The number of home owners taking out secured loans rose by almost 11 per cent in February, month on month, from 2014, according to figures recently released in the Loans Warehouse index.
More precise figures show an increase of 10.7 per cent, month on month, with a total of £58.2 million in February 2014 to £64.4 million in February of this year.
Demand for secured loans increased dramatically during the first two months of this year, with 18 per cent higher levels of lending in January and February than in the whole of the first quarter in 2013.
Gross second charge lending, year on year, is up by 36 per cent, performing better than any other area of consumer credit.
However, demand for second charge lending for property purchases declined during the first quarter of 2015. The most recent Bank of England Credit Conditions survey shows that the drop in the number of borrowers applying for second loans for house purchases, has been significant during the first three months of this year, but lenders are optimistic that demand will increase once more during the second quarter of 2015.
Matt Tristan, director and co-founder of Loans Warehouse, said that the figures for February show that demand for second charge lending is strong. Whilst the figures for secured loans for mortgages are lower, it is evident that secured loans are more and more likely to be offered by brokers to clients.
Lenders who have stuck with first charge lending since the sector began to recover in 2013 are returning to the second charge marketplace. Buy to let lender, Paragon, relaunched into the market last year for the first time in five years and Precise launched its own product at the end of 2013.
The 1,000 richest families in Britain have seen their wealth double since the financial crisis of 2007 and 2008 and are now jointly worth more than £547 billion.
Average UK incomes have not yet recovered from the worst recession to hit Britain since the Great Depression of the 1930s and thousands are still using food banks in order to survive, yet the very richest have found themselves richer than ever.
The richest 1,000 had assets of £258 billion in 2009 which has increased by 112 per cent in just six years, according The Sunday Times’ Rich List. The largest increase came in just the last twelve months.
London now has 80 billionaires, eight more than in 2014 and more than any other capital city in the world.
The richest man in the UK today is Len Blavatnik, a Ukrainian billionaire with a London address in Kensington Palace Gardens that is worth £41 million. A US citizen and now owner of Warner Music, as well as stakes in chemical and aluminium companies, Blavatnik’s holdings are said to be worth £13.17 billion. His wealth increased by £3 billion in the past 12 months, pushing the Hinduja brothers, owners of the Hinduja automotive, gas, oil and finance conglomerate, into second place.
Average household incomes, however, have only just recovered to their financial crisis levels according to the Institute of Fiscal Studies.
The richest one thousand families in Britain today own more wealth than the combined wealth of 40 per cent of all British households, says The Equality Trust. Director, Duncan Exley, said that such inequality was ‘hugely damaging’ for British society.
Three British families feature in the richest 1000 list. Galen and George Weston own Selfridges and Associated British Foods and are at number three. Denise Coates and family who own Bet365 are believed to be worth £2.3 billion, and at 44th place. Sir James Dyson and family jumped seven places to 22.
Average house prices have reached a record high, according to property website, Rightmove.
A large rise in the number of people looking for a new home to buy and a continued lack of sellers has led to a further increase in the average property price, to just over £286,000.
Rightmove is the UK’s largest property website and its report highlights the continued housing crisis in Britain today.
According to the Rightmove report, March was its busiest month since it was launched in 2000, with 20 per cent more people viewing property than during the same period in 2014. However, the number of new properties on the site was down by 4 per cent when compared to the first quarter of last year.
House prices were up in every region in April from March of this year and only down on April of last year in Wales. Prices rose the most in Greater London and the north east of England. In Greater London, average house prices are now £594,585, an increase of almost 50 per cent, or £195,000, since the last election in 2010.
Miles Shipside, director at Rightmove, said that an under supply of homes and a record demand for housing has led to an all-time high in property prices. He attributed the price rise to large numbers of potential sellers hesitating to put their homes on the market just before a general election. There has also been a record number of landlords buying properties as long term investments, due to the current poor return on savings.
“Record housing prices are largely due to the continued shortage of new build homes. Successive governments have failed to meet house building targets since the 1980s and this has led to increased property prices and rents,” Shipside added.
Unemployment in the UK has fallen to its lowest rate since the financial crisis of 2008, official figures show.
According to the Office for National Statistics (ONS), the number of people without paid employment fell by 76,000 during December, January and February, to 1.84 million. This puts the unemployment rate at 5.6 per cent, 1.3 per cent lower than in March 2014 and 7.9 per cent lower than in May 2010, when the Coalition government took power. The number of people claiming Jobseeker’s Allowance dropped by 20,700 during March of this year, to 772,400, the ONS revealed.
A senior economist at Capital Economics, Samuel Tombs, said that he expects unemployment figures to continue to drop over the coming months.
The strong unemployment figures helped to strengthen the pound against the dollar, with sterling reaching its highest rate in four weeks.
