Mortgage approvals rise to one year high in June

A leading industry group has released data showing that the number of mortgage approvals for new property purchases in the month of June reached a one year high. The data was released last week by the British Bankers’ Association and showed that the number of UK mortgage approvals for June reached 31,747.

This figure for June was an increase from the 30,803 mortgage approvals that were seen in the previous month. It was also the highest value seen since July of 2010. Statistics Director from the BBA, David Dooks, said that banks were continuing to lend on mortgages for new property purchases but added that the mortgage market was still weak. He did state that there had been some level of revival in the buy to let market, with investors seeing the benefits of buy to let in the current climate where demand for private rental homes is at an all time high.

The results also showed that there had been a drop in net lending to non-financial companies, which fell by 2.5 percent. Officials said that this drop in net lending was partly due to low demand for credit from these companies, many of which are very wary about taking on further business debt in the difficult financial climate, with many preferring to try and pay down debt rather than take more debt on. However, this could have a significant negative impact on the growth of the economy according to many industry officials.

IHS Global Insight chief economist Howard Archer said: “It is likely a sign that companies are becoming increasingly wary about borrowing and investing in the current difficult economic environment – which in itself is worrying for growth prospects.”

Tags: british bankers association, June, new property purchases, month, value, growth

Renting more expensive than mortgage repayments

In years gone by many people have rented homes rather than buying because the monthly cost of renting has been considerably lower than the cost of paying off a mortgage each month. However, recent figures have shown that this has gone into reverse, and after a very turbulent few years in the property market it has actually become cheaper each month to pay a mortgage than to pay rent.

According to the figures it costs around £709 per month to rent the average three bedroom property whereas the same property would cost £608 per month in mortgage repayments. This makes it around £100 cheaper on average to make mortgage repayments than to pay rent on a home. On the other hand just a couple of years ago it would have cost £1060 for the same property to pay a mortgage each month and just £761 to pay rent each month.

There have been many changes in the property and mortgage markets that have led to this change. This includes the base rate remaining at a record low of just 0.5 percent for over two years, which has kept mortgage repayments lower. The lack of availability of mortgages for first time buyers, driven by restrictions from lenders and demands for higher deposits, has led to soaring demand for rented homes, and this in turn has resulted in rental costs rising.

One industry expert said: “Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing home owners’ disposable income. Although the current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many.”

Tags: record, month, GBP, lack, availability, disposable income, reverse, existing home

Consumers advised to focus on debts for New Year

Industry experts are advising consumers to focus on their debt issues once the New Year comes around in order to avoid having to spend another year struggling with their finances, particularly given that the economy and job situation is still very challenging and fragile. Many people will have been struggling with debt for some time, whereas others may accrue temporary debt over the Christmas period. Either way, experts are suggesting that they tackle their debt problems head on once 2011 hits.

For many people in debt it is all too easy to bury their heads in the sand and try and forget about their debts until they spiral out of control to the extent that action has to be taken either by the borrower or their creditors. Many people are using, or have already used, their credit cards to fund their purchases over the festive season this year, and this could lead to spiralling debt levels for many people.

Tackling debt can be difficult but officials believe that by kicking the New Year off in the way that they mean to go on consumers are able to tackle their debt issues more effectively by streamlining their finances and getting things into order. Some are advising consumers to go through their budget with a fine toothcomb and go through their income and outgoings to see where they can make cutbacks to save on the amount that they pay out each month and avoid further debt.

One official said: “Another option for consumers when the New Year comes around is to consider taking out a consolidation loan and wrapping all of their various debts into one lower interest one, as this could save them money and the hassle of dealing with different creditors.”

Tags: month, job situation, action, time, debt consolidation, Business Finance, festive season

Tighten your spending for next year

With all the uncertainty over the economy and job losses many people will be stressing over their finances and for many people sorting out their finances for the New Year will be a priority. It is always a good idea to start the New Year with a streamlined budget, as it means that you can focus on your finances and try to get them into some sort of order over the course of the year.

With this in mind it is a good idea to start now when it comes to trying to sort out your finances, and there are a few simple steps that you can take, which could help you to organise your finances more effectively, make your budget more manageable, and even reduce the amount of money that you pay each month.

The first step is to go through your finances with a fine toothcomb. You need to make a list of all of your income and all of your outgoings so that you know exactly what is going into your account and exactly what is coming out of it each month. This will allow you to see where you can make cutbacks and what changes you can make to benefit you in terms of your financial situation.

Many people have a variety of payment that they make for things that they do not even use, such as gym memberships even though they never get time to go, magazine subscriptions for magazines they no longer read, and various other payments that they may have forgotten about. Take the time to cancel anything like this, as it could mean big savings each month.

Once you have gone through your finances with a fine tooth comb it is time to see whether there is anything that you can reduce payments on by switching. Many people switch services such as their utilities, broadband, insurance, credit cards, and even mortgage in order to save money, and shopping around for a better deal could make a big difference to the amount that you have to pay out each month by reducing the cost.

Finally, look at any debt that you have and consider whether consolidation might reduce your repayments and get you a better deal. You could consolidate all of your debt such as credit cards, overdraft, and loans, into one, which would save you time and hassle each month and reduce your monthly repayment.

