First time buyers still have options to help them get on the property ladder

Times are hard, and now we’re hearing that the UK’s economic recovery is ‘paralysed’ by Europe’s debt crisis. With the economy the way it is, first time buyers often write off the possibility of ever getting on the property ladder and believe they are set to rent for the rest of their lives. This is not the case anymore, with the government; various agencies; housing associations and property developers now offering a range of deals to help first time buyers get on that crucial ladder. Here are 5 tips that can help you keep those costs down…

Shared ownership

Shared-ownership is a terrific way into home ownership and is the main affordable housing scheme. If you cannot afford to buy outright, you can part buy part rent your home – you pay a rent on the share that you do not buy which is set at an ‘affordable’ rate. The bigger the share that you purchase, the less rent you have to pay.

The FirstBuy scheme

Saving for a deposit is something that holds lots of first time buyers back. Schemes like this give you a step up onto the ladder, by lending you some of the money through a shared equity offer. If you purchase your first home in England though the FirstBuy scheme, your deposit could be as low as 4% – there are online calculators to see the difference it could make. If you are looking in Scotland or Wales, there’s a similar scheme called Head Start.

Avoiding stamp dut

Not an offer as such, but a way to reduce the cost of purchasing your own home. If your home’s value is less than £250,000 there’s no Stamp Duty to pay if you complete before March 24, 2012. That could save you up to £2,500 when you move.

Family ownership with your parents

It is becoming increasingly popular for young single people to include their parents on their mortgages. Even if they just own 1% of the property this security enables you to borrow more money from the bank and buy a more expensive property.

Move to a cheaper area

This does not sound like a perfect solution but sometimes in life, we have to take a step sideways to move forwards. House prices in some areas are much cheaper. If you are willing to move to these areas then you can make buying a house a real possibility. You never know, you may make a hefty profit in the end. It is worth bearing in mind that cheaper areas do not always mean lower quality. For example, some areas are more expensive because they are close to good schools so it is worth researching prices in different areas.

Tags: main, buying, way, stamp duty, Equity sharing, Wales, ownership shared-ownership, deals, something, offer

Adequate insurance needs to be arranged by winter sports fans

With winter now here there may be many people that are planning on heading out for a break to enjoy the exhilarating thrill of winter sports. This is the type of holiday that is hugely popular with many people, but is also the type of break that comes with increased risks due to the higher risk of injury. There are also higher risks posed because of the costly equipment that holidaymakers on winter breaks have to take with them, which can cost a fortune in the event of loss, theft or damage.

Officials are now urging consumers to ensure that if they do decide to take a break involving winter sports they take the time to take out the right level and type of travel insurance. Whilst some people may already have travel insurance or may take out a standard policy it is necessary to take out a special policy when participating in winter sports. Without this, the holidaymaker may find that they are not covered and in the event of an accident, injury or issue with equipment this could prove to be extremely costly.

When arranging travel insurance for winter sports holidaymakers need to make sure that not only are they covered against the increased medical and health risks that come with winter sports but that they also ensure that their costly equipment is also covered. With standard travel insurance a large percentage do not provide cover for any type of winter sports, which is why travellers need to check their policy before they head off on a winter holiday.

One official stated: “To ensure they get the right type and level of cover for their trip, people need to focus first and foremost on pinpointing the features they need.”

Tags: break, event, winter holiday, theft, policy, winter, health, whilst

ABI wants to increase safety for young drivers

The Association of British Insurers has recently revealed a number of key priorities relating to car insurance, which is aimed at making a number of improvements including improving safety for young drivers. The organization said that it wanted to take steps to reduce young driver accidents and more importantly deaths as a matter of urgency.

Otto Thoresen, ABI’s director general, was speaking at the ABI Motor Conference recently and spoke about how all insurance companies were keen to be able to provide customers with competitive prices for their insurance cover. He said that one of the ways that would enable insurance firms to do this was to improve the safety of younger drivers .

Thoreson said that every day around eighteen young people were killed or seriously injured on the roads of Britain. He said that the ABI had called for measures to be taken some years ago to try and reduce these serious injuries and deaths and since then many young lives had been taken on the roads. The ABI wants the government to take steps to help tackle this issue, which will save lives and help to bring insurance costs down.

He said: ‘As a nation of car users with some of the busiest roads in the world, insurers are committed to providing the best possible deal for motorists. One of the key ways to achieve this has to be improving the safety of our young drivers, who continue to make up a disproportionate number of road casualties. Five years ago we called for measures, such as a minimum learning period, to tackle this tragic waste of life, yet every day 18 young people die or are seriously injured on our roads. Insurers are actively helping young drivers through the increasing use of telematic ‘black box’ systems that reward safer driving. But we cannot do this alone. So I reiterate our call to the Government to work with us to tackle this issue. The time has come to seriously consider tougher measures such as a zero tolerance drink-drive limit for drivers under 25, graduated licencing, and restrictions on driving at night and in the early hours.’

Tags: reiterate, ABI Motor Conference, organization, period, time, Association, car users, reward

More compensation payouts to be issued by Halifax

High Street banking giant, Halifax, has recently admitted that it may have to pay out more compensation to customers over a mix up with its mortgage rates. Earlier this year the lender identified around 600,000 customers who may be eligible for compensation over confusion about mortgage rates, about half of whom ended up receiving compensation payouts. The lender has now stated that there could be another 250,000 people who may be eligible with around half of them expected to actually receive compensation.

The compensation that the lender pays out could be up to £4500 per person based on a mortgage of £150,000 where the borrower has been affected for three years. The payouts will equate to either 1 percent of the mortgage interest for each year that the borrower has been affected or will be a fixed compensation payout. With tens of thousands of borrowers potentially set to receive compensation, Halifax could have another huge bill on its hands.

The confusion has arisen over Halifax increased the cap on its standard variable rate mortgages from 2 percent above the Bank of England base rate to 3 percent above. The UK’s financial regulator, the Financial Services Authority, expressed concern that wording on documentation may have led borrowers to believe that they would receive advance warning of any such changes. Halifax subsequently came to an agreement with the FSA over paying compensation to customers who were affected.

A Halifax official said: “In February 2011, we agreed a voluntary agreement with the FSA in relation to a customer contact and goodwill payment programme with specific Halifax mortgage customers. We have subsequently identified a further group of customers that are eligible for inclusion within the programme. We are now in the process of writing to these borrowers explaining what this means for them.”

Tags: standard, Mortgage loan, concern, payout, uk, compensation payouts, Mortgages, year

More compensation payouts to be issued by Halifax

High Street banking giant, Halifax, has recently admitted that it may have to pay out more compensation to customers over a mix up with its mortgage rates. Earlier this year the lender identified around 600,000 customers who may be eligible for compensation over confusion about mortgage rates, about half of whom ended up receiving compensation payouts. The lender has now stated that there could be another 250,000 people who may be eligible with around half of them expected to actually receive compensation.

The compensation that the lender pays out could be up to £4500 per person based on a mortgage of £150,000 where the borrower has been affected for three years. The payouts will equate to either 1 percent of the mortgage interest for each year that the borrower has been affected or will be a fixed compensation payout. With tens of thousands of borrowers potentially set to receive compensation, Halifax could have another huge bill on its hands.

The confusion has arisen over Halifax increased the cap on its standard variable rate mortgages from 2 percent above the Bank of England base rate to 3 percent above. The UK’s financial regulator, the Financial Services Authority, expressed concern that wording on documentation may have led borrowers to believe that they would receive advance warning of any such changes. Halifax subsequently came to an agreement with the FSA over paying compensation to customers who were affected.

A Halifax official said: “In February 2011, we agreed a voluntary agreement with the FSA in relation to a customer contact and goodwill payment programme with specific Halifax mortgage customers. We have subsequently identified a further group of customers that are eligible for inclusion within the programme. We are now in the process of writing to these borrowers explaining what this means for them.”

Tags: standard variable rate, tens of thousands, bank of england, goodwill, lender, customers, Halifax mortgage customers

Consumers rely on lottery in case they lose their jobs

Whilst a huge number of us buy lottery tickets every week in the hope of hitting the jackpot or at least securing something substantial, the chances of actually winning big are minute and for the majority of us will never happen. However, despite this, recent research has revealed that there are many people who are hoping that a lottery win will sort them out financially in the event that they lose their jobs.

Worryingly, a large number of people now have no insurance in place to protect their income in the event of a job loss and are instead looking at other options to tide them over financially, with some stating that they would use savings, others relying on family and friend to help them out, and some relying on a lottery win to ensure that they can get by if their income is suddenly cut off.

