29/02/2008 by Dave.

Debt experts have claimed that the plethora of credit cards held by UK consumers can often prove “confusing,” urging people to get on top of their debt burden.

Advisory body The Consumer Credit Counselling Service (CCCS) said that British credit culture facilitated spiralling personal debt, making the attraction of credit cards hard to resist.

A recent report from Datamonitor found that the average UK consumer owns far more payment cards than his European counterpart, a trend leading the CCCS to question UK credit culture.

James Ketchell, group spokesman, said: “In France or Belgium it’s very difficult to take credit out, and we’ve become very used to taking credit out as a means of purchasing things.”

Different credit cards served different needs, he claimed, but added: “It can become confusing and people really have to stay on top of their credit card spending and their finances as a whole

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27/02/2008 by Dave.

Financial experts have claimed that harsh lessons on bad debt and unrestricted mortgage lending for residential property have been dealt out by the credit crunch.

Noting a changing climate for lending in the US and the UK, independent financial services group Blevins Franks claimed that mortgage products were getting harder to come by, but saw the downturn as an inevitable part of a cycle.

Matthew Weston, overseas mortgages manager for Blevins Franks, claimed that the effects of the credit crunch were helping to breed more caution in the UK and the US – among lenders and borrowers alike.

He said: “Lenders over there [USA] have become more risk averse since the credit crunch. High risk profiles such as non-resident buyers and subprime clients have noticed the biggest changes.

“When times are bad lending becomes more restrictive and then frees up again as and when the economy strengthens. In a way it serves to educate mortgagors not to borrow recklessly.”

According to the Global Property Guide 2007, US home prices fell five per cent year on year in October 2007, slipping to an average value of $207,800 (£106,000).

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25/02/2008 by Dave.

Alistair Darling is being put under pressure to make big changes to the stamp duty system.

The chancellor is due to deliver his first Budget in March and many commentators believe that he may take the opportunity to raise the stamp duty threshold.

However, although the National Association of Estate Agents (NAEA) is also calling for the threshold to be raised, the organisation would like to see other changes made.

Under the NAEA’s proposals, the threshold would be increased to £200,000, with a one per cent tax levied on properties worth up to £300,000.

The organisation wants a system to be introduced whereby tax is only paid on the part of the value above the threshold.

For example, on a property worth £250,000, the first £200,000 would be tax free, while a one per cent tax would be levied against the final £50,000.

“The government needs to be aware that with inflation rising consumers need a helping hand. We would like to see a scale of stamp duty that reflects the house price inflation in recent years,” commented Stewart Lilly from the NAEA.

The proposals would see the highest level of council tax, 4.5 per cent, levied on properties worth over £2 million.

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21/02/2008 by Dave.

Britons are confused about which mortgages they should be looking at when it comes to taking out a new loan or when they decide to remortgage.

That is according to Abbey, which has revealed that the majority of borrowers are unsure whether it is best to take out a fixed-rate or tracker-rate mortgage.

It is because most analysts are also unsure which option is best, with confusion centring on how the Bank of England intends to change the base rate of interest in the coming year.

Most agree that the next movement will be downwards but there is little idea how far rates will drop and for how long.

“Depending on who you talk to there are different outlooks for the UK economy and for Bank of England base rates. While most economists agree they will go down, there is debate about how much they will fall and when,” commented head of Abbey mortgages Nici Audhlam-Gardiner.

“This uncertainty leaves homeowners with a bit of a dilemma on their hands – what is the best mortgage to go for?

“Our research shows that most popular still is the two-year fixed-rate deal, but this is followed closely by five-year fixes,” she continued.

The base rate of interest currently stands at 5.25 per cent

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18/02/2008 by Dave.

The UK housing market is set to recover from its recent troubles and prices could start rising again as early as the final quarter of 2008.

Neil Parker, a strategist with The Royal Bank of Scotland Global Banking & Markets division, has revealed that he is positive about the outlook for the housing market.

During a speech to delegates at a Manning Stainton Builder and Developer Breakfast Briefing earlier this month, Mr Parker admitted that conditions have been harsh in recent months.

However, he went on to highlight why he remains confident that the UK housing market will begin to pick up again.

“Over the past six months the UK property market has already seen a significant slowdown in activity and residential prices have fallen by about half the amount we expect them to fall overall,” said Mr Parker.

“Importantly, though, the Bank of England’s interest rate setting body - the Monetary Policy Committee - have already begun the process of reducing interest rates to support growth, and the UK Chancellor has recently made some encouraging comments regarding a loosening of the fiscal purse strings.

“We believe that the combination of a monetary and fiscal loosening will help the UK economy begin to recover, perhaps as early as the fourth quarter of 2008,” he continued.

Halifax recently revealed that UK house price growth stabilised between December and January

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15/02/2008 by Dave.

Despite many analysts forecasting that interest rates are set to fall over the coming months, one firm believes that cuts will be limited.

Legal & General has expressed its view that interest rates will not fall sharply due to a mixture of domestic and global market conditions.

It follows the publication of the Quarterly Inflation Report, which led many commentators to predict that the Bank of England would take a cautious approach to reducing interest rates.

However, most still forecasted significant cuts over the rest of the year but Legal & General is not convinced.

“It is important to remember that the pound has fallen significantly in value, particularly against the Euro and Asian currencies. This will provide a stimulus to the economy by making UK exports more price competitive but it will also mean that imports will be more expensive, putting upward pressure on inflation,” commented James Carrick from the firm.

“The Bank of England might find it difficult to strike a balance between moderate growth and stable inflation.

“With this backdrop the prospects for significant rate cuts in the UK are quite limited in my view,” he added.

Thebase rate of interest was cut by 0.25 percentage points in February, bringing interest rates down to 5.25 per cent.