Housing valuation activity levels increase in May

A recent report has shown that the level of mortgage valuation activity increased for the months of May, reflecting the sixth month in a row where this activity has seen an increase. The data was released by Connells Survey and Valuation, which recently released its Housing Market Activity report.

The report showed that when it came to mortgage valuations the month of April had seen activity remain largely flat. However, this changed in May with the number of mortgage valuations said to have increased by around 22 percent compared to the previous month. Compared to the same period last year, the number of valuations in May increased by 26 percent. This will most likely be taken as another positive sign of some level of recovery in the property market in the UK.

The data showed that one of the reasons behind the increase in activity was a marked increase in interest from first time buyers in the market. In total first time buyers made up 34 percent of all valuation activity according to the report. However, the figure was further boosted by existing homeowners who were looking to move home. There was an increase of around 11 percent on valuations for house movers for May compared to the previous month.

An official from Connells stated: “Housing market activity has resumed its slow and steady upwards trajectory, driven by an upturn at the lower end of the market. Many first-time buyers have been encouraged to enter the market by the uptick in the number of higher LTV products available recently. However, for the average first-time buyer, mortgage finance still presents a formidable challenge. The increasing variety of products is offset against comparatively high rates – alongside overly stringent criteria demanded by lenders.”

Tags: number, variety, percent, Real estate, Business Finance, property market

Interest rates stay at all time low

The base rate is to stay on hold at its record low level of 0.5 percent for another month, following the announcement from the Bank of England after the March Monetary Policy Committee meeting. The base rate was lowered to the all time of 0.5 percent in March 2008 when the Labour party was still in power, and with the recession taking its toll on the economy has remained at this level ever since.

In the run up to the latest MPC meeting some industry officials believed that the MPC would increase the base rate because of the soaring rate of inflation. The government’s target for inflation is just 2 percent by the rate of inflation has now soared to double this at 4 percent. Increasing interest rates would help to bring the rate of inflation down, hence the MPC had been under increasing pressure to increase the interest rate.

Whilst many people were calling for a base rate increase in order to try and keep a lid on inflation there will also be many people that are relieved that the base interest rate has been kept on hold, especially homeowners with variable rate mortgages. This means that they can enjoy one more month of avoiding increases in their monthly repayments.

Speculation has already arisen about when the base rate will now be increased, with some believing that it will be later on in the year. However, one official said that it can depend on a lot of things including the mood of the MPC.

He said: ‘It is possible that, despite today’s vote to leave policy unchanged, the hawks gained the support of another member. Accordingly, a rate rise within the next few months would hardly come as a shock. But raising rates now would just mean that it will take even longer for them to get back to “normal” levels. If rates do rise, I expect the move to be a small one – and if I am right about the economic outlook, even this might later be reversed.’

Tags: government, order, target, homeowners, base interest rate, Business Finance, inflation, record low level

Insurance fraud costing millions

According to a recent report insurance fraud in the UK is costing the industry tens of millions of pounds a year, with fake insurance claims becoming more and more prevalent, particularly in the current financial climate. The cost of investigating, repairing, and even paying out on fraudulent claims has resulted in a surge in costs for the insurance sector, and unfortunately these costs are then being passed on to the honest consumer.

It is thought that insurance fraud is costing the industry around £800 million a year, and officials from the Association of British Insurers have said that the most common type of fraud is in relation to home insurance. Figures indicate that in the UK around 170 homeowners file a false insurance claim every day, showing just how the value of fraudulent claims has soared to such a high level.

Whilst the insurance industry has become far more stringent with regards to running checks on claims that are made, particularly if there is something that does not seem to gel, many of these false claims still slip through the net, often because there is no way of proving that the claimant is not telling the truth. This level of fraud is costing not only the insurance industry a fortune, but also honest policyholders who have to pay more for their cover in order to cover the losses that are resulting from fraudulent claims.

An official from the Association of British Insurers said: ‘Insurance cheats do not prosper – they can expect to get caught, face problems getting future insurance and risk getting a criminal record. The majority of customers are honest and rightly object to subsidising the cheats. Insurance fraud adds an extra £44 to the average UK household’s annual insurance bill. This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers.’ 

