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30th April 2008
UK house prices see annual fall
House prices in the UK have recorded their first annual fall for 12 years, according to the Nationwide. Prices fell by 1.1% in April, the sixth monthly decline in a row, and were down 1% from the levels seen in April 2007, the building society said.

10th April 2008
Bank of England cuts interest rates to 5.0%
The Bank of England’s Monetary Policy Committee today voted to reduce the official Bank Rate by 0.25 percentage points to 5.0%. CPI inflation rose to 2.5% in February. The Committee expects inflation to rise further this year, reflecting the continuing impact of higher energy and food prices, as well as the recent depreciation of sterling on import costs.

17th March 2008
Banks rush to withdraw mortgage deals
Banks and building societies are frantically withdrawing many of their mortgage deals, as the credit crunch puts increasing strain on lenders. Scottish Widows gave mortgage brokers only 10 minutes' notice last week before it withdrew the bulk of its mortgage offers. Home owners have often filled in all their application forms and had the deal agreed by the lender, only to see it withdrawn at the last moment.

30th August 2007
Financial market turmoil poses risks for the housing market
Nationwide Building Society said that the US sub-prime crisis has created turmoil in international financial markets, but this is unlikely to have a significant additional effect on the rate of growth of house prices in the UK in the short term. House price growth in 2007 is still expected to be in the range of 5% to 8%. In August, house prices increased by 0.6% but the annual rate fell to 9.6% down from 9.9% in July.

20th August 2007
Mortgage lending growing strongly
Gross mortgage lending reached a new record for the month of July, totalling £34.4 billion, according to new data from the Council of Mortgage Lenders. Although this is down by 1% on the £34,847 of lending achieved in June, it is 13% higher than the £30.6 billion lent in the same month last year.
Mortgage lending remains robust despite the five interest rate rises since last August - although we have yet to see the full impact of higher rates. Lending is currently being fuelled by a large number of people remortgaging to better deals in case rates go any higher.

5th July 2007
Bank raises interest rates to 5.75%
The Bank of England raised interest rates by 0.25% to 5.75% citing the risk of inflation. UK credit and broad money continue to grow rapidly and output growth remains firm. Although pay pressures remain muted, the margin of spare capacity in businesses appears limited and most indicators of pricing pressure remain elevated

25th June 2007
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10th May 2007
Interest rates up again

Bank of England raised interest rates by 0.25% to 5.5% to control inflation. This is the fourth increase in a year.

31st January 2007
House repossessions rise by 65% in 2006

The number of mortgage repossessions rose from 8,140 in the first half of 2006 to 8,860 in the second half, according to figures released to day by the Council of Mortgage Lenders. This brings the total for 2006 to 17,000 - 65% higher than in 2005, but broadly similar to 2001 levels and roughly 1 in 690 mortgages.

Back in December, the CML had forecast that there would be 18,000 repossessions in 2006, 2007 and 2008. However, the rate of increase in repossessions slowed down toward the end of 2006, resulting in a more positive outturn than expected.

But the CML is now forecasting that repossessions will rise modestly to 19,000 in 2007 and 20,000 in 2008. This reflects a slight worsening in prospects as a result of higher interest rate expectations since the previous forecast.

On arrears, the number of mortgages more than six months behind on payments fell by 8.5%, from 49,010 at the end of 2005 to 44,840 at the end of 2006. This represents only 0.38% of all mortgages - approximately 1 in 260. Shorter term arrears, of 3-6 months, also fell. There was a 6% decline between the end of 2005 and the end of 2006, from 62,920 to 59,100 cases.

30th January 2007
House prices show first sign of cooling

Nationwide Building Society said UK house prices increased by only 0.3% in January, the smallest monthly rise since May 2006. The annual rate of house price growth fell to 9.3%. The typical house in the UK now costs £173,225.

Nationwide says that it is now likely that there will be a weakening in house demand as a result of stretched affordability and rising interest rates. House supply, as measured by new instructions for sale of properties with estate agents, is actually falling more quickly than demand. As a result, estate agents are still reporting house price gains but slower demand will eventually ease the rate of house price growth to more sustainable levels.

11th January 2007
Bank of England in surprise rate increase

The Bank of England raised interest rates to 5.25%, wrongfooting all but one of 50 economists polled by Reuters. It is not the first time the central bank has sent shockwaves across trading floors. Six months ago the Monetary Policy Committee's decision to tighten policy for the first time in two years also came as a surprise

27th September 2006
UK Economic Growth in Second Quarter Revised Down

The prospect of further rises in interest rates appeared less certain after data showed the economy grew less quickly in the second quarter than previously thought. Forecasts of higher unemployment from a Bank of England policymaker and tentative signs the housing market may be cooling added to these doubts, although data from the Confederation of British Industry showed robust retail sales.
"The downward revision to GDP was the biggest surprise," said Geoffrey Dicks, chief UK economist at RBS Financial Markets. "On balance, today's data argues against the need for higher interest rates.
The Bank of England raised rates for the first time in two years in August, saying the move was needed to bring inflation back to target.
Final data showed the economy grew 0.7 percent in the April-June period, down from an originally estimated 0.8 percent. A key measure of inflation, the GDP deflator, was also revised down.

