Demand continues to outstrip rental supply for most lettings agents

In the past, many people who went into private rental accommodation did so as a stop gap before getting a mortgage and buying their own home. However, over recent years things have changed radically and many of those in private rented homes are having to be in it for the long haul because they are unable to get the finance that they need to get onto the property ladder for themselves of are too concerned about matters such as the economy and their job security.

Demand for rental accommodation has soared over the past couple of years, rising to unprecedented heights and resulting in demand by far outstripping supply in many areas. According to the Association of Residential Letting Agents the situation is now becoming difficult because the private rental sector has come under increased strain. The association said that a rising number of its members are now reporting far greater demand than supply.

Around three quarters of ARLA members are said to have seen demand outstripping supply in the private rental sector, with more and more people struggling with mortgages and opting for private rental homes instead. ARLA also said that tenants were now staying in their rented homes for record periods, having reached a record high of nineteen months. London and the South East have seen particularly high levels of demand according to figures.

Tim Hyatt, president of ARLA, said: “The UK cannot rely on the rental sector to support the housing market in perpetuity. The reality is that there is a finite amount of rental property and unless both housing supply and mortgage availability improves then renters will find that their options in the market are reduced.”

Tags: high, Association, stop, private rental sector, arla

Banks fleecing customers with overdraft fees

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

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

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

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

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

Some savings accounts increase interest rates

Some savers in the UK are set to benefit from increased interest rates on their savings, with a number of financial institutions increasing the rates that they will pay savers even though the base interest rate has remained static at 0.5 percent, which is its lowest level in the three hundred and fifteen year history of the Bank of England. Read more

Tags: good news, savings accounts, uk, high interest debt, year, largest competitor, cash, high

Possible good news for NatWest customers

There could be some good news in the pipeline for customers of the bank, NatWest, if they have been trying to reclaim past overdraft charges that were applied to their accounts. Read more

Tags: bank accounts, overdraft, judge, high, bank

Tips offered on mortgage protection

Don’t borrow more than you can afford and seek independent advice before buying are just two of the mortgage protection tips offered by industry experts, LifeSearch.

The guidance arrives as consumer confidence has been affected by the Northern Rock crisis. Interest rates are also near a six-year high at 5.5 per cent, despite coming down last week.

Matt Morris, LifeSearch policy adviser, said: “Many people consider protecting their mortgage, but they usually select a policy that will pay it for them when they can’t work.”

He added that what they actually should be protecting is their income, which not only pays the mortgage, but also pays all the other bills and the everyday cost of living.

LifeSearch also advises consumers to check employee benefits, not to buy Mortgage Payment Protection Insurance without considering Income Protection and ultimately take some form of action.

LifeSearch is a life insurance and protection specialist which was established in 1997. It currently has over 200,000 customers and more than £13 billion worth of cover arranged.

Tags: Many people, mortgage, specialist, life, week, Financial economics

Many savers being fooled by Internet savings accounts

According to a recent report from This is Money, many savers across the UK are being tricked into parting with their hard earned cash by seemingly tempting high interest Internet savings accounts that look far better than they actually are.

A number of Internet savings accounts, some from big name banks such as Alliance and Leicester or the Abbey, are offering eye-catching interest rates that have got consumers flocking to open up an account. However, experts state that there is a massive sting in the tail.

What many consumers are failing to realize is that many of these accounts will only pay this rate of interest in the event that the money in the account remains untouched, and just one withdrawal from the account could seriously impact on the amount of interest that you receive. For those that do make withdrawals the interest rate is docked to the point where it falls behind many of the best buy savings accounts on offer at present.

The highest paying of these seemingly high interest savings accounts is Coventry Online, but industry officials state that even if you did open an account and did not make any withdrawals you would only receive 80 pence more for each £1000 of savings than you would with the ICICI Bank’s HiSave Account, which is currently Money Mail’s best buy savings account.

Consumers that are hunting around for a place to put their savings are urged to ensure that they read the small print with these Internet savings accounts, and do not jump in feet first based just on the eye-catching interest rates that are advertised, as the amount of interest that is received may not be close the interest rate advertised.

Tom Smith
5th December 2007

Tags: introductory, savings, deposits, attractive, rates, high, earn, interest

‘Tis the season to avoid store cards

As Christmas continued to get nearer and nearer experts have been warning consumers across the UK to avoid the temptation as taking out a store card, as this could lead to high levels of debt and real financial difficulties once the festive season is over.

With December upon us millions of shoppers are hitting the high streets and shopping malls to get their gift, clothes, and other Christmas goodies, and many retail staff are just waiting to pounce and talk vulnerable consumers into taking out a store card.

Store cards are fine for those that will repay their balance in full each month, thus avoiding any interest charges, but many experts state that consumers would be far better off with a rewards based credit card, as you can still avoid paying interest by repaying the balance in full each month, you can still enjoy benefits in the form of rewards, and you have the luxury of choice, as you can use the card in any shop rather than only at a specific shop.

