House price increase seen in March

Figures released by the High Street lender, Nationwide, have indicated that there was an increase on property prices for the month of March, with property prices increasing by more than £3000 according to the figures. Officials from Nationwide have added, however, that the annual rate of inflation on house prices is set to slow down from its current 9 percent.

In the month of February average property prices fell by 0.8 percent according to Nationwide, but in the month of March property values bounded back with an increase of 0.7 percent. In price terms this reflected an actual rise of 2 percent before any seasonal adjustments were taken into account.

The decrease in property prices that was seen in February resulted from a slowdown in demand and a drop in the number of mortgage approvals. This was partly attributed to the end of the stamp duty holiday, which had caused more people to push through property sales at the end of last year and caused an unusually profound dip at the start of this year.

Nationwide has stated that the average property price in the UK is now £164,519, and compared to February of 2009 this was £16,733 higher. However, quarterly house price inflation has fallen from 3.8 percent seen in September to 1.6 percent in March.

An economist from Nationwide stated: ‘The last two months are consistent with a relatively flat profile for house prices, and in line with the recent drops seen in buyer enquiries and house sales. Preliminary figures show that the number of loans taken out for house purchases failed to recover from January’s large dip, suggesting that weakness in house sales at the start of the year may have been due to more than just the snowy weather.’

Tags: rise, house, nationwide, annual rate, prices, property, price inflation, stamp

Rise in burglaries means more protection needed for households

Officials from the insurance industry have spoken out recently about the rise in the level of domestic burglaries during the recession, adding that it has become increasingly important for households to protect themselves from this sort of crime by ensuring that their homes are as secure as they can be. Read more

Tags: recession, rise, percent, crime figures, whammy, burglary rise, household theft, insurance sector

Rise in savings deposits at building societies

According to a recent report there was a rise in the amount of money deposited into building society savings accounts in the first half of this year. The figures were recently released by the Building Societies’ Association, and indicated that the level of deposits being made into building society savings accounts had risen by almost two thirds in the first six months of this year. Read more

Tags: stock market, rise, stock, six months, market turbulence, amount of money, dependence, business

Three way split on interest rates for July

The minutes of the latest Monetary Policy Committee meeting, which was held earlier this month, has shown that there was a three way split on interest rate movement for the month of July, indicating that setting the base rate is becoming an increasing challenge for members of the powerful committee and for the Bank of England. The minutes showed that whilst the majority of members voted to keep the rates on hold at 5%, one voted for the rate to be cut due to the slowing economy and another voted for the base rate to be raised due to soaring inflation levels. Read more

Tags: Richest, Brits, interest rates, cut, credit rating, rise, year, movement

Do you want to earn an income from your interest?

With a wide range of savings accounts to choose from consumers in the UK can enjoy finding the ideal account to suit their needs and their circumstances. The savings account that you choose will be based not just on your needs and circumstances but also on the amount that you have to invest and what you want from the account. For instance, those looking to gain instant access to a savings account would not fare well with a notice account. However, those wishing to get a tighter reign over their savings accounts withdrawals could really benefit from an account that restricts the number of withdrawals that can be made. Read more

Tags: monthly income accounts, savings account, bank account, tighter reign, bank accounts

Tighten your belts as household costs rise, says expert

Consumers are being told to be careful with their money and ‘tighten their belts’ because of the rising costs of many essential household items and bills.

Money education charity Credit Action has said people have grown accustomed to relatively low food and petrol prices but they will now have to adjust their budgets as these costs are increasing.

According to Capital Economics, food inflation is expected to remain at its current rate of six per cent for the next few months, while water and council tax bills are set to rise.

Gas bills are predicted to increase by around ten per cent and electricity by eight per cent in the second half of the year.

“For most families and people trying to manage their money and trying to budget carefully, that’s going to become much harder because there’s going to be far more cost associated with just the basic day to day living expenses,” said Chris Tapp, director of Credit Action.

Tags: day, charity, tax, belts, rise, water, Tighten, consumers

Identity theft victims older than fraudsters

Consumers who are victims of identity theft are older than the fraudsters they are conned by, shows new research.

Findings from CIFAS, the UK’s Fraud Prevention Service, revealed that males in their 40s are the most likely to become victims of identity fraud than any other age group.

Peter Hurst, chief executive with CIFAS, said: “While our research into fraudsters revealed that the typical fraudster seems to be getting younger, this displays a quite different picture.”

He added that the CIFAS research shows that that the more tech-savvy, younger, sections of society are more aware of the need to protect their data, and therefore take greater care.

Those in their 40s, who may be seen as more resource rich and burden light compared with younger spenders, are supposedly a particular niche group to exploit, said the service.

Instances of identity theft are thought to be on the rise with nearly 30 per cent of Brits falling victim to identity theft within the last 3 years, according to a poll of UK credit professionals, by the Credit Show.

Tags: Cifas, credit, group, Social Issues, picture, shows new research, younger spenders, rise

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: manager for AA Legal Services, chains, month, house prices, rise, Mortgage loan, research, Anthropology

Young women can save and still ‘have a good time’

With careful budgeting young women can “have a good time and still plan for the future” says an industry expert.

Young women think that saving for the future will mean they have to cut back on spending in the present.

