The Richest Streets In Britain Revealed

Monday, November 17th, 2008

Britons who are on the hunt for a cheap property in the current adverse financial climate may do well to avoid Kensington and Chelsea, it has been revealed.

New figures from Halifax note that while the famous London borough has long been considered a haven for the rich and famous, half of all the top 50 most expensive streets in Britain are located there. And while there are plenty of high-value postcodes found in the area, residents in the Vale may take a certain satisfaction in knowing that they live on the most expensive road in the country. According to the financial services provider, the typical house price on this street totals 4.68 million pounds, more than 200,000 pounds dearer than its nearest rival, which is Ingram Avenue in Barnet.

For those people who are setting their sights a little lower as they look to put their foot on the first rung of the property ladder, taking out a cheap loan may prove an effective way to boost deposits and make their offer more appealing to lenders during this difficult period.

And for homeowners looking for cheap property in the capital, they may find plenty of houses that are out of their price range after Halifax figures showed that 39 of the 50 most expensive roads were located in London. Meanwhile, house hunters may also like to avoid the south-east and Poole in the south-west, as these areas filled out the remaining 11 positions in the top 50 most expensive postcodes.

Indeed, Panorama Road in Poole was the only street outside of London to make an appearance in the top five, with house prices there totalling a typical 4.16 million pounds, putting it in fifth position, behind two more Kensington and Chelsea postcodes which came in fourth and third.

Commenting on the preponderance of the borough of Kensington and Chelsea addresses in the list, Martin Ellis, chief economist at Halifax, said that the area had always been considered a cool place to live among celebrities, although in recent years house prices may have received a further boost from the financial sector.

“Chelsea and Kensington have some of the most expensive streets in England and Wales. The Royal Borough has been a highly fashionable area to live in since the swinging 60s. In recent years, its prime location in central London has attracted affluent celebrities and ultra wealthy foreign businessmen helping to drive up house prices,” he said.

For buyers who have struggled to get ahead in the property market in recent months as access to cheap mortgage lending has dwindled and acceptance criteria has tightened up, taking out a personal loan may prove a lucrative weapon in the battle to secure the keys to their own home. By boosting the size of their initial deposit, consumers could find they are able to encourage banks to extend a competitive mortgage deal for the purchase of a new property. Opting for a loan for this purpose may become increasingly important after the Council of Mortgage Lenders warned that the availability of home purchase loans may constrict further as the country moves towards a recession.

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Bank Makes Historic Cut

Friday, November 7th, 2008

The Bank of England has made the biggest cut to the base rate of interest in its history in an attempt to stimulate economic recovery.

At its monthly meeting yesterday (November 6th), the Banks monetary policy committee (MPC) decided to reduce the base rate by 150 basis points, taking it to three per cent, its lowest ever level since the creation of the group in May 1997. Before yesterday, the lowest base rate witnessed under the MPCs command was 3.5 per cent. Following the decision, homeowners may well see mortgage rates start to drop, in addition to personal loan and credit card rates.

Explaining its decision to make its largest cut ever, the MPC said in a statement that the UK and global economy had experienced the most severe disruption to financial stability witnessed in nearly a century. It claimed that while the recent raft of measures to inject liquidity into the banking system and ease the burden on struggling consumers has gone some way to mitigate the effect of the financial collapse seen in September, it is likely that the resulting adverse economic conditions will remain prevalent for some time to come. It noted that as a result of the banking crisis, many consumers will have found it more difficult to obtain credit and loans as lenders have become decidedly risk averse. So too, the group noted that equity conditions in countries throughout the world have also declined sharply in the last two months.

The Bank went on to note that in the UK, figures indicate that the country is likely to enter a recession, with data showing that the economy contracted during the third quarter of this year. It noted that there have been substantial declines in consumer spending as shoppers have found their finances challenged by high bills as credit and loan availability dwindled. So too, both the residential and commercial property market was found to have declined, while the prospects for new business investment have also worsened considerably.

It continued: "Since the beginning of the year, the committee has set bank rate to balance two risks to the inflation outlook. The downside risk was that a sharp slowdown in the economy, associated with weak real income growth and the tightening in the supply of credit, pulled inflation materially below the target. The upside risk was that above-target inflation persisted for a sustained period because of elevated inflation expectations. In recent weeks, the risks to inflation have shifted decisively to the downside. As a consequence, the committee has revised down its projected outlook for inflation which, at prevailing market interest rates, contains a substantial risk of undershooting the inflation target."

