Mortgage approvals rise to one year high in June

A leading industry group has released data showing that the number of mortgage approvals for new property purchases in the month of June reached a one year high. The data was released last week by the British Bankers’ Association and showed that the number of UK mortgage approvals for June reached 31,747.

This figure for June was an increase from the 30,803 mortgage approvals that were seen in the previous month. It was also the highest value seen since July of 2010. Statistics Director from the BBA, David Dooks, said that banks were continuing to lend on mortgages for new property purchases but added that the mortgage market was still weak. He did state that there had been some level of revival in the buy to let market, with investors seeing the benefits of buy to let in the current climate where demand for private rental homes is at an all time high.

The results also showed that there had been a drop in net lending to non-financial companies, which fell by 2.5 percent. Officials said that this drop in net lending was partly due to low demand for credit from these companies, many of which are very wary about taking on further business debt in the difficult financial climate, with many preferring to try and pay down debt rather than take more debt on. However, this could have a significant negative impact on the growth of the economy according to many industry officials.

IHS Global Insight chief economist Howard Archer said: “It is likely a sign that companies are becoming increasingly wary about borrowing and investing in the current difficult economic environment – which in itself is worrying for growth prospects.”

Tags: economist, June, month, value, new property purchases, growth, british bankers association

Another decade for first time buyer mortgages to stabilise

It has been claimed in a recent report that it could take another decade before mortgages for first time buyers stabilise and reach the level that they were at prior to the global financial crisis. Before the credit crunch first time buyers were usually easily able to get a mortgage, and often did not have to even put down any deposit. However, this has all changed and these days those looking to get onto the property ladder feel that they are hanging on to an impossible dream.

Over the past couple of years things have become increasingly more difficult for first time buyers. Restrictions in the mortgage markets resulting from the financial crisis have resulted in more buyers being turned down by lenders when they apply for a mortgage. Those with damaged or poor credit history are also charged high rates of interest or turned down for a mortgage altogether.

Another huge hurdle that has faced first time buyers over the past couple of years is the matter of the deposit that lenders want in order to get a mortgage. In the past first time buyers were able to get a mortgage without even putting down any deposit, and could even borrow over and above the value of the property with a 125 percent mortgage.

However, these days lenders are demanding huge deposits from first time buyers such as 20 percent or more, which is leaving many people out in the cold when it comes to getting onto the property ladder.

One official from the homeless charity Shelter said: “The failure of successive governments to tackle Britain’s housing crisis has left an entire generation of young people with little hope of ever accessing a secure and affordable place to live. The impact both on them and on wider society is already becoming clear, with rising numbers of young people delaying having children, unable to move for job opportunities and spending longer and longer living with their parents because of the crippling cost of housing.”

Tags: Subprime mortgage crisis, value, Financial crisis of 2007–2009, mortgage, business, little hope, crisis, percent mortgage

Mortgage market in Scotland sees improvement

Recently released data has shown that the property and mortgage markets in Scotland have shown surprising improvement in the second quarter of this year, with officials expressing surprise over the figures that have been released by industry groups.

Figures were released by the Council of Mortgage Lenders, and it appears that things have improved with both first time buyers and home movers in Scotland. Officials have said that they will be keeping a close eye on the property and mortgage markets in Scotland for the remainder of the year, and could find that the markets outperform those in the rest of the UK if the performance continues as it has done so far.

The Council of Mortgage Lenders said that in the second quarter of this year the number of mortgage agreements for first time buyers increased by an impressive 18 percent, bringing the total for the second quarter to 4700. The total value of these mortgages came to £419 million, and this reflected an increase in total value of 27 percent compared to the first quarter of the year.

The figures from the Council of Mortgage Lenders also showed great improvements in the mortgage and property markets for those that were moving house. Over the course of the second quarter of the year 8000 loans were taken out, and this reflected an increase of 36 percent, which has surprised many experts.

It is thought that part of the reason behind the improvements in these markets is that lenders in Scotland appear to be getting more relaxed when it comes to granting and approving mortgage loans. The average deposit requirement for first time buyers has fallen from 23 percent to 21 percent, and some think that this may have helped to renew hope and confidence amongst buyers.

