The steaming
Tom McClelland, RICS Northern Ireland spokesperson, explained that this trend could benefit many first time home buyers, as there is “less competition for properties in the sector of the market within the first time buyer’s price range.”
According to a new survey by The Motley Fool, a much needed correction in the property market should be seen in 2008. The report estimates that the prevalence of sellers will outweigh buyers; specifically, for every four buyers there will be five sellers. This situation will create more of a buyers’ market. The Motley Fool’s recent survey shows that of those who plan to purchase a house in the future, 38% plan on doing so in 2008 and 34% plan on doing so in 2009.
David Kuo, personal finance head at The Motley Fool, states that this situation “will allow many people who have been waiting to move house to finally realise their dream.” However, he explains that, “quite often, people will ask how much they can borrow when they want to buy a property. But that is altogether the wrong question. Instead, they should ask themselves how much they can afford to repay.” Mr. Kuo’s company attempts to help people change the way they look at finance.
Owning a dog can certainly be expensive; proper food, grooming, and care for when you are out of town all add up. One of the most expensive costs in owning a dog can be the trips to the veterinarian, which can easily tally in the hundreds.
Tesco Pet Insurance has stated that for the 5.2 million dog owners in the
Tesco hopes that the 38% of pet owners who stated that they felt they could not afford veterinary treatment for their pet will consider Tesco’s new discounts in pet insurance. The company is offering a 20% discount for purchasing pet insurance online, and 10% off for purchasing pet insurance over the phone.
Are you peering out from behind the curtain, fearing the arrival of the postman? If so, you are not the only one. A recent USwitch study reported that 25% of 16-44 year olds were sweating the arrival of their January credit card bill. Why the heat under the collar? Half of those USwitch surveyed had no idea how much money they spent over the holidays.
Signs of trouble brewing in the credit and debt arenas are strikingly apparent; USwitch reports that 25% of adults surveyed find their debt unmanageable, and 9.5 million people have reached their spending limit allowed on at least one form of credit.
This report is backed by figures that show British interest repayments increased by £12.7 billion to a record high of £93 billion a year. In addition, USwitch reports that the average annual interest bill per household is up by £517 from last year, now topping £3,744.
The increase in annual interest could be a result of a rise in interest rates on their mortgage payments. This is only one aspect of the problems Britons are facing. At the same time, credit card companies are becoming much stricter in their lending practices; a reported 38% of people who applied for a credit card were rejected.
Commenting upon the staggering results of the company’s study, Mike Naylor of USwitch warned that those with large debts need to be proactive in protecting themselves. He believes that although the recent reduction in interest rates is beneficial and a step in the right direction, it may be too little, too late for many people.
If the advertisements offering 0% interest on a new credit card have lured you into considering switching credit companies, you aren’t the only one. According to an Abbey study of over 1,000 adults, what would equate to three million British consumers plan to switch credit card company in 2008.
The study looked at genders and locations and found that eight percent of men and seven percent of women said they would transfer companies. Men averaged a balance of £3,395, whereas women averaged £1,820 in credit debt.
As for locales, the credit debt to be transferred in the Midlands averaged £3,021; for the south-east of
In response to their study, Roger Lovering, managing director for Abbey Credit Cards reflected a positive note, that, “it’s great to see that many people are already turning their attention to getting their finances in order. January credit card bills can often catch people by surprise, so we would encourage people to keep a check on their finances over the festive season and plan ahead to ensure they aren’t paying over the odds for their plastic.”
Contrary to what many industry commentators expected, the Bank of England decided not to cut the base interest rate for the month. Ray Boulger, of John Charchol, suggested that may result in increased payments for mortgage holders; he approximates consumers may pay £105 more in interest than they would if the Bank of England had cut the interest rate by .25%.
Mr. Boulger expressed his own surprise at the decision to hold the rate, stating that ‘other negative economic statistics’ led him to expect a cut. One troublesome spot Mr. Boulger highlighted is inflation, pointing to NPower’s 17% price increase. However, Mr. Boulger softens this by pointing out that the consumer price index inflation is only slightly higher than the central 2% target.
In addition to expressing his surprise at the decision not to cut the interest rate, Mr. Boulger explains that if the Monetary Policy Committee goes for too long without cutting the rate, the next rate may have to be greater than had they cut it earlier.
KPMG estimates that 130,000 people will declare bankruptcy as a result of overspending during the holidays, increasing mortgage payments, and unmanageable credit card bills. This figure is 20,000 higher than 2007, which saw approximately 110,000 people declare bankruptcy.
The increase in those declaring bankruptcy reflects the decreasing ability to transfer loans from one institution to another; previously, borrowing money and receiving extra credit, even for those who already had credit issues, was relatively easy compared to now. Mark Sands, of KPMG explained that people could turn to consolidated loans, second mortgages, and credit cards for assistance. Now, he explains, these options will not be there for many people, as credit institutions tighten their lending practices. In addition to the credit crisis, people are suffering from increasing mortgage rates, as many fixed-rate mortgages are expiring.
What will happen to these 130,000 people in 2008? They will be forced to either declare bankruptcy or take out an Individual Voluntary Arrangements (IVA’s), through which they repay a portion of their debts and are then allowed to start again with a clean slate.