No change in UK interest rates

Following the August Monetary Policy Committee Meeting the Bank of England has announced that the base interest rate is once again to remain on hold at its lowest level in the history of the Bank of England. The base rate has been at its all time low of just 0.5 percent for well over two years now, which has provided relief for many homeowners and borrowers who have seen their monthly repayments plummet.

Economists have now predicted that the base rate will remain at this record low for the remainder of this year, with some even going as far as to say that it could remain at 0.5 percent next year as well. In a poll that included 32 economists the majority believed that it would be next year before the base rate was increased and a handful said that it could be 2013 before rates increased.

The news that the base rate is to remain on hold comes as no surprise to most industry experts, as the MPC is reacting to the fragile economy by keeping the base rate low. There will be many people that welcome the decision to keep rates low, such as those with mortgages on variable rates. However, there are also some groups that want to see rates increased in order to try and bring inflation levels down.

One group said that rather than increasing the base rate the MPC could look at further increasing the quantitative easing scheme, as this would increase the amount of money available to companies.

David Kern, chief economist at the British Chambers of Commerce, said: “Every effort must be made to sustain the recovery. If the economy weakens further, the MPC should not hesitate to increase the QE programme.”

Tags: time, scheme, bank of england, interest, rates, inflation, history, chief economist

Shapps wants more help for first time buyers

Since the onset of the global financial crisis banks have become increasingly cautious over their lending levels, and many people hoping to purchase a home have suffered as a result, particularly first time buyers who are being told they have to pay huge deposits to even stand a chance of getting a mortgage. Ministers are now concerned that the High Street banking giants are failing to offer loans to first time buyers even if they have excellent credit ratings and history.

In fact, concerns have become so bad that a meeting is being arranged for next month, where senior officials from major lenders will have to answer to ministers with regards to why lending levels are so high. Recent figures released by the British Banker’s Association have shown that mortgage approvals for 2010 fell to their second lowest level in eleven years, with the lowest number of approvals being seen in 2008.

It has been revealed that the Housing Minister, Grant Shapps, will be demanding answers from lenders with regards to why their lending levels are so low, and why they are no lending to first time buyers even if they have perfect credentials. There are concerns that this failure to lend to first time buyers, who are needed to keep the property market buoyant, could have a serious negative impact on the property market in the UK.

Shapps said: “We have to avoid pulling up the housing ladder and cutting off a whole generation of young people who want to buy their own home. We want to do more to help aspiring first-time buyers – the average age of the first-time buyer with no support from their family is now 37, and there are 1.4m households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability. So I’m calling together key figures from across industry to discuss how we can tackle this problem. “This cannot be achieved simply by top-down diktats from Government – there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market.”

Tags: history, first time buyers, level, Recent figures, Association, chance

Consumers receive better news about mortgages

After a year of tough times for those looking for a mortgage, consumers have finally received some good news over recent week. Read more

Tags: association costs, offer, Mortgages, income borrowers, history, free mortgage, demand, banks

RBS unveils huge losses

Banking giant, Royal Bank of Scotland, which also owns NatWest, has recently revealed huge losses of around £28 billion, which reflects the biggest loss in British commercial history. Read more

Tags: prime minister, bailout packages, giant, history, package, Banking, rbs, confidence

Brits don’t know how to detect ID theft

Almost all of us are aware that ID theft is a problem in the UK but worryingly, 42 million of us do not know how to check if we have been targeted.

New research by Capital One reveals that large numbers of us are clueless about how to discover if we have become a victim of the crime and only ten per cent know what action to take if our ID has been stolen.

“It is concerning how many people we asked had no idea how to tell if their ID had been stolen, or what to do about it if they had unfortunately become a victim,” said Sanjiv Yajnik, principal managing director at Capital One.

“The tell-tale signs of ID theft often include unexplained items appearing on bank and credit card statements, receipt of bills and receipts of goods or services you haven’t asked for, being told you are already claiming state benefits you weren’t aware of or being refused a financial service despite having a good credit history.”

The study found that 99 per cent are aware of what ID theft is and 41 per cent are concerned that they will become a victim.

However, despite this, millions of Britons fail to take precautionary action to protect themselves from ID thieves.

Around 2.5 million people still throw confidential documents away without shredding them, five million leave personal information lying around and 4.5 million regularly carry personal documents around with them in wallets and handbags.

Capital One points out that this is leaving many people open to ID theft which can lead to thieves getting credit cards and loans in your name.

This in turn can lead to problems for the victim when it comes to getting a mortgage or other financial product in the future.

Tags: Sanjiv, history, cent, service, 5 million

How To Build Up a Good Credit Rating

It is evidently not a good thing to have a bad credit rating. For example, it can limit your borrowing options. The sorts of thing that contributes to a poor credit rating are county court judgments, defaults on payments and bankcruptcy orders. In the case of circumstances such as these, the only way to get credit (loans, mortgages) is through the sub-prime market. Here the borrower is charged high rates of interest to reflect the apparent risk to the lender.

There are two main credit reference agencies who compile credit histories on individuals. These are Equifax and Experian. They take their information from sources such as the electoral roll, county court judgments and the payment of past debts. When anyone takes out a new form of credit it will leave a record which these credit agencies also draw upon. But it is not the credit agencies who make the decision about whether to offer credit to would-be borrowers. It is the lender who makes that decision, based on the information provided by the credit agencies and their own lending criteria.

Under the Data Protection Act, if a lender refuses you credit, it must tell you why. Under the Act, if scoring was used to help the lender decide not to give you credit, then you are entitled to ask for you application to be reviewed. Even it this doesn’t help you to get credit this time, you will be able to see your rating and where it might need improvement. Or it can highlight errors that may be on your record (and they do happen) and you can try to get them rectified.

If you do have a poor credit rating, it is a good thing to work to make it better. Although bankcruptcy remains on a rating for up to six years, a year of good credit practice should return a rating to a healthy state.

To begin with, you should ensure that you pay off your creditors on time. If you do have to miss a payment, tell the creditor and make sure that you make the payment the following month.

Even simple things like making sure you are on the electoral role and completing credit application forms correctly will help to improve your rating. Agencies allow people to explain why they may have had a poor credit performance, and a ‘notice of correction’ can be attached to their report explaining, for example, whey they missed payments.

It is worth buying access to your credit history from one of the agencies to make sure that everything is in order. As an example, if you have had a county court judgment, but have since paid the debt, make sure the payment is recorded on the file. If you have had a bankcruptcy order annulled, make sure a copy of the annulment or order of discharge is sent to credit agencies.

Another way of boosting your rating is to take out a store card and pay off the balance regularly and on time. The rating can be improved quickly by opening a variety of accounts, but make sure you do pay off the debt each month. You can also ask someone you know well (family or friend) with good credit history to co-sign for a small loan or credit card. This also helps your own rating.

It is a bad idea to keep applying for credit if you have already been refused by another lender. A lot of searches on history does not work in your favour. The tip is to ask the lender if you fir the profile of people they give credit to.

Having no credit record can be as bad as having a poor credit record. So if you have no credit record, start to build one up – a good one.

More Information:

• Credit Building Tactics
• Bad Credit-Credit Cards

Tom Smith
19th June 2007

Tags: adverse, payments, late, good, rating, record, history, bad, build

Secured Loans – What You Need To Know

It’s not always easy to manage your finances in the face of unforeseen or large expenses. People might have to deal with costly occasions and events such as: Read more

Tags: finance, value, secured loans, Loans, credit rating