Finance News from Loans4.co.uk http://www.loans4.co.uk/finance_loan_industry_news.php 2008-10-12T03:36:39+01:00 http://www.loans4.co.uk http://www.loans4.co.uk.net/images/Loans4Small.jpg text/html 2008-10-08T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=433-Interest_rates_slashed_by_central_banks In a decision aimed at trying to calm global financial markets and stabilise the economy central banks around the globe decided yesterday to cut their base interest rates by 0.5%. This included the Bank of England, which has cut the base rate from 5%, where it has been since April, to 4.5% - the first interest rate cut of half a percent in seven years. The announcement came one day ahead of the scheduled Monetary Policy Committee meeting, where decisions on interest rate movement are usually made. The US Federal Reserve has also slashed its base rate, taking it from 2% to 1.5%. The half point cut from the European Central Bank has seen its base rate fall from 4.25% to 3.75%. Central banks in Switzerland, Sweden, and Canada also followed suit in cutting the interest rates in what was described as an unprecedented move. China also cut its base rate, although the rate was only cut by 0.27%. Unfortunately, whilst the news of the rate cut was welcomed it appears that many investors were not convinced that the action would solve the financial crisis, and as a result of this world stock markets remained subdued. After a sleepless Tuesday night the Prime Minister, Gordon Brown, and the Chancellor, Alistair Darling, called a press conference yesterday. Here, they announced the news about the interest rate cut and also announced additional measures that they would be taking in order to try and calm the turmoil in the banking and financial markets. A package of measures to try and rescue the UK banking system was announced, and officials said that this package could end up costing around £400 billion. Part of the rescue plan for banks could see many major lenders becoming part nationalised. Gordon Brown also had some news for consumers that had money in savings accounts with the collapsed Icelandic Internet bank, Icesave, informing them that all of their savings would be guaranteed 100%, which meant that savers that had money over and above the £50,000 government guarantee threshold would not end up losing out. text/html 2008-10-07T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=432-Energy_firms_need_to_be_fairer_about_consumer_charges The UK’s energy firms have been told that they must exercise increased fairness when it comes to billing and charging consumers, and in order to ensure that this happens the energy regulator Ofgem has stepped in. Energy firms have been told by Ofgem that they must be fairer with regards to their charges to consumers, and must stop charging those that pay by direct debit or prepayment meters different rates. The regulator also said that over four million consumers had no gas supply and were therefore unable to get the best deals on electricity, which was also branded as unfair. Whilst it was found that the structure worked fine for many customers, it was also found that not all customers were receiving the benefits of competition, although there was no evidence to suggest that energy companies had been conspiring to set prices. Investigations into competition and fairness began earlier this year after the major energy companies imposed the first round of price rises for the year. A consultation into the Ofgem report is to take place now, and is set to conclude at the start of December. Officials from Ofgem have pointed out that competition will not be able to put a stop to bill increases that are stemming from the rising cost of oil and coal. They did add, however, that there was more that the energy firms could do in order to make sure that all consumers were able to access the best deals rather than only certain consumers being able to access the best prices. The chief executive of Ofgem said that the purpose of the investigation was to make sure that energy companies were no longer able to stop certain consumers from getting the best energy deals and prices, particularly when it came to more vulnerable consumers. He also said that if the energy firms failed to take action voluntarily based on the Ofgem report then there was scope to get the Competition Commission involved. Many people have expressed concern over the fact that energy firms charge consumers on prepayment higher rates for their energy bill that those that make payment by direct debit. Following the latest energy price increases consumers on prepayment meters have found themselves having to pay around £118 a year more on average for their energy usage compared to a household that pays for energy usage via direct debit. text/html 2008-10-06T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=431-Shares_plummet_due_to_global_financial_crisis There was further evidence of the global financial crisis at the start of this week, as share prices in London and New York plummeted. As the effects of the bank crisis continued to wreak havoc across the globe, share prices suffered their biggest ever fall according to recent reports. London shares saw £100 billion wiped off their value, with the FTSE 100 finally closing 391.1 down, standing at 4589.2. At one point the FTSE 100 had collapsed by nearly 9%, or 430 points, and traders working frantically as share prices collapsed around them saw the index of leading companies fall by 8%. The situation was also bad on Wall Street, with the Dow opening 515.32 lower at 9810.06. Officials have said that it is the first time in four years that this figure has been below the 10,000 mark. The news was not much better for major European markets, and the collapse of share prices around the world has dashed the hopes of many that the approval of the $700 billion bailout plan in America would help to calm the banking crisis and the financial markets. In Iceland and Russia trading on exchanges had to be suspended altogether. It came as no surprise to many people to find that the biggest share falls were within the banking industry. HBOS and Barclays both saw share prices plummet by 16%, and RBS shares fell by 21%. The price of gold, on the other hand, was pushed up even further to $870.02 per ounce as a result of the stock market collapse. Many people looking for a more lucrative way to invest their cash have been buying gold recently. In addition to plummeting share prices the pound also fell to its weakest level in two and a half years. It crashed to just over $1.73 against the dollar, which is bad news considering that just ten months ago it stood at well over $2.00 against the dollar. The Euro also fell against the dollar, and officials have said that this was all down to a high demand for dollars from European investors. text/html 2008-10-06T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=430-Increase_in_savings_guarantee_confirmed Over the past week it has been revealed that changes to the Irish banking system will mean that savers in Ireland, along with those that have savings in UK branches of certain Irish banks, will now enjoy a 100% guarantee on their savings, making them amongst the safest savings accounts in Europe. The same goes for Post Office savings accounts, which are run by the Bank of Ireland, and are therefore also covered by the increased safety net. In the UK the only savings accounts that also had this same level of protection prior to the changes in the Irish banking system were the nationalised Northern Rock, and the government backed National Savings & Investments. With all other financial institutions the 100% guarantee applied to only the first £35,000 of savings. Since the changes to the Irish banking regulations