Tags: claim, level, honest customers, uk, recent report insurance fraud, financial climate, net

Cutbacks in mortgage benefits could pose risk to vulnerable homeowners

Industry groups and campaigners are expressing concern over the effect that mortgage benefit cutbacks by the government may have on vulnerable homeowners. There are concerns that some homeowners that are in a vulnerable position, such as disabled homeowners, could be at heightened risk of repossession because of the cutbacks put into place by the coalition government.

In its recent emergency budget the coalition government revealed the details of a range of cutbacks designed to cut public spending and bring the public deficit under control. This included a range of cutbacks to benefits and to various programmes that had been put into place such as mortgage schemes.

The National Housing Federation has launched a scathing attack, stating that there are now around 64,000 homeowners with disabilities that receive assistance through the Support for Mortgage Interest scheme, known as the SMI. However, many will experience difficulties if this assistance is reduced or cut.

According to reports the SMI is to be recalculated for thousands of people with disabilities, and officials believe that around five thousand people with serious mental and physical disabilities could end up financially worse off under the system, and could face difficulties in making repayments, which could mean an increased risk of repossession.

An official from the National Housing Federation said: “This policy will hit thousands of people with disabilities, cutting off many from the prospect of owning their own home. The fact that ministers have not carried out a comprehensive impact assessment into such a major decision is very disquieting.”

The Sheffield Centre for Independent Living added: “There’s an inconsistent response from different local authorities because there are no national guidelines on how payments are made. Now we have to help a lot of people who are finding it harder to get these grants as councils review spending.”

Tags: mortgage, National Housing Federation, emergency, Independent living, homeowners, cutbacks, Government spending, councils review spending

Homeowners being moved from interest only mortgages to repayment mortgages

The fears over a double dip recession in the UK are causing havoc for many homeowners who are finding themselves being shifted from interest only mortgages with smaller monthly repayments to capital and interest mortgages that require them to make much higher monthly repayments on their mortgages. For many this will cause serious financial problems, as it will really impact on their outgoings and ability to make repayments.

A number of lenders are said to have brought in new rules and regulations with regards to this issue, and this includes the Spanish owned Santander and the banking giant Halifax. Many borrowers who do not have enough equity in their homes and are coming to the end of an interest only special deal are being shifted onto the more costly repayment mortgage by these lenders.

The move comes following concerns that the UK could be heading for a double dip recession, and a number of industry experts have said that homeowners could lose the equivalent of the average salary from the value of their homes, which will see equity levels plunge further for many homeowners. Santander has revealed that anyone that has less than 25 percent equity in their homes will be moved from their interest only mortgage onto a repayment one.

One mortgage expert said: “For home owners with interest-only mortgages, a forced switch onto a repayment deal by their lender at the end of their fixed or discounted period would lead to a significant rise in their monthly payments. For those saddled with big mortgages, it may well be an unaffordable increase, making it difficult for them to make ends meet. Lenders are worried about a further downturn in prices and are introducing these changes to protect themselves, as well as borrowers. But hard-pressed homeowners may find it’s an extra cost too far.”

Tags: mortgage, Repayment mortgage, Mortgage loan, santander, fears, homeowners, Many borrowers, Interest-only loan

Mortgage default levels falling

Over the past few years problems with finances, higher mortgage rates, and the global financial crisis has plunged many people into severe financial difficulties, and as a result of this many homeowners have been unable to keep on top of their mortgage repayments.

The high level of mortgage defaults over recent years has resulted in many people having their homes repossessed, which naturally caused a great deal of concern amongst consumers and officials. The recession also took its toll on the ability of homeowners to make repayments on their mortgages, with many people losing their jobs as a result of the recession.

However, with the recession now over and the financial markets easing up the level of mortgage repayment defaults has been falling recently. The Bank of England has issued figures showing the fall in the level of mortgage repayment defaults in the UK, which will come as good news for banks and industry groups.

The fall in mortgage defaults has been occurring for a while now, and industry experts have said that in the latter part of 2010 it will remain largely flat. Some have even predicted that in the short to medium term mortgage repayment defaults could actually start to increase again as a result in an economic slowdown caused by changes made in the recent emergency budget by the new Chancellor of the Exchequer, George Osborne.

Further job losses are also expected to occur as a result of the budget changes, and this could affect the ability of more people to make their mortgage repayments. Officials advise those that feel that they are in danger of falling behind with mortgage repayment to contact their lender or a debt advice group as early as possible so that the problem can be sorted out before banks have to resort to repossession action.

