31/10/2007 by Dave.

Consumers looking for life assurance to protect their loved ones are being urged to assess the full cost of cover over the term of the policy when selecting the best deal.

The warning, from search engine Moneyfacts.co.uk, follows the recent launch of a new life product from the Post Office, which offers a £100 cash back bonus to anyone taking out either a level or decreasing term assurance policy. Whilst on the face of it £100 looks to be a generous incentive, consumers may be able to obtain cheaper cover elsewhere that would outweigh the financial benefits of the cash back deal over the longer term.

Although the premiums on offer from the Post Office are more competitive than many of the other direct providers, a better deal can still be found elsewhere for consumers willing to shop around.

For instance, a female non-smoker aged 30 looking for £250,000 of level term assurance over 25 years would pay total premiums of £3,425 with the Post Office once the £100 cash back has been taken.

However, by opting for the most competitive premium currently on offer from AA Insurance Services, the same customer would pay just £3,099, a longer term saving of £326. In this particular scenario Egg, Legal & General, and Lutine Assurance could also provide a greater saving, despite not offering the attraction of a cash back deal.

Richard Eagling, from Moneyfacts.co.uk, makes the point that consumers need to look at the bigger picture and calculate the overall cost of their cover over the full term.

Cash back deals may seem attractive for some products such as mobile phones, but for longer term deals such as life assurance, where the consumer may be paying the same premium for 25 or 30 years, care needs to be taken.

Consumers also need to ensure that the actual product matches their requirements as the consequences of opting for the wrong life cover can be far more serious than simply opting for the wrong mobile phone contract.

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30/10/2007 by Dave.

The Council of Mortgage Lenders, Citizens Advice and Shelter are calling upon the Treasury to allow the FSA to regulate sale-and-leaseback schemes, in order to provide greater protection for consumers. In a letter to the Economic Secretary to the Treasury, Kitty Ussher, the organisations expressed concern that some of the schemes may not be treating consumers in a fair manner.

Sale-and-leaseback schemes allow owner-occupiers to sell their homes to a company and then to remain in the property by leasing it back. However, concerns about sale-and-leaseback schemes include the fact that many offer very little security of tenure, and properties are often purchased at a discounted rate without an independent valuation.

Some schemes have been criticised for the way in which they treat consumers at a potentially vulnerable time when they may be facing repossession.

The group also believes there is good case for advertising, sales and customer care standards to be investigated by the Office of Fair Trading. A lack of understanding about the products by consumers and the potentially misleading way in which some schemes are advertised has created confusion and potential detriment for some consumers in an unregulated marketplace.

Teresa Perchard, Citizens Advice Public Policy Director, said: “This is a growing problem and a completely unregulated sector which we think the government needs to look at. We have seen a number of cases where people in mortgage arrears and facing the threat of repossession have gone ahead with a so-called ‘mortgage rescue’ scheme on the understanding this would allow them remain in their home in the longer term, only to find themselves homeless within a year.

“These schemes can be difficult to understand, and the information about them can be misleading. Usually people will be required to sell their home at much less than its market value and they will have very little security of tenure as a tenant, but this is not always made clear.

“Mortgage lenders have a duty to treat borrowers in trouble sympathetically and fairly, so we would we would urge anyone with mortgage arrears to first talk to their lender, and to seek free, independent advice as quickly as possible.”

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26/10/2007 by Dave.

The National Housing and Planning Advice Unit said the housing affordability crisis was set to deepen, despite government plans to build 240,000 new homes per year.

It said house prices could soar to up to 11 times average earnings, based on current building activity, from a current level of around seven times typical salaries.

Some 270,000 new homes per year are needed to “stabilise” the ratio of house prices to income, it said.

Professor Stephen Nickell, who helped write the report, told BBC Radio: “Our projections suggest that, if we stick to existing house-building plans, they (house prices) could get up to as much as 11 times incomes.

“If, however, the government succeeds in getting their 240,000 plans a year going, then it would be somewhat less than that, but still as much as nine times average incomes.”

The report said that properties in the southeast, southwest and east of England could become more expensive relative to average pay than those in London over the next 20 years.

