First time buyers still have options to help them get on the property ladder

Times are hard, and now we’re hearing that the UK’s economic recovery is ‘paralysed’ by Europe’s debt crisis. With the economy the way it is, first time buyers often write off the possibility of ever getting on the property ladder and believe they are set to rent for the rest of their lives. This is not the case anymore, with the government; various agencies; housing associations and property developers now offering a range of deals to help first time buyers get on that crucial ladder. Here are 5 tips that can help you keep those costs down…

Shared ownership

Shared-ownership is a terrific way into home ownership and is the main affordable housing scheme. If you cannot afford to buy outright, you can part buy part rent your home – you pay a rent on the share that you do not buy which is set at an ‘affordable’ rate. The bigger the share that you purchase, the less rent you have to pay.

The FirstBuy scheme

Saving for a deposit is something that holds lots of first time buyers back. Schemes like this give you a step up onto the ladder, by lending you some of the money through a shared equity offer. If you purchase your first home in England though the FirstBuy scheme, your deposit could be as low as 4% – there are online calculators to see the difference it could make. If you are looking in Scotland or Wales, there’s a similar scheme called Head Start.

Avoiding stamp dut

Not an offer as such, but a way to reduce the cost of purchasing your own home. If your home’s value is less than £250,000 there’s no Stamp Duty to pay if you complete before March 24, 2012. That could save you up to £2,500 when you move.

Family ownership with your parents

It is becoming increasingly popular for young single people to include their parents on their mortgages. Even if they just own 1% of the property this security enables you to borrow more money from the bank and buy a more expensive property.

Move to a cheaper area

This does not sound like a perfect solution but sometimes in life, we have to take a step sideways to move forwards. House prices in some areas are much cheaper. If you are willing to move to these areas then you can make buying a house a real possibility. You never know, you may make a hefty profit in the end. It is worth bearing in mind that cheaper areas do not always mean lower quality. For example, some areas are more expensive because they are close to good schools so it is worth researching prices in different areas.

Tags: tips, main, way, Ownership, Equity sharing, deals, stamp duty, housing associations, buying, something

Consumers receive better news about mortgages

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

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

Young Adults And Car Insurance

As young drivers enter into their twenties they may become eligible for better insurance rates. However, many drivers who were once on the same policy as their parents stick with the same insurance company when it comes time to carry their own policy. This is unfortunate since there is a very good possibility that another company may offer young drivers a far better deal. Read more

Tags: finance, Financial services, offer, decrease rates, car insurance, play, rating

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: month, extra cash, offer, cash, best of intentions

Hedge your bets with Post Office savings bond

A new five-year savings bond has been launched this week, offering savers a risk-free route to high returns.

The Post Office has announced the launch of the fifth issue of its Fiveyear Saver bond, which permits savers to benefit from gains in the stock market without taking on the risk of losing their money.

The bond delivers 7.5 per cent gross interest on half of the sum deposited, plus 50 per cent of any rise in the FTSE 100 index on the rest it over the course of the five year period. People’s savings are thereby insulated from any risk of loss.

Post Office director of savings and investments Richard Norman said: “Although many investors are seeking to benefit from gains in the stock market, they also want a guarantee that they won’t lose their money.

“Post Office Fiveyear Saver is a secure investment which gives a guaranteed return, while still offering the growth potential of the FTSE-100 Index. There is no risk of losing your original deposit and you can invest from just £500.”

The maximum investment is £1 million, and the offer period is open until January 11 next year.

Tags: Fiveyear, Post Office director, risk, route, offer, Fiveyear Saver bond, Hedge, growth

Barclays offer reduced personal loan rates

Barclays bank has announced it will cut its personal loan rates when many lenders are having trouble maintaining current rates, according to Gary Druggan, managing director at Barclays Personal Loans.

Cutting rates on its entire book, the lending giant steps up competition in a move that takes advantage of its “strong balance sheet”.

The bank reports that Barclayloan Plus loan rates are going down by 0.6 per cent to 6.8 per cent APR typical.

Mr Duggan said: “At Barclays we are able to take advantage of a very strong balance sheet and finance loans from our very strong deposit taking business, enabling us to cut rates for this campaign.”

Personal loan rates have been just one of many things to be affected by recent credit crunch.

With many lenders forced to push rates up by as much as four per cent, borrowers would have trouble finding a rate below 6.9 per cent.

Mr Druggan added that anyone finding better loan rates than offered with Barclays will be refunded the difference and will also receive a bonus of one pound every month.

Tags: offer, borrowers, difference, move, pound, crunch, personal finance, apr

Sainsbury’s increases interest free period on credit cards

The supermarket giant Sainsbury’s has been offering a range of financial products and services over the years, including some very competitive deals on credit cards.

