Take out affordable home insurance

Most of us will know the feeling of having to cut back on outgoings, especially over the past couple of years, with the recession and the global financial crisis both taking their toll. For many a decision has had to be made with regards to whether they can afford certain services and purchases, and many have had to cut out services that they have always been reliant on.

However, it appears that one of the areas that some people are cutting back on is protecting themselves financially, and this includes taking out cover such as home insurance. This can, however, be a very costly mistake, and means that you could find yourself in hot water should something happen to your property or your belongings.

Your home and its contents are susceptible to a range of problems, from fire and flood damage to burglary or even damage caused by accidents. Those that do not have home insurance in place will suffer financially if they are not covered and something happens to their home or belongings. However, despite this there are more and more people that are now skimping on this cover and recent figures have revealed an alarming number of people in the UK who have no home insurance in place at all.

Fortunately, there are some good deals available on home insurance cover these days, which means that there is no need to go without this valuable protection, as you can find cover for a reasonable price. This will give you peace of mind and financial protection in the event that something does happen that results in damage to your home or your belongings.

When you choose home insurance cover you need to make sure that you get the right price, with premiums that you can comfortably afford to pay. However, you also need to make sure that you have the right level of cover, and that your home and belongings are adequately covered.

There may also be many people that do have home insurance cover but have not take an adequate level of cover out. It is important to consider whether you cover needs to be updated – for example, you may have received some expensive gadgets or items for Christmas that are now in your home but have not been included in your cover. Take some time to look at your policy and if additional cover is required get it updated.

Tags: crisis, accidents, good deals, recession, Disaster Accident, price, financial protection

Another decade for first time buyer mortgages to stabilise

It has been claimed in a recent report that it could take another decade before mortgages for first time buyers stabilise and reach the level that they were at prior to the global financial crisis. Before the credit crunch first time buyers were usually easily able to get a mortgage, and often did not have to even put down any deposit. However, this has all changed and these days those looking to get onto the property ladder feel that they are hanging on to an impossible dream.

Over the past couple of years things have become increasingly more difficult for first time buyers. Restrictions in the mortgage markets resulting from the financial crisis have resulted in more buyers being turned down by lenders when they apply for a mortgage. Those with damaged or poor credit history are also charged high rates of interest or turned down for a mortgage altogether.

Another huge hurdle that has faced first time buyers over the past couple of years is the matter of the deposit that lenders want in order to get a mortgage. In the past first time buyers were able to get a mortgage without even putting down any deposit, and could even borrow over and above the value of the property with a 125 percent mortgage.

However, these days lenders are demanding huge deposits from first time buyers such as 20 percent or more, which is leaving many people out in the cold when it comes to getting onto the property ladder.

One official from the homeless charity Shelter said: “The failure of successive governments to tackle Britain’s housing crisis has left an entire generation of young people with little hope of ever accessing a secure and affordable place to live. The impact both on them and on wider society is already becoming clear, with rising numbers of young people delaying having children, unable to move for job opportunities and spending longer and longer living with their parents because of the crippling cost of housing.”

Tags: mortgage, crisis, value, Financial crisis of 2007–2009, percent mortgage, little hope, business

Banks fleecing customers with overdraft fees

It has been revealed in a recent report that many of the UK’s banks are fleecing their customers with extortionate overdraft rates and fees despite the fact that many of the customers, as taxpayers, have a stake in the banks because of the bailouts that occurred during the credit crisis, which were funded by taxpayers’ money from the public purse.

Last month these overdraft rates are said to have hit a new high, coming in at an average of 19.1 percent. This is despite the fact that the base interest rate still stands at a record low of just 0.5 percent, which is where it has stood for the past eighteen months. The margin between the base rate and the rates that banks are charging on overdrafts is now astonishingly wide, and many of the most cash strapped customers are being hit with the rocketing overdraft charges.

Natwest and the Royal Bank of Scotland are said to be amongst the worst offenders, and these are both part of the RBS Group, in which taxpayers have a massive 84 percent stake. The average rate of interest charged on overdrafts was a massive thirty eight times more than the base interest rate, which means that banks are making a huge profit from customers that fall into the red.

