Aug/090
More Evidence of Housing Recovery
The British Bankers’ Association have today announced that high street banks are steadily approving mortgage applications on an upward curve. For the seventh month in a row approved mortgages increased after July’s figures of 38,181 were revealed - an increase of almost 7.5% on the previous month.
Following the current trend, economists are predicting that the rate of growth will increase way into the Autumn months and possibly beyond. Despite this, the BBA point out that figures were way below the seasonal predictions and this was even more of a concern given the increased demand for mortgages.
As the credit crunch worsened during the early months of 2008, one figure stood out as a key indicator. This figure was the number of approved mortgages in July 2008. Since that time, the figure has increased by 77% percent in 12 months.
The average amount borrowed was £139,700 in July but the concerns surrounding this were eased when the group’s statistics director David Dooks commented that banks were being “more realistic” over how they lend and who they lend to.
He said the ability of potential buyers to pay a deposit and long-term sustainability were key issues when banks decided whether to offer a mortgage. Property prices would also “stall” for some time.
Aug/091
Problems Getting Credit? Remove a Default from your Credit Report
There are 3 ways in which you can repair your credit rating to achieve the ultimate result of getting that car or mortgage that you really need. These options are as follows:
1. If your default/delinquent balance is over £300 you should write to the bank in question to claim that you did not receive a notice letter of the bank’s intention to serve you with a default. It helps if you have actually got the letters of correspondence to refer to in your argument but don’t worry if you do not.
2. If your default/delinquent balance is under £300 you should take a softly softly approach and politely ask the bank or financial organisation to remove the default from your report. Use the angle that you feel it is extremely harsh and that you are struggling to provide a good life for yourself and family because you cannot get a mortgage or loan to pay for necessities.
3. Finally, if you have exhausted all possibilities and have written and replied to all letters sent to you, the only choice left is for you to start a programme of repair for your report. This isn’t 100% effectively but it does leave plenty of consumers happy. This basically involves starting up credit agreements where possible (if needed anyway of course) and settling existing agreements in the proper way (avoid early termination arrangements).
Default balance over £300
This is a fairly significant amount of money and if you put yourself in the bank’s shoes for a second you will realise that – unless a genuine mistake was made – this boils down to theft. This is basically why banks take a tough stance over this and throw defaults around like grains of sand. However, if the banks do not take the proper course of action in serving you with a default then they are robbing YOU in the sense that you are unable to purchase a house for example. That is why their practice needs to be scrutinised in the same way as your credit report is search.
Ask the bank if they can prove that a letter warning of a default was sent to the registered address before the default arrived on your credit report. After 2006 the banks tightened things up quite substantially but before this time their operations were quite unprofessional and filled with ambiguity. The bank should then respond to your letter with a reply – probably a standard template reply – but never the less you have you starting point.
From this point you can keep replying until they send you proof that a notice was served and also that the agreement that you entered into is enforceable. At that point you can give up and take the emergency repair steps for improving your credit report.
Default balance under £300
Most success stories in writing off defaults are usually found in cases where the amount is much smaller. This is because the agreements tend to be of a more trivial nature such as mobile hone contracts etc. Having a mobile phone and forgetting to cancel the contract after the 12month period (which you made payments for without problems) should not prevent you from buying a family home. Okay, so this is an extreme example but one which we have heard on more than one occasion.
Be nice, be polite, get to the point, don’t waffle, address it to the bottom of the company pyramid and work your way up until you get a reply from the very top. Hopefully by this point you will have received a positive response but if not following the following last resort to repair your credit rating.
Repair your Credit Rating
Your credit rating is key to a progressive life. Without a good credit rating you will get nowhere unless you are already there – if that makes any sense! You need to make sure it is as immaculate as it can be and no matter what the state of the economy (eg. If there is a credit crunch of any description) you can assure the financial establishments that their money is safe with you.
Step 1
Open an account similar to the Natwest Step account which offers you the opportunity to open a basic account and as you prove your worthiness of managing your account they will offer you debit card, then an overdraft, then an overdraft extension, etc. etc. such progression looks very good on your credit profile.
