Friday, 11 March 2011

CAB cold-calling complaint threatens legitimate debt management firms

An investigation has been launched by the Office of Fair Trading (OFT), after a major complaint over cold-calling was lodged by the Citizens Advice Bureau (CAB).
CAB claim to have received an increase in the number of complaints reported by consumers, who were persuaded to hand over their bank account details to illegitimate ‘debt management’ firms as a direct result of cold calls.

The OFT said that cold calling by such firms was an ‘emerging unfair business practice’, and that the ‘practice of illegal or misleading cold calling for debt management services must cease immediately’.
However the advisors at debt management firms which do follow the OFT’s guidelines, have expressed concern that the CAB’s super-complaint could lead to vulnerable individuals being less likely to approach debt solutions firms, who could potentially lessen their financial woes.

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Neil Conrad, a regional advisor at Eurodebt Financial Services, said: “I think the super complaint by the CAB, who seem to want the OFT to blanket ban cold calling & up-front fees, is in danger of tarring all companies with the same brush, and could prevent people being contacted by companies such as EuroDebt, who can provide them with genuine help.”

Beverley Budsworth, Managing Director of The Business Debt Advisor, added: “The OFT guidelines on debt management do not permit cold calling by personal visit. If people have opted in or ticked a box that says they want further help, then this is permissible.
“I do hope that the OFT takes a practical approach and stamps out sharp practice but leaves intact compliant debt management companies who genuinely care about improving people’s awareness of the excellent rescue culture we have in this country.”
The OFT’s investigation is currently on-going, but the OFT is expected to publish a response to the Bureau’s complaint within the next 90 days.

Wednesday, 2 February 2011

How to protect your home

 The first issue troubled borrowers might consider is whether they can find a sum of money to use to pay off a proportion of the mortgage to bring it in line with the 75% LTV average. "Is there any money a relative could help with ,could your relatives help you out with money. Are there savings you have that you don't need access to? By reducing the borrowings you can shop around better and find a cheaper rate. It's that simple.

Another solution could be to start managing your finances now as if the costs of your mortgage had gone up already. Move a sum each month into a savings account. Sometimes it can just mean getting used to the higher outgoings and this way you still have access to those extra funds, if needed.

 A succession of interest rate rises could see a fixed rate of 6%, which might look unattractive now but appear "incredibly low" in a few year's time. Many independent mortgage brokers are urging borrowers to take out a fixed-rate mortgage as soon as possible because providers have already begun to factor in future interest rate rises and have raised the price of their fixed-term products.

Fixed rates have been climbing, but they are still the right choice for those who are fearful of how they will deal with a rise in mortgage costs. They help protect against any increase in interest rates but will also bring some stability to the monthly budget at a time when inflation continues to push up other household bills."
A two-year fixed rates can be found with rates a little below 3%. Santander offers a rate of 2.65% at 60% LTV but with a hefty £1,995 fee. For longer-term security, RBS offers a five-year fix at 3.95% with a £699 fee but only up to 50% LTV. Yorkshire Building Society offers a five-year fix at 3.99% to 60% LTV, with a £1,495 fee.

Those "with more slack in their monthly budget" (especially those who believe the recent contraction in the economy will stall the interest rate rises) may wish to opt for the initially lower variable rates. HSBC offers a lifetime tracker at 1.79% above base rate to 60% LTV with no fee.

Among other product options,  capped trackers (which track base rate but have a ceiling on how high they could go) such as Coventry Building Society's three-year tracker at 2.49% above base rate up to 75% LTV with a £999 fee and capped at 3.99%.

Lenders like Nationwide, Woolwich and RBS also offer the option to switch out of a tracker rate to a fix without penalty. Finally, those that do stick with a variable rate would be well advised to prepare for rate rises by taking advantage of the low rates now to overpay their mortgage, cutting the balance and making life easier when rates start to lift.

Find out how your mortgage payments will vary if the rate rises For independent mortgage advice

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Monday, 31 January 2011

Interest rates: could you soon face financial ruin?