the government has come under increased pressure to look at implementing a similar level of safety for other lending institutions in the UK. Whilst government officials have not buckled to the pressure to the point where they have said that they will do this, what they have done is confirmed that as of this week the 100% guarantee will apply to the first £50,000 of savings rather than the first £35,000. The new increased safety net is due to come into force as of Tuesday of this week, but officials from the Financial Services Authority will continue to look into whether the safety net should be increased further. The current increase means that around 98% of savers will have all of their savings protected according to the Chancellor, Alistair Darling. The guarantee on savings comes from the Financial Services Compensation Scheme, and the chancellor hopes that the increased level of guarantee will help to provide savers with peace of mind that their savings are secure. There were concerns after the announcement from Ireland that many people would take money from UK banks to put into Irish banks, and some have said that the government has taken fast action to increase the safety net for UK savers so that there is less chance of this happening. text/html 2008-10-02T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=429-King_urged_to_switch_priorities_and_cut_rates Just a week ahead of the next Monetary Policy Committee meeting the governor of the Bank of England, Mervyn King, is being urged to change his priorities from lowering inflation to stimulating the economy by cutting the base rate. Industry experts have said that the base rate needs to be cut as soon as possible to try and stave off a full blown recession by Christmas. Officials are calling for a larger than usual 0.5% rate cut from the Bank of England, stating that this is vital if the economy is to avoid a full recession. The central bank has found itself under increasing pressure to cut rates after a recent report revealed that lenders had made dramatic cutbacks in lending to both consumers and businesses. The situation is being made all the more difficult for the Monetary Policy Committee and the Bank of England because of reports from the International Monetary Fund that inflation is still posing a threat to the economy. The Bank of England has said that in the run up to Christmas it is going to be increasingly difficult for consumers to get loans, credit cards, mortgages, and other forms of credit. Some economists have even likened the situation in the financial markets and the economy to the Great Depression of the 1930s. It has been reported that many borrowers are now defaulting on loans and repayments on other forms of credit. Experts have suggested that by cutting interest rates by half a point and investing money to make cheap loans more readily available the Bank of England could help to reduce the effects of the predicted recession. In the meantime the Prime Minister, Gordon Brown, is set to attend an emergency summit with European leaders in order to discuss the global financial crisis. The summit takes place in Paris, and will be hosted by Nicolas Sarkozy, the French president. The presidents of the EU Commission and the European Central Bank will be attending, as will the leaders of other countries, including Italy and Germany. text/html 2008-10-01T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=428-House_prices_continue_to_fall According to recent report house prices in the UK are continuing to fall, with one of the latest report claiming that house prices fell by a further 1.7% in September. This takes the annual house price fall to 12.4%, and means that the average house price is now £20,000 lower than a year ago, standing at £161,797. Officials have said that whilst the pace of house price drops had become more stable the next couple of years were likely to be difficult ones. Prices in the south of England seem to have fared worse than those in the north according to the report. However, the rate of house price falls has remained pretty much the same for the past few months. One economist said that there had been some huge changes in the housing and financial markets, and that house prices were going through a period of sharp correction at present. However, she added that there was nothing to indicate that house prices would not continue to grow in real terms in the future. She also said that sentiment would determine how long and harsh the correction period would be. Problems in the financial markets across the globe were also having an impact on the situation, and this would also determine the length of the correction period and its severity, stated the economist. Even the Council of Mortgage Lenders has recently stated that it is pointless to try and predict where house prices were going in the short term because the financial crisis was resulting in so many changes over a short period of time. The report went on to state that house prices were now at the same level as they were in the third quarter of 2006, having peaked in October of last year and having fallen month on month following that peak. The smallest house price falls were seen in Wales compared to other parts of the UK, with East Anglia and the South West experiencing the largest house price falls. Between July and September Scotland also saw a 5% drop in house prices compared to the previous three months. text/html 2008-09-30T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=427-Conservatives_looking_to_lower_taxes Earlier this week officials from the Conservative Party, who are currently holding their conference in Birmingham, stated that they would be looking to lower taxes to try and help the many families that have been affected by the global crisis that has hit the financial markets. Conservatives hope that this pledge will help to increase their lead over Labour in the opinion polls and will win them more votes. Spokesman and shadow Chancellor for the Conservative Party, George Osborne, stated that he would also be looking to freeze council tax for two years if councils were able to stay within their budgets and that he would be aiming to get government deficits back under control. Earlier this year the Conservative Party had a twenty point lead over Labour, and based on this lead would have easily won an election. However, recently the Prime Minister has managed to win back support from some voters for his handling of the financial crisis sweeping the country, and the Conservative's lead has now halved. In his speech George Osborne pointed out that since the whole of the country was having to rein in their spending and tighten their belts it was only right that the nation's government should be doing the same. He suggested that the Conservative party was in a position to handle the financial crisis far better than Labour had done, and reminded delegates that two banks have already had to be nationalised this year. Following the announcement that Bradford & Bingley was to be nationalised Mr Osborne said that he was determined to try and put money back into the pockets of consumers and give businesses the help that they needed to compete. He added that one of the aims of the party was to leave office with taxes at a lower level than when it came in. However, he said that he would not risk losing control of national debt in order to make this happen. The plans outlined by Osborne were welcomed by groups such as the CBI. An official from the CBI stated: "The proposals for tax simplification and greater fiscal responsibility will be welcomed by business and will be echoed by the CBI when it publishes its pre-budget representations shortly." text/html 