The number of people in work increased to 31.05 million, a rise of 248,000 in a three month period and the biggest such rise of the last twelve months. The number of unemployed young people aged between 16 and 24 fell to 742,000, a drop of 22,000 during the three months to February. Long term unemployment is also down by 188,000.
Unemployment is currently lowest in the south east of England, at 4.2 per cent and highest in the North East, where it is 7.7 per cent.
Average weekly earnings also increased by 1.8 per cent over the last twelve month period, although they dropped by a percentage point between January and February. Chief economist at Markit, Chris Williamson, said that the upturn in real wages is a significant factor in the UK’s recent economic recovery. Consumer spending is up but there are uncertainties about how long this can last.
The Conservative Party has said that it will exempt all properties worth less than £1 million from inheritance tax, should it win the next election.
Chancellor George Osborne said that the move will support our basic human need to provide for our children. It will mean that more homeowners are able to pass their homes on to their children without paying tax.
The Labour party said that the Conservatives have made similar promises before and failed to deliver. Deputy leader, Harriet Harman, said that as the election approaches, it was becoming clearer that the Conservatives stood to benefit the well off, whereas Labour wanted everyone to be better off.
Independent economists said that raising the level at which properties qualify for inheritance tax in this way will disproportionately benefit the wealthy and push up property prices still further.
The Labour Party has said that it will raise £7.5 billion by fining tax avoiders and closing tax loopholes should it win the coming general election. Shadow Chancellor, Ed Balls, said that his party will carry out an immediate review of tax collection in order to close all existing loopholes, if Labour wins the election in May. They promised to increase and strengthen HM Revenue and Customs’ powers to collect taxes. They will also change rules that enable private equity managers to avoid income tax and hedge funds to sidestep stamp duty.
The Conservatives have said that they will raise £5 billion from tax avoiders but have not yet said how this will be done.
Director of Institute for Fiscal Studies, Paul Johnson, said that both parties are guilty of making up numbers. Neither party can actually know how much money can be raised by cracking down on tax evasion, he added.
Inflation in the UK remained at 0 per cent, a record low, during March, according to figures from the Office for National Statistics.
The 0 per cent rate was maintained for a second month by a drop in prices of clothes and footwear and a rise in petrol prices.
The figure was calculated using the Consumer Prices Index (CPI) and was the lowest inflation rate since the measure was first introduced during the late 1980s.
A 0 per cent inflation rate means that the cost of living has not risen during the last twelve months. However, the ONS has said that when inflation is calculated to two decimal places, prices are actually 0.01 per cent lower than they were a year ago, a fall for the first time in the CPI’s history.
Rising diesel and petrol prices have meant that inflation has remained relatively stable during February and March, although falling fuel prices have been largely responsible for low inflation over the past year.
The CPI figure for inflation is well below the government’s target rate of 2 per cent.
Experts speculate that the rate could fall still further in the coming of months although few predict that the UK will see a similar level of inflation to that of the Japanese economy. Rain Newton-Smith, director of economics at CBI business group, believes that inflation will begin to rise again during the second half of this year, particularly once fuel prices begin to recover.
Senior economic advisor, Martin Beck, said that he expected the Bank of England to wait until early 2016 before it raised interest rates.
An alternative method for calculating inflation is the Retail Price Index, which includes rises and falls in mortgage repayments, retail goods and services. The RPI also fell during March, down to 0.9 per cent, from 1 per cent in February.
Wages are being driven up by a lack of skilled workers in the UK today, according to a new report.
Almost a third of recruiting agencies have said that starting salaries are increasing, says KPMG and the Recruitment and Employment Confederation (REC).
Wage growth is strongest in the Midlands and the south of England, where the availability of suitable candidates for jobs continues to fall.
Skills shortages are a particular problem in nursing, health care and teaching.
The chief executive of REC, Kevin Green, said that almost one in three recruiters is reporting an increase in starting salaries compared with last month. There has also been a rise in the number of people successfully finding work via a recruiting agency. In the north west of England, 45 per cent of recruiting agencies surveyed by KPMG and REC said that there had been a sharp increase in the number of permanent staff appointments made.
People are feeling more confident about finding work and also about changing jobs, as they seek higher salaries. Higher salaries are being offered because of a widespread shortage of skills. Kevin Green warned that businesses will have to work hard to retain their skilled staff in the future.
Shortages are being most keenly felt in the public sector, with teachers, nurses and other health care workers in particularly short supply, for both temporary and permanent positions.
Mr Green added that politicians are debating immigration and education in the run up to the election and need to be aware that the current skills shortage is likely to have a significant impact upon the UK’s economic growth.
Bernard Brown of KPMG said that demand for talent continues to outstrip the number of candidates seeking employment and that this skills shortage is likely to slow down UK economic growth if it is allowed to continue at its current rate.
