Mortgage Lending at 8 Year Low

March 5th, 2010

For those that thought that ending stamp duty relief at the start of the year would curtail growth in the housing market, you were right. There was a substantial dip in mortgage lending during January. In fact, with only £8.02billion worth of lending, it was at its lowest since March 2001. Although this still sounds like a lot of lending, it is put into perspective when you consider that the average monthly amount lent during 2007 was over £18billion.

The British Bankers’ Association has released these figures, suggesting that the UK economy will endure a slower recovery than was initially forecast. Without putting too fine a point on it, the Bank of England’s Monetary Policy Committee has warned that the UK’s housing market looks set to be “weak” during 2010. This is a depressing thought for those that had been encouraged by the false dawn in the housing market towards the end of 2009. This was caused by the short supply of homes on the market, which forced prospective buyers into bidding over the odds for houses.

Anyone without a perfect credit score and a large deposit will find it incredibly difficult to get a mortgage as banks and building societies are still deeply insecure about the state of the UK economy and the extent of the recovery. This is also having a severe effect on the remortgaging market. Homeowners looking to take out a new mortgage loan in order to take advantage of the reduced rates will find that this end of the market has all but disappeared. The concept is sound; those on a tracker mortgage swap to a fixed when the rates have nowhere to go but up.

This can free up more money each month to meet other expenditures and debt repayments.
In terms of debt, a consolidation loan can be a potential debt solution on the market for some people. The best rates of interest are reserved for those that secure their debt consolidation loan against an asset, usually their home. However, taking out another mortgage to cover the consolidation loan could be difficult as the least amount of remortgage loans in the UK for ten years were granted in January, only 20,252.

With this in mind, the secured debt consolidation loan may not be as achievable a debt solution as it once was. If you are struggling with your unsecured debts, it is definitely worth looking at the other debt solutions options. There are many ways that you can reduce your monthly outgoings to your unsecured debt without securing it against your home. Falling behind on your debt consolidation loan means that your home could be repossessed.

As everyone faces different money troubles and different levels of personal debt, the solution to each individual’s debt problem must be suited to their circumstances. Getting professional, dedicated debt advice is the best way to be sure you’re getting the right deal on the right debt solution. Harrington Brooks are one of the longest standing and most respected debt solutions companies in the UK. Visit www.harringtonbrooks.co.uk and take the fast, free debt test to see what debt solution is right for you.

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Credit Card Holders Punished

March 3rd, 2010

Since the start of 2010, average credit card rates have hit a 12-year high. Strange, you might be thinking, since we’ve been enjoying the bank’s emergency rate of interest being set at 0.5%. Well, that just highlights that it isn’t all rates that have been on the increase. Essential, lenders have been targeting specific groups of borrowers and raising their rates without warning. This helps to keep the increase under the radar. High risk customers, those with poor credit ratings, tend to feel the brunt of this activity as the increases are introduced as an added punishment for going over their arranged credit limit and missing or making late payments. Of course, they are already penalised and charged for these things but that doesn’t stop them being punished again.

The Office of Fair Trading has put a limit of £12 on this type of penalty, limiting the lender’s ability to recoup the full sum from the missed payments. This loss of revenue was obviously not an option for the credit card companies, who simply looked elsewhere for the money. Pushing up the interest rates for lenders who feel that they aren’t in a strong enough position to argue may not seem a particularly fair way to do this but it’s the situation we find ourselves in.

It’s not just those who are considered to be potentially risky borrowers or those with a poor credit score who are currently having higher rates applied to their credit card accounts. Even those with a first rate, unblemished credit report are being hit with the big fees.

Right, so those with a great credit score are penalised and those with a poor credit score are being penalised. So, who’s not being penalised? Those safely ensconced in the middle? Even if you miss the odd payment, nothing severe but nothing too risky, you’re still fair game for the rate hike. Each case must therefore be looked at and judged on its own merits. With that in mind, should you find your rate has been increased, phone your lender and make tell them you’re leaving unless they readjust your rate, but always make sure this can actually be a possibility first. Get debt advice from an impartial financial advisor too. They’ll be able to assist you in solving a host of debt related problems.

