New energy statements failing to make impact

A recent survey that was carried out has suggested that new energy statements that were launched to make the energy market more competitive and improve understanding of payments for consumers are failing to have the desired impact. The survey was carried out by the price comparison service uswitch.com and involved questioning consumers about the new annual energy statements that have been brought in.

However, despite the aims of the annual statements is appears that consumers had either not received the new statements or may have received them but did not realise that they had received them. The statements are supposed to have been delivered to all homes in the UK and are meant to explain the various discounts that are available on different tariffs so that consumers can get the best deal possible on their energy.

Any household that hasn’t yet received one of these statements is due to receive one soon, but many may not even realise that they have received their statement. One industry group has described the statements as a ‘huge undertaking’. Suppliers were told to start sending out the first of these statements by the end of last year by the energy regulator Ofgem. The aim of the statements is to make consumers more aware of their energy use and why they may be paying as much as they are, with the hope of encouraging more competition in the market.

Ann Robinson, director of consumer policy at Uswitch, said: “Annual statements are a linchpin of Ofgem’s push to get the competitive energy market working properly, but consumers clearly do not think they are coming up to scratch. The vast majority of households will have received an annual statement by now, but only 37% recognise that they have done so. The statements appear to be poorly labelled, difficult to understand and do not stand out from ordinary energy bills.”

Tags: energy market, industry group, market, consumer policy, end, new energy, energy regulator ofgem, price comparison service

Property prices end 2010 on low

It has been revealed by a major High Street lender that property prices in the UK ended last year on a low, having slid from the start of the year. The price of property in the UK was said to be around 1.6 percent lower at the end of 2010 than at the start of the year. The data was released by the banking giant Halifax, which said that property prices fell by 1.3 percent in December compared to the previous month.

It is thought that property prices have been driven down by a number of factors. One of these is that many homeowners are flocking to sell their homes whereas there is a distinct lack of interest from buyers. This is because many buyers are unable to get the mortgage finance that they need due to continued restrictions in the mortgage market, and many others simply don’t want to make a huge financial commitment in the current financial climate and with the uncertain future with regards to jobs.

A spokesperson from the Halifax said that if homeowners become more reluctant to sell this year the falling property price trend could be halted. He also said that it was unlikely that there would be much change in terms of movement in the property market over the course of this year, and this was because interest rates were unlikely to change.

The Halifax said: “Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.”

Another mortgage expert added: “While there has been an easing down of prices, as supply has come through and demand has weakened, in certain towns and cities, not least the capital, the right type of property is still commanding the right sort of price.”

Tags: future, mortgage, type, percent, Real estate, end, earnings growth, climate

Vehicle insurance related costs soar

It has been revealed in a recent report that costs relating to insuring cars and other vehicles have soared in the UK over recent months, resulting in many drivers who may already be struggling financially due to the cost of living and petrol prices finding it even more difficult to keep their vehicles on the road.

According to the report the costs associated with insuring a car or vehicle in the UK have increased by more than 14 percent in the second quarter of this year. The figures have come from the EMB Car Insurance Price Index and the online insurance comparison site Confused.

The rise in costs associated with insuring a car are much higher than the increases that were seen in the final quarter of last year and the first quarter of this year. In the last three months of 2009 costs relating to insuring a car increased by 4.3 percent, and in the first three months of this year the costs relating to insuring a car increased by 6.3 percent.

The massive increase in costs of over 14 percent seen in the second quarter of this year has resulted in around £74 being added to the average cost of car insurance for drivers. This reflects a total increase of 31 percent according to figures, and brings the average annual cost of car insurance to £599.

Some areas saw costs relating to car insurance rise more than others, and amongst those to be hardest hit were inner London and Manchester. Insurance officials have also said that this is not the end of the bad news for drivers, as many believe that the cost of vehicle insurance could continue to increase, which would mean even higher premiums for many cash strapped drivers.