27th September 2006
Credit card issuers raise interest rates

Many credit card firms have increased their interest rates in the last three months to offset enforced cuts in their default fees, a report shows. Financial data firm Moneyfacts said 19 leading credit card issuers have put up their charges. Earlier this year, the Office of Fair Trading (OFT) told them to halve their typical default fees to £12. These are the charges users have to pay for failing to meet the minimum monthly payment on their credit card.

The list of credit card companies that have increased some of their charges includes not only American Express and Barclaycard, but also most of the UK's biggest banks, such as the Halifax, HSBC, NatWest and Lloyds TSB, plus a host of other major card issuers.

American Express has raised the rate on one card by 6%, while Barclaycard's Platinum card customers have seen the rate they have to pay for cash withdrawals go up by 6% to 27.9%. Last year the Association of Payment Clearing Services (APACS) predicted this might be the first year since the introduction of credit cards in the UK in the 1960s that their use would fall.

27th September 2006
UK debt 'double Europe average'

People in the UK are borrowing on average almost twice that of citizens in other western European countries, a report has found. Unsecured UK lending, such as credit cards, was £216bn ($408bn; 319bn euros) in 2005 - more than a third of all new non-mortgage borrowing in Europe.

The average British resident owes £3,175, business research firm Datamonitor said. Total UK personal debt, including mortgages, is about £1.2 trillion. The report, which looks at the market for borrowing via personal loans, hire purchase, credit cards and overdrafts in 16 European countries, said that the UK had an "insatiable appetite for credit". The average European owed just £1,558 in unsecured debt.

Credit cards The figures reflect the explosion in borrowing that has taken place in the UK over the last decade. The debt advisory service the Consumer Credit Counselling Service (CCCS) said overuse of credit cards lay at the heart of many of the problems encountered by its clients.

Borrowing power In terms of fresh lending, the French came an easy second to the UK last year, the report found. The Germans were second to the UK in terms of the total size of debt they had accumulated. Although the biggest economies dominate the lending market, it is in the smaller economies of Turkey and Greece that non-mortgage borrowing has been rising fastest. After recovering from an economic crisis in 2001, new lending in Turkey rose by 52% between then and 2005, with Greece seeing its unsecured borrowing rise by 29% over the same period of time. Both of those countries also top the league for the speed with which their consumers' outstanding balances have grown.

The report points out that one reason for the position of Turkey is that the country has a very undeveloped mortgage market, so borrowing is dominated by unsecured lending, with credit cards being the most popular form. The opposite is true in Holland, where unsecured credit as a proportion of all lending is just 5%, and where people often expand their mortgages so they can afford to buy things.

'Saturation point' Paul Marsh, a financial services analyst at Datamonitor, said that the UK market was at saturation point. "The UK is an increasingly difficult place to do business, due to the highly indebted nature of the population," he said. "Yet in other European countries consumers are not as indebted and the markets are not as sophisticated."

26th September 2006
£53.8m of personal loans to fund university students

New research from Sainsbury's Bank has found that around £53.8 million worth of personal loans could be taken out this year to help cover the cost of university. And the figures show the majority of personal loans will be taken out by parents who are keen to help cover their childrens’ university costs.

Sainsbury's Bank has also warned that if you are taking out a personal loan to help cover the cost of university, it is important to shop around for the best deal. But despite this fact, just four out of ten people taking out a personal loan only receive one quote.

Steven Baillie, Sainsbury's Bank loans manager, said: "As students go back to university, many will face a significant increase in their living expenses. As well as students taking on paid employment to help cover this cost, some of their parents are also taking out personal loans to help.”

20th September 2006
Underlying net mortgage lending rose by a record amount in August, British Bankers' Association data shows.

The surprise rate hike in August has not deterred house buyers. Net mortgage lending rose by 6.2 billion pounds, up from an 5.8 billion increase in July and well above the monthly average rise of 5.4 billion over the previous six months. The BBA said August's mortgage lending number beat the last record set in April 2004 when it increased by 6 billion pounds.

"The draw-down of house purchase loans in particular has driven net mortgage lending higher of late and August's increase set a new monthly record," BBA Director of Statistics David Dooks said.
The Bank of England's Kate Barker said on Tuesday the strength of the housing market had surprised policymakers this year and could boost consumer spending.
The closely-watched Nationwide and Halifax surveys showed strong rises in house prices in August, in spite of the Bank's quarter-point rate hike to 4.75 percent. Economists expect the Bank to raise rates again this year to 5 percent.

17th September 2006
Financial comparison websites may hurt credit scores

Comparison websites have sold 13.6 million products in the past year. But a report published in September 2006, by Professor Merlin Stone of Bristol Business School, says numerous applications lead to checks that can lower the credit rating. This can happen regardless of whether the application is successful or is turned down.
"Many people apply for products they will not be approved for and are left with applications on their credit scores," said Professor Stone.

His report was commissioned by the Moneyexpert comparison site. Both this and a similar service Moneysupermarket.com offer help to potential customers so they can check their existing credit scores before they apply for a loan.