The government backed pension bond scheme announced by the government last March will be extended to the end of May, George Osborne has said.
Under the scheme, pensioners have, since January, been able to buy bonds that offer competitive interest rates of up to 4 per cent.
The Chancellor said that the scheme is being extended to May because it has been ‘immensely successful and popular.’ The deadline for buying pension bonds will now be one week after the general election.
More than 600,000 people over the age of 65 have already signed up and £1 billion were sold in the first two days of the scheme alone.
The one year bond available pays an annual interest rate of 2.8 per cent, while the three year bond pays 4 per cent. Interest will be added annually on the anniversary of the investment. Pensioners are limited to investing £10,000 in each bond, an individual limit of £20,000.
The best one year bond available to everyone is currently offering 1.85 per cent interest and the best three year bond pays 2.5 per cent, 1.5 per cent below the pension bond.
National Savings and Investments currently offer up to £10 billion worth of bonds but George Osborne said that this will be extended to £15 billion.
The scheme is not without its critics, however. Some experts have been saying that it is not fair that younger people are subsidising a scheme from which only well-off pensioners can benefit.
Director General of the Institute for Economic Affairs, Mark Littlewood, said that the scheme proves that the British public is not ‘all in it together.’ Pension bonds are nothing more than a gimmick, he said, that benefits wealthy pensioners at the expense of the working age population.
Evolution Money are once again celebrating today after impressively scooping their second award so far this year, and winning the coveted Financial Reporter Awards, Best Secured Loan Lender 2015.
Rhian Roberts, Head of Evolution Money Broker Division commented:
‘What a fantastic result for Evolution Money to be awarded Best Secured Loan Lender of the Year in this year’s Financial Reporter awards. This award once again proves that our robust stress testing, responsible lending and dynamic product mix is very highly thought of throughout the industry. A huge thank-you to all our brokers and introducers who have voted for us, it truly is an a amazing result’
The significant accolade which garners votes from industry peers and professionals alike not only recognises top-notch excellence across the lending arena but how important and well-respected Evolution Money has become within the industry over the past four years. Offering a wide-ranging suite of secured loan products which match customers’ needs and requirements, Evolution Money has grown significantly to be a key player in the second charge sector.
Earlier on in the year the specialist lender won Best Adverse Secured Loan Product of the Year 2014 at this year’s Loan Talk Secured Loan Awards. Today’s award follows on from last year’s 2014 Financial Reporter Awards where Evolution Money received a Highly Commended rosette as Best Specialist Lender.
Operations Director Kerriann Turtill said about winning the award:
“Once again Evolution Money continue to stand-out as a market leader. These awards are key industry benchmarks which recognise our innovative approach, and we are very excited and proud to have won Best Secured Loan Lender 2015. Relationships with our partners are important to us – We know our products meet the needs of ours and our broker partners’ customers, and the award is key to acknowledging that as it was voted for by our industry peers and professionals which we work with on a daily basis’’
The winners’ presentation ceremony will take place on 19th May 2015, at Manchester Museum of Science & Industry. Attended by this year’s victors, runner-ups and industry professionals, the event should prove to be an evening to remember.
For a full list of all the winners please go tohttp://www.financialreporter.co.uk/awards/winners-2015/
Chancellor George Osborne has said that the Conservative Party has no plans to lower the top taxation rate should they win the next election. The Labour Party accused him, however, of refusing to rule such a move out.
Labour called on the government to promise that it will not cut the highest rate of taxation, which is currently 45 per cent for those who earn more than £150,000 per year. The Coalition government reduced the top rate from 50 per cent to 45 per cent in 2013.
Ed Balls, the shadow chancellor for the Labour party, criticised Osborne’s refusal to say categorically that he will not cut the top rate.
George Osborne was speaking to Sky News when he said that it is not ‘our plan’ to introduce a five per cent cut to the highest taxation rate. When asked if he was prepared to rule out such a cut explicitly, he replied that the Conservative Party planned to increase the tax free personal allowance to £12,500, so that people who work full-time for the minimum wage will not have to pay tax. He also said that his party intends to increase the amount people must earn before they pay the higher tax rate of 40 per cent, to £50,000. It is currently at £42,400.
David Cameron said that a cut to the top rate is not part of their policy or plan. The Labour Party has made a commitment to re-introduce the 50 per cent top taxation rate, should it win the next election, for people earning more than £150,000. It has also pledged to cut and then freeze taxation rates for small businesses.
Both the Liberal Democrats and Labour have promised to introduce a mansion tax on homes with a value of more than £2 million.
For a typical loan of £30,000.00 over 120 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £598.34.
Including a Product Fee of £2,400.00 (8% of the loan amount) and a Lending Fee of £807.00, the total amount repayable is £71,800.20.
Annual Interest Rates ranging from 11.88% to 29.38% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
