Many retirees have a second home

Over recent years many non-homeowners have found it more and more difficult to get onto the property ladder, with lenders becoming more stringent about lending money to first time buyers and demanding higher deposits, which most first time buyers cannot afford. This has resulted in many non-homeowners giving up on their dreams of homeownership for now and having to settle for renting a home instead.

However, whilst the younger generation struggles to even get a big toe on the property ladder many people that are coming up to retirement are the proud owners of second homes. A recent survey revealed that one in seven couples in their fifties and early sixties own a second home, with an average £250,000 tied up in their second homes, not including any mortgage on the second home and not including the value of their main home.

At the same time their grandchildren and in some cases even their children are struggling to get the chance to own even one home. Many are unable to secure the deposit that they need to get onto the property ladder and many others cannot afford the repayments on their current income. This has left them facing the toughest challenge to buy a home out of any other generation. The figures were released recently by the Office for National Statistics. This is the first time that calculations have been carried out to see how many people within this age group own a second home.

Overall 13 percent of people in that age group were found to own a second property, which in some cases was abroad. Many will have purchased these properties before the boom, with the average price when they purchased the home being £30,000 but the value for the same property today being an average £163,000.

Tags: percentage, time, grandchildren, price, couples, main home, time buyers, boom

Take out affordable home insurance

Most of us will know the feeling of having to cut back on outgoings, especially over the past couple of years, with the recession and the global financial crisis both taking their toll. For many a decision has had to be made with regards to whether they can afford certain services and purchases, and many have had to cut out services that they have always been reliant on.

However, it appears that one of the areas that some people are cutting back on is protecting themselves financially, and this includes taking out cover such as home insurance. This can, however, be a very costly mistake, and means that you could find yourself in hot water should something happen to your property or your belongings.

Your home and its contents are susceptible to a range of problems, from fire and flood damage to burglary or even damage caused by accidents. Those that do not have home insurance in place will suffer financially if they are not covered and something happens to their home or belongings. However, despite this there are more and more people that are now skimping on this cover and recent figures have revealed an alarming number of people in the UK who have no home insurance in place at all.

Fortunately, there are some good deals available on home insurance cover these days, which means that there is no need to go without this valuable protection, as you can find cover for a reasonable price. This will give you peace of mind and financial protection in the event that something does happen that results in damage to your home or your belongings.

When you choose home insurance cover you need to make sure that you get the right price, with premiums that you can comfortably afford to pay. However, you also need to make sure that you have the right level of cover, and that your home and belongings are adequately covered.

There may also be many people that do have home insurance cover but have not take an adequate level of cover out. It is important to consider whether you cover needs to be updated – for example, you may have received some expensive gadgets or items for Christmas that are now in your home but have not been included in your cover. Take some time to look at your policy and if additional cover is required get it updated.

Tags: good deals, recession, crisis, reliant, price, accidents, Disaster Accident

Consumers warned against locking into costly fixed rate energy tariffs

With winter now upon us it is not surprising that many people are getting concerned about their energy bills, and this is made even worse by the fact that energy usage prices are set to soar with the energy giants increasing their prices and adding the financial burden that many households are already experiencing. Scottish and Southern Energy has already announced an increase of 9 percent from the start of December, which could see the average annual bill rising by almost £70 a year.

Officials have said that it is likely that more of the UK’s energy giants will follow suit and increase their prices. However, they have also said that consumers should resist the temptation to lock themselves into costly fixed price energy deals, as this way they could end up paying hundreds of pounds extra each year. It is claimed that fixed tariffs are around 27 percent higher than online tariffs, and this could add over £230 to the average annual energy bill.

EDF Energy announced yesterday that it would be freezing standard gas and electricity prices until March 2011. However, the annual cost of this comes to £1098 a year, compared to £867 a year for its best online tariff, reflecting a difference of 27 percent.

Ann Robinson from the price comparison service uswitch.com said: ‘Fixed tariffs can be expensive; it is only worth paying the extra if you are confident prices will increase by that much. There are two key steps to keeping a lid on your energy bills – make your home more energy efficient, and switch to a competitive energy plan so you pay less for the energy you use. This could save around £422 per year.’

Tags: EDF, Renewable energy, fixed rate, officials, price, tariff, Ann Robinson, price comparison service

Using comparison sites for insurance

The cost of home insurance and vehicle insurance can be very high these days, and for the many households that are already struggling to make ends meet financially it can be difficult to afford these rising costs. At the same time having this sort of insurance in place is important to ensure that the home or vehicle is protected, and of course in the case of vehicle insurance it is a legal requirement.

The rising cost of insurance has resulted in an increase in the number of people looking to switch their cover to another provider in order to reduce costs, and this has resulted in a myriad of insurance related price comparison sites springing up over the past couple of years. These sites can often provide consumers with ease, convenience, choice, and speed when it comes to switching their insurance cover.

So, just how effective are these price comparison sites? In actual fact they can be highly effective in helping consumers to find low cost insurance deals that suit their needs and reduce costs, and they are very easy and simple to use. Consumers are able to compare a wide range of insurance options all under one virtual roof with a price comparison site, and the process is quick, simple, and convenient.

In order to use these comparison sites consumers simply need to enter details of their insurance needs and some personal details onto the website, and this will then bring up a list of potentially suitable and affordable insurance plans and providers. The consumer can then simply compare the costs and features of the policies and decide which one best suits their needs and their budget. This enables the consumer to arrange a new insurance policy quickly and easily, and to browse the options and compare with minimal hassle.

