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Fri 29th Sep, 2006
Posted in Banking, UK Finance, Savings, Consumer debt at 9:50 am by admin
With recent reports of UK indebtedness in the news, Scarborough Building Society has launched a campaign to encourage children and young people to save. Starting good savings habits now will make it easier for them to pay for university education and to take the first step onto the property ladder.
The campaign, which promotes Scarborough’s Smart Kids savings range, aims to give saving some street cred and to encourage families as a whole to think about financial priorities. Tony Burdin, head of marketing, said: ‘With growing concerns about record personal debt levels and people’s lack of provision for the future, we believe financial services providers like ourselves have a responsibility to encourage people to take stock and start saving.’
He added: ‘Because there are so many worrying statistics out there though, we felt it was also important to get these messages across in a fun way – hence the reason for a sticker campaign which we hope will both appeal to parents and communicate directly with children in a language which will be meaningful for them.’
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Posted in Bad Credit, Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Credit Card, mortgages, Remortgaging at 9:47 am by admin
An article in The Times Online warns against allowing people to ‘borrow in haste and repent at leisure’. Writer Camilla Cavendish is commenting on the recent news that the average Brit has twice as much consumer debt as the average West European, to the tune of £1.25 trillion. While Cavendish says that not all debt is bad, citing the millions of people who have acquired their own homes through mortgages, she bemoans the scarcity of sound financial advice.
Cavendish notes how easy it is to transfer balances and rack up debts, with one couple in Glasgow recently reported to have remortgaged their home eight times to the tune of £300,000. She also says that many people are ignorant about the true nature of the financial products they buy and wonders how many people have been mis-sold credit cards and other debt products.
She comments: ‘It is lunatic that the law makes it much easier to entice people into debt than to encourage them to save,’ adding: ‘Cheap money has helped to keep the economy going. But only for so long. When people fall prey to loan sharks, or default, they hurt not just themselves and their families. They will also cost us all in the long run, because they are making wholly inadequate provision for their old age.’
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Thu 28th Sep, 2006
Posted in Bad Credit, Consumer Credit, Banking, UK Finance at 11:08 am by admin
Nationwide Building Society has urged students to plan their cash withdrawals carefully to avoid expensive charges to withdraw their money. Nationwide’s research shows that half of the 400 cash machines on university and college sites charge for taking money out.
With the average student withdrawing small sums of £10 or £20 a time, a typical fee of £1.50 could be a 15 per cent charge on a £10 withdrawal. Cash machine charges on university and college sites range from 70 pence to £1.85. This can have a significant impact on student finances.
Stuart Bernau, executive director at Nationwide, said: ‘Students need to be particularly alert when they are withdrawing cash as charges to access their own money quickly add up and hit hard in the pocket of people already facing the challenge of making ends meet while they are studying.’
He added: ‘As the number of charging machines grows it is becoming ever more important that all machines that levy charges are clearly marked so that consumers have the choice to avoid these unnecessary fees.’
Nationwide has fought against cash machine charges for some time and all of its cash machines are free to use. There are also no charges for withdrawing cash abroad for Nationwide card holders.
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Posted in Consumer Credit, Homeowner Loans, UK Finance, interest rates, mortgages at 10:55 am by admin
Leeds Building Society has launched a five year fixed rate buy to let mortgage range, with fee free options for remortgagers. The five year fixed rate is at 5.24 per cent, with the fee-free version at 5.84 per cent. Both deals are available up to 80 per cent loan to value and allow the repayment of 10 per cent of the outstanding balance each year without penalty. There are no higher lending charges. The fee-free deal includes a free valuation up to £335. Early repayment charges are staggered as follows: 5 per cent of the amount redeemed in years 1-2, 4 per cent in year 3, 3 per cent in year 4, and 2 per cent in year 5.
The building society has also launched a five year fixed rate mortgage at 4.99 per cent, which also allows 10 per cent capital repayments each year without penalty. There is also a fee free five year fixed rate at 5.49 per cent.
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Wed 27th Sep, 2006
Posted in Bad Credit, Consumer Credit, Banking, UK Finance at 3:16 pm by admin
Ten years ago the Bank of England turned its head as Barings, the City of London’s oldest merchant bank collapsed. This ended the security and trust Britain’s banks had in their regulator. The myth was shattered. The Bank of England was ‘not’ in the business of protecting them from the real world.
The following years have shocked the industry: TSB, Bank of Scotland, NatWest and Abbey have all lost their independence. In 1992 Midland, once the world’s largest bank, merged with what is now called HSBC, formerly the Hong Kong and Shanghai Banking Corporation. The Bank of England never stepped in.
The financial market opened to new companies over the years, allowing more venues for lenders and debtors to find assistance and products. The market has become so loose that the Bank of England is faced with an entirely new financial community .
It is now forced to deal with complaints of fraud, scam artists posing as loan officers, and an internet banking community that does not differentiate between firms that deal with UK lenders, and those that deal with off shore lenders. This has caused the financial community to scramble
The industry is rallying to bring stability to their products and services, and protect debtors from being victimized by off shore lenders and unethical sale’s practices. The biggest worry for the UK financial community is that foreign companies will come in and by defaulting UK banks. This fear could be realized if the insolvency rate in the UK grows unchecked.
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Posted in Bad Credit, Consumer Credit, Homeowner Loans, UK Finance at 12:07 pm by admin
The Department of Trade and Industry has made plans to allow customers the opportunity to cancel a purchase within seven days. The plan will also require firms to be more ethical and truthful about the full cost of a purchase and the customer’s ability to cancel unwanted goods. The DTI hopes this measure will make life uncomfortable for doorstep financial sales representatives and debt repair con men.
