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Posted By Admin ,
Tuesday, 18 May 2010
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The year has started well for borrowers. The January meeting of the Bank of England monetary policy committee has resulted in no change in the base rate remaining at 0.5% |
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Posted By Admin ,
Tuesday, 18 May 2010
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From today the temporary stamp duty exemption on properties costing between £125,000 to £175,000 comes to an end. The Royal Institution of Chartered Surveyors said it could have a detrimental effect on the recovery in areas of the UK that were lagging behind the rest of the country.
It does seem unfortunate as the predicted house price meltdown didn’t materialise and after a dip, confidence seems to have remained quite steady with home buyers, so why mess with it now? According to the Nationwide house prices are up 5.9% in 2009.
The Royal Institution of Chartered Surveyors is calling for a review of stamp duty calling for the tax not to be charged on the first £150,000 of a property’s price, regardless of the home’s value. This is a move that would be great news for all home buyers and would currently remove some first time buyers from having to pay any stamp duty on their purchase. Of course this does assume they are able to secure a mortgage to buy in the first place.
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Posted By Admin ,
Tuesday, 18 May 2010
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The UK Government has been in dispute this week with the board of Royal Bank of Scotland over their proposal to pay their Investment Banking staff bonuses worth an average of £85,000. This is third higher than last year and is based on profits made of about £6 billion. The RBS board have threatend to resign if they are unable to pay the bonuses.
The goverment is reacting to publicity in the newspapers and television that angry voters are complaining about meeting the cost of large bonuses to bankers who they feel caused the financial crisis and triggered a recession.
The compromise has been suggested by Sir George Mathewson a former RBS chairman. He said: I would hope that commonsense prevails and a solution is found that avoids destroying the value in the business for the taxpayer. The 70%government/ taxpayer stake in the bank cost £45 billion. Sir George is urging the government to allow RBS to pay the bonuses for the future good of the business.
RBS are saying that if they are unable to pay planned bonuses to investment banking staff they will lose many of them to rival banks. They are said to be raising investment banking basic pay by up to 150 per cent to escape the Government’s restrictions on bonuses.
The question then is who is right here? In the opinion of the MoneyTalks team we agree with the bank’s view that their staff must be paid their bonuses rather than risk losing the best high flyers to their competitors. Why? Because for UK taxpayers who own 70% of RBS the better the bank performs, the more of the money used to bailout the company will be repaid. Something which we should all want to see irrespective of whether or not you like the idea of RBS bankers being rewarded.
As always let the team here at Loans2you know what you think.
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Posted By Admin ,
Tuesday, 18 May 2010
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You will have seen in the news that the banking industry received a surprising boost this week when the Supreme Court reversed two earlier rulings by the High Court and the Court of Appeal halting an antitrust challenge from the Office of Fair Trading to fees that banks & lenders charge customers who exceed overdraft limits .
The decision to back HSBC, RBS and six other UK lenders did come as a surprise, Corinne Gladstone from the OFT said the regulator will review the ruling and make an announcement next month. Marc Thorley representing Barclays said that while the odds looked stacked against them following two rulings in the OFT’s favor We wouldn’t have pursued the point to the Supreme Court if we didn’t think it was right.
A study in 2006 found that banks earn about a third of their retail revenue from overdraft charges said to be a combined figure of over £2.5 billion per year. If the ruling had gone against the banks charges for unauthorised overdrafts would have been capped at £12. Additionally banks would have had to settle many outstanding claims from customers trying to reclaim their bank charges.
It may be the end of the road now for the OFT and for the many refund claims from bank customers that had been put on hold pending a definitive ruling.
So are bank charges for unauthorised borrowing are fair? In our opinion yes they are, sorry! Infact they always have been. The truth is that most people simply don’t read the terms and conditions booklets given to them when they open their bank accounts. Read them and all the banks charges are clearly displayed. BUT! Yes please don’t complain yet, there’s more. Bank charges for unauthorised borrowing may be fair but how much is a fair amount to be expected to pay? Credit card fees have been capped at £12 and yet many banks are charging £30 for each transaction unpaid when customers either become overdrawn witout consent or exceed an agreed overdraft limit. This does seem excesive and still may be the target of a further investigation by the OFT in the future.
What are your experiences of banks and bank charges? Let the Loans2you team know.
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Posted By Admin ,
Tuesday, 18 May 2010
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As anticipated the Bank of England monetary policy committee have maintained interest rates at 0.5% for the eighth month running. It also announced a further £25bn quantitative easing over the next three months to boost the British economy. The Bank said it would increase the size of quantitative easing to £200 billion. |
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Posted By Admin ,
Tuesday, 18 May 2010
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There will not be too many smiles on the faces of anyone who has bought shares in the part nationalised UK banks within the past 6- 9 months. For Lloyds currently at 87p and RBS at 37p share prices are falling and it’s not difficult to see why. You may well be thinking that it’s just tough luck for speculators and no concern of yours, but hang on, Royal Bank of Scotland is 70% Government/Taxpayer owned, Lloyds 43%, we are all shareholders with an interest in this.
We are told that break up of Britain’s part nationalised banks is to appease European Commission concerns over a lack of competition within the banking sector. We can’t remember any of these concerns being made at the time when Lloyds were instructed by the UK Government to take over ailing HBOS, a move which jeopardised the stablility of the Lloyds group sufficiently that they then required a taxpayer bailout.
Both Lloyds and RBS hold some great companies within the groups, RBS have household names Churchill and Direct Line insurance, while Lloyds have Cheltenham & Gloucester and Internet bank Intelligent Finance. Because the banks have still been holding these profitable assets they have attracted investors to buy shares in both thinking that these together with the regular banking operations could see Lloyds and RBS turnaround and their share prices continue to improve.