The research was conducted by British Insurance, and according to the results, around 59 percent of workers were worried about the security of their jobs, which equates to around 17 million workers. This figure reflects an increase of 7 percent compared to the survey last year. However, fewer people now have any protection in place, with 20 percent of workers having protection in place last year but only 14 percent having protection according to this year’s survey.

One official from the company said: “Although we’re told the UK is coming out of a recession, this confidence is clearly not shared by the majority of workers. And with economists predicting that the economy will stagnate over 2012 or suffer a deep recession if the eurozone situation deteriorates, it’s advisable to have a plan to replace any future lost income without dipping into savings or falling into debt.”

Tags: eurozone, Gambling, Recent research, future, economists, survey, recession, Worryingly

Are you covered for bonfire night?

Homeowners are being advised to make sure that they check their home insurance policies and plans before the festivities of Bonfire Night, as they need to make sure that they have the right level of cover for their needs and to ensure that they have adequate cover in place in the event of accidents or injuries. Many people do not even think about the fact that they may not have adequate cover in place and therefore any incidents that take place could end up costing them a fortune.

Whilst households may have insurance cover in place there is a chance that certain things are not covered on their policies, and this is what officials are urging households to check before Bonfire Night comes around. For example, if you are having fireworks and a bonfire in your garden your insurance cover may not offer any public liability protection in the event that someone is inured or worse on your property, which would effectively be your responsibility.

Officials have said that every year thousands of people are injured at bonfires and fireworks parties and households that do not have the right level of protection in place could find themselves in very hot water in the event of an injury occurring on their property. A quick phone call or just checking your policy could enable you to determine whether you have the right level of cover in place and if not you can upgrade your cover before November 5^th.

One home insurance expert said: “For those hosting a fireworks party at home, it is essential to ensure your home insurance policy is up to date and that you have adequate personal liability cover. In the event of an accident such as someone getting burnt on the bonfire, you could find yourself liable for any injury or damage if you are not covered by insurance.”

Tags: adequate cover, place, chance, home insurance, phone, bonfires, public liability protection, date

Social networking sites being targeted by debt collectors

Whilst we all consider social networking sites like Facebook and Twitter to be associated with the entertainment, communicating with friends, or simply making comments to let others know your thoughts, there are some people that use them for strictly business purposes. This includes those that want to find out information or try and make contact with people for something more than just adding them as friends!

It has been revealed that in some cases debt collectors have been targeting people that owe money through the use of social networking sites, posting messages on these popular sites. However, officials are concerned that people could soon find embarrassing and confidential details about their debts and finances making their way onto the Internet if this practise continues. There are concerns that messages posted on these social networking sites by debt collection firms could be seen by friend, family and even work colleagues of the person that the message has been left for.

With this in mind the Office of Fair Trading has now warned the debt collecting industry about using these social networking sites to contact people that owe them money. The OFT has now updated its guidelines with regards to debt collecting firms, which were last updated in 2006. The debt collection industry has also been warned about contacting people at locations that are deemed inappropriate such as hospitals.

An official from the OFT said: ‘In the present economic climate, with many people, including those who may be particularly vulnerable, in financial difficulties, it is crucial they are treated fairly by companies recovering their debts. This updated guidance makes clear the standards the OFT expects of all businesses involved in debt recovery, including debt collectors, banks and law firms.’

Tags: family, whilst, twitter, official, mind, office of fair trading, debt collection firms

Demand continues to outstrip rental supply for most lettings agents

In the past, many people who went into private rental accommodation did so as a stop gap before getting a mortgage and buying their own home. However, over recent years things have changed radically and many of those in private rented homes are having to be in it for the long haul because they are unable to get the finance that they need to get onto the property ladder for themselves of are too concerned about matters such as the economy and their job security.

Demand for rental accommodation has soared over the past couple of years, rising to unprecedented heights and resulting in demand by far outstripping supply in many areas. According to the Association of Residential Letting Agents the situation is now becoming difficult because the private rental sector has come under increased strain. The association said that a rising number of its members are now reporting far greater demand than supply.

Around three quarters of ARLA members are said to have seen demand outstripping supply in the private rental sector, with more and more people struggling with mortgages and opting for private rental homes instead. ARLA also said that tenants were now staying in their rented homes for record periods, having reached a record high of nineteen months. London and the South East have seen particularly high levels of demand according to figures.

Tim Hyatt, president of ARLA, said: “The UK cannot rely on the rental sector to support the housing market in perpetuity. The reality is that there is a finite amount of rental property and unless both housing supply and mortgage availability improves then renters will find that their options in the market are reduced.”

Tags: arla, president, high, stop, home, private rental sector

Making it easier to get finance

One of the most important factors for lenders who are considering extending any form of finance to you is your credit file and rating, which will often determine whether or not lenders will be prepared to extend finance to you or not. Whether you are applying for a loan, credit card, store card, catalogue, or mortgage you will find that your credit file and rating can have a huge impact on your level of success.

For anyone that needs to take out finance and is relying on being able to get that finance it is important to do everything possible to boost your chances of success. Of course, no matter what measures you take there is still no guarantee that you will be able to get the finance that you need. However, you can increase your chances of getting it through measures such as keeping your credit file and score in check.

Maintaining responsible and timely payments on bills and debts will help to ensure that your credit file and score is not damaged. Also, showing that you can manage money responsibly will help, which means not having a range of credit cards that are maxed to the hilt or applying for finance on a regular basis – all of this will show up on your credit report.

You will be able to check your credit report on a regular basis either by ordering copies or even by checking them online, which is the easiest and most convenient way. Checking your credit file on a regular basis will ensure that you are not penalized for incorrect, inaccurate or out of date information, as you can look out for any information that is not correct and get it sorted out right away.

Tags: store card, Credit rating agency, lenders, hilt, important factors, timely payments, regular basis, convenient way

Rent increases tip renters over financial edge

According to recent reports many people who are in rented accommodation are being pushed over the financial edge as a result of not only huge rental increases but also the soaring cost of living, which has impacted hugely on their finances and their ability to keep up with rent payments. According to one leading debt charity the number of people seeking help with regards to their rent payments has soared since the onset of the recession, rising by a massive 84 percent.

National Debtline has stated that the number of people approaching debt charities and advisors for help with regards to rent arrears on their homes is continuing to increase.

One of the reasons behind the rising number of people struggling with their debt is the fact that so many more people are now being pushed towards renting due to problems getting a mortgage, which means that there are more people in a position to fall into arrears with their rent. According to figures the number of people renting in England has increased by 40 percent since 2005 and the rise in demand for rental homes has pushed rental prices up to record highs, leaving renters having to deal with crippling rents as well as soaring living costs.

One industry official said: ‘A few years ago many people in today’s rent market would be planning on buying their first home, but now it seems they are struggling to even pay the rent. On top of those people who call National Debtline with specific problems in affording the rent, there will be even more who are cutting back sharply elsewhere to make sure they can cover rent payments. This in turn can lead to other debt problems, with credit cards, overdrafts and loans being relied upon to pay for food and other essentials.’

Tags: number, rent, rental prices, huge rental increases, impacted, accommodation, Charitable organization, fact

More than a fifth of over 55s have a personal loan

Often, personal loans are associated with younger people in their twenties or thirties who may be borrowing the money to buy a new car, pay for their wedding or splash out on a luxury holiday. However, it seems that even older people are lumbered with personal loan debt these days with a recent study showing that more than one fifth of consumers aged fifty five and over were paying off a personal loan.

Whilst in years gone by people reaching their late fifties and sixties enjoyed the luxury of knowing that by the time they reached this age they had paid off their debts and often their mortgage as well, leaving them financially free to enjoy life during their retirement years with no financial burden to hold them down. However, these days things are quite different for many people in their fifties and sixties many of whom still have debts such as personal loans and mortgage debt.

Research was recently carried out by the insurance giant Aviva, which showed that more than one fifth of people aged fifty five and older have a personal loan. In total 21 percent of people over this age had a personal loan. The research was carried out as part of the Aviva Real Retirement Report and involved polling more than ten thousand people aged over fifty five.

An official from Aviva said: “The over-55s have seen their finances deteriorate over the last quarter as people struggle to keep up with the rising cost of living on a relatively fixed income. Taking out a private pension, building up a respectable savings pot and paying down debt are all simple steps that people can take to ensure they don’t face these problems in retirement.”

Tags: building, study, polling, aviva, total 21 percent, retirement, late fifties

Lack of consumer confidence continues with High Street banking giants

For the last few years the leading High Street banks in the UK have taken a real battering in terms of consumer satisfaction and confidence levels, with many people losing faith in the biggest banks, including those that have had to be bailed out by taxpayers. A recent survey has shown that lack of confidence and satisfaction with the big High street banks continues, despite their general market dominance.