However, there are also a couple of things to bear in mind when considering using these comparison sites to cut insurance costs. First of all not all insurance providers are available through comparison sites, so you need to bear in mind that you might still find a cheaper deal directly through an insurance company rather than through the comparison site, as these deals may be available through an insurance provider than does not operate through comparison sites.

Also, remember that there are now many comparison sites in operation, and it is worth checking at least a couple of sites before you make any commitment in order to ensure that you get the best possible deal.

Tags: fact, suits, insurance needs, insurance deals, budget, suit, low cost insurance deals, price

Slowdown in insurance price increases

Over the past year many drivers in the UK have been hit hard by the rising cost of petrol, and to add to their misery huge increases in vehicle insurance have also been put into place as motor insurance firms struggle to recoup losses resulting from increased claims and investment losses. This has made it increasingly difficult for drivers to keep their vehicles on the road.

However, it has been reported recently that whilst the cost of vehicle insurance is still on the up the price increases have started to slow down, which will come as a relief to many drivers who are due to renew their policies and have been concerned about how much more this will cost.

In the third quarter of this year the cost of insurance is said to have increased by 8.6 percent, taking the average cost of comprehensive cover to £650. The increase during the previous quarter came to 14.2 percent, which was much higher than the increase for the three months to the end of September. However, whilst the increase in the cost of cover has slowed down the average cost of cover is still around 37.5 percent higher than a year ago, with the increase for younger drivers taking out third party, fire, and theft cover coming in at over 54 percent.

One official involved in the research into price increases on motor insurance stated: “The price corrections that have been taking place over the past year or so have been essential to getting many private motor insurers back on an even keel after poor 2009 results. However, the level of increases is starting to slow down, with each month in the quarter showing flatter price rises than the previous one.”

Tags: price, struggle, Insurance, road, Auto insurance risk selection, Vehicle insurance, previous quarter, motor insurance firms

Now may be the time for British Gas customers to make the switch

British Gas has recently announced that around half a million of its customers are set to receive higher bills as a result of a special scheme coming to an end. The customers are those that signed a deal in 2005 by taking up the Price Freeze 2010 plan, which effectively froze their payments for a five year period up until this year.

The customers that did take up the deal managed to avoid the price hikes that were seen in 2006 and 2008, and on average saved several hundred pounds a year compared to those that were not on the plan. However, the scheme is now coming to an end, and this could see the bills of these customers increase sharply.

British Gas is writing to some customers and putting them automatically on a new price freeze plan up until 2012, although the cost per unit on this plan will be higher than it was on the plans that were signed back in 2005. Those that do not want to automatically switch to the plan are being advised to contact British Gas to let the company know, and they will then be moved to the energy supplier’s standard tariff.

Form those that are not going to switch to another scheme with British Gas it may be worth looking at the charges of other suppliers in the area to see if they can get a better deal on the cost of their gas and electricity usage than they would be being moved to the standard tariff from British Gas.

Talking of the customers that fixed their prices in 2005 one industry official said: ‘Everything fell into place for these customers. They fixed at the right time, for the right price and for the right length of time.’

Tags: price, switch, bills, british gas, energy supplier

Ways to earn and save money online

Many of us are experiencing financial problems at present due to the difficult financial climate and the recession, and most of us want to find ways to try and improve out situations by savings more money or earning a little more. Read more

Tags: Household, money saving tips, earn money online, price, save money, exchange, amount, business

Flat rental prices come down whilst rents on larger properties rise

Recently released figures have indicated that there is currently a split in the property rental market when it comes to the amount of rent that tenants are being asked to pay. Read more

Tags: rent, coming down, larger properties, price, apartment, tale, rental prices, buy-to-let

How to Save Money When Buying Groceries

In just about every household the largest expense is that of food. And, with the rising food prices many are finding it harder and harder to manage to buy the same foods in the same quantities as they once did. The price rise in food in the past year was well above the official inflation rate at an average of 5.9%. Read more

Tags: higher priced ones, supermarket guide, buying, price, lowest price, supermarkets, mysupermarket, significant savings

Save some cash on your holidays

At this time of year many of us usually start thinking about our holidays, with many planning an Easter break when the kids are off or a summer holiday to relax and unwind. Read more

Tags: price, business, open minded, special deals, sterling falling things, travel money, cheap holidays

Tesco lost out to supermarket giants over Christmas

One of the leading supermarkets in the UK has admitted that over the Christmas period it lost out to its rival supermarket giants, with the weakest sales growth in nearly two decades. In the run up to Christmas sales levels for Tesco only went up by around 2.5 percent, which was far less than its rival supermarkets. Read more

Tags: British Retail Consortium, interest, price, sales figures, year, supermarkets, tesco

Pick up a bargain when you jet off abroad

Over recent years jetting off on a holiday abroad has been out of reach financially for many people.

Whilst hotel costs and the cost of living abroad is often cheaper than in the UK, often making it cheaper to spend a week or two overseas on your holidays than in a destination in the UK, the cost of the flight to your chosen destination can really bump up the price, and it is this that has put overseas vacations out of the reach of many people. Read more

Tags: difficult economic times, price, annual holiday, fuel surcharge, holiday bargains, airline, flight operators

Will you get through the recession?

