Abacus Daily Debt News

Young people must be taught about a wide range of finance-related topics while at school, it has been argued.

Commenting on the government’s Tax Matters programme, which aims to teach pupils about tax, Wendy van den Hende of the Personal Finance Education Group said that it might not be enough to inform youths about money issues.

"Tax is only one area that people need to know about," she remarked.

Ms Van Den Hende claimed that the government is trying to prevent individuals from falling into difficulty in the future, rather than having to deal with "damage limitation once the young people have got themselves into a mess".

She said that the amount that has to be paid through tax and national insurance once individuals enter the world of work can be a "complete shock" to some.

The Tax Matters campaign has been introduced by HM Revenue & Customs, aimed at students in secondary schools.

By Jamie Price

House prices may begin to stabilise over the coming year, it has been suggested, which may be welcome news for borrowers facing the threat of negative equity in their homes.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), said that property values will probably fall a little further in 2009, then start to moderate as the months pass.

However, he explained that it is unlikely that prices will actually rise, as restrictions on supply may hold back the housing sector.

"I wouldn’t rule out a move up in prices, but I think it is very much dependent on supply remaining quite constrained," he remarked.

The latest Rics housing market survey revealed that activity in the industry picked up in April, with new buyer enquiries rising for the sixth month in a row.

An extra two-fifths (41 per cent) of Rics members saw an increase in these enquiries during the month, the research showed.

By Jamie Price

Property sales picked up slightly in April, a new report has revealed.

The Royal Institution of Chartered Surveyors (Rics) stated that new enquiries in the sector rose for the sixth month in a row.

Around two-fifths (41 per cent) more members reported a rise than a fall in new buyer enquiries during the month, the highest level seen for almost ten years.

On average, surveyors sold 10.6 homes over the last three months, a rise from 9.7 in the previous quarter.

Rics spokesperson Jeremy Leaf noted that there are "tentative signs" that activity in the market is starting to pick up.

However, he added: "We are unlikely to see significant improvement while money remains in short supply and the employment picture is uncertain."

Meanwhile, Firstrung chief executive Paul Holmes has advised people to wait for mortgage deposits to fall to ten per cent - rather than the average of 40 per cent seen at present - before entering the property market.

By Jamie Price

It would be "crazy" to buy a property at present because lenders are asking for 40 per cent deposits from borrowers in order for them to obtain mortgages, it has been stated.

Paul Holmes, the chief executive officer at Firstrung, advised people to wait for deposits to come down to around a "sensible" ten per cent before seeking homeowner loans.

This will indicate that the housing market has reached its bottom and that it is a good time to enter the market, he explained.

"Timing is everything in terms of first-time buyers," Mr Holmes remarked, adding that lenders are putting their demands up at the moment due to the recent falls in house prices.

He noted: "They are asking for big deposits to protect themselves."

Last month, Hometrack reported that property values have dropped by 10.1 per cent over the past 12 months, declining by 0.3 per cent in April.

By Jamie Price

People who have viewed owning their own home as an "unattainable dream" in recent years may now be able to enter the market due to house price drops, it has been suggested.

Katy John, a spokesperson for PricedOut.org.uk, explained that for homes to become affordable, values must fall to around four times the average person’s salary.

"We would like to see house prices gradually re-adjusting to this affordable level over time," she commented.

Many first-time buyers do not see property price declines as a sign of "doom", rather an opportunity for them to "think realistically" about purchasing a home, she noted.

Ms John said that housing transactions will start to rise again once prices come within the reach of the average UK worker.

In related news, Halifax recently reported that property is currently at its most affordable level since January 2003, with Yorkshire and the Humber and Scotland being identified as cheap places in which to buy.

By Jamie Price

House prices fell by 1.7 per cent last month, new figures have revealed, with the rate of decline appearing to slow down.

A report from Halifax showed that April’s drop in property values was less than that seen in March, which stood at 1.9 per cent.

Housing economist for the bank Martin Ellis noted that affordability has been improved by the falls, coupled with lower mortgage repayments brought about by base rate reductions.

"Mortgage rate cuts have reduced monthly payments for the average existing borrower by £111 since October 2008," he commented.

He added that property prices are expected to be pushed down further due to low consumer confidence, rising unemployment and a lack of credit.

Mr Ellis remarked: "Mortgage approvals remain at historically very low levels."

Recently, Nationwide reported that house values fell 0.4 per cent in April, taking the average cost of a property to £151,861.

By Jamie Price

It is "more important than ever" for consumers to seek debt advice on issues such as borrowing mortgages, it has been stated.

Catherine Hearnden from MyMortgageDirect noted that people do not always make the "best decision", instead opting for deals such as fee-free offers or headline rates.

She said that there is a wide range of products in the marketplace, with different deals being better suited to different individuals.

Seeking guidance on taking out the best mortgage can help customers to opt for the most "cost-effective" loan in the long-term, she suggested.

Ms Hearnden urged borrowers to make comparisons between products rather than being attracted solely by fee-free promotions.

Recent figures from the British Bankers’ Association showed that in March 2009, 26,097 new mortgages were approved, down from February’s levels.

The report added that the average value of a home loan taken out during the month stood at £128,000.

By Jamie Price

Personal debt in the UK is continuing to rise, figures have indicated.

According to Credit Action, the average household with an unsecured loan now owes £21,580 - excluding mortgages.

The total personal debt level was shown to have increased by 2.2 per cent over the last year - reaching £1,459 billion by the end of March.

And the charity noted that one person is now being declared bankrupt or insolvent every 4.5 minutes, while a home is being repossessed every ten minutes.

Other findings included the fact that the typical household owes £58,350 when mortgages are considered, while the need for debt help could be set to rise as a result of the fact that one in 33 people currently in work are expected to be unemployed by the end of the year.

A recent study by Fairinvestment.co.uk indicated that Britons are attempting to reduce their debt, as 74 per cent have not taken on any new finance since last August.

By Andy Mackay

House prices dropped 0.4 per cent in March, newly-released data has shown, potentially raising the prospect of negative equity for some homeowners.

Figures from the Land Registry revealed that the average property value stood at £152,895 in the month, taking the yearly decline to 16.2 per cent.

However, homes in the capital appeared to buck this trend, with the average value rising 0.6 per cent to £299,613, while the West Midlands saw the largest fall of two per cent.

The organisation also noted that the amount of completed sales fell by 57 per cent in January compared to a year before.

In related news, research from Nationwide has found that house values fell by 0.4 per cent in April, taking the average value down to £151,861.

Fionnuala Earley, chief economist for the building society, said that the drop was "in line with expectations" when taken in context of the economic downturn.

By Jamie Price