Step 2
Be smart, realise that a credit card is being used here for a very specific purpose and is not meant for borrowing money over many months or even years. Do not use it as an alternative to a loan.
Step 3
Do not buy a load of new gadgets. Instead buy 1 or 2 and get credit for them choosing to pay the balance over as long a period of time as possible. The more small agreements you have over long periods the better.
Aug/091
Sports Direct Announce Huge Dip in Profits
Sports retail giants Sports Direct have today announced their 12 month financials and they made bleak reading. Sports Direct, who own popular brands such as Slazenger, Lonsdale and Dunlop along with high street division Sports World, saw their profits drop by 91% from the previous 12 month period.
Unlike many of the larger high street and retail park based stores, Sports Direct have not been able to blame the credit crunch for their poor performance as their sales figures had increased. However, their particularly bad performance in investments along with the weak pound culminated in this surprising result.
The exact profit for the last 12 months totals £10.7m whereas the previous 12 months saw a £118.9m profit.
The Sports Direct group are headed by Newcastle United outcast/owner Mike Ashley and a statement on behalf of the company read: “The second half of the year remained challenging, but we are pleased with these solid full year results that reflect the resilience and relevance of our flexible business model, focused on the core principles of retailing,” said chief executive Dave Forsey.
Aug/090
Extra £50bn pumped into UK economy
The quantitative easing programme launched by the Bank of England last year was aimed at stabilising the economy and, while the country seems to be over the worst of it, the sheer size of the problems means the Bank of England have deemed it neccessary to pump an extra £50bn into the economy.
The original £175bn was has still not been phased into the economy fully and estimates suggest that £25bn is still left out of it. However, a statement read “the recession appears to be much deeper than previously thought”.
On top of this the interest rate setters also kept rates at their all time low of 0.5% for the fifth month in a row.
Aug/092
UK State Pension Questions and Answers
What is the basic state pension?
The basic state pension is paid to women at 60 and men at 65, who fulfil National Insurance (NI) contribution requirements.
From 6 April 2020, the state pension age for both men and women will be 65.
The government will introduce the change gradually from age 60 to 65 for women over a 10-year period from 2010 to 2020
How much is it worth?
The full weekly rates are (year to April 2009):
Single person: £90.70
Couple: £145.05
Will I get the full basic state pension?
Not necessarily.
What you get will depend on your National Insurance (NI) contributions - and the rules are stringent.
Your pension depends on how long you have worked for and the number of “qualifying years” you have.
A woman with a working life of 44 years will need 39 qualifying years for a full pension and a man with a working life of 49 years will need 44 qualifying years.
The government plans to reduce the number of qualifying years it takes to earn a full basic state pension to 30 as part of its overhaul of the UK pensions system.
However, the contribution record of people who have been unable to work due to unemployment, sickness or caring responsibilities, may be protected by credits or “home responsibilities protection”.
What happens if I have not made enough contributions?
If you have not paid sufficient contributions you may get a partial pension or you may not receive a pension at all.
If you are not entitled to a full Basic Pension you may receive a reduced amount.
But if you retire with less than 25% of the qualifying years for a full pension, you won’t get anything at all.
People aged 80 and over receive a non-contributory pension, at 60% of the basic state pension as long as they fulfil other requirements, such as residency rules.
What about the earnings link?
A link between state pensions and earnings was introduced by Barbara Castle in 1974.
This ensured that state pensions kept up with the rate at which salaries were rising.
However, it was scrapped six years later by Margaret Thatcher, and more pensioners must now rely on private savings to make up the difference.
Restoring the link with earnings would cost an estimated £0.5bn in the first year, rising to £10bn by 2010, according to government figures.
Isn’t the state pension age changing for women?
Legislation to equalise the pension age at 65 for both men and women has been passed.
The change will be phased in between 2010 and 2020 and will not affect anyone born before 6 April 1950.
If you are a woman and born between 6 April 1950 and 5 April 1955, your state pension age will fall somewhere between 60 and 65.
The government’s www.pensionguide.gov.uk has details on the age and date when you will be able to receive the state pension.
Longer term further rises are planned for both men and women, eventually taking the pension age to 68 by 2044.