2008-09-29T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=426-B&B_takeover_results_in_plummeting_bank_shares The takeover of beleaguered bank Bradford & Bingley earlier this week has resulted in banking shares plummeting. Although the savings part of the Bradford & Bingley was taken on by the Spanish bank, Santander, which owns Abbey, the loans business has been nationalised and taken on by the government. The news of the takeover sent shares in banks crashing down, as investors expressed concerns over what lies ahead for the banking industry. Earlier this year another troubled bank, Northern Rock, was also nationalised amidst huge problems. The crash in banking shares resulted in the biggest one day fall in the FTSE 100 index since the start of this year, as it fell 4818 points, which was down by 5.3%. After the news of the nationalisation of the Bradford & Bingley HBOS shared closed 18% down, Lloyds TSB shares closed 13.5% down, and RBS shares closed 13% down. Many other banks were affected, including Barclays, which saw share prices fall by 8.8%. In the meantime the Prime Minister, Gordon Brown, has said that the action that has been taken by the government in nationalising the bank showed that the government was prepared to take drastic action in order to ensure the stability of the financial system in the UK. The government is taking on the loan books of Bradford & Bingley, said to stand at £50 billion, whilst Santander takes on the £20 billion savings account business. Savers have been assured that their money is protected under the Financial Services Compensation Scheme. Following the nationalisation the Treasury released a statement, reading: "Following recent turbulence in global financial markets, Bradford & Bingley has found itself under increasing pressure as investors and lenders lost confidence in its ability to carry on as an independent institution." The shadow chancellor, George Osborne, stated that he had been looking at the deal, and that the government had to ensure that its main priority was protecting the taxpayer. One industry official said that the deal seemed to be a sensible one, and that the risk to the taxpayer appeared to be very low. text/html 2008-09-28T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=425-Another_lender_set_to_be_taken_over_by_the_government A second major lender and financial institution is set to be nationalised in a similar move to that seen earlier this year with the ailing bank, Northern Rock. The second financial victim that looks set to be nationalised is Bradford & Bingley, and industry experts are expecting a decision within the next day or so with regards to whether the nationalisation will go ahead. Official have confirmed that talks are still taking place with regards to the sale of some aspects of the Bradford & Bingley business, such as its two hundred branches and its savings accounts business, with rival lenders including Barclays, HSBC, and the Spanish bank Santander, which also owns Abbey. However, it is more than likely that the £50 billion loans business will end up in the government's hands. The government will be using the same legislation that was used with Northern Rock earlier this year to rush through the nationalisation of Bradford & Bingley, say industry professionals. One expert claimed that whilst no confirmation of nationalisation has yet been received the decision for the business to pass into government hands has already been made. He said that the rush decision further reflected the scope of the financial crisis facing the financial industry, and that the announcement of the decision was imminent. Insiders from both the Treasury and the Financial Services Authority have stated, however, that no decision has been made as yet. There are concerns that the nationalisation of Bradford & Bingley will add further strain to the government's finances, as the lender has around £50 billion worth of loans on its books, £41 billion of which are residential mortgages that have been handed out to buy to let investors. Whilst the government had been hoping that the whole of the B&B business could be sold to a rival such as Santander rivals have been reluctant to take on the mortgage loan side of the business due to the shrinking value of the mortgages. text/html 2008-09-25T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=424-Acceleration_in_house_price_falls_in_England_and_Wales According to data from the Land Registry house price falls across England and Wales are accelerating, with reports showing that in August prices fell by 1.9%. This has taken the annual rate of price deflation to 4.6%. The figures equate to a drop of £8,320 on the average house price compared to one year ago, and around £3,871 of that drop has occurred in the past month. The data showed that London saw its first monthly fall since the Land Registry started keeping records in 2000, with a drop of 3.2% on house prices. Just two months ago officials from the Land Registry had stated that house prices in England and Wales were still marginally higher than they had been one year earlier. However, the latest house price drops mean that this is no longer the case. The Land Registry data is now showing the same trends as data from some of the major mortgage lenders, which has been showing that house prices have fallen sharply compared to twelve months ago. In the meantime, as house prices continue to fall, mortgage lending costs appear to be on the rise again, with a number of mortgage lenders having increased their interest rates amidst uncertainty over the volatile financial markets. Reports suggest that the turmoil in the financial markets has resulted in another increase in swap rates – the rates at which banks lend to one another – and this has once again resulted in lenders pushing up mortgage interest rates. Whilst some lenders have already increased their rates, others have said that they are reviewing their mortgage rates at present, so there may be another spate of rate rises over the coming week or two. One mortgage industry expert said that consumers should expect to see a lot of changes in terms of the interest rates being charged on mortgages over the next few days. He said that whilst some lenders have already increased rates others are expected to quickly follow suit. For the past two months mortgage interest rates had been coming down due to a drop in the swap rate. text/html 2008-09-24T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=423-Extra_protection_for_Post_Office_savings_account_holders Due to changes in the Irish banking system consumers that have placed their hard earned cash into Post Office savings accounts are to receive extra protection compared to those with savings accounts with other financial institutions in the UK. The savings scheme from the Post Office is run by the Bank of Ireland, and accountholders are set to enjoy an increase in the safety net, with up to nearly £80,000 worth of savings covered under the scheme, which is more than twice the protection offered to other savers. The increased protection has come about because of a change in the Irish compensation scheme, which now covers up to €100,000. For UK savers this equates to protection on the first £79,600 of savings based on current exchange rates. Other savers in the UK only have their savings guaranteed up to the first £35,000, and this is only due to the problems that hit Northern Rock last year, where savers withdrew billions of pounds in savings in a panic when there were rumours that the bank was on the verge of collapse. Prior to this the 100% guarantee only applied to the first few thousand pounds of savings. The Irish compensation scheme previously covered only the first €20,000, and anyone with a Post Office account would have had to claim this amount in