Tags: loan, mortgage rates, Mortgage loan, mortgage, default, crisis

One billion pounds have been spent on HIPs

Earlier this week the new coalition government announced that it was abolishing Home Information Packs, or HIPs, other than keeping one element of the pack, which was the EPC or Energy Performance Certificate. The packs have caused huge controversy since they were brought in by Labour in 2007, with homeowners loathe to spend the hundreds of pounds required when trying to sell their homes.

According to recent reports homeowners in the UK have spent an astonishing £1 billion on these Home Information Packs since they were brought in, and many officials have branded this a complete waste of money adding that the HIPs were pretty pointless.

Estate agents across the nation have welcomed the new government’s decision to abolish these packs just a few days after coming into power. For estate agents the need for HIPs caused a number of problems, including a reduction in properties being sold because of the additional cost and also potential delays with property sales due to the need for the pack.

The report claims that around 2.7 million homeowners have been forced to pay for one of these packs in order to sell their homes, but that in the most part those buying the property didn’t even bother to look at the information in the packs. The new housing minister, Grant Schapps, said that he was keen to get on with ‘cutting away pointless red tape that is strangling the market’.

Eric Pickles, the Communities Secretary, said that the money that homeowners would save would come in useful for other things, stating: ‘Hips are history. I hope people can use the money they save to do something useful for themselves, like go to B&Q and buy some paint or some shelving or some white goods.’

Tags: Energy Performance Certificate, HIP, epc, Home Information Pack, homeowners

Are we home and dry when it comes to repossessions?

The UK, like many other countries, has been through a tough time over the past couple of years in terms of finances, and one of the side effects of the financial crisis has been the soaring level of repossessions that have taken place. Read more

Tags: Financial Services Authority, homeowners, mortgage, personal finance, financial crisis, repossession

Success for sale and rent back tenants

A couple who got involved in a sale and rent back scheme after selling their home to a sale and rent back company which then stopped making the mortgage repayments on the property have enjoyed victory recently, when courts decided that they could continue living at the property. Read more

Tags: sale and rent back, sales, mortgage, homeowners, victory, campaigners, abuse, financial

Should you Remortgage at a Lower Rate of Interest?

Lenders are offering sweet deals to homeowners who wish to remortgage their homes. HSBC is currently offering two-year fixed rate remortgage loans at the low rate of 2.69% and Nationwide has announced lower interest rates for those who can make a small deposit on the remortgage loan. Read more

Tags: fixed terms, five-year fixed rate, remortgage, homeowners, interest rates, bank, loan, fixed rate mortgage

Homeowners struggle to get better mortgage deals

It has been revealed in a recent report that many homeowners across the UK are struggling to get new and more affordable mortgage deals, as the recession and the difficult financial climate results in lenders still being very careful about their lending criteria. Read more

Tags: better mortgages, struggle, cheaper finance, homeowners, report, attitude, Mortgage loan, Mortgages

Two thirds of potential buyers giving up on homeownership dreams

It has been reported that around two thirds of would be buyers that were hoping to get their foot onto the first rung of the property ladder have now decided to give up on their dream for now because of the difficult financial climate and the lack of mortgage availability. Read more

Tags: it's little wonder, difficult financial climate, availability, time, first rung, first time buyers, base interest rate, homeowners

Homeowners must be wary of repossession

Over the past couple of years the world of many homeowners has been rocked because they have suddenly found themselves threatened with the loss of their home through repossession. Thousands of struggling homeowners have indeed ended up losing their homes to repossession, whilst some have taken action early and managed to avoid losing their homes. Read more

Tags: afresh, Mortgages, anyone, repossession, Citizen's Advice Bureau, busy getting court, homeowners

Repossession schemes will only help small numbers

In a recent report it has been claimed that initiatives launched to try and minimise on repossessions will only help a small number of people. Read more

Tags: Impact, personal finance, homeowners, policy studies, job, government, shadow

Rising mortgage arrears in Scotland

Recently released figures have shown that the level of mortgage arrears amongst homeowners in Scotland has been rising. An increasing number of homeowners are struggling to keep on top of their mortgage repayments. Read more

Tags: housing, debt expert, result, Arrears, Mortgages

Repossessions increase by 92 percent in a year

According to a recent report the number of homeowners that were losing their homes through repossession in the third quarter of last year rocketed by 92 percent. Read more