Source of article: BBC News
Aug/090
Halifax: UK house prices on the increase
According to one of the UK’s largest mortgage lenders, house prices are now rising at a constant rate adding weight to the arguement that the housing market is undergoing a recovery. Halifax, conducted a survey of all their properties and results showed a 1.1% increase in July alone meaning the average price of a house has increased to £159,623.
Increases in average house prices have been hard to come by since October 2007 when the last quarterly increase took place. However, in the 3 months prior to July house price had already increased by 0.8% on the previous quarter.
It is one thing being told this by estate agents and mortgage lenders, but when large private housebuilders make similar claims we should take notice. Taylor Wimpey said it was seeing signs of a turnaround, with its sales rising in the first six months of the year. A company statement read: “there are signs that the situation is beginning to improve.”
Aug/090
Lloyds blames huge 6 month loss on HBOS
After announcing that they had made a £4 billion loss in the first 6 months of 2009, Lloyds were quick to shift the focus of blame from themselves to HBOS whom they took over back in January. The loss was always inevitable given the scale of the takeover and Lloyds are hiding behind the fact that they are currently dealing with not only their own financial problems but HBOS’ cripling debts as well.
The bank is currently publicly owned to the tune of 43% after they went cap in hand to the Government to cover cripling debts with a £13.4bn loan. This was to cover ‘toxic loans’, 80% of which belonged to HBOS. Despite this depressing news, Lloyds are optimistic about the future suggesting that financial results will begin to improve in the near future.
The one thing to be taken from this is that HBOS were wildly irresponsible in their risk taking and were probably the most guilty of all UK’s major banks. It also serves as a reminder that we should think twice before going back to a culture of short-selling, bonuses, and self-gain risk taking.
Aug/090
HSBC and Barclays Announce Profits
It was announced today that, as expected, 2 of the big 5 UK banks have released their profit figures for the first half of 2009. The total profits for HSBC and Barclays have hit the £6m mark sparking fears of short selling and bonus culture dripping back into the banking system.
The profits are potentially a good sign for the economy as long as the temptation to jump straight back into big bonuses is resisted in the long term and, of course, both Barclays and HSBC refused help from the Government when the financial crisis was at its worst so far so they have every right to if they wish.
Barclays and HSBC both said they were pleased with their results, although they did point out that debts on a substantial scale still exist.
Jul/090
Direct Mortgages - The best on the UK market
Mortgage brokers have been dealt a major as The Times Online report that 2 thirds of the mortgages on the market are available through the lender only and the previously commonplace practice of your mortgage broker contacting the lender on your behalf to negotiate a deal could soon be dead in the water. As if this news wasn’t bad enough, many of the deals are actually at a marginally better rate - especially if the consumer visits their branch to arrange it.
The statistics behind this story reflect a gloomy forecast for mortgage brokers. Last year over 70% of mortgages were only available through a broker but clearly the credit crunch has had a huge impact on the banking system and ideas and recommendations that would otherwise have taken years to come to fruition have now become the way of life.
Another reason why banks are doing this is to get a grip on the flow of mortgages being dealt out. They also believe that they can get a better feel over whether handing a mortgage to a consumer is a good idea.
Statistics from Moneyfacts.co.uk
Story from: The Times Online
Jul/090
Save the Children: Child Poverty on the Increase
As you would expect, over a half of children living in poverty in the UK live in either single-parent households or homes were neither parent is employed.
Save the Children (a well respected organisation protecting UK kids) carried out research which shows that almost 200,000 more under 16’s across the nation live in poverty compared to this time last year.
According to the organistation, a rise in children residing in ‘unemployed homes’ has taken place in recent years on an unprecedented scale. This has no doubt been compounded by the fact that we are in the middle of a deep recession but nevertheless the figures look particularly bleak especially when compared to an earlier similar period.
Out of all the UK countries, Wales is experiencing the worst problems. Bridgend, Flintshire, Swansea, Carmarthenshire and Pembrokeshire are the areas pinpointed by Save the Children as the main culprates.
The choices between food, heating and transport costs that these families need to make is a tough one which is putting pressure on their lifestyles to change.
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