Tags: time buyers, mortgage markets, Mortgage loan, confidence, council of mortgage lenders, value, mortgage, scotland

Government takes steps to help homeowners

The government has recently taken steps to try and help homeowners by changing court protocols in order to make it more difficult for lenders to take court action without taking other steps first in cases where homeowners have fallen behind with mortgage repayments.

It is hoped that this will help to reduce repossession levels, and lenders will be expected to follow guidelines and take a number of other steps before taking court action. The lenders will need to demonstrate that they have taken the necessary steps if the case does end up in the courts. Read more

Tags: number, value, government help, case, Council, housing minister, climate, mortgage help

Non-smokers save 50% on life insurance

With annual non-smoking day arriving in March, consumers give themselves an opportunity to kick their habit and make savings on their life insurance, claim financial experts.

According to Lifesearch, premiums for life insurance and critical illness cover can be reduced by as much as 50 per cent if a person does not smoke.

Matt Morris, policy adviser at Lifesearch, said that ‘do you smoke?’ is one of the first questions that an insurer will ask a potential new client, and that a non-smoker has to be someone who has quit their habit for 12 months.

“A cheaper premium is not certain, as it also depends on age and health, but there is a very good chance that the premium will fall,” he said.

The research showed that a 30-year-old non smoker could save up to £1,850 over a term.

Meanwhile, the company said that the value mothers bring to a family is often under-appreciated and they should be looking into protecting themselves and their finances with insurance cover.

Tags: GBP, financial experts, claim, Tobacco, value mothers, value, savings, Types of insurance

Savers not taking full advantage of Isas

Up to one in three savers are not taking advantage of their tax-free allowance with their individual savings accounts, according to new research.

Findings from Marks and Spencers Money shows that by not saving the maximum of £3,000 in current and previous tax years, savers could have lost out on £35 per head in tax free interest.

The firm said that this means savers could have lost a potential £23 million per year.

Brendan Cook, chief executive of M&S Money, said: “With an estimated 2million new Cash Isas to be opened in the current tax year, savers could be losing out on a huge amount of tax free interest.”

He urged savers to “take more interest in their savings”, and make full use of their Isa allowance, especially when the allowance increases from April 6th.

Last week, Adrian Lowcock of Bestinvest said that one way to get good value on an Isa was to search for a broker who only took a low rate of commission.

Tags: ISAs, value, Brendan Cook, April, Marks, individual savings accounts, tax, Last week

Consumers need to be ‘wary’ of introductory Isa offers

Consumers have been warned by a financial expert to tread carefully when considering introductory offers on individual savings accounts (Isas).

Bestinvest said that introductory offers emerge when an Isa product first launches, which means no one can know the track record of a fund manager or how well it will perform.

Adrian Lowcock, senior investment adviser at Bestinvest, said: “You have to be a bit wary of them, and know what you are getting into. We tend to recommend fund managers that have a proven track record.”

He added that that one way to get “good value” with a deal is to find an advisor who will offer a discount and charge a low rate of initial commission.

Figures released in November 2007 by HM Revenue and Customs showed that the amount of money saved in Isas has now reached £208 billion.

According to the BBC, the total value of Isas has risen sevenfold from £29 billion since April 1st 2000.

Tags: sevenfold, bestinvest, individual savings account, Banking, bbc

Not all children ‘would be interested in taking financial advice’

Children would benefit from more financial education in order to make the most of their Child Trust Funds (CTF), but they might not “necessarily be interested in taking that kind of advice”, claims a financial expert.

Ark Financial Planning said that although there are children who have been made aware of the ‘value’ of money, there are more who are concerned about what they can do with it rather what it can do for them.

Phil Perry, a spokesperson for the company said that issues arise when attempts are made to label money in funds for educational costs when not everyone wants to go to university.

“I certainly think the government need to have a little bit more idea on what they expect that money to be used for,” he added.

CTF are saving accounts for children and those born after September 1st 2002 who receive a £250 voucher to start their account.

According to reports in the Daily Telegraph, those children born within a year of the September 1st 2002 can expect windfalls worth a total of £2.4 billion when they reach 18 years of age.