With the recession underway in the UK many people are worried with regards to whether they will stay afloat financially. With living costs having rocketed over the past year, and the effects of the global credit crunch still affecting households, many people have been unable to put aside money in savings to try and get them through these difficult times, which is a fact that has caused grave concern amongst many. However, there are some tips and hints that could help you to get through this period. Read more

Tags: while, staffing, price, best account, tide

Warning on house prices from Nationwide

One of the UK’s major lenders, the Nationwide Building Society, recently sent out a stark warning with regards to house prices in the UK, painting a bleak and gloomy picture of what homeowners and the housing market in general has to face over the coming couple of years. Officials from the building society are expecting things to get markedly worse before they get better in the housing market. Read more

Tags: principal focus, nationwide, value mortgages, borrowers, building society

Watchdog wants bills cut in winter

A consumer watchdog has stated that energy bills must be cut by the UK’s energy giants for the winter, stating that the fall in oil prices over recent months warrants a fall in energy prices.

Both the government and consumer campaigners have said that energy companies need to start reducing the cost of gas and electricity usage over the coming weeks, as the cost per barrel of oil has fallen by close to 50% since the summer. Petrol companies have already slashed petrol prices since the price of oil came down, although the price cuts did take some time to filter through. Read more

Tags: energy companies, uk, price, barrel, energy bills, electricity, wholesale price rises

Energy prices continue to put strain on finances

Over recent months being in charge of the household finances has become an unenviable task, as most households have found that their budgets have been overstretched, making it very difficult to make ends meet. A number of factors have contributed to these financial difficulties, such as rising borrowing costs, tighter credit conditions, soaring petrol prices, rocketing food prices, and increasing bills. And, as has been the case quite often over the past few years, it is energy bills that are causing major problems when it comes to most household budgets. Read more

Tags: energy hikes, Energy crisis, energy prices, cost, price, suppliers blaming increases, petrol

Is private health insurance the way forward?

We all want to do our best to protect our own health and that of our loved ones, but for many people in the UK the National Health Service leaves a lot to be desired. The NHS has come under fire for many things over recent years, from the length of its waiting lists and the quality of care given in hospitals to the levels of staff and even the levels of hygiene exercised in NHS hospitals. Read more

Tags: recent years, super bugs, issue, price, research, health insurance

Supermarket giants try to entice customers back

With food prices having soared out of control, in addition to the range of other hikes in bills and living costs, many people have been struggling to make ends meet when it comes to the household budget. Consumers have tried to make a range of cutbacks in order to try and make their money stretch further, and for many this has meant switching from the more expensive supermarket giants such as Tesco, Sainsbury’s, Asda, and Morrison’s, and turning to discount grocery stores such as Aldi, Netto, and Lidl. Read more

Tags: Retailing, price, recent additions, Asda, credit crunch, supermarkets, official, tesco

Some Brits losing money on savings

British taxpayers earning less than 5.4 per cent on their savings are losing money in the current economic climate, a new report warns.

With the retail price index at 4.3 per cent, consumers who are making taxable savings need to earn 5.4 per cent interest at least if they are to break even, a new report from moneysupermarket.com states.

There are currently 487 savings and current accounts which offer less than 5.4 per cent, the report notes.

Kevin Mountford, head of savings at the price comparison site, urges the government to consider ending the tax on savings as it tries to control the cost of living.

“Savers, especially those paying the higher rate of tax, should make sure they take full advantage of their annual £3,600 Isa allowance if they want to inflation proof their finances,” he adds.

Earlier this month, Nationwide Building Society released the results of a survey into saving attitudes which showed that while three-quarters of British consumers feel saving is important, just half of people in the UK do save regularly.

Tags: tax, report notes.kevin mountford, price, Brits, british taxpayers, cent, consumers feel saving, inflation

Expert highlights need to help those struggling with mortgages

Helping homeowners who are struggling with mortgage repayments is one of the key housing issues in Northern Ireland, according to an industry expert. Read more

Tags: Mortgages, council of mortgage lenders, Department, business, mortgage help, position, expert, price

Mortgages for self-build homes still available, says expert

People interested in building their own homes can still find mortgages, despite finance being scarce due to the credit crunch, the editor of Homebuilding.co.uk has said. Read more

Tags: Homebuilding.co.uk, average asking price, self build mortgages, equity, expert

British turning to overpriced “payday loans,” says expert

British consumers are increasingly turning to “payday loan” providers, which offer loans at annual percentage rates (APRs) of up to 1,355.

The loans, which are popular in the US, pay customers up to £750 into their bank account with an agreement to repay the loan at the end of the month when their paycheque arrives, according to a financial expert at fool.co.uk.

However, they typically charge £25 for every £100 borrowed, rising to £31.25 if the customer fails to pay it back on payday and can reach £1,400 if a borrower does not make any payments for a year, claims the website.

“These truly ugly loans are overpriced, overused and over here. Brits are falling victim to this form of borrowing when they should be fleeing from it,” Laura Starkey, a financial expert at price comparison site fool.co.uk, told the Independent.

To survive the credit crunch icWales.co.uk advises people to cut down on car journeys to save petrol, switch their utilities supplier and change credit cards to get the most competitive rates.

Tags: credit, Credit card, To survive, Payday, utilities supplier, price, comparison, Credit Cards

Ofgem figures show consumers are using “their buying power”

Data from Ofgem showing that over five million energy customers have switched supplier in the past year is a sign that customers are using “their buying power”, according to a consumer advisory service.