Tags: total mortgage debt, Financial Services Authority, business, repossession, homeowners, mortgage debt

Slump in equity release sector in 2008

A recently released report has shown that there was a slump in the equity release sector last year, and this slump stemmed from the Northern Rock crisis, which saw the building society becoming nationalised after falling victim to the global credit crunch. Read more

Tags: Key Retirement Solutions, equity release market, equity release, retirement, homeowners

Rate cuts may not prove of benefit to many homeowners

With the aggressive rate cuts that have been applied to the base interest rate by the Bank of England over recent months homeowners on variable rate interest deals should in theory be delighted. Since last November the base interest rate has plummeted by nearly two thirds, plunging from 5.75 percent to just 2 percent. It now stands at its lowest levels in nearly six decades, and many think that it will fall further over the next couple of months. Read more

Tags: bank of england, future rates cuts, home insurance, homeowners, variable rate, Floating interest rate, base rate cut, Mortgages

Homeowners could be paying over £100 extra a year on mortgage

According to a recent report the average homeowner in the UK could end up paying over £100 a year extra on their mortgage as a result of the bailout of failed Icelandic banks and the Bradford & Bingley. One finance expert said that the bailout had resulted in homeowners being charged around an extra £108 a year because of home loan rates being pushed up as a result of the bailout. These figures come from John Goodfellow, who is the chairman of the Building Societies’ Association. Read more

Tags: john goodfellow, uk, Mortgages, homeowners, building, Financial Services Compensation Scheme, average homeowner

Repossession hitting many households each day

Many households in the UK are being forced out of their homes through repossession on a daily basis according to recently released figures, with around 125 families a day having had their homes taken off them. An increasing number of people have been falling into arrears with their mortgages, not just because of higher interest rates, which have now fallen considerably, but also as a result of higher living costs, increased bills, and job losses. Read more

Tags: homeowners, Personal property law, repossessions, Mortgages, repossession, repossession levels, vulnerable households

Homeowners flock to try and sell homes

According to a recent report many homeowners are panicking because of the ongoing drop in property values in the UK, and this has resulted in a million homes being up for sale recently. Property values have been falling for some months, and many industry officials believe that they could fall by in excess of 10% by the end of the year. Many homeowners are worried that if they wait to sell their homes they could end up losing thousand of pounds more on the value of the property. Read more

Tags: Business and Economy, property, homeowners, remortgage, report, May, consumers, Real estate appraisal

Insurance warning for gardeners

Homeowners have been advised to do their homework before planting trees in their garden to reduce the risk of subsidence.

Research from Sainsbury’s has shown that around 9.7 million intend to plant at least one tree in their garden but has warned that such good intentions can lead to subsidence and home insurance claims in the long term.

Around 12 per cent of money that Sainsbury’s hands out to its customers is for subsidence caused by trees and vegetation.

Neil Laird, home insurance manager for Sainsbury’s, said: “It’s great news that so many of us are good-intentioned when it comes to planting trees but it’s important that we don’t put our properties at unnecessary risk of subsidence. Our advice is to do your homework before putting spade to soil.”

The warning comes as Bupa has advised homeowners that doing the garden can help people keep fit.

An hour of lawn-mowing burns as many calories as an hour’s bike ride at ten miles per hour while planting seeds for an hour uses as much energy as two games of badminton.

Tags: planting trees, vegetation, long term.Around, Nectar loyalty card, research, tree

Look to remortgage in advance

With conditions within the financial markets currently volatile, one expert has suggested that homeowners looking to remortgage ought to review their options months before their existing deal runs out.

Ray Boulger of John Charcol said that lenders are choosing to change their mortgage rates “increasingly quickly” and most new rates tend to be “higher than the ones they replace”.

The expert advised borrowers wanting to remortgage to “investigate their options as much as six or seven months before their current deal ends, because some mortgage offers are valid for six months, although others only last three months”.

Mr Boulger also suggested that people seeking to buy a new home ought to speak to a broker first to find out what mortgages are currently available, given increasingly tighter lending criteria.

Commenting on the decision taken by the Bank of England to keep the base rate of interest at 5.25 per cent, David Kuo, head of personal finance at Fool.co.uk, said that the news will be “disappointing” for homeowners.