Tags: Vehicle insurance, premiums, second quarter, car insurance, United Kingdom, quarter, Insurance, end

Credit card borrowing increased in December

Figures that have been released recently have shown that for the month of December the level of credit card borrowing increased, leading to an increase in overall consumer borrowing. Read more

Tags: Credit card, consumer debt, bank of england, consumer spending, sector, small increase

Warning for pensioners over tax codes

It was revealed recently that the systems being used by HM Revenue and Customs had resulted in millions of tax codes being incorrect, which in turn was leading to many people potentially paying too much or too little in the way of tax. Read more

Tags: Business Finance, end, Tax code, Taxation in the United Kingdom, amalgamation, customs, Low Incomes Tax Reform Group, finance

Store card customers to be penalised for being in credit

These days more and more people are wary of spending too much on credit, and this is why so many people have decided to cut back on spending on their credit and debit cards, which is a sensible decision given the mounting levels of personal debt in the UK. Read more

Tags: end, mothercare, GBP, house of fraser, debts, Credit Cards, store cards

Saving money when shopping for food

The ongoing financial climate in the UK means that we are all looking for ways to save money on our monthly outgoings, and one of the ways in which this can be done is to review your shopping habits. Many of us have shopping habits that end up costing us far more money than we actually need to spend, and in addition to this we also end up wasting a huge amount of food every week, which is basically money down the drain. Read more

Tags: save money, addition, plan, money saving tips, end, run out, long life, haven

Two building societies to merge

It has recently been revealed that two building societies, the Yorkshire and the Barnsley Building Societies, are to merge, with the larger Yorkshire building Society agreeing to the merger with its smaller rival in a form of rescue bid. This is one of a number of recent mergers and takeovers in the world of banking in the UK. The smaller building society, Barnsley, approached its rival with a view to a merger after losing a possible £10 million in the Icelandic bank collapse. Read more

Tags: december, building society, official, Yorkshire Building Society, nothing, end, exposure

2007 ended with lower lending levels from banks

A recent report has shown that there was a significantly lower level of lending to households from banks in the UK during the fourth quarter of last year. The information was released by the Bank of England, and officials from the Bank of England have put the drop in lending levels down to a number of different factors. The data came from the Bank of England’s Quarterly Credit Conditions Survey result. Read more

Tags: higher inter-bank charges, summer, interest rtae, bank of england, lenders rejecting applications, global slowdown, end, interest

Equifax: Be ‘cautious’ about ID fraud

Consumers should be more wary of people trying to steal their identity details, an expert at Equifax has advised.

Neil Munroe, external affairs director at Equifax, said that an individual’s personal credit profile could be worth “several times more” than their maximum limit on their credit card.

According to CIFAS, the total number of fraud cases the organisation received by the end of the first quarter of 2008 was 52,286, which represented an increase of ten per cent compared with the same period in 2007.

The number of occurrences which involved a fraudster impersonating someone in order to takeover their bank account were up by 146 per cent.

Mr Monroe commented that the authorities should also make an effort to combat the issue: “There is a list of precautions that individuals should take but it’s not just an individual’s fight, it is a combined fight and the government need to be doing more around it and so do companies.”

Tags: authorities, quarter, first quarter, credit, Financial services, end, Cifas, list

Avoid being the victim of credit card fraud

When it comes to credit cards consumers can look forward to a wide range of benefits, ranging from interest free credit and total convenience to flexible repayments and even a choice of rewards with some cards. However, there are also pitfalls to watch out for with credit cards, and one major concern for many people is the risk of credit card fraud. Although security relating to credit card use has become more sophisticated over recent years, the various credit card scams in operation in the UK have also become increasingly advanced, and as a result many people find themselves the victims of credit card fraud. Read more

Tags: end, credit card statements, signature strip, email link, free credit, personal finance, financial losses, credit card fraud

Borrowing to continue despite credit crunch

Consumers will continue to keep borrow, despite the credit crunch and its potentially ill effects, claims a financial expert.

