August 2007 Archive
Posted on August 31st, 2007 in Repossession.
Higher interest rates and worsening affordability conditions have seen more repossessions and homes sold at auction, according to a new report.
Research conducted by the Royal Institution of Chartered Surveyors (Rics) found that the number of residential properties sold at auction during the second quarter of 2007 represented a 22 per cent increase on the previous quarter.
The organisation stated that rising interest rates have resulted in a greater number of repossessions in 2007, which are estimated to exceed 45,000 next year.
Oliver Gilmartin, economist at Rics, said: "With the full impact of interest rate rises in 2007 yet to filter through into higher mortgage costs we continue to expect a rise in the number of homes going under the hammer into 2008."
Commenting on the situation facing many homeowners recently, Brian Morris, head of savings policy at the Building Societies Association, urged borrowers to be wary of "overstretching" themselves.
Posted on August 31st, 2007 in IVA.
People struggling to manage their debts may be interested to know that an expert haspredicted the Bank of England will freeze interest rates.
This week, Geoffrey Dicks, UK economist at Royal Bank of Scotland, suggested the Bank’s monetary policy committee (MPC) would choose to maintain the base rate at 5.75 per cent next month.
"The MPC is extremely unlikely to raise bank rates against a backdrop of highly volatile and fragile financial markets," Mr Dicks remarked.
However, there remains "little hard evidence" that the Bank is set to change its current fiscal policies, he added.
Earlier in the month, Steve Treharne, head of personal insolvency at KPMG, said that the five interest rate rises in the last year have placed even greater pressure on people struggling with their debts.
Mr Treharne said that over the course of the last 12 months the number of individual voluntary agreements increased by half.
Posted on August 31st, 2007 in Debt.
Lending and borrowing money between friends can often lead to a number of problems, one expert claims.
Stephen Rose, director of the Debt Advice Bureau, argues that it is "not a good position to be in" if an individual has difficulty getting the money back from someone in debt.
"Think about how much damage it might do, particularly in the case of a friendship, if they couldn’t afford to pay you back for whatever reason," Mr Rose comments.
A "domino effect" can be created if the person lending money to a family member is relying on those repayments to pay off their own debts, he adds, suggesting that this causes problems for everyone involved.
According to a survey by DebtSmart.com, 70 per cent of people questioned admitted to having lent money to their family, but fewer than 60 per cent had been fully repaid.
Posted on August 30th, 2007 in Debt.
New research has revealed that a significant number of people are wary of interest rate movements each month.
According to a survey conducted by ICM on behalf of Intelligent Finance, 41 per cent of respondents said they are either "worried" or "extremely worried" about the Bank of England’s decision.
The firm also discovered that four in ten people aged 18 to 24 are worried about the impact of a future rate change, although only seven per cent have taken out products that are protected from a rise.
Mark Parker, managing director at Intelligent Finance, said: "With interest rates on the rise and purse strings tightening, it’s important to make every penny work as hard as possible."
Commenting on the situation facing many people, David Stubbs, senior economist at the Royal Institution of Chartered Surveyors, recently said that affordability conditions were at their most "stretched" point for 15 years.
Posted on August 30th, 2007 in Loans.
Consumers with poor credit ratings could find they experience greater difficulty as lenders choose to further tighten their standards for loans, it has been claimed.
Firms responsible for 12 per cent of the UK’s mortgages have withdrawn certain offers and raised interest rates for borrowers with bad credit.
Fionnuala Earley, chief economist at Nationwide, said that current market conditions may prompt some lenders to "reassess" how much they wish to lend.
"The same person trying to get a mortgage will find the situation more difficult now than three months ago," she remarked.
Earlier in the month, the BBC reported that problems in the sub-prime market in the US were likely to lead to lenders in the UK raising rates for people looking for similar loans, such as a bad credit mortgage.
Paul Reynolds of MoneyQuest told the news provider that some customers may find their mortgage application is declined "completely".
