House prices still set to fall in 2011

According to recent figures the property market in the UK did edge up a little over the course of 2010, and the average property price in December was up by around 0.4 percent compared to the same month a year earlier. The figures were released by High Street lender, Nationwide, with officials from the building society stating that despite this year’s slight increase property prices were still set to drop in the first half of next year.

Nationwide said that property prices in 2010 had declined in the second half of the year compared to the first half, and that in the first half of 2011 prices would continue to fall. Nationwide said that demand for property remained weak, which would contribute to the slump in property prices. One economist from the building society said that there were two few buyers interested in property and too many properties available.

The lender also said that although property prices had edged up in December, prices had fallen in four of the last six months and were likely to continue doing so. Property prices have been falling as a result of lack of mortgage availability, increased caution from potential buyers who are steering clear of the market at present, and an over-supply of properties for sale.

An official from Nationwide said: ‘At the moment, there are probably still too few buyers chasing too many properties. As a result, the slow drift down in house prices is likely to persist in 2011, at least for the first half of the year. Whether it continues into the second half will depend on the flow of new property on to the market.’

He added: ‘Despite December’s increase, house prices have fallen in four out of the last six months and it would be premature to suggest that the recent downward trend has been broken on the basis of one month’s figures.’

Tags: Irish property bubble, economics, result, mortgage, Mortgage loan, Business and Economy, building society, slump

Mortgage rationing to continue next year

Officials from the Council of Mortgage Lenders have stated in a recent report that mortgage rationing is set to continue next year, and consumers that are hoping to get mortgage finance in order to get onto the property ladder may still face disappointment as banks continue to slash their lending.

One of the problems facing the banking industry is repayment of some of the bailout money that they took at the height of the global financial crisis, which needs to be repaid. Sadly, it is likely to be consumers that pay the price once again, as this will result in further restrictions on mortgage and other types of lending, making things more difficult for those that need to take out finance.

The CML has also said that repossession numbers are likely to increase next year, although the increase is likely to be modest. There are a number of factors that may affect repossession numbers, and this includes the government Spending Review and cuts, which could affect people’s jobs. Buyers are also likely to be put off from taking out mortgage finance even if they are able to get it, and this is due to the fragile state of the economy.

The CML said: “Given the continuing economic uncertainties, there is little to encourage buyers. First-time buyers will continue to find it difficult to get into the market. With funding in short supply, the availability of mortgages for first-time buyers will remain limited.”

The Council of Mortgage Lenders concluded: “Activity in housing and mortgage markets is set to remain broadly flat in 2011 and we do not envisage a return to the lending levels that characterised the middle of the last decade for many years to come.”

Tags: cml, economics, report, disappointment, mortgage, bank, money, property

Lack of mortgages leads to increased demand for rental property in London

The financial crisis is still having severe repercussions when it comes to the mortgage and property markets, and getting a mortgage these days can be very difficult for first time buyers because of the restrictions that are still in place amongst lenders and the high deposit levels that lenders are demanding from would be buyers in order to stand a chance of getting the mortgage loan that they need.

For those that are looking to live in London things are even more difficult, and the high cost of property in the capital coupled with the problems with getting a mortgage and lack of 100 percent mortgages has made it impossible for many people that need to or wish to live in the city to actually buy a place of their own. This has led to an increase in the number of people looking to rent property in London.

The surge in applications for rental properties in London has led to experts advising those looking to rent in London to look sooner rather than later, as the demand for property in the area is set to increase. In fact, it has now got to a point where demand has reached a level that enables some landlords to accept sealed bids from interested parties.

One official said that there was a revival in the city and a large number of students looking for accommodation, all of which had added to the high demand for rental property in the area. Another official said that landlords in London needed to consider not increasing the rent on their properties, as this would encourage existing tenants to stay on and could cut costs.

Tags: london, interested parties, personal finance, Demand (economics), economics, rental properties in london, mortgage

Trust still shrinking in UK banks

It has been claimed that the level of trust in UK banks is continuing to shrink amongst consumers following the chaos that followed the global financial crisis. The boss of Co-op said that as a result of lack of trust amongst consumers in the banking sector many were continuing to shun traditional banks.

Peter Marks, the Co-op chief, said that banks had been through a tough time since the onset of the global credit crisis, but he added that most had deserved it because they did not always act ethically. His comments came after the Co-op Bank released its performance and profits figures recently.

The bank’s first half pre-tax profits came to £260 million, which was a hike of 17 percent. Current account openings were said to have increased by 30 percent, and lending to small businesses apparently nearly doubled from £600 million to over £1 billion.

However, confidence levels in the banking sector have been sliding since the chaos that occurred with Northern Rock, which became the first official financial victim of the credit crisis in the UK. Since then various reports ranging from huge banking bonuses to senior staff to security breaches and lack of lending have seen consumer confidence take a further battering.

At one point following the credit crisis many were too nervous even to put money in the bank, and many were keeping their savings at home or in alternative places because of their lack of confidence in banks to keep their money safe.

One industry expert said: “Some banks do deserve the battering they have taken when it comes to customer confidence levels, as many have not acted ethically. It doesn’t help when all consumers see in the papers and on the internet is reports of bosses being paid huge bonuses whilst consumers are left earning little to nothing by way of interest.”

Tags: economics, money, lack of trust, bank, financial crisis

Lack of mortgages and increase in buy to let investors leads to increase in private renting

Over the past few years the mortgage lending market in the UK has become increasingly subdued, and whilst the recession may now be over and the economy on its way to recovery many people are still struggling to get a mortgage loan unless they have a very sizeable deposit to put down. At the same time the number of buy to let investors is said to have increased, which means that there is a rising number of buy to let properties on the market.

A combination of these factors is said to be affecting the number of people that are in private rented accommodation, and according to recent reports the number of people that are privately renting is set to rise, as more and more private investors come on to the market, making it increasingly easy for people to get a private rent accommodation compared to social housing, which involves going onto a waiting list or bidding on properties through council websites via the Choice Based Lettings system.

A study was recently carried out by the Building and Social Housing Foundation, and the results of the study indicated that one in five households could be living in private rented accommodation by the end of the decade. The foundation believes that there is going to be a boom in the number of people that are living in private rented accommodation, and this will make up one fifth of households by the end of the decade in ten years time.

One industry official said: “This research shows significant changes are taking place in the UK housing system. More and more of us are becoming private renters – 1m households since 2005 – some of them through choice, but many because they have no other option.”

Tags: United Kingdom, Renting, economics, buy-to-let, finance, Financial economics, uk, Private rented sector

Trends in Lending report claims house prices and mortgage lending will remain steady

The Bank of England has recently released its Trends in Lending report, which has shown that mortgage lending levels have remained steady over the first quarter of this year, and that whilst there may be a slight increase in mortgage lending over the course of the year lending levels will remain pretty steady overall.

The Bank of England report also indicated that property prices would remain flat over the course of this year, having increased slightly over recent months. Mortgage availability is expected to increase but only by a slight amount, and Loan to Value ratios are also expected to increase slightly over the course of this year.

Whilst the data from the report reflects improvement compared to last year, when the recession and the financial crisis were still taking their toll heavily on the property and mortgage markets, the climate is still expected to remain challenging for many people that are looking to get onto the property ladder or take out a mortgage for a new property.

Lenders are still likely to be looking for higher deposits, although there has been an increase in the number of lenders that are offering 10 percent deposit mortgages, which has provided some degree of relief for cash strapped first time buyers who have suffered hugely over the past couple of years since the onset of the global credit crisis.

One first time buyer said: “I hope to see the amount of deposit that lenders are looking for to come down over this year, although I’m not sure that it will. I would love to be able to get a mortgage and buy a property but until the deposit level comes down I’m stuck with renting, which is just money down the drain.”

Tags: economics, house prices, time buyer, finance, Mortgage loan, percent deposit mortgages, deposit, mortgage

Interest rates and government intervention helped repossession levels

According to figures that were recently published there was a significant drop in the number of repossession in the UK in the final three months of last year. Read more

Tags: mortgage, economics, finance, government, Labour, Subprime lending

Recession over for UK

It was announced last week that the UK has finally come out of recession. All of the other major economies had already come out of recession, with the UK left lagging behind but following the release of recent figures the UK has now joined the other countries that have at last shaken off the recession and can now start looking forward. Figures showed that in the final three months of 2009 the UK economy grew by 0.1 percent. Read more

Tags: United Kingdom, Late 2000s recession in Europe, Economy of the United Kingdom, recessions, economics

Is the recession finally over?