However, MDM Associates claims that if they work out what their outgoings are then this may not necessarily be the case.

Lisanne Mealing, director for MDM Associates, said: “You know you’re going to go out, you know you’re going to spend money on clothes: budget for it, so that you have a clear indication at the end of the day of how much you can afford to save.”

She added that an Isa is “definitely the best place to start” when it comes to saving due to the flexibility of access and use that it offers.

Research from online bank Egg found that one in five women earn more than their partner – a rise from one in ten in 2002.

Tags: MDM Associates, budgeting young women, rise, time, industry expert

Halifax house price data contradicts Nationwide data

Recently Nationwide released data that showed house prices in the UK had picked up during the month of October, following an unexpected tumble of 0.6% during the month of September.

The news of rising house prices came as a surprise for many, particularly given industry predictions that house prices would continue to fall over the last quarter and into 2008. However, the Halifax has now released data that contradicts the information provided in the Nationwide report.

According to the Halifax house prices actually fell during the month of October, taking another tumble of 0.5% and bringing the annual rate of inflation to 8.9% for October from 10.7% in September. According to the Halifax report the average house price in the UK is now just over £197,000. If house prices have fallen for the second consecutive month this is the first time since April and May 2005 where there will have been two house price drops in a row.

In the three months to October house prices were 0.3% higher than the same time last year according to reports. The Halifax stated that its figures reflect the steady ‘downward trend’ that many analysts and industry experts have been predicting would take place over the final months of the year.

The Chief Economist at Halifax stated: “The rise in interest rates since August last year and negative real earnings growth so far this year are curbing housing demand, leading to a slowdown in both price growth and activity.”

He added that the data signifies a cooling market but not a crash. “The UK economy is in a strong position. Sound market fundamentals, including high levels of employment and a shortage in the number of properties available for sale, will continue to support house prices.”

Tom Smith
15th November 2007

Tags: cost, interest, bank, homes, rates, houses, prices, rise, england

Financial fraud sees continued upwards trend

Recent data for the end of the third quarter shows that fraud is still on the increase.

According to CIFAS fraud prevention service, there has been a rise in the majority of the different areas of financial fraud.

Cases of application fraud for the aquiring of credit, insurance or other products, was up by 23 per cent with a total of 57,321 cases uncovered members of CIFAS.

Asset conversion and facility takeover cases showed sharp increases in the first three quarters of this year compared to the same period in 2006, at 24 per cent and 34 per cent.

Meanwhile, false insurance claims rose by nearly nine per cent in the same period.

Chief executive of CIFAS, Peter Hurst, commented on the findings: “Our statistics for the first three quarters of the year show a clear and worrying trend. Fraudulent activity is at an all-time high.

“Fraudsters are becoming more sophisticated and fraud departments are working harder than ever to protect their organisations from the onslaught.”

CIFAS members prevented financial losses valued at £1,900 per minute this year, compared with £1,400 per minute last year in the same period.

Tags: prevention service, finance, chief executive, high, false insurance claims, insurance claims

Many first time buyers taking a ‘wait and see’ stance

Over the past couple of years things have been extremely difficult for first time buyers in the UK.

Firstly there were problems being able to raise the money needed to purchase a property, with house prices soaring in the UK requiring buyers to obtain larger mortgages.

For first time buyers there is not equity from a previous property to rely on, which means that they have to take out a loan for all or the majority of the value of the property they wish to purchase. In order to address this problem many lenders have started offering increased income multiples and longer repayment periods on mortgages for first time buyers.

However, there is now a fresh problem for first time buyers to consider. Rising interest rates mean that in addition to having to take out a huge mortgage in order to buy a property these buyers also have to deal with huge repayments because of the increased interest rates, which have shot up by 1.25% in the past year.

Even those starting out on fixed rate mortgages have to put up with a high fixed rate, and will therefore be stuck with this high rate for a fixed period even if interest rates start to fall again in the near future.

Rumours of house prices falling towards the end of the year, combined with predictions of further interest rate rises, has now seen many first time buyers take a step back, with many deciding to rent and wait it out to see what happens before rushing to get onto the property ladder in the current economic climate.

One first time buyer stated: “I am desperate to get onto the property ladder, because I feel that the chances of ever getting my own place are getting slimmer and slimmer. But with all of these rumours about decreasing house prices and rising interest rates I want to see what happens before I make any long term commitment.”

Tom Smith
6th October 2007

Tags: rise, bank, buyer, first, rates, increase, wait

Worries over interest rates from 40% of consumers

According to a recent report around 40% of consumers in the UK are concerned about further rises in interest rates, with many already having been hit hard by rising repayments on their variable rate mortgage.

Interest rates have already risen five times since last August with a rise of 0.25% each time, taking the base rate from 4.5% last August to 5.75%, and reflecting a total rise of 1.25% within the period of a year.

Although inflation has come down to within the government’s target of 2% recently, many consumers fear that the next Monetary Policy Committee meeting will result in yet another interest rate rise, which could make matters even worse for those that are already struggling to keep up with repayments.

The rising interest rates have affected many financial areas, including resulting in an increase in repossessions as the result of many consumers being unable to keep up with repayments on their mortgages. Fixed rate mortgages have been taken up by many consumers to try and combat the problem of rising interest rates, and the Council of Mortgage Lenders stated that a record number of fixed rate mortgages were taken out in June of this year.