Ultimately, there is no better way to avoid the rising interest rates on credit cards than to not have one. Freeing yourself from the stressful burden of bad debt is a priority for a lot of people but as everyone faces different financial difficulties, the debt solution that best suits their circumstances will differ too. For a free advice about how to deal with your credit debt, drop by www.harringtonbrooks.co.uk who can help find you the debt solution to your circumstances.

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Are you the 1 in 10 that’s Permanently Overdrawn?

March 1st, 2010

Unsecured personal debt can creep up on you. Outstanding credit card balances, a little on a couple of store cards, the odd unsecured loan and even your overdraft facility on your current account; it’s amazing how much debt we can simply take for granted, as a constant feature of our lives. You may feel that this debt is manageable, that you have greater financial problems than those that tick along relatively unobtrusively in the background, but it’s frightening how quickly these background debts can become serious concerns.

Recent studies have found that 1 in every 10 people in the UK is permanently overdrawn, with another 12% using their overdraft facility at least 5 times in the year and almost half of the population using it at least once. As bleak as this sounds though, it’s actually an improvement on the same time last year, when it was almost 2 in every 10 that were permanently in the red and over half depended on their overdraft at least once in the year.

At least we’re moving in the right direction. As personal finance has been such a hot topic for so long now, it’s perhaps only natural that individuals in the UK have taken advantage of the emergency rate of interest to pay off as much of their outstanding debt as they can. It’s great that fewer people rely on their overdrafts but the number of people who are permanently in their overdraft is still too high. Were they to find themselves faced with an unforeseen expenditure or emergency outgoing, this safety net may have already been used up. Also, should their circumstances change and they were to lose their source of income and means of paying off this debt, it can become a serious debt problem.

As inflation is rising, individuals will find it increasingly difficult to get themselves out of their overdrafts if they are used to living off them. Likewise, we could well see more and more people being drawn into this way of life, depending more and more on their overdraft to pay for ordinary expenditures, rather than saving it for emergencies. So, not only are we set to be hit with a sustained cost of living increase, research suggests that banks will also increase rates of interest on their customers overdraft facility.

For impartial advice on clearing your unsecured debt, from a dedicated debt advisor, visit www.harringtonbrooks.co.uk . Harrington Brooks are one of the longest established and most respected financial solutions institutions in the UK. Their professional advisors are on hand to offer debt help to those facing financial problems.

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Should the Retirement Age be 70?

February 24th, 2010

The UK government has outlined plans for an increase in the age at which people are entitled to a state pension. At present, the retirement age for men is 65 and for women it’s 60 but women will soon find that theirs goes up to 65 too. The current government plans have the state pension age increased to 68 for everyone by 2046.

Britain’s ongoing battle with bad debt is being fought on two fronts and increasing the age at which we become entitled to a state pension could counter both. Firstly, with an aging population, the government’s spending on pensions looks like it will just keep growing. In fact, 4.4% of Britain’s GDP will be spent on state pensions in 2012, growing to 6.2% by 2032. If the plans for increasing retirement age go ahead, this would be reduced to 5.8%. In addition to this, debt on a personal level could potentially be eased by allowing people to work on longer in order to settle things like their mortgages.

However, Age Concern has warned of the potential costs of the proposed increase in retirement age. On a more personal level, people who have already calculated the impact that their state pension will have on their future finances could be caught out and find themselves facing the stress of debt problems instead of the relaxation of retirement. Of course, if you are currently facing the prospect of enforced retirement but want to keep on working to clear off your debt, the report will offer little solace.

A recent study has also suggested that increasing the state pension age to 70 within the same time would cut about £9billion a year off the UK’s deficit. The government would again benefit from a substantial reduction in state spending on pensions and more taxes as people would be working longer. It’s been suggested that the strength of the economy in the post-war years, as the baby boomer generation moved through the workforce, is set to be counterbalanced with longer periods of retirement. Essentially, either taxes will have to be increased to deal with the increased cost of longer state pensions, health and long-term care, or people will have to work longer to pay off their own debt and that of the country as a whole.