An official from the Independent Banking Advisory Service said: ‘Banks have been allowed to increase their margins despite the bank rates being so low. There is no incentive for them to do otherwise. The level of profiteering is completely out of control. Nothing about it is fair or reasonable. We face reduced incomes and increase household bills and yet again the banks are compounding our misery. We bailed them out but they have no qualms about making matters worse in our hour of need. The Government should introduce a cap on the rates. But instead it protects the banks at our cost.’

Tags: high, crisis, overdraft, fee, Bank charge

Mortgage default levels falling

Over the past few years problems with finances, higher mortgage rates, and the global financial crisis has plunged many people into severe financial difficulties, and as a result of this many homeowners have been unable to keep on top of their mortgage repayments.

The high level of mortgage defaults over recent years has resulted in many people having their homes repossessed, which naturally caused a great deal of concern amongst consumers and officials. The recession also took its toll on the ability of homeowners to make repayments on their mortgages, with many people losing their jobs as a result of the recession.

However, with the recession now over and the financial markets easing up the level of mortgage repayment defaults has been falling recently. The Bank of England has issued figures showing the fall in the level of mortgage repayment defaults in the UK, which will come as good news for banks and industry groups.

The fall in mortgage defaults has been occurring for a while now, and industry experts have said that in the latter part of 2010 it will remain largely flat. Some have even predicted that in the short to medium term mortgage repayment defaults could actually start to increase again as a result in an economic slowdown caused by changes made in the recent emergency budget by the new Chancellor of the Exchequer, George Osborne.

Further job losses are also expected to occur as a result of the budget changes, and this could affect the ability of more people to make their mortgage repayments. Officials advise those that feel that they are in danger of falling behind with mortgage repayment to contact their lender or a debt advice group as early as possible so that the problem can be sorted out before banks have to resort to repossession action.

Tags: chancellor of the exchequer, mortgage rates, mortgage, Mortgage loan, crisis

Increase seen in debt consolidation loan enquiries

According to a recent report the number of enquiries relating to debt consolidation in the UK has been rising, as consumers struggle to cope with their debt and look for solutions to try and ease the financial strain. Over the last couple of years debt problems have become a major issue for many people, with the global financial crisis and the recession taking their toll.

There are a number of options that are available to those that have unmanageable levels of debt these days, and one of these is to consolidate their debts. A debt consolidation loan is designed to allow borrowers to wrap all of their different unsecured loans, credit cards, store cards, etc into one more convenient, lower interest loan.

By consolidating their debts borrowers can enjoy reducing the overall amount of interest that they pay, will only have to deal with one creditor and one repayment each month, and can greatly reduce the amount that they are paying out each month by taking out the consolidation loan over a longer period so that repayments are smaller.

The report claims that over the past couple of years many people have accrued high levels of debt through having to borrow money to manage their day to day costs and even through having to use their credit cards for essentials, bill payments, and in some cases mortgage repayments.

Many of the enquiries that are being received by lenders who offer consolidation loans are from homeowners who want to use some of the equity in their homes to borrow money and repay their smaller debts. Consumers that are looking to consolidate their debts are being advised to compare a range of loans from different lenders to boost their chances of getting the best deal.

Tags: crisis, debt, loan, store cards, finance, longer period, lenders, debt consolidation

Slowdown in rate of firms going bust

A recently released report has shown that the rate of firms that are going bust in the UK has been slowing down. Read more

Tags: british companies, uk, cash, credit, company liquidations, level, crisis, company

No impact from VAT cut

Last year saw the government introduce a number of different measures to try and ease the effects of the financial and economic crisis on consumers, and one of the measures that was introduced was a cut in VAT, which was cut from 17.5 percent to 15 percent before Christmas. Read more

Tags: christmas, Federation of Small Businesses, put, vat cut, minimise, crisis, Small business, government

Who is telling the truth – Brown or Darling?

