Finance Matters

• 24Sep

  Pensions Regulator helps build employer confidence in talking to employees about pensions

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  From The Pensions Regulator:

  As part of an ongoing campaign focused on addressing the risks facing defined contribution scheme members, the Pensions Regulator and the FSA have today jointly published a new information leaflet for employers – ‘Guide for employers: talking to your employees about pensions’.

  The leaflet sets out questions that employers may be asked by their employees about pensions and suggests answers and other sources of information that employees can refer to. It will be relevant to employers with DB, DC and contract-based schemes.

  The leaflet does not increase the responsibilities on employers but encourages them to look at the activities they can do voluntarily, at little or no cost, to help their employees to get greater value from the scheme.

  The Pensions Regulator and FSA have come together to publish this information with a shared belief that more engaged and conf…

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• 24Sep

  Rent & Mortgage Arrears Information goes online

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  From IVANews:

  People behind with payments on their homes will have a new way of finding the best solution to their arrears problems from this week, with the publication of information and advice by the Ministry of Justice.New animated videos, interview clips and articles, to be featured on the Directgov website go from the point where there may be a problem, to communicating with landlords or mortgage lenders, how to prepare for court and what happens during and after a court hearing.Justice Minister Bridget Prentice said:‘The government has taken considerable steps to ensure people struggling to pay their rent or mortgage get the help they need to stay in their homes.‘Mortgage repossession figures released earlier this month show that the number of people facing repossession has considerably reduced since this time last year, but we’re not complacent. The information being made available today is easy to understand and accessible via the Directgov website and aims to help people find a way ou…

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• 24Sep

  BBA: Mortgages beginning to flow again

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  From This is Money:

  The British Bankers’ Association, which represents the major High Street lenders, said that net lending from its members jumped to £2.8bn in August from £1.9bn in July.
  The figure was slightly above the recent six-month average of £2.7bn and 17% higher than in August last year, as demand continued to be boosted by the recovery in the housing market.
  The BBA also released figures on the number of loans issued by banks. Here the improvement on last year was even more marked, with the 38,095 loans issued in August some 81% more than August 2008, and more than double the low of 18,330 reached in November 2008.
  However, the total loans issued in August this year were marginally down on the previous month, reflecting the end of the Summer rush in the property market.
  The number of people remortgaging remained subdued at just 26,124, while those releasing equity from their property or taking out a buy-to-let loan hit a new record low of 17,918.
  David Dooks, BBA statistic…

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• 24Sep

  Farewell to the 0% tracker mortgage

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  From This is Money:

  Two years ago Halifax was selling a two-year tracker at base rate minus 0.51%. Since April the estimated 7,500 borrowers who took it have been paying no interest.
  But that deal comes to an end on September 30 – closely followed by an identical version ending on November 30.
  Borrowers coming off these deals will suddenly find themselves paying the Halifax’s standard variable rate of 3.5%.
  This will push monthly repayments up from £544 to £792 for a borrower with a £150,000 home loan.
  Halifax is offering these customers a two-year 0.51 point discount off its standard variable rate. This would leave them paying 2.99%, with repayments of £752. But there’s a £599 fee and early redemption penalties.
  There are three remaining 0% tracker mortgage deals. Two come to an end in December. One was offered by C&G and the other to buy-to-let purchasers by BM Solutions.
  C&G borrowers will go on to a 2.5% rate and BM 2.54%. The third, also from C&am…

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• 24Sep

  First-time buyers ‘penalised’ by lenders

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  From This is Money:

  Figures from Moneyfacts.co.uk show that average two-year fixed mortgage rates for those only able to put down a 10% deposit currently sit at 6.12%.

  This is a whole 4.25% above two-year swap rates, the rate at which lenders borrow fixed rate funding between themselves.
  Cuts have seen the Bank of England base rate fall from 5% to 0.5% in the last twelve months, but had almost no impact on mortgages costs for those with limited funds.
  Rates remain stubbornly high for loans taken on a small deposit, while those who can raise 25% or 40% are seeing bargain basement deals.
  Steve Smith, senior consultant at mortgage broker Chartwell Funding said: ‘First-time buyers are being penalised for the mistakes made by the banks.’
  ‘They didn’t get us into this mess, but now they’re the ones paying because banks are unwilling to take risks on loans worth more than 75% of the property.’
  ‘Instead, what’s happening is that lenders are simply making more money out of those with limited funds by…

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• 24Sep

  Bargain Hip providers hit by slump

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  From This is Money:

  Only last month, Promise was named in a survey by consumer group Whi ch? as one of the best value-for-money suppliers of Home Information Packs.