Fiona Bartosch, spokesman for the DTI, said: ‘We don’t want to hinder reputable firms from practicing, it is the con men that this is aimed at. It is often elderly people that become victims. We have examples where salesmen have preyed upon old peoples’ fears to sell elaborate security systems that they often don’t want or need, or have refused to leave until a contract has been signed.’
If you buy something from a door-to-door retailer under the current law there is a seven day cool off period, unless, the sales person made an appointment. This has driven doorstep loan sales representatives to call first and make an appointment. This removes the ‘cold-call’ tag, and the consumer’s right to cancel the purchase within seven days.
Gordon Lishman, director general of the charity Age Concern, said: ‘We have long-campaigned for a cooling-off period to be introduced for all sales completed in the home. We often hear very distressing stories about older people being bullied into buying expensive products in their own home that they do not need or cannot afford. This new legislation should stamp out bully-boy doorstep selling and give older people greater protection.’
The DTI hopes the plan will receive enough support to make it a criminal offence for sale’s representatives to use underhand sales techniques.
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Tue 26th Sep, 2006
Posted in Bad Credit, Consumer Credit, Homeowner Loans, UK Finance at 1:22 pm by admin
Buy-to-let lenders issued 130,400 loans in the second half of last year. This is a 39% increase over the first six months. The Council of Mortgage Lenders released this information. Overall the figures show that both loans and remortgaging made a significant contribution to the growth of new buy-to-let lending in the second half of last year. This may have been the result of a softening in the lending criteria.
Many consumers are looking to the Buy-To-Let Market to offer a residual income, pay of their debts, and hopefully, afford them a financially secure future. This is not always the case. Even if the home remains occupied, increases in taxes, fluctuations in interest, and an increase in utility bills can make the buy-to-let mortgage a risky venture. This is why many lending companies avoid awarding buy-to-let mortgages. R residential property must earn a minimum of 25% rental profit before the buy-to-let lender will consider the risk.
The CML’s Director General Michael Coogan said:
“There was a notable pick-up in the buy-to-let sector in the second half of last year, so that lending in 2005 modestly exceeded the year before.”
“Despite slowing house prices last year, residential property remains a popular investment, and this is set to continue in 2006.”
There are rumors that the decrease in the overall mortgage market, a total of 18%, may explanation why lenders anticipate in an increase in the demand for rental property. This could explain why they are opening up their restrictions on buy-to-let mortgages and loans. Consumers are taking out buy-to-let mortgages and loans anticipating that the increase in rentals will lead to an increase in rental prices, offering them more profit on their investment.
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Fri 22nd Sep, 2006
Posted in Consumer Credit, UK Finance, Credit Card at 8:05 pm by admin
Moneynet reports that Brits seem to be falling out of love with their credit cards, with borrowing growth on the decline. For the fourth consecutive month, credit card holders paid off more than they borrowed, with repayments totalling £399 million in August. There was a fall of £77 million in July and over the last six months the average monthly fall has been £143 million. Recent figures from the British Bankers Association shows that loans and overdrafts are also down.
Moneyfacts suggest that rising utility bills and mortgage rates are making homeowners tighten their belts. Weaker consumer confidence has also had an effect on these figures. Moneyfacts researcher Samantha Owens commented: ‘Rising interest rates have impacted on mortgage costs, while energy bills have also been rising. This has forced people to review their finances and cut back on the luxuries that they maybe would have put on their credit card.’
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Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance at 7:46 pm by admin
The Competition Commission’s proposal promises to introduce more competition into the doorstep lending market. These lenders target the poor, high-credit-risk consumer, offering them temporary financial relief by lending them small, one year loan. This segment of the population is not financially educated enough to realize the exorbitant interest rates charged by doorstep lending companies will result in a greater hardship in the future.
Philip Cullum, deputy chief executive of the National Consumer Council (NCC), said: ‘Overall this package of measures should bring more choice and cheaper loans to the poorest households who are excluded from the mainstream credit market. More competition in the home credit market is long overdue.
‘NCC especially welcomes the proposals to oblige home credit lenders to share information on their customers’ payment records – making it easier to switch provider - and for fairer early settlement rebates for customers.’
This is a welcome relief to a market that has not been restructured for 30 years before the 2004 Credit Bill. The doorstep lenders prey on the UK’s two million poorest. Many of these people borrow money to pay utility bills, or pay off other debts. The loan not only increases their debt load, but it increase the interest paid on those loans.
If the proposal is passed as it stands, then many consumers who are locked into loans will be able to shop around for a lower interest rate, or even a early settlement plan with a lower pay-out fee.
This is a good move in the light of the doorstep company’s new venture into the internet and television market. These venues remove the stigma of the ‘door-to-door’ salesman, and makes it easier for the doorstep lending companies to pose as reputable financial institutions.
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Thu 21st Sep, 2006
Posted in Consumer Credit, Homeowner Loans, UK Finance at 5:07 pm by admin
A booming market in August means first time buyers are continuing to be squeezed by high property prices, says Moneyextra. The price of properties sought by first time buyers is rising faster than the average house price rise. First time buyers on Moneyextra looked for homes with an average value of £174,782. This is an increase of 11.6 per cent over last year and 36.4 per cent over August 2004.
In contrast the average property price searched by all buyers was £213,111. This was up just 2.08 per cent over the previous year and 6.65 per cent over July 2004. The average agreed mortgage was down 3.85 per cent over last year at £147,453.41.
The Nationwide retained its position as the most popular mortgage lender, with Woolwich and First Active in second and third places for August. For the period January to August 2006, Nationwide is still in the top spot, with Alliance and Leicester and the Halifax in second and third places respectively.
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