However it now looks as if none of this is to be. Lloyds and RBS will be forced to part with the goods parts of their business, leaving the taxpayers and other shareholders the bad debts or Toxic Assets as they are known.
In the view of the team here at Loans2you, this seems unfair to shareholders as well as a bad deal for taxpayers who are still in the case of RBS going to have to pay another £20 billion extra to buy further shares in the bank taking the government and taxpayers stake up to 84%.
Let the MoneyTalks team at Loans2you know your thoughts on this www.loans2you.net
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Posted By Admin ,
Tuesday, 18 May 2010
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UK Chancellor Alistair Darling is expected to make an announcement to Parliament early this week on the planned future for Northern Rock, RBS and the Lloyds Banking Group. Nationalised Northern Rock would be split in two and parts of LLoyds TSB and RBS broken up.
The plans would create three new banks by 2015 and to encourage competition, new rather than existing companies would be invited to operate them. Tesco and Virgin have both expressed interest.
RBS is currently 70% taxpayer owned predictions suggest that it may be forced to part with the Churchill and Direct Line insurance companies, as well as 300 of its branches and a large part of its investment bank. Lloyds Banking group 43% government owned is planning to dispose of mortgage company Cheltenham & Gloucester, Intelligent Finance, the internet bank it acquired through its takeover of HBOS, and a number of its Scottish branches.
Do you think that these proposals are good news for taxpayers? Is now the right time to be considering this given the Country is still in recession? and what will the future hold for shareholders?
As always do let the team here at Loans2you know what you think.
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Posted By Admin ,
Tuesday, 18 May 2010
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The FSA (Financial Services Authority) is proposing to introduce new rules for mortgage providers in particular banning self certification of income loans. They have published a discussion paper that outlines plans for a much more hands-on style of regulation and far tougher mortgage rules. It wants to ban self-certified mortgages and impose far heavier credit checks on people applying for mortgages.
What the FSA is suggesting:
It wants an end to self-cert mortgages that allow borrowers to declare their income. It also wants to make lenders more responsible for their customers’ ability to pay back borrowing, demanding greater affordability tests for mortgages.
Lenders would have to carefully examine applicants’ spending habits, perhaps even check bank statements, to be confident that they have enough disposable income to repay the loan. It intends to prevent firms from profiting off struggling consumers by hitting them with arrears charges.
The FSA also wants to outlaw toxic borrowing, for example, lending high loan-to-value loans to borrowers without a steady income and with a problematic credit history.
Why has it made these proposals? The last 18 months have seen many people suffering great financial distress, the FSA claimed.
Prior to the crunch, there was massive growth in the mortgage market, with many banks following high-risk lending strategies and relaxing their credit criteria.
Jon Pain, managing director of supervision at the regulator, explained:
The FSA needs to ensure that firms only lend to people who can afford to pay the money back. The reforms that we have announced today will ensure that the mortgage market works better for consumers and that it is sustainable for firms.
Will I be able to get a mortgage?
Once the new rules are brought in, some people will struggle to get a mortgage where previously they could have. There is some concern that the self-employed will struggle to gain mortgages without self-cert opportunities. However, the FSA insists that people who can afford mortgage repayments will still be able to borrow, they will just have to prove their earnings to lenders.
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Posted By Admin ,
Tuesday, 18 May 2010
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The Government has published a consultation document giving the detail of proposed changes in the law on repayment policies imposed by credit and store card providers, inviting the views of the Industry as well as consumer groups.
Consumer Minister Kevin Brennan said:
Card companies have to get their act together and do more for consumers. The Government is putting forward new measures today which we believe will give consumers a better deal. I want to hear from the most important people, the customers, about their experiences and to get their views on our proposals.
Proposed changes include:
Banning increasing credit limits without prior consent of customers.
Raising the minimum monthly repayments levels to encourage people to pay off their balance faster.
Placing restrictions on increasing the interest rate on an existing debt.
Stopping credit card companies make customers pay the cheapest debt off first. This happens to consumers who withdraw cash on their cards, typically charged at 25% APR or more.
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Posted By Admin ,
Tuesday, 18 May 2010
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Much of yesterday’s budget was as expected with Chancellor Alistair Darling mostly announcing where he planned to make savings post the Credit Crunch government borrowings. As usual smokers, drinkers and motorists will be asked to pay more like normal.
One announcement that did get some headlines was that the Chancellor will introduce a new 50% tax rate for Britain’s highest earners. The planned change comes into effect from April 2010 and will affect anyone earning more than £150,000 per year. This is approx only 1% of UK taxpayers which we think is the Labour Government making a political statement that they are the party on the side of the Working Man with approx a year to go before the next General Election.
The Conservative party reacted by saying they would not seek to oppose the new highest rate, again playing politics so that the Government couldn’t accuse them of being the party of the rich.
The MoneyTalks blog is not politically biased and we wish only to comment on money and finance related issues but in our opinion a 50% tax rate is unfair. Why?
Firstly let’s start by making it clear that nobody at Loans2you earns 150K p annum or anything like it, so it’s not personal. No a 50% tax rate is unfair because those people who have achieved an earning level of more than £150,000 are the business leaders and entrepreneurs the UK needs, more than ever in time of recession. 40% was already enough to be taking, why does the UK Government and opposition Conservative party wish to punish the most successful people in the Country? It’s totally the wrong message in our opinion, as always we will welcome yours, the Loans2you team, www.loans2you.net
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