Past Articles for the Houses and Mortgages Category

The National Landlords Association (NLA) has said landlords are risking getting into arrears by not carrying out tenant reference checks.

Over a period of six months, up to £6,000 could be accrued if a tenant does not pay rent, leaving the property’s owner to pay. This may lead to debt management difficulties if mortgage repayments cannot be met.

The NLA said checking tenants’ past renting history offers “peace of mind” at a time when high house prices are pushing increasing numbers of people into rented accommodation.

Inquiries can be made into the prospective tenants’ employment and financial status, including details on bankruptcy and County Court Judgments. Checks also confirm the applicants are who they say they are.

David Salusbury, chairman of the NLA, said running checks would enable landlords “to make an informed decision about their ability to keep up with rental payments”.

Also in property news, Halifax has said homes in English market towns are generally more expensive than in neighbouring towns.

By Dan Mather

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The future for the UK economy looks distinctly “uncomfortable”, according to the assessment of Sir John Gieve, the deputy chairman of the Bank of England.

Speaking at the London Stock Exchange recently, Sir John suggested that inflation levels will continue to rise as they have been recently and that unemployment rates could soon begin to pick up.

Both predictions will be unwelcome news for families across Britain, many of whom are finding it difficult to keep a handle on their debt management difficulties.

Sir John went on to make clear that while an interest rate cut could help consumers, the pressures on the economy from rising commodity prices make the option considerably less viable.

“After 15 years of unbroken growth and low inflation, the prospect for the rest of this year is uncomfortable, inflation will continue to rise sharply while growth tails off and unemployment picks up,” he said.

Older generations are among those being most acutely affected by the rises in the cost of living, Alliance Trust reported recently.

By Dan Mather

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The costs of gaining some measure of financial security by taking on a fixed-rate mortgage deal are becoming excessive, according to one expert.

Francis Ghiloni from mform maintains that the fixed-rate deals currently are the market are being offered at uncompetitive prices to borrowers desperate for a good deal.

In fact, the true costs of a two-year fixed-rate mortgage arrangement in the UK put these deals 45th or lower in a list of ‘best buys’, mform reports.

Given the extent of the country’s debt management problems, millions of homeowners are keen to fix their mortgage costs but many are finding it impossible to get good value.

“The cost of security appears to be excessive and fixed rates are now uncompetitive across the board for most product areas,” said Ms Ghiloni.

According to the Council of Mortgage Lenders, there are almost 1.4 million consumers whose current mortgage arrangement is set to expire over the course of this year.

By Giles Stevenson

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The Consumer Credit Counselling Service (CCCS) has outlined what it sees as the biggest problems facing indebted Britons.

Many thousands of people have committed themselves to mortgage deals that see them hand over large chunks of their monthly earnings and others are faced with the prospect of remortaging in an environment when credit is in limited supply, the service has suggested.

Additionally, the issue of negative equity is becoming increasingly real for millions of homeowners and many of those who have borrowed via sub-prime lenders are struggling to become debt free.

Furthermore, the CCCS has noted that living costs are rising for all sectors of the society and are adding to the weight of existing debt management burdens.

According to the Council of Mortgage Lenders, more than 27,000 homes have been repossessed so far this year.

By Dan Mather

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The takeover of Alliance & Leicester by the Santander banking group could ultimately lead to a reduction in choice for British borrowers, it has been claimed.

According to Pauline McCallion, editor of Your Mortgage, the acquisition deal is likely to see a merging of the mortgage offers from Alliance & Leicester and Abbey, which is already owned by Santander.

“What tends to happen with these things is they combine the two mortgage ranges and merge things that are quite similar and drop some products,” Ms McCillion explained.

“Both Abbey and Alliance and Leicester are quite big players in the UK mortgage market so it will have an effect on the amount of products available.”

As a result, the situation could mean more bad news for borrowers in the UK, many of whom are struggling to cope with their mortgage-related debt management difficulties.

Recent figures suggested that Alliance & Leicester held a 4.4 per cent share of the UK’s overall mortgage lending market, while Abbey accounted for almost 16 per cent of the sector.

