So capital gains tax should certainly be raised to a more realistic level, discouraging this sort of investment in small properties for rent.’The number of households renting privately rose by from 2.1 million to 3.1 million between 2001 and 2009 according to the English Housing Survey* Don’t forget the risk of flooding to your property, despite the warm weather says the Environment Agency. They will be at the Greenfest event in Hammersmith on June 20 giving advice on how to assess the flood risk and helping homeowners find out about early warning services. To assess general flood risk online go to www.environment-agency.gov.uk/floodthames or call Floodline on 0845 988 1188.

BANK customers have seen it all before: long lists of pledges to provide a top-quality service with a smile and with their best interests at the core of everything they do.

Well, we all know what happened next. And now Royal Bank of Scotland is having another go. Today it publishes a Customer Charter, which may sound like a Magna Carta for the box-ticking era, only this one is inspired by the customers themselves, 30,000 of them.
Brian Hartzer, whom chief executive Stephen Hester lured to Edinburgh last August from a comfortable career in Australia, has been talking to customers to find out what they want from the bank. They’ve kept it simple, and to the point.
“Most of them just want us to do the basic things well – shortening queues, extending opening hours, having a greater role in the community,” he says.
The responses have been codified into the charter, committing the bank to a series of tasks that range from a basic requirement to provide a “friendly and helpful service” to the more demanding early morning and late-night opening in 200 branches by the end of the year.
It is easy to be cynical about these things, but the charter does set down some measurable objectives behind the promises to be nice to everyone. It aims to serve the majority of customers queuing in branches within five minutes by introducing something called a “queue measurement tool” to the busiest 300 branches. There is also a pledge to stay open for business if it is the last bank in town and it will consider a range of options to ensure a local banking service is available.
Apart from talking to customers, RBS has consulted with consumer organisations including Citizens Advice Bureau, Consumer Focus and Money Advice Trust, whose chief executive Joanna Elson welcomed the charter and said it was a positive step to set out for customers what they can expect.
Hartzer, a New York-born banker, worked for ANZ in Australia where in the 1990s he experienced the sort of customer discontent and loss of faith that erupted in Britain in the wake of the breakdown in the banking system. He held the somewhat cumbersome title of chief executive officer – Australia and global segment lead for Retail. In essence, he was directly responsible for the retail, SME, and wealth businesses and over five years or so ANZ increased profit in these businesses by 50 per cent and improved its market share of Australian retail customers from fourth to second position overall as well as being recognised as having the best customer service of any bank in the country.
Hester hired him last year, rewarding him with an even longer job title – RBS executive committee member responsible for the UK retail, wealth and Ulster Bank business divisions. When he arrived in Scotland he found the banks in poor spirits and customers not being given the attention they deserved.
“The retail banking industry in Britain had driven itself off a cliff,” he says. “In my mind a sustainable business needs balance between shareholders, customers and staff, but this industry was focused on short-term shareholder value, and therefore all the other elements suffered.”
A first move was to cut fees, but price was not everything and Hartzer knew he had to tackle customers’ loss of trust. “We cannot create a good business if our customers do not feel they are getting good value,” he says.
Thirty thousand branch and support staff have been told about the charter over the past week and Hartzer says that they have shown a willingness to embrace it. The task is little short of transforming perceptions after a rotten two years which has seen profits in the division fall by 90 per cent and in the past year £1.8 billion written off in defaults on loans, credit cards and mortgages.
Customers have remained patient, with fewer desertions than some may have expected. It is probable some of this “loyalty” is due to a lack of alternatives or an unwillingness by customers to go through the hassle of changing banks, but RBS claims it opened 4.5 million accounts last year and overall customer numbers are up. In current accounts it retains a UK market share of 18 to 20 per cent, making it the third-biggest bank.
An issue needing attention is a long period of under-investment in technology, training and the branch estate, all of which are expected to improve the customer experience.
“We are absolutely committed to how we can turn this back into a business that people are proud of,” says Hartzer, delighted to have picked up an award last week for online banking on the back of some encouraging feedback on customer satisfaction.
“We understand that we got it wrong and it has been a colossal wake-up call for us. A part of the thinking behind this new charter is that we know we still have a lot of work to do.”

The Toyota Prius was second overall car, while the Lexus RX also topped its SUV category.

Honda finished second, with Mercedes, Skoda and Toyota completing the top five.

Toyota scooped two best-in-segment awards, with the The Toyota Prius was named best upper medium car, and Aygo best city car.

The Honda Jazz topped small cars, Skoda Octavia was best lower medium car, Audi A6 best executive/luxury car, Mercedes CLK best sports car, Citroen Grand C4 Picasso best MPV.

Belinda Poole, Director of Lexus, said, “The message from these results is clear: the qualities of our products and the service we deliver to our customers have no equal.

“In nine years, none of our competitors has managed to improve its performance to a level where it matches, let alone exceeds the all-round rewards of Lexus ownership.