Stamp Duty Axed on Homes Below £175,000
September 5, 2008
Homebuyers will not have to pay stamp duty on properties costing £175,000 or less for the next 12 months.
The current £125,000 threshold will be raised as part of a package of measures aimed at boosting the housing market.
Someone buying a home for £175,000 will save £1,750 under the scheme, which is likely to cost the Treasury £600m.
The government estimates half of all property transactions will now be exempt from stamp duty - up from one third when the threshold was £125,000.
Prime Minister Gordon Brown said the package of measures - including help for first-time buyers and families facing repossession - showed the government was taking action to help people through difficult times.
“Home owners need to know that we will do everything we can to keep the housing market moving,” he stated.
But the Conservatives - who say they would scrap stamp duty for first-time buyers on properties worth £250,000 or less - said the measures were a short-term survival plan to help keep Mr Brown in a job.
The government has not said how it will pay for the £600m estimated cost of the stamp duty move.
Chancellor Alistair Darling said he would reveal more details in his Autumn Pre-Budget Report.
He said the government was also considering ways of increasing the availability of mortgage finance.
But - in an echo of his weekend interview with The Guardian in which he said the economic downturn could be worse than previously thought - he said other factors would be crucial to the housing market’s recovery.
“We face a unique set of circumstances that we have not seen in generations, where you have a credit crunch and where you have high oil and food prices.
“But I remain optimistic, as I have said on many occasions before, that we can get through it.
“We will get through it and today’s measures, helping the housing market, are one example of how the government will help people.”
Other housing moves announced by the government include:
“Free” five year loans of up to 30% of a property’s value for first time buyers of new homes in England
Extension of powers for councils and housing associations to be able to pay off debt for homeowners who can no longer afford mortgage payments and then charge rent.
Shortening from 39 weeks to 13 weeks the period before Income Support for Mortgage Interest is paid
Bringing forward spending from future years to encourage more social housing to be built
The funding for these measures, which unlike the stamp duty move will only apply in England, has been previously allocated and brought forward, the Treasury said.
Under the new loans system, called HomeBuy Direct, households in England earning less than £60,000 will be offered loans free of charge for five years on new properties, co-funded by the state and developers.
Once the five-year “free” period is up, homebuyers will be asked to pay a fee, the Department for Communities and Local Government said - although no more detail of this was provided.
In a statement, the DCLG said: “Not only will this [HomeBuy Direct] help first-time buyers… it will help the housebuilding industry weather difficult conditions.”
Plans Put Forward To Lift UK Mortgage Lending
July 16, 2008
Mortgage lenders have drawn up a plan to help kick-start the mortgage market amid falling house prices and a squeeze on the availability of home loans.
The Council of Mortgage Lenders (CML) have put forward a plan to free up UK banks and building societies to offer new home loans.
It wants the Bank of England to guarantee a market in mortgage-backed securities and covered bonds.
It hoped This would encourage investment in the market for these products, pushing funds back into mortgage lending.
Lack of Confidence
The CML said that the biggest issue in the mortgage market was the lack of available funding to support new mortgage lending.
This has led to a squeeze in number of mortgage deals on the market and the cost of these loans rising.
The lenders’ body wants the Bank to essentially offer a form of secured lending. Which is hoped would help persuade investors to buy mortgage-backed securities - something that has dried up during the credit crunch.
The scheme could be set up rapidly and would act as a catalyst to restore market confidence, the CML said.
Unlike the Bank of England’s Special Liquidity Scheme - which allowed banks to swap £50bn of mortgages for government bonds - it would cover new mortgages and investors would still take the credit risk.
“A year into the credit crunch, there is no merit at all in waiting until the autumn before taking steps that will help the housing market to remain more resilient,” said CML director general Michael Coogan.
The plan would probably receive a cool welcome from those who believe it would involve the state having to underwrite the housing market.
Others might suggest that the drought in mortgage finance would continue without any action.
Three Lenders Raise Mortgage Rates
June 25, 2008
Bradford & Bingley has increased the cost of its fixed rate residential loans of between 0.5% and 0.7%.
First Direct increased its two-year fixed deal by 0.16% to 6.15%. The Co-op upped its three-year fixed rate of 0.7% and its five-year period the rate of 0.9%.
The move comes as banks find it harder and more expensive to finance loans.
They have been caught in a credit crunch, has brought an end to a decade of borrowing cheap and easy loan.
Given the slow global economic growth, accelerating inflation and the weakening of the real estate markets, banks are tightening lending requirements and raising rates to those offered mortgages.
Bradford & Bingley also raised their mortgage rates variable annuity rate of 0.1% and put the cost of buy to let deals by 0.3%
Mortgage lending hits its lowest Level for 33 Years
May 14, 2008
Mortgage lending to home buyers has hit its lowest level for 33 years, according to figures from the Council of Mortgage Lenders (CML).
Just 47,000 such mortgages were lent in March, taking the total for the first three months of the year to 142,000.
This has been the lowest quarterly total since the first three months of 1975.
The CML predicted lending and house sales would probably fall even further in the next few months as the credit crunch continues affect the banking system.
The figures are in line with the latest survey from the Royal Institution of Chartered Surveyors, which said that falls in house prices were now more widespread than at any time since 1978.
