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Confidence slides for third consecutive month
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August 11,2010
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Consumer confidence continued to fall during July with the index dropping by seven points to 56, reveal Nationwide.
This is the third consecutive month that the index has fallen and it now stands at a similar level to May 2009. The Expectations Index saw the biggest fall in July – dropping by 13 points – continuing the trend seen since February 2010.
Consumers' faith in the spending situation also deteriorated during July with the Spending Index decreasing by three points. At 93 this index now stands only slightly above its long-run average of 91.2 points.
The Present Situation Index remained unchanged during the month and continues to struggle to recover from its all-time low of 16 points seen in July 2009.
In line with recent house price figures, consumers expressed a more guarded optimism towards the housing market in July. Consumers now expect the value of their home to increase by just 0.4% over the next six months – a decrease of three tenths of a percentage point from June's figure
Martin Gahbauer, Nationwide's chief economist, said:
“Consumers continued to show caution towards the strength of the economic recovery during July. The index has now seen three consecutive months of decline and this has largely been fuelled by uncertainty as to what the next six months hold. In particular, there appears to be a growing concern among consumers as to their level of disposable income in the months ahead.
"July will have been a time for many consumers to reassess their individual circumstances following the Chancellor's emergency Budget, and inflationary pressures, such as rising food and fuel costs, may now be leading to more negative sentiment among consumers as they start to feel the pinch on their spending power.
Consumers concerned about what the future holds
“Over the previous few months we have seen a general downward trend in confidence that could be linked to the general election and consumer perceptions surrounding the impact of post-election policy changes.
"Expectations for the future have been a key driver behind the fall in overall confidence, with a lack of confidence in the future economic and employment situation forcing the index down. Since reaching a historical high of 120 points in February, the Expectations Index has now recorded a total drop of 44 points in the past five months, bringing it well below the long-run average of 92.1 for this measure.
“The number of consumers who believe their household income will be lower in six months' time has edged up since February, and in July reached its highest level since the index began in May 2004. This is perhaps largely a product of consumers taking stock of their personal situation following the emergency Budget, although fears over the state of the job market and economy as a whole are still playing a part as the UK continues on its sluggish path to recovery.
Sustained low base rate will be welcome news for many consumers
“The fall out from the emergency Budget, concerns over the direction of the housing market and concerns over the rate of inflation are still very real. However, the Bank of England's decision this month to hold base rate at 0.5% for the eighteenth month running will be welcome news for many consumers who will continue to benefit from the positive impact that low mortgage repayments are having on their disposable income.
"It remains unlikely that we will see an increase to base rate before the end of this year. Nonetheless, with inflation remaining above the Government's 3% upper limit, it is possible that we could see base rate start to slowly increase over the course of 2011 as the Bank of England looks to head off the risks that high inflation can have to the recovery. Any increase in interest rates would represent an additional squeeze on disposable incomes.”
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House prices fall 0.5% in July, say Nationwide
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August 02,2010
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House prices fall back in July as buyer demand remains weak, reveals the latest Nationwide House Price Index.
Martin Gahbauer, Nationwide's Chief Economist, said:
“House prices fell in July for the first time since February. The price of a typical UK property fell by a seasonally adjusted 0.5% month-on-month, after having been unchanged in June. The 3 month on 3 month rate of change – a smoother indicator of the near term price trend – fell from 1.7% in June to 1.3% in July, significantly below the peak of 4.0% reached in September 2009.
"There was also a sizeable drop in the annual rate of house price inflation from 8.7% in June to 6.6% in July, due in part to the strength of house price gains in the same month last year.
Demand from homebuyers remains subdued
“So far in 2010, demand from homebuyers has made little progress in building upon the recovery seen during much of 2009. Despite the introduction of a second stamp duty holiday for the vast majority of first time buyers and record low interest rates, the number of properties changing hands across the UK is still running at only half the levels seen prior to the financial crisis and recession.
“A combination of restrictive credit conditions and uncertainty about the future economic outlook continues to limit the pool of buyers to those with relatively large financial resources. Many potential buyers still lack the confidence to purchase their first home or trade up when faced with uncertainty over future income and employment prospects.
