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Archive for Housing news

Government housing measures encourage irresponsibility

Thursday, September 4th, 2008

Yesterday the government announced what were intended to be some sweeping measures designed to rescue both the housing market from its freefall.

The measures included helping out beleaguered homeowners who had fell behind on loan repayments; offering equity loans to buyers and giving a stamp duty holiday under a new threshold.

So far most commentators on the new schemes have been singularly unimpressed, particularly financial advice site, Moneysupermarket.com.

“The Government plans are certainly high on rhetoric, but lacking in fundamental help,” claimed Louise Cuming, head of mortgages at moneysupermarket.com.

Cuming states that some factors of the scheme are not just unworkable, they also encourage financial irresponsibility by bailing out homeowners who have dragged themselves into debt.

The view that the ‘British Debt Mountain’ is the fault of irresponsible lenders is a popular one in some quarters. Many have claimed that the vast amount of personal loan and credit card debt is due to lenders pushing ‘easy credit’ at borrowers who had little chance of repaying.

Cuming also points out that the plan for offering buyers 30% equity loans is also unrealistic: “this is simply a rehash of the tired old share equity story,” she says.

“This will inevitably only help a fortunate minority as it is co-funded by government and developers, and thus only available on an insignificant number of properties.”

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Credit Card, Debt management, Financial news, Homeowner Loans, Homeowners, Housing news, Missed payments, mortgages, Personal debt, Personal loans, Property, Secured loans, UK Finance, Unsecured loans | No Comments »

Savings not loans the reality for home improvements

Friday, August 29th, 2008

Reports of a new study done by the Halifax building society puts paid to the idea that Britain is a nation of spend-now, think-tomorrow shoppers, forever borrowing to fund their lifestyle.

The annual Halifax Home Improvement Survey is part of a series of studies undertaken by the Halifax over the last 17 years. This year’s results show that only 5% of people looking to improve their home are taking out a loan to do it.

This may come as a surprise to lenders and brokers, as Home Improvements is the top reason given for taking out a loan. So are many applicants lying?

People are not obliged to use their borrowings for the purpose stated when taking out a personal loan (unless it is for specific finance, like a house or car), so it’s possible that applicants feel that they will be more likely to get the cash if they sound responsible.

The figures show that more people in the 18-34 age group were likely to take out a loan (12%) than the national average, and regional differences come into play too. Despite being the biggest savers, people in Northern Ireland were more likely to take out a loan than those living in London, who saved the least.

As many as 43% of homeowners questioned believed that their improvements would add at least £5000 to the value of their home, and a further 12% believed that the value added would be from £10,000 to £25,000. Homeowners clearly feel that they are using their savings wisely, a picture contrary to the one painted by much of today’s media.
Tony Wilcox at the Halifax commented: “This research contradicts the buy now pay later culture which is so often thought to be prevalent in the UK. The fact that the vast majority of people have saved in advance of spending is extremely encouraging. Using savings for such improvements means savers are really seeing the benefits of putting money aside.”

However, whether these figures paint an acurate picture of Britain today or just an acurate picture of those using the Halifax is another thing. There is no doubt amongst the lenders and loan brokers of Britain that the home improvement loan is as popular as ever.

Posted in Borrowing, Car finance, Consumer Credit, Financial news, Financial products, Home Improvements, Homeowner Loans, Homeowners, Housing news, Personal loans, Property, Savings, Secured loans, Spending, UK Finance, Unsecured loans | No Comments »

Bad Credit Home Loan Woes

Thursday, August 28th, 2008

An increasing number of households owned on bad credit mortgages are facing repossession as they make late loan repayments.

According to figures out from Standard & Poor, nearly a quarter of all bad credit home loans are now in arrears – many by as much as 90 days. This is up from 22% in the last quarter surveyed and now officially at a record level.

Comparison website Moneysupermarket have commented that this situation is of course attributable to the credit crunch, as nearly all homeowners have been faced with increased interest rates. For families who were already on a higher than average rate, a price rise can make it impossible for repayments to be met.

Additionally, the tighter lender criteria now in place across the loans market has made it nearly impossible for families to find cheap loans when a fixed rate deal comes to an end.

With fewer loan products on the market and many lenders pulling out of the sub-prime loans market, borrowers are having real difficulty in finding a bad credit loan at a price they can afford.

With reports on an increasing number of repossessions taking place and uncertainty in the jobs market, UK debt charties are bracing themselves for floods of enquiries. As colder weather sets in and fuel requirements rise, more families are likely to be plunged into the cyle of bad debt.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Debt Consolidation, Debt management, Financial news, Financial products, Homeowner Loans, Homeowners, House repossession, Housing news, Missed payments, mortgages, Personal loans, Property, Remortgaging, Secured loans, UK Finance, Unsecured loans | 1 Comment »

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