To many people it may feel as though the UK has been stuck in recession forever, and the recent recession has resulted in many businesses and consumers suffering hugely as a result of job losses, plummeting sales and profits, and financial and economic chaos. Read more

Tags: recessions, Economic history, Late-2000s recession, Economy of the United Kingdom, economics

No movement in Bank of England base rate

It has been announced by the Bank of England that the base rate is to remain at its record low level of 0.5 percent once again, making this the eleventh month in a row where the base rate will have been at its lowest level in the history of the Bank of England. The decision comes just over a week after it was announced that the UK had finally joined other major economies by coming out of recession. Read more

Tags: bank of england base rate, interest rate, recessions, bank of england, base rate, economics, inflation

‘Bumpy’ recovery for firms in the UK

According to a recent report UK firms should be prepared for a bumpy ride to recovery over the course of this year. Despite a fall in the number of profit warnings over the final quarter of last year the accountancy company Ernst & Young has stated that the recovery for UK firms is still likely to b a bumpy and challenging one, and that companies needed to prepare themselves for this. Read more

Tags: scheme, accountancy, contrast, United Kingdom, Ernst & Young

Better future for economy following drop in unemployment

Recent figures showing that unemployment has finally fallen has brought with it hopes that the future of the economy is looking a little brighter. The figures showed that there was a significant drop in unemployment figures for the month of December. Many think that this will spell good news for both the jobs market and the economy as a whole. December saw unemployment levels fall for the first time in around two years according to reports.

Read more

Tags: Late-2000s recession, jobless figures, month, unemployment, Chris Grayling, global credit crisis

Record numbers having to take on part time work

Recent figures have shown that record numbers of people in the UK have had to take on part time work through the recession as a result of being unable to get any full time employment. Whilst the rising number of people taking on part time work has helped to bring unemployment figures down for many of these workers the hours that they are working are not bringing in adequate income to continue keeping on top of their bills, rent or mortgage, and financial commitments. Read more

Tags: Types of unemployment, total, recessions, part time work, economics

Tough year ahead for British retailers

Officials from the British Retail Consortium have recently stated that despite the encouraging sales figures seen by retailers over the Christmas and New Year period most retailers would be facing yet another very tough year over the course of 2010. Read more

Tags: High Street, economics, Deficit, Socioeconomics, Retail Consortium, Marks & Spencer

Cold weather does not put Christmas shoppers off

With the effects of the recession and the global financial crisis still taking its toll on many households many may have been keen to cut back on the spending this Christmas and try and avoid spending a fortune over the festive season. However, despite the financial difficulties that many are facing at present it appears that even the freezing weather in the UK has not put off the shoppers that are determined to get their purchases bagged and home in time for the big day. Read more

Tags: New West End Company, economics, credit, Snow, Richard Dickinson, recessions, christmas, purchases

House prices could take years to recover according to Bloomberg survey

A survey from Bloomberg has suggested that property prices in the UK could take a number of years to recover back to the level that they were at back in 2007, before the credit crunch hit. Since around October of 2007 house prices have plunged in the UK, although the last few months have seen some nominal increases in property values. Read more

Tags: Real estate, economics, house prices, Bloomberg, housing market

Rising value of instruments could mean increasing insurance cover

Many consumers that have valuable musical instruments take out insurance cover to ensure that should something happen to the instrument, such as damage or theft, they will not have to foot the bill to get it repaired or replaced. However, a recent report has suggested that some instrument owners may need to look at their insurance cover to make sure that it is adequate because the value of instruments has soared during the recession. Read more

Tags: music industry specialist, Musicguard, economics, musical instrument insurance, valuable goods insured, insurance policies

QE failing to make necessary impact

Following the recent announcement that a larger amount of money is to be ploughed into the economy through the quantitative easing programme a number of industry groups and officials have come forward to claim that the government is simply throwing good money after bad because the scheme is clearly not working. Read more

Tags: quantitative easing programme, Monetary Policy Committee, Federal Reserve System, economics, estimates, quantitative easing

Many homeowners could have worthless insurance

It has been revealed that millions of homeowners in the UK could be hanging on to insurance policies that are actually worthless as a result of a loophole relating to past convictions, according to a recent report. Read more

Tags: home, economics, tiny fine, home insurance, Household, group, homeowners insurance

Now could be the time to get on the property ladder

According to the results of a recent survey that was carried out many Brits think that it is now a good time to purchase a property and get onto the property ladder. The Building Societies Association carried out the survey, and the results showed that whilst market conditions continued to be difficult in the mortgage sector many Brits were still convinced that this was a good time to buy due to various other factors. Read more

Tags: building societies association, Mortgages, property ladder, Business Finance, first time buyers, Royal Institute of Chartered Surveyors, the Brits, economics

AMEX increases rates for late payers

Credit card giant American Express has recently announced that cardholders that make late repayments on their credit card, or those that miss repayments, will be penalised with higher interest rates. Read more

Tags: late payments, american express credit cards, economics, american express, interest rate, Credit Cards, credit card charges, payments

MPC official expects growth in the economy

According to a recent report an official from the powerful Monetary Policy Committee has predicted that there will be growth in the UK economy over the course of this year. Read more

Tags: Economy of the United Kingdom, economics, economic growth, Monetary Policy Committee, recovery, job losses, onset, official expects growth

Possible lower deposits for first time buyers

It has been claimed that many first time buyers could find that they are able to get mortgages with lower deposits over the course of this summer, following a turbulent period where lenders have been demanding sky-high deposits that first time buyers simply cannot afford, which has further impacted on the downfall of the property market. Read more

Tags: first time buyers, low deposit mortgages, credit, Banking, economics, deposit, previous property

How to Have an Inexpensive Holiday

Many people have decided to forego their holiday plans this summer because of the recession. However, there is no need to stay home and not have some leisure time because of finances. Read more

Tags: exchange rates, cheap holidays, low cost holiday, cruises, cheaper price, economics, foreign country

Lying motorists to be weeded out by insurance firms

It has been reported recently that motorists that try and hide or lie about convictions when they apply for insurance cover are to find themselves at the centre of a crackdown by the insurance industry. Read more

Tags: Driving, car insurance fraud, insurance cover, better deal, Association of British Insurers, car insurance, economics, insurance industry official

Consumers warned about getting foreign currency at the airport

For many people that lead busy lives organising foreign money in time for their holidays can be difficult, and many cannot find the time to get this done. Read more

Tags: economics, city, buying, Dynamic currency conversion, airport currency exchange, foreign currency, travel, finance

Couples that get married need to advise their car insurance company

Industry experts have recently urged couples that get married to let their car insurance companies know, stating that if they fail to do this they could be missing out on significant savings on their car insurance premiums. Read more

Tags: Usage based insurance, economics, car insurance premiums, significant savings, marriage and car insurance, car insurance, vehicle, Business and Economy

Taxpayers pay bonus for Rock employees

Over recent months the government has been using taxpayers’ money for a variety of purposes, sparking concern amongst opposition parties and the public with regards to how the public purse is being used. Read more

Tags: bank, Northern Rock employee bonus, Taxpayers pay bonus, pay, economics, Business Finance, northern rock, Northern Rock bonus

House prices plummet at a faster pace than in the 1990s

Many people that are in their thirties and over will still clearly remember the dark days of the 1990s recession and house prices crash, where many people were left in negative equity after property prices plunged. Many are seeing the same patterns for again now, with the global credit crunch leading to plunging property prices and the year finishing with a recession where many businesses are going into administration. Read more

Tags: finance, Economic history, Lloyds Banking Group, economics, house price fall, faster pace, IHS

Increase in household spending

Figures from a recently released report have shown that household spending levels have increased enormously over the past five years in order to cope with rising household bills and living costs. The figures were released some weeks ago by the Office for National Statistics, and showed that the average weekly household spend had gone up by around 13 percent in the past five years. Read more

Tags: inflation, GBP, office, economics, energy usage costs

Low deposit mortgages increasingly difficult to get

Consumers that are hoping to take out a mortgage to buy a property are still facing a tough time according to officials, even thought house prices have been falling for the past year. Availability of mortgages is still very tight as a result of the ongoing global credit crunch, and many lenders continue to take some of their best deals off the market after very short periods of time. Read more

Tags: are, house market, economics, low deposit mortgages, mortgage, past year, global credit crunch, traditional level