“More encouragingly, last week's GDP figures showed that the UK economy recovered at a faster than expected pace in the second quarter. The 1.1% quarter-on-quarter growth rate seen in April-June was the strongest since early 2006.
"For the moment, however, concerns about the medium-term impact of fiscal austerity on personal finances is more than outweighing any potential optimism about the recovery's short-term cyclical momentum.
“Up until recently, the shortage of buyers in the market was more than offset by an even more severe shortage of properties for sale, with the result that prices rose. Evidence continues to build that this imbalance between supply and demand is easing.
"The abolition of HIPs has encouraged more speculative sellers to test the market, while some of the excess supply seen in the rental market during 2009 now appears to be making its way back into the sales market as temporary landlords make another attempt to sell their properties.
“At the moment, the market is clearly easing relative to the very tight supply conditions that characterised it since early 2009. However, it will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward trending prices may be in store.”
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House prices to fall as demand dries up
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July 15,2010
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In an unprecedented warning, four leading experts raised concerns that the housing market could be teetering on a knife-edge for the next decade.
They included accountants PricewaterhouseCoopers, thE Royal Institution of Chartered Surveyors a leading economic consultancy and the Council of Mortgage Lenders.
Their warnings will worry millions of homeowners who have bought in recent years and comes amid a backdrop of reduced availability of home loans as banks - still recovering from the Credit Crunch- seek to rebuild their profits.
The first warning, from PricewaterhouseCoopers, said house prices could remain below their peak levels for the next decade.
This will directly affect around 3.6m people who have bought a property since house prices reached record levels in 2007.
Millions of homeowners have stretched themselves to the limit by taking out a supersize mortgage, but fear their property may never be worth as much money again.
PricewaterhouseCoopers says there is a '50% chance' that your home will be worth less in 2020 than it was in 2007.
John Hawksworth, head of macroeconomics at PricewaterhouseCoopers, warned: 'House prices remain vulnerable to setbacks.'
His analysis is based on 'real' house prices, that is the value of your home adjusted for normal inflation. A second report says prices could plunge by 25% over the next three years, wiping nearly £40,000 off the average house price.
This means the value of your home could drop to a level not seen since 2003, according to the research by the consultancy Capital Economics.
Ed Stansfield, chief property economist, blamed 'the huge scale of the fiscal squeeze we are about to see', such as rising unemployment and 'further pressure' on household incomes. His forecast is that prices will drop 5% this year, followed by 10% in each of the following two years.
If correct, this would mean the average house price, which was £162,000 at the end of last year, would drop to just £125,000 by the end of 2012.
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FSA propose new mortgage rules?
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July 13,2010
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The Financial Services Authority (FSA) has today outlined proposals to ensure all mortgages are carefully assessed to make sure borrowers can afford them.
Reflecting the FSA's enhanced consumer protection strategy and intensive day-to-day supervision, the proposed changes aim to ensure all lenders get back to the basics of responsible lending and that problems are prevented before they can develop or get out of control.
Some of the key proposals include:
- Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer's ability to pay;
- Requiring verification of borrowers' income in every case to prevent over inflation of income and to prevent mortgage fraud;
- Extra protection for vulnerable customers with a credit-impaired history.
The tough new proposals, published in the consultation paper, form part of a major review by the FSA into the UK mortgage market and are based on detailed analysis of past lending decisions, looking at the causes of arrears and repossessions since 2005.
The FSA found that:
- 46% of households either had no money left, or had a shortfall after mortgage payments and living costs were deducted from their income;
- Almost half of new mortgages between 2007 and the first quarter of 2010 were provided without a customer having to verify their income;
- The share of interest-only mortgages has been increasing. At the peak of the market, over 30% of all mortgages were interest-only;
- Many consumers with no repayment vehicle count on future house price rises or uncertain life events to repay their mortgage and some have no plan at all;
- Borrowers with a credit-impaired history are particularly vulnerable.
Lesley Titcomb, FSA director responsible for the mortgage market, said:
“There is a clear link between financial overstretch and mortgage arrears and repossessions, and we are determined to protect vulnerable consumers by making sure that everyone who takes on a mortgage can afford to pay it back.
