The Week unzipped

THE property market was badly knocked in January when mortgages for house movers fell by 29 per cent compared with December, according to the Council of Mortgage Lenders.

At just 28,500, activity was also 12 per cent lower than in January last year. The CML admitted the downturn takes lending back to its difficult position seen in the first few months of 2009, in the immediate aftermath of the international banking crisis.

Meanwhile, the Bank of England held the base rate at 0.5 per cent and voted to maintain the size of the asset purchase programme at 200 billion. The base rate has remained at the historic low level for two years.

Executive car tax hike

LUXURY company car drivers face a significantly higher tax bill from 6 April as the Treasury removes the 80,000 maximum list price.

The cap on list price currently puts a ceiling on the maximum income tax and national insurance contribution payable to 14,000 and 3,584 respectively. Under the new system, an executive driving a Ferrari 612 with a list price of 222,000 will pay almost 39,000 a year in income tax, while the employer will owe more than 10,000 a year for NICs. This is a 182 per cent increase compared with the capped list price.

Second-hand car buyers should be particularly wary, as HMRC charges car benefits on the list price, the amount the vehicle would cost if new.

Store's bond offer

JOHN Lewis has launched a retail corporate bond paying 6.5 per cent, of which 2 per cent is paid in John Lewis vouchers, fixed for five years.

The corporate bond aims to raise 50 million for the partnership to fund further expansion.

Savers can deposit between 1,000 and 10,000, in multiples of 1,000.

Isa rates raised

SANTANDER has increased rates on its Flexible Isa and Loyalty Flexible Isa to 3.3 and 3.5 per cent respectively and introduced a two-year fixed rate Postal Isa paying 3.7 per cent on balances over 500.

The Flexible Isa pays at least 2.8 per cent above base rate for the first year, with a guaranteed minimum return of 3.3 per cent over the period.

The Loyalty Flexible Isa, available to savers who hold a current account, mortgage or investment product with Santander, pays 3 per cent above base rate, with a minimum return of 3.5 per cent in the first year.