As such, it said that by reducing the base rate by such a degree, the UK should be able to avoid entering a period of negative inflation.

The move follows another historic cut made last month, when it slashed rates by 50 basis points a day ahead of schedule. This was the largest single cut made by the MPC. An announcement from the Bank followed a statement by chancellor Alistair Darling in which he called upon the MPC to consider the needs of Britons struggling during the downturn.

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Watchdog Says Banks Need To Put People First

Tuesday, November 4th, 2008

The government should take the opportunity to ensure that consumers are put at the heart of UK banks business model, Which? has insisted.

An announcement from the group came as it launched a major new campaign to reform the UK financial services industry. Research carried out by the firm has found that for many Britons, there is little faith that the current organisational structure of the banking industry can prevent another downturn from occurring. When questioned, more than four-fifths (81 per cent) of the 1,001 adults questioned by the group said that they thought reform is necessary to avoid the recent financial turmoil from resurging in the future.

Indeed, more than two-thirds (67 per cent) of respondents said that they blame the banks directly for the current economic contraction and the dwindling availability of credit and loans. Meanwhile, 73 per cent of people said that they had personally been exposed to banks and other loan providers offering money in an irresponsible manner.

Following the survey, Which? embarked on a new campaign urging the government to do more to ensure that consumers are protected from unsound lending practices and other similar problems. In a letter to chancellor of the Exchequer Alistair Darling, the group demanded that banks are required to do more to insulate their customers from recent corporate failures. Among the requests made by the watchdog was that all of the UK institutions which have received public funding as part of the recent bailout should be required to pass on cuts to the base rate of interest immediately. Such action could relieve strain on consumers by increasing the availability of cheap mortgages, personal loans and credit cards.

So too, the group also insisted that there should be an internal review into retail banking practices to make sure that the interests of UK customers are integral to the operations of all financial institutions.

Which? chief executive Peter Vicary-Smith commented: “Banks have had their bailout - now its time for them to deal sympathetically and fairly with the plight of ordinary consumers, many of whom are anxious about their savings or struggling with their mortgage. It is the governments duty, as a major shareholder, to ensure this happens. The government cannot afford to pass up this unique opportunity to make long-term, consumer-focused changes to the banking industry and in the short-term were after a fairer deal for consumers. We want to see an independent review leading to an overhaul of an industry that is characterised by weak competition [and] irresponsible behaviour.”

He said that many banks have a poor track record of making sure that customer services and support standards are up to scratch.

The announcement from Which? follows a raft of measures designed to add buoyancy to the banking industry. This was matched by a cut in the base rate of interest enacted by the Bank of Englands monetary policy committee, which slashed rates by 50 basis points last month. Such a move may soon be followed by a fall in mortgage and personal loan interest rates.

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BoE Says Attitudes To Risk Need A Fundamental Rethink

Tuesday, October 28th, 2008

Regulators and banking institutions across the world needs to reassess the way that financial risk is handled, the Bank of England (BoE) has warned.

In its biannual Financial Stability Report, the group claimed that the recent bust in the credit market had been far sharper than analysts had imagined. It explained that while some parties - including the Bank - had foreseen that the large scale extension of loans and credit to high-risk borrowers could cause problems for banks, investors and consumers, no one had predicted that the problem could grow so big.

And while it noted that central banks around the world have rushed to provide liquidity for lenders who have found their balance sheets dwindle in the recent economic crisis, the BoE went on to claim that in the long term, a “fundamental rethink” was needed to ensure that adequate safeguards are put in to place to stop such a situation arising again.

The group explained that while the loans and cash that was granted to UK banks would help to stabilise the countrys financial system in the near future, as the globe enters an economic downturn financial institutions will need to grow more cautious about how they provide loans, credit cards and other services. As such, the Bank warned that the growth in loans provision is likely to remain subdued over the coming years.

In the report, the group went on to iterate the scale of the recent financial crisis, which saw bank equity prices fall more heavily than was the case following September 11th, as well as the rise in interest rates in America seen in March 1994. Only Black Monday - which occurred in November 1987 - and the banking crisis of September 1974 were said to have had a bigger negative impact equity prices.