“While it is clear the mortgage market has worked well for many, we need to build a strong new framework to protect mortgage customers and to ensure that the problems we have seen in the past do not happen again, particularly as the mortgage market recovers.”
Today's report also includes the key findings from the FSA's review into arrears charges, which indicated significant variation in the level of arrears fees across the market.
The mortgage rules require arrears charges to be based on a reasonable estimate of the cost of the additional administration required as a result of the customer being in arrears.
The FSA is actively seeking views from consumer groups and industry and invites responses by 16 November 2010.
Payplan, the free debt advice provider, has welcomed the FSA's latest changes to the way lenders should treat customers in arrears, particularly the requirement for lenders to consider all options for borrowers before taking action for possession of the property.
According to Managing Director, John Fairhurst, most Payplan clients with mortgage arrears also have a range of unsecured debts (typically of around £40,000).
He said:
“In our experience, mortgage arrears need to be dealt within the context of the overall financial situation that the customer finds himself.
"In trials where we are working with a small number of mortgage lenders to talk to their clients who are in arrears, we have found that by engaging the customer about the totality of their debt situation we are nearly always better able to effect a solution that stabilises and makes the client's repayments on his unsecured debt more manageable, leaving a greater proportion of available income to put towards improving the mortgage arrears situation.
“Without having to run the risk of giving advice, lenders adopting a more holistic approach to their customers' arrears problems, can turn the FSA's new rules to their own advantage put more customers back on the straight and narrow and fulfil their obligations under TCF.
"Rather than being an extra burden, lenders should see the FSA's requirements to consider all options for clients in debt as an opportunity to help tackle underlying unsecured debt liabilities at source and thereby free up more disposable income for repayment of mortgage arrears.”
CML director general Michael Coogan said:
"There will always be a regulatory trade-off between protecting consumers from over-borrowing, and increasing the barriers to home-ownership. The mortgage market for the time being has already corrected, to a degree that the main consumer concern right now is about access to finance, not about risky lending.
"The risk is that the gain will not match the pain in the short term. The industry and consumers will feel the costs of imposing new regulatory requirements now, in a market where they are not needed, but the potential consumer benefits will only be felt at some unspecified time in the future.
"We look forward to working with the FSA to ensure that a pragmatic approach to implementation can be adopted as far as possible, to reduce the negative side-effects that may arise from well-intentioned regulation.
"There is also a need to manage the regulatory burden that may emerge if the UK proceeds with changes just at the time that the European Commission is also due to publish proposals on the same aspects of mortgage regulation."
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Savers pay the price for mortgage cuts
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July 05,2010
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Savers taking out a fixed rate bond today will receive up to 23.3% less interest than they would have nine months ago.
Moneyfacts figures show that 29% of savers are looking to fix their interest rate, with the average amount invested in a fixed rate bond standing at £36,872.
Savers investing the average amount nine months ago would have received £1,209 in interest, compared to just £978 today.
Michelle Slade, Spokesperson for Moneyfacts.co.uk, commented:
“Providers are focused on mortgage lending and as they strive to attract new business by reducing mortgage rates, they are in turn cutting savings rates to balance the books.
“Uncertainty over when bank base rate will rise means most savers are only taking a short term view, but they are being punished by the biggest reductions in rates.
“At 2.62%, the average rate on a one year bond stands at an all time low.
“Prudent savers who rely on the interest from their savings to supplement their income continue to be hit the hardest.
“Inflation also continues to take its toll on savers and is effectively depreciating the value of savers' capital.
“Savers hoping for incentives from last month's Budget were left bitterly disappointed and many continue to feel their needs have been forgotten during the credit crisis.
“With a change in bank base rate still predicted to be a little way off, the situation for savers is likely to get worse before it gets better.
“To limit the effects of falling rates, savers need to review their portfolio regularly to ensure they are receiving competitive rates.”
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Abbey announces interest rates increase
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July 05,2010
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Abbey International has announced that sterling interest rates on its popular 18 month fixed rate contracts are to be increased to 3.25% gross (3.22%AER), giving an effective rate of 4.87% over the 18 month term of the account with immediate effect.
