Posts Tagged ‘mortgages’

Lack of mortgages ‘widening divide between rich and poor’

Tuesday, May 5th, 2009

Housing body says evidence suggests a continuing affordability problem can make the children of affluent owners still richer and the poorest even more disadvantaged

The lack of mortgages available on the market is widening the wealth gap between the rich and the poor, creating a more “polarised” society, a new study warned today.

The National Housing and Planning Advice Unit (NHPAU), the body set up to provide independent advice to local and national government on housing supply and affordability, said a continuing affordability problem has accentuated inequalities with evidence suggesting “it can make the children of affluent owners still richer and the poorest even more disadvantaged”.

The wealthiest 10% of the population has seen home values rise at more than three times the rate for the poorest 10% and the NHPAU said the impact will continue for future generations as vastly differing levels of wealth are inherited by the next generation.

“We are in danger of creating a more polarised society if we fail to tackle our country’s housing affordability problem,” said Neil McDonald, chief executive at the NHPAU.

“We must not be fooled into thinking that the current fall in house prices means the problem is solved. Mortgage rationing means that housing is not more affordable in any real sense. And in the medium to long term an undersupply of housing means that affordability will simply worsen once the economy starts to revive.”

In addition to the widening wealth gap, the NHPAU said there were other social and economic consequences of the country’s continuing lack of housing affordability, including poorer health, unemployment and a housing market prone to “boom and bust”.

  • Mortgages
  • House prices
  • Housing market
  • Housing
  • Property
  • Social exclusion
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T-Mobile pushes right buttons with BlackBerry offer

Friday, May 1st, 2009

The handset of choice for business people now comes at a price that is sure to prove popular in the wider market

The fiercely addictive BlackBerry – aka the “CrackBerry” – has become the mobile of choice for those wanting to access email on the go, and has been priced at a level that has put off all but the most dedicated.

However, if you have always secretly hankered after one, but couldn’t justify the expense, T-Mobile has this week come to your aid. Since yesterday, the mobile network operator has been offering the BlackBerry Pearl for a one-off £179.99. Included in that price are all the emails you can send and receive for the next 12 months, plus unlimited internet access.

It means that, for the first time, users can join the ranks of BlackBerry owners such as Barack Obama without having to commit to an onerous monthly payment.

BlackBerrys have largely been the preserve of those who are, or whose company is, prepared to typically spend £50 a month to keep them in constant contact with their emails.

But faced with the growing threat from rivals, including the Apple iPhone, BlackBerry has decided it needs to appeal more to the mainstream consumer market.

For those of you who have seen fellow travellers maniacally punching their BlackBerrys but have been just too embarrassed to ask what they are doing, the handsets allow users access to their work or personal email (or both), almost as if they were sitting in front of their computer.

While plenty of other phones now offer email access, the BlackBerry is still considered the top handset for email access alone. Last year Orange slashed the cost of operating a BlackBerry. Now T-Mobile has gone a step further, making them affordable for most mobile users.

T-Mobile allows users to pay the one-off fee, and use the phone on a pay-as-you-go basis. After paying £179.99 for the phone, all email and internet access will be free for a year. Users will have to pay for any calls on the normal pay-as-you-go tariff – 20p per minute for the first two minutes each day then 10p/min for all other calls that day. Texts are charged at 10p.

T-Mobile says anyone could top up the phone with a small sum then simply use it to access their email for the year – without ever making a call.

At the end of the 12 months, people will have to pay another fee to retain the “free” access. This charge has not been fixed but is likely to be in the order of £100. Alternatively, at the end of the year, there’s nothing to stop you taking your BlackBerry and switching it to another deal, or rival provider.

It should be noted the phone you get is not the top-of the-range BlackBerry handset. The Pearl 8110 smartphone comes in silver, has a 2-megapixel camera, in-built GPS (so you’ll never get lost), and a 3.5mm earphone jack for listening to music on the move.

It also comes with preloaded quick-links to certain websites including Facebook, MySpace and Flick. Note, however, it does not have a full-sized Qwerty keyboard.

Crucially, it costs less than half the price of the pay-as-you-go iPhone that is offered by O2 – this, admittedly, has lots of other applications and features, but for email is arguably less effective.

