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Equilibrium's Finance and Investment News Roundup

Our roundup this week looks at how a new banking tax is likely to impact Nationwide, and brings you news of an edging up of savings rates, record sales for house builder Bovis Homes and a five-year low for the price of diesel.   

 

Banking tax 'to cost Nationwide £300m'

A new banking tax is likely to cost Nationwide around £300 million over the next five years, the lender has warned. Chancellor of the Exchequer George Osborne announced in the July Budget that a new tax surcharge on bank profits is to be introduced next year, but Nationwide Chief Executive Graham Beale is fearful the move could be particularly damaging to building societies.

According to Mr Beale, the tax will markedly impact the group's ability to lend, with the £300 million cost being equivalent to the capital required to fund lending to the tune of around £10 billion.  He said of the tax surcharge: "This represents a missed opportunity to support diversity by acknowledging that building societies are different to banks and to recognise the contribution Nationwide and other mutuals make by lending to the UK economy, and the housing market in particular."

The comments came as Nationwide announced its profit before tax in the first quarter increased to £379 million from £253 million the previous year, while its gross mortgage lending has climbed by 17.2% to £6.8 billion.  

Savings rates 'beginning to climb'

Savings rates in the UK are finally beginning to increase, new research has found. Carried out by website Moneyfacts, the report revealed that the average interest rate on the top ten savings accounts has edged up to 1.48%, having stood at 1.39% a year earlier.

However, the research also warned that 'easy access' accounts are no longer so simple to access, with tighter restrictions being placed by lenders on how many times people can withdraw from the accounts, with some only permitting three withdrawals a year.

Charlotte Nelson, a finance expert at Moneyfacts, said: "Perhaps it's time the FCA started to look more closely at these restrictive accounts - transparency will only go so far after all." 

Bovis Homes announces record half-year sales

Bovis Homes has enjoyed record half-yearly sales, with the number of properties sold rising to 1,525 in the six-month period. This is markedly higher than the 1,487 recorded across the same timeframe last year, and has helped the house builder achieve a 9% rise in half-yearly profits to reach £53.8 million.

According to the group, the average private sales price increased to £264,200, which was 10% higher than 12 months earlier.

Speaking to BBC News, Bovis Homes Chief Executive David Ritchie said: "In the last 12 to 18 months, we've seen an improvement in the land coming through the planning process, such that we are now releasing over 200,000 plots for house building each year - that's the key starting point to deliver the capacity." 

'Five-year low' as diesel prices drop

The price of diesel has fallen to a five-year low, Experian Catalist has revealed. Research carried out by the information group has shown that the average price of diesel has dropped to 113p per litre for the first time since January 2010, with supermarkets reducing prices by between 2p and 4p per litre.

The news comes after diesel became cheaper on average then petrol last month for the first time in 14 years. However, petrol prices have also dipped this week to reach their lowest level for three months, with the reductions in fuel costs coming as a consequence of drops in oil prices.