The recent survey was carried out by Intelligent Finance. According to the research four out of every ten consumers are very concerned about a further rise in interest rates, as they feel that they are not covered or prepared for yet another rise in repayments. Officials from Intelligent Finance state that consumers must take preventative action to try and ease the pressure of another interest rate rise by tightening the purse strings where necessary, and making every penny count.

One official from Intelligent Finance stated: “With interest rates on the rise and purse strings tightening, it’s important to make every penny work as hard as possible.”

Tom Smith
6th October 2007

Tags: cost, rise, england, fixed, committee, interest, increase, rate, Mortgages

Rock plight highlights need for building societies

The difficulties of financial firm Northern Rock have underlined the difference between banks and building societies, it has been claimed.

According to Britannia, building societies are a the safer alternative and that could mean that the popularity of the institution could rise.

Commenting on the crisis Emma Taynton-Young, a spokesperson for Britannia building society said: “The recent market has actually strengthened the difference between banks and building societies, and we find it very easy to explain the difference now because it’s shown the effect of the opposite business model to ours.”

She added: “So in a way, yes, building societies are the safer option, and I think this answers the point as to whether the Northern Rock crisis will provoke a rise in the popularity of building societies.”

The firm also claims that the heavy restrictions placed on building societies contribute to the amount of confidence consumers have in them as institutions.

Tags: difference, building societies, rise, britannia building society, crisis emma, Social economy, point, amount

Rush on remortgages amidst fear of rate rises

July of this year saw over a billion pounds worth of mortgages being taken out each day with many homeowners deciding to remortgage amidst fears that that interest rates would continue to rise following five interest rate hikes in the space of a year.

The highest in over six years the base rate currently stands at 5.75%, following five rate hikes of 0.25% each since August of last year. Many homeowners have had to cope with rising repayments as their mortgage repayments have soared along with interest rates.

According to figures from the Council of Mortgage Lenders nearly £35 billion was borrowed in the month of July on mortgages, which reflects a 13% rise on the amount that was borrowed in July of last year. According to the CML this increased figures result from the surge of homeowners that have decided to remortgage in order to try and get a better deal on their mortgage in the light of the series of interest rate rises that have taken place – and the threat of further interest rate rises that may yet take place.

A spokesman from the British Bankers Association stated: ‘Longer-term trends in mortgage lending are little changed but July’s strong rise was surprising, given the expected cumulative impact of higher interest rates. The resilience shows the popularity of home ownership and also reflects more remortgaging activity.’

 An official from the Building Societies Association stated: ‘As mortgage payments increase, household finances are likely to be squeezed further. Even if interest rates are near their peak, potential borrowers need to think about all their outgoings to make sure they do not overstretch themselves financially.’

Tom Smith
21st September 2007

Tags: interest, rise, rate, bank, england, remortgages, base, increase

Interest rate rises result in increase in repossessions

The five interest rate rises that have been enforced by the Bank of England over the past twelve months have taken their toll on the finances of many consumers, and there are many households that are now struggling to keep up with repayments.

A number of experts have been predicting that an increasing number of people will find it extremely difficult to keep up with repayments due to the rising interest rates, and recent figures indicate that this has already started to take effect.

Interest rates in the UK have shot up from 4.5% to 5.75% in the past year, after a series of five interest rate hikes, each of 0.25%. Homeowners have seen their repayment shoot up considerably over this time, and those with already steep mortgage repayments have had to find hundreds of pounds more in some cases as interest rates have risen. Those that went on fixed rates several years ago are now finding themselves in hot water too, as the fixed rate period ends and their interest rates shoot up to today’s base rate.

The predictions of many experts is already coming true as the first half of this year has seen home repossession resulting from bad debts hit an eight year high. Interest rates at the moment are at their highest in six years, and struggling homeowners are risking their homes because of difficulties in making repayments on their mortgages. Around 77 homes per day are currently being repossessed.

One official from the Royal Institute of Chartered Surveyors stated: “With the housing market slowing into 2008 and interest rates expected to hit 6 percent, homeowners slipping behind with their repayments may be left stranded, unable to sell their way out of trouble.”

Tom Smith
17th September 2007

Tags: increase, rate, rise, payments, base, interest, bank, england, Mortgages

Lenders increase mortgage rates

Halifax has said that global turmoil in credit markets was to blame for the rise in rates of 20 of its tracker mortgages.

More specifically, the bank explained that there had been a sharp increase in short-term interest rates that banks pay when they lend to each other.

Such mortgages are often financed by banks borrowing money on the international markets yet because of the sub-prime fears in the US availability of lending has slowed dramatically.

Halifax’s announcement of its decision came in the wake of news that Northern Rock had ceased offering sub-prime products, which it had done in partnership with US investment bank Lehman Brothers.

Abbey has also increased the tracked margin above the Bank of England’s base rate for its tracker products.

Halifax’s Paul Fincham, said: “Pricing has changed in the markets. Also we have seen other lenders move so we needed to adjust our rates.”

Ray Boulger, spokesperson for the broker John Charcol, said: “It means that the effect is now being felt by borrowers across the board.”

