Archive for the ‘Financial News’ Category
Rent rise
The average tenant pays £713 a month due to the huge rise in the rental market. This is a rise of 1.2% compared to last month August’s rents have shot up. The places that saw the greatest rise were Wales and the South East of England.
Arrears therefore seen and increase for the first time since April, because of the high demand in the rental market there has been no alternative but to up the cost of the monthly rents as landlords are finding that they are benefiting.
Average houses sold in August see a huge drop!
UK estate agents on average sold around 14 homes in the last four months; this is the lowest seen since 2009. The things that led to the sluggish housing market are the economy uncertainty and the lack of mortgage lending; this was reported by the Royal Institution of Chartered Surveyors.
Rics have said that more surveyors reported price fall compared to the amount of price rise. They are also expecting prices still to fall then rise in future months.
Alan Collett, housing spokesman for Rics has commented; “worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers, even if they have mortgage finance available.”
Interest Rate reside at 0.5%
The Bank of England’s Monetary Policy Committee has held the UK interest rates at a low of 0.5% for the record amount of time.
Due to concerns for the economy, economists suggested that the interest rate remained unchanged as they don’t believe the economy would survive an increase. Figures provided by the Banks have shown that savers have lost out on £43bn due to interest rates being so low.
Figures have shown that mortgage brokers have gained £51bn.
George Osborne, Chancellor, has put policymakers under increased pressure as he admitted on Tuesday that the economy has weakened and all hopes of growth have been revised down.
Sovereign Debt Investment cut in value will not prove good for Banks
The chief executive of Deutsche Bank has warned that if sovereign debt investments value is cut then the European banks will not survive.
This was said as Greece have been asking private investors to swap their current Greek bonds for others that have to pay less interest over a longer term, after a gathering of bank bosses in German this week.
Many people believe that the chief executive is merely stating the obvious regarding the Banks and how they would struggle. If they did cut the sovereign debt investment this would limit bank profits for a number of years.
Retail sales fall in August
Weak consumer confidence and high inflation continue to dampen the spirits of spenders throughout August as the retail sales shown a fall.
Sales throughout August fell by 0.6% compared in previous months and this is because customers are going for like to like sale instead of looking around at other sales, therefore providing a fall in the retail sales according to the British Retail Consortium.
Last year saw the total sales for August up by 2.8% whereas this year the total sales were up 1.5% obviously this shows a huge drop. Riots are not to blame for the impact on the sales as they were not widespread over England, and also data released on Monday shown that the rioters had little impact on UK high Streets.
Complaints rise at the Royal Bank of Scotland
RBS and NatWest have been overrun by complaints about mis sold payment protection insurance. At the start of 2011, PPI afflictions made up 47% of those to Royal Bank of Scotland pushing the total amount to 68,414 and 31% to those of NatWest increasing their amount to 147,109.
PPI complaints were put on hold during the legal cases at the high court’s earlier in the year because they have been on hold for so long banks all over the UK have until Thursday to tell customers what will be happening with their cases and how they will be dealing with it.
Approvals starting to rise
Mortgage approvals to house buyers are starting to pick up. 49,239 mortgages were approved but not lent on to house buyers in the month of July. This is the third monthly increased and shown approvals to be up 3% from this time last year.
Mutual mortgage companies have approved an additional 16% worth of mortgages compared to last year. Completed sales this year have been stagnated so far, and HMRC confirmed that 79,000 homes were sold in July in the UK. Although that made the record for highest sales this year it is still lower than last year’s figures.
Under-supply of homes sees housing market go into ‘crisis’.
The Government are failing to see the under lying problem of shortage of homes on the housing market, The National Housing Federation have said that the shortage of homes has caused rents to rise and home ownership rates to decrease.
Although the housing market is going downhill due to the short fall of the properties available, the government are making more public land available for building. NHF have said that if the government invested in more affordable housing then they would see a faster economic recovery, it will also help the housing market dramatically.
First time buyers face dilemma
First time buyers are struggling with the mortgage market/housing market being so rigid at the moment. They are stuck in a dilemma as to whether to save for a mortgage deposit or go into a rental house knowing that the market for rental is increasing slightly.
First time buyer black spots are covering 11 regions of the UK which might wipe out first time buyers all together, but also causing the UK rental market to increase their monthly rents. In the normal market climax 40% of potential purchasers are first time buyers but as the market at a low currently the first time buyer’s percentage is 23% which is dropping further in many regions of the UK.
Lack of demand for borrowing
Households and companies are having a safety first approach to debt reflecting in the UK economy. There are outstanding debts on many clients’ overdrafts and personal loans of an outstanding amount £52bn; this is the lowest seen since 10 years ago.
However there has been a report that mortgage approvals have increased in July. Debt repayment by companies was outstripping new loans. People are using existing funds to cover payments instead of borrowing more.