Global financial job losses to be huge

According to recently released figures the number of jobs that are set to go within the global financial sector will be far greater than originally anticipated, and it is thought that around 350,000 jobs could be lost as a result of the turmoil that has wreaked havoc in the financial sector since the onset of the global credit crunch. Read more

Tags: seismic shift, Brian Sullivan, credit crunch, climate, economics, 1960s, finance jobs

Marked rise in repossession levels

A recent report has shown that the rise in repossession levels in the UK is resulting in around one hundred and twenty families a day being evicted from their homes. In the second quarter of this year it is said that one hundred and twenty families a day were losing their homes to repossession, which reflects a 70% rise compared to a year earlier. Furthermore, industry officials have predicted that this figure will continue to rise as the nation edges every closer to a deep recession and the global financial crisis continues to take a hold. Read more

Tags: repossessions, day, Mortgages, rate, credit, point, base rate, economics

CML said mortgage lending fell again in August

According to officials from the Council of Mortgage Lenders mortgage lending levels fell in August, with the value of mortgage lending having fallen by 12 percent compared to July and by 36 percent compared to August of the previous year. The total amount of new mortgage lending for the month came to just £21.8 billion. This was the lowest level of mortgage lending since 2005 and the lowest level of mortgage lending in August since 2002. Read more

Tags: property transactions, amount, industry, new mortgage lending, economics, mortgage lending, council of mortgage lenders, long house prices

What’s going on with house prices and mortgages?

There is no doubt that both the housing and the mortgage market have been going through a very turbulent time over the past year. House prices have been falling month on month, and mortgage availability has become increasingly tight. However, amidst all of the chaos that has been going on in these sectors many people may have become confused over what is actually going on in these markets. Read more

Tags: official, Mortgages, favour, house prices, time, three-bed home

Interest rates kept on hold for another month

Following the Monetary Policy Committee meeting that was held last week the Bank of England has announced that the base rate is to be kept on hold at 5% for yet another month. This signifies the fifth month in a row where the base rate has remained unchanged, as the central bank and members of the powerful MPC struggle to deal with both soaring inflation levels and a slowing economy.
Read more

Tags: bank of england, interest rates, economics, row, committee meeting, committee, england, struggle

Will inflation levels get worse before they get better?

The financial headlines has recently been filled with news about the soaring rate of inflation, and this comes as no surprise given that the rate of inflation has soared to its highest level since records began in 1997. For some months now the rate of inflation has been steadily rising, and it has been soaring above the government’s target of 2% for some months now. For July the rate of inflation hit an all time high of 4.4%, which came as no surprise to many who had already predicted that the rate of inflation would keep on rocketing. Read more

Tags: Stagflation, degree, inflation, control, economics, Banking, Economy of the United Kingdom, stagnant economy

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: Labour, United Kingdom, gordon brown, Alistair Darling, nation, economics, crisis, Labour Party

Inflation levels continue to soar

Inflation levels in the UK have been at the centre of concern for the Bank of England and other government sectors for some months now, having rocketed to way over the government’s target earlier this year, and showing signs that the rise is set to continue. The government target for CPI inflation is 2%, but for the past few months it has soared out of control. In May the level of inflation hit 3.3%, and this resulted in the governor of the Bank of England, Mervyn King, having to write to the Chancellor of the Exchequer, Alistair Darling, to explain why inflation levels had soared so high, and what was going to be done to bring them back towards target.
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Tags: industry, cpi inflation, economics, Central bank, inflation, cost, The Prime Minister

Central bank governor and deputy governor did not agree on interest rates

Following the recent Monetary Policy Committee meeting earlier this month the Bank of England announced that it would be keeping interest rates on hold at 5.25%, stating that the risk of rising inflation had to be considered in addition to the slowing economy. Interest rates have already fallen twice since December, and industry experts predict that they will fall at least one more time before summer and then again in the latter half of the year.

According to the minutes from the March Monetary Policy Committee meeting there was a 2-7 split over whether interest rates should be cut in March, with the Deputy Governor of the Bank of England, Sir John Geive, agreeing with MPC member David Blanchflower that rates should be cut by a further 0.25%, which would have taken the base rate from 5.25% to 5%. However, the other seven members of the committee, including the Governor of the Bank of England, Mervyn King, wanted interest rates to be kept on hold.

The Bank of England has not taken the stance of the US Federal Reserve, which has been slashing its interest rates lately in order to try and keep recession at bay. Over the past six months the US Federal Reserve has cut the interest rates by a massive 3%, taking them from 5.25% to 2.25%. However, following the majority vote the Bank of England decided to keep rates at 5.25%. Analysts and economists are now speculating over whether there will be a further base rate cut following April’s Monetary Policy Committee meeting, although many think that the next base rate cut may come in May.

Recent Additions:

• Mortgage lender offering some impressive rates on savings
• Bank savings interest rates start to come down
• Pay and bills could further affect consumer finances
• Increasing number of first time buyers look to brokers for assistance
• Gazundering becoming more commonplace

Tags: interest rate, Central bank governor, cut following april, Business Finance, economics, Deputy Governor

Unions angry over insurance job cuts

Officials from unions have been angered by a decision by insurance giant Aviva to cut eighteen hundred jobs around the country. Just two years ago the company moved part of its operation to India, and ended up cutting around four thousand people from the workforce. This latest announcement has further angered union officials. Officials from Aviva say that the move is designed to improve service and cut costs, but this has not impressed unions. Read more

Tags: union officials, job cuts, economics, Insurance, aviva, unemployment, Product Issues, number

Credit squeeze hitting savers

Consumers are increasingly feeling that they are unable to save as much as they might like to due to the current economic downturn, according to Nationwide Building Society.

Matthew Carter, Nationwide director for savings, said that although three in four people believe it is important to put money away in a savings account, some do not feel “they can afford to save as much as they need to” because their finances are being squeezed by the credit crunch.

New research from the building society has revealed that 57 per cent of people would like to be able to save more than they are currently doing.

Mr Carter pointed out that it is a good time to save at the moment because there are a number of accounts with attractive rates.

“The products available mean it’s a good time for savers so it’s incredibly unfortunate that would-be savers haven’t the spare money to put aside.”

Meanwhile uSwitch.com has said that the credit crunch and rising inflation are making life “tougher” for many people.

Tags: matthew carter, consumers, Business Finance, moment, Business and Economy, economics, time

Travel insurance is a ‘wise’ purchase for activity holidays

People heading off for an action-packed holiday this summer have been advised that travel http://www.themoneystop.co.uk/car-insurance” target=”_self”>insurance is “undoubtedly the wisest purchase” they can make before they go abroad, according to STA Travel.

A spokesperson for the company noted that travel insurance is an important consideration for anyone planning a gap year, as it can provide cover in the event of a holidaymaker needing medical attention, or if they lose any possessions.

The company warned travellers not to view travel cover as an “unnecessary cost”.

“You should ensure the travel insurance you take out covers all the countries you plan to travel to and any activities you plan to participate in,” the spokesperson commented.

According to a recent study conducted by Defaqto, one in seven holidaymakers travel overseas without a travel insurance policy.

Travellers considering adventure holidays such as rafting the Grand Canyon or reaching Everest Base Camp should ensure they are properly covered by travel insurance.

Tags: adventure, economics, spokesperson, Camp, Everest Base, everest base camp, Hospitality Recreation, possessions

It’s ‘risky’ not to take out life insurance with your mortgage, says expert

Although people are trying to save money as they find their finances increasingly squeezed by the credit crunch, neglecting to take out life insurance along with a mortgage can be “risky” an expert has advised. Read more

Tags: economics, critical illness cover, Plan Insure, provider, assurance, plan

Younger people ‘nonchalant’ about their cards

Younger people seem to be less concerned about keeping their credit cards safe from fraudsters, a new report has suggested.

Two thirds of those aged under 50 said they had reported a credit card stolen compared to 78 per cent of people aged 50 years old or over, according to research by Saga.

Furthermore, a “massive” 88 per cent people aged between 18 and 34 years old said that they did not raise an eyebrow if someone took their credit card out of their sight when they were making a payment.

This is in contrast to 65 per cent of over 55 year olds saying they would not kick up a fuss in the same situation.

Andrew Goodsell, chief executive of Saga, commented: “Our study shows a worrying trend that men and younger people are generally less concerned about ID fraud than their older counterparts, and are not taking the steps to prevent fraudulent activity.”