Nickell said demand for housing across the southeast of England, excluding London, was growing very rapidly.

“Of course, there are lots of jobs being created in London, but more and more people are living outside London in the surrounding regions and commuting into London and that’s going to drive up house prices across the south of England,” he said.

However, the economist said that other parts of the country would also feature in the “story of continually rising house prices” over the longer term.

“Across the country, we will see even further rises in the price of houses, even if the government’s 240,000-a-year target by 2016 is actually hit,” said Nickell.

The unit was established last November in response to one of the key recommendations of a housing supply review which found that, during the last 30 years of the 20th century, house-building rates halved while demand for new homes rose by a third.

Its report comes on the same day as housing minister Yvette Cooper is expected to unveil funding to encourage local councils to help build millions of affordable new homes.

The plans also include measures to encourage councils to bring empty properties back into use.

An estimated 670,000 properties currently stand empty and nearly 300,000 in England are long-term vacant.

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25/10/2007 by Dave.

British families are feeling the effect of the five base rate rises since last summer, and are pulling in their horns, according to the latest Borrowing Monitor from Alliance & Leicester.

In July last year, before the first of these rises, the Thermometer stood at ‘fighting fit’, whereas now that interest payments are consuming more household income, the Thermometer shows people are feeling rather less comfortable.

The thermometer shows the total burden of consumer debt against the level of base rates for households with a mortgage. Worth noting is that base rate would need to rise to 8.25% for the cost of debt servicing as a proportion of household income to reach the 1990 level.

Meanwhile, with interest rates now unlikely to hit the 6% level widely predicted in the summer, and with borrowing slowing, A&L says we may see household budgets looking less stretched, especially if rates start to drop again.

To cope with the increases in mortgage payments and other household bills, families are cutting down on their other borrowing and are saving less. By contrast people living in rented accommodation aren’t cutting back and are also worrying far more about their borrowing than those with mortgages.

Savings in Britain reached an all time low in the first quarter of the year, with people saving just 2.1% of their incomes. Although this picked up in the second quarter, to 3.1%, this is still half the ten year average of 6%. Savings wealth is increasingly concentrating into the hands of those without any borrowings. And those with mortgages, are lagging increasingly behind the average.

In January 2006, the average amount of savings of a mortgaged household stood at 64% of the average savings of homes with no mortgage to pay. Their savings now stand at 48% of those without mortgages.

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23/10/2007 by Dave.

The latest survey from the National Association of Estate Agents (NAEA) has revealed a quiet September for the housing market as the number of sales agreed and buyers on books were both down for the time of year, while stock levels were reported to be at a high.

The number of sales agreed per agent was down in September from both the previous month and the same time last year, according to the survey. On average, 11 sales were agreed per agent in September, compared with 12 in August and 14 in September 2006.

This year’s September figure is closer to levels usually reported over the quieter summer and festive periods. With considerable uncertainty surrounding the market at the moment, it is perhaps unsurprising that home buyers and sellers have been reluctant to commit to a sale. On top of the reduced sales agreed figures, the percentage of sales which fell through remained at a high of 10.7% in September for a second month running.

Meanwhile, the percentage difference between asking price and sales price widened to 3.9%, up on the previous month’s figure of 3.5% and September 2006’s figure of 3.1%. With a lack of buyers and higher than usual stock levels characterising many regional markets at the moment, the NAEA is warning sellers to be realistic about property pricing if they want to achieve a quick sale.

Home buyers were holding back this summer as figures for the number of purchasers on estate agents books were at their lowest since the NAEA survey began. Moving into September the trend seems to have continued as the number of buyers on books remained at 326 per agent for the second month running. This figure is the third lowest recorded since the survey began, only to be beaten by June and July of this year when buyer levels were at 322 and 314 per agent respectively.

The latest September figure is also down on the same time last year when agents recorded an average of 346 buyers on their books.

First time buyers reduced their share of the market in September for the second month running, down to 8.8% compared with 9.7% in August and 11.1% in September 2006.