Tags: fine, uncertainty, list, overdraft, amount

Credit card debts soaring amongst pensioners

It has been reported recently that credit card debt amongst pensioners has been soaring, with struggling pensioners sitting on £1.1 billion worth of credit card debt. Financial problems amongst many pensioners have increased as a result of soaring inflation coupled with minimal rates of interest being paid on their life savings.

Figures were released recently by Gfk NOP and showed that pensioners were no spending a fortune collectively on their credit cards each month, with pensioners’ credit card spending values rising by 20 percent since the start of this year. June saw pensioners spend an average of £354 each on their credit cards. The last time this level of spending was reached was at the height of the credit crunch in October 2008.

The total outstanding debt level for June amongst credit card pensioners was £1.1 billion, and this reflect an increase from £900 million from six months earlier. With many pensioners being hit with the rise in the cost of living coupled with the drop in savings interest rates many have had to turn to their credit cards to fund their essential spending, and this has seen the level of credit card debt rocket amongst older people. Many also have additional debts to deal with such as loans and finance, and a recent survey showed that one fifth of those aged fifty five and over still had a mortgage to pay off.

Joanna Parsley, a spokesperson for the consumer group Credit Action, said that older people were in a very vulnerable position, stating: ‘The growing indebtedness of older people is scary. We are talking about a generation who are particularly vulnerable as the income from their savings has been devastated.’

Tags: credit card debt, Credit Cards, Social Issues, debt level, debt

Making money from your home

These days many people are finding it difficult to sell their homes, largely because there is a shortage of buyers fuelled by lack of mortgage availability and low consumer confidence amongst would be buyers. The scrapping of the controversial Home Information Packs by the coalition government resulted in more people wanting to put their properties up for sale, but the low level of interest from buyers may have put many sellers in a difficult position.

Whilst it may be difficult for sellers to actually get their properties sold in the current climate there are ways in which it may be possible to make some money from the property if a decision is made to take it off the market until conditions improve. For some people this could be a viable way to clear some more of the mortgage whilst the property market improves.

Hiring out a room to a friend

Many people probably know of a friend, colleague, or even a family member who may be looking for a place to live, and offering a room out to such a person could help out the friend or family member and bring in some more money to pay the bills and mortgage. For many this is a great solution because they are sharing with someone that they know rather than a complete stranger but at the same time will still be able to make some money to make the mortgage and bill payments each month.

Taking in a lodger

In the current climate many people are struggling to afford a mortgage or even to rent a property of their own, and this has resulted in many looking for just a room to rent. If you do not have a problem offering up a room to someone that you do not know personally then taking in a lodger could be a good way to make money on your property. You could advertise your room, or you may find that there are people that place adverts to say that they are looking for a room.

Look at local amenities

It is a good idea to look at local amenities in your area, as you may find that there are colleges, universities, schools, or hospitals nearby where students, teachers, or doctors and nurses may be looking for local accommodation close to their work. Again, it may be a good idea to advertise if you are willing to rent out a room or you may find that those looking for accommodation place adverts themselves, enabling you to contact them.

Tags: property, mortgage, position, accommodation, money, month, scrapping

Mortgage approvals still slow

According to figures mortgage approvals in the UK for the start of this year have been sluggish despite optimism over improvements in the market. The Bank of England released data showing that the level of mortgage approvals in March did increase slightly from the previous month rising from 46,882 to 48,901.

The figure for mortgage approvals in March was also said to be 17 percent higher than the figure in March of last year, so there have been some signs of improvement. However, the bigger picture indicates that mortgage approvals remain sluggish for the first part of the year.

Apart from 2009 the number of mortgage approvals for the first quarter of this year was at its lowest on record according to the figures. One economist said that the Bank of England figures showed that the mortgage market and housing sector were finding it difficult to gain momentum following the turbulence of the last couple of years.

He added that over the coming months property prices in the UK were likely to be erratic, and for the remainder of the year it was most likely that property prices would be flat. The Building Societies Association added that the mortgage market remained fragile and was likely to remain so in the short term.

The group said that some of the factors that could contribute to this fragility included the uncertainty over leadership of the country, jobs, interest rates, and inflation on property prices.

One financial expert concluded: “It is good news for borrows that lenders are slowly acclimatising to a new landscape of the mortgage market and continue to improve on the competitiveness of new mortgage deals. But lending figures show that there is only a slight improvement in the market; we still have a way to go before the market returns to any sort of normality.”

Tags: slight improvement, Banking, bank of england, month, new landscape, mortgage, societies, finance

Better future for economy following drop in unemployment

Recent figures showing that unemployment has finally fallen has brought with it hopes that the future of the economy is looking a little brighter. The figures showed that there was a significant drop in unemployment figures for the month of December. Many think that this will spell good news for both the jobs market and the economy as a whole. December saw unemployment levels fall for the first time in around two years according to reports.