Colin Jackson, director of Baronworth Investment Services, has said borrowers “get into a spiral” which could result in debt being built up.

Many people are now using credit cards to pay off their mortgages which is “the most awful situation to be in”, according to Mr Jackson.

He added: “If you’re using your credit card because you haven’t got enough money at the end of the month to pay anyway then you’ll run up bill on your credit card and where do you go next? Another credit card.”

Mr Jackson also said that consumers are finding it “very tough” to put money aside due to rising costs of day-to-day living.

The latest debt statistics from Credit Action shows that total consumer credit lending to individuals in October 2007 was £222 billion.

This figure has increased by 5.8 per cent in the last 12 months.

Tags: personal finance, bill, 12 months, Credit Action, awful situation, end, Credit history, crunch

Debt advisers expecting flood of enquiries

According to a recent report debt advisers across the UK are gearing themselves up for a flood of debt related enquiries as thousands of fixed rate mortgage deals come to an end. Many consumers across the UK took out fixed rate deals in 2005 for a two year period, with a low fixed rate of under 4.5% in many cases.
However, since that time interest rates have rocketed, with a series of five interest rate hikes in the space of a year, taking the rate up to 5.75%.

The credit crunch that was sparked in the United States sub-prime sectors has also had global repercussions, and has resulted in some lenders hiking up their mortgage rates even further. This means that the thousands of people that will be coming out of their fixed rate deals will not only face a huge rise in their interest rates and mortgage repayments, but will also find it increasingly difficult to remortgage to a more competitive deal.

Even those that switch to another fixed rate will have to fix at a far higher rate than they did in 2005, which means a huge rise in their monthly repayments.

It is thought that in the coming months around twelve thousand homeowners will see their fixed rate periods come to an end, and will face repayment rises of 40%. This means that many will have to find hundreds of pounds extra each month in order to continue with repayments on their mortgages, and this could send many households into the red, tipping them over the financial edge and leaving them facing repossession.

All homeowners that are due to come out of their fixed rate deals will face these problems, with many lenders having hiked up their standard variable rates to 8% or more. However, sub-prime borrowers will face severe affordability problems, as many sub-prime lenders have increased their rates to beyond 10% according to some experts.

It is thought that both the level of debt enquiries and the level of repossession will increase over the coming months as a result of this situation. The Consumer Credit Counselling Service has announced that it is opening a specialist repossession advice centre to deal with the severity of the situation.

Tom Smith
25th October 2007

Tags: consumer, fixed, debt, deals, rate

HSBC removes mortgage fees in promotion

In a reflection of the UK’s increasingly competitive mortgage market, high street bank HSBC has announced that it will axe all mortgage fees for two months, effective immediately.

The bank said that it was making the move as a reaction to the ongoing Financial Standards Authority (FSA) investigation into the charges.

Consumer groups have complained to the FSA that charges such as exit fees have been ramped up in recent years , while not costing providers any extra money over that period.

Head of mortgages at the bank Rob Chesters said: “With some lenders recently bowing to pressure to scrap their exit fees, HSBC has decided to stay one step ahead by removing all fees on its standard mortgage range until the end of September.”

Some advisers say, however, that the promotion might not be all that it seems. “With HSBC’s rates higher than many rivals, homeowners could be better off choosing to pay fees and head elsewhere”, This Is Money counsels.

The FSA is due to report its findings later in the year.

Tags: bank rob chesters, Financial Standards Authority, United Kingdom, consumer groups, hsbc, mortgage market

Mortgage bills set to soar for former fixed rate customers

Recent reports indicate that a million mortgage payers in the UK could soon see their mortgage repayments shoot up by over thirty percent in some cases, as their fixed rate deal comes to its end.

It is thought that consumers that took out a fixed rate deal several years ago for two or three years are going to have a shock, as their mortgage repayments soar to hundreds of pounds more per month as a result of the four interest rate rises enforced by the Bank of England over the past year.