Footprint
Professor Stone argues that the problem lies with the fact that some comparison websites assume all potential customers are the same and have good credit histories. If someone eventually applies for a product such as a mortgage or credit card, the lender checks their credit history.

This enquiry is logged and thus leaves a "footprint" on the files kept by credit scoring companies such as Experian and Equifax. Equifax's spokesman Neil Munro said: "These footprints are used by future lenders as an indication of your credit-worthiness. So if you have too many of these applications on your file in a short period of time, a lot of the ratings systems the lenders will use will probably downgrade your credit rating.
According to Moneyexpert, about 3.5 million people had applications for financial products rejected in the past year after being channelled through comparison sites.

This process can develop into a spiral, with failed applicants trying again and again to buy polices or products they have no hope of getting, but simply leaving themselves with a worse credit score each time.

7th September 2006
Following success on credit card default charges - OFT turns attention to bank current accounts.

In response to the OFT's statement of principles on the calculation of credit card default charges, credit card issuers have agreed to reduce their default charges - the majority by almost half.

In April, the OFT stated that credit card default charges had been generally set at a significantly higher level than was considered fair and set a £12 threshold for OFT intervention unless there were exceptional business factors. Many card issuers have stated that they do not agree with the OFT's view of the law and that they believe that their default charges were fair but, in view of the reduction in charges across the market, the OFT is satisfied that no further intervention is warranted in this area at this time and that this change has brought about substantial benefits for consumers.

The April statement also indicated that the OFT considers that the broad principles in relation to default charges are likely to be relevant to other standard agreements with consumers such as those for bank current accounts. The responses received from the banking industry have generally challenged this belief but the OFT remains of the view that the broad principles do read across to the retail banking area and has decided to undertake further work on the application of these principles to bank current accounts.

31st August 2006
House price growth firm in August
Nationwide Building Society said UK house prices are now 6.6% higher than a year ago. This is the fastest annual rate of growth since April 2005. The typical house in the UK now costs £167,721.

11th August 2006
Bankruptcy cases on the increase
The number of bankruptcy petitions issued by the courts has risen year-on-year, the Department for Constitutional Affairs (DCA) has said. In total, 15,796 people were the subject of a petition between April and June this year, an increase of nearly 10% on the same period last year.
The number of bankruptcy petitions from creditors fell, but was outweighed by a 20% rise in debtor petitions. In short, more people are applying for bankruptcy than being forced into it.
The DCA figures echo statistics issued by the government's Insolvency Service. A record 26,000 people became insolvent in England and Wales during the second quarter of 2006 - 66% more than in the same period last year, the service said.
At the time, debt experts predicted that more than 100,000 people would become insolvent during the course of 2006. The insolvency statistics include people going bankrupt and those taking out Individual Voluntary Arrangements (IVAs) - an alternative to bankruptcy that allows debtors to come to an agreement with their creditors.

20th July 2006
Strong mortgage lending but weak consumer credit
For June 2006, The British Bankers Association said that mortgage lending continued to grow strongly but consumer credit was not nearly so robust. Net unsecured lending in 2006, so far, rose by less than half the increase seen in the same period of last year. Borrowing on credit cards remains particularly subdued.

Net mortgage lending rose by an underlying £5.6bn. This was slightly lower than the £5.8bn rise in May but higher than the average of +£5.3bn over the previous six months. In the first half of 2006 mortgage lending was some 18% stronger than in the equivalent period of 2005.
Unsecured personal lending fell by £0.1bn in June, compared with an average rise of £0.3bn in the previous six months. Loans & overdrafts rose by £0.2bn, whilst underlying credit card borrowing fell by £0.2bn and has now declined in four of the last six months.

6th July 2006
UK house price growth falls sharply in the second quarter of 2006
Nationwide Building Society said that the quarterly rate of house price growth in the UK fell back sharply from 2.2% in Q1 to 0.9% in Q2. However, the annual rate of house price growth was stable at 4.8%. England is lagging behind other parts of the UK where prices grew at 3.6% over the year. In contrast, Scottish and Northern Irish house prices are booming with annual growth of 10.7% and 24.9% respectively.

Within England, the fastest annual rate of house price growth was in London where prices increased by 4.7%. The Northern region saw the slowest annual growth at only 1.0%.

10th May 2006
1000% APR Loan Shark netted
A loan shark who has preyed on some of the most vulnerable members of society has been sentenced at Birmingham Crown Court. Alan McNally operated the unlicensed money lending operation in the Northfield area of Birmingham after poaching his employer's clients whilst working at a finance company. Abusing his position of trust, he left the company and approached clients to offer illegal loans with interest rates of over 1000% APR. McNally paid personal visits to his victims' homes when they were unable to meet payments.
Investigators from the DTI-funded Loan Shark Team swooped on McNally's home within weeks of receiving tip-offs to the Loan Shark Hotline 0121 693 1122. Alan McNally from Yardley Wood, Birmingham had about 75 clients which he lent money using £20,000 raised from remortgaging his home. The typical loan amount was for £100.