Read more

Tags: Labor, month, global credit crisis, economics, Late-2000s recession, unemployment, Chris Grayling, jobless figures

Dormancy fees could affect customers trying not to use their credit cards

Whilst credit cards have certainly come in useful for many people in the current financial climate, overstretched finances and the threat of job losses has resulted in many consumers trying to avoid using their credit cards other than in dire emergencies, preferring instead to keep the card to one side and only use it if and when it is really needed. Read more

Tags: account, credit card provider, american express credit cards, consumers, month, dormant credit card charges

Some cardholders could spend more than a lifetime paying their credit card debt

Concerns have been expressed recently that some credit card holders who are customers of the credit card giant Barclaycard could end up spending more than their lifetime trying to repay their credit card balance, after the credit card company announced that it was planning to reduce the minimum level of repayment that it was asking from its customers each month. Read more

Tags: bill, Credit Cards, industry, month, GBP

Banks still turning down thousands of mortgage applications

It has been revealed that whilst many reports have claimed that restrictions on mortgage and general lending have started to ease off recently banks are still turning down thousands of mortgage applications every month, further hindering the recovery of the housing market. Read more

Tags: month, Mortgages, bank of england, stringent regulations, Real estate economics, Labour, reasons why, mortgage applications

Shopping Around for the Best Deal in Broadband

The aim of the British government is to bring Broadband into every home in the country within a three year period. This is indeed an ambitious plan that leaves households scrambling to find the best possible deal in getting a connection. Read more

Tags: United Kingdom, month, cheap broadband, connection, plan, long time, dial, high speed internet

PM prepared to plough billions for into financial sector

Earlier this month the Prime Minister, Gordon Brown, and the Chancellor of the Exchequer, Alistair Darling, indicated that they were prepared to plough billions of pounds more into the financial sector through the use of taxpayer’s money in order to try and get things moving again. Read more

Tags: Alistair Darling, Prime Minister and the chancellor, Shadow Chancellor of the Exchequer, month, part, gordon brown, purse, government financial help

Increase in people not happy with energy firms

A recent report has indicated that an increasing number of people are no longer happy with their energy firms, with this year’s price hikes playing a large part in how satisfied consumers are with their energy suppliers. The study was recently carried out by price comparison website uswitch.com, and found that whilst around 33% of consumers were dissatisfied with their energy supplier this time last year, this figure had now risen to around 41% of consumers. Read more

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The collapse of the Icelandic banks – how it’s affected us

Earlier this month the already chaotic financial markets were thrown into even more turmoil with the Icelandic banking collapse. Consumers, businesses, and charities were horrified to learn about the collapse, and many feared that they would lose their money. In some cases it seems that they may have been right to think that. Over the past couple of years many businesses, authorities, charities, and consumers have been rushing to Icelandic banks to invest their savings, with accounts such as Icesave and Kaupthing Edge offering high interest rates on savings in order to attract new customers.

However, the joy of these savers, who thought that they were making huge returns on their money, was to be short lived. Read more

Tags: The government, savings, iceland banks, UK branches, Icelandic banks, period, month, case

Smart saving with a regular savings account

We all know how difficult it can be to get into the habit of putting a little money aside each month for a rainy day or even for emergencies, and even with the best of intentions many of us never get round to transferring that cash into our savings account, finding other ways to spend it instead. And when a special occasion comes around or we need some extra cash to fund a special purchase it can be very disappointing to look at our savings account balance and realize that there is very little there to rely on. Read more

Tags: cash, extra cash, bank, savings accounts, best of intentions, offer, month, date

Housing boom an ‘unmitigated disaster’

The housing boom has been an “unmitigated disaster” for the UK’s economy and society, Firstrung has said. Read more

Tags: housing, home, Mortgages, housing boom, month, UK's economy

Many UK workers at ‘financial tipping point’

New research commissioned by Callcredit has revealed that 40 per cent of people in the UK would not be able to live off their savings for more than a month, rising to 53 per cent among people aged between 25 and 34-years-old.

One in four people have been forced to reduce their savings or stopped saving altogether because of the financial pressures they are facing due to the credit crunch.

Head of the credit reference agency Owen Roberts said: “Many of the UK’s workforce are at what could be described as a financial tipping point where just one unexpected unfortunate incident could have dire financial consequences.”

Mr Roberts advised people who are struggling financially to take an “active role” in sorting out their debts by reviewing their credit reports and bank statements to get a clear idea of how much they owe.

Credit Action recently warned people not to become too reliant on paying their essential household bills with credit cards.

Tags: reference, incident, credit reference agency, credit, credit reports, month

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: market, manager, tables.A recent survey, mortgage deals, month, expiration date, rate, interest rate

Bank cuts base rate, but lenders raise mortgage rates

Yesterday’s cuts in the Bank of England’s base rate, intended to help prevent the slide towards recession, were immediately undermined as lenders increased mortgage rates.

The third cut in the base rate since December will bring relief to the estimated six million home owners with tracker and variable rate mortgages, helping them save more than £30 a month on a £200,000 mortgage.

However, those on cheap fixed-rate deals which are due to expire this year may face financial difficulties.

Nationwide and Alliance & Leicester are among a number of lenders who increased their fixed-rate offers by up to 0.35 per cent.

