Personal Finance News
Mortgage lending falls 8% in April
Posted 2008-05-20
Mortgage lending in April fell by eight per cent compared to the same month last year, according to new figures from the Council of Mortgage Lenders.The groups statistics show that lending also fell five per cent when compared to March, leaving the gross lending figure for the month at £25.3 billion.For March and April combined, lending was down 16 per cent from the same period in 2007."In the wake of the credit crunch, 2008 will be remembered as a very weak year in the housing market," said CML director general, Michael Coogan.He added that the group forecasts some indirect benefits from the Bank of Englands special liquidity scheme will begin to be seen in the mortgage market later in the year."Over the next few months, lending volumes will get worse before they get better," he concluded.This news follows an announcement from the Royal Institution of Chartered Surveyors which predicts that house prices will fall by five per cent this year. ...
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Fixed-rate mortgages prove popular
Posted 2008-05-20
Five-year, fixed-rate mortgages are increasing in popularity, it has emerged.Abbeys latest mortgage index shows that demand for fixed-rate deals has grown for the fifth consecutive month, with 30 per cent of buyers questioned saying they would opt for such a mortgage.It has been anticipated that much of this demand comes from people who are coming off fixed-rate deals this year, with Financial Services Authority figures showing 1.4 million homeowners are due to complete fixed-rate deals in 2008.The bank has attributed the enthusiasm for fixed mortgages to the financial certainty they provide, especially after the Bank of Englands decision to hold interest rates at five per cent in May.Phil Cliff, Abbey mortgage director, added: "Opting for a longer-term fixed-rate mortgage will provide mortgage borrowers with financial security in uncertain economic times."Meanwhile, it was previously reported that self-build mortgages are still available, with homebuilding.co.uk claiming that this is because such homes tend to benefit up to 25-30 per cent in terms of equity....
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Mortgages ’still available for self-build homes’
Posted 2008-05-19
Mortgages are still available for self-build homes despite the effects of the credit crunch being felt elsewhere in the market, it has emerged.Jason Orme, editor of Homebuilding.co.uk, states that most self-built properties have "an inbuilt equity from scratch" of between 25 and 30 per cent greater than the cost of the mortgage making them attractive to lenders amid unstable house prices.He adds that such developments are often regarded as a "safe bet" when applying for a mortgage."In terms of the actual market itself, I believe there are still lenders who are still offering 90 per cent mortgages, and quite possibly 95 per cent mortgages, in terms of loan-to-value," continues Mr Orme.According to Rightmoves May House Price Index, between April and May the average asking price for a newly-marketed property rose by 1.2 per cent and reached a record high of £242,500.In April house prices fell overall by 0.1 per cent....
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National Debtline: Reliance on payday loans symptomatic of money troubles
Posted 2008-05-19
Individuals who are regularly relying on payday loans may have a serious underlying debt problem, according to one expert.The National Debtline has stated borrowers regularly using short-term, high-interest loans are "over committed" and paying out more than they are earning.Beccy Boden-Wilks, a spokesperson for the group, added: "If somebody feels the need to use a payday loan on a regular basis, its probably symptomatic of a serious underlying debt problem."Ms Boden-Wilks continued to say that individuals should try to get themselves out of this cycle by taking a good look at their budget and getting help from their creditors or mortgage lender to make sure it is more manageable.This follows news that the number of people taking payday loans has more than doubled since last September.According to Tim Moss, head of loans at Moneysupermarket.com, people are resorting to this type of borrowing to cope with the increasing costs of food, fuel and utilities....
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Travellers warned over additional charges abroad
Posted 2008-05-18
A personal finance website has warned people going abroad of the additional charges they face when using credit cards there.Moneyfacts claimed that most card providers apply a charge for using them for retail and cash transactions in foreign countries and that debit cards can also incur additional fees.The site also advised against withdrawing cash on a credit card due to the high and immediate application of interest and suggested that travellers work out a financial plan of action before they leave the country."Most credit cards charge a foreign usage charge, some as much as three per cent for both purchases and cash transactions. This charge is applied each time the card is used and can soon mount up to a significant amount," a spokesperson said.Travellers are advised against making several small withdrawals as they will be charged for every transaction.Moneyfacts is a price comparison site that allows consumers to analyse the costs of products such as mortgages and credit card interest rates....
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Credit card fraud warning
Posted 2008-05-18
Credit card fraud is likely to rise as a direct result of the credit crunch, an industry expert has claimed.David Kuo, head of personal finance at Fool.co.uk, believes that tightening economic conditions will likely lead to an increase in people providing false information on credit card applications.An increase in the cost of living coupled with high inflation rates have left many peoples finances stretched and looking for ways to plug the gap."What has happened at the moment is that people have found their personal finances being stretched in several directions. First of all they have bigger outgoings and any increase in income that they have had has not been sufficient to cover outgoings," he said.Mr Kuo advised those considering lying to providers in order to secure credit that such a move would not be wise.According to research by the UKs fraud prevention service CIFAS, the number of people telling untruths on credit applications increased by 13 per cent in the first three months of 2008....
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Loan rates on the rise
Posted 2008-05-18
New research has found that the average rates of interest on unsecured loans of £5,000 and £7,500 have risen by one per cent over the last six months.According to MoneyExpert, the rate for a £5,000 sum is around 10.16 per cent compared with 9.4475 per cent in November last year.The average for a loan of £7,500 has risen to 8.88 per cent from 7.97 per cent in the same time period.Sean Gardner, founder of MoneyExpert.com, believes that the Bank of England faces a big challenge restoring confidence to the financial markets after lenders raised their rates despite the bank slashing interest rates three times."The unsecured loans market is almost mirroring the mortgage market where the issue is not so much rates but availability - whether or not lenders will let you have the cash," he said.Personal debt in the UK at the end of March was around £1.43 trillion....
Savings market has gone “bananas”
Posted 2008-05-15
Savers have been told to take advantage of the current climate in the financial markets as there are some attractive deals available to them.David Kuo, head of personal finance at Fool.co.uk, said that the high levels of interest being offered on some savings accounts can be beneficial to consumers but did urge caution when considering which one to choose.He stressed that while some of the rates may seem very good value, the deal could turn out to be a double-edged sword and that those who offer the best product tend to be the most high-risk, as a rule of thumb."The savings market has gone bananas, but its ripe for savers. ...
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Savings market has gone “bananas”
Posted 2008-05-15
Savers have been told to take advantage of the current climate in the financial markets as there are some attractive deals available to them.David Kuo, head of personal finance at Fool.co.uk, said that the high levels of interest being offered on some savings accounts can be beneficial to consumers but did urge caution when considering which one to choose.He stressed that while some of the rates may seem very good value, the deal could turn out to be a double-edged sword and that those who offer the best product tend to be the most high-risk, as a rule of thumb."The savings market has gone bananas, but its ripe for savers. ...
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Cost of living fuels payday loans rise
Posted 2008-05-15
The number of payday loans being taken out by consumers has increased by 55 per cent since September last year, new research has found.A survey by Moneysupermarket.com has found that the rise in cost of utility bills and food has seen payday loans become a more popular option for borrowers in need of short-term credit.However, Tim Moss, head of the price comparison site, warned that such forms of credit are only beneficial if the loan is for a short period of time and advised consumers to borrow from family members if the money is needed over a longer period of time."As disposable income is being squeezed through increases in the cost of food, fuel, utilities and general living necessities, these loans are increasingly used to help those on a tight budget. They are a bit like a taxi - convenient for short-term journeys," he said.Payday loans are designed to cover a persons expenses until their next pay day....