Commenting after today's sentencing, Consumer Minister Ian McCartney said: "This should send out a clear message that there is no hiding place for loan sharks. We will take action against those people who think they are above the law. The Government is determined to get illegal lenders of the streets and out of our communities. Loan sharks are the lowest of the low. They prey on the most vulnerable people in our communities and we are determined to stop them operating and making money out of misery."

24th April 2006
Strong mortgage lending but weak consumer credit in March, according to the British Bankers' Association. In March 2006, total sterling lending to the UK private sector showed a net underlying increase of £23.0bn (+2.0%) to £1,191bn. This was double both the previous month's underlying rise of £11.4bn and the average over the previous six months.

Net mortgage lending rose by an underlying £5.4bn. This was higher than both the £4.7bn rise in February and the average of +£4.9bn over the previous six months. Unsecured personal lending fell by £0.4bn compared with an average rise of £0.5bn in the previous six months. Loans & overdrafts fell by more than £0.1bn, whilst credit card borrowing also declined by £0.2bn compared with an average increase of £0.2bn in the previous six months.

David Dooks, BBA director of statistics, said: "The contrast between stronger mortgage lending and net repayments of unsecured borrowing suggests that individuals are optimistic about the housing market, though careful about card borrowing, overdrafts or taking on personal loans."

23rd March 2006
CCJs surged in 2005 according to the Registry Trust. Count Court Judgments (CCJs) rose by nearly 7% in 2005 to 573,000 in 2005, reversing the declining trend since 1991. Registry Trust Chairman, Malcolm Hurlston, said: “This is a clear sign of the pressure on lenders from the rise in over-indebtedness. They are now flocking back to the courts to take effective action to help them recover their money…this is a clear demonstration of the importance of judgment information to responsible lending – few people get credit once they have a judgment against them.”

9th January 2006
Halifax reported a 5.1% annual increase in UK house prices in 2005, the smallest increase for 10 years and significantly below the long-term annual average of 8%. The annual rate of house price inflation slowed in all regions in 2005 with the exception of London where prices rose by 6.7% compared with a 3.9% rise in 2004. House prices increased by less than 10% in all nine English regions for the first time since 1998.

Halifax expects the housing market to be flat in 2006 with modest nominal house price growth and no change in real terms. UK house prices are forecast to rise by 3%, broadly in line with the predicted rise in retail price inflation. The annual rate of house price inflation is expected to increase during the first half of 2006, potentially reaching a peak of 7 - 8% mid year as modest price rises compare with slight falls in early 2005. The annual rate is subsequently expected to fall as prices rise at a significantly slower pace than in the second half of 2005.

The recent pick-up in prices is entirely consistent with the improvement noted by all the main indicators of housing market activity over the past few months. The number of mortgage approvals to fund house purchase increased for the fifth successive month in November, according to the latest Bank of England figures. The most recent RICS survey reported the sixth successive monthly rise in new buyer enquiries for house purchases in November, marking the longest running period of increases since 2001.

29th December 2005
Gross mortgage lending recovered strongly in November 2005 but consumer credit was very weak, said the British Bankers Association.

David Dooks, BBA director of statistics, said: "Gross lending on mortgages reached a very high level in November confirming the recovery in the housing market after a relatively weaker early part of the year. Approvals, particularly for house purchase, continued to be strong with little evidence of the normal seasonal slowdown. By contrast consumer credit was very weak with little sign that the slight improvement in retail sales was feeding through to lending."

Gross mortgage lending was £18.0bn in November. This was among the highest on record and 23% higher than November 2004.
Seasonally adjusted net mortgage lending (gross lending minus repayments and redemptions) rose by £5.1bn, compared with £4.3bn in October and £4.1bn in November 2004. This was the strongest increase since July 2004 and compares with an average of £4.4bn over the previous six months.
There were 192,927 mortgage approvals (for all purposes) in November, with a total value of £19.1bn. The number of approvals was virtually the same as October 2005 but 22% higher than November 2004. The average approval for house purchase rose to £130,800.
Net lending on loans and overdrafts rose by £0.1bn (having risen by £0.5bn in October) well down on the average increase over the previous six months. Net lending on credit cards also rose by £0.1bn, in line with the average increase in the previous six months.

2nd December 2005
House prices increased by 1.2% in November and 4.5% over the last year, according to the Halifax House Price Index. Commenting, Martin Ellis, Chief Economist, said:
"House prices increased by 1.2% in November. Overall, prices have increased by 4.7% over the past six months. The high level of employment and good earnings growth continues to underpin housing demand.

The slowdown in UK economic growth over the past year and the historically high level of house prices relative to average earnings are, however, expected to curb the recent improvement in housing demand and prevent another sustained period of sharply rising property values.”

21st November 2005
Annual fees on credit cards are set to make a comeback as issuers face shrinking margins from regulation, rate tarts and rising credit losses, according to PricewaterhouseCoopers' latest study of the UK consumer credit market, Precious Plastic 2006.

Profit margins have been hit by an increase in bad debts and the study contains new research showing that individuals who enter into Individual Voluntary Arrangements (IVAs) owe an average of £60,000 to 11 creditors (credit cards and other unsecured borrowing).