Following on from the report, the Council of Mortgages Lenders (CML) highlighted concerns that in the wake of the financial crisis, mortgage assets were being severely undervalued, which could further inhibit the provisions of loans for house purchase in the future.

Michael Coogan, CML director general, exclaimed: “We continue to find it frustrating that in the US, poor credit quality caused the funding crisis, whereas here in the UK the funding crisis has been a major cause of the worsening credit picture. Underlying UK mortgage credit quality has never been the primary issue, yet the reduction in funding to support new lending has had a detrimental impact on the credit quality of existing mortgages, through house price falls, a narrowing of options for borrowers and the prospect of rising unemployment.”

For those who are concerned about their financial security amid falling house prices, tightened credit and heightened risks of redundancy, taking out payment protection insurance may be of interest. Indeed, David Kuo, head of personal finance at independent advice service the Motley Fool, warned earlier this year that taking out such protection could become essential for Britons as loans and credit cards become harder to come by and the economy shrinks.

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Consumers Unprepared For Recession

Friday, October 24th, 2008

With figures from the Office for National Statistics showing that the country has slipped into negative economic growth, one independent financial adviser has warned that Britons are not ready for a recession.

According to the Motley Fool, concerns about the onset of a recession have abounded for a number of months, but even with figures showing that the economy shrank last quarter, many consumers have struggled to protect themselves against a sustained economic downturn. Research carried out by the group has shown that many Britons have found it difficult to put money aside in recent months as food, fuel and energy inflation squeezed household budgets. Of those questioned by the group, 70 per cent had less than one fifth of their monthly income at their disposal after accounting for household expenses.

Meanwhile, one out of seven said that they have no money at all left over at the end of each month, while one in eight stated that their outgoings are greater than their household income. In such a situation, the group warned that making savings to tide people over in the event of a prolonged recession will be difficult for many Britons.

For those who have found financial responsibilities spiralling out of control in recent months, taking out a debt consolidation loan may be of interest. In spreading out repayments over a longer period of time, consumers may find they are able to alleviate the strain on their monthly income and perhaps put a little aside each month to prepare for disadvantageous circumstances.

David Kuo, head of personal finance at the Motley Fool, warned: “We are only in the early stages of a recession so we have yet to feel the full impact of the economic downturn. Consequently, it is important to tackle our finances head on now before it is too late to do anything about it. Ensuring that we can survive on less than four-fifths of our current income is vital. If you lose your present job through redundancy, your next job could pay precisely that - less than four-fifths of what you now earn. It is, therefore, vital that we cut back on household expenses and start putting money aside immediately.”

Furthering this, he urged Britons to re-evaluate their outgoings and cut back on all areas of non-essential spending in an effort to reduce the drain on finances and to allow people to put money aside for circumstances such as job loss. For those who are unable to do so, they may have to rely on personal loans or credit cards to support them during periods of unemployment.

Mr Kuo concluded by urging people to remember that positive action can help to minimise the impact of a recession, insisting that although employment could come to an end, it need not be the end of the road for financial security.

Consumers may have found it particularly difficult to put money aside as household bills have soared. And figures from the Bank of England published in September show that many consumers fear that inflation may get worse in the year to come. For those who have been unable to keep up with payment commitments, taking out a debt consolidation loan may prove effective in getting finances back on track.

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Consumers Seek Help As Winter Nears

Friday, October 10th, 2008

The number of people struggling with their home heating costs has escalated dramatically, Citizens Advice has claimed.

According to the organisation, there has been a notable increase in the number of people looking for advice regarding ways to keep energy costs under control as they slip into debt to their supplier. So too, as the number of cheap personal loan for house purchases has dwindled, instances of people slipping into arrears has also increased.

For those who are struggling with demands such as mortgages and utility bills as they eat into monthly expenditure, taking out a debt consolidation loan may prove an effective way to get finances back on track.

Meanwhile, Citizens Advice has called upon mortgage providers to show a little leniency during times of considerable financial turbulence and afford struggling homeowners the support necessary to keep them in their homes. Indeed, the group pointed out that lenders may need to begin extending assistance to more people after figures showed that the number of enquiries made about secured loans arrears assistance rose 35 per cent in the last 12 months.

