Mortgage payments fall, energy bills soar

Recent analysis of spending by households suggests that the prices of running a home are actually rising below the inflation level.

It now costs on average £9 590 a year to run a home, which is up 1.9 per cent from £9 411 the previous year, compared to the official consumer price index rate of inflation of 2.9 per cent.

Over a five year period however, the cost of running a home has increased by a mere 2 per cent, whereas consumer prices over the period have increased by a staggering 18 per cent.

The small rise in the price of running a home can be put down to the fact that mortgage repayments have fallen by an average of 21 per cent over the last five years, with every other aspect of running a home increased more or less with the rate of inflation. Mortgage repayments stand at 37 per cent of household costs.

However, while mortgages repayments are falling, energy bill are soaring; it is now estimated that 18 per cent of the total cost of running of a home is contributed to energy bills.  Five years ago, electricity, gas and other fuels made up roughly 12 per cent of household costs; this figure has now increased to 18 per cent.

Unsurprisingly, the highest average cost of running a home was in London, 26 per cent above the rest of the England and close to around 50 per cent higher than in Northern Ireland, where it is currently the cheapest place to run a home.

Martin Ellis, housing economist at Halifax commented on the analysis they conducted, saying: ‘Overall, the cost of owning a home has increased by two per cent over the past five years, representing a significant decline in real terms. Lower mortgage payments have largely offset increases in other items of housing-related expenditure, such as the substantial rises in electricity and gas bills.’

While the finding suggest the cost of running a home are increasing below the rate of inflation, it is important to acknowledge that the statistics only focused on mortgage repayment and not the price of renting. The price of renting has steadily increased over the 5 year time frame. While the analysis may say that lower mortgage payment are offsetting the rising costs, in reality, those feeling the pinch most are people who rent their homes.  And with the economy as it is, in particular for the younger demographic, those who rent are an increasing majority.

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admin, May 13th 2013 | Tags: , , , , ,
Posted in Budgeting

Buying Furniture on the Cheap

When moving home or redecorating, the cost of furniture can make a large bill even more expensive. Thinking a little bit out of the box can save you precious pounds. Follow these tips for furnishing your home on the cheap.

Pre-owned furniture

Consider buying pre-owned furniture. This can sometimes just be as good as new furniture particularly when it is well looked after. This will of course be cheaper than something brand new. You can start by putting the word out to friends and relatives that you are interested in some of their furniture and line yourself up to be the first option when they decide to sell it.

Also, advertisements for used furniture can be found on websites such as Gumtree and are also sold on online markets like ebay.

Alternatively, local newspapers, car boot sales and garage sales are great places to find older bits of furniture that can be renovated to something unique.

What’s cheaper than cheap? Free! Free – cycling is when you essentially trade your items for someone else’s. For example, if you are downgrading your home, you might swap your extra bed for a sofa- bed. This is a win-win situation where both your parties’ needs are served.

Online

When furniture is sold online, the shop cuts many costs associated with rental space and paying staff. In some cases, these savings are passed onto customers. This means you can bag yourself a bargain from the comfort of your own home.

Warehouses & Outlet Stores

Warehouses sell items in bulk to suppliers. In some instances, they allow individual customers buy from them at wholesale price which is cheaper than the store price. This is a good option when you want your furniture to be new but would rather not pay full price.

Similarly, outlet stores offer the option of buying new furniture at reduced prices. Items tend to be reduced if they are from a previous collection (this is particularly true with designer items) or if they still remain after the sales.

Another way to get the expensive furniture you’ve been eyeing up in the display at a fraction of the cost is to ask for it! Retailers always discount the cost of items that are used in displays.

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admin, April 15th 2013 | Tags: , , , , ,
Posted in Saving Money

Some top tips on How to Make and Save Money in these difficult times

Saving money is something that all of us are trying to do at the moment; prices are rising, living costs are at an all-time high and job security is poor. What about, however, something that allowed you to make money, rather than just save? Here’s the question: do you have a spare room? Perhaps one of your children has moved on, or gone to university? That room, if rented to a lodger, could net you up to £4250 a year, tax free!