By Frank Charlton

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The effect of inflation on everyday costs is prompting Britons to take action to improve their financial situation, a new survey has suggested.

According to Abbey, 86 per cent of people in the UK intend to make a change in their life that can help them get on top of their finances or even get debt free.

For example, 84 per cent intend to cut back on non-essential items and begin to shop smarter, with 61 per cent looking for offers and deals.

Meanwhile, many are looking to make more money on top of their regular earnings. A second job is on the agenda for 12 per cent, while 30 per cent aim to sell possessions.

Phil Cliff, director of mortgages at Abbey, said the figures are evidence of the tightening of belts across the UK.

“Careful financial planning and budgeting can help combat the effects of rising inflation - and everyone should ensure that they are shopping around for the best financial products,” he advised.

Related research by Abbey found that the UK could save £800 million a month through a more sensible approach to shopping.

By Neil Condron

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Borrowers across Britain have been let down by the Bank of England’s decision to maintain the base rate of interest at five per cent, it has been claimed.

Price comparison firm Fool.co.uk has suggested that the bank’s choice to hold fire on interest rates will have come as a blow to more than 30 million people in the UK.

And with so many households struggling to become debt free, the fact that previous base rate cuts have not been fully passed on by lenders is another cause for consumer concern, the company insists.

“The Bank of England may be happy to sit on its hands, but homeowners must not do the same. Make yourself a cash-cushion now,” said David Kuo, head of personal finance at money website Fool.co.uk.

“It’s the most comfortable thing to sit on in a recession and it beats sitting on your hands any day.”

A report from Ernst & Young last week suggested that the typical individual in the UK is almost 15 per cent worse off financially now than was the case five years ago.

By Giles Stevenson

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The Bank of England has opted to maintain the base rate of interest at five per cent after its monetary policy committee met this morning.

Many businesses and consumers with debt management problems have been hoping that the bank would reduce interest rates but this will not happen for another month at least.

A number of organisations had called for a cut in the cost of borrowing in order to boost the economy but the latest inflation data was such that the decision by the bank was widely expected by economists.

Responding to the base rate hold, the Royal Institute of Chartered Surveyors said: “The weakening economic picture, as signalled most visibly by the deterioration in both business and consumer sentiment, will justify an easing in policy later in the year.”

Credit Action revealed recently that the average British household pays out almost £3,775 every year to service the interest on their respective debt management mountains.

By Dan Mather

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Homeowners who are struggling with debt management concerns have been warned about some of the potential pitfalls associated with sale and rent back schemes.

The price comparison firm Fool.co.uk has suggested that more than a quarter of British homeowners believe they could live in their property for as long as they would like if they enter a sale and lease back deal - but this is not always the case.

And close to 15 per cent of people think that they would receive the full market value for the property under the terms of a sale and lease back scheme but prices paid under these circumstances are typically unfavourable for sellers.

“I would urge anyone considering doing this to do their research,” said Donna Werbner, property expert at Fool.co.uk.

“What is particularly shameful about these schemes is that they are targeted at homeowners facing repossession - so people who are at their most financially vulnerable.”

According to Credit Action, the typical British household has a debt management mountain worth close to £58,000, including their mortgage arrears.

By Dan Mather

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The National Association of Estate Agents (NAEA) is hoping for reductions in the base rate of interest.

According to the organisation, when it comes to setting interest rates, the Bank of England should act in a way that does not damage the UK economy and offers some support to potential borrowers.

Credit consumers are finding it tough to become debt free and increasing interest rates would worsen their situation and dampen the prospects for the housing sector, the NAEA maintains.

“We understand that there are significant pressures on the wider economy at this time,” said the association’s chief executive Peter Bolton.

“As a result we urge the Bank of England not to raise rates today and to decrease them as soon as possible.”

The levels of interest being charged on fixed-rate mortgage deals in the UK are continuing to rise despite the fact that swap rates between financial institutions peaked several weeks ago, MoneyFacts.co.uk reported recently.

By Giles Stevenson

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