“Many lenders are yet to pass on the recent base rate reductions – instead they are busy increasing rates, demanding larger deposits, tightening lending criteria and, in some cases, withdrawing deals from the market altogether,” commented Ann Robinson, director of consumer policy at uSwitch.com.

However a number of big lenders including Halifax, Nationwide, the Woolwich, Cheltenham & Gloucester and First Direct announced within minutes of the Bank’s decision that they would cut their standard variable mortgage rates by 0.25 per cent.

Tags: year, gloucester, month, number, woolwich, home, home owners, bank's decision

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

Future Mortgages slashes loan-to-value ratio by 20%

Specialist lender Future Mortgages plans to slash the maximum loan-to-value ratio by up to 20 per cent today for its prime and near-prime products.

Future Mortgages has reviewed its lending due to soaring demand for mortgages as well as daily price increases from competitors, resulting in the decision to tighten lending criteria.

The latest research from the Abbey Mortgage Index confirms that mortgage lenders can expect a high demand for five-year fixed rate mortgages, despite recent reports that the mortgage market is declining.

Additionally, the number of people who would choose any type of fixed mortgage product has risen from 35 per cent last month to 53 per cent this month. However tracker mortgages are less popular with only five per cent of respondents opting for them compared to 12 per cent last quarter.

Commenting on Future Mortgages’ decision, a spokesman said: “We see these actions as prudent and a strong indication of our desire to retain a market position in chosen sectors while simultaneously maintaining our servicing proposition in these challenging times.”

Tags: daily price increases, Abbey Mortgage, mortgage, loan, month, tracker, maximum, tracker mortgages

BoE to cut interest rates next week?

The increasing downside risk due to the credit crunch is one of the reasons behind a possible interest rate cut by the Bank of England (BoE) next week, financial analysts have predicted.

Experts from six financial institutions including the Centre for Economic and Business Research, Global Insight, Nationwide and Barclays Capital, all anticipate that BoE’s monetary policy committee (Mpc) to cut rates by 0.25 per cent in April.

Lloyds TSB and HSBC said that there would be no change in rates this month.

Howard Archer, UK chief economist at Global Insight, said: “We believe that the increasing downside risks to UK growth stemming from tight credit conditions will prompt the Bank of England to trim interest rates by a further 25 basis points to 5.00 per cent at its April meeting.”

The decision by the Mpc on interest rates will be announced at 12 noon on April 10th after its monthly two-day meeting.

Currently interest rates stand at 5.25 per cent.

Tags: month, April, economist, business research, Lloyds Banking Group, week

Building societies still lending despite the credit crunch

Building societies are still in a good position to offer funds for mortgages despite some announcing they were restricting lending, one financial expert has claimed.

According to the Building Societies Association (BSA), action taken last week by certain building societies was not an indication that these providers were struggling in the wake of the credit crunch.

With certain larger lenders withdrawing from the marketplace, many smaller firms were inundated with applicants which required a re-adjustment of service levels to ensure customers were still dealt with, said the firm.

Neil Johnson, PR and policy manager for the BSA, said: “Building societies are largely funded by retail deposits rather than wholesale markets. So the problems in the wholesale markets haven’t affected them in the same way that they’ve affected banks.”

Earlier this month, the BBC reported that five building societies – the Bath, the Earl Shilton, the Newbury, Melton Mowbray and the Tipton & Coseley – had restricted or halted new mortgage lending due to an influx of new customers.

Tags: good position, Social economy, month, bank of england, economics, business, Financial services, societies

Under 35s facing credit card and loan debt

A new study has found that people under the age of 35 in Yorkshire are having to spend £160 a month servicing their debts.

Skipton Building Society reports that after paying rent and mortgage costs, the single largest outgoing for people within this group is paying off credit card bills and loan repayments.

The firm’s research also revealed that 73 per cent of people under the age of 35 in Yorkshire have some form of debt, with the average person owing £8,477.

However, a further 11 per cent were found to owe more than £20,000.

Jennifer Holloway, head of media relations at Skipton, said that it is “definitely time for a wake up call” for many people, given that they may have to work longer and earn more to be able to retire comfortably.

“And even though it may seem daunting, it could be easy for those in the red to join those in the black,” she commented.

In related news, Abbey recently reported that millions of people were looking to take advantage of balance transfer deals and switch money owed on one credit card to another during the first three months of 2008.

Tags: month, finance, abbey, credit card bills, personal finance, loan, North Yorkshire

Average family pays £42 per day in bills

The average family in the UK is spending up to £42 per day on bills, a figure which is expected to rise further according to new figures.

Findings from Data show that the cost of primary bills has risen to £3,426 a year for the typical UK household, which is expected to increase more when the council tax and water bill increases arrive.

Added to the average mortgage costs, which equate to £12,000 per year, the average household bill works out at over £15,000 per year – or £42 per day.

Moira Haynes, a spokeswoman for Citizens Advice, said: “Our debt inquiry figures suggest that growing numbers of people are not only finding themselves over-committed on credit cards, loans and overdrafts, but are also struggling to meet day-to-day living expenses.”