Ireland and then have the rest of the compensation topped up by the Financial Services Compensation Scheme in the UK up to the £35,000 limit. The additional protection that has been brought in due to the changes in Ireland will cover UK Post Office savings account holders, as well as those with savings accounts with Irish banks operating in England, such as Bank of Ireland branches, Allied-Irish Bank, and Anglo-Irish Bank. The government offers a 100% guarantee on deposits with Northern Rock, which was nationalised earlier this year, and National Savings and Investments. However, next to these two account types the Post Office savings account will be the most comprehensively covered in the UK as a result of the increased protection that has come into play in Ireland. text/html 2008-09-23T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=422-Forget_about_predicting_house_price_movement_states_CML The Council of Mortgage Lenders has stated that trying to predict the movement of house prices in England and Wales at the moment is a waste of time, with officials from the CML branding this process as a 'futile' one. The agency has said that there is no point trying to guess the short term course of the housing market in terms of prices at present due to volatile conditions. The CML predicted earlier this year that house prices would fall by around 7% over the course of this year. However, it has now admitted that even its own prediction is already outdated and that there is little point in trying to update this prediction because the situation is changing so rapidly and on such a frequent basis. Experts from the CML have said that the housing market is not likely to recover from the current slump for another couple of years at least, but is now reluctant to put forward a figure in terms of potential falls in house prices because of the changes that are taking place and the speed at which the situation has been changing. In fact, many people and groups within the industry have made predictions with regards to house price falls over the course of this year, with predictions ranging from falls of as low as 5% and as high as 40%. Changes in predictions over the course of the year so far have caused increased uncertainty in the housing markets. Last year many industry officials had predicted that house prices would stabilise or even continue to increase this year, but the slump that hit the markets in the first half of this year has resulted in rapid changes being made to these predictions. With many seniors and economists from lenders around the nation banding around dramatically differing figures with regards to house price movement for the remainder of this year the CML has said that it needs to await further clarity before making any further predictions on where it thinks house prices will be by the end of the year. text/html 2008-09-22T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=421-Brown_urged_to_follow_in_footsteps_of_US Government officials in the United States have recently announced that they are discussing a possible $700 billion bailout of US banks, the bill for which will go to the taxpayer. According to a recent report the UK Prime Minister, Gordon Brown, is now being urged by the city to follow suit and look at bailing out UK banks at an estimated cost of £200 billion, which would also come from the public purse. However, with banks declaring record bad debts some fear that the UK government could be seen as acting as 'fairy godmother' to banks that have acted irresponsibly and incompetently. In the meantime government officials have said that whilst no bailout of this nature is currently being planned it has not ruled out following in the footsteps of the United States. In the city experts have said that Gordon Brown needs to act quickly in terms of implementing some sort of bailout in order to prevent an economic meltdown similar to the one that has been seen in the United States. They claim that the move is necessary in order to prevent a financial collapse. One economist said: 'If there are serious problems with illiquid and toxic assets on the books of banks that can't be unblocked, it may be necessary that other countries, including the UK, consider an option like this.' If the government does decide to take this route the UK's taxpayers will be lumbered with an estimated £200 billion worth of bad bank debts. In America the Treasury has said that the bailout will be aimed at banks with 'significant operations' and in the UK it will be big name banks such as HSBC, Barclays, and RBS that will be waiting to find out whether they are likely to benefit from any proposed bailout. The call for Gordon Brown to consider this type of mass bailout has come from former Bank of England expert, Willem Buiter, as well as a number of leading economists. At present the Bank of England's Special Liquidity Scheme, or SLS, allows banks to temporarily offload such bad debts, and a move such as this would mean significant expansion to this scheme. text/html 2008-09-21T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=420-Good_news_on_retail_sales_figures There has not been a great deal of good news in the UK's financial headlines lately, with the struggling economy and soaring inflation levels sending the country into a dark depression. However, recently released figures regarding retail sales figures for the month of August showed that there was actually a surprise increase in UK retail sales. The data comes from the Office for National Statistics. August saw the level of High Street sales rise by 1.2%, and this resulted in the figures being around 3.3% higher than they were a year earlier. Following a string of gloomy predictions and surveys, many industry experts had been expecting retail High Street sales figures to actually drop by around 0.5%. It is thought that part of the increase was fuelled by the purchase of goods for students going back to school or college, thus the need to purchase items such as books, uniforms, clothes, stationery, and other related items. This led to a marked increased in shoe and clothing sales levels. However, spending on food actually fell by around 0.2%. The figures have surprised many industry professionals, who had expected sales levels to fall due to the expectations of consumers cutting back on spending levels because of the state of the economy. Industry groups such as the CBI and British Retail Consortium have recently released reports indicating that retailers faced a difficult time due to the likelihood of a cut in consumer spending. Officials from these agencies blamed a number of factors for the expected drop in consumer spending on the High Street, and this included soaring inflation levels, bad weather, and rising living costs, all of which seem to be denting consumer confidence. However, whilst the surprise increase in retail sales levels has been welcomed, figures also show that in the three months to August there was a fall of 0.8% in retails sales figures compared to the three months previous, and this was the largest drop seen since the end of 1990. A number of industry experts have predicted that the current economic gloom means that the figures will quickly correct themselves, and that they were likely to fall over the coming months. text/html 2008-09-21T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=419-Lloyds_TSB_takes_over_HBOS Last week saw the sealing of a deal where high street bank Lloyds TSB took over HBOS. This came as part of a rescue deal, and in order to aid the takeover government officials are said to have scrapped the usual competition rules in an unprecedented move. The twelve billion pound deal was supported by the government, with officials determined not to let another bank