Which? said that energy customers need to keep looking out for the best deal as there are significant price differences between companies.

Siobhan, Parker from Switch with Which? said: “The fact that 5 million people switched last year shows that consumers are using their buying power and taking their business elsewhere if they’re not on the best tariff.”

She added that there are still improvements to be made as the research showed that nearly half of UK households have never changed supplier while even those who have already switched may find that new tariffs could offer further savings.

Figures released showed that 5.1 million consumers transferred their business to a different company in an attempt to find a cheaper deal.

This is the highest number of switchers for five years, said the body.

Tags: price, half, attempt, uk households, Green electricity in the United Kingdom, supplier, ofgem, body

Credit card restrictions could increase debt for consumers

Credit card restrictions could lead to consumers taking on more expensive debt, one financial expert has claimed.

Moneywise magazine has said that consumers could be more likely to use their overdraft facility if credit cards are restricted, which could incur bank charges which would be a more expensive short term debt.

Rachel Lacey, editor of the magazine, said that credit conditions are going to be tight for the rest of the year.

“I think whether you’re a new borrower seeking a fresh sort of credit, like a new loan or a credit card, it’s going to be hard,” she continued.

The magazine also said that stricter lending criteria could come as “a bit of a shock” to a consumer culture accustomed to the idea of ’spend now, pay later’.

According to findings from uSwitch, the price comparison and switching website, almost one in four UK adults are finding debts unmanageable.

Up to 9.5 million have maxed out on one form of credit in the last six months and 38 per cent have had a credit card application rejected.

Tags: form, Business Finance, lacey, Moneywise, facility, bank, price, sort

UK private housing market valued at £4tn

UK homes are worth a total of £4 trillion, according to new research from the Halifax.

The findings revealed that the value of the UK’s private housing stock rose by 9 per cent (nearly £320 billion) in 2007.

Martin Ellis, chief economist at Halifax, said: “UK home owners have collectively accumulated an extra £2 trillion of equity in their homes over the past decade as property prices have risen.

“This has significantly strengthened the household balance sheet. Mortgage debt accounts for only 30 per cent of the value of the UK’s £4 trillion worth of housing assets,” he added.

The value of the housing stock has more than tripled over the past decade, rising by 208 per cent from £1.3 trillion in 1997.

By comparison, the headline retail price index (RPI) has risen by 31 per cent over the past ten years.

Meanwhile, the Bank of England’s decision to hold interest rates at 5.5 per cent is “not all doom and gloom” for home buyers, according to the Leeds Building Society.

Tags: halifax, economics, interest rates, headline retail price index, price

House price ‘correction’ of 35 per cent expected

The affordability of house prices are expected to correct themselves by 35 per cent, according to an economic expert.

Firstrung have said that inflation on property, “as a phenonmenon”, is over for the present generation of consumers.

However, some first time buyers who might have a good income are going to struggle in the wake of the credit crunch, despite having clean credit histories.

Paul Holmes, chief executive officer of Firstrung, said: “Last year first-time buyers watched prices go up on first-time buyer properties by an average of £19,000.”

“We’re now reverting back to the lending standards that the banks and building societies operated within in the 1980s. It’s become that bad.”

He estimated that prices will fall by 12 per cent over the course of the next year.

Just before Christmas it was announced by the Halifax that the average house in 96 per cent of towns are now not affordable for first time buyers, and that the number of first-time buyers was at the lowest level since 1980.

Tags: house prices, Business Finance, buyers watched prices, officer, Paul Holmes, price

Christmas costs falling

The real cost of Christmas is falling steadily after taking inflation into account.

According to recent research by Halifax Unsecured Personal Loans, the price of the UK’s favourite gifts has continued to fall.

The study found that the price of games and toys has fallen most in the last year, dropping by six per cent, with woolly jumpers and socks falling in price by four per cent.

Indeed, in the past decade, the price of toys has gone down in real terms by 45 per cent, with spirits down by 26 per cent and brussel sprouts by 18 per cent.

“Our research shows that the cost of traditional Christmas favourites has actually fallen – good news for Christmas shoppers.

“However, just because the real price of items such as toys, CDs and Christmas cake has fallen, doesn’t mean we don’t need to budget and organize our finances.”

Halifax states that Christmas is as good a time as any to sort out finances, adding that it should not need to take up more time than decoration a Christmas tree.

Tags: Unsecured Personal Loans, Agriculture and Forestry, Christmas lights, uk, cent, price, budget

Barclay’s share prices fall amidst rumours

Barclays Bank, one of the UK’s high street banking giants, has seen its share prices plummet to their lowest level in two and a half years.

It is thought that the fall in share prices could be partly due to rumours that the bank has experienced financial problems in light of the recent credit crunch that has swept across the UK. Rumours were sparked back in August when the bank took out two overnight loans from the Bank of England, which was blamed on ‘technical’ problems.

Share prices tumbled by 8% at one point, taking them to 524.5 pence. This was followed by a slight recovery, with share prices at 537.5 at closing, which was a drop of 5.9%. Barclays has denied having any funding problems following the emergency loans. In fact, in order to try and restore consumer confidence the bank’s head of global retail and commercial banking, Frits Seegers, purchased £700,000 worth of Barclay’s shares on Friday.

Ian Poulter at Landsbanki Financials stated: “There are concerns about writedowns and everything else, but the comments Barclays have made to date suggest that is not an issue, as does the fact they are still buying back their own shares.”

