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

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Some areas are at risk of negative equity, claims expert

There are concerns that certain areas of the country may be prone to negative equity over the next two years, according to the UK property market information provider Mouseprice.

A survey published this month found that 23 per cent of 24 to 34-year-olds are worried about having negative equity and 13 per cent of respondents said they had decided to delay their plans to move until the situation in the housing market situation improves.

Jonathan Upton, business development director at Mouseprice, said: “The conditions that are required for negative equity are present in some areas,” adding that the situation will depend on the level of deposit that people took out, when they bought their house and the profile of the housing market where they live.

However, Mr Upton also commented that it is difficult to tell whether first-time buyers will be particularly hard hit.

In their favour, people who are not yet on the housing ladder may benefit from falling house prices, giving them a stronger hand in negotiations.

Tags: favour, survey, Business and Economy, business, provider mouseprice.a survey, business development, equity, house

Prepaid currency cards “more competitive” than credit cards

Holidaymakers are likely to favour prepaid currency cards over traditional travellers’ cheques, according to industry experts.

The currency cards are on offer from the Post Office, Barclay’s and Lloyds TSB and allow travellers to withdraw cash abroad. Travellers load the currency they need on to the card before setting off on their holiday.

Moneysupermarket.com explains that currency cards have the edge on credit cards because there are no fees for transactions. They can also be used by individuals who have difficulties acquiring credit.

Steve Willey, of Moneysupermarket.com, said: “In terms of their use, effectively they’re a traveller’s cheque replacement.

“Once people have got comfortable with the concept and realise that there are savings to be made, then I think this will become just ‘the way to do things’.”

Travellers are also protected against fraud because the card is frozen if it is stolen and the balance and card holder’s details remain protected.

Last year statistics from APACs revealed an increase of 77 per cent of fraud associated with cards stolen abroad.

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Tracker mortgages ‘best bet’

Tracker mortgages are the “best bet” for those consumers who want to benefit from falling interest rates this year, according to finance experts.

Moneysupermarket.com said that while rates have been going down, increasing numbers of consumers have been reverting to tracker mortgages.

Louise Cuming, head of mortgages at moneysupermarket.com, said: “At the moment, the percentage of customers that are on trackers… although it’s only 24 per cent, that’s the highest it’s been since back in 2005.”

She added that trend for rates is going to be down, so these products are useful for those spenders where affordability is no issue.

However, moneysupermarket.com warned that tracker mortgages should only be used by those consumers who can afford to risk higher repayments in the future.

The most recent figures from the Council of Mortgage Lenders, for December 2007, show that 29,600 tracker loans were taken out by homebuyers – making up 24 per cent of all home loans.

A survey by Fairinvestment.co.uk last week revealed that 23 per cent of Britons polled would favour a tracker mortgage.

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Consumers favour cards over cheques

The use of cheques by consumers is being increasingly shunned due to the popularity of debit and credit cards, one financial expert has claimed.

According to the Association of Payment Clearing Services (APACS), while cheques are still popular for use with certain payments, such as paying the window cleaner and as birthday presents, cards are the most popular with increasing numbers of consumers using them every year.

A spokesperson for APACS (female), said: “Part of it is a generational thing. Many of the older generation continue to use cheques and are very used to them.”

She added that “the younger generation, particularly those under 20, probably don’t even bother carrying a cheque book around with them”.

Meanwhile, findings from the APACS, there were over 4.4 million business and personal cheques issued each day in 2007, compared with 11 million in the peak year for cheque volumes, 1990.

The body predicts that by 2016 there will be only 2.3 million cheques per day.

Tags: older generation, personal cheques, favour, payment, debit and credit, business, book