The survey was carried out by the consumer campaign group, Which?. As part of the process twenty eight banks and building societies were analysed in terms of their customer satisfaction levels. All main services were looked at when assessing customer satisfaction levels, including current accounts, savings accounts, credit cards and mortgages. This comes after it was revealed that in the first half of this year the Financial Ombudsman Service received around 54 percent more complaints about financial institutions compared to the final half of last year.

When it came to customer satisfaction levels amongst financial institutions none of the leading High Street banks even managed to make the top fifteen. In fact, the results showed that the four banks that had the highest levels of customer satisfaction when it came to current accounts controlled only 6 percent of the current account market whereas the four banks that had the lowest levels of customer satisfaction with current accounts controlled 38 percent of the current account market.

An official from Which? said: “The high street is dominated by banks that have a shocking record for customer satisfaction – what more proof do we need that the market isn’t working? We will only have a truly competitive market when banks are made to face up to a simple choice – either look after your customers or be prepared to lose them.”

Tags: Current account, year, shocking record, none, consumer satisfaction, satisfaction

Over half of Brits hope to see base rate increase

When the Bank of England originally announced that the base interest rate in the UK was being dropped to an all time low of just 0.5 percent thirty months ago, there were many people who were ecstatic as a result of being able to save money on their outgoings and borrowing in what had become a very difficult financial and economic climate.

However, thirty months on the base rate is still at this record low and whilst the economic and financial climate is still difficult a rising number of people are now starting to hope that the base rate will soon start to increase again. Whilst many borrowers have indeed benefitted from the low base rate there are also many that have suffered, such as savers who have lost a fortune in interest on their savings and consumers who have seen inflation soar.

A recent survey has revealed that more than half of UK consumers are now hoping that the base interest rate in the UK will increase for one of a number of reasons. In total, 52 percent of consumers are hoping to see the base interest rate increase. Of these, 41 percent wanted the base rate to rise so that they would be able to get better returns on their savings, which have really suffered over recent year. A further 11 percent said that they would like to see the base rate rise in order to tackle soaring inflation.

One industry expert stated: “With the Bank of England Base Rate sitting at a record low for the past two and a half years it is clear that there have been winners and losers, with savers generally feeling the combined impact of low rates and high inflation. Some borrowers have benefited, particularly those mortgage borrowers with large deposits, or those who want to borrower larger amounts on personal loans.”

Tags: low rates, increase, winners and losers, rate increase, recent survey, uk consumers, interest rate

Mortgage lending starts to pick up

Over the past year mortgage lending in the UK has remained very subdued, having gone through a very turbulent and difficult period after the global financial crisis and recession wreaked havoc across the nation’s financial markets. Many people have struggled to get a mortgage over the past year or two, which has resulted in fewer people being able to buy property and far more people having to rent a home.

However, there is some good news on the horizon as recent reports have revealed that mortgage lending levels have increased for a third month in a row, sparking hopes that property sales could start to increase as a result of this. Approvals are now said to be 3 percent higher than they were in July of last year, which is promising news. However, many first time buyers will still struggle to find a deposit for a mortgage, which will continue to cause a problem on the mortgage and property markets.

Despite this news, figures relating to property sales have shown that so far this year property sales have been stagnating. Figures were released by HM Revenue and Customs, showing that in July there were 79,000 property sales. This was the highest number of sales so far this year according to the figures but it was still a lower figure than a year ago.

One economist said that compared to long term trends and norms housing activity was still very low at present despite increases in mortgage approvals.

He said: “With consumer confidence weak and the economic outlook currently looking pretty grim, we see little reason to change our view that modest falls in house prices are more likely than not over the coming months.”

Tags: economist, property, term trends, outlook, July, recession, home, horizon

Debt conscious Brits opt for staycations

According to a recent report a rising number of people in the UK who are conscious about falling into debt and want to avoid the pitfalls of any further debt are now opting for staycations when it comes to holidays, as they believe that this will be the cheapest option for them in the current climate. Nearly one in four Brits stated in a recent survey that they would be trying to spend less on their holiday this year.

For many people, going abroad on holiday has become increasingly difficult as a result of their financial situations. Many have found that the cost of flights and accommodation have become too much for them to manage on their more limited budgets, and those with families are finding it increasingly difficult to afford to take the whole family on an overseas holiday, as this can run into many hundreds or even thousands of pounds.

The survey was carried out by the Insolvency trade body, R3, which said that of those that were trying to save money on their holidays nearly 60 percent had decided to holiday at home. Those that decided that they still wanted to holiday abroad looked at other ways to save money, with over 70 percent reducing the cost of accommodation, 66 percent choosing cheaper travel, and 60 percent deciding to spend less money whilst they were on their holiday.

An official from the firm said: “People choosing not to have a holiday this year is likely to have grown out of necessity rather than choice. UK households will either simply not have the money to go on holiday as result of cuts to their disposable income or have decided to save their money in preparation for the difficult times ahead. R3’s latest personal debt snapshot revealed only a quarter (25%) of consumers believe their financial situation will improve over the next six months. The money saved from spending less or not having a holiday at all will provide individuals with a financial ‘buffer’ in case they fall on hard times.”

Tags: Brits, financial situation, choosing, holiday, spain, current climate, choice uk

First time buyer age soaring

A recent study has shown how the average age of the first time buyer has soared over recent decades, with the younger people of today expecting to be around twelve years older than their parents were when they manage to purchase a property for the first time. The study was carried out by the Post Office and showed that the difficult economic and financial climate had really taken its toll on potential first time buyers.

Over the past few years, first time buyers have been hit hard by the problems in the mortgage and property markets. Many have been unable to afford to raise the huge deposits that lenders have been demanding and many others have been unable to get a mortgage at all due to increased restrictions and stringency from lenders, who have been exercising increased caution.

The study involved polling parents and younger people and showed that the average age of parents when they bought their first property was around twenty three whereas their kids expected to be around thirty five years of age on average by the time they managed to afford a property themselves. This would see the average age of the first time buyer soar by twelve years, with parents in the 1960s purchasing in their mid twenties and younger people today having to wait until their mid thirties. The average twenty-something of today earns around £21,000 in terms of salary, but with average property prices at £164,000 most would be unable to consider buying a property on their own.

One industry official stated: “Many would-be first-time buyers may have been put off trying to get onto the housing ladder by the size of deposits now needed. Some may be deterred by their perception of high mortgage repayments.”

Tags: post, GBP, Parent, recent study, average property prices, first time buyer, would-be first-time buyers, 1960s

No change in UK interest rates

Following the August Monetary Policy Committee Meeting the Bank of England has announced that the base interest rate is once again to remain on hold at its lowest level in the history of the Bank of England. The base rate has been at its all time low of just 0.5 percent for well over two years now, which has provided relief for many homeowners and borrowers who have seen their monthly repayments plummet.

Economists have now predicted that the base rate will remain at this record low for the remainder of this year, with some even going as far as to say that it could remain at 0.5 percent next year as well. In a poll that included 32 economists the majority believed that it would be next year before the base rate was increased and a handful said that it could be 2013 before rates increased.

The news that the base rate is to remain on hold comes as no surprise to most industry experts, as the MPC is reacting to the fragile economy by keeping the base rate low. There will be many people that welcome the decision to keep rates low, such as those with mortgages on variable rates. However, there are also some groups that want to see rates increased in order to try and bring inflation levels down.

One group said that rather than increasing the base rate the MPC could look at further increasing the quantitative easing scheme, as this would increase the amount of money available to companies.

David Kern, chief economist at the British Chambers of Commerce, said: “Every effort must be made to sustain the recovery. If the economy weakens further, the MPC should not hesitate to increase the QE programme.”

Tags: bank of england, time, inflation, chief economist, interest, scheme, rates

Interest rates unlikely to increase this year

A recent poll has suggested that the base interest rate is unlikely to be increased over the course of this year, which is something that will bring relief to many homeowners and borrowers who are already struggling to make ends meet due to soaring costs and bills. The data comes from the latest Reuters poll of economists, which reveal that there is now only a 30 percent chance that the Monetary Policy Committee will increase the base rate from its current record low of just 0.5 percent where it has been for well over two years.

However, economists are predicting that there will be a base rate increase in the first quarter of next year although some believe that the next rate hike could be at least one year away, perhaps even longer. One industry official welcomed the news of the unlikelihood of a rate rise, stating that there were many households and individuals that would not be able to cope with a rate increase in the current climate due to overstretched finances, soaring living costs and rocketing bills.

