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No house price forecasts for 2009
The Nationwide and the Halifax are two of the UK’s biggest mortgage lenders and each month both reveal the state of the housing market by commenting on how house prices have changed. At the end of each year they normally make their predictions for the following year, as to whether house prices will rise or fall. However, neither the Nationwide, the Halifax nor the Council of Mortgage Lenders (CML) are making any predictions for next year. This highlights that uncertainty of the housing market. House prices have fallen sharply this year and if it’s too difficult for the experts to make predictions, it’s uncertain as to whether the housing market will perk up any time soon.
Let’s now review the other top money stories of the past week commencing the 15th December 2008.
Monday 15th December
Households have less spare cash - A survey conducted by the Bank of England in late September and early October revealed that the typical household has less spare cash to either spend or save. Of the 2,500 households questioned more than half had seen a decline in their available income after paying tax, debt repayments and utility bills. Many households had experienced an increase in their mortgage repayments as they had come to the end of their fixed rate deals earlier in the year. However, since the survey has been carried out many households have seen their mortgage repayments fall as they have benefitted from the cut in interest rates, giving them a slight respite from financial pressures.
Let’s now review the other top money stories of the past week commencing the 15th December 2008.
Monday 15th December
Households have less spare cash - A survey conducted by the Bank of England in late September and early October revealed that the typical household has less spare cash to either spend or save. Of the 2,500 households questioned more than half had seen a decline in their available income after paying tax, debt repayments and utility bills. Many households had experienced an increase in their mortgage repayments as they had come to the end of their fixed rate deals earlier in the year. However, since the survey has been carried out many households have seen their mortgage repayments fall as they have benefitted from the cut in interest rates, giving them a slight respite from financial pressures.
Tuesday 16th December
Inflation falls to 4.1% –Inflation - the measure of how quickly prices are rising – has fallen to 4.1% in November. The Consumer Prices Index (CPI) has shown that inflation fell from 4.5% in October to 4.1% in November and this fall has been mainly attributed to falling oil and energy prices. For example, the average price of a litre of petrol fell by 9.3 pence between October and November this year.
Government offers loans to the lowly paid –The government has revealed that it plans to reform the Social Fund to enable those on benefits and also low paid individuals to have access to a £1,500 loan. Eligible individuals will be able to receive a 75% advance on their benefits and be able to repay these in 6 instalments with future earnings. The interest rates will be capped at 2%. These changes to the Social Fund are designed to combat the increasing demand for more expensive sources of credit. Many people who are lowly paid or who are on benefits are often denied credit by mainstream lenders and so then resort to non-standard lenders, or are pushed into approaching loan sharks for credit who charge much high rates of interest. The revised Social Fund will also give claimants basic training on how to budget and they will be encouraged to save. Credit Unions will also receive access to Social Fund money so they can help those on low incomes. These ideas are still in the pipeline and have only been announced as a discussion to reform the Social Fund; they are not in place yet. The Social Fund can offer crisis loans however, to see if you are eligible contact your local Jobcentre Plus.
Inflation falls to 4.1% –Inflation - the measure of how quickly prices are rising – has fallen to 4.1% in November. The Consumer Prices Index (CPI) has shown that inflation fell from 4.5% in October to 4.1% in November and this fall has been mainly attributed to falling oil and energy prices. For example, the average price of a litre of petrol fell by 9.3 pence between October and November this year.
Government offers loans to the lowly paid –The government has revealed that it plans to reform the Social Fund to enable those on benefits and also low paid individuals to have access to a £1,500 loan. Eligible individuals will be able to receive a 75% advance on their benefits and be able to repay these in 6 instalments with future earnings. The interest rates will be capped at 2%. These changes to the Social Fund are designed to combat the increasing demand for more expensive sources of credit. Many people who are lowly paid or who are on benefits are often denied credit by mainstream lenders and so then resort to non-standard lenders, or are pushed into approaching loan sharks for credit who charge much high rates of interest. The revised Social Fund will also give claimants basic training on how to budget and they will be encouraged to save. Credit Unions will also receive access to Social Fund money so they can help those on low incomes. These ideas are still in the pipeline and have only been announced as a discussion to reform the Social Fund; they are not in place yet. The Social Fund can offer crisis loans however, to see if you are eligible contact your local Jobcentre Plus.
Wednesday 17th December
Unemployment reaches 1.86 million –Figures released today by the Office of National Statistics (ONS) have revealed that unemployment rose by 137,000 in the three months up to October this year. There are now 1.86 million people in the UK who are unemployed. This increase lifts unemployment levels up to 6%, the highest seen since 1999. In November an additional 75,700 people claimed jobseeker's allowance, bringing the total amount of claimants up to 1.07million - which is the highest level seen since March 1991. Unemployment levels are expected to increase further as more firms cut jobs during the financial crisis, at the moment it seems not a week goes by without a firm announcing job cuts. The government is due to unveil a new scheme for the unemployed, allocating £158million to help those redundant develop new skills.