The thirty month low in share prices comes just shortly after the crisis that hit Northern Rock, where share prices plummeted by over 80% after it became widely known that the bank had taken an emergency loan from the Bank of England. This fuelled speculation that the bank was on the verge of collapse, and over £2 billion in savings was also withdrawn in addition to a huge tumble in share prices.

Tom Smith
10th November 2007

Tags: fall, price, savings, bank, barclays, share, value

Huge difference in car insurance premiums based on jobs

A recent survey has shown that there is a huge difference in the amount of money drivers have to pay for their car insurance based on their job – even in cases where their jobs do not involve driving in many cases.

As part of the research thirteen insurance companies were used and quotes compared for 465 different professions. The results of the research showed that there was a difference of around £850 between the premiums paid by those in the highest bracket professions and the amount paid by those in the lowest bracket professions.

At the top of the league tables and paying the highest in terms of insurance premiums are footballers, who are charged an average of £1348 a year for fully comprehensive car insurance. Other professions in the top ten included comedians, who were charged the second highest premiums, stuntmen, circus employees, cab drivers, fortune tellers, builders, and national press journalists. Other professions made up the top fifteen highest paying policyholders, including bin men, driving instructors, mechanics, telephone salesmen, and bizarrely beekeepers.

Amongst those paying the lowest premiums on their car insurance cover were secretaries, who enjoyed the lowest premiums of all the professions included in the research, police officers, paramedics, doctors, lawyers, bank managers, teachers, firemen, and computer consultants. One insurance professional stated: “Insurers assess risk in many different ways — one of which is profession.”

However, she added that it was still important for people to compare quotes despite their profession, as many insurance companies also base premiums on their own claims experience of different professions.

The research was carried out by insurance price comparison website confused.com, and in order to get the different quotes the company used the character of a man aged 32, living in the London area, driving a Ford Mondeo, and enjoying maximum no claims bonus.

Tom Smith
5th November 2007

Tags: premium, Insurance, quote, depending, occupation

Insurers discover increased cases of fraud

British insurance companies are uncovering greater numbers of frauds every day.

According to the Association of British Insurers (ABI) in excess of £1 million worth of fraudulent insurance claims are made every day.

This number of claims uncovered and prevented rises to a total yearly claims figure of £480 million which represents three times the amount found in 2003.

Nick Starling, Director of General Insurance and Health at the ABI, said: “Fraudulent insurance claims cost £1.6 billion, and add £40 a year to the premiums paid by honest customers.

“But the industry is fighting back. Insurance cheats are more likely to be caught than ever before. And cheats will pay a high price as future insurance and credit will be more expensive and harder to obtain”

The majority of fraudulent claims (85 per cent) involve the claimant exaggerating the value of the loss of money or possessions, with over half of falsified claims regarding household insurance.

One example of a fraudulent claim concerns a man who asked for “recovery expenses” after allegedly suffering a heart attack on holiday in West Africa. He in fact used the money for visits to local brothels.

Tags: three times, fraud, Insurance, value, man, general insurance, price, fraudulent insurance claims

Is a house price crash on its way?

According to some experts in the UK there could be a housing market crash around the corner, similar to that seen in the 1990s.

The predictions come from industry professionals at the Royal Institute of Chartered Surveyors. Over the coming year expectation for house prices in the UK have been lowered by the RICS. According to one senior official from the institute the predictions are perfectly ‘legitimate’ and have not been made irresponsibly.

Over the coming year officials from RICS are predicting that there is a 20% chance that house prices will fall by 10% in the London area. In a similar housing market crash in the 1990s, house prices plummeted on average by around 35%. However, despite these predictions from RICS officials there are other industry professionals that disagree and feel that the chances of a housing market crash are very slim.

One industry expert stated that although interest rates have gone up by a total of 1.25% over the past year in
a series of 0.25% rises, there has been no sharp rise in interest rates. This, along with other factors, made the chances of a housing market crash very unlikely, he stated. Banks and building societies in the UK have been reporting a slowdown in the housing market, and independent research has indicated that both consumer interest and agreed sales have been slowing down over the past few months.

If the housing market does crash, as it did a decade ago, many could see the equity levels in their homes plummet, and for those that have recently taken out 100% loan to value mortgages this could leave them in negative equity, which means that they will owe more on their mortgage than the value of their property.

However, for first time buyers who are looking to get onto the property ladder a housing market crash could prove to be the ideal opportunity to increase affordability – recent reports have indicated that many first time buyers are taking a ‘wait and see’ stance rather than rushing into purchasing, amidst rumours that house prices will fall over the coming months.

Tom Smith
16th October 2007

Tags: fall, cost, house, Mortgages, price, rates, crash, interest

Stamp duty shows record increase

The total value of stamp duty generated by the sale of residential property rose by a record level during the year 2006 to 2007, a new report has said.

According to Halifax, HMRC figures reveal that stamp duty revenue rose by 40 per cent over the year to hit £6.4 billion.

The bank also claimed that the last five years have seen a 140 per cent increase in this revenue, up from £2.7 billion in 2001 to 2002.

It is the south of England that has contributed most to stamp duty revenue, the report said, accounting for 73 per cent of the total.

In addition, the higher bands for the tax – three per cent for properties over £250,000 and four per cent for those over £500,000 – contributed 79 per cent of revenue.

“The revenue generated from stamp duty on property purchases has soared as governments of both political parties have failed to link thresholds to house price inflation,” Martin Ellis, chief economist at Halifax, commented.