Despite being the lowest increases for 14 years, a survey from the Times showed that the average council tax rise will be 3.9 per cent, which equates to an additional £52 per month on a band d property.

Tags: show, month, living, bill increases, Economic history, Labour Party, day-to-day living

Brits spend record amount of £4.5bn online

British consumers have broken the record for the amount spent over the internet in January – with £4.5 billion being used to purchase goods online.

Findings from the Interactive Media in Retail Group (IMRG) reveal that the figure was a 75 per cent increase on figures from last year’s January.

Anthoula Madden, vice president of consumer products and retail at Capgemini UK, said: “The index shows that January sales are as large a phenomenon online as they are on the high street, with the overall online market continuing to show strong growth.”

He added that the high growth in the sales of electrical goods and clothing suggests that consumers are treating themselves to items missed from Christmas stocking lists.

According to the results of the survey, consumers spent 38 per cent more on electrical goods over the internet last month compared to January 2007, while clothing figures increased by 32 per cent.

The figures from January contrast with findings from those compiled by the Office for National Statistics which showed that spending in December dropped by 0.4 per cent compared.

Tags: consumer, record, uk, clothing, Interactive

Parents can help children buy property

First-time buyers can receive financial help from their parents when paying for a property without any inheritance tax implications, one mortgage expert claimed.

Bestinvest said that if a child’s funding for purchasing a house is assisted by their parents, then they are “party” to the mortgage.

Because of this, parents would rather give them some money and ensure the mortgage is in the child’s name, stated the firm.

Peter O’Donovan, mortgage manager for Bestinvest, said there would be no inheritance tax implications if a property is in a child’s name.

“Even when the parent uses their income to assist [with mortgage payments], the mortgage might be in three names but the property will just be in the child’s name,” he added.

Research released by Abbey earlier this month found that first born children are more likely to receive financial help for a home purchase than their siblings.

Up to 17 per cent of first-borns are given money towards their first home compared with 12 per cent of second-born children.

Tags: mortgage, siblings, month, help, cent, personal finance, mortgage expert, income

Bridging loans “should not be employed”

Bridging loans should not be employed “unless absolutely unavoidable” claim a legal body.

AA Legal Services said that although broken property chains remain, they should never be considered a routine factor and if one is obtained as a last resort, it should only be used where the period is limited.

James Molloy, product manager for AA Legal Services, said that the market will never be rid of aborted transactions and broken chains.

“Certainly not without reform around making the commitment to proceed legally binding earlier in the process – as in the Scottish process,” he added.

However, in all cases, and with all financial products appropriate advice in individual circumstances is essential.”

Research from the Times estimated that one in three property chains is broken.

According to new research from Hometrack, house prices dipped for the fourth month running while the average time it takes to sell a property is on the rise.

Tags: research, Anthropology, manager for AA Legal Services, Mortgage loan, month, rise

‘Unattractive’ interest rates increase premium bond popularity

Unattractive interest rates are responsible for the increase in the popularity of premium bonds, claims an asset management company.

Mark Dampier, head of research at Hargreaves Lansdown, said the tax free returns from premium bonds have also helped make them more attractive.

“It is based partly on the fact that interest rates had gone down so far that people stared to think: ‘Why not have a bet in the premium bonds’?” he said.

He added that premium bonds are popular with self-employed people started to take advantage of the tax free benefits.

“If you are lucky enough have quite a lot of money, premium bonds are often a port of call. You don’t have to put them on an income tax return form,” added Mr Dampier

From August 1st 2005 there were two £1 million jackpots drawn each month and, at the current odds, over a million other cash prizes. The winning bond numbers are selected at random each month.

Tags: Lansdown, advantage, odds, lot, month, cash, head of research, Business Finance

Three million use credit cards ‘every day’

Three million people in the UK use their credit cards every single day, it was claimed this week.

That amounts to nearly one in every ten of the UK’s 34 million credit card holders.

54 per cent were found to use their cards once a week, while 35 per cent use them once a month or less frequently.

The research was carried out by Abbey, itself a provider of credit cards.

Online shopping was found to be the most widespread use to which credit cards are put, with 20 million flexing their plastic over the internet.

Surprisingly, high street shopping proved to be less popular, with only 19 million spending on credit cards in real-world shops.

The research found that 57 per cent pay off their credit card bills every month in full, while only 3 per cent admit to having difficulties making regular payments.

Roger Lovering, managing director of Abbey Credit Cards, said: “There is no one way that people use their credit card and we see as many different spending patterns as there are people.”

Tags: high street shopping, cent, month, provider, cent admit, director

Buy-to-let lending continues to thrive

Buy-to-let mortgage lending is booming, in spite of widespread concern about the state of the market.

With the Royal Institution of Chartered Surveyors (RICS) warning that house prices are falling at their fastest rate for two years yesterday, many believe that the buy-to-let sector will contract.

However, new data published this week suggests that many investors continue to believe that buy-to-let remains a good deal.

New figures from the Council of Mortgage Lenders (CML) showed that £7.8 billion was taken out in loans under their ‘other lending’ category in August – of which buy-to-let is a major component.

The sum makes up almost 25 per cent of the £34 billion borrowed that month, and is 37 per cent up on the figure for the previous month.