It’s not certain what will happen in the future. It does pay to plan for every eventuality though. You may find yourself working longer and using these earnings to pay off your mortgage and settle your debts before you retire. However, your circumstances can change at any time so it’s never too early to start paying off debts. Talk to a specialist debt advisor at Harrington Brooks, one of the longest established financial institutions in the UK, for impartial advice on the best debt solution to your personal debt problem. Visit www.harringtonbrooks.co.uk and take the fast, free debt test.

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The top 10 tips to fight off fraudsters

February 17th, 2010

There are a lot of means by which criminals can help themselves to the hard earned cash in your bank account. Too often, the first we know about this kind of fraud or identity theft is when it affects our credit rating and impacts on our own ability to secure credit, or we get stuck with a massive bill. Either way, it’s something we all have to be mindful of. Below is a list of the top ten techniques for fighting the fraudsters so you’re better equipped to keep yourself and your savings safe.

1. Keep a grip on your bank account.
Account takeover is where fraudsters impersonate you by gathering your personal information and then contacting your bank. This is essentially identity theft and while posing as you, they can transfer funds out of the account or change the address on your account and request replacement cards to be sent to the new address. So, shred any sensitive material and make a note of when your statements are due. If they’re delayed, it could mean they have been intercepted.

2. Be safe with pin numbers and passwords.
Don’t write down your Pin as you run the risk of fraud and if the worst were to happen, your bank could refuse to refund you as they believe you were negligent with your details. Never share your Pin with anyone and try to use different passwords for all your accounts.

3. Bring down your credit limits.
This is essentially an act of damage limitation. Reducing your limits can cap any potential losses if your cards are stolen. Keep an eye on lenders increasing your limit without your consent too. New laws will give you the power to opt out of these unwanted credit increases.

4. Cancel any cards you don’t use.
With 66 million credit cards in the UK and only 49 million adults, it stands to reason that people have more than one. Check what cards you don’t use anymore and cancel them. The fewer cards you have, the less likely you’ll be a victim of fraud.

5. Don’t get caught out by phishing.
“Phishing” is when an email is sent to you by fraudsters, claiming to be your bank. Chances are, it’ll have your bank’s logo and give a return email that looks genuine. Normally, you’ll be warned about a breach of your account and to log in. Then you’ll be sent to a fake site that collects your details for the fraudsters. Your bank will not email you if your account has been breached, they’ll most likely phone or write to you. Always ensure you go to your bank’s website directly and don’t follow these links if you are suspivious

6. Stay close to your bank.
Not physically, but give them your mobile number so they can contact you swiftly, if anything does happen. If you’re going to do a lot of shopping, it makes sense to inform your bank. Tell them before making a big purchase you’re going overseas. Make sure you have your bank’s phone number on you too, just in case.

7. Consider a pre-paid card.
You can just top up the card and use it like a credit or debit card, it has Chip and Pin so can be used securely in shops and you can use it to draw money from cash machines. It isn’t linked to a current account or credit card though, so you can’t over extend it. You’ll normally pay a fee to take out a prepaid card though.

8. Keep an eye on your statements.
Get into the habit of going through your bank and card statements, rather than just tossing them aside. Your statement tells you exactly when and where the card has been used, so if it wasn’t you or there are any suspicious transactions, let the bank or card company know straight away.

9. Guard against viruses.
Many banks offer free security software to protect your computer from attack. A virus will normally wait until you log in to your online banking and insert a dummy page. If you enter your personal data it will be sent via the virus to the fraudsters.

10. Keep a grip on your card.
Criminals can get hold of your card details by skimming the card through a special machine that stores the data. They then transfer the info to a fake card and use it in countries that don’t have Chip and Pin readers. Chip and Pin readers are hand-held so you can see what’s happening. They shouldn’t need to take your card anywhere.

Harrington Brooks are here to help you with a host of financial queries. If you’re worried about fraud, debt or other financial issues, stop by www.harringtonbrooks.co.uk and get in touch with one of our dedicated debt advisors.

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