Addressing the Conservative Party conference in Blackpool the shadow chancellor George Osbourne pledged to increase the stamp duty threshold if they are elected, meaning only properties worth £250,000 or more would qualify.

Currently, homes with a value of between £125,000 and £250,000 are subject to a one per cent stamp duty levy.

Tags: Conservative, addition, Blackpool, price, government, house price, cent

Supermarkets branch out to car insurance

Over recent years supermarket giants in the UK have branched out enormously and in addition to offering groceries and household goods many have also been offering a wide range of financial products, such as loans, credit cards, insurance products and even banking facilities.

According to a recent report, Tesco has now gone a step further and has launched a price comparison website for those looking for deals on car insurance in the UK.

There are already a rising number of price comparison websites in operation for car insurance, and Tesco will be joining this long line of comparison sites with its news venture Tesco Compare.com, which has been launched in conjunction with the Royal Bank of Scotland. The site will be launched in mid-September, but consumers should be aware that there will be a limited number of insurance companies that are used in the comparison, which totals around twenty in all.

As has been the trend in other sectors, this move by Tesco could result in other supermarket giants also setting up similar sites, which means that the huge number of price comparison sites could balloon even further in the near future. As with other price comparison sites customers will be able to enter their details into the Tesco website in order to search for the best deal on car insurance, but this will be from between the companies listed by Tesco.

Amongst the insurance companies that will be listed are some RBS ones, including Churchill, and consumers are reminded that because of the limited number of insurance companies that will be listed there could be better deals available from other insurance companies that are not listed on the Tesco site. 

Tom Smith
20th September 2007

Tags: price, car, compare, tesco, finance, brokers, Insurance, comparisons, site

BCC warns Bank of England against rate rise

The British Chambers of Commerce (BCC) has claimed that “economic damage” will be done in the UK if interest rates go up again.

The Bank of England’s monetary policy committee (MPC) will meet later this week to decide whether to put rates up or not.

According to the BCC’s chief economic adviser David Kern, the MPC should wait for previous rate rises to avert potential damage – and there have been five in the past twelve months – to take full effect before putting another increase on: “There are already signs that the housing market may have started to soften”, he said.

Mr Kern’s position is backed up by the latest monthly house price figures from mortgage lenders Nationwide, which show a seasonally adjusted gain in inflation of just 0.1 per cent for July, dragging down the overall inflation rate for 2007 to 9.9 per cent, well down on previous double digit showings.

A Reuters poll has also previously shown a comfortable majority of city analysts agreeing that rates are scheduled to go up to six per cent by the end of the year.

Tags: bank of england, uk, inflation rate, price, interest, signs

CML chief: Housing market to come off boil

The director general of the Council of Mortgage Lenders (CML), Michael Coogan, has claimed that house price inflation will cool off dramatically next year.

Speaking to Reuters, he said that prices seem likely to record their smallest increase in a decade, at maybe just two to three per cent, partially due to rises in interest rates.

The Bank of England set the new base rate at 5.75 per cent two weeks ago – the fifth rise in a year – and many analysts predict further increases in coming months.

Mr Coogan counselled against fears of a slump in prices: “I don’t believe there will be a crash. But clearly a slowdown is more likely”, he said, pointing to the still robust economy as a bulwark against forced house sales.

He added that “we’ve already seen on the consumer credit side that loans have been reduced and people are looking to repay their credit card and other debts… That trend is likely to continue.”

The prospect of a dramatic slowdown seems distant, however: Figures released by the Department of Communities and Local Government today show still-strong inflation, with annual house price rises remaining in the double percentage figures: inflation in prices stood at 10.9 per cent in May, against 11.3 per cent the previous month.

The figures also showed regional variations – with inflation particularly strong in London, Scotland and Northern Ireland.

http://uk.reuters.com/article/personalFinanceNews/idUKNOA64267220070716?rpc=401&
http://business.timesonline.co.uk/tol/business/economics/article2083427.ece

Tags: I don't believe, ece, show, cml, consumer, crash, price inflation

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, rate, price, Consumer Price, loan, interest

Government to crackdown on insurance cover from travel agents

According to a recent report the government in the UK plans to crackdown on travel insurance cover purchased from travel agents in a bid to provide consumers with higher levels of protection when they purchase this insurance.

The government has announced plans to regulate the sector, and this means that travellers could look forward to increased levels of protection when they purchase their travel cover from travel agents.

The government has announced that the Financial Services Authority will now be regulating travel insurance sold alongside holidays by travel agents. Travel agents that plan to sell this type of insurance with holidays will therefore have to make sure that it is designed to fit the needs of customers.

Customers will have to be treated fairly in line with Financial Services Authority regulations when buying these policies, and in the even that the customer of dissatisfied with an aspect of the sale of the policy he or she can go through the Financial Ombudsman Service.

Ed Balls, economic secretary to the Treasury, stated: ‘Evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at explaining the key features and exclusions of the product and guiding the customer through the sales process.’

The crackdown results from complaints from consumers groups with regards to unsuitable and expensive policies being sold to customers in the past – a problem that this move will help to reduce. The new regulations are set to come into force in 2009, although many officials from the travel agents industry are not happy about the move.

The travel agency industry had asked for the opportunity to make changes without these new regulations being put in place, but were not granted this opportunity.