He said: “Given that many people in the UK are currently struggling to make ends meet, an interest rate rise which will push up mortgage payments will cause a huge increase in families facing financial difficulty. The longer that interest rates are left unchanged the better from a personal debt point of view.”

The MPC has faced a difficult decision over recent months when it comes to increase interest rates, as members have been under pressure to vote for an increase due to soaring inflation levels but have also been under pressure to keep the rate on hold because of the concerns about the economy and affordability.

Tags: uk, quarter, Business Finance, mortgage, reuters poll, something, committee, course

Brits turn to credit cards three weeks after getting paid

It has been claimed in a recent report that millions of Brits are able to manage for around three weeks or so after getting paid before they are forced to turn to their credit cards. The reliance of many Brits on credit cards has increased as a result of soaring living costs, spiralling bills, frozen wages and government cutbacks. All of this has led to people being unable to manage as well as they used to in terms of their finances.

Whereas in the past consumer wages may have lasted more people for the full four week before the next payday came around, many are now finding that it lasts for only three of the four weeks, leaving them with a week where there money has run dry. This is the point where millions of Brits are turning to their credit cards to fund their living costs for the final week before payday comes around.

The research showed that around a quarter of consumers in the UK turn to their credit cards once they have run out of cash in their current accounts. The majority tend to run out of cash around three weeks after getting paid, at which point they turn to their credit cards. However, around one tenth of those that have to subsidise their monthly spending with a credit card are only able to manage for fifteen days before having to turn to their cards.

An official involved in the research said: “With most of the population feeling the pinch at the moment, it’s no surprise to see so many people reliant on credit so early in the month. However, unless you plan this properly and know you’re able to pay off your balance, this can be a dangerous trap to fall into. If you’re the type of person who doesn’t pay off their card every month, you need to look at the steps you can take to reduce monthly expenditure before turning to credit products. Budgeting is crucial at the moment and people will be amazed at how much cash they can free up each month by simply sitting down and going through their finances.”

Tags: monthly spending, consumers, spiralling, type, person, budgeting, expenditure, pinch

Payday loan repayment delays can lead to hefty charges

According to a recent report there are now many people who take out payday loans in order to bridge the gap between paydays. With the cost of living soaring, petrol prices having rocketed, bills going up, and food costing much more, many people are now struggling to make ends meet financially and their wages are simply not lasting for the whole month, leaving them short of cash part way through the month when the next payday is still a long way off.

As a result of this, more and more people have found themselves in a situation where they have had to borrow money in order to make ends meet and for some this is becoming a regular occurrence. Whilst some people are turning to family members and friends in order to secure this finance to tide them over others are turning to lenders, with many opting for payday loans because they are quick to process, require no credit checks, allow consumers to borrow modest amounts of money for short periods of time, and offer a fixed fee.

However, whilst some people have found these payday loans to be a financial lifeline in a very difficult climate, industry experts are warning that the cost of borrowing can increase even further with these payday loans if they are not repaid on time. The interest rates charges are already extortionate on these loans, although many customers do not realise this because they are borrowing the money for such a short period of time.

One financial industry professional said: “There is a real danger that customers could fall into a spiral of debt where they have to take out a loan each month just to make ends meets. The golden rule is not to borrow money unless it is absolutely necessary.”

Tags: personal finance, order, customers, result, credit checks, short periods, tide, Payday loan repayment

Mortgage default levels could rise

According to a recent report the number of homeowners that are defaulting on their mortgage repayments in the UK is set to rise over the coming three months. The data comes from a survey that was carried out by the Bank of England amongst lenders and formed part of the central bank’s quarterly survey on credit conditions.

Over the past three months default levels amongst UK homeowners is said to have remained relatively flat. However, the figures showed that the balance of lenders who were expecting the rate of defaults on mortgage loans to increase rose to its highest level since the end of 2009.

The survey also showed that banks were not expecting to see any sharp increases in lending over the coming months, with the outlook for bad debts being cited as one of the reasons why banks may remain reluctant to lend in the immediate future. One economist said that the Bank of England report had nothing in it that suggested banks were likely to start lending more soon.

According to the data there has also been little in the way of change over the last three months when it comes to the availability of personal loans, mortgages and business loans. The data indicated that there could be an increase in unsecured lending to households over the next three months but that mortgage lending was likely to remain flat.

The report did indicate that there had been a marked improvement in the buy to let sector in the UK, with demand for buy to let having increased over the past few months. Lenders are expecting this improvements to continue over the coming few months and for the remainder of this year according to the report.

Tags: quarterly survey, uk homeowners, economist, bank, business loans, Federal Housing Administration, improvements, United Kingdom

Debt affecting the lives of many students

There is little doubt that the high levels of debt that students have to get into in order to get an advanced education have affected their abilities to do many things in life. For many people that leave university with high levels of debt the next decade or more could be spent focusing on repaying the debt, with everything else having to be put onto the back burner.

A study that was recently carried out has revealed the extent to which many students are having to put their lives on hold in order to focus on their student debt after leaving university. As a double whammy, many now not only face the prospect of having to spend over a decade repaying their student debt but also face very bleak prospects of getting a high paid job because of the current climate.

Uswitch.com carried out research to show how many students are having to put their lives on hold in order to repay their student debt. Over 30 percent had been unable to start a pension when they wanted to according to the reports and nearly 50 percent had been forced to put off buying a home. Nearly 60 percent of students had been unable to save money because of their debts and close to 30 percent had delayed plans for marriage.

One industry official said: “The fact that graduates have to put their life on hold because they are knee deep in student debt is a sorry state of affairs. And as fees go up, students risk running up even bigger debts. But without a degree, getting a job in today’s stagnant market may be even harder.”

He added: “Going to university used to be the norm, but it is now becoming a catch 22. It is also worrying that students are going to university blind to the financial implications. Higher fees and lack of job prospects may be out of your control, but if university is right for you it’s more important than ever that you are as financially prepared as possible.”

Tags: official, life, fact, Higher fees, Student loan, debts, Financial services, study

Gazumping causes further increase in private rents

Gazumping is something that has been rife in the property purchase market for many years. However, there has been rising evidence that this process has also been spreading through the private rental sector over recent months, as potential tenants become more and more unscrupulous in a bid to get their hands on the rented property of their choice.

Many landlords will be celebrating the recent news that private rents have increased once again in May but demand for rental properties remains very strong. There are now more and more people after each rented property that comes onto the market, with this unprecedented demand for rental homes resulting in processed such as sealed bids and gazumping coming into force.

Many officials have said that the increase in gazumping within the private rental market has been one of the driving forced behind the rental increases that have been seen in the sector over recent months. Whilst rents have not increased hugely between April and May, with the average increase being £4 per month taking the average monthly rent to £696.

Compared to May of last year monthly rents were around 4.4 percent higher. However, there were significant regional variations according to reports, with areas such as London seeing an increase of around 7.8 percent on rents in the last year but places such as the East of England seeing rents fall by around 1.2 percent in the same time period. The general increase in rents for yet another month will be welcomed by landlords, who will be able to see further increases in their investment returns coupled with continued increasing demand for their properties.

An official from the property group LSL said: “The rocketing cost of living, combined with ongoing difficulty first-time buyers are experiencing in obtaining a mortgage, is increasing the number reliant on rental accommodation. With the fierce competition for homes, rental gazumping is becoming more commonplace and properties are being let beyond asking price, putting further upwards pressure on the market. For tenants, unable to buy, renting is becoming less affordable as demand booms. Rents are increasing at twice the rate of wages.”

Tags: recent, london, same time period, rental gazumping, first time buyers, rental, regional variations, Many officials

Housing valuation activity levels increase in May

A recent report has shown that the level of mortgage valuation activity increased for the months of May, reflecting the sixth month in a row where this activity has seen an increase. The data was released by Connells Survey and Valuation, which recently released its Housing Market Activity report.

The report showed that when it came to mortgage valuations the month of April had seen activity remain largely flat. However, this changed in May with the number of mortgage valuations said to have increased by around 22 percent compared to the previous month. Compared to the same period last year, the number of valuations in May increased by 26 percent. This will most likely be taken as another positive sign of some level of recovery in the property market in the UK.

The data showed that one of the reasons behind the increase in activity was a marked increase in interest from first time buyers in the market. In total first time buyers made up 34 percent of all valuation activity according to the report. However, the figure was further boosted by existing homeowners who were looking to move home. There was an increase of around 11 percent on valuations for house movers for May compared to the previous month.