fall victim to the global credit crunch. Over the past two weeks shares in HBOS have plummeted amidst fears that it was having problems obtaining finance on the wholesale money markets – a problem that many lenders have had since the onset of the global credit crunch. Each HBOS share will now be worth 0.83 of Lloyds TSB shares, which were valued at £2.32 based on closing prices earlier this week – just one quarter of their value one year ago. There have been mixed reactions to the takeover, which is said to have resulted in a merger that could change the face of banking forever due to the creation of a super bank. In Scotland the situation was described as the darkest day in Scottish banking history, and there are also rumours that there could be up to forty thousand job losses as a result of the deal. One industry official said that HBOS was pushed into the arms of Lloyds TSB as a result of concerns about another run on a UK bank, which is what happened to Northern Rock, which eventually had to be nationalised. Officials had not expected HBOS to become a victim of the global credit crunch, although some had thought that it would struggle to make a profit through 2010. Lloyds TSB has high hopes following the takeover, and expects annual earnings to be boosted by one billion as well as earnings per share rising by around 20% per year. There are still talks taking place with regards to senior positions within the new super bank, although the Lloyds TSB CEO and chairman will stay in place. Alistair Darling, Chancellor of the Exchequer, has welcomed the takeover deal, and the government has stated that it will smooth over regulatory approval in order to ensure that the UK's financial system remains stable. text/html 2008-09-17T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=418-Housing_problems_could_be_worse_than_expected According to a recent report the problems in the housing market could be worse that originally anticipated as a result of the chaos that has ensued in the financial markets recently. Industry officials have stated that homeowners should prepare themselves for a house price fall that is greater and faster than they may have expected as a result of the ongoing chaos in the financial sector. Officials have said that amongst the global factors that are likely to affect the housing sector in the near future are the takeover of Merrill Lynch and the collapse of the well known investment bank Lehman Brothers recently. Whilst the mortgage industry is already suffering officials have said that situations such as these are likely to result in further tightening of mortgage conditions and increased difficulties in the mortgage markets. An official from housing firm Knight Frank said that property prices were already down by between 10-12 percent year on year, and these falls were likely to increase as a result of the chaos in the financial markets recently. He added that the firm expected to see a fall of 20 percent in total with falls of between 1-2 percent in value on a monthly basis. Another official stated that the situation would probably result in vendors readjusting to pricing differences more quickly. However, another official said that the recent changes in the financial markets could affect confidence and sentiment to the point where house price falls could be prolonged across the whole of the market sector. He said that many had been convinced that the nation had managed to get through the worst of the problems, but recent activity in the financial sectors, not just locally but globally, could have had a damaging effect on many levels. In fact he described this as: "I got the sense that people were beginning to get back on the road again. But instead another two and maybe even three trucks have ploughed into the back of you." He added that he expected house prices to drop by an average 15 percent this year. text/html 2008-09-16T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=417-Further_rise_in_inflation_levels_ Recently released figures have shown that inflation levels rose to 4.7% for August. The rise in inflation came as no huge surprise, as many industry officials had predicted that inflation would rise again, and even the governor of the Bank of England, Mervyn King, has suggested that inflation could rise to 5% or higher by the end of the year. However, although most officials had been expecting the level of inflation to rise reports suggest that the rise was higher than had been expected. Mervyn King has apparently written to the Chancellor of the Exchequer, Alistair Darling, stating that it is quite possible that the rate of inflation will rise to 5% before it starts to come back down. The government's target rate of inflation is 2% and the current rate of inflation stands at well over double this target rate. Mervyn King has blamed the rises on an increase in food and energy prices. In fact, higher gas and electricity bills are said to have been one of the main contributory factors in the August rise in inflation levels. There was a drop in the price of heating and petrol in this period, but according to recent figures this was counteracted by the rise in energy costs. The cost of food and non-alcoholic drinks has also been rising, and again this has also been blamed for the sharp rise in inflation levels. Meat and fruit prices in particular are said to have contributed to the inflation hikes. The Bank of England governor will have to continue writing to the Chancellor every three months as long as the rate of inflation remains 1% or more above the target rate of inflation – or if it falls 1% or below the rate of inflation. In his last letter he is said to have blamed "sharp, largely unanticipated" rises in energy and food costs for the sharp increase in inflation levels. King has gone on to state that the rate of inflation is likely to stay over target until well into the coming year, and he has predicted that he will have to write a number of letters to the chancellor before the rate of inflation starts to fall again. text/html 2008-09-15T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=416-Thousands_lose_their_jobs_at_Lehman_Brothers Thousands of Lehman Brothers' employees in London received shocking news yesterday morning after being told that they had to clear their desks because the firm is closing down. US bank, Lehman Brothers, is one of the most well known names in investment banking. However, the firm has failed to recover from recent problems, and as a result will have to close, with four thousand workers in the city having lost their jobs. According to reports a further one thousand jobs in the High Wycombe area will also have to go. Staff members in the city were clearing their desks on Monday after being informed of the situation by seniors at 8.30. Senior members of staff only found out the situation themselves late on Sunday night. Many employees now fear that they may not even get paid for this month. With the thousands of bank workers now out of work and search for another job, a number of makeshift recruitment offices were set up in the Canary Wharf area to try and aid some of the people that have been affected. One twenty three year old investment banker who lost his job simply stated: 'The company has ceased to exist so there is not much to say. Everyone has lost their jobs. Everyone is clearing out their stuff now. The whole company. It is closing.' In addition to the massive culling of jobs there is also further bad news on the horizon. The collapse of Lehman Brothers now means that all those that would have been entitled to a bonus from the firm will now get nothing. It is thought that some may have been entitled to bonuses of at least £1 million. Many employees were said to have headed to the