Homeowners who bought at rock-bottom interest rates are 'on the edge of an abyss' and could have problems paying their mortgage when rates finally rise
Homeowners who took out a mortgage during the past two years and know nothing other than rock-bottom interest rates could face financial ruin when the Bank of England finally raises the cost of mortgages.
The rate-spoilt generation are "standing on the edge of an absolute abyss", according to Heather Keats of the Community Money Advice debt charity. She said: "This is going to be the most enormous problem for us, because people are simply burying their heads in the sand at the moment."
Some economists believe a rise in base rate, previously not expected until the end of 2011, could be closer following spiraling inflation and last week's news that two of the nine Monetary Policy Committee members voted for a rise in January.
The outlook is particularly grim because consumers are already feeling the squeeze thanks to a combination of "toxic" factors: the recent VAT increase, rising inflation, imminent public sector redundancies and the knock-on effect in the private sector.
Moreover, wage freezes and overtime bans have led to real wages being eroded to 2005 levels. "One has to go back to the 1920s to find a time when real wages fell over a period of six years," said the Bank of England's Mervyn King last week.
Mortgage borrowers can therefore ill afford to ignore the prospect of interest rate rises. But more than seven million homeowners have not reviewed their mortgage since the base rate first fell to 0.5% in March 2009, according to research by advice website With the base rate remaining at 0.5% for a record 22 months, homeowners have been lulled into a false sense of security and have failed to review their mortgage rates, the website said.
One in 10 homeowners said they have never reviewed their mortgage at all, and a small but significant proportion of those who have (4%) said they had failed to take any action because they did not understand what effect a change in base rate would have on them.
The real nightmare is for those who took out their mortgage some time ago and borrowed at 75% or more loan-to-value (LTV). For these people it will be more difficult to secure a fixed rate now and the higher the mortgage percentage, the harder it will be to find a decent rate. They might find there is little they can do. But make no mistake, a rise in interest rates will impact hugely on a household's finances.
A rate rise of one percentage point would add £76.38 to the £648 monthly cost of a 25-year £150,000 repayment tracker mortgage with a rate of 2.17% (the average of the three current best buys), according to A two percentage point rise would add £158 per month and if the mortgage rate rose by three percentage points to 5.17%, borrowers would face an extra £244 each month.
Even a 0.5% or a 1% rise will lead to her charity being flooded with people who are desperate. "It will affect everyone all across middle-income Britain, as they are often the ones who had previously used different types of credit, such as loans and credit cards, because they knew how to. Credit tightening now means they will have few other options.
The problem of rising mortgage rates applied not just to first-time buyers, but anyone who has stretched themselves financially, regardless of how long they have had their mortgage.
"The banks' attitudes are different now after they all got their fingers burned by the credit crunch. When a borrower gets into trouble, instead of looking at different repayment structures or helping customers, they will want to dive in and get their assets back. It could have a snowball effect on household debt."
Keats said her charity usually starts dealing with consumers' problems around eight months after a rate rise occurs, when everything else they have done to meet their housing costs has failed. Even if someone's home is repossessed, that's not always the end of it,A bank can still pursue former homeowners for any shortfall they believe they are owed for up to 12 years. When interest rates hit 15% in 1990, we were still dealing with related financial problems in 2002. The fall-out is incredible."
Una Farrell of the Consumer Credit Counselling Service said the charity's clients are currently making an average monthly mortgage payment of £564.60, meaning a two percentage point increase in rates would see client's mortgage costs rise by £308. "That is quite an increase when the average CCCS client only has a budget surplus of £43," she said.
Debt counsellors say that when borrowers are put under financial pressure a debt spiral occurs, where they try to juggle their debts and make a choice as to which repayments or bills they should pay first.
The problem is that when consumers panic and there are people knocking on the door for their money, they can make the wrong choices.
Whether you have done a budgeting exercise before or not, do one today go through your expenses and see if there is anything that can be stopped for the time being and, for the essentials, can you find a cheaper provider? There are so many resources available online these days it is almost impossible not to be able to save money on your bills, but no one else will do that for you – you have to do it yourself.
Clearly, the best advice is to take action now, because the headache of interest rate rises is undoubtedly on its way. There is nothing you can do to stop it, so prepare yourself.