  Commenting on the group’s demise, a spokesperson for Promise Home Packs said: ‘The political environment at the current time makes it far from clear whether Hips will play a long term role in the housing market.

  In its research, Which? found that some groups, especially estate agents, were charging more than double to compile a pack than an independent specialist provider. It concluded that in some cases, home sellers could save hundreds if they shop around.

  The survey found that the average price for a Hip was £368 but many estate agents were also found to charge significantly more, with Spicerhaart and Countrywide each charging £401….

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• 24Sep

  Borrowers fail to overpay on mortgages

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  From This is Money:

  The figures, compiled by professional advice website Unbiased.co.uk, show that just 20% of those with tracker mortgages have held their repayments at the same level they were at before interest rates started to fall.

  Instead 19% of the 2,026 people surveyed said they were spending the extra cash on day-to-day expenses or treats, while 24% said they were using the cash to repay other debts.

  One in five people said they were paying the money into a savings account and 7% said they were leaving it in their current account to build up a surplus.

  ‘Such action would enable many thousands of borrowers to take years off their mortgage repayment term, or enjoy a greater level of repayment comfort down the line, should the economy take longer to recover….

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• 24Sep

  No rivals for HSBC’s 1.99% mortgage

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  From This is Money:

  Previously, if a lender unveiled a clear, market-leading rate, other banks and building societies would follow.
  But although HSBC’s attractive deal captured headlines, it has not resulted in a rush of competing offers.
  David Hollingworth at independent mortgage broker London & Country says that in the current climate lenders remain risk averse and want to keep their ‘heads below the parapet’.
  ‘Short-term borrowing costs for the banks dipped again last week and are at their lowest level this year,’ he says.
  ‘Normally when this happens we’d expect some easing in mortgage rates, but lenders simply don’t want the business.’
  Nationwide Building Society and Alliance & Leicester tweaked some of their mortgage deals downwards last week by a maximum of 0.16 and 0.1 of a percentage point respectively. But some of Nationwide’s fixed remortgage rates rose.
  HSBC’s 1.99% two-year discounted rate loan is only available to borrowers with at least 40% equity or deposit and there is…

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• 24Sep

  Property to fall as ‘irrational’ rally ends

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  From This is Money:

  The bounce in the market that has seen prices rise by 8.4% since February, on the Nationwide measure, will fall away towards the end of the year, says James Thomas, head of the residential department at Jones Lang LaSalle.
  The ‘seemingly irrational’ rise in prices is likely to prove only temporary, according to Thomas, who said a double-dip W-shaped outlook for the market is likely.
  He said: ‘The unforeseen and seemingly irrational pick-up in prices has altered the outlook for UK house prices but it is likely that this recovery will prove temporary.
  ‘The economic fundamentals that have supported the upturn, most notably the constrained supply of housing for sale, will be eroded as unemployment hits a peak and mortgage lending remains weak.
  ‘While the recent improvement in the market is encouraging, it is impossible to ignore the short-term risks posed to the UK residential sector by rising unemployment and poor credit availability.
  ‘We anticipate the current market revival t…

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• 24Sep

  Property shortage puts off home movers

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  From This is Money:

  Average asking prices rise by 0.6% in September, according to the property listing website, which said a dwindling supply of property on agent’s books was deterring homeowners from trading up.
  The average asking price was £223,996, down 1.5% on last year.
  Rightmove said that estate agents had the lowest numbers of homes per sale per branch for 18 months, with almost a third more coming off their books than coming to the market.
  The difficulty in finding good quality new homes to buy combined with the need to raise large deposits to get good mortgage rates, is putting off those who would otherwise consider moving.
  A North South divide is well established, the study says, with property scarcity leaving the four regions in the south with higher or close to break-even asking prices than this time last year, but the northern regions remain in negative territory.
  Miles Shipside, commercial director of Rightmove, comments: ‘There’s an autumn window for new sellers where a sensible…

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