The CML said: “Total lending has been buoyed by a strong buy-to-let market.

“[Other lending] covers buy-to-let which has continued to be underpinned by house price increases, tenant demand, rent increases and landlords’ willingness to take long-term investment decisions.”

In the same period, the CML’s figure showed that borrowing for new purchases fell by 11 per cent on the previous month, while remortgaging borrowing fell by 12 per cent.

Tags: GBP, buy-to-let, week, cml, month

Downturn for house price growth

House price growth finally changed direction for the first time since October 2005, as property prices began to fall in many areas of the country, the latest housing market survey from the Royal Institution of Chartered Surveyors (Rics) has revealed.

With higher interest rates and market volatility, demand continued to weaken throughout August, particularly in the West Midlands, the north-west and East Anglia.

During the month, 1.8 per cent more chartered surveyors reported falls rather than rises in house prices, although London has yet to be affected by the credit market situation and continues to show the strongest growth in England.

Ian Perry, a spokesman for Rics, said: “Potential house buyers have become far more cautious as they wait and see what affect interest rate rises will have on household finances. Affordability is at its most stretched in over a decade and many will worry that rising mortgage repayments will prove a step too far.

“The market will soften further, going into the autumn, reducing some impetus from those that have been chasing a rapidly moving target.”

According to a recent report from the National Association of Estate Agents, the introduction of Home Information Packs (Hip) for three-bedroom properties is likely to lead to a similar decline in the number of these properties on the market as that which was seen after the introduction of the four-bedroom Hip.

Tags: spokesman, interest, home, house price, growth, month

Average house prices approach £200,000

The average price of a house has almost reached the £200,000 mark, according to new figures, but the rate of growth has shown further signs of slowing.

According to the Halifax House Price Index, house prices increase by 0.4 per cent during the month of August, with the average cost now £199,770.

This is the third month out of four that house price inflation has dropped below 0.5 per cent and the Halifax report claims this is indicative of a slowdown in the market.

In addition, the three-monthly rate of growth fell from 4.5 per cent in March to 1.6 per cent in August.

“The downward trend in house price growth is expected to continue over the remainder of 2007 as the five interest rate rises since last summer have an increasing impact on household spending and housing demand,” said chief economist Martin Ellis.

“Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale will, however, continue to support house prices.”

The figures also showed that mortgage approvals in the three months to July of this year were nine per cent lower than those recorded during the peak September to November 2006 period.

Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said the figures meant speculation of an imminent interest rate cut was “premature”.

Tags: institution of chartered surveyors, Real estate economics, housing, house price, Average house prices, month, cent, United States Department of Housing and Urban Development

Inheritance tax spreading as house prices rise

Inheritance tax, traditionally thought of as the exclusive preserve of the super-rich, is affecting more and more Britons as house prices rise.

This is the claim made today by Calculis Ltd, an independent financial advisor.

Currently, UK tax laws have 40 per cent in every pound of assets left by a deceased person over £300,000 being made payable to HM Revenue and Customs.

Director of Calculis Alex Pegley said: “The tax is hitting people it’s not supposed to be hitting; it’s hitting people with bog-standard houses in the south.”

According to the latest Halifax House Price Index, average property prices are 11.2 per cent up on the equivalent month in 2006.

Furthermore, a recent report from the National House Price Federation claimed that house prices would rise by a further 40 per cent in the next five years.

Tags: Calculis Alex Pegley, Index, assets, finance, Calculis Ltd, month, independent financial advisor, uk

Halifax launches new fixed-rate deal

Mortgage provider Halifax made its new 25-year fixed-rate deal available today.

This represents a response from lenders to Gordon Brown’s call for long-term fixed-rate mortgages as a way of alleviating home buyers being priced out of the market. Halifax’s new deal will lock in the holder’s interest rate until 2032.

The provider will be counting on customers gambling on further interest rate rises, as its rate of 6.39 per cent is much higher than the majority of variable rate deals, which are in line with the current base rate of 5.75 per cent.

A spokesman for Halifax said that the new mortgage “means homeowners can balance the security of a fixed interest rate with a range of flexible features built into the product”.

The provider added that it hoped to “radically change the consumer’s view of longer-term products”.

The Bank of England decided today to leave the base rate as it is for this month.

It has risen five times since last August, however, and most industry analysts predict further rises before the year is out.

Tags: view, Floating interest rate, longer-term products, range, response

Increasing numbers of players in small business loans market

Increasing numbers of lenders are getting involved in the increasingly competitive small business loans market, leaving consumers apparently spoilt for choice.

Lloyds TSB said today, however, that customers must be sure that they will be able to pay back money lent, and to have a thorough risk assessment before going ahead with the loan.

Senior manager of lending at the bank, Stuart Wilson, also said that the current climate – with the Bank of England raising interest rates last week – meant that people looking for loans should take extra care, and that those having difficulty with meeting their repayments should seek out their lender for advice.

Referring to small businesses, he added: “In terms of availability I think there are more and more players in the market who would cater for all types of lending options. So I don’t think there’s necessarily customers who are not able to start up because of a lack of funding, it’s just looking around the marketplace and seeing who is looking to lend to them.”

