BSA: Customers still have “a very wide choice” in mortgage market

Although the range of mortgages available has shrunk in the past year, it continues to be a competitive market where customers still have “a very wide choice,” the Building Societies Association (BSA) has said.

Neil Johnson, PR and policy manager at BSA, said that building societies in particular are offering competitively priced products, which is why they are featuring prominently on the best-buy tables.

A recent survey by Moneyfacts.co.uk revealed that the number of mortgage deals available has dropped by 60 per cent compared to last year.

This may leave many borrowers in financial difficulty about since 1.4 million people are due to come off cheap fixed-rate mortgage deals this year, says the Financial Services Authority.

By the end of 2008 more than 100,000 home owners are expected to be in negative equity, according to the Market Oracle.

Earlier this month HSBC announced that it would match the interest rate of previous deals for two years for borrowers whose fixed-rates were nearing their expiration date.

Commenting on HSBC’s move, Mr Johnson said: “It’s what you would expect in the competitive mortgage market that we’ve got, where providers actually offer different products that will appeal to different customers.”

Tags: manager, rate, mortgage deals, market, expiration date

More women responsible for household finances than men

Women are more likely than men to be responsible for financial decisions in UK households, according to new research.

A study by Family Investments, a Child Trust Fund (CTF) provider, found that 59 per cent of women are in charge of decision-making regarding family money.

These findings corroborate research by Norwich & Peterborough Building Society released last month which showed that although 74 per cent of men are still the primary earners within a family, most financial decisions are either made together or by women.

In particular, women were found to take control of day-to-day spending on their children and homes.

“Indeed, this puts the myth of the father as the financial head of the family to rest,” commented Gary Lacey, group product manager at Norwich & Peterborough.

Two-thirds of women prefer to do their banking over the internet, even though only 20 per cent open their online bank account via the internet, according to the study.

Women also seemed more knowledgeable about children’s savings products than men, with over 60 per cent identifying that CTFs are a tax-efficient savings option.

Tags: manager, Financial services, two thirds, investments, online, month, household finances, head

Up to 1.78m homeowners without insurance

Up to 1.78 million homeowners do not have buildings insurance while a further 656,000 consumers are not aware whether they possess it, one financial expert has claimed.

The research from Sainsbury’s Bank shows that female homeowners are more likely to be without cover than their male counterparts with 1.055 million women admitting to not having it in place.

A further eight per cent of homeowners aged 65 and over and another eight per cent of those aged between 25 and 34 said that they do not have buildings insurance.

Neil Laird, home insurance manager with Sainsbury’s said that thousands of homes could be at risk from storms this week, so it’s alarming to see so many without the insurance.

“The growing number of weather-related instances really highlights the importance of having adequate cover in this area and unlimited buildings cover ensures peace of mind that you won’t be left underinsured should the unthinkable happen,” he stated.

Meanwhile, the firm said that the earthquake from last week could result in 3,250 home insurance claims.

Tags: financial expert, manager, home insurance claims, male counterparts, peace of mind, neil laird, business

More first time buyers purchasing homes together

Increasing numbers of first time buyers are opting to buy homes as a couple rather than individually, claim independent mortgage experts.

John Charcol said that in the past, lifestyle choice and affordability have meant that there are more single first time buyers, but this figure was reversed last year with joint buyers making up half the home purchases compared with 45 per cent the previous year.

Katie Tucker, technical manager for John Charcol, said: “Buying together is a very sensible choice in terms of affordability. Not only for splitting the mortgage and the bills, but more cuddling up should save you on the heating!”

She added that increases in property value and mortgage payments with incomes remaining the same are all factors which have contributed to the buying trends.

Ms Tucker also said that more women are buying property jointly with more men taking the decision to settle down with a partner for their first home.

Meanwhile, research from MoneyExpert.com showed that as many as 1.39 million homeowners have switched their mortgage provider in the past six months.

Tags: manager, finance, Moneyexpert, year, Ms Tucker, business

Failing to take out insurance puts homes at risk

Failing to take out building insurance can put your home at “real risk”, according to one expert.