Tom Smith
4th July 2007

Tags: agency, finance, holiday, changes, cover, cost, price

Some people may never own their own home

According to recent reports future homebuyers could face house prices that are up to ten times the amount of their salaries, which means that many of today’s younger people could face the prospect of never being able to purchase their own home.

The research from the government backed National Housing and Planning Advice Unit (NHPAU) indicates that in order to avoid this situation many more homes will have to be build, otherwise millions of people will be left out in the cold when it comes to home ownership in the UK.

According to the research over a third of those that do not own their own home at the moment are doubtful that they will ever be able to afford to buy their own home. Another 20% of non-homeowners believe that they will have to wait a minimum of five years before they can afford to consider getting onto the property ladder. The purpose of the government run National Housing and Planning Advice Unit is to offer advice on improving affordability in the housing market.

The figures indicate that just seven years ago the average house prices was around four times the average salary of the consumers. However, with prices set to rise to ten times the average salary future generations face a very bleak future when it comes to the possibility of home ownership.

According to the chairman of the NHPAU: ‘First-time buyers have seen a big rise in the deposit needed to buy a home and the amount of their income spent on mortgages. Demand for housing is growing and unless action is taken, pressure on the market will only get worse.’

Tom Smith
4th July 2007

Tags: first, salary, price, buyers, cost

Neighbours cost homeowners £93.4m

Brits spend more than £93.4 million each year on damage caused by their neighbours.

New research by Abbey has found that around 543,000 of us have to endure household damage by our neighbours every year.

Londoners are the worst affected, with ten per cent encountering damage, while people in Wales are the least affected.

The average insurance claim made after a neighbour has caused damage is around £172 but one in twenty is hit for £1,000 or more.

“Not all damage caused to people’s homes by their neighbours is malicious. In many cases this type of damage is accidental. However there are often misconceptions about whose insurance is to be used to claim for it,” explained Prasad Shastri from Abbey.

“It is always the policy holder of the damaged home that will need to submit a claim. For example, if your neighbour was to cut down a tree that accidentally breaks a window, it is only you that can claim for damage to your property, not your neighbour, highlighting how important it is for you to make sure your insurance covers you against accidental damage caused to your property by other people.”

Homeowners are also warned by Abbey that buying insurance on price alone can be dangerous as it is important to make sure that you have adequate cover for your home and its contents.

Tags: Household, Wales, accidental, window, Insurance, misconceptions, price, abbey

House prices still rising

House prices have continued to accelerate, with the latest figures showing a rise for the 18th consecutive month.

The Royal Institute of Chartered Surveyors (Rics) has published housing market survey and it makes for bad reading for first-time buyers.

Statistics shows that new buyer enquiries fell for the fifth consecutive month in April and the decline is taking place at a faster rate.

Rics says that this is down to the latest round of interest rate rises which helped to make more homes unaffordable.

“Last week’s interest rate hike may not be the last as the housing market has not slowed as quickly as expected given the initial round of rate rises,” commented Ian Perry from Rics.

“With prices buoyant and conditions still tight, another rate rise later in the summer looks likely.”

Things look set to get worst for first-time buyers as the introduction of Home Information Packs (Hips) in June may force some sellers to take their properties of the market.

Currently, the housing market is benefiting from increased supply as people try to avoid having to fork out for a Hip and prices still continue to rise.

“The fear of paying the upfront buying costs of Hips has pushed more property onto the market,” said Mr Perry. “This will continue throughout May but conditions should tighten if Hips goes ahead on June 1st as sellers withdraw from the market.”

Tags: fear, faster rate.Rics, summer, price, Royal Institution of Chartered Surveyors

Hips will put off sellers

The introduction of home information packs (Hips) to the UK housing market is likely to reduce the number of properties sold.

That is according to the National Association of Estate Agents (NAEA) which says the ’see what happens’ seller is likely to become a thing of the past.

Research shows that around 20 per cent of homeowners, who were not even considering selling their home, have been tempted to put their house on the market after seeing their neighbour get a good price for theirs.

However, the NAEA believes that with Hips set to become a mandatory part of any sale from 1st June this year, this type of seller will be put off – adversely affecting those trying to get a mortgage on a property.

It is going to cost up to £500 to obtain a Hip and this may prove to be too costly for a homeowner who is merely interested in finding out how much their home is worth.

“A significant percentage of sales that go through start with a seller testing the water,” explained Peter King, the NAEA’s chief executive.

“The lack of ability to do this without paying for a Hip first is likely to put many sellers off.

“This will reduce the supply of houses available, cause the market to slow down and lead to additional house price inflation. Both these factors could adversely affect the economy,” he added.

The NAEA is calling upon the government to back down over the introduction of Hips.

Tags: cent, NAEA, introduction, government, National Association of Estate Agents, house, price

Housing market may be cooling

There are very early signs that the UK housing market may be slowing down.

That is according to Nationwide Building Society, which says house price growth in January was the lowest it has been for eight months.

According to the firm, prices increased by just 0.3 per cent in January, a significant drop on the 1.2 per cent increase seen in December.

“House prices increased by just 0.3 per cent in January, the smallest monthly rise since May last year, which pulled the annual rate of house price growth back into single digits,” said Fionnuala Earley from Nationwide.

“Prices increased at an annual rate of 9.3 per cent in January, down from 10.5 per cent last month.”

The building society has also predicted that house prices will remain firm despite the recent rise in interest rates and the possibility of further rises in the year ahead.