The minimum balance required is £100,000, with the account open to both existing clients and to those with funds not currently invested with Abbey International. This is a limited offer and may be withdrawn at any time.
Abbey International has also upped the rate on its 2-Year Escalator Bond to 3.50% gross/AER in year 1 and 4.00% gross/AER in year 2, giving an excellent combination of return and safety. The minimum balance is again £100,000
Abbey International is part of the highly regarded Santander Group, which has more than 150 years experience in banking and has clients all over the world. Santander has an AA credit rating from Fitch and Aa2 rating from Moody's credit rating agencies.
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Conditions remain challenging for first-time buyer
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June 30,2010
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First-time buyers made up the lowest proportion of house purchase loans since September 2007, the latest data from the CML regulated mortgage survey showed.
They accounted for 35% of all house purchase loans in April, down from 39% in March and 38% in April 2009, confirming that getting a mortgage remains difficult for those first-time buyers that do not have a substantial deposit.
Overall, there were 40,000 house purchase loans in April, worth £5.7 billion – down from 45,000 (worth £6.3 billion) in March but up from 35,000 (worth £4.5 billion) in April 2009. The Easter break contributed to an expected seasonal dip in lending.
There was an even more pronounced drop in remortgaging, which remains subdued. There were 24,000 loans for remortgaging, worth £2.9 billion, down 16% in volume and 17% in value on March, and 26% lower (on both measures) than a year ago.
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BoE split on interest rate decision
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June 23,2010
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A member of the Bank of England's Monetary Policy Committee last night voted for rates to rise to 0.75% from 0.5%, MPC minutes reveal.
The Governor invited the Committee to vote on the proposition that:
- The Bank Rate should be maintained at 0.5%.
- The Bank of England should maintain the stock of asset purchases financed by the issuance
of central bank reserves at £200 billion.
Seven members of the Committee (the Governor, Charles Bean, Paul Tucker, Spencer Dale, Paul Fisher, David Miles and Adam Posen) voted in favour of the proposition.
Andrew Sentance voted against, preferring an increase in Bank Rate of 25 basis points.
The 7-to-1 majority means rates are kept at 0.5% for the 15th consecutive month.
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Confidence in UK housing market slips
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June 19,2010
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Less than half of those contributing to the Building Societies Association’s (BSA) June Property Tracker survey think that now is a good time to buy a home. The confidence level slipped to 45%, down from 49% in March, possibly reflecting concerns about the state of the economy and the various austerity warnings issued by the new Government. Fifty-five per cent of people surveyed considered job security a barrier to buying a home, followed by the ability to save for a deposit, at 53%. Respondents were also asked what the Government should do to promote home ownership and while no preferred single solution emerged, 36% suggested clamping down on properties standing empty. Thirty-three per cent wanted stamp duty removed or reduced; 32% more lending from banks or building societies; 28% opted for help in saving a deposit and 27% a simplification of the home buying process. The BSA suggests that this range of measures could help turn Housing Minister Grant Shapp’s promise of an “age of aspiration” for Britain’s would-be homebuyers into a reality.
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Confidence in UK housing market slips
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June 19,2010
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Less than half of those contributing to the Building Societies Association’s (BSA) June Property Tracker survey think that now is a good time to buy a home. The confidence level slipped to 45%, down from 49% in March, possibly reflecting concerns about the state of the economy and the various austerity warnings issued by the new Government. Fifty-five per cent of people surveyed considered job security a barrier to buying a home, followed by the ability to save for a deposit, at 53%. Respondents were also asked what the Government should do to promote home ownership and while no preferred single solution emerged, 36% suggested clamping down on properties standing empty. Thirty-three per cent wanted stamp duty removed or reduced; 32% more lending from banks or building societies; 28% opted for help in saving a deposit and 27% a simplification of the home buying process. The BSA suggests that this range of measures could help turn Housing Minister Grant Shapp’s promise of an “age of aspiration” for Britain’s would-be homebuyers into a reality.
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Possibility BoE will restrict max LTV available to
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June 17,2010
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moneysupermarket.com comment on speculation that the Bank of England will restrict the maximum LTV available to home buyers ahead of George Osborne's Mansion House speech this evening.