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Tuesday, 25 January 2011

lack of mortgage lending

Bank of England's Adam Posen warns over lack of mortgage lending

Bank of England policymaker Adam Posen has told Bloomberg that he sees a “downside” risk to the UK housing market due to the lack of credit for first-time buyers and “very low” levels of home sales.

House prices rebounded last year from their worst slump since the early 1990s, as the Bank's Monetary Policy Committee held the interest rate at a record low of 0.5pc, however demand for mortgages weakened. Data last week from the Council of Mortgage Lenders showed mortgage advances for 2010 sunk to their lowest level in a decade.
“You look at the difficulty many first-time buyers or younger people have in getting mortgages [and the] very low volume of transactions – these to me are things saying ‘I am much more worried about a downside risk to the housing market from here than any further appreciation,’” Mr Posen told Bloomberg.
“My view is two things have supported the UK housing market in the last couple of years,” Mr Posen said. “One is our interest-rate cuts and quantitative easing directly affecting mortgage affordability” and the second that the level of UK homebuilding was “relatively small for the size of the economy compared to Spain or Ireland or the US”.
“You have both a demand factor through aggressive monetary ease and a supply factor in that the oversupply was much less,” he said. “That to me is a very straightforward explanation for why housing prices have been relatively resilient.”
Mr Posen has repeatedly urged his Bank of England colleagues not "overreact" to inflation remaining over target by increasing interest rates and in recent months has argued for policy to move in the opposite direction – to provide further stimulus.
He previously said he thinks the economy still has a long way to go to run at full tilt in the wake of the recession. "The workers of the United Kingdom did not wake up one morning ... and find that their left arms had fallen off and half of their offices had disappeared," he said last month.
A total of just £136.3bn was lent during the year, the lowest level since 2000, and 5pc below the 2009 figure, which was the lowest total for nine years, according to the CML.
The group, which is predicting total advances of around £135bn for 2011, also warned that consumer demand could be even weaker than previously expected if inflationary pressures led to an early rise in interest rates.
Advances during the final month of the year were also low, with just £11bn lent in December, the most subdued figure for the month since 2000, and 6pc down on November's total.
It was also the fourth consecutive month during which lending levels had been the lowest for the month in question for a decade.
But while December is traditionally a quiet month for the mortgage market, there were few signs that lending levels would pick up during January.
The Bank of England's Trends in Lending report showed that the number of mortgages approved for house purchase by the major lenders had dropped to just 40,000 during the month, the lowest level since March 2009 and down from 45,000 in November.
The number of homes changing hands also fell during December, with just 75,000 properties sold for more than £40,000, down from 77,000 in November, according to figures from HM Revenue & Customs.
Paul Sabbato, a director of broker First 4 Bridging, said: "The near-paralysis of the mortgage market continues. December is always a quiet month but this was a quieter December than usual.
"There's no doubt that many people who may have been considering buying a couple of months ago have shelved their plans until there is more clarity on when, and by how much, rates will rise."
Howard Archer, chief UK and European economist at IHS Global Insight, said: "Latest data suggest that housing market activity ended 2010 very much on the back foot, which suggests that house prices will remain under pressure in the early months of 2011 at least.
"This evidence of ongoing very weak housing market activity reinforces our belief that house prices will fall further in 2011, although current mounting signs of fewer houses coming on to the market could provide some support to prices."
Although any increases to interest rates are likely to be small, the move would have a big impact on the confidence of potential buyers.
CML economist Peter Charles said: "Money market rates have recently moved higher in anticipation of a rise in base rate and some lenders have recently reflected these increases in their product pricing.
"Against this backdrop, consumer demand may be weaker than we would otherwise have expected. Higher interest rates will also hit the budgets of existing borrowers, although the expected modest rises in base rate will result in a relatively small proportionate rise in monthly payments for most mortgage holders."
He added that the group did not think this would have a big impact on the number of people who struggled to keep up with their mortgage, and it did not anticipate revising its current arrears forecast.