This comes just after recent warnings from Apacs for people to make sure they keep their PINs safe.

Tags: apacs, cent, someone, economics, fraud, Credit card

People using credit to ‘patch holes in their budgets’

With financial conditions worsening under the current credit crunch, people are increasingly turning to credit to make up any shortfalls in their budgets, Fool.co.uk has said.

David Kuo, head of personal finance at Fool.co.uk, also said that credit fraud is likely to increase as people struggle to cover their living expenses.

People are increasingly seeing their personal finances being stretched as they face bigger outgoings due to rising household expenses. At the same time, salaries have not risen fast enough to cover the increased costs, Mr Kuo said.

Capital Economics recently reported that average earnings growth is set to remain at just under four per cent a year while food inflation is expected to stay at six per cent over the coming months.

“Initially it just starts with [people] saving a little less money…the next step is [people] start raiding [their] savings in order to try and cover [their] outgoings. The third step is [people] have to use credit in order to try and patch up any holes in [their] budget,” commented Mr Kuo.

Tags: order, fool, Simple Dollar, food, economics, Household, budget, business

CAB: People struggling to meet basic living costs

The Citizens’ Advice Bureau (CAB) has said that more people are seeking help because they are struggling to pay basic household bills as the credit crunch tightens.

A spokesperson for the charity said the combination of soaring household expenses and rising housing costs is putting extra pressure on people’s budgets.

The CAB said that the number of people approaching the organisation for advice on mortgage arrears problems rose by 35 per cent in the first two months of 2008 compared with the same period last year.

Many people are also having difficulties paying for essentials such as gas, electricity, water and council tax.

“We believe these trends reflect recent increases in the cost of living, suggesting a significant number of households are struggling to meet their most basic living costs,” said the spokesperson.

According to the Office for National Statistics, UK consumer inflation reached its highest level in 13 months in April due to high food and fuel costs.

Tags: number of households, economics, spokesperson, credit crunch tightens, office, statistics uk

Building societies still lending despite the credit crunch

Building societies are still in a good position to offer funds for mortgages despite some announcing they were restricting lending, one financial expert has claimed.

According to the Building Societies Association (BSA), action taken last week by certain building societies was not an indication that these providers were struggling in the wake of the credit crunch.

With certain larger lenders withdrawing from the marketplace, many smaller firms were inundated with applicants which required a re-adjustment of service levels to ensure customers were still dealt with, said the firm.

Neil Johnson, PR and policy manager for the BSA, said: “Building societies are largely funded by retail deposits rather than wholesale markets. So the problems in the wholesale markets haven’t affected them in the same way that they’ve affected banks.”

Earlier this month, the BBC reported that five building societies – the Bath, the Earl Shilton, the Newbury, Melton Mowbray and the Tipton & Coseley – had restricted or halted new mortgage lending due to an influx of new customers.

Tags: Financial services, business, economics, month, societies, good position, bank of england, Social economy

70 working days needed to pay off average debt interest, survey claims

People who borrow money using personal loans and credit cards need to work for an average of 70 days per year just to pay off the interest their borrowing accrues.

That is according to Unbiased.co.uk, which has proclaimed March 10 “Debt Freedom Day” to draw attention to amount of money consumers are having to pay just to service their debts – let alone pay them off.

Last year’s Debt Freedom Day fell on February 1, and this year’s date reflects the dramatically increased amount of unsecured borrowing British consumers are taking out.

Although credit card borrowing has fallen slightly from last year £55.6 billion to £54.9 billion from 2006 to 2007, the value of personal loans taken out has risen to £9.8 billion from £2.6 billion last year.

Combined with the effect of the credit crunch – which has pushed up the rates of interest charged on personal loans by an average of 0.5 per cent in the last year – debt and interest have soared.

Unbiased chief executive David Elms warned: “While Debt Freedom Day is of course a hypothetical point in the financial calendar, people should pay attention to it. In the current economic client is has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so.”

Tags: Credit Cards, point, cent, Unbiased, credit crunch, taken out, economics

BoE keeps bank rate on hold

The Bank of England (BoE) has chosen to leave the base rate of interest at its present level of 5.25 per cent.

According to Abbey, the BoE monetary policy committee’s (MPC’s) decision will not have come as much of a surprise to the markets.

Barry Naisbitt, chief economist at the firm, said that last month’s inflation report from the BoE indicated that lower interest rates were “consistent” with meeting its target of two per cent inflation.

This month, the majority of the MPC’s members decided that slowing economic activity “needed to be balanced against their expectation that activity would slow and that inflation indicators remain high”, he claimed.

However, Mr Naisbitt suggested that this view is likely to change over the coming months and a rate cut could be on the way.

Responding to the move, Colbalt Capital said that leaving rates unchanged was “a shame” but noted that the MPC was in a “no-win situation”.

A cut would have been a “welcome boost” for homeowners, it stated.

Tags: rate cut, economics, Colbalt, Colbalt Capital, economist, committee

London’s size responsible for title of worst city for card fraud

The size of London and its population are the main reasons behind its recent labelling as the UK’s worst city for credit and debit card fraud, one financial expert claims.

According to payments association APACS, the fact that there are more cards in issue in London and therefore more transactions and more retail outlets are the reasons behind the city being crowned the UK’s “fraud hotspot”.

Mark Bowerman, a spokesperson for APACS, said that despite the difference between regions in the numbers of people, ways of consumers protecting themselves against card fraud are the same.

“As long as you are a cardholder who’s following common sense precautions you can minimise the chances of yourself becoming a victim; and [they are] the same steps to take whether you’re in London or in Yorkshire,” he added.

New research from the CPP Group revealed that London has overtaken Birmingham as the worst city for credit and debit card fraud.

In only a year, the capital city has risen from fifth to first position in the UK’s top ten of card fraud hotspots.

Tags: issue, cpp group, fraud, payments association, economics, CPP, common sense, victim

Christmas spending goes on credit cards

The effects of the credit crunch failed to deter Christmas shoppers with a seasonal increase in the average outstanding balance recorded, according to new research.

Findings from Moneyextra.com shows that many spenders put their festive spending on their credit cards as the average balance jumped 17 per cent in January to £2,168.

Robin Amlot of Moneyextra.com, said: “There is a clear trend of falling outstanding credit card balances over the course of the last three years. The question is whether this actually reflects consumers clearing debts or merely a rescheduling of them.”

He adds that there is now a rise in other forms of borrowing, notably secured lending as consumers look to re-schedule expensive high-interest rate short-term credit card debt.

However, although credit card balances are up from the £1,842 recorded in December, they have not increased as much compared with previous years.

January 2008’s figure is down 25 per cent when compared with an average balance of £2,901 at the same time in 2007.

Meanwhile, Moneyextra.com said that consumers could save more than £4,500 by shopping around for financial products.

Tags: card, moneyextra, clear trend, course, average balance

Insurance industry commits to pay out more

The insurance industry’s commitment to pay out more on claims for critical illness, income protection and life insurance has been welcomed by industry experts.

Previously clients, insurers and medical practitioners were sometimes “unsure of what position to take” when dealing with a claim where medical information had not been disclosed unless the customer has deliberately withheld it.

Graeme Trudgill, technical and corporate affairs executive of British Insurance Brokers’ Association, said: “The Association of British Insurers (ABI) are trying to make the situation a bit more black and white to help customers do the right thing and to pay the claim.”

He added that some claims have not been accepted for “various reasons” and critical illness has had a “bad time” in the press.

The ABI changes are hoped to make the process of making a claim more consumer friendly.

According to LifeSearch, one in five critical illness claims are rejected.

However, according to its research carried out in the fourth quarter of 2007, there has been a marked improvement in the number of claims being paid out in the last 12 to 18 months.

Tags: lifesearch, industry, insurance brokers association, quarter, consumer

Green mortgages ‘not affected by the credit crunch’

Green mortgages have not been affected by the credit crunch, due to the “type of person” who takes one out claims one lender.

Norwich and Peterborough Building Society said that, despite concern over interest rates, there has been no change in the numbers of people taking out green mortgages.

“The reason they’re interested in a green mortgage is because of their personal ethics, so we’ve seen no difference at all,” said Alison Rolls, a spokesperson for the business.

She adds that green mortgages are still very much a “niche product” with growth being much slower than would be good for the environment.

Overall more consumers still need to “put the environment more on their shopping list” and think less about interest rates.

