Finance Matters

• 31Aug

  Relatives warned over foster pay

  Money No Comments

  From The BBC:

  People who look after a relative’s child often miss out on money from the local council.
  Campaigners claim these “kinship carers” may get no help with the cost of caring for the child.
  They warn that some have to go to court to make local councils pay them as foster parents.
  But the Local Government Association denies the problem is widespread and says all local authorities should follow the law.
  Legal wrangling

  The relatives’ lawyer, Nigel Priestley of solicitors Ridley & Hall, explained the outcome to Money Box on BBC Radio 4.
  “Recently we brought cases against two London Boroughs.
  “In one they’ve paid back-pay of £37,000 and in the other almost £50,000.
  “And in one case their money has leapt from £85 per week to £410 a week.
  “Over recent years we have got total back-pay [for families] in excess of £500,000.”
  Munby judgement
  Nigel Priestley helps people who have been asked by social services to look after a relative’s child but who are then not paid as foster pare…

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• 31Aug

  New ISA guidelines: bark or bite?

  Money No Comments

  From The BBC:

  Cash ISA transfers could still take more than four weeks despite new guidelines.
  Angela Knight, chief executive of the British Bankers’ Association says the aim is to “get it done quicker”.
  The proposals follow customer complaints about long delays and lost interest.
  But although the guidelines could speed the transfer up to 23 working days, without loss of interest, they are not enforceable.
  Cash bonus
  Keeping savings in cash has become much more popular since the start of the credit crunch.
  And cash ISAs in particular have seen more interest, due to their tax-free status.
  Customers wanting to benefit from the best rates can transfer their money between some providers.

  This could mean the transfer took months, leaving a customer’s money in limbo.
  And many had to complain to get lost interest restored.
  Numerous complaints prompted the British Bankers’ Association (BBA), the Building Societies Association (BSA) and the Tax Incentivised Savings Association (TISA) to g…

  Click to read the full article »
• 30Aug

  Crisis plan for property as crash feared

  Mortgages No Comments

  From This is Money:

  Under measures which could be unveiled as early as next week, councils could be allowed to buy repossessed and unsold properties to help people stay in their own homes.
  The Evening Standard revealed this month that town halls want to be able to offer financial help to borrowers unable to pay their mortgages in return for a stake in their homes or outright ownership.
  It emerged today that Mr Brown is keen to back the idea as ministers prepare an economic package to help voters cope with soaring mortgage costs and fuel and food bills this winter. Councils could also help people pay for deposits for new homes.
  Labour’s fears of a full-blown recession were underlined by a startling warning from one of the Bank of England’s senior policymakers.
  Professor David Blanchflower, who helps make the Bank’s interest rate decisions, said that two million Britons may be out of work by Christmas and big cuts in interest rates are needed now to stop the economy heading into a deep and prolonge…

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• 30Aug

  Selling your house in a slow market

  Mortgages No Comments

  From This is Money:

  Interior designer Barbara Ward, from Lincolnshire, was in charge of selling her father’s three-bedroom semi-detached house in Doncaster, Yorkshire, when he had to move into a residential home earlier this month.
  ‘At 1.30pm I met with the Haart estate agent in Doncaster. By 6pm I’d had a viewer for the house and at 10am the next morning there was an offer of the asking price. I was gobsmacked. I’d expected a six-month wait,’ says Barbara.
  The home was on sale for £105,000. ‘I wasn’t greedy, I wanted a realistic valuation. Buyers aren’t stupid, so I knew we had to go for a realistic price – and it worked,’ she says.
  Hometrack, a consultancy that analyses estate agents’ figures, says the average home now takes 11 weeks to attract a buyer, and has at least 15 viewings before an acceptable offer is made.
  ‘We’re in a price-led market and it was on at the right price to create interest,’ says Paul Gray, director of Haart in Doncaster.
  Barbara Ward’s experience is not unusual….

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• 30Aug

  Worst house prices fall for 18 years

  Mortgages No Comments

  From This is Money:

  The average price has fallen by 10.5% over the past 12 months, wiping about £30,000 off the value of a typical London home, according to the Nationwide building society.
  The last time that house price falls were measured in double digits was in the autumn of 1990 during the depths of the last recession, when it took six years for values to recover. The figures confirm there is still no sign of an easing of the credit crunch almost a year on from the collapse of Northern Rock. A leading City forecaster is now predicting a full-blown recession for the British economy next year.
  Capital Economics said GDP will fall by 0.2%, which would be the first full-year drop in national income since 1991. Officially, the Government is still predicting growth of at least 2.25% next year.
  Another bleak set of financial results from leading companies this morning added to the growing mood of gloom as the City continued its return to work after the summer break.
  Property agents and consult…