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Monday, 24 January 2011

Homeowners and fixed rate mortgages

Homeowners who want a fixed rate mortgage were today urged to move fast as lenders began pulling their best deals, following rising funding costs.
Nearly a dozen lenders have either withdrawn or increased some of their fixed rate mortgages during the past week, including First Direct, which has pulled its best buy two and five-year fixed rate products
Other lenders that have hiked at least some of their mortgage rates include Lloyds TSB, Halifax, Northern Rock, Skipton Building Society and the Co-operative Bank, with some groups increasing rates by up to 0.7 of a percentage point.
The latest round of re-pricing has been sparked by a steep increase in swap rates, upon which fixed rate deals are partially based.
Since the beginning of the year two-year swap rates have risen from 1.53% to 1.79%, while five-year ones have jumped from 2.66% to 2.93%, amid speculation the Bank of England's Monetary Policy Committee will raise interest rates sooner than previously expected because of high inflation.
The Confederation of British Industry (CBI) predicted last month high inflation will force the Bank of England to raise interest rates gradually in the spring from its 0.5% historic low. Others suggest the rise may come later.
The latest inflation figures yesterday showed the Consumer Prices Index rose by more than expected during December, increasing to 3.7%, up from 3.3% in November, and well above the Bank's 2% target.
We saw lenders pulling their fixed rate deals last week and that trend has continued into this week.
Swap rates have been increasing over the past couple of weeks, putting upward pressure on the prices of fixed rate mortgages.
"Once you get a few lenders re-pricing, that puts pressure on other lenders to respond. There are very few five-year fixed rate deals still available for under 4%.
"No-one knows what will happen to rates in future but the trend is upwards at present."
He suggests people who want the security a fixed rate deal should consider remortgaging now in case they rise further.
Although many economists now expect interest rates to start rising sooner than previously expected because of inflationary pressures, they are still set to remain low by historic standards.
It is also important to factor in any arrangement fees, which can be as high as £1,500, when considering which mortgage to take out, while borrowers should also remember that fixed rate mortgages can come with hefty early redemption fees if they want to get out of the deal early.
some deals allow you to book a rate but not draw the money for a few months.
If rates jump and you move to a pre-booked fix you've not lost out.
But if you dump the fix because you want to continue on a variable rate or you find a better fix you will lose any fee – that can hit £200 – payable on application. So view this charge as an insurance policy. For independent mortgage advice

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Thursday, 20 January 2011

Repossessions set to rise

Number of repossessions to rise as lenders lose patience

The number of people being evicted from their homes will rise this year as banks lose patience with home owners who fail to keep up with their mortgage payments, lenders have warned.

An estimated 40,000 home owners will have their properties repossessed in 2011, up from an estimated 36,000 last year, according to the Council of Mortgage Lenders.
It blamed rising unemployment and more people struggling to keep up with their monthly mortgage payments.
In a statement, it said: “Our prediction that mortgage arrears and possessions will tick up again in 2011 will ensure that there is ongoing scrutiny of market behaviour.
“In our view, payment problems will be driven by a combination of job losses, reduced government support for borrowers in difficulty and an end to the mortgage rescue options for some households with worsening mortgage arrears. There are limits to forbearance as well, and this will come to the fore over the next few years.”
During the economic downturn, lenders were told by the Government to regard repossession as a last resort for borrowers in difficulty.
Home owners looking for a new deal suffered amid a lack of affordable mortgages last year and the CML said this pressure is likely to “intensify” in 2011.
It said: “Unfortunately, there is a real risk this year that pressures on mortgage funding may intensify again as the deadlines draw nearer for firms to repay their commitments under official support schemes.”
Under the terms of their massive billion pound bailout by the Government during the credit crisis, Britain’s biggest high street lenders were told to lend to struggling home owners.
These lending targets are due to be withdrawn at the end of next month, when the state-owned banks will be free to set their own targets. These are widely expected to be significantly lower due to the lack of competition in the mortgage market.
In November last year, the CML unveiled the latest repossessions statistics which showed the number of people evicted from their homes fell for the fourth consecutive quarter to 8,900 between July and September, down from 9,400 in the preceding three months.
It also reported a slight improvement in the number of people who had fallen behind with their mortgage during the third quarter, with 176,100 people in arrears of 2.5 per cent or more of their outstanding debt, down from 178,200 at the end of June.
It is due to report the exact number of repossessions for last year next month.