According to Mortgages.co.uk, green mortgages aim to reduce negative impact on our environment.

Lenders that offer this package will often make contributions to charities that support the environment or the welfare of the less fortunate.

Tags: credit crunch, Peterborough Building Society, support, economics, Financial crisis of 2007–2009, crunch, Super jumbo mortgage, Alison Rolls

UK private housing market valued at £4tn

UK homes are worth a total of £4 trillion, according to new research from the Halifax.

The findings revealed that the value of the UK’s private housing stock rose by 9 per cent (nearly £320 billion) in 2007.

Martin Ellis, chief economist at Halifax, said: “UK home owners have collectively accumulated an extra £2 trillion of equity in their homes over the past decade as property prices have risen.

“This has significantly strengthened the household balance sheet. Mortgage debt accounts for only 30 per cent of the value of the UK’s £4 trillion worth of housing assets,” he added.

The value of the housing stock has more than tripled over the past decade, rising by 208 per cent from £1.3 trillion in 1997.

By comparison, the headline retail price index (RPI) has risen by 31 per cent over the past ten years.

Meanwhile, the Bank of England’s decision to hold interest rates at 5.5 per cent is “not all doom and gloom” for home buyers, according to the Leeds Building Society.

Tags: headline retail price index, housing market, finance, economics, interest rates, england, halifax

“More and more” homeowners using drawdown lifetime mortgages

Increasing numbers of homeowners are taking advantage of drawdown lifetime mortgages according to industry experts.

Intune group ltd, the subsidiary of Help the Aged which provides financial products to those aged over 50 years old, said drawdown mortgages allow the consumer to release money from property over stages.

Mark Gettinby, director of financial services of the Intune group, said: “This gives clients the peace of mind of knowing that they have funds available to them as and when they need them.”

Drawdown mortgages, among other equity release plans, are commonly used to supplement income, fund one off purchases or to pay off debts such as credit cards and mortgages to increase disposable income.

Mr Gettingby added that they especially benefit the homeowners over the age of 55.

According to research from the Safe Home Income Plans (SHIP), drawdown mortgages account for 51 per cent of all new equity release plans sold.

Further findings from SHIP found that the sale of equity release plans had increased by 15 per cent in the third quarter of 2007.

Tags: Help the Aged, director of financial services of the Intune group, ltd, Aged, safe, equity release, economics, debts

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

Consumers need to spend carefully at Christmas

Consumers should be careful with their Christmas spending and ensure they do not put more than they can afford to pay back on credit, warn financial experts.

The Consumer Credit Counselling Service has said, that despite it being the festive season, people still need to remember that money spent on credit has to be repaid over the course of the year.

James Ketchell, spokesperson for CCCS, said: “The amounts you put on for Christmas spending might be done in good faith and for good reasons, but they do have to be measured by common sense too.”

CreditExpert.co.uk has predicted that, despite recent interest rates rises and the credit crunch, the majority of Christmas consumers will not be reducing their spending.

The news comes even though 29 per cent of respondents admit money is tighter this year.

According to statistics from Credit Action, the total personal UK debt stood at £1,380 billion at the end of September.

Tags: respondents admit money, economics, sense, statistics, News, consumers, year

Lending to get tighter in the New Year

The effects of the credit crunch will see lenders “tightening up” and looking at minor misdemeanours which may well have been ignored in the past, claim financial experts.

Equifax has said there could be an increase in the number of loan applications in the New Year, as lenders look more carefully at a person’s payment history.

Neil Munroe, external affairs director for Equifax, said: “Any negativity that might not have been a problem in the past might rise in prominence.”

He also warned consumers that an increase in the number of applications within a short space of time can look suspect.

Repeated searches on a consumer’s history have the potential to affect a person’s credit rating.

The latest figures from Credit Action show that total consumer credit lending to individuals in October 2007 was £222 billion. This has increased 5.8 per cent in the last 12 month.

Total lending in October 2007 grew by £8.8 billion.

Tags: finance, claim financial experts, personal finance, economics, time, equifax, Credit Action

Home insurance should cover new installations

Homeowners could benefit from increasing home insurance cover to cater for the increased value of their homes following renovations advised an industry body.

The British Insurance Brokers’ Association (BIBA) said that the reassessment of the contents value and building cover is dependent on what work has been done and its size.

Steve Foulsham, technical services officer for BIBA, said: “If it’s an expensive, state of the art new kitchen worth £10,000, then you may wish to increase your sum insured to cater for that.”

He added that BIBA gets many queries from members of the public asking for clarification on what falls within home and contents insurance.

The “general feeling” among insurers is that once a renovation has been fixed down, it becomes part of the building, Mr Foulsham concluded.

According to the British Retail Consortium, citing figures from Datamonitor, in 2008 the UK DIY and hardware market is estimated to be worth £16.1 billion.

This is an increase of 17.7 per cent since 2003.

Tags: sum, public asking, part, building, industry, economics, body

Student finances not ‘greatly’ affected by credit crunch

The National Union of Students (NUS) has announced that finances for this year’s intake of students were not ‘greatly’ affected by the credit crunch.

A spokesman for the NUS said that there has been little evidence to suggest that banks are overly worried about students.

He said: “The risk outlay on students is that much less than for giving out a mortgage and they also take the view that a graduate is likely to be a customer for the rest of their life and they are willing to take that risk.”

HSBC’s adding of interest to graduate accounts is the only evidence of a tightening of credit he commented.

Statistics published by the Office for National Statistics show that the maximum amounts available to new students in 2007-8 are 76 to 85 per cent higher than they were ten years ago.

The NUS is a voluntary membership organisation comprised from student representative organisations in colleges and universities from across the UK and Northern Ireland.

Tags: National Statistics, economics, office, finance, nus, voluntary membership organisation

Mortgage tightening to ease next year

The tightening of the mortgage market will ease somewhat going into the new year, according to the Council of Mortgage Lenders.

Sarah Robson, a spokesperson for the trade association, explained that interest rate falls would take some pressure off the market making it less tricky for borrowers to obtain adverse credit mortgages.

Interest rates are predicted to fall to five per cent by the middle of next year, offering some hope to borrowers

Ms Robson explained that homeowners with poor credit history may be able to improve their status.

She said: “If they did have a good credit history for five years straight, that would be taken into consideration – but their previous record would still be there.”

The next decision on the Bank of England base rate, currently at 5.75 per cent, will take place on December 6th this year.

Yesterday, the BBC report that a range of its adverse credit mortgages will be withdrawn today, due to market tightening.

Tags: adverse credit mortgages.Interest, interest rate, New Year's Day, england, economics, adverse credit mortgages, record, council of mortgage lenders

Bank holds interest rates

The Bank of England has held interest rates at 5.75 per cent for the fourth month in a row.

The decision, announced at noon on Thursday, comes as no surprise with many analysts predicting such a freeze well in advance.

Ongoing uncertainty in world financial markets and the rising price of oil led members of the Bank’s Monetary Policy Committee (MPC) to keep rates at their current peak.

That will mean prolonged misery for many homeowners, struggling to cope with high mortgage payments.

Chief executive of the National Association of Estate Agents (NAEA), Peter Bolton King, was critical.

He said: “I would have hoped that the Bank of England would have considered this month’s rate movement carefully as confidence in the market needs to be restored and a relaxation of interest rates would do just this.

“The last 12 months has been an extremely busy period for the housing market and consumers are crying out for reassurance.”

Tags: executive, Monetary policy, economics, interest rates, consumers, committee, confidence, market

‘Simple steps’ to save money on premiums

There are simple ways of reducing the money paid out on insurance premiums, an industry expert has explained.

According to LifeSearch, there are five principal steps in cutting back on unnecessary spending on life cover.

It lists these as, shopping around, switching existing insurer, acting early, quitting smoking and considering family income benefit.

LifeSearch suggests that now is an excellent time to buy life insurance, as premiums are at their lowest for several years, with the price of cover falling by over 40 per cent in the past five years.

“If you can decide which product you should have on the grounds of one factor, such as price, then websites which compare that factor must be a good thing…So if you know exactly what you want, and you are right, comparison sites and aggregators can be useful, ” said Tom Baigrie, managing director of LifeSearch.

One particularly useful piece of advice for those considering life cover could be to buy it as soon as possible, as the price goes up the older you are.

Tags: unnecessary spending, economics, product, Financial services, life insurance, Insurance, finance

Negative payment ‘fiddling’ widespread

Recent research shows that a staggering 296 out of 300 credit card providers use a negative payment hierarchy.