And more short-term figures show that this problem has become particularly acute in the last few months. The group noted that in the second quarter of this financial year (July to September), the number of secured loans arrears enquiries shot up 51 per cent across Citizens Advice Bureaux across England and Wales when compared to the preceding three months.

Commenting on the figures, chief executive of the group David Harker said: “While we are pleased to see the number of consumer credit problems going down, the increase in the number of enquiries about basic essentials is worrying and these figures show how the current economic situation is hitting vulnerable and low income households the hardest. To prevent this situation worsening, it is vital that mortgage lenders and fuel companies do everything in their power to help people in arrears to come to a workable solution over repayment arrangements, rather than piling on extra charges. All creditors should treat borrowers in arrears fairly and sympathetically.”

He went on to say that anyone who is worried about the state of their finances should seek out professional and impartial advice immediately. It noted that while loans providers should always be flexible in their negotiations, it was important that people also sought guidance from free, fair and confidential services such as Citizens Advice or another similar organisations.

For those who have found it difficult to keep their feet on the ground in the recent financial shake up, taking out a debt consolidation may prove an effective way to stop financial obligations from spiralling out of control. Meanwhile, Co-Operative Financial Services pointed out last month that many consumers are smartening up to the benefits of the web in the fight against rising costs.

According to the organisation, more than two-thirds of Britons (68 per cent) have used online services in order to help get their finances order, with many citing the onset of the credit crunch as a principal reason for doing so.

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Bank Makes The Cut

Wednesday, October 8th, 2008

The Bank of Englands monetary policy committee (MPC) has made a 0.5 per cent cut to the base rate of interest at its monthly meeting, one day ahead of schedule and following an earlier announcement by chancellor Alistair Darling in which he urged the Bank to consider the needs of the consumer.

The MPC moved to drop rates from 5 per cent to 4.5 per cent. It was the first time it has decided to alter the base rate since April, when it made a 25 basis point cut. The last time a reduction of this size was made was in November 2001. Following on from the move, consumers could find that their banks drop the rates on a range of products including credit cards, personal loans and mortgages. However, it may mean that returns on savings also decreases.

After the announcement was made, commentators rushed to offer their support for the move, which was welcomed by the price comparison site moneysupermarket as surprising but decisive action. The group added that it seemed that the Bank had retreated in its longstanding battle against rising inflation and rushed to the aid of borrowers, who may soon see the benefit in falling variable loans rates. Indeed, it noted that 4.2 million mortgage holders with tracker products will surely welcome the news as it will bring a significant boost to their ability to put money aside.

“However, as a note of caution this is not a magic cure all and we wont see either the mortgage or the housing market bouncing back to where it was 18 months ago,” the price comparison site added. “Sadly too much water has passed under that bridge to be ended by a quick fix. Lenders wont change their strict attitudes to risk just yet, and the cut may not filter through to rates for new borrowers and first-time buyers, so not everybody will feel the benefit,” it said.

And while many commentators welcomed the move, a number of banks moved quickly to pass the rate cut on to customers, with Barclays, Halifax, Lloyds and Cheltenham & Gloucester among them. For existing customers, the rate cut will come into effect from November 1st, while Barclays will begin offering its lowered rate to new customers from tomorrow (October 9th).

Commenting on the development, Andy Gray, head of mortgages for the Woolwich, said that consumers should take confidence from the decision, which will help to bolster a stagnating housing market and help people who are managing to make their pay packet last the month.

When it met last month, the MPC held the rate at five per cent in order to keep inflation at bay. Following their decision, the Fair Investment Company pointed out that the group had probably stepped back from a cut in the hope that the recent rescue package designed to stimulate the housing market. For those who are encouraged to enter the market after todays announcement, taking out a personal loan may be recommended.

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World Cup Glory Comes At A Price

Monday, October 6th, 2008

After a promising return to form in the first two games of the England football teams qualifying campaign for the World Cup, supporters may need to start thinking about the financial implications of following their team to glory.

Such is the claim of Abbey, which has noted that while fans will be hoping that the team can continue to keep up the solid form shown against Croatia last month, many may fail to realise how much following them to the final will cost. According to research carried out by the group, an avid fan flying to see the final in person would be likely to pay a minimum of 3,372 pounds if they plan to do so on a shoestring.