Rate tarts (those who move from issuer to issuer to finance their debts at no cost) are estimated to have cost the industry a further £600 million in lost revenue on balance transfers, despite the introduction by many card issuers of a 2% fee for such transfers. The provision of consumer credit is also in the regulatory spotlight with a number of separate inquiries focusing on most sources of revenue.

25th November 2005
Loan approvals for home purchases rose 23 percent on a year ago in October, data from the British Bankers' Association showed on Friday, in further evidence that housing market activity is gradually picking up.

Mortgage approvals -- the number of loans agreed but not yet made -- rose to 72,328 from 70,105 in September. The figure, often viewed as a leading indicator of house prices, was the highest since June 2004 and up markedly from 59,011 a year earlier.

"The data suggest the housing market is seeing reasonably healthy turnover at the moment. This is also borne out by the latest survey evidence consistently showing increased buyer interest," said Howard Archer, economist at Global Insight. "Clearly, August's interest rate cut has supported housing market activity, along with reduced fears that house prices could crash."

6th October 2005
Halifax says that house prices increased by 1.2% in September and by 1.8% in the third quarter. The annual rate of house price inflation, at 3.0%, is significantly lower than the 20.5% recorded in 2004 Quarter 3.

The annual rate of house price inflation has slowed significantly in all the regions of Britain over the past 12 months and is now in single figures throughout the mainland. The biggest gains in house prices over the past year have been in the North West (9.1%) and Yorkshire & the Humber (8.0%). Four regions have experienced small falls during the last 12 months: East Midlands (-0.4%), East Anglia (-0.8%), South East (-1.1%) and South West (-1.5%).

20th September 2005 - August sees remortgaging boost to lending figures
Gross mortgage lending rose by 9% to an estimated £27.5 billion in August, up from £25.2 billion in July, according to the Council of Mortgage Lenders. This was one of the highest figures on record, 4% higher than the £26.5 billion of August 2004, and the highest figure since July 2004.

There was an increase in all types of lending, although the most pronounced increase was in remortgaging. Remortgaging went up by 15% to £11.7 billion in August from £10.2 billion in July, reaching its highest level since October 2003. This probably reflects borrowers taking advantage of lower interest rates and remortgaging into cheaper deals, especially as a large number of people will have been coming to the end of their previous deals. But as a proportion of total business remortgaging rose only slightly, from 41% in July to 43% in August.

Lending for house purchase rose by 6% to £12.5 billion in August, up from £11.8 billion in July, but down slightly on the £12.8 billion recorded last August. Lending for house purchase accounted for 45% of lending, down from 47% in July and 48% last August. The number of loans for house purchase rose from 96,000 in July to an estimated 101,000 in August. However, this was still below the 110,000 in August last year. First-time buyers accounted for 30% of this total, very similar to the proportion throughout the past year (which has varied from 28%-32% on a monthly basis).

Affordability maintained a similar picture to previous months. Typical first-time buyers borrowed around 87% of their property value, representing 3.22 times their income. Typical movers borrowed 68% of their property value, representing 2.95 times their income. However, the pricing of both fixed and variable-rate products continued to fall, with the average fixed rate in August at 5.23% and the average variable rate at 5.61%. The pricing differential between fixed and variable rates prompted a further increase in the popularity of fixed-rate business, which accounted for 54% of all loans in August, the highest proportion ever since monthly records began in 1998.

Commenting on the figures, CML Director General Michael Coogan said:
"The doom-mongers' prophecies look to have been wrong, as lending has continued to strengthen over the summer. Although the market remains far from spectacular in terms of transaction numbers and house prices, the prospects of a significant market correction are receding

16th September 2005 - Secured loans demand 'to ease off'
Demand for secured loans is set to cool over the coming five years as the property market continues to slow down, research has claimed. Market analyst Datamonitor said the double digit growth in secured lending seen during the past few years was unlikely to be repeated in the near future.

Instead it expects total advances of the loans, which are secured against people's homes, to increase at a rate of just 5.3% a year between now and the end of 2009 to reach £35.4 billion a year. This is well down on jumps of 50% a year recorded over the past five years, with total advances reaching £32.6 billion last year, well up on the previous year's figure of £28.1 billion.

Author of the report Maya Imberg said: "As the UK 's housing market slows to a soft landing, the rapid growth rates the secured lending market has enjoyed over the last five years are set to cool."

15th September 2005 - Mortgage customers 'wasting thousands'
Abbey says that Britons coming to the end of a mortgage deal are collectively wasting £20 million a month by failing to switch to a better rate.

Around 50 per cent of homeowners have a fixed or tracker rate mortgage, but 35 per cent of these say they will not bother remortgaging when their current deal expires, according to high street bank Abbey.

The group said this meant an estimated 280,000 people who have either recently come to the end or are about to come to the end of a deal plan to stay on their lender's standard variable rate, which their rate automatically reverts to, at a collective cost of £20 million each month.

