• From This is Money:

    People who want to fix their mortgage rate for two years are now typically paying 4.99%, according to financial information group Moneyfacts.co.uk.

    The cost of the deals rose sharply during July to peak at 5.21% as lenders responded to rising swap rates, upon which the mortgages are partially based.

    The average margin charged on a two-year fixed-rate mortgage is now 3.21%, up from 2.72% in June.

    Michelle Slade, spokeswoman for Moneyfacts.co.uk, said: ‘Borrowers are finally starting to see more positive news coming out of the mortgage market.

    ‘Lenders have become accustomed to the post banking collapse world and appear to finally be relaxing their credit criteria while remaining within a regulated frame work.’…

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  • From This is Money:

    Savers can also benefit from up to 15% of any rise in the value of properties invested in, but risk a maximum fall of 30% if the portfolio’s value drops.

    The fund receives two years’ rent from the landlord upfront, which translates into a 13.5% interest payment for investors over that period. They will receive this as soon as the opportunity to invest in the fund closes, which is expected to be at the end of 2009.

    The properties will be sold or refinanced after two years with the fund sharing in 15% of any profit. The maximum exposure to falling property values is 30%, dubbed a ‘downside protection.

    Derek Uittenbroek of Smith & Williamson, which is marketing the fund, says: ‘Investors get their income upfront, rather than having to worry about rent collection or occupancy rates.
    ‘Meanwhile, the downside safeguard shields them from fluctuations in the market, while still allowing them to enjoy a share of any potential gain.’

    While Sipp savers investors can also re…

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  • From This is Money:

    If there has been a rise in the value of the house, will we be liable to pay capital gains tax? P.M.H., Bexley, Kent
    From the information you have provided I think that there may be a CGT liability though this does depend on the increase in the property’s value.

    The rules state that you will normally have a chargeable gain if your property is worth more than you paid for it when you sell or dispose of it.

    It’s worth bearing in mind that when working out the chargeable gain you can deduct some of the costs of buying, selling and improving the property. There is a single rate of capital gains tax of 18% for individuals on taxable gains….

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  • From This is Money:

    The cost of cover has jumped 5.6 per cent in the past three months, the fastest quarterly rise in the past 15 years, according to broker AA Insurance.
    The cost of comprehensive cover has risen 14 per cent in the past year. The average quote on AA’s Insurance Premium Index is £821, up from £721 a year ago.
    The AA’s measure of the ‘shop-around price’ – the average of the cheapest three quotes for each risk – jumped 13 per cent from £488 to £551.
    Simon Douglas, director of AA Insurance, says: ‘Most drivers are experiencing sharp increases when they renew their insurance.’
    Keith Maxwell, head of motor insurance at More Than, says: ‘Insurers can only go on writing unprofitable business for so long and we’re seeing more expensive and more frequent claims for personal injury.’
    Against the backdrop of rising prices, it is more important than ever to become a smart buyer.
    Never take a renewal quote from your existing insurer without checking the market for a…

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  • From This is Money:

    But their dreams of a happy retirement have been shattered and their 21-year marriage has been brought close to breaking point – all because of a bitter dispute with their buildings insurer, Axa Spain.
    Retired teacher Barrie, 67, and Janet, 68, face financial ruin. They own a property rendered uninhabitable because of structural damage caused by a leak from a water main. They cannot sell it and now owe more than £39,000 to banks, credit card companies and friends.
    The mounting debt is the result of a costly legal battle with Axa Spain, which has involved them employing architects and surveyors.
    The couple have also had to rent an apartment for the past two years.
    Janet, a former senior administrator at the Royal College of Veterinary Surgeons, has moved back to Lewes, East Sussex, to stay with friends because she is so distressed.
    Spanish builders have told the couple it will cost about 110,000 euros (£98,000) to repair the damage – money they do not have.
    The…

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  • From This is Money:

    The cost of raw materials, such as wood and gold and silver, has risen considerably. Added to this, the falling value of sterling has pushed up the price of instruments because many are imported from the Continent and Japan.
    Noel Sheehan, owner of Sheehan’s Music, the musical instrument specialist in Leicester, says instruments have increased in value across the board by at least 20%, and in some cases as much as 50%.
    ‘To give a few examples, a mid-range saxophone from Japan two years ago would have cost about £1,300,’ he says.
    ‘Today, it would cost £1,900. A clarinet from France costing £1,200 in 2007 would now cost £1,800.’
    Specialist insurer Musicguard says the average claim on its policies has risen from £629 in 2007 to £967.
    Musical instruments are covered under most standard home insurance policies, typically for values up to £1,500.
    But if householders have not updated their insurance for a few years they may be underinsured…

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  • From This is Money:

    He does it not because it means another product sale – and more commission for him – but because he truly values the cover’s worth.
    Michael, 48, suffered a heart attack in February, one of the 275,000 people every year who have one. He has made a full recovery, but says he does not know how he would have coped financially without payments from the two insurance policies that he took out to provide financial protection against serious illness.
    ‘The heart attack came out of the blue,’ says Michael, who is divorced and lives in Bradford, West Yorkshire. ‘I had just eaten a bacon sandwich and thought the pain was indigestion, but within an hour and a half I was lying on an operating table at Leeds General Infirmary.’
    Michael has yet to return to work full time and thanks to the financial buffer provided by his insurance he has not had to rush matters.
    ‘I’m a one-man business so I dread to think what I would have done if I had not had the cover,’ he says. ‘I’ve been able to pay dow…

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  • From This is Money:

    Anxiety about shortcomings in the National Health Service also play a part. A survey by Sure Insurance conducted at a mother and baby show in central London last month revealed that a third of parents were concerned about the ability of the NHS to care for their child.
    Consumer experts say medical insurance for children can be expensive and as healthcare is an emotional issue, parents can feel pressured to buy the cover.
    They point out that often the best specialist paediatricians and departments for childhood cancers and other serious illnesses are in NHS hospitals, so private care may not always be the best course.
    But Jason Pettit, head of sales operations at private healthcare insurer Bupa, says: ‘Although the NHS can provide excellent care, parents tell us they want to be able to choose a private hospital if they wish. Private cover also provides more choice and control over treatment – you see specialists and have tests done quickly.’
    Parents who want cover for their ch…

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  • From This is Money:

    In Cumbria, Dumfries and southern Scotland hundreds of homes and businesses were inundated after rivers burst their banks and flood defences were overwhelmed.
    More than 12 inches of rain fell in some parts of Cumbria in 24 hours.
    But despite the damage and tragic loss of life, the floods are not being classed as a ‘major event’ on a par with the flooding in the summer of 2007 in Yorkshire and the Midlands that cost £3bn.
    Instead, the scale of damage is nearer that of the flooding in Carlisle in 2005 that caused about £250m in losses.
    Malcolm Tarling, spokesman for the Association of British Insurers, says: ‘This is not an event on the scale of 2007.
    ‘It is, sadly, the sort of event that the industry expects to see during a winter and is financially and practically able to cope with.’
    At present, insurers have agreed to continue to cover high-risk properties, so long as the Government invests in better flood defences.
    ›› What to do if you’ve been…

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  • From This is Money:

    Mohammed Patel, 24, charged car owners £500 a time to stage accidents in their vehicles – thereby opening the way for the owners to put in massively inflated insurance claims.
    Scores of innocent motorists who found themselves driving behind Patel were put at risk when he put his fraud into practice by suddenly slamming on his brakes at roundabouts.
    He usually picked on elderly female motorists who were driving alone, as he believed they wouldn’t cause a fuss.
    His favourite trick was to disengage his brake lights so the target motorist would have no warning of the impending collision and would therefore admit liability. He staged the accidents at slow speeds to protect himself from whiplash.
    His car owner customers – who were not present during the crashes – would then often claim there were four people in the car and invent extra damage, claiming on average around £17,000 for each accident.
    Claims would include compensation for injuries, such as whiplash, damage…

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