Tags: northern rock, global turmoil, lehman brothers, england, bank of england

Future demand for buy to let mortgages could fall

According to a recent report the demand for buy to let mortgages could fall in the future, as a slow down in the rise of property values hits, lumbering landlords with higher mortgage repayments but lower house value inflation and rental income.

However, reports have also indicated that at present landlords are doing very well, and in the past year enjoyed returns of around 13%. Reports indicate that landlords saw the property vales rise on average by around 7.3% and saw rental returns of around 5.5% of the property value.

The figures come from a report issued by Birmingham Midshires. The report indicated that although the 13% property value rise seen was up from the previous twelve months of 11.9% rental payments dropped from 5.7% in the previous twelve months to 5.5% last year. Birmingham Midshires warned that the interest rate rises had led to mortgage repayments being higher than rental payments, and that this could have a dampening effect on the popularity and take up of buy to let mortgages.

One economist from the building society stated: ‘While house price growth in the sector is expected to be more subdued near-term, reflecting the impact of higher interest rates, the potential for further increases in rents should encourage long-term investors. There also remains the potential for healthy long-term capital appreciation in the buy-to-let sector, particularly given the backdrop of more households being formed each year than there are new properties being built.’

Along with homeowners buy to let landlords are likely to be hit hard by the interest rate rises that have been applied by the Bank of England over the past year, as it means higher repayments on the mortgage without higher rental income.

Tom Smith
1st August 2007

Tags: property, rent, landlords, let, payments, value, rental, cost

BOE governor warns on borrowing and lending

The Governor of the Bank of England, Mervyn King, has stressed the importance of consumers being careful not to borrow money that they cannot afford, and lenders being more careful about who they lend money to.

Mr King stated that consumer debt levels in the UK could lead to a major debt crisis. And with another interest rate rise due in July – which will be the fifth interest rate rise since last August – many more people in the UK could find themselves struggling with unmanageable debt.

Speaking at the Mansion House Banquet in London, Mr King addressed families and individuals, stating: ‘be cautious about how much you borrow’.

He also addressed lenders stating: ‘be cautious about how much you lend’.

At last month’s Monetary Policy Committee meeting Mr King actually voted for a quarter percent rise in interest rates, but the majority vote was to keep interest rates stable in June. However, this month’s meeting is likely to see a different result, and a further quarter percent rise is widely predicted.

At the dinner – also attended by new Prime Minister Gordon Brown – Mr King stated: ‘Be cautious about how much you borrow is not a bad maxim for each and every one of us here tonight.’

He also addressed lenders, adding: ‘Excessive leverage is the common theme of many financial crises of the past. Are we really so much cleverer than the financiers of the past?’

One LibDem spokesman said: ‘A combination of an economic slowdown and higher interest rates could spell disaster for large numbers of heavily-indebted families. If interest rates rise further, many home owners will simply not be able to pay.’

And the Shadow Chancellor added: ‘Millions of people are struggling as the cost of living is rising faster than their incomes.’

Tom Smith
9th July 2007

Tags: rates, borrow, rise, england, increase, lender, bank, loan, afford, interest

Housing Market Cools

It seems that the UK property market may be cooling at last, as estate agents are reporting that there has been an increase in properties coming up for sale. In the last few months that number of sellers has increased, but interest from buyers has taken a downward turn.

One online agency reported that the number of properties for sale has risen by over 13% in April, far above expectations. Another internet agency said that it had seen an increase in properties on the market by nearly 20% compared with the same time a year before. The trend appears to be the same across the market.

Although the time of year does see an increase in properties on the market, this time the numbers seem higher than usual. The shortage of housing stock that has had an influence on the way the market has risen seems to be reducing. The sellers’ market looks as though it is coming to an end, and the market may be close to its peak.

It seems that properties in the £150,000-£350,000 price bracket are having the toughest time, where affordability is tight and the slowdown is likely to bite hardest. First-time buyers are finding it extremely difficult to get into the market as property has been pushed further beyond their reach.

Another influence on the number of properties coming to market has been the wish to avoid the need for Home Information Packs (HIPs) in the lead up to their planned introduction of 1 June, and again in the lead up to the new date of 1 August.

Bank of England mortgage figure approval figures reached a twelve-month low in April at 107,000.

The Royal Institution of Chartered Surveyors believed that the HIPS, the continued increase in house prices and the increase in interest rates have combined to lead bring about a cooling of the market.

Estate agents believe that HIPs are single biggest reason for the increase in properties coming to market. These look to be extremely unpopular with sellers who will have to go to more trouble than before and, of course, pay for the packs.

Buyers, however, will see benefits with all the information they need in a single accessible pack. The uncertainty surrounding the introduction of HIPs has led to confusion, especially with the change in emphasis by the government, who said that the Packs would only be applicable to homes with four or bedrooms when the new date was announced.

Since then there has been even more confusion with a recent comment that there will be enough trained energy assessors by 1 August to encompass three bedroom houses. The government maintain that they announced that houses of smaller size will be included in the scheme as soon as enough assessors are available. If that happens by 1 August then three-bedrooms homes are likely to be included.

The general economy remains strong and interest in property is liable to remain so too. When confusion over HIPs dies down in the coming months, we are likely to see a return to normal trends.

