Finance Matters

• 23Sep

  Regulator confirms appointment of new executive director

  Pensions No Comments

  From The Pensions Regulator:

  The Pensions Regulator today confirmed the appointment of Graham Brammer as a new executive director with lead responsibility for the design and delivery of the new employer duties contained in the current Pensions Bill.

  Mr Brammer will be taking up his new position today (15 September). He was formerly director, account servicing operations and board director of UK retail banking for the Barclays Group where he was responsible for leading several major transformation programmes, with overall responsibility for all retail banking operations (excluding mortgages) including global payment systems, payment operations to support over 10 million customers and Barclays’ ATM networks. He led a team of 3000 staff.

  Announcing the new appointment David Norgrove, the regulator’s chairman, said: “I am delighted that Graham Brammer is joining us to help to lead the design and delivery of o…

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• 23Sep

  Homebuyers benefit as auctions cut prices

  Mortgages No Comments

  From This is Money:

  With finance tight and property prices falling, a growing number of homes are failing to sell at auction and auctioneers are demanding realistic reserve prices, or turning sellers away.
  Figures from auction specialist the Essential Information Group (EIG) show just 54% of residential properties going under the hammer selling in the three months to August, compared to 71% a year earlier.
  And David Sandeman, managing director of EIG, says: ‘Auctioneers are getting harder and harder on vendors and saying prices just have to come down.
  ‘If you have a house at an estate agent that’s been trying to be sold at £300,000 and isn’t going, then the reserve needs to be £220,000 or £230,000 maximum, not £280,000, otherwise it just isn’t going to appeal.
  The dramatic switch from a sellers’ to buyers’ market has seen house prices slam into reverse ? with a shift from annual growth of 11% in August 2007 to year-on-year falls of 11% in August 2008, according to the Halifax h…

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• 23Sep

  How the Lloyds / HBOS merger affects us

  Mortgages No Comments

  From This is Money:

  While some issues have been settled, many pressing questions remain. Financial Mail explores the consequences for the millions of customers of the massive new conglomerate.
  Is this a done deal?
  The deal will take three to four months to conclude. HBOS shareholders will be asked to vote on the merger and there are rumbles that some big institutional shareholders are not happy. They feel HBOS directors ‘ bottled it’ and could have tried harder to stay independent.
  That sentiment may be shared by many of HBOS’s 2m small shareholders, who have seen the value of their shares plummet in the past 18 months.
  However, with financial markets shaken by a brutal week, there appear to be few alternatives for HBOS at the moment.
  What will happen to Lloyds and Halifax branches?
  Culling bank branches is a core part of Lloyds TSB’s plan to save £1bn a year in running costs through the merger.
  Lloyds already has the biggest branch network of any UK bank, with 1,900 branches. Merging…

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• 23Sep

  Mortgage bills to rise on banking chaos

  Mortgages No Comments

  From This is Money:

  One specialist lender, First National, yesterday raised the cost of new mortgages by as much as 1.6 percentage points – adding £166 a month to the cost of a typical £150,000 loan.
  The third biggest building society, the Yorkshire, raised some fixed rates by up to 0.3 points.
  Experts warn big mainstream lenders are likely to raise rates on both fixed and tracker deals.
  The rises came as it emerged that customers of the Lloyds-TSB/Halifax ‘super-bank’ could be up to £405 a year worse off.
  A study for the Daily Mail carried out by personal finance site Moneyfacts.co.uk shows Lloyds-TSB generally offers poorer value products than the Halifax.
  It is feared the super-bank could its financial muscle to shift customers to the dearer deals. It comes after figures showed mortgage lending has fallen to its lowest level for three years.
  Banks are cautious of lending to each other for fear of being caught out by ‘toxic’ debt. This has pushed the interest rates banks c…

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• 23Sep

  I need a mortgage – should I act now?

  Mortgages No Comments

  From This is Money:

  Simon Lambert, This is Money mortgages expert, says: Just as us mortgage journalists were dusting off the calculators to work out potential savings for mortgage borrowers from some good value offers, another crisis hit.
  Mortgage lenders had been cutting rates over the past month or so as Libor and Swap rates improved – these are the rates at which banks lend to each other.
  They soared when the credit crunch began a year ago because banks no longer trusted one another. You can see a recent history of Libor rates and average fixed-rate mortgages under ‘Mortgages’ in our interest rates round-up.