According to Fool.co.uk, 99 per cent of people with a regular balance on credit cards with varying interest rates on debts are being ripped off by their provider.

“It is not illegal to fiddle with the order in which payments are allocated on credit cards. But negative payment hierarchy is a devious way to exploit customers’ inexperience,” said David Kuo, head of personal finance at the finance site.

“Our study shows that whilst the vast majority of card providers employ this sly practice, Nationwide and Saga should be applauded for their use of ‘positive’ payment hierarchy,” he added.

Those particularly at risk from negative equity payments are people using zero per cent credit cards for balance transfer as well as purchases and cash withdrawals.

Repayments made on the card will then go towards pay off debts with the cheapest interest first, while debts with heavier interest are left to stack up interest charges and earn the provider money at the cost of the card holder.

Nationwide have revealed that consumers could pay an estimated £500 million on interest without knowing before banks are required to outline the order in which payments are made next year.

Tags: money, negative equity payments, economics, hierarchy, pay, credit

Insurance switching gains momentum

There has been a marked increase in insurance switching, an industry expert has said.

According to MoneyExpert.com, the car and home insurance markets have seen a dramatic rise in people changing policy.

In the last six months, insurance customers for these sectors have abandoned in excess of 9.2 million uncompetitive policies.

The website’s Switching Index shows that, in the same period ten per cent have switched home insurance policy while 15 per cent have changed motor insurance policy.

In total, 9.27 million policies have been swapped in the last six months, which represents a staggering increase of 1.6 million from the previous quarter this year.

Sean Gardner, chief executive of MoneyExpert.com, said: “The good news is there are plenty of excellent offers out there and many product sectors are incredibly competitive – insurance being a prime example.

“It will almost certainly be the case that everyone can save money by switching and we would urge consumers to continue to seek out the best deals.”

Tags: Financial services, home insurance, momentum, best deals, economics, case

CML: House prices not affected by mortgage shortage

The reduction in the availability of mortgage products is unlikely to affect house prices.

According to the Council of Mortgage Lenders (CML), the sub-prime sector is most likely to be affected and this would have only a minimal impact on the housing market in the UK.

Bernard Clarke, a spokesperson for the CML, explained: “The housing market continues to be underpinned by consumer demand for owner occupation, strong aspirations for owner occupation and there’s a shortage of supply.

“Those fundamentals will continue to underpin the market to a much greater extent than any shortage of mortgage products to customers.”

He added that despite fluctuations, uncertainty and speculations over a possible collapse, there remains confidence in the market.

Moneyfacts has recently revealed that the availability of buy-to-let and residential mortgage products has reduced by 40 per cent in the last few months.

Furthermore, 72 per cent of bad buy-to-let mortgage products were taken off the market as well as 54 per cent of bad credit residential mortgage products.

Tags: shortage, uk, confidence, sub-prime sector, supply, economics, Mortgage loan, housing market

Personal loan rate increases ‘disproportionate’

There have been widespread increases in personal loan rates in wake of the interest rate hike in July, according to recent research.

Figures show that the rises are disproportionate to the interest rate increase with an average increase of one per cent APR to personal loan rates since July this year compared to the 0.25 per cent base rate increase.

Differences also exist between offline and online deals, with APR currently at 8.7 per cent offline and 7.7 per cent online.

Mike Naylor, personal finance expert at the company carrying out the research, uSwith.com, said: “There are already huge variations in the loan rates available to consumers amongst both online and offline deals.

“Throwing the personal pricing smoke screen into the melting pot is just causing further confusion, making it a complete minefield for consumers to shop around and get the best deal.”

He added that consumers should exercise “caution” if offered “personal pricing” for offline deals as this was not necessarily in their interests.

Banks have also been criticised recently for excessive charging on credit cards and overdrafts as well as on currency exchange.

Tags: interest, smoke screen, exchange, year, loan rate, economics, Currency, rate increase

Young people should ‘consider insurance options’

Young people should shop around more for life insurance providers, an industry expert has said.

According to Clare Moyles of Sainsbury’s Bank, younger people are often inclined to use the same provider for life insurance as they have to take out a mortgage.

She said: “Younger people tend to go with their mortgage lender because they might be a first time buyer and that tends to be the easiest thing to do.

“Not shopping around is a disadvantage for them because with life insurance your premiums do stay the same.”

For those who are “younger and healthier”, she added, premiums will cost less. By sticking with one lender without looking at the other options, people are missing out on possible savings.

Information from the Association of British Insurers this year showed that £160 million per day was paid out in Britain in 2005 by the UK insurance industry.

This figure comprises £17 million in death benefits and £144 million paid to pensioners and long term savers.

Tags: Insurance, Title insurance in the United States, economics, expert, United Kingdom, shopping, time, Types of insurance

Caution advised for first-time buyers looking overseas

As recent studies reveal more and more first-time buyers are looking to make their first steps on the property ladder overseas, it is important they are aware of the possible pitfalls.

A report from UK National Savings & Investments discovered 84 per cent of 18- to 30-year-olds believe buying property abroad is a more feasible option than buying in the UK.

But some industry insiders have been quick to point out that the situation for first-time buyers looking to invest overseas is generally similar to that in the UK.

Helen Adams, managing director of FirstRungNow.com, warned: “People aren’t going to be giving really big mortgages to people who are … renting in the UK.”

She added that “the best thing to do is to find out where you’re interested in buying and then speak to a mortgage specialist in that field”.

The warning comes as the major political parties look to bring the issue facing first-time-buyers to the forefront of the political agenda ahead of a possible election.

The Conservatives pledged recently to remove stamp duty for houses valued between £125,000 and £250,000, which currently stands at one per cent.

Tags: political agenda, thing, com, economics, Economy of the Republic of Ireland, first time buyers, cent, possible election.the conservatives

Britons saving at record levels

Savings among British consumers has reached record-breaking highs, new research indicates.

According to research by Unbiased, savings in the second quarter topped £47 billion, which has been attributed to an increasing number of people taking advantage of the recent rise in interest rates.

Commenting on the figures, David Elms, chief executive of Unbiased said: “It is extremely encouraging to see that savvy consumers are taking advantage of the recent rate hikes with previously unseen record levels of savings now taking place!

“Plus it’s even better that Britons appear to have tightened their belts and are approaching borrowing far more cautiously than in previous months.”

The research, which also analyses the rate of borrowing, claims that £4 billion was loaned during the quarter, almost £13 billion less for the same three months of 2006.

In addition the saving to borrowing ratio has also decreased for 32 pence borrowed against every pound saved to eight pence borrowed against every pound.

Tags: pound, record, british consumers, economics, Business Finance, chief executive, GBP, money

Study: Home-buying process ‘fraught with difficulties’

A new study by AA Insurance has found that prospective homeowners are increasingly wary of buying a new home.

The survey found that buying a house tops the list of daunting prospects among young people ahead of getting married or divorced and starting their own business.

Discontent stems from a range of sources, with 29 per cent saying they found the whole home-buying process difficult while one in ten harboured serious concerns about hidden faults.

Estate agents in particular do little to assuage the fears of homebuyers as 62 per cent of respondents said they did not trust them, placing them only marginally behind politicians (73 per cent) in terms of general unscrupulousness.

And even once homebuyers have taken the plunge it seems almost three in ten find they are unsatisfied with their new dwelling after moving in.

Janet Pell, head of AA Home Insurance, commented: “For most people, buying a home will be the most important purchase they make in their lifetime, so it’s really important to get it right and make sure you have no regrets once the contract is signed.”

She added: “Once you’ve found your dream home, make sure you shop around for the best deal on your mortgage, surveys and home insurance”.

Tags: buying, Financial economics, survey, in.janet pell, percentage, list, AA Insurance, economics

Mortgage figures fall in July

July saw a decrease in the amount of mortgages being taken out, according to figures released recently by the Council Mortgage Lenders (CML).

The value of those mortgages that were given also fell, the CML statistics showed.

However, when not accounting for lending for house purchase or remortgages, lending overall actually grew to £7.8 billion in July, its highest-ever figure.

Michael Coogan, CML director general, commented: “A slight fall in lending between June and July has emerged for the third year in a row, so of course we cannot read too much into a single month’s figures.

“But the long-anticipated slowdown in the housing and mortgage markets may now be beginning to materialise.”