In an attempt to overcome the effects of the credit crunch, the Bank of England recently made extra funds available to UK banks to encourage them to start lending to each other again but so far this is having little affect and Libor still remains high relative to the Bank rate and any improvement in credit market conditions will take time to feed through into the mortgage market
However, one of the biggest mortgage lenders, the Nationwide building society, cut some of its fixed rate loans for new borrowers by up to 0.3%.
The society said it was responding to the Bank of England’s move to restore lending between banks.
Last week though, the Building Societies Association warned that the current blockage in the mortgage market might last for another two years.
First-time buyers
The number of mortgages for house purchase has now fallen by 40% over the past year And first-time buyers are continuing to be squeezed out even more than before.
There were 17,800 first-time buyer loans in March, the lowest monthly level on record since monthly figures were first compiled in 2002.
This took the number of first-time buyer mortgages in the first quarter of 2008 to 53,700, which was the lowest quarterly figure since the start of 1975.
If your thinking of applying for a mortgage or loan in the near future its more important than ever to make sure the information held on your credit file is accurate and up to date as the smallest error could lead to you being refused credit or charged a higher interest rate costing you thousands even tens of thousands over a mortgage term whilst the banks are tightening there belts.
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200 Percent Increase in Phishing Incidents During the First Quarter of 2008
April 28, 2008
APACS, the UK payments association, has published figures showing a 200 percent increase in the number of phishing attacks in the UK. During the period January to March 2008 there were 10,000 reported incidents a new record.
Phishing is the name given to false emails that claim to be from banks and other financial institutions but are actually sent to you by fraudsters. These emails typically tell you to click on a link that takes you to a fake website identical to what you would expect to see. You are usually then asked to verify or update your personal security information but, by doing so, you are actually giving your information to the fraudster who has created the fake website. The fraudster then uses the details to access your real online bank account and take your money.
Number of reported phishing incidents* targeted against UK banks and building societies Q1 2006 – Q1 2008
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
|
|
2006 |
2,369 |
2,738 |
3,967 |
5,102 |
14,156 |
|
2007 |
3,394 |
3,830 |
8,931 |
9,642 |
25,797 |
|
2008 |
10,235 |
- |
- |
- |
- |
A typical phishing incident, involves thousands or even million’s of emails are sent out blindly by fraudsters, in the hope of trying to con unsuspecting people into clicking on a link that will send them to a fake website. The criminals’ objective is to fool people into thinking it is a genuine site so they will enter their online banking security information.
Sandra Quinn, director of communications at APACS, says:
“Although online banking fraud losses fell last year the fraudsters clearly aren’t giving up. Phishing scams are continuing to rise and they are becoming ever more sophisticated, which is why we want to remind people to remain wise to them. The advice is quite simple: just remember that your bank will never send you emails asking you to disclose PIN numbers, login details or complete passwords – if you receive an email of this nature you should delete it. If you think your details have been compromised you should contact your bank immediately.”
APACS research shows that although the number of people either deleting or taking no action when receiving a phishing email has increased from 75% in 2006 to 82% last year, there are still nearly one in five people who don’t follow these common sense precautions. Also, although 93% of people have anti-virus software on their PC, almost one in three people (29%) don’t have any anti-spyware software on their computer.
To avoid phishing scams, we advise you:
- Always be suspicious of unsolicited emails that claim to be from your bank; delete any phishing emails that you receive your bank will never send an email asking for sensitive account information.
- Never give your login details, PINs or passwords in full by email – banks will never request these in this way as email is not secure way to transmit account data online.
- Always access your internet bank account by typing your bank’s web address directly into the address bar on your web browser;
- Ensure that there is a locked padlock or unbroken key in the bottom right of your browser window when accessing your bank’s website. The beginning of the bank’s internet address will also change from ‘http’ to ‘https’ when a secure connection is made.
- Make sure PCs you use for any online transactions are equipped with up-to-date security and virus protection.
- Take extra care when using an internet cafe or public computer for online banking if possible avoid using a public network when making financial transactions online.
- Phishing emails can be reported directly to most banks via their website or to APACS at reports@banksafeonline.org.uk.
HSBC loses disk with private details of 370,000 customers
April 28, 2008
The disk went missing in February, three months after Paul Gray resigned as chairman of Revenue & Customs over the loss in the post of two child benefit information disks, which contained data on every child in Britain and the bank and national insurance details of their parents.
A spokesman for HSBC said an internal inquiry began as soon as the bank was told the disk had not arrived at its destination.
But Royal Mail said it had not been contacted about the lost disk. “If HSBC requests it, we will of course help with any investigation,” a spokesman said.
The City regulator, the Financial Services Authority, was informed only last week, HSBC admitted.
The bank said the data loss had come about because of a “unique set of circumstances”, blaming the failure of a secure encrypted digital link between HSBC’s Southampton office and reinsurer Swiss Re in Folkestone, Kent. It said the information had been required urgently by Swiss Re and, when the secure link failed, it had been burned on to a disk and put in the Royal Mail’s business post. No courier service was involved, HSBC said.
The FSA has signalled its determination to clamp down on firms not taking reasonable care of customer data. It has imposed heavy fines on companies failing to own up to breaches in data security.
Last December the FSA fined Norwich Union £1.26m for lax security which allowed fraudsters to target life insurance policyholders. The regulator criticised the insurer for failing to address deficiencies swiftly.