Tags: advice, little bit, expert, daily telegraph, value, child trust funds, CTF, company

Tracker mortgages ‘coming into their own’

Tracker mortgages are now “really coming into their own,” according to a leading mortgage adviser.

Ray Boulger, senior technical director and spokesperson for John Charcol, has said that, “providing the starting point is good”, a tracker nearly always gets you better value than a fixed rate mortgage.

He said: “We’ve been recommending tracker mortgages for those people who want a variable mortgage for a long time.”

A tracker ensures a consumer’s interest rate on a mortgage moves in line with the Bank of England’s rate. This does not leave home owners “at the mercy of your lender”.

There are a “proportion of lenders” that do not move their standard variable rates and associated discount rates in line with the Bank’s rate.

Mr Boulger added that “availability is not a problem” for tracker deals.

While Nationwide, Abbey and Halifax have all lowered their rates, following the Bank of England’s reduction in its base rate by a quarter of a per cent, the Press Association reports that they are three of only eight of the 120 or so mortgage lenders in the UK to have done so.

Tags: value, loan, variable rates, tracker deals.While, john charcol, mortgage lenders, senior technical director and spokesperson, tracker

Popularity of equity release in the rise

According to a recent report the popularity of equity release schemes is on the up, and experts state that the quality and service in this area is also improving.

Equity release schemes have gained a bad reputation and have been at the centre of controversy, with one equity release provider recently being fined by the Financial Services Authority for giving inaccurate advice to consumers. However, despite its poor reputation equity release is becoming a hit with older homeowners.

According to Norwich Union these equity release schemes are particularly popular with homeowners that are close to retirement. In a survey of 1600 people between the ages of 50 and 56 one in ten stated that they would consider equity release programmes in the future. These schemes were not as popular with those that had already retired, with survey results showing that only one in twenty retired consumers would look at equity release.

One equity release worker stated that the information provided to consumers these days is far more detailed and comprehensive.

She said: ‘The market today is very different. The paperwork given to customers before they sign goes so much further. It really shows what they’re getting into.’

A Prudential equity release customer also said: ‘I was afraid of the financial bits, but my neighbour sat in on one of the meetings. It told me how much I could draw down and I’ve taken about a third of an agreed maximum.’

She added: ‘The compound interest rate is the nasty bit. The man from the Pru worked out that on average I’m likely to live another 27 years. He then told me how much I’d owe, based on the interest rate, if I borrowed varying amounts over various times.’

Alan Wright
26th November 2007

Tags: home, mortgage, value, equity, release, property, loan

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, bank, share, value, savings, price

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

Car owners leaving ‘paradise’ on display

One in five British drivers are leaving their cars unattended with valuables on display worth more than £200, it has emerged.

Zurich research has discovered that 85 per cent of car owners are leaving belongings in their cars with an average value of £145, representing a total of £3.9 billion worth of gadgets on display to potential thieves.

The study also found that younger drivers between 18 and 24 years old are the worst offenders for leaving their possessions visible to thieves, while popular items left include car stereos, polling 51 per cent, and CD collections, which were left by 44 per cent of drivers.

With many Britons not taking adequate precautions to protect their vehicles from thieves with 18 per cent of having no security measures in place, Zurich has commented that UK cars are a “thief’s paradise”.

“Harried, time-poor drivers often fail to realise just how valuable the possessions they leave in their cars are and are not taking the right precautions,” Zurich Insurance head of motor underwriting Roy Seeds said.

A Direct Line spokesperson has recently advised younger drivers that taking part in the government’s Pass Plus training initiative, at a cost of about £100, could help to reduce the cost of their insurance premium by up to 35 per cent.

Tags: britons, value, security, potential thieves, premium, Business Finance

Happy couples warned over insurance

People in the UK are being urged to check their wedding insurance, as gifts they received on their happy day may not be covered after the cover period expires.

According to research by Abbey, 13 per cent of home contents insurance policies will not cover the value of wedding gifts temporarily.

And even if they do, this cover tends to only last a month – so the 28,000 happy couples married last month may need to move fast to ensure they are covered.