Tags: advance, remortgage, interest, finance, tighter lending, decision, homeowners

Estate agents claim HIPs affecting the market

According to many estate agents the controversial Home Information Packs, of HIPs, are having an adverse effect on the housing market, with fewer homeowners with larger properties now putting their homes up for sale.

According to the National Association of Estate Agents there are fewer larger properties on the market now than is normally expected at this time of the year. Many estate agents put this down to consumer reluctance to deal with Home Information Packs, which have been at the centre of controversy since they were introduced.

HIPs are now required for all homes being sold that have three or more bedrooms. Eventually HIPs will be rolled out to all sizes of properties that are being sold, and there are concerns that this could affect the market further. According the government officials the Home Information Packs are of benefit to consumers. However, many industry professionals disagree and state that the packs are harming the housing market and putting many homeowners off selling.

The Chief Executive of the National Association of Estate Agents stated: “Clearly everyone accepts that there are a number of financial and economic factors that have caused the market to take a breather after seven hectic years. However, these figures show that there is an anomaly between instructions on properties where a Hip is required and where one is not.”

He also said: “With sales slowing and normally a traditional autumn bulge in instructions, it would be normal to expect stock levels to be significantly higher. This once again appears to show the adverse effect Hips are having on the market, the lives of consumers and indeed the overall economy.”

Alan Wright
13th November 2007

Tags: problems, estate, packs, homeowners, information, home, houses

Homeowners urged to switch mortgages

Homeowners failing to look for a better deal on their expiring fixed rate mortgage could each stand to lose £2,600 if they stay on their provider’s standard variable rate (SVR) for two years, according to Moneysupermarket.com.

The price comparison website found that such mortgage “inertia” could end up costing British homeowners £5.9 billion a year, with an estimated one in five households stuck on an SVR mortgage.

Louise Cuming, head of mortgages at the website, said: “This shows how vital it is for homeowners to find the most competitive product when their fixed rate deal comes to an end.

“Providers have long played on the fact homeowners can be slow to react when their deal ends. Switching homeowners to an SVR increases bank and building society profits at our expense.”

Since the effects of the US sub-prime credit market crisis began to be felt by British banks and mortgage providers, many have begun to push up the rates on their tracker mortgages.

However, these rates are usually still much closer to the Bank of England base rate of 5.75 per cent than SVR rates, which currently stand at well above seven per cent on average.

Tags: SVR mortgage.Louise, GBP, cuming, homeowners, average, price comparison, deal, sub-prime credit market

Risk of default increased by lack of checks

According to a recent report released by the UK’s financial regulatory body the risk of homeowners defaulting on their mortgage repayments has been increased as a result of various lenders allowing them to borrow money to purchase a home without carrying out adequate checks into their income.

The Financial Services Authority claims that some lenders have been allowing consumers to borrow money to buy property but have failed to determine whether they can actually afford the repayments based on their income.

With a series of five interest rate rises already having taken place in the past year, along with the threat of further rises, many homeowners with variable rate mortgages are struggling to keep up with repayments, even though they may have been able to comfortably afford the repayments when they took out the loan. However, for those that were struggling initially, as a result of being able to borrow more money than they could actually afford, the interest rate rises could tip them over the edge.

The FSA has been investigating the sub-prime market, where brokers and lenders seem to be unable to show whether the borrower can actually afford to make repayments on the amount that they borrow. According to reports around one third of brokers have been unable to confirm whether a borrower could actually afford the mortgage, and over half of them allowed borrowers to self certify their income.

One MP stated: “Talking about a few rogue brokers is just skimming the surface of the problem. While rogue brokers are a problem, the more pressing issue is high street lenders aggressively trying to build market share. Lending income multiples for mortgages are now at an all-time high and, with interest rates set to rise further, the outlook for many homeowners looks grim.

Tom Smith
13th September 2007

Tags: Mortgages, lenders, default, home, payments, brokers, homeowners

Protect yourself from flooding

Homeowners across much of England and Wales have endured flooding in recent days and Halifax Home Insurance is offering advice to those who live in high-risk areas.

The insurance firm says that around five million Brits live in flood-risk areas and these people are advised to take action to prevent their home and the items inside it being consumed by water.

Weather experts are predicting more rain in the coming days and Halifax is urging homeowners to follow its advice.

The firm says that homeowners should place sand bags outside doors and windows before a flood strikes.