canteen of the skyscraper after hearing the news where they drowned their sorrows with alcohol. Many others were using up the last of the credit on their canteen cards. One of the workers who received the bad news had only just started at the firm, with Monday being his first day. He explained that he had been late getting there because of the fire in the Euro tunnel, and when he finally arrived he was told he did not have a job. text/html 2008-09-14T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=415-Another_warning_about_imminent_recession Another industry group has now warned that the UK is heading for recession, stating that the situation is likely to occur before the end of this year. Business group the CBI has predicted that by the end of this month the UK will see the economy shrink by 0.2% and between October and December it will shrink by a further 0.1%. Two consecutive quarters of negative growth will mean that the country has gone into recession. The second quarter of this year saw no growth at all in the UK economy. Other warnings have been recently issues by the British Chambers of Commerce and the European Commission. The good news is that the industry group has predicted that whilst the UK is likely to slide into recession the situation will be nowhere near as bad and prolonged as it was in the early 1990s. In fact, officials have said that the recession is likely to be a shallow one. The CBI has also predicted that in the coming year the UK's economy will only grow by around 0.3%, which would mean the worst performance since 1992. The sharp rise in energy and food costs has been partly blamed for the up and coming recession, as has the sharp downturn in the housing market. A spokesperson for the CBI said that he hoped and predicted that the recession would be a short lived one, adding that whilst inflation levels were likely to shoot up to 4.8% this quarter they would fall significantly over the course of next year. He said that this would help the nation to quickly recover from the recession. He went on to state that the base rate, which currently stands at 5% having remained unchanged for the past five months, will fall by 1% to 4% by spring of next year, which should also help the UK to recover quickly from the recession. The base rate last went down in April, but since that time the Monetary Policy Committee has had to struggle with rising inflation as well as a slowing economy, resulting in the base rate remaining static over recent months. text/html 2008-09-11T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=414-Gloomy_prediction_from_European_Commission Over the past few days the European Commission has made the gloomy prediction that by the end of this year the UK, Spain, and Germany will have fallen into recession. The definition of recession is two consecutive negative quarters of growth, and the European Commission has predicted that this situation will occur in the UK and the other two countries before the year is out. The commission has also revised its growth prediction for Europe, changing it from the previous estimate of 1.7% to the lower projection of 1.3% for this year. The economy in the fifteen nation Eurozone has shrunk by 0.2% during the second quarter of the year, which is the first decline since the zone was created nine years ago. Industry officials have said that the cause of this is a drop in consumer spending coupled with a slow down in exports. Like the Bank of England the European Central Bank has had to keep rates on hold at 4.25% following its latest meeting, and this is the result of soaring inflation. The commission has predicted that inflation levels in the Eurozone are likely to soar to 3.6%. The European Commission has predicted that over the next two quarters the UK economy will shrink by 0.2% each quarter. Two negative quarters of growth are also widely expected in Spain and Germany over the same period, plunging all three countries into recession. Official figures have shown that in the second quarter of this year there was no growth at all in the UK economy. A spokesperson from the UK Treasury said that the UK, like many other countries, was suffering the effects of the global credit crunch coupled with soaring food, energy, and fuel prices. He added that the slowdown in the economy was a result of the combination of these factors. However, he went on to state that the nation was well placed to deal with these problems as a result of high employment levels, lower interest rates, and rising income levels. He also said that whilst growth in the second quarter of the year in the UK was zero, other countries such as Japan, Italy, France, and Germany saw negative growth during the second quarter. text/html 2008-09-10T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=413-Mortgage_availability_may_not_be_as_restricted_as_many_are_led_to_believe Over recent months many reports have led consumers to believe that getting a mortgage has become all but impossible unless you have bags of money to put down by way of a deposit and an extremely clean credit profile. However, one recent report has suggested that whilst the mortgage market has become more restricted since the onset of the global credit crunch last summer it may not be as difficult to get a mortgage as some people have come to think. Officials have said that the confidence of first time buyers now needs to be repaired, as many have taken the reports as red and have convinced themselves that they have no chance of getting a mortgage – a factor that has impacted severely on the housing market and contributed greatly to the ongoing slump in housing sales. Recent research has suggested that mortgages may not be as difficult to access as past reports have suggested, and that brokers can still prove to be an invaluable service to those looking to get the best mortgage deal for their needs and circumstances. Industry experts have said that there are a number of factors that have contributed to low confidence levels amongst consumers, and this includes reports of restricted mortgage availability, rising unemployment levels, soaring inflation, and rocketing household costs. One mortgage broker said that confidence was a critical factor when it comes to breathing life back into the housing market again, adding that prices needed to stabilise in order to help restore confidence, the levels of which are partly affected by whether prices are falling or rising. The Royal Institute of Chartered Surveyors has suggested that house prices may be stabilising because sellers are being more realistic about their asking prices. With property values down by around 10% on last year, and with potential buyers able to negotiate another 10% off the asking price in many cases, buyers could find that they can purchase a property for around 20% less than this time last year. RICS has also reported some minor changes that may indicate a brighter outlook for the mortgage and housing markets. According to its report the number of new instructions in the London area has risen slightly and the number of surveyors reporting falling house prices has dropped from 86.9% to 83.9%. text/html 2008-09-09T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=412-Mortgage_lending_for_July_slightly_steadier According to figures recently out mortgage lending levels for the month of July steadied off slightly, with the same number of loans being made for the month as in June. Figures from the Council of Mortgage Lenders have shown that there were 47,000 new home loans made in July, which was the same number of loans made in June. Whilst the number of mortgage loans for July seems to have steadied industry figures have pointed out that the lending levels are still around 51% lower than they were