For many months now both consumers and industries have been concerned about the slowdown that has hit the UK’s economy. With the nation hitting a period of stagflation, which is a toxic combination of stagnant economic growth and soaring inflation levels, it seems that the nation has been thrown into chaos. Even the Monetary Policy Committee and the Bank of England have been at loggerheads over recent months with regards to the movement of the base rate, with some wanting to increase the rate to curb inflation and others wanting to cut the rate to boost the economy. Read more

Tags: crisis, Labour Party, Alistair Darling, Labour, nation, United Kingdom, economics

UK facing worst economic crisis in six decades

In a very stark and frank interview with a national newspaper Alistair Darling, the Chancellor of the Exchequer, has stated that the UK is facing its worst economic crisis in six decades. The chancellor insisted that he had to be straight with the public because it was his duty to do so, and he warned that the economic downturn was set to be far more damaging and long lasting than had originally been predicted – mirroring earlier opinions from a number of trade and industry groups. Read more

Tags: state, Chancellor level, Trotskyists, economy, The chancellor

Personal loan costs on the up

The worsening credit crisis is pushing up the cost of taking out a ce.co.uk/loans/” target=”_self”>loan, despite cuts in the Bank of England base rate.

Moneyfacts, a financial data provider, claims that the average rate on a three year £5,000 unsecured personal loan has risen by 1.7 per cent in the past year, adding an extra £300 to the bill.

Nearly a third of personal loans taken out in the past year were for debt consolidation. A quarter of those borrowers ran into further debt, and 85 per cent of all those taking out loans were not asked to pay off existing debts by their lenders.

Worryingly, 70 per cent of loan applicants were not asked for proof of income, according to price comparison service uSwitch.com.

Mike Naylor of uSwitch.com commented: “With more than 7,716 loan repayments being missed every day and record write-offs, you might think that lenders had learnt their lesson.”

Figures released by the Bank of England last week showed that new consumer credit rose by £2.4 billion in February, compared to an increase £900 million in January.

Tags: February, crisis, year, credit, bill

Mortgage market “still buoyant”

The mortgage market is “still buoyant” despite the recent financial crisis due to the amount of remortgage business available, claims one expert.

Despite the market being healthy, Bestinvest said that it is becoming increasingly harder and more expensive to look at remortgaging property. .

Peter O’Donovan, mortgage manager for Bestinvest, said: “There are still plenty of people looking to buy houses, it’s just the cost of doing so, and once again making sure they understand exactly what it is they are entering into.”

Previously a remortgage would only cost a couple of hundred pounds but now the average fee is a £1,000, he added.

According to the Council of Mortgage Lenders, the credit crunch has resulted in funding difficulties for a number of mortgage lenders, reducing their capacity to lend.

Lenders have responded by reappraising the risks involved in lending, resulting in a tightening in lending criteria and a widening in mortgage margins to parts of the market.

Tags: amount, lending, funding, expert, crisis, UK mortgage terminology, mortgage manager, manager

British property market is in “danger”

The British property market is in danger zone which is set to continue beyond 2008 and into subsequent years, claims the Daily Telegraph.

Findings from the Daily Telegraph and Lombard Street Research Housing Affordability Index has revealed that house prices can no longer be classed as affordable, due to the combination of inflation and increasing debt costs.

Speaking to the Daily Telegraph, Diana Choyleva, the director at Lombard Street Research, said: “I would say that around about now house prices are in unaffordable territory – this is the danger zone for the market.

“It is still too early to say yet whether what happens next will be as bad, or perhaps even worse, than the early 1990s crisis,” she continued.

The index suggests that house prices are currently at their most overvalued since 1991 when many homes were repossessed.

Meanwhile, new research from Your Mortgage magazine has revealed that house price growth in inner London should hit 4.6 per cent with Greater London seeing 4.3 per cent growth.

Tags: the Daily Telegraph, Economic history, cent, Housing Affordability Index, housing, growth, Affordability, crisis

Mortgage deals upset by credit crunch

Mortgage applications are being hit by the global credit crunch, new research has warned.

The chaos in global financial markets caused by the US sub-prime lending crisis is now unquestionably affecting ordinary people in the UK.