  Libor rates soared following the collapse of Lehman Brothers on Monday, but despite that there has so far not been a rush to pull deals.
  The mortgage market is constantly shifting at the moment and it is impossible to know whether rates will rise imminently or what will happen to them in months to come.
  Security and certainty should be the crucial question for borrowers, so if you do ne…

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• 23Sep

  Over 60s lose money from change

  Money No Comments

  From The BBC:

  The government has confirmed that people over 60 will lose money when new rules on backdating benefits begin next month.
  People who claim pension credit and money off their council tax or rent from 6 October will have the backdating cut from 12 months to three.
  Official figures show that will save the government £300m over three years.
  But ministers say a new simplified claims procedure will attract 50,000 extra claims over the same period.
  Official figures
  The cut in backdating will mean £1,600 less on the average claim when the benefit is first paid.
  The government says that will save £170m next year.
  But the government is also making it easier to claim these three benefits.
  In future, a claim for pension credit will also count as a claim for council tax benefit and, for tenants, housing benefit as well.
  In the past, separate forms had to be signed for each.
  The government says that will result in 50,000 extra people getting council tax benefit.
  New figures

  The net r…

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• 23Sep

  FTSE posts biggest one-day rise

  Money No Comments

  From The BBC:

  The FTSE 100 share index has closed more than 400 points higher, its biggest one-day rise, after the US confirmed a financial bail-out plan.
  It ended the day 8.8% higher at 5311.3 points. But after a turbulent week on the markets, the FTSE was 105 points lower than its value on Monday.
  Banking shares were amongst the biggest gainers, with Royal Bank of Scotland up 32% and Barclays and HBOS both up 29%.
  They were helped by a ban on short-selling of financial shares.

  The restriction was announced late on Thursday by the Financial Services Authority (FSA) which banned short-selling in a number of financial shares.
  Short-selling involves traders profiting from falling share prices. The technique works when investors borrow shares from another investor, and then sell them hoping the price will fall.
  The aim is then to buy back the asset at a lower price and return it to its owner, pocketing the difference.
  Previously anyone could short a position in a company’s shares, but typical…

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• 23Sep

  Shares slide amid bail-out fears

  Business No Comments

  From The BBC:

  European shares have edged lower, following sharper falls in Asia, amid uncertainty about the impact of the massive US financial bail-out plan.
  Doubts over how soon the 0bn (£382bn) US rescue plan can be applied have emerged from both the Democrats and Republicans.
  The FTSE 100 fell 0.5% and France’s Cac 40 slid 0.6%. Hong Kong’s HSI shed 2.7% and China’s main stock fell 1.5%.
  On Monday, US shares fell sharply, with the Dow Jones index closing down 3.3%.
  The White House says Congress must back the rescue plan to stop wider economic harm.
  Many politicians appear alarmed by the scale and implications of the global financial crisis.

  While most are anxious to find bi-partisan ways of getting behind the bail-out, others are critical of what they see as a waste of taxpayers’ money, correspondents say.
  Oil surge
  In the US on Monday, the Dow Jones index closed 372.75 points, or 3.3% lower, at 11,015.6, wiping out the gains made during Friday’s rally.
  Banking shares were particula…

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• 23Sep

  Food demand drives M&B sales

  Business No Comments

  From The BBC:

  Demand for food has helped Mitchells & Butlers boost like-for-like sales by 1.3% in the nine weeks to 20 September.
  M&B, whose pub brands include All Bar One, said about two-thirds of total sales were now generated from meals and drinks ordered with food.
  But it blamed a slowdown at its mid-market Harvester pubs on the pressure which families with mortgages faced.
  Offsetting rising food and energy bills meant it would have to triple sales growth, it said.
  Value for money
  Food sales grew 3.6% in the period, slower than it had seen previously.
  The firm’s pubs have become increasingly reliant on food since the smoking ban deterred many drinkers. It said it was now selling 115 million meals a year – up 8.2%.
  An increased demand for cask ale and soft drinks saw overall drink sales rise by 0.3%.
  M&B said it expected that customers feeling the pinch during the economic slowdown would “intensify the demand for both enhanced quality and value for money”.
  It owns and runs some 2,000 pub…

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• 23Sep

  Fed relaxes bank investment rules

  Business No Comments

  From The BBC:

  The US central bank has relaxed the rules governing investors who take minority stakes in banks, a move that could encourage greater investment.
  The US Federal Reserve said investors can now take a 33% stake in a firm without incurring regulatory hurdles, up from the previous limit of 25%.
  Minority investors are also allowed a voting stake of up to 15%, from 9.9%.
  The rules apply to any investor, such as private equity firms, that wants to take a minority stake in a bank.
  In the past certain groups – notably private equity firms – have been reluctant to invest more than a certain amount in banks because of the implied oversight by the central bank.
  Chip McDonald, a partner at law firm Jones Day, said the move should enable greater investment in banks when they most need it.
  The credit crisis has made it far harder for banks to gain capital from each other, and therefore more difficult for businesses and individuals to gain access to funding….

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