Hannah-Mercedes Skenfield, mortgage manager at moneysupermarket.com, said:
"Any move to introduce a cap on lending in the mortgage market would be disastrous for the millions of borrowers who don't have a 25 per cent deposit and could put the housing market into suspended animation for many years to come.
"Based on mortgage searches through moneysupermarket.com up to 40% of people looking for a mortgage have less than a 25% deposit. A minimum 25% deposit could kill their dream owning their own home, despite the fact that many would be perfectly capable of meeting their monthly mortgage repayments.
"By and large the mortgage market is competitive and works well for consumers: levels of arrears and repossessions are relatively low, even as we come out of recession. Lenders have learnt their lesson from the crisis in 2008 and we certainly don't advocate a return to 125% mortgages and the excesses of sub prime lending we saw a few years ago.
"Over the past few months we've seen banks and building societies tentatively renewing their appetite to lend and we've seen some green shoots in the housing market. Our concern is that a blanket LTV restriction will freeze the housing market for years to come. Although LTV is a factor when making lending decisions, it is more important to factor in affordability and judge each application on its own merits.
"For many young people looking to get a foot on the first rung of the housing ladder a deposit of perhaps £25,000 is unthinkable, especially for those saddled with student debt, yet in many cases their mortgage repayments would be similar to the rent they are already paying.
"The average age of first time buyers is now 29 and this would only increase as a result. Excluding more people from the market could distort the price of housing, lead to stagnation in the market and effectively drag more people into difficulty as they become trapped on expensive mortgage deals which they are unable to refinance and will be at the mercy of their existing mortgage lenders' pricing policies.
"Affordability is not the absolute fix-all, but LTV is a blunt regulatory tool that will create more problems than it fixes."
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Total UK personal debt at £1,460bn
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June 03,2010
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Total UK personal debt at the end of April 2010 stood at £1,460bn, reveal the latest debt statistics from Credit Action.
The twelve-month growth was 0.8%. Individuals owe more than what the whole country produces in a year.
Total lending in April 2010 rose by £0.4bn; secured lending increased by £0.5bn in the month; consumer credit lending decreased by £0.1bn (total lending in Jan 2008 grew by £8.4bn).
Total secured lending on dwellings at the end of April 2010 stood at £1,239bn. The twelve-month growth rate fell to 0.9%.
Total consumer credit lending to individuals at the end of April 2010 was £221bn. The annual growth rate of consumer credit fell by 0.2% to - 0.1%.
Average household debt in the UK is ~ £8,761 (excluding mortgages). This figure increases to £18,252 if the average is based on the number of households who actually have some form of unsecured loan.
Average household debt in the UK is ~ £57,915 (including mortgages). If you add to this the March 2010 budget report figure for public sector net debt (PSND) expected in 2014-15 (excluding financial interventions) then this figure rises to £113,709 per household.
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Total UK personal debt at £1,460bn
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June 03,2010
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Total UK personal debt at the end of April 2010 stood at £1,460bn, reveal the latest debt statistics from Credit Action.
The twelve-month growth was 0.8%. Individuals owe more than what the whole country produces in a year.
Total lending in April 2010 rose by £0.4bn; secured lending increased by £0.5bn in the month; consumer credit lending decreased by £0.1bn (total lending in Jan 2008 grew by £8.4bn).
Total secured lending on dwellings at the end of April 2010 stood at £1,239bn. The twelve-month growth rate fell to 0.9%.
Total consumer credit lending to individuals at the end of April 2010 was £221bn. The annual growth rate of consumer credit fell by 0.2% to - 0.1%.
Average household debt in the UK is ~ £8,761 (excluding mortgages). This figure increases to £18,252 if the average is based on the number of households who actually have some form of unsecured loan.
Average household debt in the UK is ~ £57,915 (including mortgages). If you add to this the March 2010 budget report figure for public sector net debt (PSND) expected in 2014-15 (excluding financial interventions) then this figure rises to £113,709 per household.
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The deficit is the priority, says Queen
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May 25,2010
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The Queen's Speech was delivered at 11.30 today as part of the State Opening of Parliament.
Her Majesty said:
"The first priority is to reduce the deficit and restore economic growth.