Affordability is “ever more stretched” he added, but Britons will not see any let up in the financial troubles they face soon.

Meanwhile, Halifax’s latest house price index has shown that the average price of a house in England and Wales has risen to nearly £200,000.

Tags: United States Department of Housing and Urban Development, Council Mortgage Lenders, year, economics, single month, mortgage markets, General, slight fall

Insurers count costs of floods

The floods in the West Country last month, along with the Central England floods in June, have cumulatively been termed the worst in 60 years in the UK.

Now, as the waters have receded, Britain’s insurers have been counting the costs.

Aviva, owner of Norwich Union and the biggest insurance company in the country, announced last week that it faced £340 million-worth of claims, split evenly between the two deluges.

Royal Bank of Scotland, the UK’s second-largest home insurer said that the floods would cost them around £250 million.

Insurance premiums for extreme weather conditions are likely to go up nationwide, with those in areas which have previously flooded likely to be most severely affected.

Last month, the Association of British Insurers (ABI) was forced to revise its estimates upwards for the recent floods to a grand total of £2.5 billion.

According to Risk Management Solutions, the damage caused by the floods was much smaller than that wreaked by those in 1947, which would cost “between £4.5 billion and £6 billion” if repeated today.

Tags: damage, economics, insurers, West Country, home insurance, June, Central England, bank of scotland

ABI survey urges insurers to “come clean” on customer comments

An independent panel has urged insurers to give “warts and all” accounts of their performance, as they publish results from Britain’s first nationwide insurers’ survey.

Run by the Association of British Insurers (ABI), the Customer Impact study – currently in its first year – asked 18,000 insurance holders to rate their provider on products, sales and service.

Many major insurers have already published their first reports on how customers have rated them.

The Consumer Impact Panel, however, has expressed concern as to whether results have been especially selected to cast the insurer in as favourable a light as possible.

Chairman of the panel, former Scottish Widows boss Mike Ross, said: “Firms should present a balanced assessment of what customers think, with no cherry picking and should have a comparison of their performance against the industry average.

“Companies should be honest about their areas of weakness and show what action they are taking to address these weaknesses.”

Tags: widows boss mike, consumer, economics, insurer, finance, action, mike ross, service.Many major insurers

ABI issues warning as floods worsen

The Association of British Insurers (ABI) said yesterday that the floods in Southern and Western England, still ongoing, could hit the industry for “hundreds of millions of pounds” in claims.

With flood levels at 60-year highs in places, and with waters still rising, the ABI made its sombre announcement based on calculations that the average business would claim £100,000, and the average home £15,000 to £30,000.

Last month’s catastrophic floods in the Midlands already carry an estimated £2 billion insurance bill, according to the association.

Gordon Brown, visiting Gloucestershire – the worst-affected area by the floods – today, told reporters that “what we saw here was a month’s rainfall in some places in an hour, something that was quite unprecedented, and put enormous pressure on water and the emergency services”.

The Financial Times estimates the average insurance payout for storm damage in a year as between £400 million and £800 million.

Tags: something, Gloucestershire, United Kingdom, Southern, water, insurance bill, The Financial Times, economics

Holidaymakers miss home within 10 days

Brits holidaying abroad begin to miss home within nine to ten days of arriving at their destination.

That is according to new research by Halifax Travel Insurance which shows that holidaying Britons often take a number of ‘British’ items abroad with them to remind them of home.

The top items include teabags, British beer, cornflakes, ketchup and biscuits but many holidaymakers also pack DVDs of British shows as they are not keen on the prospect of foreign TV.

According to Halifax, this could potentially lead to financial loss for many if their travel insurance policy does not cover the loss or damage of these things.

In addition, many travellers could get themselves into trouble by not checking regulations in particular countries regarding the importation of specific items.

“Holidaymakers who do not check regulations regarding the importation of food and drink into a country could find items being confiscated and destroyed,” said Vicky Emmott from Halifax Travel Insurance.

“Visiting the FCO [Foreign and Commonwealth Office] website before departure can help travellers avoid delays and incidents when taking consumables abroad.

“Travellers taking expensive DVDs and music abroad should also ensure that it is adequately covered should it be damaged in transit or stolen,” she added.

The research showed that people from Wales, the Midlands and eastern England are the most likely to miss home while abroad.

Tags: foreign tv.according, vicky, economics, foreign, DVDs, Halifax Travel Insurance, country

Homebuyers ‘prudent’ over mortgages

Homebuyers are increasingly prepared to take special measures to avoid getting a mortgage that will push them to their financial limits.

As the Bank of England continues to increase interest rates, many first-time buyers are cutting back on other expenses so that they will be in a better position to cope should rates rise further.

Research by Yorkshire Bank shows that 24 per cent of buyers are keen to avoid maxing out on a mortgage and this is leading to a change in lifestyle for many.

Almost a quarter of those asked said that owning their own home is so important to them that they are prepared to give up holidays, nice cars and cut back their social life to be able to afford one.

With 77 per cent of Brits apparently expecting further interest rate rises in the next year, it is little wonder that so many people are looking ahead and do not want to strain their finances too much.

“What our survey shows is prudence, not panic – all the signs are that the market will still remain strong,” commented Gary Lumby, head of retail at Yorkshire Bank.

“But with rises in the Bank of England’s base rate and with many economists predicting a further rise if not next month, then in the near future, it is inevitable that homebuyers will become a little more cautious with their borrowing.”

The research also found that 70 per cent of buyers expect house prices to increase in the next 12 months but only 17 per cent are prepared to offer the full asking price right away.

Tags: retail, rise, Banking, economics, yorkshire

Mortgage lending down

Mortgage lending fell in April of this year but is still markedly higher than the same period in 2006.

Figures from the Council of Mortgage Lenders (CML) show that borrowing fell to £28.8 billion in the month.

That is down nine per cent on the £31.7 billion which was borrowed in March but remains 18 per cent higher than figures from April 2006.

It is also the highest ever figure recorded for April but CML officials say that the market is levelling out.

“Lending is still strong, but it does seem to be stabilising in 2007 following its major growth in 2006,” said Michael Coogan, director general at the CML.

“With higher interest rates now beginning to have an impact, the modest slowing in activity that we have been expecting over the rest of the year looks set to materialise.

“Even so, we continue to expect lending in 2007 to be around four to five per cent higher than in 2006,” he added.

Tags: figure, materialise, modest slowing, economics, borrowing, April, month, rest

Buy-to-let grows, so does rent

The number of people taking out a mortgage for a buy-to-let property has remained constant despite a series of interest rate rises in the last year.

Some experts had predicted that as the cost of borrowing increased, landlords would shy away from increasing the number of properties they own.

However, figures from specialist lender Paragon show that they are continuing to increase their portfolios and simply charging increased rent to cover the costs.

In the last three months alone, the average rent charged on a buy-to-let property grew by 6.5 per cent.

“The market remains buoyant for both intermediaries and lenders, with good volumes of business for both property purchase and for refinancing of existing portfolios,” said John Heron, managing director of Paragon.

“Investors are encouraged by the strength of tenant demand, which enables them to increase rents on existing tenancies when they are renewed and apply a higher rent to new tenants than they would have charged three or six months ago.”

Almost a third of landlords said that they had increased rent due to rising borrowing costs.

Tags: strength, refinancing, demand, economics, Financial economics, cent."The market, specialist lender, year

Record mortgage lending figures

New figures from the Council of Mortgage Lenders (CML) show that we borrowed a record amount of money in March 2007.

In total, £31.3 billion was leant to people who took out a mortgage on a house, representing an all-time record for lending figures in March.

It is the most amount of money that has ever been borrowed during the month of March and shows that the housing market is still very strong.

The figure for March represents a 22 per cent increase on the amount borrowed in February and a 10 per cent rise on the £28.3 billion which was leant in March 2006.

“This is the highest-ever March lending figure,” said Michael Coogan, director general of the CML.

“It is clear that many borrowers are taking sensible steps to shelter against higher mortgage costs.”

Despite the increasing figures, the CML says that the high levels of mortgage lending may not continue for much longer.

“There is still a question mark over just how strong mortgage lending will be over the coming months as the prospect of higher interest rates takes its toll on demand,” added Mr Coogan.

“But, we continue to expect mortgage lending to reach a record £360 billion this year.”

Tags: economics, director general, question mark, Mr Coogan, sensible steps, money

Credit card customers urged to check statements

UK payments association Apacs has urged credit card customers to check their statements carefully, as many people are currently guilty of not doing so.