Energy firms not offering the best deals -The charity Age Concern have reported that energy firms are failing to report cheaper social tariffs to those that are less well-off. Only 600,000 households are currently on providers' lower social tariffs, despite the number of households in fuel poverty reaching 5.4million. Age Concern, National Energy Action and the Child Poverty Action Group are applying pressure on the government to make energy providers tell consumers about the cheapest deals available. If you end up spending 10% of your monthly income on energy, then you are one of the 5.4 million people estimated to be living in fuel poverty. Contact your energy provider to see if you are on their cheapest tariff and it also pays to shop around, by using price comparison sites such as Moneysupermarket.com or uSwitch to make sure your supplier is the cheapest around.
Thursday 18th December
More homeowners predicted to fall behind on mortgage repayments –The Council of Mortgage Lenders (CML) has predicted that up to 500,000 households could be more than 3 months in arrears with their mortgage payments in 2009. The CML largely blame rising unemployment for the increase in homeowners that can’t keep up with repayments. It is expected that 210,000 households will have fallen 3 months behind with their mortgage repayments by the end of 2008. As we have said before, if you have fallen into arrears with your mortgage repayments it is vital to take action. Contact your lender and explain your situation to them – it is also worth seeking advice from the Consumer Credit Counselling Service (CCCS) who have a free phone number: 0800 138 1111.
Increase in non-charging cash machines –The Treasury announced today that it plans to place over 600 non-charging cash machines in low income areas. There are already 527 new free cash machines operating in low income areas across the country, with a further 136 expected to be placed over the next 6 months. This is great news as it now means that many people are not being charged to access their own money from a cash machine. It is estimated that up to 1.5 million people are expected to benefit from these free cash machines and people in low income areas where non charging machines have been installed are estimated to be saving in the region of £7 per person per week because there is free access to a cash machine in their area. Back to top
Prepared for moneybasics by Joanna Parsley, Advocacy Officer (Credit Action).
Unemployment reaches 1.86 million –Figures released today by the Office of National Statistics (ONS) have revealed that unemployment rose by 137,000 in the three months up to October this year. There are now 1.86 million people in the UK who are unemployed. This increase lifts unemployment levels up to 6%, the highest seen since 1999. In November an additional 75,700 people claimed jobseeker's allowance, bringing the total amount of claimants up to 1.07million - which is the highest level seen since March 1991. Unemployment levels are expected to increase further as more firms cut jobs during the financial crisis, at the moment it seems not a week goes by without a firm announcing job cuts. The government is due to unveil a new scheme for the unemployed, allocating £158million to help those redundant develop new skills.
Energy firms not offering the best deals -The charity Age Concern have reported that energy firms are failing to report cheaper social tariffs to those that are less well-off. Only 600,000 households are currently on providers' lower social tariffs, despite the number of households in fuel poverty reaching 5.4million. Age Concern, National Energy Action and the Child Poverty Action Group are applying pressure on the government to make energy providers tell consumers about the cheapest deals available. If you end up spending 10% of your monthly income on energy, then you are one of the 5.4 million people estimated to be living in fuel poverty. Contact your energy provider to see if you are on their cheapest tariff and it also pays to shop around, by using price comparison sites such as Moneysupermarket.com or uSwitch to make sure your supplier is the cheapest around.
Thursday 18th December
More homeowners predicted to fall behind on mortgage repayments –The Council of Mortgage Lenders (CML) has predicted that up to 500,000 households could be more than 3 months in arrears with their mortgage payments in 2009. The CML largely blame rising unemployment for the increase in homeowners that can’t keep up with repayments. It is expected that 210,000 households will have fallen 3 months behind with their mortgage repayments by the end of 2008. As we have said before, if you have fallen into arrears with your mortgage repayments it is vital to take action. Contact your lender and explain your situation to them – it is also worth seeking advice from the Consumer Credit Counselling Service (CCCS) who have a free phone number: 0800 138 1111.
Increase in non-charging cash machines –The Treasury announced today that it plans to place over 600 non-charging cash machines in low income areas. There are already 527 new free cash machines operating in low income areas across the country, with a further 136 expected to be placed over the next 6 months. This is great news as it now means that many people are not being charged to access their own money from a cash machine. It is estimated that up to 1.5 million people are expected to benefit from these free cash machines and people in low income areas where non charging machines have been installed are estimated to be saving in the region of £7 per person per week because there is free access to a cash machine in their area. Back to top
Prepared for moneybasics by Joanna Parsley, Advocacy Officer (Credit Action).
| Top Money Stories December 15th - 19th 2008 |
- No house price forecasts for 2009
- Households have less spare cash
- Inflation falls to 4.1%
- Government offers loans to the lowly paid
- Unemployment reaches 1.86 million
- Energy firms not offering the best deals
- More homeowners predicted to fall behind on mortgage repayments
- Increase in non-charging cash machines