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Tuesday, 18 January 2011

debt management plan

If you have a serious debt problem and don't know where to turn, relax, there is help!
Use our contact form to contact us for further information about debt management.
If you have debts over £15,000, you should be aware that an Individual Voluntary Arrangement (IVA) would possibly be a better solution to your problem, however not everybody fits the criteria for an IVA, a Personal Plan may be the only debt management solution available to you, unless bankruptcy is recommended.
Arranging a personal plan can be ideal if you are going through a short-term bad patch financially (lack of overtime, etc.). It will give you control of your finances until your situation improves allowing you to get back on track with your creditors.
The IPP debt management solution is an agreement between you and your creditor that can be made when you are in a situation where you can no longer afford to make your unsecured debt repayments in full. However you may be able to make a reduced offer of payment from your disposable income.
An Informal Personal Plan does not involve any legal paperwork or court appearances.

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Beat rising Funeral prices

Beat Rising Prices
By paying for funeral costs in advance

While the emotional costs of losing a loved one are incalculable, the financial costs is sadly easier to calculate- the average price of funeral arrangements are expected to rise by some £280 each year.

Even if you have put money aside for your funeral costs, with low interest rates affecting savings accounts your family could face additional burdens when the time comes.

Choosing to pay for a funeral in advance with a quaranteed funeral plan will give your family extra security at a difficult time. That’s because it allows you to pay for funeral services today, safeguarding your loved ones from future price rises.

·         Protect your family – from the burden of meeting funeral expenses
·         Beat rising prices – pay at today’s prices with flexible payment options to suit you
·         Fixed price plan – unlike some other plans there will never be a shortfall
·         Guaranteed acceptance – if you are aged 50 or over

Call Now for a FREE information pack 08450  526 840

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Monday, 17 January 2011

Selling property for cash

"If You're Considering Selling Your Property for Cash, You Need Honesty, Efficiency & a Genuine Offer!"

Welcome to a Fast Growing Network of Registered Cash Property Buyers.  

If you are serious about getting the highest cash offer for your house and completing quickly, especially in today's market, you have come to the right place. Each year, the associates of Abbey Broadway help thousands of sellers sell their properties fast for cash and move on with their lives. Here are the benefits:

·         You can sell for any purpose
·         We pay your solicitor's fees
·         You save on estate agency fees.
·         We can stop repossession at any time.
·         There is no need to decorate or refurbish your property
·         Receive an offer after just one viewing.
·         Complete within 28 days or on a date that suits you.
·         Your sale is totally confidential.

Although most people are familiar with selling a property through an estate agent, making a decision to sell for cash could be a bit daunting. With Abbey Broadway, you can sell with total confidence. We represent some of the most experienced cash investors in the industry who are registered to conform to our standards and ethical guidelines. These include:

·         being honest about the cash offer that is necessarily below the market value. 
·         giving you the highest possible offer that creates a win / win situation.
·         not disguising an offer with costly terms and hidden charges.
·         not charging you any fees including the valuation.
·         involving you in every step of the whole process.
·         completing on the date as agreed.
·         being flexible to accommodate your needs.  

       Request a PRELIMINARY OFFER now and we will match you with an associate cash buyer in your area immediately. 

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Compare conveyancing solicitors quotes
For independent mortgage advice
Making a will made easy
Debt management Help & Advice
Selling your Home Online
Quick cash house sales
Estate Planning

Sunday, 16 January 2011

Can you extend your way out of the property slump?

Extensions and your mortgage

If you don't have enough equity in your property to secure the most competitive mortgage rates, extending your home could be an innovative way of accessing cheaper finance. Once the improvement is complete and you have the property revalued, you may find you are eligible for a greater range of mortgages, because your home is worth more, but your home loan is at the same level.