However, the real problem is with those that do not repay their balance in full, as store cards charge very high rates of interest, and the interest that you will pay on any outstanding balance will by far exceed any rewards and discounts that you receive. Therefore those that wish to spread repayments on their Christmas spending are strongly advised to opt for a 0% purchase credit card in order to avoid paying interest rather than an expensive and restrictive store card.

One industry official stated: ‘With storecards the advice is simple: Don’t use them, avoid the gimmicks, don’t be lured in. Invariably people forget about spending on their plastic, or they use credit precisely because they know they won’t be able to repay the debt immediately. Under those circumstances there is no more expensive form of borrowing than a storecard. The discounts can be attractive, and some storecards offer 0% deals if you spend a lot of money in-store. So if you’re adamant you need a storecard, ensure you make the most of it by keeping up to speed on all the incentives on offer.’

Tom Smith
1st December 2007

Tags: incentives, credit, store, cost, high, cards

Foreign currency mortgages: Long-term debt solution

Investors in the UK could find that taking out a foreign currency mortgage will clear their debt in the long term, it has emerged.

According to David Alexander, chief executive at Alexander Associates Group, the best option for those hoping to rely on the strengthening sterling to reduce their debt is a multi-currency mortgage.

“You would hope over a period of 25 years that you would clear your whole mortgage if you’re managing it via a multi-currency mortgage… You would hope that on an annual basis you would average five per cent reduction in your debt,” he said.

He added that those going into a multi-currency mortgage must understand the fact that it is always a long term investment, “just as a mortgage is a long-term debt”.

Reuters reported the pound reaching a four and a half year low against the euro this week, which is also currently enjoying an all-time high against the US dollar.

Tags: alexander associates, Financial services, fact, David Alexander, uk, finance, long term investment, high

Financial fraud sees continued upwards trend

Recent data for the end of the third quarter shows that fraud is still on the increase.

According to CIFAS fraud prevention service, there has been a rise in the majority of the different areas of financial fraud.

Cases of application fraud for the aquiring of credit, insurance or other products, was up by 23 per cent with a total of 57,321 cases uncovered members of CIFAS.

Asset conversion and facility takeover cases showed sharp increases in the first three quarters of this year compared to the same period in 2006, at 24 per cent and 34 per cent.

Meanwhile, false insurance claims rose by nearly nine per cent in the same period.

Chief executive of CIFAS, Peter Hurst, commented on the findings: “Our statistics for the first three quarters of the year show a clear and worrying trend. Fraudulent activity is at an all-time high.

“Fraudsters are becoming more sophisticated and fraud departments are working harder than ever to protect their organisations from the onslaught.”

CIFAS members prevented financial losses valued at £1,900 per minute this year, compared with £1,400 per minute last year in the same period.

Tags: false insurance claims, insurance claims, rise, high, finance, prevention service, chief executive, identity theft

Interest payments on current accounts to be abolished by First Direct

The Internet banking arm of the HSBC, First Direct, has announced that it will be cutting interest charges on current accounts for customers.

According to officials from the bank the money that is saved from not having to pay interest on current accounts will be used to increase interest rates paid on savings accounts. However, following the mass exodus of customers earlier this year, after the bank announced that some customers would be charged monthly fees of £10, this could be a bad move for the online bank.

First Direct currently has two current accounts in place, and although these accounts do not enjoy the greatest interest rates there is still interest paid on deposits. The cheque account offers an interest rate of just 0.1% on credit balances, whilst the bank account offers 2%. However, in November the two accounts will be merged to create just one standard account known as the 1st Account, and this will pay no interest at all on credit balances.

Officials from First Direct state that customers will be compensated by way of better deals on their savings. An instant access account paying 5.5% will be available, although this is still far lower than the best buy savings accounts offered by other financial institutions, with the highest currently standing at 6.3%. An interest free overdraft facility of £250 will also be available to customers, along with free text banking that could help customers to avoid penalty charges applied when the account goes over its limit.

An official from the bank stated: “A staggering 96 per cent of our customers told us credit interest wasn’t an important factor in choosing to bank with us. We figured it made far more sense to use every single penny we now pay in credit interest to give customers the chance to earn serious interest on higher-interest savings accounts.”

Tom Smith
26th October 2007

Tags: customers, accounts, direct, savings, first

Icesave launches new fixed rate accounts for savers

Icesave, which is currently celebrating its first birthday, has announced the launch of a number of fixed rate savings accounts for customers wishing to save between £1000 and £2 million.

These accounts allow customers to choose from one, two, or three year terms, also enabling them to choose between having their interest paid on a monthly basis or an annual basis. By choosing one of these accounts savers can lock in the interest at a fixed rate for the set term, which means that the interest rate on the savings account will not fall even if the base rate set by the Bank of England does.

Experts state that the two and three year fixed rate deals from Icesave are impressive. The three year account enables savers to enjoy interest rates of 6.31% if paid monthly and 6.5% if paid annually. With the two year account savers can enjoy 6.41% if paid monthly and 6.6% if paid annually. The one year account enables savers to enjoy 6.5% if paid monthly and 6.7% if paid annually. However, a number of industry professionals have stated that there are better one year accounts out there, and savers should shop around.

