Personal Finance News
Secondary loans could spell trouble for homeowners
Posted 2008-05-6
Housing charity Shelter has warned that the number of repossessions this year could come close to the record of 59,000 set in 1993, due to secondary loans being taken out by homeowners over the last few years.The organisation claims that during high property inflation, many homeowners took out secondary loans to cover the cost of home improvements and to pay off debts such as credit cards.Shelter claims that almost 20 per cent of repossession orders passing through the county courts are against people who have secondary loans secured against their homes and up to 53,000 properties could be reclaimed.Adam Sampson, chief executive of Shelter, said that the actual number of repossessions could are likely to be much higher than previous estimates."We are finding lots of cases where lenders of other financial products are taking action themselves. And those ones, by and large, are not counted in the statistics; but they will add substantially to the total number of people who lose their homes," he said.Shelter helps tenants and homeowners fight for their rights concerning property by offering advice and campaigning....
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First-time buyer values fall
Posted 2008-05-6
The price of a house for first-time buyers is being affected by their dwindling numbers, it has been claimed.Moneyextra.com has claimed that the average price of a property that a first-time buyer is willing to pay was £170,559, a 5.75 per cent decrease on the previous month and 4.78 per cent lower than a year ago.Research by the price comparison site also revealed that the number of people securing mortgages with dual income applications rose to an all-time high of 44.79 per cent.Robin Amlot, senior editor of Moneyextra.com believes the market is now a buyers one."While it may be getting tougher to get a mortgage now, it would appear that those first time buyers who are in a position to buy are now driving much harder bargains with sellers. Housing is very definitely a buyers market," he said.According to housing charity Shelter, the price of the average first-time property increased from £52,674 to £159,494 in the decade to 2007....
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Consumers urged to fight bank charges
Posted 2008-05-6
Consumers are being urged to fight against allegedly unfair bank charges that could have blotted credit ratings.Marc Gander, founder of the Consumer Action Group, has claimed that if customers did challenge the charges against them and won, the result would be a nightmare for banks and could cost them large sums of money.He pointed out that black spots appear on peoples credit rating if they have exceeded their overdraft limits which could affect a persons ability to secure funding in the future."Anybody who has had a bank charge, meaning that they have exceeded their overdraft limit, has this black mark put on their credit record. Your whole existence is compromised - its a savage blow," he said.For that reason, Mr Gander is pushing people to challenge any charges they feel to be irregular which would be "super expensive and a super nightmare" for banks.The Office of Fair Trading recently won the right to investigate whether overdraft charges issued by banks are excessive or not....
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Buy-to-let mortgages become scarce
Posted 2008-05-5
The number of buy-to-let mortgage products has decreased significantly over the last month, which could point to a housing disaster, an industry expert has claimed.According to research from Moneysupermarket.com, the number of deals available to landlords fell by 40 per cent in the last month, while the number of people renting property increased by five per cent.Louise Cuming, head of mortgages at the site, believes that the trend could lead to a worrying situation in the future."Our research shows the number of buy to let products has decreased from 4025 to 674 in just one year, with nearly 600 of these products removed since March 31st. I fear we will soon see many people unable to buy or rent," she said.The research also found that 11 per cent of people who had considered getting a mortgage feel they have been priced out.In related news, recently an advisory firm to potential buy-to-let investors, Inside Track, went into administration and customers have threatened legal action for their losses of several thousand pounds....
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Credit card companies only have “so much” to lend
Posted 2008-05-5
A personal finance expert has claimed that banks want to issue credit cards but only have so much money to lend.In response to recent figures, which showed up to 18,000 people a day are refused credit cards, David Kuo, head of personal finance at Fool.co.uk, says that banks are increasingly wary about unsecured lending.He said that lenders have to weigh up who the most suitable candidates to lend to are."I think the problem that we have at the moment is that credit card companies do want to issue credit cards but they only have so much money to lend. ...