Brokers are reporting that 17 per cent of decisions in principle by mortgage lenders are not being honoured after the event, due to the rapidly changing conditions.

And nearly a quarter (23 per cent) of all mortgage offers being made have been affected by the credit crunch, brokers have told GE Money Home Lending.

Duncan Berry, Sales Director, GE Money Home Lending, warned: “During these challenging times there will inevitably be changes to ranges with shorter notice periods, but communication is key and lenders should endeavour to give brokers reasonable notice to alterations in product ranges and changes to pipeline dates.”

Nevertheless, brokers themselves were found to be remarkably tolerant of lenders’ behaviour.

59 per cent said that it was acceptable for deals to be withdrawn or changed at short notice.

Tags: chaos, Yield spread premium, event, product ranges, Financial crisis of 2007–2009, crisis, brokers reasonable notice, Financial economics

Tracker rate deals gaining popularity

Fear over the fate of the UK property market has led to a significant increase in tracker rate mortgage interest.

According to GE Money, tracker and discount products are set to account for a third of all broker business, representing a 120 per cent increase from the last quarter.

The changes results from the fact that 89 per cent of mortgage brokers believe that interest rates have peaked, with nearly half anticipating a fall in the base rate in the next few months.

Subsequently, brokers are increasingly recommending discount and tracker products over longer fixed rate deals.

Gerry Bell, head of mortgage marketing at GE Money home lending, said: “Consumers and brokers alike have clearly been concerned by the recent stress in the financial sector and our research indicates that the market is now being boosted by a possible decrease in interest rates in the coming months.

“This will also be welcome news to those homeowners currently coming to the end of a fixed rate product who are concerned about re-mortgage products and rates that will be available to them.”

The UK markets have felt the far-reaching impact of the sub-prime mortgage crisis afflicting the US this year that has led to worldwide credit squeeze.

Tags: cent, mortgage, welcome news, interest rates, Mortgage broker, crisis

Over 55s not ready for retirement

Millions of Britons aged 55 or over have not even begun to think about life after retirement.

That is according to new research by Abbey which found that around two million people in this age group have given it no thought at all.

In addition, 4.5 million people have not made plans for what they will do once they stop working.

This statistic is worrying many observers who say that many people are going to head into retirement and face a financial crisis due to their wayward banking.

The next generation is not looking much better either, with 1.8 million people between the ages of 45 and 54 not having considered retirement.

“This research shows the potential retirement time bomb that the 50 plus generation are facing,” warned Reza Attar-Zadeh, head of savings at Abbey.

According to Abbey’s study, one million people over the age of 55 feel that they will have to work through their retirement as they have little money put aside.

Added to this, 1.5 million in the same generation say that their home is their only form of financial insurance to see them through their twilight years.

Tags: crisis, Financial services, group, one million, Generations and Age Groups, retirement, Social Issues, head

Brits unprepared for money crisis

Millions of us are not handling our banking very well, meaning that we are not prepared for a financial crisis.

According to Birmingham Midshires, a large majority of us are not putting money aside in preparation for a change in out circumstances.

The firm carried out research into the matter and found that a staggering 95 per cent of us fear we would be financially crippled if we had to care for an elderly relative in old age.

The unexpected birth of a child would also leave many of us struggling, with 86 per cent saying that they would not be able to afford to bring up a child.

Redundancy is another area of concern, with 80 per cent admitting to being financially unprepared should the worst happen.

London is the region that would be most affected by redundancy as 82 per cent claim that they could not support their family in the short-term without their regular wage.

“It is alarming that so many people could struggle if hit by a financial emergency or unforeseen cost,” warned Jason Robinson from Birmingham Midshires.

“We are concerned about people’s liquid wealth – the money that should be available to them in a financial emergency.

“Much is talked about the need for saving for the long-term, but without an accessible savings pot set aside for that rainy day, short-term financial costs can leave families with severe difficulties,” he added.

The best advice for building up your liquid finances is to put a little aside from each pay cheque and do not use it until necessary.

Tags: Pound sterling, Business Finance, accessible savings pot, need, money, crisis, Birmingham, pot