Tom Smith
8th July 2007

Tags: hips, rates, slow, england, bank, rise, housing, decrease, house

Interest rates rise

Credit card and mortgage holders and those with loans have been hit with yet another interest rate rise.

The Bank of England’s Monetry Policy Committee (MPC) has decided to increase the base rate to its highest level for six years.

It now stands at 5.75 per cent and some industry experts have been warning of big financial repercussions for many people.

The decision by the MPC is the fifth rate rise in a year and many borrowers simply would not have been prepared.

Industry figures have been predicting rises for some time and this latest one came as no surprise, but those who borrowed money a few years ago had no idea that things would change so much.

The MPC took the decision in an attempt to bring inflation under control.

“The committee judged that, relative to the two per cent target, the balance of risks to the outlook for inflation in the medium term continued to lie to the upside,” the MPC said in a statement.

“Against that background, it further judged that an increase in Bank Rate of 0.25 percentage points to 5.75 per cent was necessary to meet the two per cent target for CPI [Consumer Price Index] inflation in the medium term.”

Tags: policy committee, highest level, rise, level, term interest, Monetry

50% of income going on mortgage

Some Londoners are spending as much as 50 per cent of their take-home income on their mortgages.

New figures from Woolwich highlight the precarious situation that many homeowners find themselves in and things could get worse with the Bank of England widely expected to announce a 0.25 per cent interest rate rise today (July 5th).

The average first-time buyer in the UK is said to be forking out 32.4 per cent of their take-home income on mortgage payments as property prices boom and people become evermore desperate to get onto the housing ladder.

The figures are a concern for many industry figures and Andy Gray, head of mortgages at the Woolwich, said further rate rises are likely to have a massive impact on the housing market.

“We fully expect the average age of first-time buyers to go up until people are well into their 30s,” he revealed.

“For those lucky enough to be on the ladder, the data suggests that in certain areas of London they are already stretched. The last thing any of them need is a further increase in base rates.”

First-time buyers, many of whom are understandably desperate to get onto the property ladder, are advised to carefully calculate their finances before taking out a mortgage to ensure that they are financially prepared for any future rate rises or changes to their circumstances.

Tags: rise, increase, mortgage, Real estate, housing market, andy gray, United Kingdom, market

Good news for savers with Sainsbury’s

Those with Internet savings accounts with Sainsbury’s are in for some good news, as the supermarket giant and bank has now raised the interest rate on its Internet savings account to 6%, a rise of 0.25% from its previous interest rate of 5.75%.

According to This is Money this makes the Internet savings account from Sainsbury’s one of the best savings accounts to have. Prior to the interest rate rise the top savings account according to This is Money was with Icesave, which offered a rate of almost 6 percent.

Last week the Bank of England opted to leave the interest rates stable at 5.5 percent. Interest rate rises have taken place four times within the last year, rising each time by 0.25 percent.

However, in many cases savings accounts operators have been very slow to apply any interest rate rise to savings accounts, and in some cases have failed to pass on all or any of the rises to savers.

One the other hand they have been quick to apply to interest rate rise on borrowing, which means that those that have borrowed money have to repay more and those that are saving money get lower returns.

Sainsbury’s, on the other hand, has decided to raise the interest rate on the Internet savings account by 0.25 percent, even though there was no interest rate applied by the Bank of England last week.

The account does no require any notice and does not have any penalties attached to making any withdrawals. There is also no minimum deposit with the Internet savings account.

One spokesperson from Sainsbury’s stated: ‘With so many accounts in the market, savers need to think about which savings account best suits their needs, whether that’s benefiting from a short term bonus or being able to access their funds without any penalties. Our Internet Saver is ideal for those savers who want to receive a great rate but also want to have regular access to their cash without any restrictions.’

Tom Smith
5th July 2007

Tags: england, increase, bank, savings, earn

Car insurance increases

Car insurance premiums are higher than ever before, according to the AA’s British Insurance Premium Index.

However, home and contents insurance premiums have fallen in the past quarter.

AA says that the average car insurance premium is now £822, a rise of 2.5 per cent in the last three months.

The firm points out that this is more than double the amount quoted in the first ever index back in July 1994.

Despite this, home and contents insurance premiums have fallen slightly in the same period of time.

Buildings cover is down almost two per cent, with the average quote being £207, while contents insurance has fallen by a little over one per cent to £147.

“Home insurance represents particularly good value having changed little over the past decade and while the trend of car insurance is firmly upward, there are still deals to be had,” said Kevin Sinclair, managing director of AA Insurance.

“Things have never been better for customers in terms of choice but make sure you’re comparing like for like and not just price for price.”

Tags: three months, insurance premiums, Social Issues, Financial services, car insurance premiums, amount, rise, decade

Motor insurance at 2yr high

Comprehensive motor insurance premiums are at their highest level for two years.

Figures from Experian show that premiums in the direct market peaked in May, sitting 7.9 per cent higher than they were in the same month in 2006.

Experian has developed a Motor Insurance Benchmark to accurately measure insurance premium movements and this shows that the current average in the direct market is £560.

The intermediary market also saw the average premium rise to £529, the highest level for 11 months.