Many consumers took out low rate fixed rate mortgages a few years ago, but these are now set to come to the end of their term, which means that those mortgage holders now have to face the financial pinch of all four interest rate rises in one fell swoop.

Although consumers could switch to another fixed rate deal once their previous one expires, it will be at a much higher rate than their previous one, which means that they will still have to pay out a small fortune each month in additional repayments.

Some industry professionals feel that the million or so people that are set to see their repayments soar over the next year may find it a real struggle to cope because of the amount by which their repayments will rise. It is likely that these customer took out a fixed rate at around 4.5 percent a couple of years ago, and the most favourable rates on fixed rate mortgages now are around 5.5 percent. And with interest rates set to rise again in the coming months this could rise yet again.

One banking analyst stated: ‘For some customers we see a 25-30% increase in interest payments.’

He also stated that those people that had to struggle with repayments in order to get onto the property ladder may now find that repayments are totally unmanageable because of the number of interest rate rises that have been applied since they took out their initial loan.

Tom Smith
19th June 2007

Tags: increase, fixed, end, cost, rate, introductory

Homeowners warned about fixed-rate deadline

Mortgage holders are being encouraged to plan ahead if they are due to reach the end of their fixed-rate deals in the coming months.

The Council of Mortgage Lenders (CML) says that around 1.3 million people took out a fixed-rate deal in 2005, while a further 1.5 million did the same in 2006.

Most would have had just a one or two-year period of paying a fixed rate and the CML is warning that borrowers must be prepared to start paying increased levels of interest.

According to the CML, the average borrower will face a rate increase of between 0.75 per cent and 1.5 per cent.

This could potentially have a devastating effect on many homeowners and, although the Bank of England has chosen to freeze interest rates at 5.5 per cent in June, rates are likely to increase further in the coming months.

“While today’s [June 7th's] decision not to raise rates is welcome, there is no cause for complacency. More than two million borrowers over the next year and a half will reach the end of fixed-rate deals, and will face the prospect of higher mortgage payments,” commented Michael Coogan, director general at the CML.

“For most people, the scale of the increase will be manageable. But it makes sense for borrowers whose fixed-rates will end soon to start planning ahead now and to recognise that their monthly costs will be higher in the future.

“Anyone who thinks they may face financial difficulties should talk to their lender at an early stage to see what steps can be taken to improve their situation,” he added.

Tags: end, increase, mortgage, financial difficulties, half, rate deals

Every town has average house price above £100k

The latest proof that house prices in the UK are less affordable than ever before has been provided by Halifax.

The bank’s House Price Index shows that for the first time ever, the average house price in every UK town is above £100,000.

At the end of 2006 the average price in Lochgelly, Fife, was below this threshold but the latest figures put the average home in the region at £104,738.

Despite this, the town remains the cheapest in the UK, however, the same cannot be said for towns in Northern Ireland.

The province completely dominates the top ten biggest house price increases of the last 12 months, with the average price sitting at £206,495.

It has been a rapid rise for Northern Ireland to being the fourth most expensive part of the UK from being the second cheapest just two years ago.

Despite the rising prices throughout the UK, Halifax bank remains confident that we will soon see the market slowing.

“Overall, [UK] house prices increased by 2.8 per cent in 2007 Q1, well below the 4.2 per cent rise in 2006 Q4,” said Martin Ellis, Halifax’s chief economist. “There is also evidence of reduced market activity.

“We expect the higher level of interest rates, negative real earnings growth and above inflation council tax bill increases to lead to slower house price growth over the coming months.”

Tags: q1, real earnings growth, end, cent, House price index, earnings growth, level, Council Tax

Delay in bank charges decision from OFT

The Office of Fair Trading has announced a decision to delay the decision with regards to what can be construed as a fair bank charge for those that default on their current accounts. Many experts were expecting a decision from the Office of Fair Trading this month, but the OFT has now stated that the decision will be left until the end of the this year, as further investigation in bank charges is required before any conclusion can be reached.

