Rental arrears still on the rise

It has been claimed by a property firm that the level of rent arrears amongst private tenants has increased again. According to LSL rental arrears for the month of December increased compared to November, rising from 10 percent to 12 percent. The data was collated as part of a monthly survey that was carried out by LSL, and showed how financial problems were impacting on the abilities of private tenants to keep up with their rent.

According to LSL the level of rent that was either paid late or not paid at all increased by 2 percent between November and December of 2010. In addition, the value of unpaid rent increased to £276 million. Officials from the company said that rising unemployed had impacted severely on the ability of private tenants to pay their rent, and that continued increases in unemployment levels following government cutbacks would see the problems with rent arrears continue.

The data also showed that in the month of December the average rent charged by private landlords actually decreased slightly by 1.2 percent to £684 per month on average. This was because they wanted to try and tempt prospective tenants during the cold winter period, and many prospective tenants did not venture out in the cold weather to look for property.

An LSL official said: “Arrears have been rising since October as public sector spending cuts start to bite in many areas of the country. With unemployment set to increase this year, and rents likely to rise once more in the spring, more tenants will be at risk of falling behind with rent payments.” He added: “Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period. If a landlord cuts the rental price by 5% to fill a property immediately, he will save £275 over the year rather than seeing their property vacant for the duration of the month. Nevertheless, with the supply of mortgage finance to both first-time buyers and would-be landlords still constrained, we are likely to see rents re-start their upwards march before the spring.”

Tags: landlord, sector spending cuts, private landlords, december, costly void period, Renting

Mortgage arrears up by 30 percent

Over the past year the level of mortgage arrears amongst homeowners in the UK has increased by around 30 percent according to recent reports, and this is despite the fact that the UK base interest rate has been at its lowest level in the history of the Bank of England since April of this year. Read more

Tags: mortgage arrears, current climate, situation, mortgage repayments, place, average, Mortgage loan, variety

Saving is sexy again, says expert

More people are putting aside money as saving is “becoming sexy again,” according to an expert.

Emma Byrne, a savings advisor, said that people aged between 18 to 34-years-old are increasingly seeing saving as a financial priority and are more concerned about it than 55-year-olds.

A study conducted by Opinium Research earlier this month revealed that men feel they need an average of £101,999 to be financially secure, compared to a figure of £82,193 for women, making the overall average £92,507.

Furthermore, one in 50 people said they would leave their partner if they were financially secure enough to do so.

Although Ms Byrne noted that a third of people regularly move any spare money they have left at the end of the moth into a savings account, she also voiced concerns about the remaining two-thirds of the population who do not have this habit.

Ms Byrne said: “We’d really encourage people, once they’ve sorted out their monthly incoming and outgoings, to go and put that money into a savings account.”

Tags: average, Opinium, GBP, habit, expert, home, population, Ms Byrne

Women need longer to pay off student debts than men

Women need on average five more years than men to pay off their student debts, according to new figures from the government.

In an answer to a parliamentary question, higher education minister Bill Rammell revealed that female graduates need an average of 16 years to pay off their debts, while men need only eleven.

While the minister stressed that having a degree is worth around £100,000 in lifetime earnings, the Conservatives condemned the situation.

Education spokesman David Willetts said: “This shows that women get a raw deal in the labour market. Women’s earnings are more intermittent and still lower than men’s.”

He suggested that the impact of women taking time away from their careers to raise families was a major factor.

However, National Union of Students women’s officer Kat Stark disagreed.

She said: “Women are taking longer than men to pay off their student loans because they are paid less, not because they are taking time off to have children.”

Tags: higher education minister, Labour, question, lifetime earnings, student debts, market women, union, average

Extra home insurance needed during Christmas

Consumers need to make sure they have adequate home insurance cover to protect them from theft as well as damage during the festive period, warns Bradford and Bingley.

With 76,000 homes the target of unwelcome intruders, the bank has said that shoppers need to ensure they have enough insurance cover taken out to protect Christmas gifts.

Dave Foyle, head of general insurance at Bradford and Bingley, said: “With so much money and effort invested in the Christmas period, people should make sure that they don’t overlook the necessity of protecting their home and its contents from unwanted visitors.”

He added that by making sure adequate home insurance cover is in place consumers can make the most of the “fun time” which is Christmas.

The Deloitte Christmas Retail Survey for 2007 revealed that consumers were set to spend seven per cent more on Christmas this year, with the total average spending now at £706 compared with £662 in 2006.

The total predicted spend for this Christmas is £33.6 billion.

Tags: place, fun time, unwelcome intruders, adequate home insurance, extra, home insurance, christmas, average

Make sure you have savings for an emergency

An independent financial advisor is urging consumers in the UK to make sure that they have some savings put aside to serve as a ‘financial cushion’, which can then be used in the case of emergencies.

The advisor, from Christie Scott, states that consumers should always have at least three months worth of wages put aside in savings to fall back on should the need arise. This is particularly important for the self employed, who may find that income for some months is far lower than for others, and therefore may need extra money to subsidise their income now and again.

The firm Christie Scott has pointed out that in order to ensure that there is money in the savings account for emergencies consumers will not necessarily have to dramatically cut down on their social life and spending. Simply making some basic cutbacks and reassessing expenditure could help to top up any savings in order to try and get the balance up to three months worth of salary. Consumers are urged to look through their monthly income and outgoings in order to try and direct some extra cash into savings each month.