“The last 12 months have seen comprehensive motor insurance premiums in the direct market increase and overtake premiums in the intermediary market,” said David Murby from Experian.

“Traditionally, premiums in the intermediary market have been higher, but after peaking in February 2006 [reaching £557], they started falling significantly. They passed each other in July 2006, when intermediary premiums were at their lowest.

“The whole motor insurance industry is going through a period of transition and it is not as clear-cut as it was 15 years ago,” he added.

At present, it would seem that people looking for motor insurance are better off going through an intermediary but buyers should always shop around for the best deal and remember that things can change very quickly.

Tags: comprehensive motor insurance, rise, transition, current average, Insurance, direct market increase, increase, GBP

House prices grow again

House prices have continued to grow in the UK, according to new figures from Communities and Local Government (CLG).

The CLG’s house price index highlighted a 1.2 per cent increase in property prices between March and April of this year.

It means that the average buyer can expect to have to take out a mortgage of £209,454, signalling an 11.3 per cent increase within a year.

There were, of course, variations within the countries of the UK, with the average house price in England hitting £216,707.

Property in Northern Ireland is the most expensive, with the average price being £228,208, while Scotland is the cheapest at £115,516.

“The rise in UK prices between March and April can be attributed to increases in average prices for bungalows (1.9 per cent), terraced houses (1.7 per cent), semi-detached dwellings (1.4 per cent), detached properties (0.8 per cent) and flats (0.7 per cent),” a CLG statement said.

Northern Ireland saw the biggest year-on-year house price growth, with properties increasing in value by 54.1 per cent in the last 12 months.

The most expensive place to buy a house remains London, where the average price is £320,191.

Tags: london, expensive place, Communities, house price, Scottish Government, March, rise, price index

Bank Considers Latest Rate Decision

Since the last announcement on 10 May when rates increase by a quarter of a percent to 5.5% there has been a lot of speculation about the way interest rates may go in June.

The latest forecast is for rates to remain unchanged, but another quarter percent rise is still possible. At 5.5% in May rates went up to their highest level since February 2001. Read more

Tags: Mortgages, rates, repayments, england, home, increase, bank, house, interest

Three billion in savings pulled from ING

Annoyed savers with money saved with ING Direct have pulled three billion pounds in savings from the bank.

Many customers have been outraged by the bank’s failure to pass on interest rate rises to savers, and as a result many have pulled large sums of cash that they were savings with ING. According to bank officials there are a number of customers that have removed large balances from the bank to try and find a better interest rate elsewhere, but the bank also stated that overall customer numbers hadn’t been affected.

According to bank officials ING is not prepared to compromise on services for other customers in order to try and get better rates for others. Launched in 2003, ING Direct has boasted a reputation as a bank that offers competitive rates of interest as well as good customer service. However, the interest rates on savings accounts with ING Direct have been stuck at 4.75% for some time.

The Bank of England has raised interest rates four times in the past year, with interest rate rises in August 2006, November 2006, January 2007, and May 2007. Customers are angry because ING has failed to pass on the interest rates that were applied by the Bank of England in November 2006 and January 2007. However, bank officials state that the latest interest rate, which was announced in May, will be applied to savings account in June.

One ING official stated: ‘The vast majority of customers are still with ING but those customers with higher balances who are rate conscious are people who are constantly looking for best rates in the market. Are there better rates out there? Yes there are. Do those companies pay all their customers the same rate? No they do not. We are trying to be consistently fair with all our customers so 5% is the highest and the lowest interest rate they will receive.’

Tom Smith
4th June 200

Tags: customers, savings, increase, accounts, bank, interest, rate, rise, england, market

Homebuyers ‘prudent’ over mortgages

Homebuyers are increasingly prepared to take special measures to avoid getting a mortgage that will push them to their financial limits.

As the Bank of England continues to increase interest rates, many first-time buyers are cutting back on other expenses so that they will be in a better position to cope should rates rise further.

Research by Yorkshire Bank shows that 24 per cent of buyers are keen to avoid maxing out on a mortgage and this is leading to a change in lifestyle for many.

Almost a quarter of those asked said that owning their own home is so important to them that they are prepared to give up holidays, nice cars and cut back their social life to be able to afford one.

With 77 per cent of Brits apparently expecting further interest rate rises in the next year, it is little wonder that so many people are looking ahead and do not want to strain their finances too much.

“What our survey shows is prudence, not panic – all the signs are that the market will still remain strong,” commented Gary Lumby, head of retail at Yorkshire Bank.

“But with rises in the Bank of England’s base rate and with many economists predicting a further rise if not next month, then in the near future, it is inevitable that homebuyers will become a little more cautious with their borrowing.”

The research also found that 70 per cent of buyers expect house prices to increase in the next 12 months but only 17 per cent are prepared to offer the full asking price right away.

Tags: economics, retail, Banking, rise, first time buyers, rate

What the recent interest rate rise means for your mortgage repayments

On 11th May the Bank of England increased its rates by another 0.25% to 5.5%, meaning that six million homeowners in Britain will face bigger monthly payments for their mortgages. Read more

Tags: consecutive, increase, surveyors, inflation, rise, cost, mortgage, prices, england, interest

Consumers should keep an eye on their savings rate

Consumers are being urged to keep an eye on their savings rate following the latest interest rate rise by the Bank of England.