For example, if you have a loan equivalent to 65 per cent or less of the value of your home, you can access deals such as First Direct's five-year fixed-rate mortgage on 3.89 per cent, which has a modest £99 arrangement fee. If you only have 10 or 20 per cent equity, you will struggle to get a deal, and will have to pay higher rates such as Skipton Building Society's 5.78 per cent five-year fixed rate, which has a hefty £995 fee on top.
Many people finance home improvements by adding to their mortgage, but this has become more difficult, particularly for those with little equity in their homes.
You used to be able to provide lenders with the plan of an extension, get a value on the completed project and then get an offer based on that, this is much more unlikely now, though small or medium lenders may do so.
If you had a high loan-to-value (LTV) in the first instance, you may struggle to get a further advance from your lender, even if the work you planned on having done, such as a loft conversion, would add value and ultimately improve your equity stake,
Those borrowers already on high LTVs would realistically have to use their own money to fund home improvements.
However, Nationwide says it is prepared to listen to existing borrowers who apply for extra money for home improvements, on a case-by-case basis, studying any plans they have in place.

Other financing

If you are sure your planned improvements will add value, but your mortgage lender won't listen, you do have other options in the short term.
suggestion is that you may be able to put some of the cost of the improvement on a 0 per cent credit card for a year, and then pay it off by remortgaging at the end of the loan period, after your home has been revalued. This would depend on how much money you needed, of course, and how confident you were in the project. Other sources of finance include personal loans, which are unsecured, and are coming down in price.
Over the past few weeks we have seen Tesco Bank, HSBC, Barclays, First Direct and Sainsbury's Finance all cut rates on personal loans above £7,000. Sainsbury's is currently the best buy at an annual percentage rate (APR) of 7.4 if you have a Nectar card.
Finally you could get a second charge on your property, which is basically a more expensive mortgage which is also secured on your house. This arrangement would cost you about 10 per cent interest, which is far more expensive than most ordinary home loans.

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Thursday, 13 January 2011

buying or selling property: Can you extend your way out of the property slump?...

buying or selling property: Can you extend your way out of the property slump?...: "Falling house prices can mean costly mortgages. Avoid them by adding to the value of your home. According to Halifax, the average home lost ..."

Can you extend your way out of the property slump? part 1 of 2

Falling house prices can mean costly mortgages. Avoid them by adding to the value of your home.

According to Halifax, the average home lost £2,000 of its value last month, and prices are expected to fall further throughout 2011. That could be a problem for many people with mortgages, because if your property loses value, your loan-to-value ratio increases and you may have to pay a higher rate if and when you remortgage.
But there may be a way of preventing your home losing value. According to Nationwide, some home improvements will add more value to your property than the cost of carrying them out. What's more, with savings rates at an all-time low, this could be a more lucrative use of any spare cash you have stashed away, and you would get to enjoy the fruits of your labour into the bargain.
But you will need to do some careful homework to ensure that your Grand Design pays off. It is also hard to gain finance in the current climate, so you may need to think laterally about how to borrow any money you might need. But if you get it right you could end up with a home that keeps its value throughout the year, and a cheaper mortgage to go with it.

Pick your project

While some renovations will markedly improve the value of your house, others will not add a penny. As a rule, anything that adds floor space to your home (unless you are eating up a tiny garden) is a good investment, but other projects may be more questionable.
According to Nationwide, increasing your floor space adds almost five per cent to the price of a typical house, while if your house is detached, the price will go up by seven per cent. If you convert your loft, adding a bedroom and a bathroom, you could add up to 20 per cent to your property value.
The National Association of Estate Agents calculates that an extension could add between 10 and 50 per cent to the value, while upgrading the exterior of your house could see an uplift of 15 per cent. A new kitchen can also be a good investment, adding between 10 and 15 per cent.
On the other hand, putting in a swimming pool or a home gym won't give you any payback. The swimming pool is the classic example, By all means put one in if it gives you pleasure, but it won't add value."

