More compensation payouts to be issued by Halifax

High Street banking giant, Halifax, has recently admitted that it may have to pay out more compensation to customers over a mix up with its mortgage rates. Earlier this year the lender identified around 600,000 customers who may be eligible for compensation over confusion about mortgage rates, about half of whom ended up receiving compensation payouts. The lender has now stated that there could be another 250,000 people who may be eligible with around half of them expected to actually receive compensation.

The compensation that the lender pays out could be up to £4500 per person based on a mortgage of £150,000 where the borrower has been affected for three years. The payouts will equate to either 1 percent of the mortgage interest for each year that the borrower has been affected or will be a fixed compensation payout. With tens of thousands of borrowers potentially set to receive compensation, Halifax could have another huge bill on its hands.

The confusion has arisen over Halifax increased the cap on its standard variable rate mortgages from 2 percent above the Bank of England base rate to 3 percent above. The UK’s financial regulator, the Financial Services Authority, expressed concern that wording on documentation may have led borrowers to believe that they would receive advance warning of any such changes. Halifax subsequently came to an agreement with the FSA over paying compensation to customers who were affected.

A Halifax official said: “In February 2011, we agreed a voluntary agreement with the FSA in relation to a customer contact and goodwill payment programme with specific Halifax mortgage customers. We have subsequently identified a further group of customers that are eligible for inclusion within the programme. We are now in the process of writing to these borrowers explaining what this means for them.”

Tags: bank of england, tens of thousands, goodwill, Halifax mortgage customers, Street banking giant, customers

Half of young Brits think renting is a waste of money

It has been revealed in a recent survey that around half of young Brits believe that renting a property is a waste of money. However, despite this opinion many are being forced to rent because they are unable to get a mortgage in the current climate to get onto the property ladder and get a place of their own.

Recently released figures have shown how restrictions in the mortgage market are driving up the cost of renting, and whilst many non-homeowners believe that renting is a waste of money more and more are having to do this and pay more for the privilege. With so many would be first time buyers unable to get a mortgages the demand for rental properties is high, and this is driving property rental prices up further.

Recent research has shown that the amount that buyers are now expected to pay out by way of a deposit is unmanageable for many people, and whilst buyers may have no problem affording the repayments on a mortgage, especially with the base rate at an all time low, many simply cannot raise the deposit required by lenders, which is running into tens of thousands of pounds in some cases.

The level of deposit required in London has reached nearly £30,000 for first time buyers, which means that many are relegated to renting or living with friends and family. However, with the cost of rents having also rocketed some people in the London area would be looking at paying close to £1000 a month just for a one bedroom flat, with the average rent across the UK having now increased to nearly £700.

Tags: first time buyer, research, property, london, climate, mortgage

Deposit levels could shoot up further for would be buyers

Until the end of 2007 the UK, along with many other nations, had enjoyed around a decade of easy credit, and for many the sudden financial restrictions that came into play with the onset of the global credit crunch in 2007 came as a real shock. Read more

Tags: first time buyers, nigh, tens of thousands, part, Commercial mortgage, high income multiples, mortgage industry, house deposits