30/04/2008 by Dave.

The UK housing market is not set for a major crash, according to one expert.

Assetz said that much of the media hype surrounding the housing market and a possible crash is unfounded.

It claims that the market is simply levelling out after years of rapid growth and believes that prices will begin to pick up again towards the end of 2008.

“As I have been stating for some time now, the housing market is very unlikely to crash,” said Stuart Law, chief executive of Assetz.

“The fundamental economics of supply and demand support this – the government has made it clear we need to build 240,000 new homes per year up to 2016 to meet current targets but in reality, today’s house-builders are building nowhere near this target.

“In fact, a fall, as opposed to an increase, in new starts is expected over the next two years,” he added.

Mr Law went on to say that he expects house prices to rise by five per cent.

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28/04/2008 by Dave.

Many people face the prospect of repossession this year, according to the Centre for Economics and Business Research (Cebr).

It claims that there will be a 23 per cent increase in the number of repossessed properties.

According to the organisation, mortgage deals are set to remain expensive due to the global credit crunch and over 33,000 people are predicted to have their homes repossessed.

“The stark rise in repossessions forecast shows why the Chancellor and the Bank of England are so keen to sort out the problems in the wholesale financial markets,” said Cebr managing economist John Ward.

“Unless or until this tap of mortgage finance starts to flow again, the outcome will be a reduction in house prices and an increase in repossessions,” he added.

The Bank of England recently launched its Special Liquidity Scheme, aimed at easing the credit crunch and encouraging lenders to hand out loans to borrowers.

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25/04/2008 by Dave.

The number of people taking out mortgages fell in March as the effects of the global credit crunch continued to be felt.

According to the latest figures from the Council of Mortgage lenders (CML), £26.3 billion was lent in the month.

That translates into a drop of 17 per cent compared to the amount lent in March 2007 and is a sign of the troubles currently being experienced within the market.

In addition, although lending for mortgages increased by five per cent between February and March, the CML would usually expect this figure to be nearer 20 per cent.

Michael Coogan, director general of the CML, said that things look set to get worse over the course of the year.

“Lending on completed transactions is currently running at levels considerably lower than a year ago,” he commented.

“However, the picture for mortgage approvals for new business and prospective lending levels in the next few months is worsening.

“As mortgage costs increase, it remains important for any borrower with potential financial difficulties to speak to their lender as soon as possible, and preferably before they have missed a payment,” he added.

Mortgage borrowers were boosted in April when the Bank of England cut the base rate of interest to five per cent.

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23/04/2008 by Dave.

Many people in the UK are willing to borrow beyond their means and accrue high levels of debt in order to keep up with the spending of their peers and create a facade of wealth, it has been claimed.

Credit services specialist CreditExpert.co.uk found that over a third of Britons acknowledge judging people’s wealth on the basis of their clothes, identifying a worrying trend when translated into borrowing.

The group claimed that additionally some 20 per cent of Brits see ample jewellery as a mark of someone’s financial health, creating a consumer climate which exerts a pressure on people to borrow and keep spending.

Jim Hodgkins, managing director of CreditExpert.co.uk, said: “But using credit to fund a lifestyle you can’t really afford can lead to huge financial problems and if you don’t keep tight control of your spending and how much you’re borrowing, you can easily find you can’t afford the payments and start to fall behind with them.

“If that happens, you’ll soon make yourself less financially attractive to lenders and find that you can’t get access to the best possible credit deals.”

Debt management and debt consolidation packages can help people rein in their lending, but people were also advised to stay on top of their borrowing by regularly monitoring their credit report.

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21/04/2008 by Dave.

The average borrower seeking credit card deals is finding the cost of plastic increasingly steep, it has been claimed.

Financial website MoneyExpert.com has claimed that credit card providers are defying the Bank of England’s recent interest rate cuts and raising their own interest rates, landing borrowers with increased risk.

According to the financial site, the average standard APR on credit card purchases has shot up 0.56 per cent over the past six months, reaching 17.12 per cent.

Sean Gardner of MoneyExpert.com said: “Everyone is finding it more difficult to make ends meet as the cost of living rises. People will want to turn to credit and that means splashing the cash on the plastic.

“Most of us would normally seek out a new zero per cent deal to tide us over the bad times, but with lenders playing a cautious game getting one of those cards is more difficult than it used to be. You’ll need to convince the card company that you can afford to repay your debts.”

Further worrying signals were issued last week as banks met the base rut cut with a series of increases in the interest rates on their mortgage products.