Increasing competition in the market has led lenders to advertise more and more attractive introductory offers to induce new startups to take out a loan with them. NatWest is launching a new small business bank account this month where all bank charges are free for the first two years.

Tags: Commercial mortgage, current climate, bank of england, small businesses, lloyds, lack

Lenders announce mortgage rate increases

British mortgage holders will feel the squeeze, as Nationwide, Northern Rock and Halifax all announced a rise in their base rates yesterday.

The rise comes as a direct response to the Bank of England’s decision last week to raise interest rates to 5.75 per cent – their highest level for six years.

The new rates for variable mortgage holders are now 7.75, 7.84 and 7.24 per cent respectively, with all three passing on the full 0.25 per cent increase to their customers.

These increases work out as £33 extra a month for a £200,000 loan. Mortgage holders coming off a two or three year short-term fixed rate deal in the next few months will feel the difference worst of all, with rates having stood at just 4-4.5 per cent when their fixed rate period commenced.

Mortgage holders could find the situation worsening still, with many economists predicting further rate rises by the end of the year.

The Consumer Price Index – the government’s inflation yardstick – stands at 2.5 per cent, according to most recent figures. The Bank of England, which uses interest rate rises to cool inflation, has a target of just two per cent.

Tags: rates yesterday.The rise, Consumer Price, price, interest, rate, Economy of the United Kingdom

Base rate set to increase to 5.75 per cent?

The Bank of England’s monetary policy committee may be tempted to increase the base rate to 5.75 per cent at this week’s monthly meeting on Thursday, many commentators believe.

Howard Archer, chief economist at the Global Insight consultancy, claims that the committee will experience a “very tight vote again”.

At last month’s meeting, the governor of the Bank of England Mervyn King’s desire to increase rates for a fifth time since August 2006 was blocked by MPC members for the first time since the bank gained independence ten years ago.

Mr Archer said that only one of the five who voted to hold rates at 5.50 per cent last month would have to change their vote to effect a rate rise.

Last month, Mr King said that Britons should expect a further interest rate increase to cope with an over-heating economy and increasing inflationary pressures.

Despite UK inflation falling to 2.5 per cent in May, this was still some way below the government’s two per cent target.

Tags: mr archer, bank, economy, inflationary pressures, time, britons, governor, month

Rewards Credit Cards – Compare Credit Card Rewards Programs Online

Credit card users in the UK can enjoy a good choice of cards these days to suit all needs and circumstances.

One popular type of card is the reward credit card, and these cards are available from a wide range of card issuers offering a variety of rewards. With rewards credit cards you can earn points or rewards when you spend on the card, and these points can then be exchanged for goods, vouchers, or money off purchases depending on the type of card and reward that you choose.

As with other types of credit cards it is best to avoid making cash transactions on rewards credit cards, as card companies tend to charge hefty rates of interest and expensive charges on cash transactions. Also, no reward is received on cash transactions, and therefore you will not receive the full benefit of the card and may offset the benefits of the card through having to pay interest and charges on your cash transactions.

The interest rates, reward levels, and types of rewards offered on reward credit cards can vary from one credit card company to another, and this means that it is important to compare a range of cards in order to find the best one for you. Those that will benefit the most from these reward credit cards are those that repay their balance in full at the end of each month.

If you repay your balance in full each month rather than spreading the repayments you can earn the loyalty or rewards points on purchases that you make on the card but you won’t have to pay any interest, which enables you to really make the most of this type of card.

You can get all sorts of rewards credit cards, such as branded rewards credit cards and rewards based cards from supermarkets that enable you to earn store loyalty points.

The more you spend on your rewards credit card the more rewards points you can earn, and the better the rewards. For those looking to spread repayments on their credit cards a low interest or 0% interest on purchases credit card is probably more beneficial that a rewards card.

If you are looking to apply for a rewards credit card to earn points or rewards when you spend you should bear in mind that the terms and conditions as well as the rewards can vary. You can compare the range of rewards credit card easily and conveniently online, where you can also make your application.

Tags: business, Reward website, Credit card users, reward credit card, wide range, rewards credit cards, benefit, month

July move ‘popular’ among older Britons

July is regarded as the most popular month for people over the age of 50 to move house, according to Saga Home Insurance.

Figures released by the group indicate that more people in the over-50s bracket have moved house in July in the last five years than any other month.

Downsizing appears to be popular among over a third of respondents in the poll, with many wanting to move to a smaller home.

Some 34 per cent of respondents also cited the desire to be closer to family as a motivating factor to move.

Andrew Goodsell, chief executive of Saga, said: “We can see that family is a key influencer on where future retirees will migrate to, but we can also get a sense of just how people plan to spend their retirement – with shopping and social activity as key attractions when searching the area to retire to.”

Mr Goodsell said that people moving home might consider taking on Saga Home Insurance, which might help them minimise the stress of moving home.

Tags: activity, Health care, retirement, stress, month, bracket, minimise, home insurance

Mortgage lending may be easing

Mortgage lending has continued to grow, with figures for May breaking records for the month.

