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: Britain, mountain, credit, business, drop of a hat

Personal loan rates need to be capped

Calls have been made for the government to put a cap on the interest rates charged on personal loans. This follows research that showed that most consumers in Britain want to see a cap on the rates of interest that lenders can charge for personal loans. The research was carried out recently by Compass on behalf of YouGov.

According to the results of the study around 68 percent of consumers believe that the government has a responsibility to protect consumers who take out personal loans by ensuring that a cap is put on personal loan interest rates. In addition to this the research found that a similar number of people, around 69 percent, wanted to see government officials promoting affordable means of credit such as credit unions.

Earlier this year a report was produced by consumer watchdog group Consumer Focus, and this showed that the popularity of ‘legal loan sharking’ was increasing. The watchdog’s report showed how the number of people that were taking out payday loans had quadrupled in the past four years, with around 1.2 Brits now taking out such loans.

The Association of British Credit Unions also issued a recent warning to consumers, warning them to be vigilant for loans that seemed attractive but in actual fact charged up to 2500 percent in interest per year. Compass said that the calls for caps on personal loans would be a test to see whether the new government would be supporting consumers or lenders.

One Compass official said: “This is a key test of the coalition government’s stated commitment to create a fairer society. Now we need to see if it backs the people or the financiers.”

Tags: loan, Britain, credit, finance, cap, interest

Britain drops to 25th for quality of life

A recent report has indicated that Britain has now fallen to 25th in the global rankings in terms of quality of life, falling even further down the list than last year when it came in at number 20 in the rankings. Amongst the countries that have now overtaken Britain in the rankings for quality of life are Lithuania, Uruguay, and the Czech Republic. France took the number one spot in the polls for the fifth year in a row. Read more

Tags: France, International Living, Jackie Flynn, United Kingdom, Britain

Many expect to be able to survive on welfare

It has been revealed in a recent report that many people in Britain feel that they would be able to survive adequately on government welfare in the event that they lost their jobs. More than a third of Brits were found to believe that the government would provide them with adequate sums of cash if they lost their jobs, even though the amount per week comes to under £70.00. Read more

Tags: unemployment benefit, Scottish, jobseeker's allowance, recent years, welfare, outgoings, Britain, giant scottish provident

Negotiating a Settlement When Your Job Has Become Redundant

Job losses have occurred in all sectors of the economy in recent months due to the global recession which is taking its toll on companies of all sizes. Read more

Tags: job losses, Britain, percentage, employer, policy, good idea, redundancies, job settlement

Deposit free mortgages were a bad idea

City Minister, Lord Myners, has recently stated that the 100 percent and 125 percent mortgages that many lenders used to offer to borrowers in the UK were a bad idea. Myners described these mortgages as ‘foolish’, adding that banks should never have offered these mega mortgages. Read more

Tags: uk, result, Britain, accountability, free mortgages, huge deposit, deposit free mortgages, Banking

Debt becomes ‘norm’ for Brits

Getting into debt is now accepted as normal and in many cases necessary, an industry expert has said.

Alastair Mathews, director of policy educational charity pfeg, explained that if people wish to go to university or buy a house, most will rely on loans to do so and will thus not be able to avoid getting into debt.

With credit easily available to those needing it over the past few years, it has been easier than ever to build up considerable debt.

“We have almost officially built debt in to the system now,” said Mr Mathews.

He continued: “We have a changing culture from the traditional British attitude of wanting something and saving for it – where maybe you waited for half a lifetime for it – to now, where the feeling is ‘if I want something, I’ll have it’.”

According to statistics from Credit Action published this month, total personal debt in Britain stands at £1,380 billion. This figure has gone up by an impressive £120 billion (10 per cent) in the past twelve months.

Tags: cent, attitude, Britain, debt, figure

High-end mortgage industry sees growth

Despite only representing a small amount of mortgage business, demand for high-end products is growing, an industry expert has said.

According to Andrew Arnott, a spokesperson for Investec, larger-scale mortgage growth is hailing particularly from “areas of multi-currency mortgages”.
“Certainly more banks offer larger-size mortgages than in the past,” he said.

“A lot of the products on the market aren’t available if the loan size is over, say, half a million or a million pounds.

“It is more specialist players that deal with those sorts of mortgages, so it’s more difficult for borrowers to find products right for them.”

Recent research by Halifax Estate Agents revealed that the number of house sales for £1 million has tripled in the last five years, with 6,107 homes selling for over a million from June 2006 to June 2007.

Halifax has estimated that there are currently 88,000 houses in Britain worth in excess of £1 million.

Tags: research, mortgage, high-end products, house, loan size, business demand

CML: Bridging loans “useful” despite reputation

Despite their bad reputation, bridging loans remain the “obvious choice”, said the Council of Mortgage Lenders (CML) today.

Loans used to cover the period between buying a new property and selling your old one are not well respected due to their expensive entry and exit fees and high interest rates.

However, a spokesperson for CML explained that, while they do not offer long term solutions, bridging loans are the “main and obvious route where there is a mismatch”.

She added: “Because bridging is an expensive form of property finance, it is ideally the case that the borrower and the finance company should have a clear view as to what the exit strategy from that bridging finance deal is.

“It shouldn’t necessarily be seen as a long term solution to any property-related transaction.”

Additionally, she warned that entering this type of agreement “does not make any sense” for people who do not know what their “subsequent rollover strategy” will be.