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17/04/2008 by Dave.

Much of middle Britain is planning to reduce spending as the global credit crunch hits households across the country.

New research from Axa revealed that 15 per cent of those questioned blamed falling house prices for their spending concerns.

A further 15 per cent said that the burden of paying off debts has forced them to rethink their spending strategy.

A total of 72 per cent of households with a total income of £30,000 or more said that they have little choice but to cut back on spending.

“It’s no wonder that households with above-average incomes are struggling to cope. A typical family in middle Britain may have a higher than average income but millions are weighed down by high lifestyle costs and face tough choices as the strain on their finances takes its toll,” said Steve Folkard, spokesman for Axa.

“One of the biggest issues however is that many seemingly well off households lack the motivation to tackle their problems.

“We’ve had it easy for so long and been happily spending without thinking of the consequences that now people aren’t sure what to do,” he continued.

The Land Registry recently revealed that house prices stagnated in February

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15/04/2008 by Dave.

With the global credit crunch affecting many UK families, the Repossession Advice Centre has explained the process behind having a home repossessed.

It revealed that a property can be repossessed within just three months of the first warning being issued.

In addition, the organisation explained that some courts are more lenient than others.

It comes as the Bank of England has published a report, revealing that it expects there to be a rise in people defaulting on their mortgages over the next three months.

“The quickest it [repossession] can happen from the first warning is probably three months,” said David Warnes from the Repossession Advice Centre.

“You have to bear in mind that the courts try to be on the side of the person being repossessed, especially if they’ve got a family, because if that person gets repossessed then they fall onto the council to be housed.

“The courts have an understanding that if they can mediate and keep people in their homes then that’s what they will try and do,” he added.

The Council of Mortgage Lenders revealed that 27,100 repossessions took pace in 2007.

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11/04/2008 by Dave.

As many as 60,000 families in the UK are at risk of having their homes repossessed.

That is according to the Liberal Democrat party, which was commenting on official figures.

Julia Goldsworthy, Liberal Democrat shadow communities and local government secretary, has called upon the government to take action.

“Ministers are not prepared to deal with the housing crash as the safety nets have been withdrawn. There are almost a million fewer social homes to rent than during the last recession while the number of families waiting for housing has skyrocketed,” she said.

“This government has buried its head in the sand, and it is overstretched families who are paying the price.

“Ministers must act decisively and commit resources to a national network of financial advice centres, with face-to-face services that are free at the point of use,” added Ms Goldsworthy.

The Council of Mortgage Lenders recently revealed that 1.4 million borrowers are set to face higher mortgage costs in 2008.

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09/04/2008 by Dave.

Ben Bernanke, US central bank chairman, alluded this week to the possibility of a recession in America. Speaking at the Joint Economic Committee hearing in Washington, Bernanke said that the early part of 2008 would see a downturn in economy, but that in later part of the year economic growth would pick up again.

This was this first time that a US recession had been publicly acknowledged, although Bernanke was quick to highlight that the decline would be mild and fairly short lived. The implications for the UK are significant as historically the American economy has had a knock-on effect on the British economic climate.

The UK is already showing signs of an economic downturn, with mortgage companies such as First Direct withdrawing its entire range for new customers and the Co-Op following suit. The Bank of England has produced figures showing that unsecured debt has risen to its highest levels since October 2002.

Vince Cable, a Lib Dem Treasury spokesman, echoed Bernankes warning when he stated that there were signs that repossessions were reaching the levels last seen in the 1990s during the recession.

In a climate where mortgage products are disappearing and mortgage approvals are falling considerably consumers are struggling for options and debt management is often a necessity.

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07/04/2008 by Dave.

Young Brits fear getting into debt more than being a victim of violent crime, new figures have shown.

In fact, being strapped for cash is the biggest concern for people between the ages of 16 to 25.

A recent poll shows that 48 per cent of those asked said that their biggest worry was getting into debt which reflects the difficulties may are having in paying university fees and student loans.

The Youth Future Fears UK report, compiled by Ipsos Mori showed that 40 per cent also feared being unable to find a job.

Sue Farrington, from Agents4Change which is campaigning to get young people more active in the community, said: “Young people have genuine fears for the future but they are not powerless to overcome them.

“They can help keep our streets safer by mentoring young people at risk of offending, give advice on managing debt by volunteering to teach budgeting and financial skills and help combat global warming by taking part in recycling or conservation projects.”

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