Talk to the experts

The figures above are merely average ones, since every property and location is different. If you're unsure whether to go ahead with an extension, talk to the people who know your area best. Talk to agents, they are not just there to sell your home –they will want to build up relationships as use them

A good estate agent will tell you whether your home will benefit financially from an extension, loft conversion or other project. Variables to consider include whether you have sufficient downstairs living space to support an extra bedroom above, and whether you will lose a bedroom on the first floor if you put a staircase up to the loft.

simply paying attention to neglected areas of your home could reap the greatest rewards.
Homefinders have become more choosy, so it's good to enter a house that's clearly loved. That means it's been well maintained and presented. Investing in a modern kitchen and bathrooms will always make a return on investment, Leaky roofs or gutters full of dead leaves will end up with water seeping into the house, and that can seriously affect the worth of a property. Out-of-date electrics are a turn off and will allow a buyer to offer substantially less than the asking price.

Even if you aren't thinking of selling in the next few years, attention to these details will stop the value of your home drifting down further than the rest of the market.

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Wednesday, 12 January 2011

buying or selling property: YOU PAY THE PIPER, YOU CALL THE TUNE part 2

buying or selling property: YOU PAY THE PIPER, YOU CALL THE TUNE part 2: "A modern approachIt’s straightforward enough to establish the composition of the estate – a face-to-face conversation with properly briefed ..."


A modern approach
It’s straightforward enough to establish the composition of the estate – a face-to-face conversation with properly briefed executors and / or family of the deceased will reveal the work necessary to administer the estate from top to bottom and give the service provider enough information to price the assignment accurately. Where possible, the discussion can take place on the phone, which ought to keep the cost down. In any event, the quotation will include the service provider’s professional fee for dealing with each discrete task, VAT on the fee and the cost of any disbursements (obvious ones being the Court fee and office copies of the grant).
Swings and roundabouts - blind pricing
Experience shows that some service providers will apparently happily price the administration of a particular estate without knowing what and how much work will be necessary to administer it. Some service providers may take the view that as long as what is lost on the swings is more than recouped on the roundabouts and a profit is made overall, everybody will be happy. However, is it fair that the roundabouter, who has paid too much for estate administration should subsidise not only the service provider’s business model but also the swinger, who has paid too little?
In practice, the prices offered in such blind pricing tend not to be fully inclusive: they are unlikely to include VAT on the fee, charges for dealing with anything remotely out of the ordinary (e.g. the gathering in and sale of overseas assets, setting up of trusts contained in the will etc) and any third party costs.
Very few service providers will commit firmly to a fixed end-date for the administration of anything but the most straightforward estate. As a rule it is very difficult to predict how long some tasks will take to complete. Some providers, however, will agree to a clause in their terms of engagement such that they will refund a certain amount of their fee for every month by which they exceed the end date agreed at the point of their taking instructions.
Advice to the consumer
Here are some tips for the consumer:
• Remember – YOU call the tune
• Estate administration can be complex – find a service provider you like and trust
• Shop around – but be wary of hourly rates and / or fees based on the value of the estate or parts of it (e.g. the deceased’s home)
• Ask for a fixed fee quotation, not estimate
• Ask what the price you’ve been given excludes – if the fee you’ve been given is truly fixed and transparent, the correct answer will be “Nothing”
• Look for as firm a commitment as possible to completing the administration within a given timeframe
And finally, to quote Yogi Berra:
• “Always go to other people's funerals, otherwise they won't go to yours.”

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buying or selling property: YOU PAY THE PIPER, YOU CALL THE TUNE Part 1

buying or selling property: YOU PAY THE PIPER, YOU CALL THE TUNE Part 1: "YOU PAY THE PIPER, YOU CALL THE TUNE “If I can’t take it with me, I’m not going…”Variously attributed to George Burns, and a host of other c..."