It also advises that pipes should be protected in case appliances move during a flood, furniture should be moved upstairs and insurance policy information should be kept close to hand in case a claim needs to be made.

Halifax also has some advice for those who have already been affected by flooding.

They are being told to ensure gas, water and electricity supplies have been checked before being switched back on.

In addition, all affected appliances should be thoroughly checked by a qualified engineer, doors and windows should be opened and redecorating should not begin until the property is completely dried out.

It is possible to find out if you live in a flood-risk area by contacting the Environment Agency Floodline.

Tags: homeowners, Halifax Home Insurance, Atmospheric sciences, home, flood

Hips lead to property boom

The introduction of Home Information Packs (Hips) has led to an increase in the number of properties on the market.

Property website Rightmove has revealed that the number of homes on the market swelled by ten per cent in June as homeowners scrambled to avoid the August 1st deadline.

The site says that around 200,000 new homes were put on the market in June, signalling the largest monthly stock rise for nearly three years.

Rightmove says that the increase is undoubtedly related to the introduction of Hips which will initially affect homes with four or more bedrooms.

“The rush to beat the impending Hips deadline appears to have attracted some poorly motivated sellers to the market,” commented Miles Shipside, commercial director at Rightmove.

“They are chancing their arm at some fairly bullish prices considering there is now a lot of property up for sale.

“Their main motivation will have been to save some money avoiding a Hip, rather than being realistic on price because they had seen a property they desperately wanted to buy,” he added.

Mr Shipside went on to point out that those who have put their home on the market in order to save cash by not getting a Hip may have actually cost themselves money.

He said that with the market currently flooded, many homeowners are being forced to drop the price of their home to make a sale.

Tags: property boom, market.property website rightmove, cash, deadline.The site, homeowners

Homeowners losing £40m on insurance

Homeowners who fail to shop around for home and life insurance are losing out on a combined £40 million per year.

The figure has been put forward by the Post Office which says many Brits simply get their insurance from their mortgage lender due to convenience.

Around eight million people in the UK opt to buy their insurance from the same firm that gives them their mortgage, with one in ten people incorrectly believing that it was compulsory that they do so.

A further one in 20 were convinced that their loan would be at risk if they did not also buy insurance, while 63 per cent chose their mortgage provider’s insurance because it was convenient to do so.

“Convenient doesn’t always mean cheap,” said head of insurance at the Post Office Phil Ashkuri. “Many homeowners don’t realise taking out buildings and contents insurance with their mortgage lender is generally not the best value deal. And it’s not compulsory for securing their mortgage.

“Our advice is shop around as there are better home insurance deals out there from standalone providers.”

The majority of buyers will be able to find a better deal by getting their insurance from a different source to their mortgage, loan or credit card provider.

Tags: homeowners, shop, Types of insurance, Agents and Marketers, figure

Don’t bodge it yourself (BIY)

Homeowners are being encouraged to avoid partaking in any bodge it yourself (BIY) over the Bank Holiday weekend.

According to Halifax Home Insurance, we spend £607 million on repairing the damage we do to our homes while trying to fix them up.

Traditionally the UK goes DIY mad over the Bank Holiday and this is often when the majority of damage is done.

However, Halifax is warning people not to take on a job which they are not qualified to do as it could end up costing a lot more to fix the job than it would have to have got a professional in originally.

“Whilst well planned and executed home improvements can add significant value to a home, getting it wrong can be a disaster,” commented Vicky Emmott, senior manager of underwriting at Halifax.

“We’d advise anyone planning any major improvements to their home to employ qualified and reputable tradesmen, rather than going it alone.

“Indeed trying to tackle certain areas that you are not qualified for, such as electrics or plumbing, could invalidate your home insurance and leave you liable for the cost of any subsequent damage,” she added.

DIY enthusiasts are encouraged to make sure there house is properly covered before embarking on a project.

Tags: bank, home insurance, majority, major improvements, holiday, whilst, homeowners, home improvements

Leaks cost Brits £1.8bn

Leaking water is causing billions of pounds worth of damage in our homes each and every year.

New research shows that around 3.3 million homes are affected by leaks on an annual basis with the costs running to £1.8 billion.

Halifax Home Insurance has carried out a study into the problem and found that the most common sources of a household leak are washing machines, dishwashers, burst water tanks, pipes, showers and baths.

Homeowners are being advised to make sure that they check appliances regularly to ensure that any potential problems are spotted early.