Before you sign up, you should check out Orange’s rival pay-as-you-go offering. It will sell you its BlackBerry for £155, which includes £10 of calls. Again, you get unlimited email and web access; however you need to pay the mobile phone company £5 a month for continued “unlimited” access. Call charges are 15p/min on its basic Racoon tariff.

Alternatively, plenty of phone companies will provide you with a free BlackBerry if you are prepared to sign a 12- or 18-month contract from £30 a month, although these do include a calls and/or text allowance.

Also, be aware that while there are plenty of users who love their BlackBerrys, some have grown to hate them, unable to control their need to constantly see whether they have been contacted. They have not been dubbed the CrackBerry for nothing, but at least the pay-as-you-go deal gives you a chance to try them without signing an expensive contract.

Lap up free web surfing with BT’s plug-in dongle

Do you use your laptop away from home and want to access the internet on the cheap? Then you might want to consider BT’s £50 dongle.

A dongle is a small plug-in for your computer that allows laptop users to access the internet via the mobile phone network. This week BT said anyone on its broadband package, which costs £15.65 a month, can pay a one-off £50 for its dongle, then surf the web for free from almost anywhere in the UK.

In certain areas it will give internet access at speeds of up to 7.2Mb and works on the 3G network, which covers 80% of the UK.

The dongle is £50 if you are on BT broadband option 1 and 2, or £9.99 if you are on the higher download option 3 (which costs £24.46 a month). Downloads are limited to 1GB a month, equal to roughly 300 e-mails, 400 minutes of websurfing, 48 photos, or 144 songs. John Petter, managing director of BT’s consumer division, said: “You can use mobile broadband on the train, in the coffee shop or in the park for all the things you go online for – to look at emails or check the football results.”

Rival mobile phone company 3, which has traditionally offered the cheapest dongles, charges £48 plus £10 a month for 1Gb of downloads, although the purchase fee is waived if you sign an 18-month contract.

New BT customers also have to sign an 18-month contract but pay nothing to use the dongle, thereby saving £120 a year.

The BT dongle, however, only works with Windows operating systems – a version for Apple Mac users is on the way. Meanwhile, BT Total Broadband customers already have free access to the BT FON network, 150,000 BT Openzone Wi-Fi hotspots across the UK and Ireland. Customers will also soon benefit from BT’s takeover of Wi-Fi hotspots at more than 650 Starbucks cafes in the UK and Ireland.

  • Internet, phones & broadband
  • BlackBerry
  • Mobile phones
  • Consumer affairs
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Mortgages: Fixing the odds

Friday, May 1st, 2009

Most of us are betting on a rise, which is why there is a ‘huge surge’ in five-year deals. Rupert Jones reports

Growing numbers of people are looking to fix their monthly mortgage payments for five years or more, after concluding there is only one way for interest rates to go – and that’s up.

Mortgage broker John Charcol this week revealed it has seen a huge surge. It adds that up until recently, around 70% of the fixed-rate deals were being taken out for two years, but it is the five-year deals that are now proving really popular. They accounted for more than half of all the fixes taken out via the firm in April.

With the Bank of England base rate now at a record low of 0.5%, it is hard to imagine the official cost of borrowing going any lower. So if you want the certainty of knowing what your home loan payments will be for quite a while, perhaps now is a good time to sign up for the longer term.

Many specialists reckon the desirability of fixing for longer is driven by the fact that interest rates have to go up at some point – though the timing and scale of the increase are, of course, still open to question. Some predict they will start rising again before the end of the year; others believe they will stay broadly where they are for the foreseeable future.

There will be many homeowners out there whose existing mortgages are coming to an end soon and who will be wondering what they should do. Many will be on fixed rates now and will want to take out another one.

Borrowers have traditionally preferred the flexibility offered by shorter fixes, in case they move home/change job/split up. And rates on two-year fixes are usually lower than those for five years-plus. Also, the big downside of longer-term fixed-rates is the fact you are often tied in by early redemption penalties for a long time.

But it is clear that growing numbers of people are keen on the peace of mind that they offer. (Incidentally, if your current deal is ending soon, check what rate your lender will put you on to, as for some people this may not be a bad bet. For example, Nationwide’s base mortgage rate is only 2.5%).

