Anyone looking at the latest mortgage lending figures from the big banks and building societies will be shocked to see a 42% drop to 14,500, year-on-year, in the number of first time buyers being granted a mortgage in December.
First time buyers are seen as crucial to any housing revival.
There is an easy explanation for this sharp fall. December 2009 saw the end of a stamp duty holiday designed to rescue the housing market. So there was a rush of buyers trying to take advantage.
The stamp duty concession meant no stamp duty had to be paid on properties under £175,000. The threshold went back to £125,000 at the end of 2009.
However, first time buyer numbers are still on a downward trend. The total fell by 3% between November and December 2010, according to the Council for Mortgage Lenders. And it was lower for the year as a whole.
The trend will focus attention on next week's First Time Buyer Summit called by the housing minister, Grant Shapps. He has summoned housing and lending bodies to suggest better ways of bringing young buyers into the market.
Another factor which they are bound to look at is the rise in deposits which first time buyers are having to to pay.
The typical deposit has risen again, to 23% from 21%. Of course, this is for buyers who succeed in getting mortgage. Many others don't succeed or don't try because of the high level of deposits required by lenders.
Friday, 11 February 2011
Thursday, 10 February 2011
How to raise £627,000 for charity
64 year-old jeweller, Nicholas Mullings, has managed this amazing feat by sifting through packets of discarded trinkets in search of gold.
For 17 years, he has given up his Saturdays to sort out packets for the Alzheimer's Society. In an average year he will sort through 10,000 of them.
I met this remarkable man while filming in his shop near Westminster, where he has served Prime Minsters and film stars since 1965.
It's called the Old Jewellery Appeal. The idea came from the charity itself, but Nicholas gave it a vital twist.
"They wanted to ask for the good stuff," he tells me, "But I told them to ask for the plonk."
He shows me bags of unwanted bits and bobs, ready to be sorted.
There are a few interesting trophies. Nicholas hands me a little grey ball which is inscribed with "Kimberley Siege 1899-1900".
"It's probably a Boer bullet," he says.
Often, Nicholas clocks up 12 hours of work on a Saturday, hunting for gold to be melted down and sold. And sometimes he puts in a Sunday as well.
How does he manage it? Well, he makes plenty of spare time for himself - by being economical with sleep.
"I get up at 3.30am every day," he reveals, "And I'm in work before six during the week."
Pinned to the wall in the shop is a cheque from Mrs Thatcher. It's a funny one because the bank got its printing wrong, calling her Maragaret Lady Thatcher.
She's another one who never seemed to need any shut-eye.
Anyway, Nicholas's painstaking work has raised £627,610, so far. It's a wonderful achievement.
For 17 years, he has given up his Saturdays to sort out packets for the Alzheimer's Society. In an average year he will sort through 10,000 of them.
I met this remarkable man while filming in his shop near Westminster, where he has served Prime Minsters and film stars since 1965.
It's called the Old Jewellery Appeal. The idea came from the charity itself, but Nicholas gave it a vital twist.
"They wanted to ask for the good stuff," he tells me, "But I told them to ask for the plonk."
He shows me bags of unwanted bits and bobs, ready to be sorted.
There are a few interesting trophies. Nicholas hands me a little grey ball which is inscribed with "Kimberley Siege 1899-1900".
"It's probably a Boer bullet," he says.
Often, Nicholas clocks up 12 hours of work on a Saturday, hunting for gold to be melted down and sold. And sometimes he puts in a Sunday as well.
How does he manage it? Well, he makes plenty of spare time for himself - by being economical with sleep.
"I get up at 3.30am every day," he reveals, "And I'm in work before six during the week."
Pinned to the wall in the shop is a cheque from Mrs Thatcher. It's a funny one because the bank got its printing wrong, calling her Maragaret Lady Thatcher.
She's another one who never seemed to need any shut-eye.
Anyway, Nicholas's painstaking work has raised £627,610, so far. It's a wonderful achievement.
Wednesday, 9 February 2011
Parents feel the pressure to help with tuition fees
Now there are indications from Oxford that it could raise tuition fees to the maximum of £9,000 next year, matching Cambridge. At the same time there is evidence that parents are being frightened into saving more to help cover their children's fees.
Here are two parents' stories...
SARAH MARTEN is a mother of two children, aged 15 and 13, so university fees are only three years away.
She's been saving to help with some of their costs, but can't put aside any more to cover the hike in fees to a potential £9,000 a year.
"We put in plans to save up enough money to cover the fees for 3 years of a degree for each of our 2 children and now it's looking like that money we'd saved will only cover one year of a degree, so obviously there's a massive shortfall and we're not sure what we're going to do.