The group noted that for those who fly economy, bed down in budget accommodation and opt for the lowest value tickets, the costs will tally up to approximately this amount.

Meanwhile, for those who are looking to enjoy the games in a slightly higher level of comfort, taking out a cheap loan may prove an effective way to make the most of a potentially victorious World Cup campaign. Indeed, Abbey warned that for those planning to spend moderately during their trip to South Africa - which hosts the games in 2010 - they can expect costs to rise over 5,000 pounds.

It explained that for those flying premium economy, staying in mid-range accommodation and going for mid-price tickets, total costs are likely to average 5,193 pounds if the England team can make it all the way to the final.

For those who enjoy a lap of luxury, the financial commitment to the England campaign is likely to cost an average of 11,174 pounds, although this does include business class travel, top-end hotel accommodation and the best available match tickets. It noted that the hotel alone is likely to cost nearly 1,000 pounds more than the entire spending of the fan travelling to South Africa on a shoe string.

Commenting on the findings, Reza Attar-Zadeh, director of savings and investments at Abbey, said: “Its great that England have got off to a winning start. But those who fancy the national teams chances of not only making it to South Africa, but going all the way to the final have some serious saving to do.”

Fans who fail to do so may find themselves being forced to dip into savings or apply for personal loans to make sure they can follow the path to glory in person. However, while many may dream of seeing the national side lift the sports most prestigious trophy, some may find that the financial commitment required is too big a weight to bear. Indeed, recent figures have suggested that current economic woes are already beginning to hurt many fans following their club in the Premiership.

According to Virgin Money, one in four football fans will be forced to spectate from their armchairs this season as the costs of attendance soar. For those who are struggling for a way to make sure they are on the terraces this season, taking out a cheap loan may be of interest.

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Inflation Expectations Hit Series High

Thursday, September 11th, 2008

Britains expectation of further inflation in the next 12 months was at a series high in August, new figures from the Bank of England and GfK NOP show.

When asked what they expected the rate of inflation will be in a years time, UK residents questioned in the poll gave a median answer of 4.4 per cent, up from 4.3 per cent in May, which was in turn the highest result recorded in the data series. Meanwhile, the median result for the perceived level of current inflation was 5.4 per cent, compared with the previous series high of 4.9 per cent. Furthermore, fewer people than ever thought that inflation was at about the right level, with 39 per cent saying they believed this to be the case.

As inflation has continued, many consumers may have found that their ability to pay for everyday living costs such as food and petrol have been constrained. This, in turn, could have a wider impact on their ability to meet mortgage or personal loan repayments.

Indeed, when it comes to getting some respite in repayment rates in the next 12 months, 54 per cent expected that interest rates on products such as mortgages and loans would rise in the next year, compared with 48 per cent in May. Meanwhile, ten per cent said they thought the Bank of England would enact an interest rate cut in the next 12 months, down from 12 per cent in May, showing that a declining number of people expect loan and mortgage commitments to lessen.

This is despite the balance of people believing that interest rates should go down rather than up. While nine per cent said they thought higher rates would be best for the economy, 40 per cent said that rates needed to fall.

For those looking to take advantage of current interest rates in anticipation of a future increase, taking out a cheap low-rate loan soon may be of interest.

It appears that fewer people are satisfied with the current job that the Bank of England is doing in terms of limiting inflation, the net satisfaction index - which measures the number of people who are happy minus those who are not - stood at 18 per cent, down four percentage points from May.

Commenting on the findings, Howard Archer, chief UK and European economist at analyst firm Global Insight, told the Times: “This highlights how sharply higher food and energy prices are shaping peoples perception of the overall inflation level. The further rise in inflation expectations in August is obviously not good news for the Bank and could reinforce the monetary policy committees reluctance to cut interest rates in the near term, despite the likelihood of recession.”

For those who have been struggling to keep up with payments for food and other areas of expenditure such as mortgages and fuel costs, taking out a debt consolidation loan may be of interest. Indeed, a recent statement from the Council of Mortgage Lenders has warned that the Bank of England will be unable to reduce interest rates until the “super spike” in inflation subsides.

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