Finance Matters

• 27Jul

  Debt Collection Agencies could change ownership

  IVAs No Comments

  From IVANews:

  One in six companies in the UK debt collection agency industry could change ownership as a result of the current economic climate, claims a new study by financial analysts Plimsoll.
  The analysts claim that while a “surprising” number of cash rich competitors wait in the wings, the market could be set for a prolonged period of consolidation. Plimsoll analysed 208 companies with a turnover of more than £1m per annum and the company picked out 64 that it claimed are primed to be taken over.
  David Pattison, author of the new Plimsoll Industry Analysis – Debt Collection Agencies, said: “I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market. With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyer’s market out there for cash rich companies.”
  Pattison added: “In the Plimsoll Industry Analysis…

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• 27Jul

  Are IVAs easier to obtain ?

  IVAs No Comments

  From IVANews:

  Banks and other lenders seem to be relaxing their payment thresholds for individual voluntary arrangements (IVAs) and are approving lower-repayment applications for the first time
  Previously, only debtors able to commit to monthly payments of at least £200, paid over five years, were accepted, which is beyond the means of many people. In the past few months, though, creditors have agreed to hundreds of more flexible IVAs with monthly payments of under £200.
  The main IVA selling point, as an alternative to bankruptcy, is that debtors are able to reduce their debts to a single monthly payment and have a legally binding agreement to become debt-free upon completion of the arrangement. From the creditors’ point of view they can claw back a proportion of what they are owed in a relatively short amount of time, and IVAs offer better returns for lenders than bankruptcies.
  While lower monthly payments may be welcome to some debtors who would have been unable to meet a £200 payment,…

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• 27Jul

  Credit card use is declining

  IVAs No Comments

  From IVANews:

  With the credit meltdown of last fall and all the fallout in the business since then, it was only a matter of time before you’d get a letter from your credit card issuer phrased something like this.
  “We’re notifying you that the terms of your account are changing.”
  The Hodges house got one of these from Capital One this past week. It’s a Visa with no balance, and we don’t use it any more (part of the credit card purge we and many others have done). The old annual percentage rate (APR) was 12.65 percent for purchases and a 19.74 percent rate for cash advances.
  The letter advised us of a new rate at 17.9 percent for purchases and balance transfers. As with many deals, it’s adjustable and is essentially 14.65 percent added to the prime rate. The default rate, which is triggered when your payment is late twice in any 12 billing periods, will be 29.4 percent.
  It was the rationale that got my attention.
  “Due to extraordinary changes in the econ…

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• 27Jul

  Untitled

  IVAs No Comments

  From IVANews:

  This is a busy week for the insolvency industry. The insolvency stats come out this Friday and they will likely show an increase in IVAs and Bankruptcies.
  IVA.co.uk Petition for the abolition of the Insolvency Register
  Full name of petition: We the undersigned petition the Prime Minister to ‘abolish,regulate or limit private company access to the Insolvency Website.
  The petition will now be handed to the government.
  Petition: http://petitions.number10.gov.uk/InsolvReg/
   
  Insolvency Register for some – but not for others!
  Staveley’s name does not appear on the register of individuals authorised and regulated by the Financial Services Authority.
  It seems that there are ways to avoid being on the register (which probably involve having powerful friends)
  Source: http://www.guardian.co.uk/business/2008/nov/04/amanda-staveley-barclays-debts-iva
  Insolvency rate to rise 41% by end of 2009 (for small companies)
  Smaller company insolvencies are set to rise by a “catastrophic 

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• 27Jul

  Two-thirds of advisers fail equity release test

  Mortgages No Comments

  From This is Money:

  Just a third of the 40 advisers checked on met all the tests and only five out of 12 equity release specialists passed the benchmarks. This compared to eight of the 28 general financial advisers.

  Of those tested, 23 failed to carry out the fact-find they are meant to do on a customer before giving recommendations and seven did not even ask what the applicant’s income was: vital for working out how much they need to boost it.

  Some advisers didn’t say how quickly debt grows or discuss compound interest, which boosts debt when none of it is paid off.

  Martyn Hocking, of Which? added: ‘If you’ve been hit by plunging pensions, it might be tempting to release some much-needed money using your home. However, opting for an equity release plan is a big decision and it’s not one that should be taken lightly.’

  The equity release industry has defended itself against Which?’s attack, but admitted that there needs to be serious improvements in advice given.