Nationwide said that consumers avoided building and home contents insurance due to the supposed ‘complexity’ involved in the contracts, but stated that it is not complicated at all.

Charlotte Sjoberg, campaigns manager for Nationwide, said the need for insurance had not necessarily increased since the spate of bad weather.

“Whether you are in a flood risk area or not, it is really important to protect your home against unexpected events. You really don’t know what could happen,” she said.

She also said that is it important for homeowners to have the right amount of insurance cover and to be aware that home contents and building insurance protect consumers in different ways.

Research conducted by the building society has found that one in five of home owners do not have buildings insurance, and that one in four do not know what is included in their policy.

Furthermore, 14 per cent of those surveyed had also failed to take out home contents insurance.

Tags: weather, Title insurance in the United States, flood risk, real risk, Financial services, building and home contents insurance, insurance policy, manager

Mortgage market “still buoyant”

The mortgage market is “still buoyant” despite the recent financial crisis due to the amount of remortgage business available, claims one expert.

Despite the market being healthy, Bestinvest said that it is becoming increasingly harder and more expensive to look at remortgaging property. .

Peter O’Donovan, mortgage manager for Bestinvest, said: “There are still plenty of people looking to buy houses, it’s just the cost of doing so, and once again making sure they understand exactly what it is they are entering into.”

Previously a remortgage would only cost a couple of hundred pounds but now the average fee is a £1,000, he added.

According to the Council of Mortgage Lenders, the credit crunch has resulted in funding difficulties for a number of mortgage lenders, reducing their capacity to lend.

Lenders have responded by reappraising the risks involved in lending, resulting in a tightening in lending criteria and a widening in mortgage margins to parts of the market.

Tags: amount, manager, lending, funding, UK mortgage terminology, crisis, mortgage manager, expert

2008 set to be ‘a tough year financially’

2008 is “going to be a bit of a shock” and a “tough year financially” for consumers, according to a financial expert.

The end of fixed rate mortgages and the rising price of gas and electric bills both contribute to the more pessimistic financial outlook for next year, says AWD Chase de Vere.

Susan Hannums, savings manager for AWD Chase de Vere, said: “I think it is going to be harder to save, but the thing we need to drum in more than anything else is that we’ve got to start paying off and get away from using credit all the time.”

She added that borrowing “is really what got us here in the first place”.

Consumers need to think of other methods of saving to “turn things around”, concluded Ms Hannums.

Research from Credit Action earlier in the year revealed that total personal debt in the UK has reached £1.25 trillion.

Tags: Economic history, manager, personal debt, concluded ms hannums, Business Finance, year, anything, Vere

Fixed-rate mortgages on expensive buys

Property investors are advised to take out fixed-rate mortgage when purchasing high-value properties.

According to Bestinvest, when mortgage repayments increase by even a small amount, homeowners paying off debts on a high-value property can find their repayments increasing dramatically.

With any changes to the Bank of England’s interest rate, house prices and borrowing costs are directly impacted. With a fixed-rate mortgage, buyers are not vulnerable to these fluctuations.

Peter O’Donovan, mortgage manager at Bestinvest, advised that young professional first-time buyers should consider a mortgage with a fixed rate: “It obviously is down to the person’s view of risk, and what they have in the background to support their mortgage repayments.

“But in general I would suggest to people borrowing a larger sum for the first time to take a fixed rate, because it’s quite a large part of their disposable income going [towards repayments].”

The latest statistics from the Council of Mortgage Lenders show that 3,000 mortgages worth £250,000 to £500,000 were taken out in July this year by first-time buyers. This represents a rise from January’s figure of 2,000.

Tags: fixed rate mortgage, Peter O'Donovan, first time buyers, interest rate, figure, risk, GBP, manager

Poor home security affects insurance, Halifax says

Insurers at Halifax warned today that poor home security can invalidate claims.

According to statistics released by the insurance provider, claims for unforced burglary tend to rise hugely at this time of year, with a full 50 per cent increase in August 2006 over the figures for January of that year.