Banks and building societies are often notoriously slow at applying any interest rate rises to savings account, yet are quick to apply them on borrowing, which means that they make maximum profits from any interest rate rises. The Bank of England has raised interest rates four times in the last nine months, taking them from 4.5% last August to 5.5% earlier this week. However, although borrowers quickly see repayments on variable rate loans and mortgages going up, savers do not benefit from the same speedy action.

In some cases, according to industry experts, banks and building societies simply leave the interest rate on savings unaltered, and most consumers fail to notice or concern themselves about this, leaving the banks to rake in million in additional profit.

Experts are urging consumers to keep on eye on their interest rates on savings every time the Bank of England imposes another interest rate rise, and to make sure that they either see the rate reflected on their savings account or consider switching accounts to one that does offer a competitive rate of interest.

Many of those with savings account may have to wait until June to see any rise in interest rates on their savings, and even this small delay could rake in huge profits for banks and building societies.

Kevin Mountford, head of savings and current accounts at moneysupermarket.com stated: ‘It takes providers an average of 20 days to pass on an interest rate rise. With each half per cent rise bringing in £12m per day in interest it’s easy to see why providers delay. If the reason for the average 20-day delay is operational then banks and building societies should backdate the rise.’

Tom Smith
21st May 2007

Tags: switch, accounts, savings, change, current, compare, rise, rate

Older travellers face insurance cost hike

People looking forward to going travelling in their retirement could be in for a shock when taking out insurance.

Average premiums for travel cover increase by more than 100 per cent when people reach their 66th birthday and rise again by a similar amount when customers reach 70, according to Moneysupermarket.com.

The most competitive annual multi-trip insurance premium was found to be £35.42 for a 65-year-old person, compared to £88.64 for a 66-year-old and £171.08 for someone of 71.

Richard Mason, director of insurance for the site, said: “Anyone who dreams of seeing the world in their retirement will get a nasty shock when they reach their 66th birthday and find insurers have doubled the cost of their travel insurance.

“The situation gets even worse for travellers entering their 70s as the cost of cover leaps by almost as much again.”

Mr Mason stressed that people should be able to take advantage of fairly-priced travel insurance, whatever their age.

Tags: Financial economics, insurance policy, travellers face insurance, rise, old person, birthday

Homeowners anxiously await MPC’s decision

The Bank of England’s monetary policy committee (MPC) is to announce on Thursday whether it will raise, lower or maintain the base rate of interest.

While most analysts have predicted that the interest rate will have to rise another quarter point before this summer, analysts are in disagreement about whether or not April will see a rate rise to 5.5 per cent.

Stephen Smith, director of housing at Legal & General, said: “Borrowers will be waiting to see if they are going to be in the red or the black in the base rate roulette next week.

“Rates are still at a relatively low level compared to 70s and 80s and many people would struggle with today’s debts at yesterday’s prices. Whilst the boom and bust has flattened out since the turn of the Millennium, borrowers are still facing a probable hike in rates in the near future.”

Mr Smith warned that June and August were likely to hit those with mortgages hardest, since they were the most likely months for a base rate rise. He compared them to Park Lane and Mayfair on a Monopoly board as “you just want to get through them without having to pay out more money!”

The Council of Mortgage Lenders predicted that recent interest rate rises would start to have an affect on the value of homes and that while prices would still go up by seven per cent, this would be a marked deceleration compared to previous years.

Fionnuala Earley, Nationwide’s chief economist, also predicted that a rate rise would not curb the rising level of value in the property market, adding: “The UK housing market will remain fairly firm in the short term, partly because of the momentum built up in the market that will take a few months to work through, but also because of supply constraints.”

If an interest rate rise does occur on Thursday, homeowners with a £100,000 mortgage would find themselves £15 worse off per month.

Tags: quarter point, Nationwide's chief economist, level, rise, point, bank of england

Credit card borrowing falls

The amount of money we borrow on credit cards fell in January, with industry experts saying this shows we are all managing our finances better.

Figures from the British Insurance Brokers’ Association (BBA) show that borrowing on credit cards fell by £0.5 billion in the first month of 2007.

This is despite increases elsewhere across the board, with mortgage lending rising by £5.6 billion and total UK lending to the private sector growing by £21.9 billion.

A lack of borrowing on credit cards is being seen as a positive sign that personal finances are being better managed by the majority of the population.

“We can see that the January sales did not encourage borrowing on credit cards,” said David Dooks, director of statistics at BBA.

“As in the second half of last year, card borrowing is contracting and, with weaker retail sales being reported, this reflects the consumer’s current attitude to spending and their commitments.”

The BBA has also revealed that levels of unsecured personal lending were unchanged in January.

Figures for mortgage lending were in line with the monthly average increases for the last six months, with Mr Dooks saying that the rise was expected.

“Mortgage lending continued to be buoyant, as we expected following the high volumes of approvals in the final quarter of last year,” he added.

Tags: january sales, retail sales, positive sign, Credit Cards, January, second half, credit, rise

Casino to affect house prices

The news that Manchester has been chosen as the site for the UK’s first super-casino has led some industry experts to predict a rise in house prices in the city.