High street bank Abbey this week launched what it claimed were “the best fixed rates in a decade,” including several longer-term deals aimed at those looking to remortgage.

There is a three-year fix at 4.09%, a seven-year at 4.99% and – for those who are really looking for long-term security – a 15-year at 5.38%. They are available via Abbey branches or over the phone “for a limited time only” and all carry up to 75% loan to value £995 fee. Maximum loan is £250,000.

The Spanish-owned bank also issued research showing that the number of homeowners who believe the base rate has fallen as low as it will go has more than doubled over the past two months. “Now is definitely the time for borrowers to fix and guarantee certainty­ of their monthly payment, especially if they are looking for a longer-term fix,” it adds.

Seven-year rates are relatively rare, though a few lenders have started offering them on the grounds that some borrowers are interested in fixing for longer than five years, but do not want to go up to 10 years, says Ray Boulger at John Charcol. While five-year deals accounted for 56% of the fixes taken out through his firm in April, 10-year products made up only 4%.

Abbey’s claims that its deals were the best for 10 years were refuted by Boulger, though he acknowledged that its rates are pretty competitive. He says that at 4.99%, Abbey’s seven-year fix is good value. Skipton Building Society has a seven-year fix at 4.79%, though to get that you need a minimum 40% deposit. If you can cobble together a 25% deposit, the rate is 5.14%.

Abbey’s 15-year fix, at 5.38%, is comfortably the best available over this period, though there aren’t many on the market, says Boulger. The penalties locking you into deals like this can make them a turn-off. Abbey’s 15-year loan has a 7% redemption penalty for the full 15 years.

This week also saw Alliance & Leicester launch a four-year fixed-rate loan with a rate of 4.39%. But the product fee for this mortgage is 1% of the loan amount, and you can only borrow up to 65% of the value of your home.

  • Mortgages
  • Property
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One £285m mortgage rescue scheme. One family helped

Thursday, April 30th, 2009

It was announced with much fanfare in September at the height of the banking crisis – the government’s big idea to stop vulnerable people being thrown out of their homes. But yesterday it emerged that the mortgage protection scheme has so far helped just one family across the whole of the UK.

The scheme, part of a package of emergency measures rushed in last autumn after months of tumbling house prices, has been “operational across the country” since January, according to the local government department; yet data published on its website yesterday showed that just one homeowner, in the east of England, has qualified.

The shadow housing spokesman, Grant Schapps, seized on the figures, saying they revealed the rescue scheme, which was expected to cost ?285m and help 6,000 families over the next two years, to be a sham. “Thousands of families have looked to Gordon Brown for help to survive his recession and he’s looked the other way. He got us into this mess and he needs to help ordinary families through it,” he said.

A government spokesman said local councils were now actively considering applications for the scheme from more than 450 other families, and insisted it had always expected it to take three months to get off the ground.

Under the scheme, homeowners struggling with their repayments should be able to sell a share of their property – or all of it – to a social landlord and rent it back, enabling them to stay in their home instead of facing repossession.

With the Council of Mortgage Lenders predicting as many as 75,000 repossessions in 2009, Alistair Darling made a series of changes to the scheme in the budget. They will come into effect next month and should increase the number of homeowners who could qualify.

The government is keen to nurse the housing market back to health and give voters back the feelgood factor. The chancellor also extended the stamp duty holiday for buyers of properties worth ?175,000 or less and he is encouraging the nationalised lender Northern Rock to expand its mortgage book, helping to boost loans to first-time buyers.

But yesterday brought fresh evidence that there is little sign of a let-up in the housing downturn. Data from the Nationwide showed that prices slipped back by 0.4% in April, wiping out some of the surprise 0.9% gain in March, which was viewed at the time as evidence of a spring bounce. The renewed decline brought the average cost of a home in the UK down to ?151,861 – 15% lower than in April last year.

Ed Stansfield, property economist at Capital Economics, said: “Rising unemployment and widespread pay freezes will mean that prices fall considerably further.”

  • Mortgages
  • Recession
  • Credit crunch
  • Housing market
  • Property
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