The decision by the OFT is good news for some people that are waiting to make a claim for unfair and unjustified charges, as it buys them extra time to make their claims without the level of their claim being affected by the OFT decision. The OFT has confirmed that an announcement about the further investigations in to these banks charges will be made around the end of April of this year.

Once a decision has been reached with regards to what is deemed to be a fair charge for those exceeding their overdraft limits and defaulting on their current account in others ways, future claimants will probably only be able to reclaim the difference between what they were originally charged and the amount that is deemed fair by the Office of Fair Trading, so this gives customers extra time to reclaim the full amount for which they were charged. On the other hand, this delay spells bad news for those that were looking to get lower fees from banks in the future.

One thing that has been worrying a number of consumers and experts in the field is the prospect of banks introducing account fees on current accounts if the charges are dramatically reduced in a bid to try and recoup costs.

Tom Smith
23/4/07

Tags: bank, delay, prospect, Bad news, consumer protection, end, Consumer Direct, overdraft

Borrowers paying too much interest

Britons are paying £9.3 billion too much interest through unsecured borrowing, leading to a worsening debt crisis.

That is according to Zopa, a marketplace for people to lend and borrow money from each other, which says that the majority of borrowers are being overcharged.

Zopa reveals that the end of 2006 saw every adult in the UK in debt to the tune of an average £4,611, with the money spread across credit cards, store cards, personal loans and overdrafts.

This is said to include £201, that the firm says is the average amount of interest which borrowers are being overcharged per year.

“The scale of personal debt in the UK is quite astonishing and the extent to which people are being ripped off by their banks, credit card and personal loan companies is simply outrageous,” said James Alexander, chief executive officer of Zopa.

“People in this country desperately need to start shopping around for a better deal. One of the best ways for people to take that important first step to getting their debt under control and managed properly is by taking advantage of the best interest rates available.”

Zopa claims to offer borrowers better deals by cutting out the banks in the whole lending process.

Those of you considering taking out a loan may find that borrowing in this way is attractive, however, the most important thing to do is to shop around for the best deal that suits your needs.

Tags: debt, officer, adult, Unsecured debt, GBP, loan companies, store, end

Idle homes making rich richer

A new breed of home-buyers is sweeping the nation, and particularly London, with the sole intention of making as much money as possible.

Super-rich investors are increasingly snapping up properties even though they have absolutely no intention of living in them. The idea is that they leave the house empty and wait for it to increase in value, before selling it on at a profit.

They have been labelled as buy-to-sitters and they tend to purchase homes at the high end of the market in order to see the biggest profits.

Lulu Egerton, from estate agents Lane Fox, says that many wealthy people see investing in property as something of a hobby.

“The super-rich acquire property in the same way as they buy fine art or fine wine – it almost turns into a kind of international collection,” Ms Egerton told the Evening Standard.

“It can happen over several years. Sometimes it’s no more than a whim, in other cases as families grow they move to a bigger property but the previous homes are neither sold nor let but held as assets.”

Becoming a buy-to-sitter is certainly a hobby which can only be indulged in by the very rich and is hardly helpful to first-time-buyers who are struggling to get a mortgage and buy a house.

“They have the right to hang on to what is undoubtedly a good investment but it does contribute to a real shortage of big houses at the very top of the market and does nothing to help London’s housing crisis,” said Richard Cotton from Cluttons estate agent.

For many Londoners the prospect of owning two homes is a distant dream, however a growing number of people find that they may be able to afford two properties if they leave the capital.

Tags: Cluttons, wine, money, sweeping the nation, nothing, end, Idle homes, biggest profits.lulu egerton

Endowment Mortgages UK – What Are They?

Interest only mortgages

Buying a house is the most expensive purchase you will ever make in your life. In the UK we are a nation of house buyers. In other countries they are quite happy renting property. Here, it’s our great history of land-owning that we can thank for the biggest millstone most of us carry for decades! Read more

Tags: massive growth, end, property, Mortgages, Margaret Thatcher