"Action will be taken to accelerate the reduction of the structural budget deficit. A new Office for Budget Responsibility will provide confidence in the management of the public finances.
"The tax and benefits system will be made fairer and simpler. Changes to National Insurance will safeguard jobs and support the economy. People will be supported into work with sanctions for those who refuse available jobs and the timetable for increasing the State Pension Age will be reviewed.
"Legislation will reform financial services regulation to learn from the financial crisis and to make fair and transparent payments to Equitable Life policy holders.
Responding to the Queen's Speech, Kerrie Kelly the Director General of the ABI, said:
"This highly significant Queen's Speech will profoundly impact the way financial services are regulated and used by consumers. The insurance industry stands ready to do its part to assist the Government in ensuring that the country is financially resilient and that people are encouraged and assisted to plan and save for their financial future.
"It is also crucial that the UK remains a competitive place to do business. Reforms to the banking sector should not fetter the insurance sector, which was not part of the problem for financial services and the broader economy and whose continued success is vital to the recovery and future strength of the UK."
Stephen Sklaroff, FLA Director General, said:
"The retail credit industry has seen an avalanche of new consumer protection regulation in recent months, much of which has yet to bed down. Further moves - including last week's suggestion of possible interest rate caps on cards and a new cooling-off period - would gold-plate recent EU regulations and risk a further contraction in the retail credit market at an already difficult time for customers.
"We will be seeking clarification of the Government's plans soon as possible."
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Many tenants bracing themselves for year of rent r
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May 27,2010
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Renters' inability to get onto the housing ladder continues to put pressure on the rented sector, with more tenants forecasting a resultant rise in rents, reveal Rightmove.
40% expect rents to be higher in 12 months' time, a significant increase on the 27% who forecast rises in Q2 2009.
Miles Shipside, commercial director at Rightmove, comments:
“Tenants are as close to the coal face as you can get, and their growing view is that rents are on the way up. With tenants staying in properties longer, and fewer landlords expanding their portfolios, supply is being outstripped by demand in many areas and higher rents are the likely outcome. Tenants' sentiments in this survey are spot on.”
Our survey also reveals that the movement from the rental sector into owner occupation is at a virtual standstill. The Rightmove Consumer Rental Forecast a year ago recorded 58% of those surveyed stating they would like to buy but could not afford to, compared to 59% now.
On a regional level, the South East (64.2%) is most affected by affordability issues and the West Midlands (53.5%) the least.
Miles Shipside adds:
“The on-going mortgage famine has meant a consistent demand by lenders for substantial deposits over the last year and there is a strong correlation between this and the frustrations of would-be first-time buyers unable to get on the ladder. It is unlikely these figures will change until lenders can access much more wholesale funding, or potential borrowers can save up the bigger deposits required.”
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Advisers urged to think carefully before recommend
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May 21,2010
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The growing array of products available in the market means mortgage advisers are being forced to think laterally more than ever before when dealing with cases.
TFC Homeloans, the specialist distributor, is urging advisers to ensure they consider all available solutions, particularly when dealing with remortgage clients.
Andy Brown, Managing Partner of TFC Homeloans, says:
"In recent months we've seen providers develop and diversify into areas to fill many gaps in the mortgage market. For example, secured loans, short term finance, and sale and rent back can all be viable options for customers, making for a very complex market indeed.
"It's a trend that is opening up an opportunity for our company, but more to the point it is making the market more complex for advisers to navigate."
TFC feels the complexity is evident particularly where advisers are dealing with remortgage cases due to the significant gap in the rates on new deals when compared to older variable rate products.
Brown explains:
"We are dealing with an ever-increasing number of instances where an adviser contacts us to discuss remortgage options for a client but ultimately decides to recommend them an alternative solution. A popular example is where a client wants to remortgage to release equity, but is on a low SVR type deal.
"In this instance a remortgage can see their interest rate double, so the best option can be to leave the mortgage as it is and take out a secured loan for the additional borrowing. The overall cost of borrowing is favourable for the client, and it leaves them free to consolidate into a remortgage in future when the products in the market are more competitive."