One industry professional stated: ‘The fixed-rate market is not like the variable market where you have a whole load of other factors and restrictions to consider, so the rate itself is key. On that basis, the Icesave two- and three-year accounts are the best at the moment, but you should probably look elsewhere for a one-year rate.’

Another industry official said: ‘In the fixed-rate market, if you are not being offered the best rate then it is so-so. However rates in this market are not good at the moment: they are so close to variable rates, you have to question whether it is worth locking in your money for the given period. The one-year market is very competitive at the moment. Nottingham’s 6.83% offers a good margin over variable rates, so if you are looking for a one-year bond at the moment, that’s the one you should go with.’

Tom Smith
26th October 2007

Tags: savers, high, earn, market, fixed, Banking, interest

Over 50s could enjoy great deal on their savings

Over recent weeks a number of high interest savings accounts have come to light, with many experts urging apathetic consumers to make the effort and switch from a lower interest account to one of the higher interest ones, including Icesave, ICICI, and Sainsbury’s Internet savings accounts.

A new player has now entered the field of higher interest savings accounts, this time targeting the over 50s. The account is being made available from Saga, and is offering 6.2% before tax on deposits of £1 and over.

The account will pay a minimum of the base rate plus 0.45% for the first year, and then for the second year will pay a minimum of the base rate. After year two the account promises to pay at least the base rate minus 0.25%. Any base rate changes will also be passed on to savers within two days, which will be refreshing news for many savers that have been left waiting following base rate rises whilst banks quickly act upon pushing up the rates on borrowing and then dawdle over putting up interest rates for savers.

Savers in the UK have been urged by industry professionals to start taking action in order to make the most of their savings, as it was found that many had left their savings stagnating in low interest accounts where the banks had failed to pass on all of sometimes any of the interest rate rises. Although the savings such as those from Sainsbury’s and IceSave are still recommended for the under 50s according to This is Money, the new Saga account could prove invaluable for savers over the age of 50.

Tom Smith
27th September 2007

Tags: interest, building society, Banking, low, grow, bank, savings, accounts, high

Banks have paid out £200 million this year

According to the latest statistics banks in the UK have already paid out over £200 million this year in the form of repaid bank charges to customers that have made claims for any charged imposed over the past six years.

The study shows that over £200 million has been paid out in just the past seven months alone reflecting the financial problems that have resulted for banks as a result of these bank charges.

The report was put together by Credit Suisse, and suggests that around 1% of the profits of the major groups will be lost as a result of repaying these bank charges, which have been dominating the financial headlines in the UK over recent months. In addition to having to repay these charges, which have amounted to thousands of pounds for some customers, banks have also had to take on extra staff to deal with the flood of claims, which has cost even more.

Although banks have been doing their best to get out of having to pay these charges back to customers, they have also been unable to justify the charges to courts and regulatory authorities. Banks have traditionally charged up to around £35 for exceeding an overdraft limit and for returned cheques and direct debits. However, the cost actually incurred by the bank is though to be around £2-£5, which means that the banks have been making hefty profits from the charges.

A decision with regards to bank charges, and what can be classed as a fair fee, is expected at the end of the year. It was expected earlier but was postponed so that further reviews could be carried out following concerns that free banking in the UK could come to an end as a result of these bank charge claims.

Tom Smith
13th September 2007

Tags: reclaim, claims, fee, high, bank, court, lost, charges

Interest rate rise reaction

The Bank of England yesterday (July 5th) announced another 0.25 per cent increase in the base rate, taking it to a six-year high of 5.75 per cent.

Mortgage holders, credit card borrowers and those with loans will be hit hardest and many industry figures are warning of the implications of the rise.

Citizens Advice warns that many people will be adversely affected by the rate rise and says that it has seen an increasing number of people visiting its local bureaux after falling behind with mortgage payments.

It says that the rate rise will tip over the edge those who are just about struggling along and is calling upon lenders to be sympathetic to their borrowers.

Despite the dangers associated with a base rate increase, many first-time buyers (FTBs) will not be deterred from trying to get onto the property ladder.

That is according to new research by Bradford & Bingley that shows 46 per cent of FTBs are concerned that house prices will become even more unaffordable in the future and so do not want to wait.

Many industry figures are predicting that the Bank of England will announce a further rate rise before the end of the year, taking the base level to six per cent.

However, this could lead to further criticism from many, with Scottish Widows Investment Partnership already saying that a further rise is unnecessary as it expects inflation to fall in the coming months.

Tags: rate rise, Loans, high, cent increase, cent, advice

Pet Insurance

It’s a Dog’s Life

Whether you have received a cute kitten or a puppy as a present or been out and bought one for yourself, vets bills and care of the animal are all part and parcel of being a pet owner. Insurance is there to help with the unexpected or even expected bills. Read more

Tags: dogs, plan, treatment, Insurance, pet