“Changing fashions in the housing market have increased the likelihood of homes being damaged by leaking water,” explained Vicky Emmott, senior underwriter at Halifax Home Insurance.

“The trend for homes with multiple bathrooms and the current vogue for wet rooms have significantly increased the risk of water leaks and damage in the home.

“Older properties are vulnerable as a result of corroding pipes, which face increasing strain as Britain endures ever more extreme fluctuations in temperature as a result of global warming,” she added.

Halifax says that 36 per cent of British homeowners are running the risk of losing out financially as they do not have building insurance that covers water damage.

It is vital that homeowners take out insurance to cover themselves against potential disasters, particularly with increasingly unpredictable weather affecting the UK.

Tags: pipes, Insurance, homeowners, water leaks, Washing machine

Fixed-rate mortgage fees rising

Mortgage lenders are raising their application fees for fixed-rate mortgages, as the products become more and more popular.

With interest rates currently standing at 5.25 per cent and fears among many that future rises are imminent, first-time buyers are fearful of taking out variable rate mortgages.

However, as lenders have recognised the growing trend, they have begun increasing application fees, according to MoneyExpert.com.

The average application fee has risen by 18.5 per cent since last August, with products that have a fee of at least £750 also becoming much more common.

“Homeowners are desperate to fix their mortgage rates to avoid incurring further costs caused by rising interest rates,” said Sean Gardner from the website.

“It’s the sensible option, as further rises aren’t out of the question.”

People considering taking out a mortgage, particularly first-time buyers, may find that a fixed-rate is the best option for them.

However, it is recommended that you shop around to find the best mortgage to suit your circumstances and ensure that you can realistically afford to pay the application fee.

Tags: option, fee, trend, personal finance, homeowners, application fee, Business Finance, first time buyer

Winter will see more claims

Homeowners are likely to make more insurance claims in the coming months as a result of the bad weather.

That is according to Lloyds TSB, which says it is expecting to see a 15 per cent increase in burst pipe claims during the first quarter of this year.

The insurance provider is highlighting the fact that something as seemingly minor as a burst pipe can prove to be both a major headache and a real financial burden.

Lloyds has revealed that the average claim for a burst pipe is around £2,500, while the most expensive the firm has ever seen was £156,000 for a particularly troublesome problem.

Homeowners are being warned to take action to help keep damage from a burst pipe to a minimum, with advice such as locating the stopcock, gas valve and ball valves, in case the worst happens.

Lloyds also advises people to leave their heating on a low heat if they are going away on holiday, as this will prevent pipes from freezing, while outdoor pipes should be well insulated during the winter months.

“So far this winter we’ve had relatively mild weather so many homeowners were caught unprepared for this cold snap,” said Lloyds TSB’s Phil Loney.

“A little bit of effort now could save you a lot of wasted time and stress caused by problems such as burst pipes or broken boilers.

“To give yourself peace of mind, make sure you have adequate home insurance that will cover you if the icy conditions do take their toll,” he added.

Residents are also advised to leave their insurance details with a trusted neighbour when travelling in case there is an incident while the house is empty.

Tags: Valve, peace of mind, weather, homeowners, little bit, Insurance

Surprise interest rate rise

The Bank of England has stunned economists by raising the interest rate to its highest level for six years.

In the build up to the decision being announced, it was considered by almost everyone in the industry that the rate would be held.

However, on Thursday January 11th, it was announced that the interest rate would rise by 0.25 per cent, taking it to 5.25 per cent.

It is the third time since August that the Bank of England has increased the rate by 0.25 per cent and is bad news for people with mortgages.

“This is another rise in a short period of time that could hit some homeowners hard,” said Peter Tutton from Citizens Advice.

“We are already seeing a rapidly growing number of people falling behind with mortgage payments and in some cases threatened with repossession, and we know some people are taking on mortgages that stretch them to the absolute limit.

“Any increase in mortgage interest rates could spell disaster for people whose finances are balanced on the very edge of affordability,” he added.

The rate rise is good news for savers however, although the uncertainty created by today’s announcement is unstabling for most people.

“Markets are going to be wondering if this marks a more intensive process of monetary tightening,” Peter Dixon, economist at Commerzbank, told Reuters.

“Is the bank going to raise again? That’s the question that is going to be ringing round the dealing rooms this afternoon.”

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