According to research by the group, nearly half of all credit card users do not check their product statements thoroughly.

A surprising four per cent of respondents to the survey said that they never look at their credit card statements.

To help people make sense of communications from their provider, Apacs has created an advice guide explaining everything about the features and terms included in statements and giving hints on how to understand various details and terminology.

Sandra Quinn, director of communications at Apacs, said: “Although people are getting better at checking their statements, our research suggests that there is still a lot of work to be done.

“Armed with this advice guide we believe consumers will be better equipped to get the most from their credit card statement.”

The association’s study reveals that Yorkshire and Humberside is the worst region for ignoring credit card updates, with nine per cent of people admitting to never checking their statements.

Tags: Association, credit, worst region, economics, apacs, credit card statement, Banking

RBS launches mortgage options for spring

The Royal Bank of Scotland (RBS) has announced a number of new mortgage offers for the coming season, including a two-year fixed-rate deal at 5.19 per cent.

This package is available to cover up to 75 per cent of the value of a property and charges a product fee of £499. RBS states that this offer will suit homeowners and remortgage customers who like to know what their monthly repayments will be.

A two-year base-rate tracker mortgage has also been unveiled, currently priced at 4.95 per cent – 0.3 per cent below the Bank of England base rate – with a fee of £999.

Completing the new portfolio of products is a deal for people who have already paid off a chunk of their mortgage. This offer is available with a two-year fixed interest rate of 4.99 per cent, for loans covering up to 50 per cent of the value of a home.

This package is only available to existing RBS current account holders.

Darrell Evans, commercial and product director for RBS Mortgages, said: “With some uncertainty on what will happen to interest rates, home buyers and remortgagers will be looking for the best deal possible.

“We’ve provided a great choice of competitive deals to match the needs of either first-time buyers, switchers or those remortgaging.”

Tags: best deal, remortgaging, bank of england base rate, economics, interest rate, Royal Bank of Scotland, new mortgage offers, RBS launches mortgage

Insurers still have work to do

A new survey shows that most of us are pleased with the service we receive from insurers but many firms are still failing to deliver in specific areas.

The Association of British Insurers (ABI) asked thousands of people to take part in the Customer Impact survey and the results were generally positive.

However, despite the majority of customers (55 per cent) saying that they would be “extremely” or “very likely” to recommend their insurance firm to a friend, 20 per cent responded with a negative “not at all” or “not very likely”.

A massive 85 per cent of those questioned said that their company was easy to do business with, while 53 per cent were either “extremely” or “very satisfied” with the service they received.

Customers generally rated the insurance sales process as “very good” or “excellent”, with 58 per cent of people responding in this way.

Despite these positive figures, customers said that the thing most lacking in the sales process is clarity of information at the point of sale.

In addition, the complaints process was also highlighted as being in need of fine tuning, with four per cent of people having complained in the last 12 months and 50 per cent of these describing the handling of their complaint as “poor”.

“This year’s survey shows a strong position in several areas, and room for improvement in others,” said Stephen Sklaroff from ABI.

“Each company will review their own performance against the industry results, and where necessary take action to improve.”

Tags: economics, room, sale.In addition, Impact, British Insurers, year, industry results, percentage

Costs may fall on 100% mortgages

The fact that many first-time buyers are taking out 100 per cent mortgages may be a good thing.

Many commentators and industry experts have warned that the mortgages are dangerous as youngsters are being saddled with large amounts of debt.

However, Ray Boulger, a senior technical manager at John Charcol, says with more people getting them, we will soon start to see 100 per cent mortgages that are value for money.

“Despite the furore surrounding the availability of mortgages reaching as much as 125 or 130 per cent of a property’s value,” he said.

“In actual fact, very few people qualify for that amount of money and the average plus size loan to value is more like 103 per cent.

“The good news for borrowers here is that as competition increases, the premiums usually associated with these kinds of mortgages should be reduced,” added Mr Boulger.

The rise on popularity of 100 per cent mortgages is down to an increased number of people going to universities, according to Mr Boulger, with more people coming away with debt which prevents them from being able to save up for a deposit.

It is predicted by the technical manager that the cost of borrowing on a 100 per cent mortgage will “come down by the year end”.

Tags: Ray Boulger, mortgage, year end, borrowing, economics, popularity

Skiers warned over insurance

Holidaymakers planning a skiing trip in the coming months are being warned to check their travel insurance policy before setting off.

The Post Office says that the mild winter has left many people disappointed, as there has not been enough snowfall.

Recent weeks have seen a fairly heavy dumping in many parts of Europe, but the travel insurance provider says that there is still a risk that a lack of snow may stop play.

The firm warns holidaymakers to check their travel insurance policy before setting off, ensure that they are covered and read the small print to make sure there are no hidden surprises.

“So far, this ski season has been among the worst on record in Europe with some areas having little or no snowfall,” said Kevin McAdam from the Post Office. “This can mean limited time on the slopes, plus an increased risk of injury or damage to equipment due to poor conditions.

“This may leave people without the holiday they would have wanted and looking for some form of compensation.

“Our advice is to make sure you know exactly what your cover offers before you go and, importantly, what evidence you need to have before you come home,” he added.

Mr McAdam went on to say that many insurance companies will only pay out if all of the slopes are closed for 12, or even 24, hours. Many firms also want written confirmation from authorities that the slopes were closed.

Tags: economics, Hospitality Recreation, small print, risk, holiday, insurance policy, winter, insurance companies

Housing market may be cooling

There are very early signs that the UK housing market may be slowing down.

That is according to Nationwide Building Society, which says house price growth in January was the lowest it has been for eight months.

According to the firm, prices increased by just 0.3 per cent in January, a significant drop on the 1.2 per cent increase seen in December.

“House prices increased by just 0.3 per cent in January, the smallest monthly rise since May last year, which pulled the annual rate of house price growth back into single digits,” said Fionnuala Earley from Nationwide.

“Prices increased at an annual rate of 9.3 per cent in January, down from 10.5 per cent last month.”

The building society has also predicted that house prices will remain firm despite the recent rise in interest rates and the possibility of further rises in the year ahead.

“2007 started off with a bang as the Bank of England raised interest rates for the third time in six months. Only time will tell how much the surprise decision will affect sentiment in the housing market,” added Ms Earley.

The average price of a house in the UK currently stands at £173,225, down from the £173,746 price in December.

Tags: Nationwide Building Society, house, Fionnuala Earley, price, significant drop, firm, economics

New car? New insurance

A new year brings a new set of registration plates and quite often a new car.

However, insuarncewide.com is warning drivers not to get too caught up in the excitement of buying a new car that they forget all about insurance.

The firm says that simply transferring your previous insurance policy could leave you out of pocket and it is always worth shopping around.

“Think new car, new policy, or at least do your research online to check whether you could get a better deal than your existing policy offers,” said James Harrison, chief executive of insurancewide.com.

“A driver’s profile will constantly change. Your age, occupation, address and type of car all affect your premium and the type of insurer capable of offering the most competitive product and price.”

Mr Harrison went on to say that it may be worth talking to your dealer to see if there is a period of free insurance on offer when buying the vehicle.

He also pointed out that many discounts are available online, before adding that those seeking insurance need to have their wits about them.

“Finally, don’t be misled by insurers’ advertising campaigns that don’t tell the whole story or that don’t really apply to you,” added Mr Harrison.

“Decide what cover you need for your own circumstances, then look for it.”

Tags: insurance policy, story, new insurance, Mr Harrison, com, economics, don't tell

Chip and pin scare

Fears are growing that criminals may soon be able to collect customer information from doctored chip and pin machines.

Credit card holders could be targeted if thieves get their hands on the information which was discovered by a specialist research team at Cambridge University.

The team claims to have achieved its goal of reconfiguring a machine, allowing it to copy personal account and pin numbers.

This information can then be used to create fake cards, leaving consumers vulnerable to theft from their account.

It took just one month and £1,000 for the researchers to crack the system, with team members saying that all of the information and equipment is available over the internet from computer manufacturers.

The researchers specialise in testing the security of electronic hardware and the payments association Apacs says it is unlikely that the scam will be carried out on the high street.

An Apacs statement said: “People could, in theory, use this to steal account details from cards. Our experts are in discussion with the manufacturers of terminals to see what can be done.”

Tags: scare, pin scare, GBP, information, street, thieves, security, economics