  ‘But continuous i…

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• 27Jul

  Bovey’s new bankruptcy threat over ‘£150k debt’

  Mortgages No Comments

  From This is Money:

  If he fails to pay up they are threatening to pursue the husband of TV presenter Anthea Turner for bankruptcy.
  Mr Bovey is also being chased by accountants over a luxury clay-pigeon shotgun bought by his company for his use at charity shoots.
  Imagine Homes, once billed as Britain’s biggest buy-to-let property empire, went into administration last year with debts of £50m. These are business debts for which Mr Bovey is not personally liable.
  Administrators from accountancy firm Deloitte are now going through its books to find out what assets remain.
  But Stuart McIntyre, the former finance director of Imagine Homes, has claimed that Mr Bovey has kept personal items purchased for him by the company, and some company assets.
  It is understood that the items include the shotgun and a £150,000 overpayment of rental income made to Mr Bovey from company properties.
  If Deloitte does not resolve the matter, it will consider filing for bankruptcy against Mr Bovey – the seco…

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• 27Jul

  Banking costs ‘put up mortgages’

  Business No Comments

  From The BBC:

  The British Bankers Association has defended the rise in the cost of borrowing – despite the base rate remaining at a record low.Financial website Moneyfacts claimed mortgage profits had increased nearly fourfold in recent months, with typical fixed-rate deals also going up. But banks are facing “substantially” higher costs, the association’s chief executive, Angela Knight, insisted. And they had been “instructed” to put far more money in reserve, she said. In the UK, banks were “holding twice the amount of the worldwide average”, Ms Knight added. “You can’t hold it and lend it at the same time.” ‘Far less’ cashMoneyfacts described lenders’ potential profit margins as being the largest it had seen since it began keeping records in 1988. For a bank, the margin is the difference between the cost of borrowing money and the amount it charges people to have a mortgage.
  “Typically we would have seen a 0.8% margin on top of their product,” said Michelle Slade from the website. “Now we are se…

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• 27Jul

  New rules ‘threat to High Street’

  Business No Comments

  From The BBC:

  Traditional high streets could be put at risk from out-of-town shopping areas unless proposed changes to planning rules are scrapped, MPs have said.Ministers want to replace the “need test”, which aims to prevent excessive retail park or supermarket development. However, the communities select committee wants it retained to prevent town centres being damaged. Communities Minister John Healey said the changes meant “greater safeguards for the high street, not less”. The Association of Convenience Stores has welcomed the MPs’ report. ‘Undesirable effects’The need test was created in response to complaints that smaller shops were being damaged by chains developing larger stores. It forced planning committees to address whether the local community needed the proposed superstore. However, a 2005 review of planning regulations found the test was having “undesirable effects”, such as restricting competition and consumer choice. The government announced plans to scrap it two years later. It wa…

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• 27Jul

  Fresh backing for troubled plane

  Business No Comments

  From The BBC:

  Defence ministers from seven European nations have pledged to continue to support the much delayed Airbus A400M military transport aircraft project.The ministers from Belgium, France, Germany, Luxembourg, Spain, Turkey and the UK now hope to agree a new contract for the plane by the end of the year. There had been fears that some countries would decide to walk away from the troubled project. The A400M’s maiden flight is a year late due to technical and budget woes. A second deadline of March this year was also missed. The plane is not now due to take to the skies until the end of this year. ‘Good news'”We hope to save the programme. We have decided to open a renegotiation,” said the UK’s Defence Procurement Minister Quentin Davies.
  The A400M project was launched in 2003, with orders for 180 planes so far. The plane was designed as a replacement for the main Nato military transport aircraft, the US-built Lockheed Martin Hercules. “I am convinced this programme will be re-launched, whic…

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• 27Jul

  UK economy continues to contract

  Business No Comments

  From The BBC:

  The UK economy contracted 0.8% between April and June, more than double the figure economists had expected.While an improvement on the previous quarter, the figures may indicate that the recovery could take longer than previously had been thought. The contraction was much less than the 2.4% seen in the first quarter but was still above analysts’ 0.3% prediction. The latest figures take the annual rate of decline to 5.6%, the biggest fall since records began in 1955. Liam Byrne, Chief Secretary to the Treasury, said that he was cautious but confident that growth was going to return at the end of the year. “We are not out of the woods by any stretch of the imagination, but what today’s figures show is that the pace of the downturn is easing,” he said. The BBC’s economic editor Stephanie Flanders was less upbeat. “Anyone who was worried about the momentum of the recovery before will be that much more concerned now,” she observed. “Not least, because the recovery has yet to actually show i…

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