The Council of Mortgage Lenders (CML) says that May lending figures reached £30.6 billion, a 12 per cent increase on the £27.4 billion that was lent in April.

The figure was also a five per cent increase on the £29 billion that was lent in May 2006 but the CML says that this shows that the market is easing.

Despite breaking records, the year-on-year growth of five per cent is well below the typical 12-15 per cent increase we are used to seeing.

Although this is a clear sign of the market easing up, the CML says that May’s figures remain very strong.

“While today’s lending figure is a new record for the month of May, it does indicate that the market is slowing down following the rapid and sustained growth we saw last year,” said Michael Coogan, director general of the CML.

“Going forward we expect lending to ease as we progress through the year, but the market will remain in good shape.

“Although further interest rate rises will continue to dampen demand, we are still on course to meet our prediction of a record £360 billion of lending during 2007,” he added.

Some experts are expecting the introduction of Home Information Packs into the property market from August of this year to help boost house prices.

Tags: sustained growth, General, course, good shape, progress, home, council of mortgage lenders

Mortgage lending down

Mortgage lending fell in April of this year but is still markedly higher than the same period in 2006.

Figures from the Council of Mortgage Lenders (CML) show that borrowing fell to £28.8 billion in the month.

That is down nine per cent on the £31.7 billion which was borrowed in March but remains 18 per cent higher than figures from April 2006.

It is also the highest ever figure recorded for April but CML officials say that the market is levelling out.

“Lending is still strong, but it does seem to be stabilising in 2007 following its major growth in 2006,” said Michael Coogan, director general at the CML.

“With higher interest rates now beginning to have an impact, the modest slowing in activity that we have been expecting over the rest of the year looks set to materialise.

“Even so, we continue to expect lending in 2007 to be around four to five per cent higher than in 2006,” he added.

Tags: figure, April, borrowing, materialise, month, economics, rest, modest slowing

Rural demand ‘outstripping supply’

Bad news for anyone looking to get a big house in the country as demand is outstripping supply by an average of 15 to one, rising as high as 29 to one in some areas.

Competition is so fierce that even before considering a mortgage to obtain such a property, anyone bidding in Tunbridge Wells, Ascot and Worcester is likely to be competing against 28 others, estate agent Knight Frank said.

Manor houses, farmhouses and country cottages have risen by £4,516, £13,474 and £34,241 per month on average since December while the number of interested buyers has risen by 21 per cent since January.

“The current average price of a manor house has now broken the £3 million barrier,” commented Knight Frank’s head of residential research Liam Bailey.

“Payment of City bonuses together with an increasing international presence in the country house market has aided price growth.”

This means that this is three percentage points ahead of the number of available houses, giving an annualised growth rate of 12.4 per cent.

Tags: said.Manor houses, percentage, Business Finance, month, estate, Rural demand

Landlords rely on mortgage advisers

Landlords in the UK rely heavily on mortgage advisers when it comes to investing in a property.

That is according to the latest research from Alliance & Leicester which found that 74 per cent of landlords seek advice.

In total, 28 per cent admitted to relying on an adviser “a great deal”, while 46 per cent use them “a fair amount”.

The buy-to-let market is seemingly dominated by landlords who use an adviser, with 55 per cent admitting to relying on one to make them aware of new deals and arranging the actual mortgage.

“From our research, it is clear that advice plays an important part for buy-to-let investors,” said Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester.

“Landlords need their advisers to obtain information that they can’t easily get hold of themselves as well as helping them get the best mortgage product for their needs.

“The fact that half of landlords taking advice (49 per cent) remain loyal to one adviser shows just how much they really do value this relationship,” he added.

The research also found that over a third (40 per cent) of landlords meet with their mortgage broker every month, while nine per cent meet with them on a weekly basis.

Tags: deal, landlord, information, mortgage advisers, month, use, weekly basis, landlords taking advice

Do You Have Enough Life Insurance?

Besides the thousands of people who do not have life insurance, many that do are actually underinsured. Many have children or family members that rely on them financially, and don’t realize their coverage is less than ideal. In the event of a death, a family has enough to cope with emotionally, without the additional worry and burden of paying any mortgage and bills. If a breadwinner dies without sufficient insurance, their family might ultimately have to sell their home, at the time when they most need to be recovering from the loss. Read more

Tags: home, whole life insurance, shopping, month, life insurance cover, debts, life insurance, ideal

Brits urged to borrow sensibly

British consumers are being encouraged to make sure that they only borrow what they can reasonably pay back.

Debt advice firm Thomas Charles is calling upon Britons to take control of their finances following the expensive Christmas period.

The company says January and February are some of the worst months for consumers when it comes to falling into debt.

This is put down to over spending during the festive season and often results in people borrowing more money to see them through the difficult period.

James Falla, director of Thomas Charles, says consumers need to ensure that they are only borrowing money which they can afford to repay.

“If you are taking a loan, then you should know full well that you have to pay back an amount every month,” he said.

Consumers are also advised to take a proper look into the best ways of borrowing money and see which method is best suited to their circumstances.

Tags: Thomas Charles, James Falla, director, debt advice, month, control, british consumers, circumstances