The report also revealed that many insurers limit their wedding cover. So, with the average amount spent on a present at £43, inviting more people could mean the limit is quickly exceeded.

“Sadly the amount of cover is often not enough to cover the number of gifts received by couples, and it only lasts for a month on average, potentially leaving newlyweds underinsured,” said Prasad Shastri from Abbey.

According to the study, newlyweds with temporary insurance of up to £1,000 would hit their limit after receiving gifts from on average 23 guests.

Tags: limit, cent, period, number, amount, value, insurance policy, home contents insurance

Holidaymakers ‘lie on insurance claims’

A significant number of people from the UK confess that they give false information when making a holiday insurance claim.

According to research by Direct Line, 11 per cent of British holidaymakers increase the overall value of a claim.

Another five per cent admit that they have added extra items to an insurance claim. Of the 13 per cent to have made a travel cover claim, 15 per cent admit to lying.

“The telling of a ‘little white lie’ is fraud however they chose to justify it,” said Chris Price from Direct Line. “Contemplating committing fraud is a serious matter and we would urge anyone about to claim on their travel insurance not to take this lightly.”

The study revealed that jewellery was the most popular item for which to make a false claim, with 25 per cent seeking money back for such items.

A recent report from Sainsbury’s Bank showed that 8.8 million people from the UK booked a last-minute summer holiday this year – but in their haste to get away 19 per cent forgot to arrange travel insurance.

Tags: year, travel, value, cover, Jewellery, Mill, haste

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: payments, increase, cost, landlords, rent, value, buy, rates, rental

Barclaycard introduces ‘wave and pay’ credit card

In another small step towards a cashless society, Londoners will be able to make purchases on a combined Oyster and credit card from this autumn.

Along with more traditional transactions, the new ‘wave and pay’ card will perform the same function as the Oyster card, a ‘contactless’ payment system which has enabled quicker, cash-free payment at cheaper rates on the London public transport system.

The new product from Barclaycard, called the OnePulse, was developed in collaboration with the consortium which operates the Oyster card, TranSys.

In a further innovation , the card will be enabled for contactless payment for low value transactions. Users will be able to pay for purchases under £10 by swiping the card in a special reader, rather than having to enter their PIN.

The new technology has been successfully roadtested at Barclays’ Canary Wharf headquarters.

The card operates on the typical variable APR of 14.9 per cent, and offers zero per cent interest on products bought in the first six months.

Recent figures released by Apacs show that card spending has risen by 269 per cent in the UK over the past decade, with just a 17 per cent increase for cash.

Tags: OnePulse, value, United Kingdom, cent, GBP, Business Finance, transport, barclays

Brits losing a fortune by failing to put their cash in savings accounts

In the olden days stashing your money in various cunning locations around the house seemed to be the norm, as many people did not have access to savings accounts as they do today.

However, according to a recent survey there are still an alarming number of Brits that insist on keeping their cash in the house, which not only raises security issues but also means that collectively Brits could be losing out on millions of pounds worth of interest from banks and building societies each and every year.

A recent survey was carried out by Virgin Money, and according to the result of the survey around one in every six adults in Britain are still keeping cash in the home rather than opting to place it in a savings account. The results indicate that if these people were to put the cash that they have kept in the house into an average Internet savings account they could be accruing around £174 million each year in interest collectively. Instead, this money simply sits around earning nothing for them, and increased the risk of financial losses through theft in the event that the cash is stolen by a visitor or the house is burgled.

The survey showed that one percent of Brits that were surveyed admitted to having up to one thousand pounds in the home, whereas two percent of Brits stated that they had up to five thousand stashed in the home. Experts warn that since inflation has been on the rise, and the money is simply lying around failing to accrue any interest, it is in danger of losing its purchasing power, so consumers are doing nothing to help themselves by leaving it in the home.

Industry professional add that there is around three and a half billion pounds in total that is lying around the homes of Brits rather than being placed into savings account, and that this amount could depreciate by two hundred million pounds within the next three years.

Tom Smith
10th June 2007

Tags: savings, inflation, value, cash, spend, safe, earn, bank, interest

Housing market slowing down

House prices in the UK are increasing in price at the slowest rate they have all year.

