Broken rung on the property ladder

A new report has shown that the UK’s property ladder has a serious broken rung, which is namely the first rung that so many first time buyers are anxious to get their foot onto. A new report entitled ‘Broken Ladder’ has been released by the Home Builders’ Federation, and its contents show just how serious a problem it has become for potential first time buyers to realise their dreams of homeownership.

Shockingly the report suggests that in the current climate someone looking to get onto the property ladder would have to spend every penny of their income saving for two years simply to raise the deposit that most lenders were demanding, and in London this figure increased to three years. This would mean having no money for rent, food, clothes, or living expenses.

Over a five year period first time buyers would still have to save 50 percent of their income to put aside towards a deposit in order to raise the amount that lenders wanted, and again this would be even higher in areas such as London. The Home Builders’ Federation has said that the situation has now become critical at a time when the property market is already in turmoil.

A spokesperson for the Home Builders’ Federation said: “These figures reveal the extent of our housing crisis. First-time buyers – the life-blood of the housing market – are almost entirely shut out. The lack of mortgage availability is further strangling a market already choking on a lack of supply. We desperately need an increase in lending and a properly functioning and sustainable mortgage market. At the same time, the Government must ensure that the new planning policy and incentives they are basing the success of their housing plans on are put in place immediately. Without more houses and more mortgages, young families will be unable to have the security of a roof over their heads and the housing crisis will very quickly reach the point of no return.”

 

Tags: Real estate economics, incentives, Home Builders, realise, income, situation, food, young families

Brits ‘worth more than they think’

Most Britons have possessions in their home worth considerably more than they realise, a study claims.

The average 40-year-old thinks their possessions are worth about £29,000 but in actual fact the true value of their possessions is over £40,000, according to the research from More Th>n insurance.

It is 46-year-olds who were found to have the highest value possessions in their homes of any age group, with an average figure of £40,919.

More Th>n product director Dowshan Humzah suggested the findings add weight to the old adage that life begins at 40 but expressed concern at how little thought people seem to be giving to the total value of their possessions.

“Brits work hard enough to buy things but by not keeping track of what they own, they run the risk of being under-insured.”

Meanwhile, research from Sainsbury’s Bank has suggested that British consumers are to spend £7.89 billion in the summer sales this year.

Tags: Humzah, realise, old adage, Sainsbury's Bank, age group, average figure, product

Kids’ rooms are worth £14bn

The average child in the UK is now worth around £1,260 due to the number of gadgets present in his or her bedroom.

In total, the UK’s children have £14 billion worth of goods in their rooms, with one in ten parents admitting they have spent £2,500 on keeping their youngsters entertained.

Co-operative Insurance (CIS) carried out research into the matter and found that although parents are keen to keep giving their children the latest gadgets, very few update their insurance policy at the same rate.

“Many parents simply do not realise just how valuable the contents of their children’s rooms are,” said David Neave from CIS.

“It is important for people to regularly review the value of their home contents and if necessary increase the level of cover to ensure that it is adequate.”

The most common electrical item to be found in a child’s bedroom is a TV, with 21 per cent of parents saying they allow their child to have one so that they can watch their own programmes undisturbed.

The CIS research also reveals portable gadgets are becoming more popular among children. Around 60 per cent now carry a mobile telephone.

Mr Neave said that this too should lead to parents reconsidering their insurance policies.

“Parents should also ensure that they have personal possessions cover for those items which their children take out of the home; such cover can be provided simply, by adding it to the contents cover,” he added.

Tags: uk, kids, child's bedroom, child, realise

PPI complaints set to soar

The number of complaints concerning payment protection insurance (PPI) could run into the tens of thousands.

According to financial research company Defaqto there may be a huge surge in complaints, but the firm warns that consumers may not be better off as a result.

A report by Defaqto highlights that lenders may increase rates and charges on money borrowed in order to make up for the loss of PPI income.

The firm also warns that bank charges may be imposed for some customers, spelling the end of free banking and, potentially, putting many consumers in a worse situation than they are currently in.

Defaqto is calling upon lenders to work hard to increase public confidence in the PPI market by becoming more open.

“Too many customers do not realise that they have the right to shop around for payment protection insurance,” said Brian Brown, head of insurance at Defaqto and author of the report.

“Therefore the industry must widen public understanding of PPI through greater transparency if the market is to be seen to be operating competitively and in the best interest of consumers.”

Mr Brown says that consumers should be made aware that they can get a loan from one bank, yet get PPI cover from another.

If you are considering taking out a loan it may be worthwhile getting PPI in order to protect yourself should your personal circumstances change and you are unable to keep up repayments.

The important thing to remember is that you are able to shop around for the policy that best suits your needs.

Tags: realise, research company defaqto, consumers."mr brown, worse situation, money

Danger of only investing in your home

We are being warned that we could be setting ourselves up for a fall by investing almost all of our money into a single property.

That is according to a report which states that almost two-thirds of us are running the risk of financial ruin by investing too heavily in a single asset.

Researchers at Durham University have discovered that as many as 62 per cent of us invest the majority of our money in a house and could face real difficulties if a housing market drop, like that seen in the late 1980s, were to take place.

“This study really draws attention to the precarious position of the majority of English homeowners’ savings,” said Susan Smith from the university.

“While many would think it strange to invest everything they have into one particular company, to all intents and purposes more than seven million people in England are doing just this by ‘banking on housing’.

“In fact, they are investing almost everything they have into just one building, in one neighbourhood, in one town, in one region, despite the hindsight of a recent housing market collapse,” she added.

The research found that 30 per cent of people take out a mortgage but do not see their home as a way of storing and accumulating wealth.

This apparent lack of vision when it comes to the housing market is even more alarming when you realise that 59 per cent have no other savings or investments to fall back on.

Homeowners are being advised to ensure that they have some secondary savings.

Tags: fact, asset, university, property, Susan Smith, home insurance