An official from Connells stated: “Housing market activity has resumed its slow and steady upwards trajectory, driven by an upturn at the lower end of the market. Many first-time buyers have been encouraged to enter the market by the uptick in the number of higher LTV products available recently. However, for the average first-time buyer, mortgage finance still presents a formidable challenge. The increasing variety of products is offset against comparatively high rates – alongside overly stringent criteria demanded by lenders.”

Tags: Real estate, number, homeowners, steady upwards trajectory, property market, variety, percent, Business Finance

Lending figures expected to see mixed reactions

Over the past decade Britain has become addicted to borrowing, and up until the onset of the global credit crisis most people – including those with damaged credit – were able to get finance pretty easily with banks and financial institutions eager to loan money to anyone that wanted it. This has, of course, resulted in a huge personal debt mountain that has left many people struggling with their finances and unable to keep up with their debt repayments.

The Bank of England is set to release figures later this week relating to mortgage lending and consumer credit. It is widely thought that the figures will show that lending and consumer credit levels are very low. It is thought that whilst some people will find that the figures make for very bleak reading indeed there are many others that will see the subdued lending data as a positive sign.

Many city officials are likely to see the low lending levels as something that could dampen the economic recovery and reduce consumer confidence levels. However, some people will see them as a sign that Britain is not as addicted to debt as it once was and that consumers are now focussing on trying to clear their debts and live within their means rather than borrowing money at the drop of a hat to buy things that they cannot really afford.

Peter Dixon, strategist at Commerzbank, said: ‘Within the context of rebalancing the economy away from personal debt, these low figures may be no bad thing. Those who argue that borrowing should be stronger are missing the bigger picture.’

Ross Walker, economist at Royal Bank of Scotland, said: ‘The British household sector needs to de-leverage. This is happening, but at a snail’s pace. That said, a more rapid correction would probably be associated with recession in consumer and property markets.’

Tags: mountain, city, drop of a hat, decade britain, week, credit, business, Britain

Official tries to explain banks’ low business lending levels

It was announced recently by the Business Secretary, Vince Cable, that the big banks in the UK were failing to meet their agreed targets with regards to lending to small and medium sized businesses. Figures were released recently showing that based on quarterly results the banks had not met their targets, and were therefore not on target for meeting their annual business lending minimum figure.

The banks have argued consistently that the reason behind the low lending figures for small and medium sized businesses was that in the current climate many businesses did not want to take out loans. Banks claim that whilst they are making credit available for business customers the low demand for finance means that there is little they can do to increase their lending figures until demand increases.

This has now been backed up by an industry official, Anthony Thomson, chairman and co-founder of Metro Bank. He said that his bank is now targeting small businesses as its main customer but that demand for borrowing is low. He said that whilst many businesses had signed up to the bank the demand for finance was much lower than had been expected, which meant that the bank was unable to lend as much to business customers as it may have anticipated. He also said that businesses were failing to look for the best rates on loans.

He said: ‘I hate to sound like I am defending the big banks but our experience is that there is just not the demand for credit from small companies.’ He also said: ‘I always thought small firms would be very sensitive to interest rates, but they are even less concerned about the rates than consumers.’

Tags: customer, industry official, borrowing, Anthony Thomson, Metro

Record levels reached for rents

Over the past year getting a mortgage has remained difficult for the many non-homeowners who are desperate to get onto the property ladder. This has led to an increasing number of people that may normally have opted for a mortgage to buy their own place having no other option but to rent. The demand for rental homes has rocketed as a result of this, which has pushed up rental costs.

It has now been revealed that rents are at their highest level since they last reached record highs back in November of last year. The average rent being paid has now soared to £692 per month, reflecting an increase of 0.8 percent compared to the previous month and a rise of 4.4 percent compared to the same period last year.

The landlords of private rented properties are, on average, raking in around £30 per tenant more each month as a result of these increases. Whilst the rent increases are good news for landlords, as they have a huge demand for their properties, it is not so good for tenants who are already struggling financially and do not have to option in many cases of being able to invest in their own property because of the financial restrictions in the mortgage market.

There are concerns amongst landlords about increased levels of arrears and missed or late payments recently. One official said: “The final bank holiday of the month delayed many rental payments, but on top of this, thousands of tenants took advantage of the opportunity and booked holidays, which has impacted on the timely payment of rent. Nevertheless, despite the short-term factors, landlords need to remain especially vigilant over the medium-term. We are yet to see the true picture emerge from public sector spending cuts, and changing employment situations will hamper many tenants’ ability to meet their monthly rent cheque on time.”

Tags: payment, Renting, Record levels, top, landlord, mortgage, opportunity, result

Repossessions increase by 15 percent

It has been reported recently that repossession numbers have increased by 15 percent in the UK, with the first quarter of this year reflecting the first quarterly increase since the third quarter of 2009. According to officials repossession figures have been in decline for the past five quarters. However, a range of factors has now seen this figure increase with many officials stating that it is likely to continue increase over the course of this year.

The Council of Mortgage Lenders released these figures, and it is officials from the CML that believe the number of repossessions will continue to soar over the coming year. In the three months to the end of March 9,100 property were taken back by lenders and it is predicted by the CML that this could rise to as many as 40,000 or more over the course of this year. Some people are coping at present simply because of the base interest rate being at its rock bottom low of just 0.5 percent. However, if this increases over the next few months, as many believe it will, more and more people could find their homes being repossessed.

Officials have highlighted a number of factors which are thought to be partly responsible for the increase in repossession numbers. There are concerns that more and more people are struggling with their finances and finding it difficult to meet mortgage repayments because of factors such as frozen wages, increased taxes, government cutbacks, and rocketing living costs.

The Council of Mortgage Lenders stated: ‘Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty. Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator’s concern that too much forbearance may be as bad as too little.’

Tags: March, concern, rate, officials, increase, regulator

BBQ season could put homes at risk

Many people in the UK take out home insurance to protect both their belongings and their homes against damage, which can come in many different forms. One industry official has recently warned consumers to make sure that they stay safe when having barbeques at home, as there can be many dangers associated with this type of event.

With the lovely warm weather we have had recently and the summer season coming up there could be an increase in the number of people that are now having barbeques in their gardens and yards. These can be fun events for family and friends to enjoy but can also be fraught with danger, especially if there are kids around or a lot of people that are drinking at the BBQ.

Of course, consumers need to make sure that they do have adequate insurance in place to protect themselves financially in the event that something like this does happen during a barbeque. The Royal Society for the Prevention of Accidents has spoken out to urge consumers to be careful when they are holding a barbeque to ensure that they are taking precautions, having safety equipment at hand, and keep drinkers and children away from the barbeque to prevent any accidents that could damage the home and worse still cause serious injuries.

At this time of year the number of people having barbeques goes up and whilst this is great fun for those involved it does mean that danger levels also increase accordingly.

Sheila Merrill, RoSPA’s public health adviser, stated: “Hopefully, the good weather will continue throughout the summer and taking care with barbecues will mean that everyone stays safe to enjoy it.”

Tags: family and friends, fraught with danger, Hopefully, Prevention, accidents, home, adviser, number

Motor insurance continues to rise

A recent survey has shown that motor insurance is continuing to increase, leaving many drivers who are already struggling to keep up with the cost of running their vehicle in an even worse situation in terms of their finances. The cost of vehicle insurance has been soaring recently and is much higher now than it was a year ago. On top of this drivers have had to deal with vast increases in petrol costs, leaving many financially crippled.

According to the results of the survey the cost of insuring a vehicle is now nearly 31 percent higher than it was a year ago. Compared to March the cost of vehicle insurance cover in April increased by 4 percent, showing that car insurance costs are continuing to increase. Many drivers are now being forced to abandon their vehicles and look at other modes of transport because of the high costs involved with running their vehicle.

An official from one insurance monitoring group, Tiger.co.uk, said: “Our analysis shows that car insurance inflation continues to be a major financial issue for the majority of UK drivers. Within our analysis inflation in the last month has been particularly prevalent for younger female drivers and we may well be seeing here the early impact of the recent EU gender ruling that, from December 2012, will outlaw the use as gender as an insurance risk factor in its own right.”

For the many people who are already struggling experts are advising considering a switch in insurance, as the cost of cover can vary from one provider to another. Drivers can compare the cost and levels of cover with ease using the Internet and can look at finding a more appropriate level of cover at a more affordable price.

Tags: year, group, risk factor, Business and Economy, The cost, Many drivers, vast increases

Many paying for fuel with credit cards

For many people credit cards have provided a convenient and simple means of making payments instead of paying cash or using cheques. However, it appears that these days credit cards have become an essential tool to help people afford to fill up their cars so that they can get around. Many people have used their cards at petrol stations in the past simply because of the convenience that they provide. However, these days people are said to be using them out of necessity.

