Abacus Daily Debt News

There is a "huge" level of demand for property from first-time buyers, it has been claimed.

Peter Bolton King, the chief executive of the National Association of Estate Agents, stated that a large proportion of those looking to get onto the property ladder are visiting agencies and registering their interest.

He was commenting on data released by the Council of Mortgage Lenders (CML), which revealed that there has been a sharp drop in the approval of homeowner loans over the past year.

The figures highlight how first-time buyers are "being frustrated at the final hurdle because lenders are not making mortgages available", remarked Mr Bolton-King.

He argued that more action must be taken to help this group, which he described as "crucial" to both the housing market and the wider economy.

The CML report noted that in 2008, there were 516,000 house purchase loans borrowed, which represented a fall of 49 per cent compared to 2007.

By Jamie Price

Thousands of Britons are taking out personal loans to help them fund home improvement work, new figures have revealed.

Research from Sainsbury’s Finance has suggested that the current situation in the housing market has led to people looking to add to their homes instead of move.

The firm noted that in 2008, approximately 425,000 loans totalling over £4 billion were taken out for this purpose.

This represented a 24 per cent rise compared to 2007’s figures, it stated.

"If people do decide that they need a loan to pay for their home improvements, they should make sure they look around for the best rates on the market," advised head of loans Steven Baillie.

He added that many homeowners were carrying out the DIY work to help them get a better price when they decide to sell.

Recently, Frances Walker of the Consumer Credit Counselling Service claimed that many younger borrowers are turning to payday loans to help them meet costs in the wake of the economic downturn.

By Jamie Price

The housing sector is a "buyer’s market" at present, an industry insider has claimed.

Founder of the Property Investors Network Simon Zutshi stated that the current circumstances make now a good time to buy a home, providing the funds are available.

He added that in his opinion, despite recent falls in values, prices will "level out" at some point in the future.

"It’s possible to get a good deal at the moment, but … if you are buying property now then you want to make sure you have a cash reserve," Mr Zutshi advised.

He explained that this can help to offset the risk posed by unexpected costs such as bills.

Mr Zutshi went on to suggest that property should still be viewed as an asset despite price drops, adding that any rise in value will then be a "bonus" for owners.

Meanwhile, Michael O’Flynn from FindaProperty.com has predicted that 2009 will see a "modest" improvement in the housing market.

By Jamie Price

Setting the right price for a property is paramount if it is to sell in the present climate, it has been stated.

Content editor of FindaProperty.com Michael O’Flynn has offered some tips that may be relevant to those selling a home or people looking to obtain one at a low cost.

He noted that there are a "lot of potential buyers out there", but added: "Price is everything in the current market."

"The feedback we are receiving from agents generally is that competitively priced properties will sell," Mr O’Flynn remarked.

And he revealed that some agents have received "multiple" offers on houses that had a value appropriate for current circumstances.

Meanwhile, the Rightmove House Price Index for January 2009 has shown that £213,570 was the average asking price for a UK property, which was a drop of 1.9 per cent compared to December’s figures.

A fall in house values may help people seeking loans or mortgages to take on a smaller amount of debt.

By Jamie Price

A large proportion of young adults are returning to their family homes due to the credit crunch, new figures have revealed.

Research by Abbey Mortgages has found that over a million Brits aged 18-24 moved back in with their parents in 2008, or put off plans to move out.

In addition, 440,000 of those aged 25-34 moved back to, or remained, at home, while 471,000 35 to 44-year-olds also did the same.

The company dubbed these people ‘Baby Boomerangers’, noting that 33 per cent of them hailed from the north of England.

Nici Audhlam-Gardiner, director of Abbey Mortgages, said that living with parents can help some individuals to save up a deposit for their own home.

"Millions of Britons have realised that sometimes you have to take one step backwards in order to go two steps forward," she remarked.

Recently, Abbey announced it was reducing prices on some of its fixed-rate mortgages.

Discounts were unveiled on its two and three-year products that have loan-to-values of 75 per cent.

By Jamie Price

The decision by the Bank of England to lower the base rate to one per cent has been criticised by the Building Societies Association (BSA).

It will harm savers as well as borrowers, the body argued, with director general Adrian Coles describing it as “bad news”.

He commented: “The rate cut is an assault on savers who will have seen their interest payments drop by 83 per cent since July 2007.”

The BSA had previously urged the Bank’s monetary policy committee to avoid reducing the base rate further.

Mr Cole stated that the move could damage the flow of lending, explaining that individuals will be less likely to save and therefore “the flow of funds into the mortgage market will be further disrupted”.

Saga Personal Finance also expressed its disapproval of the decision, noting it could hinder pensioners that rely on savings to top up their incomes.

Tenant demand for private rented accommodation is continuing to be strong, according to new research.

Over a third of landlords are currently experiencing rising interest in their properties, revealed a survey by Paragon Mortgages.

The poll showed that 40 per cent of participants feel that tenant demand will grow in 2009, while the amount of homes owned by an average landlord rose from 12.1 to 13.2 in the third quarter of last year.

John Heron, the managing director of the firm, said that there may be opportunities in 2009 for mortgage borrowers to "expand their portfolios in the current market".

Meanwhile, the government has been urged to take action to boost the flow of lending by the Treasury Committee.

It noted that a lack of credit is the biggest short-term problem for the UK’s financial situation.

If no action is taken, the "recovery of the economy will be placed in jeopardy", claimed committee chairman John McFall.

By Jamie Price

Two-thirds of the population feel more prone to sickness, less fit and more stressed compared to three years ago before the onset of the credit crunch, according to research from Friends Provident.

It found that 19 per cent of people are now sleeping less, while 37 per cent are spending more time worrying.

The organisation warned that this could lead to further conditions such as clinical depression, headaches and stress-related illnesses.

This Monday was labelled as National Sickie Day by the firm, as it is statistically the worst day for absenteeism at work.

“People need to make more effort to protect and care for themselves, otherwise National Sickie Day could be the start of a long-term national health issue,” remarked Mark Jones, head of protection at Friends Provident.

Meanwhile, Gill Trevelyan, the head of good practice services for the Advisory, Conciliation and Arbitration Service, has said that employers must not make absentees feel guilty for taking time off in the current climate.

Abacus Comment:
The credit crunch is clearly having an impact on the national peace of mind as can be seen in the UK Worry Index 2008 from Reallyworried.com.
The top places are dominated by financial concerns more so than in recent years. Debt did not appear in last years top 20, but is No.4 on the 2008 list.

We encourgage people not to “worry and do nothing”, but to take action and begin to stop worrying. If you can afford at least £25 per week towards your debts, then a debt management plan could ease your worries and allow you to take back control of your finances.

People could save a large amount of money by buying more energy-efficient appliances for their homes, it has been stated.

Adrian Arnold from the Energy Saving Trust claimed that consumers could save around £186 per year on electric bills by purchasing an A-rated fridge, rather than one rated G, which is the worst grade for fuel efficiency.

"If everyone in the UK looked for the most energy-efficient rated product you would actually take a billion pounds out of the nation’s domestic energy bill," he remarked.

He added that this amount would be enough to power 780,000 homes for 12 months.

Mr Arnold also noted that purchasing more efficient appliances can contribute towards tackling climate change.

A recent poll conducted by the Energy Saving Trust discovered that 77 per cent of people are aware of energy rating labels, which can be found on domestic products.

It showed that 90 per cent of those questioned think the labels are useful.