Archive for May, 2011
Customers of the Bank of Scotland are expecting to receive at least £17m in compensation.
This is due to the company mishandling complaints made about investment products. Many complaints that should have been dealt with were rejected by the Bank of Scotland and so the FSA (the Financial Services Authority) fined the company by £3.5m
Policies were sold to clients without any explanation about what they were signing into or buying. Many of the policies were sold to older clients and the bank now has to review over thousands of cases to see if the clients are eligible for any compensation.
Bank figures show that they are falling billions of pounds short of expected lending targets to small firms
Project Merlin, were what the government called there loan target agreement and this signed in February through many talks with banks and treasuries.
The banks have made a shortfall on £2bn of there estimate they agreed to stick to when lending to smaller businesses in the last three months. They aimed to lend out a huge total of £19bn to small business and have not been on course. Really banks are not obliged to discuss targets but the Royal Bank of Scotland have admitted that there lending has gone down.
Scheme doesn’t meet target original set.
The scheme that was originally intended to prevent repossession in England has been below the target level but above budget.
The mortgage rescue scheme is put in place for residents to still live in their property but they will be required to rent it back off the housing association this is a scheme for the housing associations to benefit it is simply helping people so that they are not losing their homes.
The scheme has helped 2,600 households avoid repossession says the National Audit Office but unfortunately the target was 6,000. Costs were supposed to see predicted totals of £205 million whereas the NAO again found out that the total was exceeded and the new sum came to £240 million.
Home sales in US rise by 7.3%
Sales in the US rose for a second month in April as figures have shown an increase up to 7.3%. 323,000 homes were sold in US in April showing that the outcome were stronger than forecasting.
Although figures have saw a high this month in comparison to this time last year they are still at a historically low as they are 23.1% lower than last year’s figures.
There has been a slight improvement in April as figures show. New home sales only represent a small portion of the housing market in the US. Despite rock bottom prices and historically low mortgage rates homebuyers face high unemployment a weak economic recovery.
Mortgages harder for first time buyers
The average age for first time buyers is looking to be a high of 38 years old as the marketing conditions are making it very difficult for many below that age to get on the market ladder.
Many people who have not yet got a property were asked what age they expected to get their first property. 61% of the people asked said that they will not be looking to buying at property at all. Mortgage products on offer for first time buyers have dropped by a massive £13,000 since 2007, although over the past year products have risen by 200 offering them people that do wish to get on the property ladder the opportunity.
Asking prices for houses have increased by 1.3% last month this is the highest recorded level in three years.
Due to dip in sellers and the low interest rate asking prices are being increased and so are sellers’ optimism. Rightmove have recorded that estate agents have the highest number of properties on the market that has ever been recorded so they believe that the optimism has been mis-placed.
The average property asking price recorded on Rightmove is £238,874 which shows 1.3% increase than last month but also a 0.7% increase compared to last year. March saw house prices rise by 1.7%. The last time the housing market saw such an increase was in June 2008.
Decrease in household income
Household income is showing a huge drop this month and may return to 2004 levels. This is the biggest drop in income in the past 30 years, recent economy reports have recorded an average fall of 3% this year for incomes. This is the steepest drop since 1981 and has also taken levels back to comparison to 2004.
Due to low inflation and higher social benefits household incomes actually rose through the recession according to the institute for fiscal studies. However the IFS report are showing different details as they believe that both the recession and higher inflation will lead to the income to be decreased.
Retailers facing tough times.
High street retailers are going to facing some tough times as finance for families are getting tighter. Prices for everything are looking to be rising, inflation is soaring and subdued pay rise mean that households have less to spend.
Due to this many households with be cutting down on their spending and trying to make sure they have as much money as need and this will have a huge impact on retailers. Many small shops that are unable to beat competitive prices will be hit the hardest.
Rental market seeing an increase in the capital
The rental market is seeing expensive properties hit the market because many people are failing to sell their homes in London and South East of England. There has been an 11.6% increase in the capital value of rental homes according to research carried out by the Association of Residential Letting Agents (ARLA).
At the end of 2010 properties being put up for rent were high valued properties averaging at £401,400 compared to the rental increase this year as average house prices that are being put on the market for rental in £447,900 and this is because people are struggling to sell their properties.
Housing associations in Manchester are demanding greater powers to evict problem tenants.
Landlord, Irwell Valley had a house in Bury that he rented out as soon as he found out that it was being used as a drugs den by his tenant he started eviction procedures this was in February. On the 15th April the magistrates court start eviction orders unfortunately the house had already been vandalised and all valuables had been taken. Irwell applied for a repossession order on the 28th February after he had received complaints about anti-social behaviour.