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First time buyers could benefit from economic climate
Posted 2008-02-8
Mortgage lenders are becoming more stringent in terms of lending criteria, but not necessarily to the detriment of first-time buyers. In fact first time buyers could benefit from the current economic climate. According to Moneyfacts.co.uk larger deposits or third party guarantees are now needed by first time buyers. As such, this may stop them from over committing themselves in a home purchase. Darren Cook, head of mortgages at Moneyfacts.co.uk said:”I think lenders are still supporting first-time buyers, they’re possibly just being a little bit more prudent in how they advance their funds,” Mr Cook said. Since December last year 11 mortgage lenders have reduced the provision of maximum loans. ...
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Rate rise could lead to bigger household energy bills
Posted 2008-02-7
Research by uSwitch.com shows that the average energy bill with E.On (formerly Powergen) is set to rise from £913 to £1,063. The energy provider will raise prices from February the 8th, a trend that has seen all but one major energy supplier increase their prices in recent months. Bucking the trend Scottish & Southern energy have assured a price freeze until late March. Anne Robinson, director of consumer policy at uSwitch.com said: “With savings of up to £325 to be made, now is the time for consumers to really start making competition work for them.” ...
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Mortgage lenders respond to interest rate decision with loan rate cut.
Posted 2008-02-6
UK mortgage lenders have responded to the Bank of England’s decision to cut interest rates by cutting home loan rates. The Bank cut the base rate of interest to 5.25% in response to the ongoing credit crunch and worries over the economy. Mortgage lenders are now passing on the cut to homeowners resulting in a £100,000 mortgage decreasing by £16 a month. David Kern, economic adviser to the British Chamber of Commerce said: “The MPC’s decision to cut interest rates to 5.25% per cent was necessary for the economy. In the face of worsening global and domestic conditions, a refusal to act would have entailed unacceptable risks.” Mr Kern believes that the move may not be enough, with the more acute threat of rising inflation. He added: “We would have welcomed a bold UK move five per cent.” ...
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Lenders call for tighter regulation
Posted 2008-02-5
Mortgage lenders have called for tighter regulation to stop fraudulent new build deals. The Council of Mortgage Lenders (CML) believe that difficult conditions in the property market could encourage developers to offer deals such as cash-back offers that inflate the value of the property. Other deals the CML are concerned about are offers of white goods, holidays and free legal fees. The CML said: “In recent years, discounts and incentives have had the effect of making the real value of new homes less than transparent. This is bad news for genuine buyers and for lenders. Buyers may find themselves with a mortgage more than the property’s value, while lenders may find themselves exposed to fraud and the risk of loss.” ...
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Base rate cut by 0.25%
Posted 2008-02-5
In response to signs that the UK economy is slowing down, the Bank of England has cut the base rate of interest by 0.25%. Widely predicted by financial experts, the cut will be welcomed by borrowers, the day after energy supplier E.On became the latest major power company to raise prices. The Bank ruled out a larger cut, trying to stimulate slower economic growth, whilst being wary of a potential rise in inflation. Ray Boulger of John Charcol said: “With the Monetary Policy Committee (MPC) receiving significant criticism for not cutting the rate for the second consecutive month in January, after a unanimous vote for the December cut, together with discussion on whether the 0.5% cut might be necessary to achieve economic stability, there was never any real doubt on the outcome of today’s meeting.” Mr Charcol added: “The MPC is now effectively running hard to stay still.” ...
Level of joint buyers spikes in 2007
Posted 2008-02-4
The number of partners buying homes together shot up in 2007, new research from John Charcol shows. The number of first time buys made buy couples grew by 45% in 2006 and 50% in 2007. The number of men buying houses alone fell to match this shift, whilst the number of women buying alone stayed roughly the same. Kate Tucker of John Charcol said: “”Buying together is a very sensible choice in terms of affordability. Not only for splitting the mortgage and the bills, but more cuddling up should save you on the heating!” Ms Tucker added that it is prudent for couples to rent first, to ensure the decision to live with their partner is the right one. As well as the level of joint buyers rising the market for secured loans is set to rise; The Bank of England has predicted that demand from householders for secured loans will rise in the first quarter of2008. ...
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Young people most likely to turn to debt consolidation
Posted 2008-02-4
New research from Halifax shows that young people are most receptive to taking on debt consolidation loans. People between 20 and 29 are most likely to turn to debt consolidation, with the 30-39 year age group the next most likely. January sees twice as many loans as any other month, with men more likely than women to take out debt consolidation loans, a figure consistent throughout the year. Neil Chandler of Halifax said: “For many people, the start of the year is a time to get personal finances in order - transferring debt from more expensive products such as store cards or other loans.” For those who take out loans, The Consumer Credit Counselling Service advises they share information about their loans with family and friends. ...
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Romantic Brits urged to think of insurance for Valentine’s gifts
Posted 2008-02-3
Big spenders are being advised to consider revaluating their home insurance after buying expensive Valentine’s gifts. According to Direct Line Insurance couples will spend £467 million this year on Valentine’s jewellery. Andrew Lowe, head of Direct Line Home Insurance, said: “Insurance is probably the last thing on most people’s mind when they are showering their loved ones with gifts on Valentine’s Day. Having the right cover in place could prevent heartache if the unthinkable happens and that precious item is lost or stolen.” On top of insurance, Direct Line advised people t o keep proof of purchase and photographs of expensive items such as jewellery. Due to recent bad weather homeowners in flood areas have also been advised to assess their home insurance coverage. ...
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Consumers worried about inflation
Posted 2008-02-2
Consumer confidence is being dented over fears about the rising rate of inflation. The latest Consumer Barometer from Lloyds TSB Corporate Markets shows that the level of people expecting interest rates to be higher rather than lower in 12 months grew by two per cent in January. In turn, this concern is damaging consumer confidence in the UK. Trevor Williams, chief economist with Lloyds TSB Corporate Markets, believes that even further interest rates may not stem the worry consumers are feeling. He said:”As far as consumers are concerned, any respite granted in interest rates today will be short-lived. Even so, if we do see a cut this will ease the burden of interest payments and as such will help boost economic activity.” ...
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UK consumers should be wary of inflation
Posted 2008-02-1
The Bank of England’s recent interest rate cut could fuel inflation, according to the price comparison website fool.co.uk. The Bank’s decision was not unexpected, but with rising energy costs and high oil prices, the cut could push up inflation. Fool.co.uk believes that the Monetary Policy Committee is willing to let inflation rise in order to avoid a recession. David Kuo, head of personal finance at fool said: “Consumers should be aware of the damaging effects of inflation even if the Bank of England chooses to ignore it for now. In order to beat rising prices, we need to ensure that any savings we have will guarantee a better return.”Meanwhile, the Bank of England has predicted that demand for secured loans is set to rise in the first quarter of 2008 as lenders tighten up other credit products. ...