Mortgage rates have risen quite steeply during the past two years, increasing from an average of 4.21 per cent in September 2003 to 5.5 per cent now. If a borrower had taken out a two-year fixed rate in 2003 they would have paid an average of 4 per cent, but when this deal runs out they will revert to an average SVR of 6.5 per cent, increasing monthly mortgage repayments on a £100,000 loan by £148. Abbey found that the majority of homeowners did not know how competitive their mortgage was, with more than half of people either not knowing or having only a vague idea what rate they were paying

14th September 2005 - High interest store cards criticised.
Customers are being overcharged by up to £1 million a year for credit through store cards and associated insurance. According to the Competition Commission, interest rates are also between ten and twenty per cent higher than necessary. As a result, cardholders have paid in the region of £80 to £100 million a year in term of excess prices. CC Deputy Chairman Christopher Clarke, who is chairing the inquiry, said: "We have provisionally concluded that there are features of the store card market that effectively insulate retailers and consumer credit providers from competitive pressures, notably from credit cards and store branded credit cards.

"There is therefore little competitive pressure either on APRs or insurance. Retailers' primary concern is to avoid having an APR on their store card which is above those of other store cards.

"At the same time, consumers' sensitivity to APR levels and other charges is low. Taken together, this results in store cardholders who take up credit, and associated insurance, paying more than they would in a fully competitive market."

The CC identified some 70 retailers operating store card services. They were mostly department stores and clothing retailers, provided by six main store card issuers: Arg Card Services, Creation Financial Services, General Electric Consumer Finance UK (GECF), HSBC Group, Ikano Financial Services and Style Financial Services.

1st September 2005
Nationwide Building Society says that UK house prices fell by 0.2% in August reducing the annual rate of house price inflation to 2.3%, compared to 2.6% last month and 18.9% at this time last year. However, housing activity has been creeping up since the end of 2004. The current levels of monthly house purchase approvals, estimated at 97,000 in August, are now higher than at this time last year.

30th August 2005
Bank of England says mortgage lending in July saw weakest rise since June 2002. Mortgage lending grew by £6.5bn compared to £7.1bn in June. Net consumer credit also increased less than expected with annual growth of 12.1% the weakest since June 2001.

17th August 2005
Credit card firms are increasingly clawing back money from customers known as "rate tarts", research has shown. According to the financial research company Moneyfacts, 29 credit cards now charge a one-off fee on any debts transferred from another card. Rate tarts move their debts between credit cards to take advantage of low-interest introductory offers.

4th August 2005
Bank of England Reduces Interest Rates by 0.25 Percentage Points to 4.5%. The Bank of England's Monetary Policy Committee today voted to reduce the Bank's repo rate by 0.25 percentage points to 4.5%.

In the first half of the year, output growth in the United Kingdom was subdued. Household spending and business investment growth have slowed. Although there are some signs of a pickup in consumer spending, downside risks remain in the near term. Looking further ahead, however, the rise in equity prices and the recent fall in the exchange rate should boost activity.

CPI inflation was 2.0% in June. Higher oil prices may raise inflation further in the short term. But, in the Committee's view, the slackening in the pressure of demand on supply capacity should lead to some moderation in inflation. Against that background, the Committee judged that a decrease of 0.25 percentage points in the repo rate to 4.5% was necessary to keep CPI inflation on track to meet the 2% target in the medium term.

4th August 2005
Individual insolvencies are rising strongly says the DTI. The Department of Trade and Industry said that there were 15,394 individual insolvencies in England and Wales in the second quarter of 2005 on a seasonally adjusted basis. This was an increase of 11.7% on the previous quarter and an increase of 36.8% on the same period a year ago.

This was made up of 11,195 bankruptcies, an increase of 7.8% on the previous quarter and 27.5% on the corresponding quarter of last year, and 4,199 Individual Voluntary Arrangements (IVA's), an increase of 23.7% on the previous quarter and an increase of 69.6% on the corresponding quarter of the previous year.

29th July 2005
Demand for credit declines, says the Bank of England. The BofE said that the increase in total net lending to individuals in June (£8.8 billion) was less than in May and weaker than the previous six month average.

Within the total, the increase in net lending secured on dwellings (£7.5 billion) was weaker than the increase in May but stronger than the previous six month average. The twelve-month growth rate fell from 11.1% in May to 10.8%. The number of loans approved for house purchase was in line with May, while those for remortgaging were higher and those for other purposes were lower.

The increase in consumer credit (£1.3 billion) was weaker than May’s outturn. Within this, both net credit card lending and net other loans were weaker than in May and their respective previous six month averages.

28th July 2005
House prices increased by 0.2% in July, according to the Nationwide

House prices bounced back in July reversing the fall in June. However, the overall picture remains one of a gently softening market. The annual rate of house price inflation fell to +2.6% in July, its lowest rate since May 1996. The price of a typical house is now £158,348.

27th July 2005
Mortgage arrears and possessions - numbers up, but still very small say the Council of Mortgage Lenders.

The numbers of repossessions and cases of mortgage arrears both rose in the first half of this year, but both remain at extremely low levels by historical standards, according to new results published today by the CML.

The number of properties taken into possession rose from 3,070 in the second half of last year (the lowest figure on record) to 4,640 in the first half of this year (similar to the half-yearly levels of 2002 and 2003). The number in the first half of last year was 3,160. Repossession occurred in 0.04% of all mortgages, compared to 0.03% last year. Put another way, the half-yearly repossession rate was around 1 in 2,500 mortgages, compared with around 1 in 250 when repossession rates peaked in the second half of 1991.