Rent out your Drive

There is a growing call for parking spaces, especially for people who work within the congestion charge zone in London. Even in other cities across the UK parking can be ludicrously expensive, and many people who live in the suburbs are renting out their drives. It makes sense, especially if you are in a prime location, as off-road parking is very much at a premium. Some people are making as much as £10,000 a year renting out an empty drive or garage.

Change your policies

This applies to all your bills: check for the best deal on house insurance, gas and electricity, mobile phones, broadband and all the utilities that you have to pay for. Don’t be satisfied with staying with your current provider, as it will not be the best deal you can get. Shop around, use comparison websites, talk to your current providers and see if you are paying too much. One customer we know of had his broadband slashed from £15 per month to £6 per month when his provider analysed his usage. That’s over £100 a year in saved money!

Consider Second Hand

It’s a sensible thing to do when buying major items, especially high-depreciation goods such as cars and electrical items. Your average new car depreciates in value immediately it leaves the showroom; you can pick up serious bargains on two or three year old models. The same can be said of expensive electrical goods, and the savings can be massive. It only takes a little commonsense to make and save money, even in these times of austerity.

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admin, March 2nd 2013 | Tags: , , , , ,
Posted in Budgeting, Saving Money

Numbers of complaints against banks over PPI soar

Overseeing and receiving the fallout and consumer anger resulting from mis-sold PPI insurance, the Financial Ombudsman Service (FOS) has also been rocked by the scandal.

What shook the whole banking sector as the scandal broke was the sheer volume. In the manner of a stream, the claims slowly trickled in at first, before picking up momentum and gathering pace, and developing into a flood of claims which does not show signs of abating. Banks have been assessing and paying out hundreds of thousands of claims under the watchful eyes of the Financial Services Authority, with the Big Four banks setting aside nearly £13bn to cover the cost of PPI claims alone, with commentators predicting that the amount paid out could eventually exceed £20bn.

It is not just the compensation, or the related interest rate swap scandal affecting banks and businesses, or the dishonesty, greed, manipulation of customers and risk taking that created the PPI scandal that are issues here.  The FOS has been monitoring and receiving complaints against banks concerning PPI claims- but also in the matter of compensation. The major banks are taking up to one year to assess process and pay out claims in some instances. In short, the major banks are overwhelmed by the scale of PPI claims, and have poor processes and administration for this matter. They also do not seem to be doing enough about this as the onus is on the customers to claim back their money, not on the bank to arrange compensation payouts to anyone who has been affected.

What began as a few isolated complaints at the turn of the millennium has turned into a deluge. In the second half of 2012, the FOS received more than 250,000 new complaints concerning PPI claims and related issues, receiving since 2000 more than half a million such complaints. The Lloyds Group (Halifax, Lloyds TSB, Bank of Scotland and Trustee Savings Bank) received the most complaints; 93,454; 82,000 of which were PPI related. All of these complaints have to processed and resolved.

In an effort to deal with this flood of complaints, the FOS has had to take on new staff to keep up with the volume- an action been mirrored across the banking industry. Thousands have been employed by banks and independent Claims Management Companies specifically to process and administer PPI claims. In itself, this is representative of growing employment levels nationwide and industry wide.

The matter is by no means at an end. New claimants keep coming forward, and prior claims still need to be assessed, processed, and compensated. This in itself will cause more delays- and more angry complaints to the FOS. What started out as another banking scandal has taken on a life if its own- and developed into quite a profitable industry in its own right.

This is echoed by chief ombudsman Natalie Ceeney. “The number of PPI complaints has continued to increase at unprecedented levels, and we are now regularly taking on around 2,000 new cases each day. However, as the complaint levels show no sign of slowing, consumers increasingly having to wait longer to get their complaints sorted.”

This article was a guest contribution provided by Henry Court. Henry is a regular contributor to finance sites and also works with PPIClaimsCo.co.

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admin, February 18th 2013 | Tags: , , ,
Posted in Finance News

Barclaycard’s 25-month 0% Balance Transfer Card

Paying your card debt is now easy with Barclaycard. A lot of card holders tend to have big problems when it comes to overspending using their credit card. It sure maybe a lot easier to purchase anything from food, clothes, pay for hotel accommodations, and add on travel expenses with just one swipe using your credit cards. The hard part is when it comes to paying the debt owed. It’s a lot more convenient to bring a credit card instead of having instant cash with us but when we tend to go beyond the limit, it can be very difficult to pay all the credit card bills at once.