As all drivers will know the cost of petrol and diesel has rocketed over recent months, and the cost of filling up a tank has soared. As a result of this many people have had to resort to using their credit cards to pay for fuel at petrol stations because they cannot afford to do anything else, and this has sparked concerns about the knock on effect that this will have on consumer debt levels.

Daily living costs have soared in many areas recently, yet many people have seen their pay either frozen or reduced because of the recession and the financial climate, which has left most struggling to cope with the rise in the cost of living. Many people are not only paying for their fuel with their credit cards but are also now meeting other essential living costs with their cards. Many are unable to make much more than the minimum repayment after using their cards to this degree and will come to a point where they have maxed out their card and have massive debts to pay as well as still having to find a way to meet the cost of living.

One official said: “With inflation hitting 4.4 per cent last month, it’s not surprising that many families need to resort to using their credit cards for more and more living expenses. But we believe this does highlight just how important it is to keep on top of credit commitments overall.”

Tags: payments, credit commitments, credit, knock, climate, Daily, consumer, consumer debt levels

Renting more expensive than mortgage repayments

In years gone by many people have rented homes rather than buying because the monthly cost of renting has been considerably lower than the cost of paying off a mortgage each month. However, recent figures have shown that this has gone into reverse, and after a very turbulent few years in the property market it has actually become cheaper each month to pay a mortgage than to pay rent.

According to the figures it costs around £709 per month to rent the average three bedroom property whereas the same property would cost £608 per month in mortgage repayments. This makes it around £100 cheaper on average to make mortgage repayments than to pay rent on a home. On the other hand just a couple of years ago it would have cost £1060 for the same property to pay a mortgage each month and just £761 to pay rent each month.

There have been many changes in the property and mortgage markets that have led to this change. This includes the base rate remaining at a record low of just 0.5 percent for over two years, which has kept mortgage repayments lower. The lack of availability of mortgages for first time buyers, driven by restrictions from lenders and demands for higher deposits, has led to soaring demand for rented homes, and this in turn has resulted in rental costs rising.

One industry expert said: “Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing home owners’ disposable income. Although the current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many.”

Tags: GBP, lack, availability, record, reverse, month, disposable income, existing home

Many retirees have a second home

Over recent years many non-homeowners have found it more and more difficult to get onto the property ladder, with lenders becoming more stringent about lending money to first time buyers and demanding higher deposits, which most first time buyers cannot afford. This has resulted in many non-homeowners giving up on their dreams of homeownership for now and having to settle for renting a home instead.

However, whilst the younger generation struggles to even get a big toe on the property ladder many people that are coming up to retirement are the proud owners of second homes. A recent survey revealed that one in seven couples in their fifties and early sixties own a second home, with an average £250,000 tied up in their second homes, not including any mortgage on the second home and not including the value of their main home.

At the same time their grandchildren and in some cases even their children are struggling to get the chance to own even one home. Many are unable to secure the deposit that they need to get onto the property ladder and many others cannot afford the repayments on their current income. This has left them facing the toughest challenge to buy a home out of any other generation. The figures were released recently by the Office for National Statistics. This is the first time that calculations have been carried out to see how many people within this age group own a second home.

Overall 13 percent of people in that age group were found to own a second property, which in some cases was abroad. Many will have purchased these properties before the boom, with the average price when they purchased the home being £30,000 but the value for the same property today being an average £163,000.

Tags: price, time buyers, percentage, grandchildren, main home, time, couples, boom

Family debt set to spiral

It has been suggested recently that family debt is set to spiral out of control over the next four years, with families expected to be struggling with average debts of around £84,000 per household. A report claims that the level of total household debt by 2015, including mortgages, loans, and credit cards, will reach an amazing £2,126 billion. For many this prediction is cause for concern given the difficult financial future that many people are already facing.

The documents were released by the government’s spending watchdog, the Office for Budget Responsibility. Over recent months this agency is said to have significantly increased its predictions when it comes to the size and level of household debt in Britain. At present the debt level stands at £1,628 billion but it is predicted that this will increase every year until the end of parliament in 2015.

The Office of Budget Responsibility has said that part of the reason for this increased forecast when it comes to household debt is the austerity drive from the government, which is set to have a huge impact on families and households, affecting their finances hugely. In June of last year the prediction was that household debt would stand at £1,823 billion by 2015.

There are concerns that as a result of the government cutbacks, the soaring cost of living, and wage freezes or cuts, many families will have no other option but to increase their debts in order to keep their heads above water, but their ability to do this and to repay their debts will eventually run out, leaving them in a very difficult financial situation.

Labour’s treasury spokesman David Hanson said: ‘Hard-pressed families will have to borrow more money to deal with the effect of George Osborne’s tax and benefits squeeze.’

Tags: Business Finance, financial, option, situation, credit, government cutbacks

Money Advice service now available for consumers

There is no doubt that there are many people these days that are desperate for financial advice, as they have a range of money issues that they need advice and help with, including debt advice, pensions advice, and advice on savings and other financial services. However, it has become increasingly difficult for people to get the advice that they needed over recent years, especially in respect of debt with demand for these services soaring.

However, the government has now launched its Money Advice Service, which is designed to provide consumers with advice relating to a wide range of financial issues that may be causing confusion or problems. Consumers are able to use the service online or can use it by phoning or visiting an advisor in person. The aim of the service is to offer free, impartial advice to those that have issues relating to their finances.

The service deals with a wide range of different areas relating to finance, and it is available to anyone that needs advice regardless of what their financial situation is. The service also offers access to a range of tools and resources for consumers to use in order to help them with their financial queries and issues. The service has evolved from the Consumer Financial Education Body, which was launched in 2010.

The service’s chairman Gerard Lemos said: “The Money Advice Service is here to make people’s lives easier and better. We’re not here to sell people anything and we won’t charge anyone – we are here to help people take decisions about their money and plan for a better future for themselves and their families.”

Another official stated: “It is important that everyone in the UK has the knowledge, skills and confidence to make the financial decisions that are right for them. We welcome the launch of the Money Advice Service as a new way to give consumers information about managing their money and choosing the financial products that are right for them.”

Tags: financial, way, better future, anyone, advice, service online, service, launch

First time buyers could benefit if banks were protected with insurance

For many first time buyers in the UK the dream of homeownership is one that has slipped from their grasp completely, with lenders either demanding huge deposits that first time buyers simply don’t have or refusing to offer a mortgage loan at all. Many first time buyers have been frozen out of the market by cautious banks who do not want to take on the risk of defaults with a high loan to value loan.

However, one major banking group has said that the number of loans granted to first time buyers with high loan to value ratios could increase hugely if insurance companies would offer banks cover that would protect them against defaults. The claim was made by officials at Lloyds Banking Group, who said that the number of first time buyers could double if this sort of insurance cover was made available.

An official from the Council of Mortgage Lenders, Michael Coogan, said recently that he had previously urged the housing minister, Grant Shapps, to look at making improvements by encouraging a ‘more active mortgage insurance market’ which would provide protection to lenders and make them more able to extend low deposit mortgage borrowing for first time buyers. The cover would be mortgage indemnity insurance and would allow the borrower to claim back part of the loss if a person defaults, is repossessed, and then the property is sold for less than the amount owed on it.

One official from Lloyds TSB said: “There’s been a lot of conversation recently about mortgage indemnity and whether it’s a way to manage the transference of risk. You could be missing an opportunity to double the first-time buyer market.”

Tags: value loan, mortgage, mortgage borrowing, lloyds tsb, claim, property, lloyds

OFT to look into credit card surcharges

Credit cards have undoubtedly made life easier for many people, enabling them to enjoy flexibility with their repayments, the security of not having to use cash, and the ability to make purchases with ease using the phone or the Internet. Many people use their credit and debit cards to make all sorts of purchases online these days, which means that they can enjoy the ease and convenience of browsing products and services from the comfort of their own homes, and making payments safely and securely on reputable websites.

However, one sting in the tail of using credit and debit cards to make payments online is that many retailers and companies charge administrative fees, and many of these are quite extortionate, pushing up the cost of the purchase enormously. Many cardholders have made a purchase only to realise at the last minute that they are going to be charged a hefty fee on top of the purchase price simply because they are using their credit or debit card.

An official from one travel site said: “Many travel providers are not only passing the bank charges to customers, they are actually increasing them to generate extra revenue. The fact that some holiday companies also charge for debit card payments is a worrying development.”