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Funding a property on unsecured debt is ‘very dangerous’
Posted 2008-05-5
House buyers are being warned about the perils of purchasing a house using unsecured loans and other funds.Peter Beckett, the business development director at iammoving.com, claims that with the housing market in such a delicate state, raising a deposit with credit card and unsecured loans is "very dangerous".Recent research has found that three out of ten first-time buyers are using unsecured funds to buy their first property."The whole housing market is at a turning point, whereby the prices are coming down and first-time buyers are looking for ways to be able to manage to get on the ladder. But it is a very dangerous thing to do it on the back of unsecured debt," he said.Mr Beckett added that unless one feels confident about their job security, such forms of financing are unwise.Research from iammoving.com revealed that 17 per cent of first-time buyers are borrowing money from friends and family to purchase a house....
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Personal bankruptcies increase
Posted 2008-05-5
The Insolvency Service has claimed that personal insolvencies across England and Wales have risen for the first time since 2006.Individual cases for the first quarter of 2008 included 15,651 bankruptcies and 9,614 individual voluntary agreements (IVA), totalling 25,264 and representing a 1.7 per cent increase on the previous quarter.Mike Gerrard, a personal insolvency partner at Grant Thornton expects the number to rise by the end of the year as the effects of the credit crunch are felt by more people."Although some individuals showing up in the latest insolvency figures will have done so because of financial difficulties brought about by the global downturn, it wont be until later this year or early next that we will see the full extent of the credit crunch on UK individuals," he said.Bankruptcy is one way a person can deal with debts they can no longer service and it involves their assets being shared amongst creditors, according to the Insolvency Service....
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Research shows current account ‘ignorance’
Posted 2008-05-5
More than 25 per cent of people in the UK have only ever had one current account, new research has found.A survey by Moneysupermarket.com has claimed that ignorance and disinterest are costing people dearly when it comes to earning interest on their accounts.Despite heavy advertisements, nearly 75 per cent of respondents knew little about the competitive rates being offered by Halifax, Alliance and Leicester and Abbey.Kevin Mountford, head of savings at Moneysupermarket.com, believes consumers must shop around in order to secure a good deal."Its a shame consumers seem hesitant to change current accounts as most providers make the process as easy as possible. If you could buy the same TV for £210 less somewhere else, you wouldnt think twice, however when it comes to current accounts, it seems consumers are happy to miss out," he said.People in the north of the country were found to change their accounts the least, with 31 per cent saying they have only ever had one account.Moneysupermarket.com is a price comparison site that allows shoppers to evaluate insurance and other products on the market....
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Brits take advantage of foreign property investments
Posted 2008-05-1
An international property specialist has reported an increase in people looking to remortgage their overseas properties.Since the start of the year Assetz Finance has reported a 40 per cent increase in the number of Brits looking to remortgage their properties in France and Spain.With it becoming increasingly difficult to secure funding in the UK, more residents are looking to take advantage of the European base rate and some attractive deals being offered on the continent.Katy Hepworth, overseas mortgage manager of Assetz Finance, says that while servicing mortgages in Britain is one people are looking to remortgage, it is not the only one."Repaying more expensive UK debts is not the only reason overseas property owners choose to secure mortgages and release equity from their foreign properties. Many borrowers use the funds for projects such as further property purchases and renovation," she said.Assetz is a property specialist, with interests in the UK and around the world....
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CAG: High likelihood the OFT will find against the banks
Posted 2008-04-30
Following the landmark ruling by the high court, that allows the Office of Fair Trading (OFT) to investigate overdraft charges imposed by banks, the founder of the Consumer Action Group (CAG) believes the body will almost certainly find that they are unfair.Marc Gardner noted that should the office come to this conclusion, there will likely be an appeal which could see the court of appeal overrule or rdefine the high courts decision.He said it was unlikely that the banks themselves will decide to refund customers voluntarily, and predicted a slow process which will probably see many people never being reimbursed."I cannot believe for one moment that the OFT will say to the banks that theyve got to put their hands up, investigate their databases, contact everybody theyve taken money from and refund it. My personal view is that there will be a repayment scheme agreed between the FSA (Financial Services Association) and the banks," Mr Gardner stated.According to estimates from the BBC, banks refunded nearly £748 million to over 378,000 people last year....
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