According to recent reports the retail giant has now announced that its credit cards – which already offered an attractive ten months interest free credit on purchases – will now be offering an increased interest free period of twelve months, which is likely to attract increased custom as well as placing the cards amongst the top of the best buy tables.

Officials from Moneyfacts have stated that the cards are all the more attractive because they also offer a low rate life of balance transfer facility, so in addition to enjoy twelve months of interest free credit on purchases customers can also transfer costly existing credit card balances and enjoy a low rate of interest for the life of the transferred balance – the rate currently stands at 5.94%. The standard variable rate on the credit cards is 15.9%.

One official from Moneyfacts stated: “The standard and platinum deals were already competitive, but extending its offer to 12 months pushes its standard card to hold joint top position of the moneyfacts’ best buys, along with Halifax and HSBC, with all three offering a standard revert to rate of 15.9% APR. The Platinum card offer is market leading, with the next best interest free offer at 11 months. These cards also come with the added benefit of a lifetime balance transfer deal at 5.94% pa, which in today’s market is a pretty competitive. Combined with the 0% offer, these deals are a very attractive overall package.” 

She added that the Sainsbury’s credit cards were now looked upon as a five star deal, as they offered savings on both transferred balanced and purchases, making them great value and convenient.

Tom Smith
5th September 2007

Tags: purchases, increased, introductory, sainsburys, card, offer

Mortgage Reality About To Bite

The next three months will see many thousands of homeowners come face to face with reality as their cheap fixed rate deals come to an end.

The deals were taken out in August and September 2005 when the Bank’s base rate had fallen to 4.5%. At that time you could get a two-year fixed rate mortgage with an interest rate as low as 4.24%.

If borrowers do nothing and let their mortgage slip onto the lender’s standard variable rate (SVR) then if they’re on an average £130,000 mortgage they will see their repayments go up by up to £290 a month.

Looking for a new fixed rate deal is not going to make them feel any better as the lowest fixed rates are now at around 5.6% and come with huge arrangement fees attached. Even those, therefore, could add £110 to the repayments from a 4.24% rate.

When you switch providers you will have to pay an exit fee to your previous lender, together with valuation and legal fees concerning your new mortgage. These could easily get near to £1,000 on a £130,000 loan, but this will still work out much cheaper than sliding onto the SVR.

One of the most attractive products due to end soon is Halifax’s two-year fixed deal at 4.29%, which expires on 30 September. There are about 30,000 customers on this deal. If they don’t take any action they will end up on the bank’s SVR of 7.75%. On a £130,000 loan monthly payments will go up from £707 a month to £981 – an increase of £274. Another popular one is Alliance & Leicester’s 4.28%, ending on 31 October. A&L’s SVR is under review, but is likely to go up to 7.89% before then. Repayments will go up from £706 a month to £993 – up £287. A&L also has a rate of 4.24%, ending at the same time. In this case the repayment rise will be £290.

Experts suggest that anyone with a mortgage deal ending in the next few months should start looking around for a new deal now, but should steel themselves in the expectation of paying a lot more than they are now.

There are other good two-year old deals that are ending soon, such as Northern Rock’s 4.69% on 31 August, Cheltenham & Gloucester’s 4.39% on 30 September and Abbey’s 4.59% on 2 November.

Halifax is offering a range of remortgages only to existing customers. One is a two-year fix at 5.89%. Anyone moving onto it from 4.29% will see their repayments rise to £829 a month from £707 on a £130,000 loan, and will still have to pay the £849 arrangement fee.

Britannia has a good looking two-year deal at 5.69%, accompanied by a fee of £999. That’s £813 a month on a £130,000 loan and costs £20,511 over the two years. If an A&L borrower on 4.28% were to switch to the Britannia deal they would save £180 a month and £2,500 over two years rather than stay on the A&L SVR.

Tom Smith
25th September 2007

Tags: Mortgages, discounted, standard, fixed, introductory, variable, rates

Current accounts help poor save money, union says

Current accounts are the safest way for those on low incomes to save money, credit unions said today.

ABCUL, the main trade association for the unions, said that these accounts also give lower-income customers access to direct debit, allowing utility bills to be paid more cheaply.

Spokesperson Lucia Webster said that they offered “a safe and accessible option for many people in the UK.

“It offers much more than a basic bank account from a high street bank.”

Ms Webster added that unions “offer a wide range of services to all sectors of the community, including people who may have difficulty accessing high street banking services.”

The Family Resources Survey from 2005/06 shows that 97 per cent of British households have some form of saving account, with fully 90 per cent of the population hold a current account.

Tags: account, high street banking, offer, Direct debit, Financial institutions, Transactional account, utility, savings account