in the same period last year, which was before the onset of the global credit crunch. Officials from the CML added that things have not been getting any easier for struggling first time buyers, who have seen a reduction in the amount that they can borrow and an increase in the level of deposit that they need to put down. One spokesperson from the CML said that the new measures put into place by the government with regards to stamp duty could increase affordability for some first time buyers, as stamp duty will now be suspended on properties up to the value of £175,000. However, he also added that many first time buyers may be waiting for the housing market to stabilise and for property prices to fall further before they take the plunge. There has been more bad news from the Royal Institute of Chartered Surveyors as well, with a recent report from RICS indicating that some estate agents are now selling an average of just one property a week, with property sales having gone through the floor and sales figures at their worst in around thirty years. A number of industry professionals have also indicated that both house prices and mortgage lending levels could continue to fall further over the coming months, and whilst the fall in house prices could be good news for first time buyers it is all dependant on whether they can get the finance to purchase or not. Figures have shown that in July 17,300 new loans were made to first time buyers, and this reflected a drop of 5% compared to June and a drop of 48% compared to one year ago. text/html 2008-09-08T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=411-Interest_rate_cuts_could_result_in_huge_savings According to a recent report predicted interest rate cuts could result in annual savings of up to £2000 in mortgage repayments for borrowers who benefit from falling base rate and mortgage interest rates. Industry officials have said that if the Bank of England cuts the base rate over the coming months, which is highly anticipated, and lenders then follow suit some homeowners could be in line to save a couple of thousand pounds each year. Over the next twelve months officials have predicted that the base rate is likely to fall a number of times. Earlier this year industry officials had predicted that interest rates would fall over the course of this year and over next year, which would have meant that affordability for borrowers would have been greater. This is now still true, with the mortgage base rate thought to be dropping to 4% or below over the coming year. The value of homes in the UK, although falling, means that many people have a mortgage of £250,000 or more, and a fall in the base rate of just one percent would mean a saving of around £2000 per year based on this level of mortgage. The typical saving with most families being on an average mortgage of around £138,000 per year would be around £1300. One industry official stated that despite the soaring level of inflation, which at 4.4% is way higher than the government's 2% target, many industry officials are expecting the base rate to be cut over the coming year, and if the base rate continues to fall many homeowners could find themselves facing a far easier financial situation. Officials have also predicted that consumers will see a rise in the number of offers available from lenders. Some lenders have already cut their mortgage interest rate after the swap rate, which is indicative of mortgage borrowing rates, fell. The possible rate cuts are likely to come as good news to industry officials, as it means that the housing market could be boosted, with some officials claiming that some borrowers are saving fortune as a result of such deals. Another official said that this was the most encouraging round of interest rate cuts that had been seen for some years, adding that the coming months would see lenders putting more of a focus on cutting rates. text/html 2008-09-07T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=410-Cost_of_food_still_soaring According to the results of a recent survey the cost of food in the UK continues to soar, and it is believed that since January alone the cost of food items has gone up by 8.3%. Rising food prices is just one of a number of factors that are adversely affecting household budgets, leaving many struggling to make ends meet each month. In addition to soaring food prices, higher energy bills, petrol prices, and borrowing costs are all impacting upon the average household budget. The index showing the food price rises showed that meat and fish products had gone up by 22.9%. Frozen foods had gone up by 5.8%, pet food by 6.5%, and canned foods by 15%. Some foods such as croissants, mayonnaise, and even chicken had gone up in price by more than 40%. Staying healthy may become more difficult and expensive, with fresh fruit and vegetables having gone up by 14.7% since January, and the cost of household items such as laundry and washing products have gone up by 14.4%. Many officials are concerned over the soaring cost of food, which has by far exceeded the rate of inflation. It is thought that over the past year food prices have rocketed by around 10%, which is over twice the rate of inflation, which stands at 4.4%. Fresh foods are thought to have gone up even more in the past year, with industry officials estimating that the rise in price of fresh produce was around 11.9%. Other food and grocery products that were found to have gone up in price since January of this year included drinks, which showed inflation of 6.8%, baked goods and cereals, which have gone up by 6%, household goods, which have risen by 4.4%, and health and beauty products, which increased in price by just 0.4%. The cost of the weekly or monthly shop has soared over the past year, and many households, particularly larger families, are paying hundreds of pounds extra each year to fill their trolleys compared to the amount that they were paying a couple of years ago. Some of the UK's smaller, discount stores are now expanding their product range to cater for the rising number of consumers turning to them for more affordable shopping. text/html 2008-09-04T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=409-Personal_loan_rates_rise_due_to_PPI According to a recent report the interest rates being charged on some personal loans are going up as a result of a crackdown on Payment Protection Insurance cover. PPI has been at the centre of controversy for the last couple of years, and the Financial Services Authority has been cracking down on lenders seen to be mis-selling this insurance to consumers that either cannot benefit from it or never wanted to take it out in the first place. The FSA has fined a number of firms over mis-selling PPI, with its largest fine being handed out earlier this year after HFC Bank was fined £1 million for breaching PPI regulations. However, industry officials have said that whilst the crackdown and threat of action from the FSA is making lenders more cautious about how and to whom they sell PPI it is also resulting in lenders looking for other ways to recoup the losses on unsecured personal loans. Figures suggest that since the crackdown on PPI lenders have been raising the rates on their unsecured loans in order to claw back some of the lost revenue resulting from the reduction in PPI sales. In addition to this many lenders have also raised rates in a bid to try and cut back on the amount of money that they are lending because of the problems caused by the ongoing global credit crunch. Although the rate rises don't make a huge different to the monthly repayment on many of these loans, over the term of the loan it can make a difference of close to £200 even on best buy deals when borrowing £5000 taken over a five year repayment