Consumers with credit cards should worry no more for there’s this new offer from Barclaycard.  As a brand they are known for their wide range of credit cards to choose from that enables you to do balance transfers and does provide you with a lot of convenience. The credit card provider already launched what they call the 25-month zero balance transfer card and it is first offered only by the company that allows their users to easily pay their credit card debt without having to hurry.

The new card gives figures such as a 3.2 percent fee on its 25-month platinum visa card which for the record is already wanted by many consumers.  Reported by Lovemoney- it would mean that if you have a debt amounting to £2,000, you would only have to pay 3.2 percent of the said amount and that’s £64.

The competition is really tough in this kind of market system. Just right after Barclaycard has launched its offer competitors like Halifax also introduced a similar offer to a lot of customers. This is said to be due to a price war that has been occurring in the said market.

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admin, January 30th 2013 | Tags: ,
Posted in personal finance

UK Homes Rise in Value


Interesting statistics, provided by Zoopla.co.uk, claim that the UK housing market is back on track, with values of houses across the UK now at the same level they were in 2009. This will come as a surprise to those in the business of selling houses, who are still struggling to find buyers. The website used estimated values of every home in the UK to reveal that the total value of properties is now £5.96trillion. England, it should be noted, returned much better results than both Scotland and Wales.

Indeed, the main resurgence in prices has come – as is to be expected – from a boom in the London housing market. In London alone it is estimated that values increased by over £42billion. This is due in no small part to overseas buyers who are fleeing the troubled Eurozone, and the trend is – in some places – expected to continue.

Difficult to Forecast

Despite the initial optimism, Lawrence Hall – a spokesman for Zoopla – was cautious about the future:

“Even with the worst economic downturn in living memory over the past few years, the value of Britain’s housing stock has grown a staggering amount over the last 10 years. It’s hard to see if we will experience the same levels of year-on-year growth witnessed in the early noughties, but with overall values beginning to creep back up, homeowners should be feeling a little more confident.”

The industry is divided as to whether the market will continue to recover in 2013, with some areas forecasting gains and others losses, and there were notable losers in the last year. Sheffield, Doncaster and Stoke on Trent – all towns in the Midlands – saw the biggest losses in house values across the year. The next year will be depending upon foreign buyers continuing their rush to get into London, but there are some experts who are forecasting a slow-down in interest in the coming months.

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admin, January 11th 2013 | Tags: , , , ,
Posted in personal finance

5 easy steps to create your first budget

  1. How much money do you earn?

Add up your regular monthly income. This is easy as looking at your pay check! If you are self – employed, simply divide your net earnings over the year by 12. Also consider other forms incomes that are not regular. For example, these could commission, bonuses or dividends. Also find the average for the year.

 2. What do you spend your money on?

Make a list of all your necessary expenses. These are the bills you must pay each month like: your rent or mortgage, insurance for your car and home, utility bills, food and petrol. Next,  add to the list your luxuries. These may include, holidays, going out, gym memberships and gifts. Add all these ups as your annual bill, then divide by 12 to calculate the cost per month.  Remember the expenses that a paid annually, for example, council tax.

3. Subtract how much you spend from how much you earn

Once you have calculated your annual income and your annual expenses, it’s time to do the maths. Simply subtract your total expenditure for the year from your total income for the year.  If you are spending more than you earn, you need to make some cuts.  If you are in a position where you have money left over after your expenses, it means you can start thinking about savings!

4. Ways to reduce your expenses

If you find that you are spending money which you do not have, luxuries should be the first thing to go! So, instead of paying monthly gym memberships maybe join a local sports team which is likely to have an annual low cost membership.   Necessary expenses are usually harder to cut. You can think about shopping around for better utility bills or negotiation on your car insurance.

5. Sticking to the budget

Every month, go over your statements and compare your expenses to your budget predictions. This is a good way to identify which areas you are successful in and which need improvement.

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admin, December 29th 2012 | Tags: , , , ,
Posted in Budgeting