2006 credit card borrowing down

Credit card borrowing fell in December 2006, according to updated figures released by the British Bankers’ Association (BBA).

Following the release of figures from the Major British Banking Groups earlier this month, BBA has gathered more information,

This new data shows that credit card borrowing fell by £0.3 billion in December, with the overall annual figure rising by just two per cent.

“The annual growth in consumer credit, at only two per cent, is low by historical comparison and, although strong Christmas sales have been reported, our December figures suggest that spending was not fuelled by more borrowing on credit cards,” said David Dooks from BBA.

Mortgage lending in December fell in comparison to November, but even this figure was a seven per cent increase on the same month in 2005.

In total, mortgage lending reached £18.1 billion, with 123,518 mortgages being approved.

The average amount lent for the purpose of buying a home soared in comparison to December 2005, with the average amount being £146,400, nine per cent more than the year before.

“The final quarter of last year, despite seasonally lower activity in December, showed the mortgage market to be stronger than at the same time a year earlier and lending still growing significantly at a time of rising interest rates,” added Mr Dooks.

Tags: activity, information, Association, consumer credit, increase, interest, british bankers association, quarter

Winter will see more claims

Homeowners are likely to make more insurance claims in the coming months as a result of the bad weather.

That is according to Lloyds TSB, which says it is expecting to see a 15 per cent increase in burst pipe claims during the first quarter of this year.

The insurance provider is highlighting the fact that something as seemingly minor as a burst pipe can prove to be both a major headache and a real financial burden.

Lloyds has revealed that the average claim for a burst pipe is around £2,500, while the most expensive the firm has ever seen was £156,000 for a particularly troublesome problem.

Homeowners are being warned to take action to help keep damage from a burst pipe to a minimum, with advice such as locating the stopcock, gas valve and ball valves, in case the worst happens.

Lloyds also advises people to leave their heating on a low heat if they are going away on holiday, as this will prevent pipes from freezing, while outdoor pipes should be well insulated during the winter months.

“So far this winter we’ve had relatively mild weather so many homeowners were caught unprepared for this cold snap,” said Lloyds TSB’s Phil Loney.

“A little bit of effort now could save you a lot of wasted time and stress caused by problems such as burst pipes or broken boilers.

“To give yourself peace of mind, make sure you have adequate home insurance that will cover you if the icy conditions do take their toll,” he added.

Residents are also advised to leave their insurance details with a trusted neighbour when travelling in case there is an incident while the house is empty.

Tags: tsb, weather, little bit, peace of mind, Insurance, Valve, mind

FSA makes MEAF statement

The Financial Services Authority (FSA) has released a statement on mortgage exit administration fees (MEAF).

The organisation was responding to recent concerns which have been raised about MEAFs which have been unfairly increased.

It means that some consumers have been charged higher exit fees than was originally agreed and has made switching mortgage lender and paying a mortgage off early more difficult.

FSA officials have now said that lenders have four options, one of which they must settle on by February 28th.

Lenders can either charge no MEAF whatsoever, charge the original MEAF, a revised MEAF or the current increased MEAF.

“We expect that these measures, agreed with the Council of Mortgage Lenders, will stop borrowers from being surprised by unexpected increases in these fees,” said Clive Briault, managing director of retail markets at FSA.

“People will now know when they sign up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be increased fairly.”

FSA is also calling for previous customers to be given the same treatment as new customers, meaning if a customer has paid a higher MEAF than current borrowers, he or she should be refunded.

Tags: mortgage lenders, idea, administration, Financial Services Authority, clear idea, council of mortgage lenders, customer, meaf

Bonuses won’t be blown this year

Many of the UK’s top earners are preparing to receive their bonuses this week and they already know what they will spend them on.

That is according to Barclays Wealth, which carried out research and found that 65 per cent have already planned what they will spend them on, while only five per cent will seek professional advice.

Although big bonuses are traditionally blown on champagne and expensive parties, Barclay’s research shows that many intend to invest them this year.

A total of 43 per cent of those questioned said that they will choose long-term financial investments over partying, with personal debt and mortgages the main focus.

The number one priority appears to be investing in a UK property, with 23 per cent saying this is what they intend to do.

This is closely followed by any other financial investment (19 per cent), clearing debts (15 per cent), holidays (12 per cent) and home improvements (ten per cent).

“It is encouraging that our research shows that people are intending to be responsible with spending their bonus this year,” said Jonathan Williams from Barclays Wealth.

The majority of workers are expecting to receive a bonus of between £5,000 and £25,000, with ten per cent anticipating an even greater sum.

Tags: long-term financial investments, bonus, financial investment, majority, debt, expensive parties, barclay

Anti loan shark scheme welcomed

A new scheme to tackle loans sharks has been welcomed by the National Consumer Council (NCC).

The organisation is hopeful that by introducing the project, around 200,000 of the UK’s poorest people will receive help.

Hopes have been raised that some of the most vulnerable people will now be able to escape the vice-like grip of illegal lenders.

“Removing illegal lenders from these communities not only frees their victims from threats and intimidation, but can help people find ways to borrow more cheaply,” said Claire Whyley, deputy director of policy at NCC.

“It’s vital, though, that these new projects are supported by efforts to make more affordable credit widely accessible in poor communities.”

Large numbers of people turn to loan sharks because they have such a bad credit rating that they feel they will not be given a loan by a reputable lender.