term. With personal loan rates on the rise consumers are being advised to compare loans from a number of providers before making any commitment, as otherwise the total amount repaid on the loan could work out to be very costly. Another alternative for those that own their own homes is to opt for a secured loan, as this offers the facility to borrow greater amounts and to enjoy longer repayment terms, which could help to keep monthly costs down. text/html 2008-09-03T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=408-Interest_rates_stay_steady_at_5% Following today's Monetary Policy Committee meeting the Bank of England has announced that the base rate is to be kept at 5% for the fifth month in a row. With MPC members struggling to get inflation levels back under control whilst also trying to address the slowing economy the move to keep interest rates on hold again has come as no surprise to most people. Interest rates have fallen this year, with a rate cut in February and then April. However, since the April cut the base rate has been kept on hold at 5%. For the past two months there has been a three way split amongst MPC member when it comes to voting on interest rate movement, with one member voting for a cut, one voting for a rise, and the remainder voting to keep rates steady. Although many industry officials expected the base rate to remain static for the remainder of the year, many have now stated that the likelihood of a rate cut before the end of the year has been increased because of the slowing economy and the risk of recession. In the second quarter of this year economic growth saw its worst performance since the early 1990s, when it ground to a halt. At present the rate of inflation has soared to over double the government's 2% target, standing at 4.4%, and industry officials expect inflation levels to continue rising over the course of the year. However, the risk of recession for the nation is also rising and this is making it very difficult for MPC members when it comes to setting the base rate. One economist said that the MPC was still very concerned about rising inflation. An official from the TUC said that he was disappointed with the decision, adding that inflation was no longer the major threat facing the economy. He said that a rate cut this month would have offered hope and help to all those that are concerned about losing their jobs and their homes, and he added: "This is a depressing decision." text/html 2008-09-03T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=407-The_housing_market_latest According to recently released figures house prices in the UK have taken a hit for the eleventh month in a row, with figures for August showing a 5.3% drop in house prices compared to last August. The fall in house prices between July and August was 0.9%, which was a lower drop than seen in the previous two months. The figures have come from the property consultancy firm Hometrack, with officials claiming that this is the largest annual fall since records began in 2001. However, the figures provided did not take seasonal adjustments into account. On the positive side an official from Hometrack said that it looked as though the falling house prices were starting to attract interest from buyers, which could help to breathe life into the housing market in terms of property sales. However, he added that regaining stability in the housing market could take some time. Data from the survey also showed that it was taking an average eleven weeks to sell a property, and this is said to be twice as long as it was taking to sell a property a year ago. Officials did report, however, that the number of viewings that were required to sell a property fell for the first time in around one year. One Hometrack official said that there could still be a long way to go when it comes to the re-pricing of property in the UK, because although interest was being generated through falling house prices the economic outlook and current financial climate was having a damaging effect on the housing market. However, the government has also recently announced that it is suspending stamp duty for buyers where the property is purchased for £175,000 or less, and this could act as an incentive for undecided buyers, which could also help to boost the slowing housing market. The survey also showed that the proportion of a property’s asking price being attained on sold properties had fell slightly to the lowest level since the survey began, falling from 90.9% in July to 90.7% for August. text/html 2008-09-02T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=406-Government_takes_action_over_stamp_duty Having caused speculation amongst consumers and industry officials after a speech from Alistair Darling, who indicated that stamp duty could be suspended for a period, the government has now announced that it is now taking action over stamp duty in order to increase affordability for potential buyers. The new plan from the government will see a twelve month suspension on stamp duty on properties costing up to £175,000. At present the stamp duty exemption only applies to properties that are purchased for £125,000 or less. It is thought that the increased threshold for stamp duty exemption will cost the government around £600 million. When the stamp duty threshold was £125,000 officials estimate that the portion of property transactions that did not have to pay stamp duty was around one third. However, with the threshold now having been increased to £175,000 it is thought that around half of property transactions will be able to benefit from stamp duty exemption for the coming year. The Prime Minister, Gordon Brown, stated that this move, as well as other action that had been taken to help first time buyers and struggling homeowners, showed that the government was taking the slump in the housing and mortgage markets very seriously and was willing to take the necessary action in order to make things easier for those experiencing problems. Once again, however, the PM has been verbally attacked by Conservative Party officials, who have branded these moves as a short term survival plan for Brown. The Conservative party has already claimed that it would scrap stamp duty on properties worth £250,000 or less. In the meantime the Chancellor, Alistair Darling, has said that the government is also looking at further ways to increase liquidity in the mortgage market. The move to scrap stamp duty on properties will make purchasing a property a little easier for some potential buyers, and those purchasing a property costing £175,000 will save £1750 by way of stamp duty, which equates to 1% of the property value. Alistair Darling has stated that further details about the scheme will be revealed in his pre-budget report, which is to be released in the autumn. text/html 2008-09-01T23:00:00+01:00 http://www.loans4.co.uk Loans4 Limited http://www.loans4.co.uk/loan_news/news.php?item=405-Crisis_plan_details_could_be_unveiled_this_week According to a recent report the Prime Minister, Gordon Brown, could be set to unveil new plans this week in relation to helping first time buyers as well as struggling homeowners. As the housing slump continues, and homeowners continue to struggle with mortgage repayments, the government is said to be looking at launching an emergency plan to try and ease the effects of a house prices crash. There are now fears that house prices could plummet by more than 30%, and these warnings have resulted in a crisis plan being drafted by the PM. Under the plan local authorities could be given the green light to purchase part or all of unsold or repossessed properties, which could help people to stay in their own homes. This comes after authorities expressed interest in helping