A super-complaint has been launched by the consumer campaign group Which? for the various surcharges and fees to be looked into. The Office of Fair Trading is now looking into these fees and could end up making companies reduce the fees that they charge by way of administration costs for credit and debit card use.

The UK Payment Association said: “The credit card costs are per transaction. If you are booking six tickets at once, or one ticket in one credit card booking, the processing costs would be the same. It’s hard to see how companies can charge per item.”

 

Tags: various surcharges, administration costs, sting in the tail, consumer campaign group, online, purchase price

Minimum savings will come from smart meters

There has been a lot of talk about how the rollout of smart meters for households and businesses in the UK will provide a win win situation, where consumers and businesses will save money on bills and energy firms won’t have to send out inspectors because the usage data will be sent to them automatically. It is claimed that these smart meters, which are digital meters, will put an end to the unreliable estimated bills that energy firms send out.

However, it has recently been revealed that consumers will not benefit from the smart meters because the cost of the rollout will be factored into their bills, which effectively means that they will be paying for them, yet the savings that they are set to make only comes to around £23 by 2020. The cost of the rollout is said to be around £11.3 billion and the Department for Energy and Climate Change has said that this is something that consumers will end up paying for.

The estimated saving is only 2 percent of the average household annual energy bill, and officials have said that it does not take into account any increases in energy costs over the coming years. Ofgem, the UK’s energy regulator, has estimated that bills could increase by between £168 and £700 a year by 2016 because energy firms need to invest in new power stations, which will result in costs being passed onto consumers.

Chris Huhne, the Climate Change and Energy Secretary said: “Smart meters are a key part of giving us more control over how we use energy at home and at work, helping us to cut out waste and save money. In combination with our plans to reform the electricity market and introduce the green deal for homes and businesses, the roll-out of smart meters will help us keep the lights on while reducing emissions and getting the best possible deal for the consumer.”

Tags: Household, Department for Energy and Climate Change, annual energy, electricity market, households, win situation, business, Minimum savings

Osborne fails to instil confidence in consumers

Earlier this week the Chancellor of the Exchequer, George Osborne, delivered his 2011 Budget speech, which was watched by many people hoping to get a glimmer of hope with regards to their financial situations. Osborne did announce a range of measures that were aimed at trying to boost affordability for different groups such as first time buyers and drivers. However, according to the results of a recent poll many people are still facing uncertainty and are not feeling any more confident about their futures following the budget.

The chancellor announced a number of measures designed to try and help struggling consumers in the current climate, such as a new equity loan scheme for first time buyers to help them get onto the property ladder and a cut in fuel tax instead of an increase in order to help drivers cope with the soaring cost of petrol.

Despite these measures a recent poll carried out by uswitch.com has shown that many people now feel less confident about their financial situations than they did before the budget speech was delivered. The survey resulted showed that around 36 percent of consumers were less confident about their finances now than they had been prior to the budget speech. Another 20 percent of respondents admitted that they were concerned about their jobs.

Around 58 percent of the people that were polled as part of the survey said that they believed that now as not a good time to take on any additional financial commitments or make any major decision relating to finances because of the uncertainty that they faced with regards to their finances and their jobs.

One official from uswitch.com stated: “Stripping down living costs and household bills to the bare minimum will help consumers enjoy more disposable income.”

Tags: fuel, chancellor of the exchequer, loan, George Osborne, Kenneth Clarke, chancellor, part, additional financial commitments

Property Ombudsman reports on estate agent complaint figures

Estate agents have never been known as one of the best loved professions in the UK, and many people joke about how wary they are of estate agents. However, is seems that many people actually are not huge fans of people in this profession and this has been reflected in recent complaints figures that have been released by the Financial Ombudsman, Christopher Hamer.

According to Hamer the number of complaints that were made last year against estate agents in the UK soared to their highest level since records began two decades ago. The previous peak when it came to complaints about estate agents was seen during the peak of the financial crisis and recession back in 2008, but last year’s levels surpassed even this by a massive 28 percent according to the figures.

There were a number of main reasons why people were complaining and in total there were 1338 official complaints that were made against estate agents last year. These related to matter such as lack of communication from the estate agent, marketing and advertising used by the estate agent, and the way in which estate agents had handled complaints made by consumers. Hamer said that the level of complaints was unacceptable and that people were simply not willing to put up with poor service, bad communication, etc. any longer when they were having to shell out a lot of money in the difficult financial climate.

Hamer said: “People are less ready to be satisfied in times of economic stress to accept less than perfect service, especially when they are spending a lot of money.”

The figures showed that the vast majority of complaints related to lack of communications between the estate agents and the consumer. The highest levels of complaints were made against estate agents in the South East.

Tags: advertising, United Kingdom, property, Business and Economy, The Property Ombudsman

Mortgage markets still look bleak

According to a leading industry group the mortgage market in the UK still looks bleak, with the lenders stating that it has become ’stuck in a rut’. Over the course of February it is claimed that the low levels of lending have continued. Officials have said that the level of lending for the month of February were nearly as low as they were for January, with around £9.5 billion of gross lending.

The Council of Mortgage Lenders released the figures, and they have stated that it is likely that this year will continue to be a challenging and difficult one when it comes to the mortgage and property sectors. Another survey has revealed how the cost of renting has shot up as a result of so many people being unable or unwilling to get a mortgage, which has resulted in a higher demand for rented property.

The Council of Mortgage Lenders has said that part of the problem stems from restrictions amongst lenders when it comes to granting mortgage finance. However, the group also said that there was a definite drop in consumer appetite for new borrowing, with many people too worried about their financial situations and their job security to risk taking on a huge mortgage.

One official also commented on the increase in rents and demand for rented property, stating: “The fierce competition among renters in many areas of the country has cut short the traditional lull we tend to see between December and February. The consistently constrained level of lending to home buyers has bolstered demand – and rents – in the private rental sector during what is typically a slower period. With the mortgage market even more sluggish since the start of 2011, this backlog of frustrated buyers has increased even further and rents have risen correspondingly.”

Tags: huge mortgage, Mortgages, result, council of mortgage lenders, job security, drop

Interest rates stay at all time low

The base rate is to stay on hold at its record low level of 0.5 percent for another month, following the announcement from the Bank of England after the March Monetary Policy Committee meeting. The base rate was lowered to the all time of 0.5 percent in March 2008 when the Labour party was still in power, and with the recession taking its toll on the economy has remained at this level ever since.

In the run up to the latest MPC meeting some industry officials believed that the MPC would increase the base rate because of the soaring rate of inflation. The government’s target for inflation is just 2 percent by the rate of inflation has now soared to double this at 4 percent. Increasing interest rates would help to bring the rate of inflation down, hence the MPC had been under increasing pressure to increase the interest rate.

Whilst many people were calling for a base rate increase in order to try and keep a lid on inflation there will also be many people that are relieved that the base interest rate has been kept on hold, especially homeowners with variable rate mortgages. This means that they can enjoy one more month of avoiding increases in their monthly repayments.

Speculation has already arisen about when the base rate will now be increased, with some believing that it will be later on in the year. However, one official said that it can depend on a lot of things including the mood of the MPC.

He said: ‘It is possible that, despite today’s vote to leave policy unchanged, the hawks gained the support of another member. Accordingly, a rate rise within the next few months would hardly come as a shock. But raising rates now would just mean that it will take even longer for them to get back to “normal” levels. If rates do rise, I expect the move to be a small one – and if I am right about the economic outlook, even this might later be reversed.’

Tags: Business Finance, base interest rate, record low level, order, inflation, target, government, homeowners

Many could find mortgage repayments lower than rent

These days renting a property is something that a growing number of people are doing, and this is for a variety of reasons. There are many people that are renting purely because they prefer not to be tied down to a particular area or property. Others want to enjoy the convenience of not having to worry about the upkeep of the property. Some people rent because they cannot afford a mortgage, struggle to get finance, or have damaged credit.

Property website Zoopla has recently released data showing that the monthly cost of renting a property is now higher than the cost of buying a home in a massive 80 percent of the UK. It is claimed that it costs about 10.5 percent more on average to rent a home than to buy one, which is an increase from the 8.7 percent seen in the middle of last year.

In fourteen of the largest towns and cities across Great Britain the cost of renting a home was more than 20 percent higher than the cost of buying one. In Milton Keynes, for example, the monthly rent on a two bedroom flat was £785 whereas the monthly cost of buying a home on an interest only mortgage was 42 percent lower at £554.