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• 30Aug

  Mortgage dilemma after base rate hint

  Mortgages No Comments

  From This is Money:

  Fixed-rate deals have been falling over the past month, with many banks and building societies slashing them by as much as 0.5 percentage points.
  Now the Monetary Policy Committee has said it believes pressures on inflation in the economy have eased, leading many economists to predict a base rate cut by the end of the year.
  This makes tracker mortgages look attractive to those hoping to take advantage of a possible rate cut.
  Cuts in the base rate are far from certain, so you should never take a tracker unless you can afford a possible sudden rise in your repayments. Some tracker deals have no fee and no early repayment charges – so you could switch to a new deal should rates increase from the current 5%.
  Fee-free lifetime trackers have become a speciality at Barclays. It has a rate of 0.89 percentage points above base rate, giving a starting rate of 5.89%. You need a 40% deposit, but because there are no charges you can quit whenever you want. Initial monthly repayments on a &p…

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• 30Aug

  Buyers warned on shared equity schemes

  Mortgages No Comments

  From This is Money:

  They have huge appeal, especially to young people who would otherwise find it hard to buy.
  Unfortunately, these schemes are not quite what they seem. Lenders, mortgage brokers, housing associations and others are all urging extreme caution, warning purchasers that these deals could store up massive problems for the future. Buyers should consider alternative routes to ownership, they say.
  The reason for the offers is that homebuilders are in desperate trouble, with some verging on bankruptcy, and others slashing prices and cutting staff.
  Persimmon, the nation’s biggest homebuilder, last week said profits had plunged by more than 60% over the past year while the number of homes it had sold had fallen by a third. It described conditions as ‘the worst in recent memory’.
  To help sell properties to cash-strapped buyers who otherwise cannot get mortgages, developers are offering shared-equity schemes.
  In a typical shared-equity deal, the developer ‘lends’ the homebuyer 25% of the p…

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• 30Aug

  More London agents forced to quit

  Mortgages No Comments

  From This is Money:

  The collapse of the housing market has forced Jonathan Vandermolen, founder of Blenheim Bishop, to make 10 staff redundant and put his offices on the market.
  Mr Vandermolen said: ‘I couldn’t make it work. Income from new homes was 75% down on the previous year and my view of that market is not good long-term.’
  The closure of Blenheim Bishop’s sales side ? the firm will continue letting properties ? comes as estate agents face the worst market conditions in years. Household names like Kinleigh, Folkard and Hayward are shutting formerly busy London offices.
  Private equity group BC Partners, which paid £390m for Foxtons in May 2007, has been forced to call in banking advisers NM Rothschild to tackle its ‘debt mountain’. Branch closures have not been ruled out.
  Savills will announce its figures tomorrow and they are expected to make grim reading. The estate agency has already reduced its advertising budget and made redundancies among its 4,000 London employees.
  Two years a…

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• 30Aug

  Property slump sees sellers renting out

  Mortgages No Comments

  From This is Money:

  The Royal Institution of Chartered Surveyors said instructions to let properties during the three months to July increased at their fastest pace since its survey began.
  It said 43% of its members reported seeing a rise in the number of new landlord instructions, up from 30% during the previous quarter.
  The group attributed the jump to frustrated owners opting to become landlords after being unable to sell their homes in the current market.
  It said the credit crunch and housing market downturn had also boosted demanded for rented property as people either delayed buying a house or were unable to obtain the mortgage they needed to do so. Tenant demand rose at its fastest rate since 1998, with 37% of chartered surveyors reporting an increase in lettings, up from 30% during the previous quarter.
  The group said demand for family homes was particularly strong, with 43% of surveyors reporting an increase in the number of house lettings, compared with 34% who reported a jump in demand…

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• 30Aug

  Mortgage respite – but only for the well-off

  Mortgages No Comments

  From This is Money:

  Abbey, the biggest mortgage lender, has cut its two and three-year fixed rates by up to a quarter of a percentage point. Its best two-year fix is now at 5.89% with a £995 fee.

  C&G cut its fixed rates by up to 0.31 of a point with the best deals starting at 5.65%.

  The bank also shaved 0.1 of a percentage point off its tracker deals, which start at 5.69%.

  Melanie Bien, director at the independent mortgage broker Savills, says: ‘Swap rates – the rates at which banks lend to each other – have fallen by about half a percentage point in the past month, so it is no surprise that fixed rates have started to fall. It is a huge relief to borrowers.’…

  Click to read the full article »

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