The CML is the trade body for mortgage lenders. Members make up 98 per cent of total mortgage lending in Britain.

Tags: reputation, spokesperson, trade body, cml, finance

Students expect to be in debt

Young people in university education now treat debt as an expected way of life, it is claimed.

National Debtline spokesperson Becky Boden-Wilkes has commented that young people in Britain are no longer frightened and more accustomed to getting in to debt because they are used to acquiring an overdraft or student loan from the age of 18.

However, despite most graduates expecting to accrue a debt total of £15,000 by the age of 21, she said, students are not worried about the issue because they belief their learning potential accrued from university will enable them to pay of their debt later in life.

Thisismoney.co.uk recently reported that debt among UK graduates has increased by 197 per cent over the last decade to a current total debt figure of £3.2 billion.

Ms Boden-Wilkes acknowledged that students are encouraged to make friends and meet new people when they begin university, which can result in a substantial expenditure of money.

“There definitely needs to be more talk about budgeting and people working out what they need each week,” she said.

Tags: university education, budgeting, UK graduates, cent, substantial expenditure, figure, Public finance, Britain

More financial education needed says CCCS

Britons need to be better educated on their financial management, an expert has warned.

According to Consumer Credit Counselling Service (CCCS) spokesperson James Ketchell, many people lack sufficient knowledge when it comes to using credit and assessing whether they can afford it.

Commenting that there needs to be more financial education among young people, he highlighted the difference between managing credit in comparison to a student loan, which provides cheap credit and is automatically deducted out of a borrower’s wage packet.

Mr Ketchell said that it is currently very easy for people in employment to be offered to take on more credit, adding: ” As prices have gone up and wages have stagnated and mortgages have gone up, people have to use a bit more common sense in their financial dealings.”

His warnings come after Credit Action recently stated its assertion that young people in Britain, amidst rising figures of debt saddled by today’s graduates, have been “educated into debt but not about debt”.

Tags: difference, personal finance, wages, borrower's wage packet, Knowledge, packet, Britain, action

Eight million Britons have five-figure debts

Britain’s debt crisis is worsening, new figures released today show.

According to debt consultancy firm Thomas Charles, eight million Britons – one fifth of the entire adult population – hold debts of over £10,000.

The firm largely blamed heavily advertised store cards and credit cards for the growth of the problem.

Director of Thomas Charles, James Falla, said that the figures show a “sharp increase” in debt holders over the last year.

“These high levels of debt are linked to the rise in interest rates over the year”, he added.

The Bank of England’s monetary policy committee has also announced today that it will not be increasing interest rates for August.

Rates had been raised five times in the previous twelve months to 5.75 per cent, putting the squeeze still further on indebted Britons.

The chief economist at the Institute of Directors, Graeme Leach, termed the decision “a pause for thought”, and said that a further rate rise to six per cent would likely come in the autumn.

Tags: britons, increase, cent, fifth, Britain

Dry weather causing subsidence threat

Climate change could have an effect on the number of home insurance claims made in Britain.

New research shows that the 80 per cent of garden centres in the country have seen an increase in people enquiring about subsidence of their property in the last year.

This is thought to be down to the hot weather which has led to soil drying out and tree roots moving to find water, leading to the ground beneath properties being destabilised.

“Last year’s water restrictions highlighted the threatening conditions for subsidence,” said Neil Curling from Halifax Home Insurance.

“With Britain having already experienced unprecedented high temperatures in 2007 and an extremely dry April, we are concerned that increasing numbers of properties could be affected and are urging householders to be vigilant to this threat.”

The Met Office is predicting above average temperatures for the summer ahead, which will only exacerbate the problem, but homeowners’ habits could also be having an effect.

Around 76 per cent of garden centre managers say that demand for exotic plants and trees has increased in the last 12 months but Halifax is warning buyers to do their research first.

“Green-fingered Britons planting new exotic species, should carefully research the impact they could have on their garden and their home,” continued Mr Curling.

“Britons may be unaware of the appropriate distance to plant an exotic species away from their property to ensure the tree or shrub’s root system does not cause subsidence later down the line as the roots take water out of the soil.”

Halifax says that something as simple as trimming a tree or shrub can keep protect a property from subsidence.

Tags: Britain, number, garden, ground beneath properties, Mr Curling, britons, office, High-pressure area

Summertime brings garden danger

We are being warned to be extra vigilant this summer as thieves look to strike in our gardens.

Halifax Home Insurance says that incidents of garden theft increase dramatically between March and August every year as people begin spending more time outside.

With the clocks set to go forward on Sunday (March 25th), Britain is officially entering summertime and that inevitably means we will begin taking out our patio furniture.

The warning from the insurance firm however, is that we must all take precautions to keep out garden furniture safe and should be covered against theft.

“Homeowners can forget to pay as much attention to security outside the house as they do inside,” said Vicky Emmott, senior manager of underwriting at Halifax Home Insurance.

“With many people realising how much value they can add to their property by improving their gardens, there are now rich pickings for thieves, and now is the time to take steps to avoid becoming the next.”

According to the insurer, the average claim for garden theft is around £400, while those living in Stoke-on-Trent are the most at risk.

Doncaster and Southampton follow closely behind, with Halifax revealing that tools, barbecues, garden furniture and bikes are the most popular items to be taken.

Homeowners are advised to lock all valuable garden items away when they are not in use, while gates should remain locked when you are not sitting in the garden.

Tags: year, Summertime brings garden, Insurance, home, finance, theft, March, Britain