Received wisdom that the increase is caused by claimants jetting off on their holidays is also incorrect: 55 per cent of claims are made from those who occupied their home at the time of the robbery.

Open windows and doors due to the warmer weather was cited by the insurer as the main reason behind the break-ins.

Underwriting manager at Halifax Vicky Emmott said: “During the summer, we invariably see claims for unforced burglary increase dramatically, as people leave doors and windows open to keep their homes cool.

“Burglars can be in and out in seconds, so we are advising people to keep valuables out of sight, and avoid leaving doors and windows open when rooms are unoccupied, or when out in the garden.”

Other top tips offered by the insurer looking to boost their security, such as recommending that neighbourhood watch schemes be joined and that safety latches on windows be used.

National Home Security Week begins on August 25th.

Tags: burglars, August, home insurance, manager, January, cent, Types of insurance, out of sight

Europe-bound stags and hens should be covered, Confetti says

A combination of low air fares and heavy media promotion has made foreign destinations for stag and hen parties increasingly popular, with Eastern European locations such as Prague and Tallinn particular destinations for bargain-hungry boozers.

However, a leading events organiser says today that travel insurance is a must for those going on such short breaks.

Confetti says that it is “just not worth it” to not take out cover, with an accident or injury proportionally more likely to occur on a boozy weekend away.

PR manager for Confetti Carol Richardson said: “It’s not worth having things spoilt. You never know when things are going to wrong, unfortunately. And it’s just not worth it these days.

“With the erratic weather that we’re having and situations at airports across the world, it’s well worth taking out insurance, just for peace of mind.”

UK consular officials in the Czech Republic capital and stag and hen party hotspot Prague also said earlier this month that they received a “disproportionate” number of calls relating to hospital visits and arrests, thanks to the stag and hen parties that flock to the historic city.

Tags: city, world, Czech Republic capital, bargain-hungry boozers.However, disproportionate number, events organiser, manager, Carol Richardson

Buy-to-let insurance risk warning

With buy-to-let investments becoming an increasingly attractive proposition for consumers, Sainsbury’s Bank is encouraging landlords to ensure they are adequately covered.

With figures from the Council of Mortgage Lenders showing that the number of buy-to-let mortgages has increased to 21 per cent, there are also now believed to be more than three million privately rented properties in the UK.

With the properties being worth a collective £510 billion, landlords are being advised in the strongest terms to ensure that they take out a comprehensive insurance policy.

Sainsbury’s Bank policies ensure against rental income of up to £20,000, while also providing contents cover of up to £40,000.

“Robert O’May, home insurance manager at Sainsbury’s Bank, said: “There has been huge growth in the number of properties rented out and it’s a lucrative venture for many.

“It’s therefore important for landlords to pick a good home insurance policy to protect their investments,” he added.

Tags: manager, income, home insurance, insurance policy, buy to let mortgages, venture

John Charcol unveils buy-to-let mortgage brace

Mortgage broker John Charcol has launched two new tracker mortgages for buy-to-let investors, with rental cover requirements which are “not too onerous”.

One of the John Charcol mortgages possesses a 90 per cent loan-to-value (LTV) rate and will track the Bank of England base rate at plus 0.74 per cent for the term.

No early repayment charges apply and rental cover of 100 per cent is also applicable to the deal.

The group’s other package has a maximum LTV rate of 85 per cent and is available to both new purchasers and remortgagers.

Its rate is set at the Bank of England base rate plus 0.39 per cent, with the fee for the package set at £999.

Ray Boulger, senior technical manager at the broker, said that with gross rental yields on many other packages seriously restricting choice, the two mortgages “have been designed with rental cover requirements that are not too onerous”.

He added: “For most buy-to-let investors the choice for the best value mortgage tracker is now primarily between taking out a cheaper two-year tracker, with a view to continuing to take up a new deal every two years, or securing the convenience of a lifetime tracker at a slighter higher rate.”

Tags: LTV, Loan to value, manager, group, cent, view, base