First-time buyers face bigger deposits

First-time buyers are now having to stump up bigger deposits than before to buy their first home, even though property prices have been falling in recent months, it has been reported. Read more

Tags: first time buyers, Mortgages, mortgage deposits, first time buyer, home, property, cash, belts

New credit cards can ‘ease the pinch’

The global credit crunch may be prompting both consumers and lender to tighten their belts, but a number of new credit cards have recently been launched which could help ‘ease the pinch’, it has been reported.

According to the online resource Thrifty Scot, a number of credit card companies have brought out new products which could benefit consumers.

The website highlighted the Halifax all in one product, the Saga credit card, the American Express card and Abbey’s Zero credit option.

However, the news provider also pointed out that an industry official remarked Abbey’s card is not necessarily the best option around:

“Around 80 per cent of credit cards offer a lower standard APR on purchases compared to Abbey’s Zero card…its standard balance transfer rate of 18.9 per cent is among the highest go-to rates on the market.”

Meanwhile, recent research by Fairinvestment.co.uk revealed that 21 per cent of people surveyed say zero per cent balance transfer is the most important feature of a credit card.

Tags: Financial services, Saga credit card, consumers, transfer, zero card, crunch, online resource, belts

Tighten your belts as household costs rise, says expert

Consumers are being told to be careful with their money and ‘tighten their belts’ because of the rising costs of many essential household items and bills.

Money education charity Credit Action has said people have grown accustomed to relatively low food and petrol prices but they will now have to adjust their budgets as these costs are increasing.

According to Capital Economics, food inflation is expected to remain at its current rate of six per cent for the next few months, while water and council tax bills are set to rise.

Gas bills are predicted to increase by around ten per cent and electricity by eight per cent in the second half of the year.

“For most families and people trying to manage their money and trying to budget carefully, that’s going to become much harder because there’s going to be far more cost associated with just the basic day to day living expenses,” said Chris Tapp, director of Credit Action.

Tags: belts, charity, rise, consumers, water, Tighten, day, tax

BOE warns mortgage defaults to increase

Defaults on mortgage payments are expected to increase this year, according to the latest research from the Bank of England.

The Bank’s Credit Conditions survey revealed that borrowers and small-to-medium-enterprises are expected to find it increasingly difficult to source loans after the tightening of lenders’ belts due to the effects of the credit crunch.

The Council of Mortgage Lenders said that the findings increase the likelihood of a further cut in interest rates.

Bob Pannell, head of research at the CML, said: “This survey corroborates other evidence of worsening market sentiment. This may increase the chances of interest rate cuts sooner rather than later if inflation remains subdued.”

He recommended that consumers should re-evaluate their finances to avoid coming financially unstuck.

The number of borrowers who default on their payments is expected to the rise as a number of fixed rate mortgages expire over the next few months.

The Bank cut interest rates to 5.5 per cent last month, the first cut for two years.

Tags: source, Financial crisis of 2007–2009, mortgage payments, finance, head

Savings gulf opens up in UK

New research from Alliance & Leicester, released today, shows that Britons hold six times more in savings and investments than they do in debt.

Property was totted up as being worth £4.3 trillion, savings at £820 billion, with other assets including pensions totalling £1.8 trillion. Total borrowings came to £1.3 trillion.

This impressive ratio – gleaned from figures from the Bank of England, the Council of Mortgage Lenders and the government by the pollster YouGov – hides a financial gulf splitting the populace.

While richer households enjoy the property boom and the strong economy, lower income households are saving less as belts are tightened.

Evidence for this is found in savings figures: while the national average comes to £31,300, almost one third of households have no savings at all – pointing to a big split between the “haves” and the “have nots”.

Alliance and Leicester pointed out a general decrease in savings, with the bank’s head of savings and investments Ewan Edwards pointing out that on average just 2.1 per cent of disposable income is currently saved by Britons, when the figure averages out at 6 per cent over the last decade.

“Britons are increasingly losing the savings habit”, he concluded.

Tags: bank of england, splitting, council of mortgage lenders, income, split, britons