The number of mortgages in arrears of 3-6 months was 57,220 - up from 53,960 in the second half of last year and 49,720 in the first half of 2004. This equates to 0.50% of all mortgages (compared with 0.47% and 0.43% in the second and first halves of last year).

Arrears of 6-12 months accounted for 30,980 cases, compared with 26,920 in the second half of last year and 26,980 in the first half of 2004. This equates to 0.27%, compared with 0.23% throughout last year.

The number of mortgages more than 12 months in arrear was 12,380, up from 11,210 in the second half of last year and 11,480 in the first half of 2004. This equates to 0.11% of all mortgages, compared with 0.10% throughout last year.

The CML expects the rising trend to continue over its three year forecast period, but the absolute numbers are set to remain relatively small. The likelihood is that, as long as the wider economy performs as expected, repossession rates will peak at perhaps 12,000 a year during 2007, and subsequently stabilise.

Peter Williams, CML Deputy Director General, commented:
"It now seems clear that the second half of 2004 marked the trough in the number of mortgage arrears and possessions. Arrears and possessions now look set to rise a little, but only to the sort of levels experienced in the past few years. A re-run of the early 1990s is certainly not on the cards.”

21st June 2005
The Woolwich says that the proportion of household income spent on monthly mortgage payments across England and Wales has stabilised at around 18.0% - 18.5%. However, this is much lower than the previous highs set in 1990.Andy Gray, head of mortgages for the Woolwich, said: “The mortgage affordability numbers show that the concern expressed by some commentators about affordability is probably overdone. Much has been made of the current house price to earnings ratio being at a record 6.32.”

20th June 2005
The British Bankers Association painted a subdued lending picture in May. Net mortgage lending rose by an underlying £4.3bn but this was lower than the average increase in the previous six months of £4.5bn.Whilst personal loans saw an average rise, credit card lending by the major banks continued at a very low level, in line with weak retail sales. Corporate demand was also muted.

20th June 2005
Lloyds TSB has warned that a higher [bad debt] charge in retail banking, reflecting an increase in the number of customers experiencing repayment difficulties, is expected to be offset by a lower charge in the Group’s corporate lending portfolios. The rate of consumer lending growth in the first half of 2005 is expected to be slightly lower than the double digit growth rates experienced in recent years. Lloyds TSB expects to deliver a satisfactory trading performance for the first half of 2005.

8th June 2005
The Royal Bank of Scotland warned of increased credit card arrears this year, necessitating increased bad debt provisions. RBS has seen a transition in consumer behaviour away from unsecured lending.

7th June 2005
The Halifax said that house prices fell by 0.6% in May. The annual rate of house price inflation fell to 5.7% in May, continuing the downward trend. The number of house sales is around 30% lower than last year. Halifax forecasts a decline of 2% in house prices this year.

6th May 2005
Individual insolvencies in England and Wales in the first quarter of 2005 increased by 27.9% on the same period a year ago, according to the Department of Trade and Industry. The 13,229 insolvencies comprised 10,091 bankruptcies (+24.5% on the same period a year ago) and 3,139 Individual Voluntary Arrangements (+40.1% on the same period a year ago).

6th May 2005
House prices were unchanged in April, according to the Halifax , and the annual rate of house price inflation declined to +7.8%. The number of loans approved for house purchase increased in March, according to the Bank of England, but was still 26% lower than a year ago. The house price to earnings ratio has dropped from a peak of 5.63 in September 2004 to 5.48 in February 2005. The value of households' net housing equity has almost doubled over the past five years resulting in net housing equity accounting for 44% of household wealth in 2004 compared with 29% in 1999.

31st March 2005
Bank of England said borrowing against houses fell dramatically in the fourth quarter of last year. The Bank of England’s estimate for Mortgage Equity Withdrawal for Q4 2004 was £6.9 billion, compared with a revised estimate of £11.3 billion for Q3 2004. Figures are Seasonally Adjusted.

£mn (SA)
2003 Q4	2004 Q1	2004 Q2	2004 Q3	2004 Q4
16,817	15,525	13,724	11,297	6,933

31st March 2005
Nationwide says house prices fell by 0.6% in March – the biggest monthly price fall since June 1995. House prices grew by 7.9% in the year to March – the first time the annual growth rate has fallen below 10% since June 2001. Nationwide says the housing market is experiencing a soft landing.

31st March 2005
Bank of England reported a sharp slowdown in consumer borrowing in February. Net consumer credit grew by £1.7 billion in February, down from £2.4 billion in January. Credit card borrowing also fell from £1.1 billion to £828 million.

21st March 2005
Business failures are set to rise after two year lull says BDO Stoy Hayward. 2005 will mark the beginning of a sea change for UK business as the number of firms going bust is expected to increase for the first time in two years, according to experts at BDO Stoy Hayward.

The latest BDO Stoy Hayward Industry Watch reveals a 3 per cent increase in the number of business failures in 2005 from last year. This is equivalent to an average of 315 businesses going bust per week. Since 2003, there has been a steady decline in the number of businesses failing but this is set to change. A tough year is expected for businesses in 2005 with increases in inflation and interest rates, a decline in consumer confidence and a more volatile global economic environment likely to result in an increasing number of businesses failing. Consequently, Industry Watch predicts that 17,043 businesses will fail in 2006, a further 4 per cent increase from 2005.