Guy Garrard, Head of Business Development at Tiuta, says:
"There's no doubt a new landscape is evolving in the financial services market. It's inevitable that this impacts on the role of the intermediary and it's important for advisers to keep abreast of the latest product offerings.
"There's an important role for providers, the media, and distributors to help educate and support the adviser community and ensure they are best placed to advise their clients appropriately."
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Hips 'were Labour plot to hike council tax'
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May 20,2010
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Labour planned to use home information packs to push up council tax bills, the Tories claimed yesterday as they moved to scrap the controversial documents.
Gordon Brown's ministers meant to collect details from the packs and add them to the state database used for calculating the tax, previously secret papers reveal.
The packs were introduced in 2007 in the name of helping homebuyers. However, most of the information they were supposed to contain, such as the structural quality of the house, was stripped out in the arguments that surrounded their launch.
Now the most useful facts describe the energy rating of a home, and many sellers resent having to pay about £300 for an inspection and pack.
Papers released by Communities Secretary Eric Pickles show ministers intended to use the information to complete a database on 22m homes held by the Valuation Office Agency.
It updates the council tax banding of properties and has been preparing for a revaluation of homes in England that would generate bigger council tax bills for anyone whose home has risen in value over the past 20 years.
The unpublished paper prepared by the VOA was headed: 'Council tax revaluation - procurement of domestic dwelling data.'
It said: 'The Housing Act passed in the last Parliament created the requirement to have Hips, which will be required of vendors to produce before a property can be marketed for sale.' Officials were in the process of 'using a subset of data from these packs to create a central government property database.
'Clearly this will take time to grow and be a useful source to the VOA', it added.
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Mortgage lending drops by 90% from peak
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May 08,2010
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Mortgage lending has dropped by nearly 90 per cent from its peak in 2007, new figures reveal.
Some £3.7 billion worth of home loans were approved during the first three months of the year, in comparison to the £28.3 billion that was lent when the housing market was at its peak in the first quarter of 2007, the Bank of England statistics show.
William Griffith, spokesperson for PricedOut, says: "This is clearly a very dysfunctional market and mortgage lenders are still very finance constrained."
He advises that first-time buyer should "sit this one out" until the property market levels out and new rules are put in place to encourage sensible mortgage lending.
Figures from GfK Financial recently revealed that first-time buyer numbers have dropped below 350,000 for the first time in two decades.
Additionally, the data showed that while 800,000 people under the age of 30 would like to buy a home this year, less than half of that number will be able to afford to do so.
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Mortgage lending drops by 90% from peak
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May 08,2010
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Mortgage lending has dropped by nearly 90 per cent from its peak in 2007, new figures reveal.
Some £3.7 billion worth of home loans were approved during the first three months of the year, in comparison to the £28.3 billion that was lent when the housing market was at its peak in the first quarter of 2007, the Bank of England statistics show.
William Griffith, spokesperson for PricedOut, says: "This is clearly a very dysfunctional market and mortgage lenders are still very finance constrained."
He advises that first-time buyer should "sit this one out" until the property market levels out and new rules are put in place to encourage sensible mortgage lending.
Figures from GfK Financial recently revealed that first-time buyer numbers have dropped below 350,000 for the first time in two decades.
Additionally, the data showed that while 800,000 people under the age of 30 would like to buy a home this year, less than half of that number will be able to afford to do so.
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Strict lending criteria hits 'High End' residentia
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April 29,2010
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Investec Specialist Private Bank says that increased lending restrictions from banks and building societies has resulted in a growing number of high net worth individuals finding it difficult to secure mortgages of £1million or more.
Many of these people are successful entrepreneurs, but they are being refused credit because their finances and wealth are not straightforward, and often other banks and building societies are bound by rigid lending criteria which do not accommodate this.
Investec, which specialises in servicing the financial needs of the 'entrepreneurial class', sees this development in the market as a huge opportunity to dramatically grow its lending business.
Investec's mortgage business is aimed at the top end of the market, with loans available exclusively to individuals with sustainable earnings in excess of £300,000 a year who are looking to borrow a minimum of £1 million. A typical client would be in the market for property starting at £1.5 million.