However, loan sharks are not restricted by regulation and often charge extortionately high interest rates.

As a result, many borrowers find themselves in an even worse financial situation than before they borrowed the money.

Tags: lenders, rating, loan, vice-like grip, scheme, regulation, director, finance

Protect home ahead of severe weather

Homeowners are being warned that they should protect their home from the elements as the UK endures a period of severe weather.

Insurance firm Saga says residents must take precautions in order to avoid having to fork out for weather related damaged.

Particular emphasis is being put on encouraging people to check the outside of their homes ahead of any more storms that may hit the country.

Saga is urging homeowners to ensure snow is cleared as quickly as possible, to avoid leaks and damp, while loose putty in windows can cause problems with allowing water to get inside the house.

In addition, people are encouraged to keep a torch and batteries handy in case of a power cut, while doors should also be kept closed in order to retain heat.

Flooding is another major problem which can have a devastating effect on a home. In some parts of the UK it is advisable to take out insurance against flood damage.

It is possible to find out if you live in an area liable to be flooded by calling the Environment Agency’s Floodline.

Saga has produced a free guide, called Prepare Your Home for Bad Weather, aimed at helping homeowners during the winter months.

Tags: addition, major problem, damage, flooding, power cut, prepare, Bad Weather, floodline

Council Tax rebates

Millions of people may have been paying too much council tax due to rushed housing valuations which were carried out in 1993.

Many households are in line to receive thousands of pounds, with hundreds of people having already been given their windfall.

The news could go a long way to helping many homeowners who are struggling to keep up mortgage repayments as a result of rising interest rates.

Some homeowners have received thousands of pounds in back payments and campaigners are urging more people to see if they too are entitled to have their council tax cut.

It is possible to find out if you are paying too much council tax by making a simple online check.

Campaigners say that the problems arose when the Conservative government worked to quickly replace the hugely unpopular poll tax.

As many as 60 per cent of council tax valuations were carried out by estate agents, with a large number being labelled ’second gear valuations’, because agents would simply drive past a house and allocate it a band.

As a result, many people are now paying too much or too little council tax, with large discrepancies between homes on the same street.

Homeowners are being warned that their council tax could just as easily rise as a result of a revaluation.

Tags: england, gear valuations, rise, gear, Valuation Office Agency, windfall.The news, finance

£12m pad

At a time of ever-increasing house prices it is perhaps no surprise that a London apartment has just been registered as one of the most expensive properties ever.

A three-bedroom luxury apartment in London’s Belgravia has been snapped up by foreign buyers for a whopping £12 million.

That means every square foot in the apartment is worth £3,000, making it one of the most expensive properties ever, according to estate agent WA Ellis.

The owners are getting all the luxurious comforts you would expect for such a large figure, with a marble master bedroom and a 52-inch plasma TV included.

The main reason for the huge price tag however, is a simple case of demand heavily outweighing supply.

“Everyone wants to come here and most of it is City-fuelled,” Daniel Wiggin from WA Ellis told the Press Association.

“Belgravia, Knightsbridge and Chelsea seem to be among the most popular areas that they want to live in and we have an immense lack of stock – a shortage of supply and a vast amount of demand.”

Tags: knightsbridge, master, pad, chelsea, agent wa ellis.the, case, city

Burns night warning

Scots have been warned to be careful as they celebrate Burns Night.

Zurich Insurance says that a large number of claims are made following the celebrations, as partygoers become slightly over zealous and cause damage to their homes.

According to the firm, 32 per cent of Scottish parents who celebrate the night suffer domestic damage.

With the annual claim reaching more than £100, Zurich says that it is vital people take out adequate insurance to cover any mishaps.

“If people are planning to celebrate Burns Night with a party at home, it’s worth taking a few minutes to check their insurance policies – possibly even considering extending the protection for their contents to include accidental damage,” said Martin Hall from Zurich.

The firm says that stained carpets and damaged furniture are the most common casualties of such parties and it believes that people should be free to celebrate without the concern of having to pay for any damage.

“By making sure they have the right policy in place, they can let their hair down, and have a worry free Burns Night,” added Mr Hall.

Burns Night is a celebration of the poet Robert Burns, the man who wrote Auld Lang Syne.

Tags: Scottish literature, GBP, Scottish, common casualties, warning, Financial services

New buyers will feel pinch

First time buyers will be adversely affected by recent interest rate rises, says the Royal Institution of Chartered Surveyors (Rics).

The organisation believes that people taking their first step onto the property ladder are likely to fall behind with mortgage repayments as a result of the rise.

Conversely, Rics points out that buy-to-let investors are less likely to suffer the same fate, with age being cited as one of the key factors.

Figures show that those with a buy-to-let mortgage are generally older and have more disposable income, making them more secure in the market.

Rics says that 0.96 per cent of all mortgages in the UK are in arrears, with only a tiny percentage of these being buy-to-let properties.

“Buy-to-let investors will be less at risk from repossessions in the coming months,” said David Stubbs from Rics.

“Older, wiser investors are likely to ride out periods of interest rate rises looking to the benefits of long term capital growth rather than short term rental income.

“January’s surprise interest rate rise is likely to soften new buyer enquiries in the coming months but those buyers who have already taken the housing market plunge could find mortgage companies knocking at their doors in the near future as affordability conditions bite.”

Tags: interest, future, rate rise, Business Finance, ladder, interest rate, periods, interest rate rise

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