18th March 2005
"Predictably flat" mortgage market in February, says CML.

Total gross lending in February remained flat at £17.2 billion, according to the latest data from the Council of Mortgage Lenders, virtually unchanged from January's figure of £17.3 billion but 18% lower than in February last year (£21.1 billion). There is a strong seasonal trend to mortgage lending, with a marked fall in lending seen every year in January and February, so this flat trend in lending was expected.

16th March 2005
In his Budget, Gordon Brown announced a doubling in the lower Stamp Duty Land Tax threshold to £120,000 and that the Inheritance Tax threshold will increase from £263,000 to £300,000 by 2007. Child Tax Credit will rise by 13% in line with earnings, over the course of the next three years.

1st March 2005
Nationwide says that house prices rose by 0.5% in February, confounding market expectations. However, annual house inflation eased to +10.2% from +12.6% in January meaning that the price of a typical property now stands at £152,879. Nationwide expects that the 2005 increase in house prices will be nearer the bottom of the 0-5% range.

2nd February 2005
The public's appetite for debt appears to be on the rise, according to a report from HSBC Bank, in a sign that five interest rate hikes between November 2003 and last August may no longer be having much effect. HSBC Bank's index has been designed to provide a measure of consumer financial confidence based on data collected from around 1,700 branches across Britain.

Growth in the non-seasonally adjusted index of borrowing enquiries in January accelerated to 4.4 percent on a year ago from 2.3 percent in December. It was also up 1.8 percent in the latest three months on a year earlier. The growth was driven by demand for new mortgages and mortgage equity withdrawal, HSBC said. John Butler, UK economist at HSBC, said: "Intense price competition in the market is clouding the picture but is clearly supporting borrowing activity."

1st February 2005
Housing Finance online highlights growing problems for first-time buyers across the UK. Housing affordability continued to worsen in 2004 in all four national markets within the UK, the Council of Mortgage Lender's annual review of market developments in England, Scotland, Wales and Northern Ireland shows. All four countries saw a decline in the number of first-time buyers. In England, house prices rose by 13% in 2004 and the average amount borrowed rose to almost three times the buyer's income, compared to 2.8 times income in 2003.

Commenting on the review, the CML's deputy director general Peter Williams said:
"What emerges is a picture of contrasting trends in local markets, but the over-arching theme is one of growing affordability problems and a decline in the number of first-time buyers. Last week's announcement by John Prescott provides some welcome encouragement for first-time buyers in England. One straightforward reform that the UK Government could implement to help improve affordability for first-time-buyers wherever they live would be to raise the threshold for stamp duty in the forthcoming Budget."

27th January 2005
Nationwide says that house prices rose by 0.4% in January 2005, causing the annual rate of house price inflation to ease slightly to 12.6% from 12.7% in December. Nationwide says that it is increasingly a buyers’ market. Prices have been broadly stable for six months. However, there are indications that sentiment may be about to turn more positive.
Nationwide expects prices to rise by 2% in 2005 and interest rates to peak at 5% in the spring or early summer.

7th January 2005
Halifax says house prices rose by 1.1% in December and by 0.1% in the fourth quarter– the smallest quarterly gain since the second quarter of 2000. House prices increased by 15.1% in 2004 but by only 2.8% in the second half. Halifax expects a 2% decline in house prices in 2005.
Halifax believes that the continuing signs of a genuine slowdown in the housing market are likely to reduce the pressures on the Bank of England to raise interest rates again. Halifax believes that base rates have peaked at their current rate of 4.75% and that rates will end the year at 4.25%.

4th January 2005
The Bank of England said that total lending to individuals grew by £7.8 billion or 0.8% in November, seasonally adjusted, £0.6 billion weaker than the increase in October. The three-month (annualised) growth rate fell to 10.3% from 11.4% (11.7%) in October, while the twelve-month growth rate fell to 13.1% from 13.6%

Secured lending grew by £6.5 billion or 0.8% in November, seasonally adjusted, £0.5 billion weaker than the increase in October. The three-month (annualised) growth rate fell to 10.2% from 11.3% (11.7%) in October, while the twelve-month growth rate fell to 13.4% from 14.0% in October. Gross advances were £1.8 billion weaker at £21.1 billion. The value of all loans approved was £19.9 billion, £1.3 billion weaker than in October and £2.0 billion weaker than the average in the three-months to October. The number of loans approved for house purchase in November was 77,000, seasonally adjusted, compared with the average of 89,000 in the three-months to October.

Consumer credit grew by £1.4 billion or 0.8% in November, seasonally adjusted, £0.1 billion weaker than the increase in October. The three-month (annualised) growth rate fell to 10.4% from 11.7% (11.8%) in October while the twelve-month growth rate fell to 11.7% from 11.8% in October. Gross advances were £18.8 billion, £0.2 billion weaker than the average in the three-months to October.

News Archive 1: 13th December 2004 to December 2003

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