The Halifax House Price Index shows that properties increased in value by 0.3 per cent in May, signalling the third consecutive month of the market slowing down.

The average house price sits at a lofty £196,893 and buyer interest fell for the fifth consecutive month.

The housing market is expected to continue to slow down in the coming months, with increasing interest rates and reduced real earnings each playing a part.

Commenting on the 0.3 per cent price increase, Martin Ellis, chief economist at Halifax, cited rising interest rates as the main factor.

“This is the smallest increase so far this year and the third successive easing in the monthly growth rate,” he said.

“The recent slowing in monthly house price inflation, together with further evidence of moderation in housing market activity, suggests that the interest rate rises since last summer are having an impact on the market.”

A slowing down of the housing market is good news for first-time buyers as ever-increasing house prices are making it very difficult for young buyers to get onto the property ladder.

Tags: United Kingdom, part, Subprime mortgage crisis, successive easing, rising interest rates, Index, halifax

Protect your expensive wedding gifts

A new report has highlighted the importance of home insurance for newly weds, citing the cost of ever extravagant wedding gifts as the main reason for needing to get home insurance cover pretty much right away following the wedding.

According to reports wedding gifts are getting more and more extravagant, and with gifts as expensive and luxurious as plasma screen TVs and the like being purchased as wedding gifts in some cases, home insurance cover is more important than ever for newly weds with thousands of pounds worth of presents.

Research was carried out by NFU Mutual, which showed that under ten percent of newlywed couples actually check their insurance policies immediately after the wedding, which means that millions of pounds worth of extravagant wedding gifts could be at risk, as it could be left in the new homes of newlyweds as they jet off to enjoy their honeymoon still caught up in the excitement of the wedding.

Research also showed that many newlyweds couldn’t remember whether they had checked their policies or not following the wedding. Officials reports that millions of pounds are spent on wedding gifts each year in the UK, and those gifts could be at risk from damage or theft – particularly if they are being left in the house whilst the couple go on honeymoon – which could mean huge financial losses for the newlyweds just as they embark upon their married life together.

One official from NFU Mutual stated: “There is a great deal of excitement in the run up to a wedding and naturally, the practicalities of checking your home insurance can sometimes be forgotten.”

Tom Smith
31st May 2007

Tags: gifts, burglary, in, home, honeymoon, Insurance, wedding, break

You could get a better deal with annual travel insurance

According to officials from MoneyExpert buying annual travel insurance cover could work out cheaper than opting for single trip cover, although experts do warn that consumers need to carefully check the policies to see what is and isn’t covered before making any commitment.

According to researchers from MoneyExpert some annual travel insurance policies can work out cheaper than single trip policies, but consumers must check that they are adequately covered.

One MoneyExpert official stated: “Holiday makers often think that single trip cover is simple and cheap, but the truth is it’s often not best value for money. You are certainly paying for a quick fix. As with all insurance, the quality of cover will always vary so like-for-like comparisons are quite difficult to make. Nevertheless it remains the case that you can get annual travel insurance for the whole family without breaking the bank. Focusing on price alone can mean holidaymakers will be left with insurance that is not worth the price. Insurance policies are only tested when you need to make a claim. You don’t want to find out when you are making a claim that you’ve saved money at your expense.”

MoneyExpert officials have warned that although it can be cheaper to take out annual cover, consumers should take into consideration the quality of the cover as well as the price. It is important to ensure that you compare different policies, and know exactly what you are and are not covered for in order to ensure that you get proper value for money with your travel insurance policy.

According to Sean Gardner from MoneyExpert: “Average prices provide a guide as to what to look for. It is then up to holidaymakers to probe a little deeper to find the policy that suits them best.”

Tom Smith
26th May 2007

Tags: value, trip, money expert, Insurance, News, travel, cover, annual, single

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

Secured Loans – What You Need To Know

It’s not always easy to manage your finances in the face of unforeseen or large expenses. People might have to deal with costly occasions and events such as: Read more

Tags: Loans, credit rating, homeowner loans, history, value