It is thought that the reason that there is now such a wide gap between renting and buying in so many places is because the high demand for rental homes has resulted in an increase in rents. At the same time low demand for purchased property had driven down the price. With the addition of the all time low base interest rate this has resulted in a situation where it actually costs less per month to pay a mortgage than to pay rent.

Tags: percent, rent, massive 80 percent, buying, property, renting a home, Swansea, low demand

Mixed feelings over store cards

When it comes to store cards there is a great deal of bad press, and these cards have earned a very bad reputation over the years, mainly because of the high rates of interest that they charge. Some store cards charge up to 30 percent APR, and this results in many people who make only the minimum repayment on their debt paying a fortune in interest and spending lengthy periods of time trying to clear their debt.

Many people are swayed into taking out a store card because retailers offer them incentives such as on the spot discounts for applying for and being accepted for a store card when they are shopping. This can tempt many people into taking out a card and getting into debt especially when the cards are promoted at times such as Christmas when people are looking for ways to fund their purchases.

However, some industry officials have said that although these cards do receive bad press and are slated for a number of reasons they can actually prove very useful for consumers. They can provide a convenient means of shopping, and like credit cards balanced can be paid off within interest free periods so that no interest is charged on the debt.

One consumer campaign group official said: ‘With APRs of around 30%, store cards are never good value for borrowing. Our investigation into the market found it was too easy to get hold of credit and that too many retailers were offering cards either without telling the customer that they’d be credit checked, or, worse still, without credit checking them at all. That’s not to mention the lack of privacy in reading out your personal details in a busy high street store.’

However, the Finance Leasing Association said: ‘There is no evidence of consumers being unable to manage their spending on cards. Customers are already able to change their mind about taking out a credit card. New EU regulation bought in February this year provides customers with an opportunity to change their mind within 14 days of taking out the card.’

Tags: business, free periods, consumer campaign group official, percent, high street store, campaign group, New

Competition pushes loan rates down further

A number of lenders across the UK have reduced their personal loan interest rates over the past few months, which has increased affordability when it comes to borrowing in the UK. Most lenders have applied their best rate reductions to loans in the mid-range section, which are generally unsecured loans of between £7500 and £15000.

It has been reported recently that competition in the personal loan sector is resulting in increasingly affordable deals coming onto the market for potential borrowers. The base interest rate in the UK has been standing at just 0.5 percent for twenty two months now, which is the lowest level it has ever been in the history of the Bank of England, which spans well over three centuries.

The increasing competition means that lenders are continually trying to get one over on one another by reducing personal loan rates to make themselves more popular amongst consumers. This is helping to further drive down the interest rates charged on loans, as when one lender reduces the rates the others tend to follow. One lender, M&S, has now reduced the interest rate on its mid-range personal loan to just 6.9 percent, and this is the first time in around two and a half years that it has dropped below the 7 percent barrier.

According to one industry official restrictions are being eased up to some degree, giving consumers access the more affordable deals on the market. He said: ‘At long last, after a period of inactivity, we are starting to see the whole personal loan market starting to open up. Many lenders are beginning to open their books to more consumers and we are seeing more competitive deals, even for loans below £7,500.’

Tags: Affordability, section, drive, competition, lenders, best rate reductions, rate

New energy statements failing to make impact

A recent survey that was carried out has suggested that new energy statements that were launched to make the energy market more competitive and improve understanding of payments for consumers are failing to have the desired impact. The survey was carried out by the price comparison service uswitch.com and involved questioning consumers about the new annual energy statements that have been brought in.

However, despite the aims of the annual statements is appears that consumers had either not received the new statements or may have received them but did not realise that they had received them. The statements are supposed to have been delivered to all homes in the UK and are meant to explain the various discounts that are available on different tariffs so that consumers can get the best deal possible on their energy.

Any household that hasn’t yet received one of these statements is due to receive one soon, but many may not even realise that they have received their statement. One industry group has described the statements as a ‘huge undertaking’. Suppliers were told to start sending out the first of these statements by the end of last year by the energy regulator Ofgem. The aim of the statements is to make consumers more aware of their energy use and why they may be paying as much as they are, with the hope of encouraging more competition in the market.

Ann Robinson, director of consumer policy at Uswitch, said: “Annual statements are a linchpin of Ofgem’s push to get the competitive energy market working properly, but consumers clearly do not think they are coming up to scratch. The vast majority of households will have received an annual statement by now, but only 37% recognise that they have done so. The statements appear to be poorly labelled, difficult to understand and do not stand out from ordinary energy bills.”

Tags: new energy, end, market, energy market, industry group, price comparison service

Rising unemployment sparks debt fears

Increases in unemployment levels seen in the final quarter of last year have sparked concerns about rising repossessions and spiralling debt problems according to recent reports. Personal debt levels in the UK have been causing concern for the past few years, with the recession, global credit crisis, and difficult financial climate highlighting the debt problems that many people were experiencing.                                                                     

It has been revealed recently that the level of unemployment in the UK soared in the last three months of last year, with the figure increasing by 44,000 taking the total number of unemployed to nearly 2.5 million. Many of those affected by unemployment are younger people. Concerns have now increased with regards to how the rising level of unemployment will affect people that have debts that they are already struggling with and those that have a mortgage to pay.

In addition to this the strong possibility of interest rate rises this year will also impact upon the ability of consumers to pay both their mortgages or rent and their other debts such as credit cards, loans, and other forms of finance. It is thought that the base interest rate, which has been at an all time low of just 0.5 percent for the past twenty two months, will soon have to increase in order to curb spiralling inflation, which is at twice the target level set by the government.

The government has acknowledged that the level of unemployment soared in the latter part of 2010 but claims that it has now started to improve again. Chris Grayling, the Employment Minister, stated: “We’ve got a long way to go and I want to see these figures start to come down, but certainly the evidence is over the past month things have settled down and we are not seeing the increases we saw earlier in the last quarter.”

Tags: interest, strong possibility, evidence, business, inflation, Minister, addition, concern

A third of cardholders hit by fraudsters

According to recent figures one third of cardholders have been hit by card fraud in the past five years. The figures show that around fifteen million Brits have fallen victim to card fraud over the past five years, which reflects a sharp increase on the figure eighteen months ago, where the number of cardholders hit by card fraud stood at 27 percent.

According to ACI Worldwide a greater number of Brits have been defrauded on their cards than in any other major country apart from China. However, despite this there was a greater level of consumer satisfaction amongst British consumers with regards to how banks dealt with their claims than there was in other countries.

Around 80 percent of customers said that they were satisfied with how their fraud case had been dealt with by their bank, and this compared to 75 percent in 2009. Around 40 percent of these said that the main reason for this high level of satisfaction was the speed at which they received their money back after falling victim to card fraud.

It is estimated that card fraud in the UK costs the economy around £30 billion a year, and with fraudsters using a range of sophisticated methods and hunting grounds to commit their crimes this is a figure that could easily increase.

David Divitt, from ACI Worldwide, said: ‘Fraud is constantly changing and, looking forward, the industry will need to increase focus on identifying identity theft and assisting victims to maintain this improvement in customer experience.’

However, the UK Cards Association has stated: ‘The most recent card fraud figures for the UK, which are based on actual losses and not on research, show that card fraud is falling – a 28% fall in 2009 and a further 20% fall in the first half of last year.’

Tags: aci worldwide, increase, show, satisfaction, money, focus, greater number, GBP

Mortgage holders breathe a sigh of relief over base rate

Many mortgage holders around Britain will be breathing a sigh of relief this week after the Bank of England announced that it was keeping the base interest rate on hold at just 0.5 percent. This is the 22^nd month that the base rate has been at this record low, leaving the base rate at the lowest level that it has been in the three century history of the Bank of England.

The Monetary Policy Committee has been under increased pressure from various industry groups because of the soaring rate of inflation, which has rocketed to way above the 2 percent target set by the government. However, the committee has also taken into account the continued fragility of the economy, and has therefore decided to keep the base rate at the level it has been at for nearly two years.

There were no further plans for Quantitative Easing announced following the February meeting, which also came as no surprise to most industry officials. It is not yet known how the decision amongst MPC members was split. However, in the January meeting there were two members that voted for a rate increase and one that wanted to see the QE scheme extended.

A spokesperson for the manufacturing group EEF said: “The MPC is right to hold off on rate rises for now as an increase will do little to alter the path of inflation in the short term, which is being driven higher by commodity prices and tax. The contraction across the economy in the final months of 2010 may well have been a blip, but as the bigger risk now appears to be growth, the MPC should continue to hold steady until the picture becomes clearer and the economy is firmly back on an upward track.”

Tags: blip, Many mortgage holders, bank of england, bigger risk, monetary, century history, short term

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