The financial advisor stated that in some cases people believed that savings was only worth it if interest rates were high, but this was not necessarily the case.

She stated: “More people may be inclined to save when interest rates are higher. When rates are low some people see little point. Most don’t understand the concept of compound interest – meaning that even low interest rates added steadily over time will make a difference.”

Research has shown that in the second quarter of last year the average amount being saved was £1376 per person, and this has fallen to £910 per person for the second quarter of this year.

Tom Smith
1st October 2007

Tags: interest, average, accounts, emergency, savings, self employed, salary

Homeowners urged to switch mortgages

Homeowners failing to look for a better deal on their expiring fixed rate mortgage could each stand to lose £2,600 if they stay on their provider’s standard variable rate (SVR) for two years, according to Moneysupermarket.com.

The price comparison website found that such mortgage “inertia” could end up costing British homeowners £5.9 billion a year, with an estimated one in five households stuck on an SVR mortgage.

Louise Cuming, head of mortgages at the website, said: “This shows how vital it is for homeowners to find the most competitive product when their fixed rate deal comes to an end.

“Providers have long played on the fact homeowners can be slow to react when their deal ends. Switching homeowners to an SVR increases bank and building society profits at our expense.”

Since the effects of the US sub-prime credit market crisis began to be felt by British banks and mortgage providers, many have begun to push up the rates on their tracker mortgages.

However, these rates are usually still much closer to the Bank of England base rate of 5.75 per cent than SVR rates, which currently stand at well above seven per cent on average.

Tags: homeowners, sub-prime credit market, deal, average, price comparison, GBP, cuming

Mortgage holders in for a ‘rate shock’

Mortgage provider Nationwide has warned homeowners coming off of two year fixed rate deals this autumn that they could be in for a nasty shock as their monthly repayments jump up by £200.

Two years ago, the average fixed rate for a homeowner loan was just 4.56 per cent, but 250,000 homeowners will be seeing their mortgage revert to standard variable rate, which now is an average of 7.65 per cent, more than three per cent what they are currently paying.

Although Nationwide is urging customers to negotiate a remortgage as soon as possible and preferably before their existing deal expires, the average fixed rate is also a lot higher today than it was in 2005. In fact, the increase from 4.56 per cent to 6.41 per cent will still cost customers £110 a month on a £100,000 loan.

“For some borrowers it will come as quite a fright to see their mortgage payments increase dramatically,” said Matthew Carter, director of mortgages at Nationwide. To absorb some of this shock, borrowers need to consider remortgaging as soon as their deal ends, or beforehand if their lender allows it.”

He also noted that there has been growing interest in the bank’s 25 year fixed rate mortgage since the last Bank of England base rate rise.

According to a recent survey by Abbey Mortgages however, less than one in four Britons would consider taking out a 25 year fixed rate homeowner loan.

Tags: bank, finance, today, monthly repayments, average fixed rate, average

Youngsters have big ambitions

A generation of financially ambitious youngsters are heading into the world and they have grand plans for where they want to be in the coming years.

Research by Alliance & Leicester shows that around 24 per cent of today’s 16-21 year olds who currently work expect to be earning £40,000 within the next ten years.

That would mean they would be earning almost double the national average wage which currently sits at £23,244.

The ambition to earn more means that the majority of people in this age group (81 per cent) expect to have a mortgage and own a property by the time they reach 30.

A recent survey by National Savings & Investments labelled many British savers as fantasists but today’s 16-21-year-old working population has reason to feel confident.

Figures show that 26 per cent of people who chose to go straight into fulltime employment are now debt free and can begin thinking about saving up some money for their future plans.

“These days, young people have high financial and lifestyle aspirations and getting on the career ladder early can be the quickest way to achieve their goals for many,” said Helen Palmer from Alliance & Leicester.

“As a group they recognise the growing trends of graduate debt and, in contrast, the potential advantages of going straight into employment – especially climbing the first rung of the property ladder and earning substantial amounts of money.

“It is important for this group to maximize the potential of their hard earned cash and this isn’t about clever investment choices or making timely and strategic financial decisions – it’s about basic management of money in a current account,” she added.

Tags: average, youngsters, Financial services, age group, basic management, year, helen palmer, recent survey

Motorists to save on insurance

Britain’s motorists are being told that they can make big savings by shopping around for their car insurance.

Recent figures show that the cost of owning a car is growing all the time, with Zurich recently putting the figure at an average of £1,766.62 per car, per year.

The increased price of petrol and road taxes during the latest Budget have added to these costs and many drivers are being forced to change their habits.

American Express carried out a survey of British motorists and found that 15 per cent have started driving less as a result of increased fuel prices.

In addition, ten per cent have bought a more economical car, while one per cent uses public transport more often.

However, American Express says that many drivers could save themselves a packet by shopping around for their car insurance.

“The cost of motoring seems to rise year on year and whilst there is little motorists can do to cut the cost of fuel or road tax, insurance is one area where real savings can be made,” commented Joanne Field, marketing manager for the firm.

Those looking for car insurance are advised to shop around for the deal that best suits their needs, compare similar policies and protect their no claims bonus once a deal is agreed.

Tags: GBP, latest budget, Express, cost, time, average, bonus, american express