Nationwide Building Society described the award as a “vote of confidence” in Manchester and said the number of jobs created will affect house prices.

“This could be good news for house prices in Manchester,” said Fionnuala Earley from Nationwide.

“It will bring new jobs to the city and the decision clearly represents a vote of confidence in Manchester’s infrastructure and the city’s ability to support a new super-casino. New jobs will lead to an increased need for housing which will support local demand and house prices.”

The news is undoubtedly good for those who already own houses in Manchester as they will see the value of their property soar.

However, first-time buyers will struggle to purchase a property in the city as prices rise, while Ms Earley also says the casino may have a negative impact on the value of some homes.

“Depending on the location of the casino, there could still be some negative impact on local prices if factors, like noise, for example, become an issue,” she said.

House prices in Manchester have risen by three per cent in the last year and by 101 per cent in the last five years.

Tags: Manchester, need, site, year, noise, cent, building society, rise

Council Tax rebates

Millions of people may have been paying too much council tax due to rushed housing valuations which were carried out in 1993.

Many households are in line to receive thousands of pounds, with hundreds of people having already been given their windfall.

The news could go a long way to helping many homeowners who are struggling to keep up mortgage repayments as a result of rising interest rates.

Some homeowners have received thousands of pounds in back payments and campaigners are urging more people to see if they too are entitled to have their council tax cut.

It is possible to find out if you are paying too much council tax by making a simple online check.

Campaigners say that the problems arose when the Conservative government worked to quickly replace the hugely unpopular poll tax.

As many as 60 per cent of council tax valuations were carried out by estate agents, with a large number being labelled ’second gear valuations’, because agents would simply drive past a house and allocate it a band.

As a result, many people are now paying too much or too little council tax, with large discrepancies between homes on the same street.

Homeowners are being warned that their council tax could just as easily rise as a result of a revaluation.

Tags: Valuation Office Agency, gear, england, Council, windfall.The news, gear valuations, finance, rise

Lifetime mortgages popular among Brits

Lifetime mortgages and other equity release products are becoming more popular among Britons.

That is according to Safe Homes Income Plans (Ship), which says that a record-breaking £1.2 billion worth of lifetime mortgages were sold in 2006.

The firm has revealed that 2006 was a record year and, considering the way the market is growing, it expects to see that figure rise to £1.7 billion in 2007.

“The equity release market has come a long way over the past decade and has made very real strides in its attempt to rid itself from the scepticism that surrounded it in the early years,” said chief executive of Ship Jon King.

“Equity release has never been cheaper, more accessible or – with full regulation imminent in 2007 – safer.

“Modern drawdown products are a far cry from the inflexible, poor value products of the past,” he added.

A fall in the cost of lifetime mortgages due to increased competition is being touted as one of the main reasons behind their surge in popularity.

Tags: real strides, income, past decade, value, Jon King, equity release, britons

HSBC offers new 5-year mortgage

A new 5.55 per cent, five-year fixed rate mortgage plan has been launched by HSBC.

Following the base interest rate rise to 5.25 per cent last week, the package replaces HSBC’s Green Sale mortgage with a fixed rate of 5.17 per cent, which has sold out.

The new plan offers the incentive of no booking or exit fees, with interest charged daily.

Rob Chesters, head of mortgages at HSBC, said: “Following the recent increase in interest rates, we are pleased to be able to announce immediately our new five-year fixed rate mortgage, which comes with a very competitive rate and no booking fee.

“Our Green Sale mortgage proved to be very popular with the many homeowners spring cleaning their finances this January, selling-out in the first two weeks of the sale.”

The fixed rate reverts to 6.25 per cent variable once the five-year fixed rate period has expired.

HSBC serves 15.6 million customers in the UK and over 125 million customers worldwide.

Tags: rate rise, green, uk, rate, Green Sale mortgage, United Kingdom

Interest Rate Rise Could Mean Nearly £300M More To Pay For Homeowners

A recent study carried out in relation to the recent interest rate rise enforced by the Bank of England has shown that mortgage payers in the UK could be paying nearly three hundred million pounds more collectively in monthly repayments on their mortgages. The interest rate hike was recently announced, after Bank of England officials increased it from 4.75% to 5%.

The figures with regards to the monthly rise in total mortgage repayments came from an analysis carried out by Egg. Officials from Egg have advised consumers to start shopping around for a better deal on their mortgages in order to try and save money on the amount that they will otherwise have to pay out as a result of the interest rate increase. Those on a variable rate mortgage could find that the 0.25% rise in the base rate could make a significant difference to their monthly outgoing based on the value of their mortgage.

According to the report from Egg, those with variable rate mortgages in the UK will each pay an average of around £35.92 more each month as a result of the interest rate increase. With over eight million mortgage payers currently on a variable rate, this could mean a rise of around £292 million per month on total mortgage repayments.

Officials state that by doing a little research and shopping around for a more competitive mortgage deal consumers could cut back on the financial impact that the interest rate rise has on their monthly outgoings. There are a number of deals available on the market at the moment, and some consumers may prefer to opt for a fixed rate mortgage to avoid further financial implications in the event that the interest rate rises again early next years, as predicted by some financial experts.

Tags: bank, interest, pay, Mortgages, deals, home, offers, rise, rate, house