“2007 started off with a bang as the Bank of England raised interest rates for the third time in six months. Only time will tell how much the surprise decision will affect sentiment in the housing market,” added Ms Earley.

The average price of a house in the UK currently stands at £173,225, down from the £173,746 price in December.

Tags: price, house, Fionnuala Earley, economics, significant drop, Nationwide Building Society, firm

House prices rise by 9.9%

House prices in the UK rose by 9.9 per cent throughout 2006, according to the Halifax bank.

A report carried out by the bank shows that price inflation on properties in the country increased during the last 12 months.

Despite the overall rise, Halifax said that prices fell by one per cent in December, with some industry figures hopeful of a slowing down in the market.

“It remains too early to conclude that this indicates a genuine slowdown in the housing market,” said Halifax’s chief economist Martin Ellis.

“Overall, prices in the final quarter of 2006 were 4.2 per cent higher than in the previous quarter, marking the strongest quarterly rise since 2004 quarter two.”

Northern Ireland saw the biggest increases during 2006, with the average house price rising by 53 per cent.

Halifax’s report is based on figures from its own lending to customers but falls in line with other major lenders’ results.

Nationwide recently published a report into 2006 house prices and put the rate of inflation at 10.5 per cent.

Although Halifax says factors such as economic growth, rising employment and lack of supply will drive up house prices, the bank expects to see a slowdown in the coming year.

“Higher interest rates, greater pressure on household finances and subdued real earnings growth will… constrain housing demand,” said Mr Ellis. “We expect house prices to increase by four per cent in 2007.”

Tags: Economic disasters, final quarter, quarter, chief economist, major lenders, Halifax bank.A report, average house price

London house prices dwarf UK

People looking to get a mortgage for a home in London may be put off by recent figures regarding house prices.

Those living in the capital saw the cost of a home rise by an incredible 11.3 per cent in one year.

The data, gathered by Nationwide, looked at house prices in the last quarter of 2006 and found that London is speeding ahead of the rest of the UK.

A typical house in London is likely to set a buyer back £269,327, making it over £97,000 more expensive than the country’s average.

“The price of houses in London continues to dwarf those in other parts of the country,” said Fionnuala Earley, Nationwide’s group economist.

“The typical house in London costs £269,327 – more than one-and-a-half-times higher than the average price in the UK of £172,065.

“House prices also increased by more per day in the capital during 2006. A typical house in Greater London increased by more than £75 per day, compared with the UK average of £40 per day,” she added.

Ms Earley went on to say that a number of factors have contributed to the sky-high price of property in London.

Among them is a large imbalance between supply and demand for housing, while improved transport infrastructure and other developments in preparation for the Olympic Games in 2012 have also contributed.

Tags: imbalance, United Kingdom, the Olympic Games, Olympic Games, Travel and Tourism, figures regarding house, price, UK.A typical house

Banks’ January sales scam

Consumers are being warned that banks are trying to fool them with so-called new year sales, says an industry expert.

A number of high street banks have launched special deals this week, claiming to offer consumers attractive rates on a number of products.

However, consumer campaigner and founder of moneysavingexpert.com Martin Lewis says the sales are nothing more than a “great scam”.

“I have not seen anything I would describe as a sale,” said Mr Lewis. “A sale is a period when you get better deals. This is a bank promotion to look like a shop sale.

“What you are actually seeing is the big four high street banks, who are hideously overpriced normally, doing some price reduction so that they are now only over priced.”

Mr Lewis went on to say that consumers should give most of the banks’ sale items a miss and aired his anger at the behaviour of some of the leading banks.

“It is a great scam. You are more expensive than the market place, so you reduce prices and call it a sale,” he added.

Tags: industry expert, consumers attractive rates, price, january sales, street

Extended Mortgage Terms Means Huge Amounts of Interest For Consumers

The rising property prices in the UK over the years have resulted in many people losing out on the chance to get their foot on the property ladder.

And because of this, over recent years, many banks and building societies have started to offer longer mortgage repayment terms over and above the traditional twenty-five year mortgage, as well as offering higher salary multiples, in a bid to attract consumers that are desperate to get onto the property ladder. Over recent years many lenders have been offering thirty and thirty-five year mortgage repayment terms.

However, experts are now concerned because some lenders have started offering even longer repayment terms, with up to fifty-seven years now being offered as a mortgage repayment term option with some mortgage providers. These mortgages have been labelled as ‘madness’ by experts, who state that although the monthly repayments will be lower for consumers because of the extended term, rising interest rates and the amount of time for which the borrower will be in debt could prove a real problem.

One director of a mortgage broker stated: “Life-long mortgages are a false economy. You end up paying literally tens of thousands of pounds in extra interest. It really is not a sensible thing to do. The idea of paying off a mortgage for 40, 50 or even 57 years is madness.”

With average house prices in the UK rising to well over two hundred thousand pounds, and with interest rates rising to five percent, a number of lenders have made changes to the mortgages that they offer in terms of the length of the mortgages available and the amount that can be borrowed. This is to attract more custom from those that would otherwise be unable to purchase a property.

Tags: extend, terms, Loans, increase, years, Mortgages, costs

No Claims Discount – What Is It?

A No Claims Bonus is basically the same as a No Claims Discount, but technically one results in the other. Either way, they make a heck of a difference to how much your car insurance costs. Read more

Tags: option, price, insurance policy documents, car insurance, maximum, car insurance costs, hefty wedge, no claims discount