Tuesday, 11 January 2011


“If I can’t take it with me, I’m not going…”
Variously attributed to George Burns, and a host of other comedians, there is something about this old adage that chimes with those of us professionally involved in estate administration. The corollary is, presumably, “As long as I’m solvent, I’ll survive.” Would that it were so. Either way, as consumers, all of us tend to look for an attractive deal, whatever we’re buying, including estate administration services.
In general, people don’t mind paying for estate administration services. In general, people absolutely do mind open-ended fees and not knowing what a transaction is going to cost them. Increasingly, consumers look for a fixed-price service and prefer to know – to the penny – what they are going to be asked to pay for it, before instructing their service provider.
The status quo
The traditional model requires consumers to put faith in their service provider to (a) deliver the service to a high professional standard and (b) deliver value for money – although consumers are unlikely to know whether they’ve received value for money until after the final invoice arrives, if then. Although the days of calculating the fee by weighing the file are, thankfully, long behind us, many service providers resolutely prefer to offer a fee estimate, based on an hourly rate and / or a percentage of the estate’s value, notwithstanding increasing consumer demand for binding, fixed-fee quotations.
Who’s in charge? The consumer!
If you accept the proposition that The Consumer Calls The Tune (and if you don’t, you should probably stop reading here…), it makes perfect sense to offer a pricing model that provides a straightforward, transparent price quotation, guaranteed not to increase.
Estate administration lends itself well to a fixed-fee approach. Although each estate will differ from others on its facts, its administration will comprise a number of discrete tasks, all of which must be completed before the file can be closed.
Varying degrees of complexity
Some estates will be very straightforward to administer – perhaps the consumer will only require assistance with the extraction of the grant of representation. Others will be highly complex and may present a welcome challenge to the most experienced estate administration professional. Whichever, it’s easy enough to quote the correct price for administering either, as well as for every other on the spectrum of complexity.

Monday, 10 January 2011

House Prices Down

House prices down by 1.6% in 2010

Halifax says house prices fell by 1.3% in December and 1.6% in 2010, with the rate of decline 'slower' than the falls seen in 2008
House prices fell by 1.3% in December, contributing to a 1.6% decline over the whole of last year, according to figures released by the Halifax this morning.

However, the lender pointed out that the quarterly price change (lenders' preferred measure because it smoothes out monthly volatility) from October to December dropped just 0.9% compared to the previous quarter. Martin Ellis, housing economist for the Halifax, said the quarterly rate of decline was "significantly less than the quarterly falls of 5%-6% during the second half of 2008".

The slow rate of decline mirrors what housing minister Grant Shapps said was necessary to allow struggling first-time buyers to find homes they could afford.

However, Ellis said that while continued low interest rates would help make mortgages more affordable for first-time buyers, with new borrowers having to use 29% of their average disposable earnings to meet typical monthly mortgage payments in the last quarter of last year, compared to 48% in mid-2007, it has made it easier for existing homeowners to resist putting their homes on the market.

"Interest rate rates are likely to remain very low for some time. This will continue to support a favourable affordability position for those entering the market and limit financial pressure on existing homeowners to sell.
"Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings and higher taxes could put some downward pressure on demand"
Howard Archer, chief UK economist for IHS Global Insight, was more gloomy about mortgage rates, believing inflation could force the Bank of England into an early rise.

He added that the 0.9% fall in the last quarter of 2010 was consistent with his predictions for house prices in 2011: "If our forecast of a 10% correction proves to be right, average house prices on the Halifax measure will drop to £152,536 in 2011 – a decline of £10,899 from the December 2010 level of £163,435. This means house prices will fall around 7% in 2011."

Price falls are likely to vary in size around the country depending on the impact of public spending cuts, according to the Halifax. James Scott-Lee, chairman of the Chancellors Group of estate agents, agreed, saying the headline Halifax figure could not summarise regional variations within the market.

"The Halifax house prices figure will doubtless trigger more doom and gloom," he said. "However, while there has been an easing down of prices, as supply has come through and demand has weakened, in certain towns and cities – not least the capital – the right type of property is still commanding the right sort of price.
"Poor quality properties in areas of oversupply are under real pressure but sought-after properties in areas of high demand are still performing well."
He added: "Come the end of 2011 we expect prices in London and the south-east to be higher than they are at present, while towns and cities in the north could suffer further price falls."