Investec offers highly personalised mortgages based on the income and wealth of the individual client rather than the mortgaged property alone, the approach used by the majority of lenders. It aims to 'out-think' the opposition with offerings such as currency mortgages and innovative facilities for clients with complex requirements.
As an example of banks and building societies becoming less willing to lend to mortgage customers, analysis of industry data by Investec Specialist Private Bank reveals that the average maximum loan to value for mortgages featuring in Moneyfacts' best-but tables in January 2008 was 88%. However, by March 2009 it had fallen to 77%, and by February 2010 it was 75%.
Investec is not constrained by hard and fast loan-to-value ratios. Instead, when deciding how much to lend to a potential client, it will assess their overall financial wealth as opposed to the value of the property they wish to buy.
Nicky Walden, Investec Specialist Private Bank said:
“In the residential high end mortgage market, there is too much focus on the property as opposed to the individual, and this needs to be rebalanced. However, in order to do this you need to be able to understand the intricacies of a potential client's finances and their true wealth.”
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There is more incentive than ever for potential fi
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April 24,2010
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Karen Barrett, chief
executive of unbiased.co.uk, says the government has given this group
of would-be homeowners a "helping hand" by raising the stamp duty
threshold to £250,000 and they may wish to take advantage of this.
However,
she states it is important that first-time buyers do not rush into
purchasing a home without undertaking sufficient research.
"Buying
your first property is daunting and requires careful planning and
research - not only into finding the right house, but also ensuring you
will be able to cover the monthly mortgage repayments, the fees and the
extra costs involved," adds Ms Barrett.
Her comments come in
response to the site's new Advice Drivers report, which reveals that
first-time buyers accounted for 40 per cent of all mortgage enquiries
in March.
However, although it would seem that this group of
potential purchasers are seeking advice, it may not be transpiring into
sales. New figures from GfK Financial show that the number of
first-time buyers has dropped to its lowest level in two decades.
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2010 to be 'the year of the landlord'
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March 10,2010
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The coming year is set to be the year of the buy-to-let landlord, according to one property expert.
Jon Brown says that with the recovery of the UK economy moving at a slow pace and mortgage lending tightened, an increasing number of would-be homeowners are moving into the rental market.
"As much as there has been a small recovery in the housing market, the majority of the UK public, while perhaps aspiring to buy a house, will still prefer to rent," he states.
Mr Brown's comments come in response to recent data from the Royal Institute of Chartered Surveyors, which revealed that house prices in the UK have increased by ten per cent since their lowest point in April 2009.
But he adds that the only reason why there has been an apparent growth over the last year is because of the scale of the crash that was experienced due to the worldwide economic downturn.
Mr Brown explains that while it is likely that house prices will continue to rise, achieving the levels of property value that were seen before the recession is "simply not sustainable".
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Property Doom?
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March 06,2010
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Britain looks set to finally exit the recession after a long old slog and the boom in commercial and residential property prices coming to an abrupt halt with house prices down 20% year on year by January last year. 2009 was a funny year for homeowners, house prices defied expectations after falling in the first few months and then rising by the summer whilst some still continue in places. Despite this it is widely predicted by housing market analysts that the housing market recovery is not as robust as the media may suggest.
Even the most optimistic forecasts seem to suggest that prices will remain static this year as the wider economy suffers growing unemployment and public sector cuts, along with possible tax rises and economic volatility after the 2010 general election.
Still, it is not all doom and gloom. There is hope in central London where buying trends are skewed by high proportions of super wealthy purchasers not needing mortgages and the growing number of foreign buyers taking advantage of the weak pound, may contribute to seeing price rises. Similarly those areas with infrastructure improvements, like Kent, which will have fast commuter train services may start to see rises rather than falls. Only time will tell what 2010 will bring, but the only thing that is certain at the moment is that there is no certainty.
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As a professional investment company...
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February 02,2010
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As a professional investment company, we buy properties from people who need to sell fast. This may be because of financial difficulties, structural or completion problems, wanting to avoid agents and broken chains.
Perhaps you're frustrated by the slow house-selling process, drained by the costs of an unsold property or need a quick sale to avoid losing the home you want?
Whatever the situation, we can help. We provide a fast and efficient service which avoids all the pressures of selling your home.
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