The good news for first time buyers is that with the current oversupply of one and two bedroom properties there is more choice at the lower end of the market, which can potentially be taken advantage of over the coming months.

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19/10/2007 by Dave.

Those considering a debt consolidation strategy may be interested to hear that more than three-quarters of credit cards on the market leave borrowers with the most expensive debts left on their bill the longest, it has been claimed.

According to a survey by MoneyExpert.com, 76 per cent of credit cards clear cash withdrawals last, which may mean that and increased amount of consumer debt accrues interest for longer.

In addition eight in ten cards clear cash withdrawals and purchases last, which are claimed to be the most expensive methods of borrowing.

“Your purchase could sit on your account for over a year while you pay off your balance transfer, incurring interest of at least 20 per cent,” said Sean Gardener, chief executive of MoneyExpert.com.

Credit card holders may find a number of products within the UK loans market which could be an ideal solution to minimise interest payments and consolidate borrowing

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19/10/2007 by Dave.

Statistics from the housing charity shelter have shown that over 1 million people are having to pay their mortgage repayments on high interest credit cards who often charge interest between 15 and 18 per cent.

Young people are the likeliest category to adopt this tactic due to the difficulty of getting on the property ladder and struggling with huge debts.

This disturbing trend comes in bleak times for the consumer with interest rate increases and high housing costs. Adam Sampson, Chief Executive of Shelter commented that, ‘Ordinary people are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession’.

Choice One Finance would advise anyone who is using this way of paying the mortgage to contact their lender with a view to lengthening the term of the mortgage or switching to an interest only method of payment to keep monthly costs down in the short term.

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17/10/2007 by Dave.

Britons are causing £350 million pounds worth of damage to their homes by copying DIY shows, according to Halifax.

About 750,000 Britons have caused chaos in their homes by seeing something on TV and trying to replicate it, costing about £484 in repairs each time.

Shows are also inspiring home owners to take-up DIY and they are spending an average of £4,880 on each project, with ‘Changing Rooms’ the most popular source of ideas.

With house prices slowing in September, according to the Financial Times’ house price index, home owners will not want to damage their properties with extravagant projects.

Vicky Emmott, of Halifax Home Insurance, said: “It all looks so simple on TV, making it easy to forget that the work on makeover shows is being carried out by highly trained and skilled professionals.

“But if you don’t know what you’re doing we’d advise anyone planning any major improvements that DIY should really stand for Don’t Involve Yourself.”

Nick Knowles of ‘DIY SOS’ was voted as the most inspirational TV presenter.

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16/10/2007 by Dave.

First-time buyers are becoming a rare species, according to new research from moneysupermarket.com.

The number of people classified as first time buyers has dropped by 20 per cent since March suggesting that rising house prices and tight lending conditions are beginning to take their toll.

The prosperity of the buy to let market may also make it harder for first-time buyers to get onto the ladder.

Homeowners, according to the research, are increasingly turning towards fixed rate deals to provide security over their mortgage repayments.

Head of mortgages at moneysupermarket.com, Louise Cuming, said: “It looks like the attrition of first time buyers as they either move out of owner occupation or onto second time purchases is occurring at a much faster rate than new first time buyers coming into the market.”

She was not surprised that first-time buyers were getting cold feet following the turmoil in the markets over recent months.

“The past month has been fraught with uncertainty and lenders have begun acting independently of the Bank of England in terms of rate pricing,” she added.

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15/10/2007 by Dave.

The public remain unconvinced by Home Information Packs (Hips) according to London & Country.

They believe most of the public do not understand what you actually get when purchasing a Hip.

A spokesperson for London & Country, said: “At the moment the jury is still very much out on Hips. Only time will tell.

“People were very aware that they needed them but there was an overall feeling of not having value for money.”

Research published in October stated that 62 per cent of people believed that Hips would not have an impact on how a home would sell.

“There is not an appreciation of the value of the Hips as yet. You were going to have to do the energy rating anyway, so getting it in the Hip could probably represent not too horrendous value,” she continued.

From September 10th 2007 all people selling a three-bedroom house and above had to provide a Hip.

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