We will try and save a little bit more but we've only go 3 or 4 years to save up many thousands of pounds and it's simply not going to be possible to save that sum of money in so short a time.
It feels absolutely impossible. I mean we don't have that much surplus income. Interest rates are really low as well. And when you put those things together and you look at how much you can save it's going to be a really small amount.
We feel very angry about what's happened. We feel very disappointed. The thing that we want to avoid at all costs is for our children to start their adult working lives saddled with these huge debts. That's really important to us and we're not going to be able to do anything about it. That 's going to happen.
We've always encouraged them to be sensible. We want them to take a gap year and work during that time and save some money. We'll still be trying to help them find ways to fund their university without taking on a huge amount of debt."
MANDY SHARP has been prompted to save more after hearing about the rise in tuition fees. She has a 5 year-old daughter, who has just started school.
Mandy is salting away £100 a month in a tax free ISA and she plans to add lump sums when she has spare cash.
"I felt very nervous. It's a lot of money. I don't know what I'll be doing with my life at that stage. So it's spurred me to increase my savings for her to make it that bit easier.
It's hugely daunting. It's huge amounts and I don't want her to have those big debts when she comes out of university. I never had those fees when I went to university. It's a lot to come away with in terms of debt. That worries me.
It's not an ideal way to start your early years in a career. You won't be earning a large salary. You'll need rent, you may be looking for a flat and there are all those other living expenses. It could be a huge burden.
I'd like to be able to help her. I've been saving since she was a baby. I feel education is important I want her to have the best. I'm not saying I'll be able to cover the whole cost but if I can help her as much as I can, then I'd like to do that."
Here are two parents' stories...
SARAH MARTEN is a mother of two children, aged 15 and 13, so university fees are only three years away.
She's been saving to help with some of their costs, but can't put aside any more to cover the hike in fees to a potential £9,000 a year.
"We put in plans to save up enough money to cover the fees for 3 years of a degree for each of our 2 children and now it's looking like that money we'd saved will only cover one year of a degree, so obviously there's a massive shortfall and we're not sure what we're going to do.
We will try and save a little bit more but we've only go 3 or 4 years to save up many thousands of pounds and it's simply not going to be possible to save that sum of money in so short a time.
It feels absolutely impossible. I mean we don't have that much surplus income. Interest rates are really low as well. And when you put those things together and you look at how much you can save it's going to be a really small amount.
We feel very angry about what's happened. We feel very disappointed. The thing that we want to avoid at all costs is for our children to start their adult working lives saddled with these huge debts. That's really important to us and we're not going to be able to do anything about it. That 's going to happen.
We've always encouraged them to be sensible. We want them to take a gap year and work during that time and save some money. We'll still be trying to help them find ways to fund their university without taking on a huge amount of debt."
MANDY SHARP has been prompted to save more after hearing about the rise in tuition fees. She has a 5 year-old daughter, who has just started school.
Mandy is salting away £100 a month in a tax free ISA and she plans to add lump sums when she has spare cash.
"I felt very nervous. It's a lot of money. I don't know what I'll be doing with my life at that stage. So it's spurred me to increase my savings for her to make it that bit easier.
It's hugely daunting. It's huge amounts and I don't want her to have those big debts when she comes out of university. I never had those fees when I went to university. It's a lot to come away with in terms of debt. That worries me.
It's not an ideal way to start your early years in a career. You won't be earning a large salary. You'll need rent, you may be looking for a flat and there are all those other living expenses. It could be a huge burden.
I'd like to be able to help her. I've been saving since she was a baby. I feel education is important I want her to have the best. I'm not saying I'll be able to cover the whole cost but if I can help her as much as I can, then I'd like to do that."
Tuesday, 8 February 2011
Any good news hidden in these diabolical insolvency figures?
A record 135,000 insolvencies in one year.
And the climate is getting even more hellish: the average household owes £57,000, prices are rising, incomes are being squeezed.
So insolvencies could be even worse this year.
This is the grim analysis which you have seen all over the papers. And yet, there may be something positive hiding in the figures.
Remember first why we have insolvency procedures. There is the debtor who can't afford the repayments and the creditor who isn't getting the debt serviced or returned. It's a dead end: no one can go anywhere.
So we have a set of tools to clear the way. They range from informal negotiations, right through to bankruptcy, which has to be sanctioned in court.
The debtor can start again, after meeting strict conditions over a set period. The creditor may retrieve some of the borrowings, or possibly nothing at all. But the financial position is crystallised.
The newest tool is the Debt Relief Order. It is a mild form of bankruptcy, designed for people with virtually no assets and debts of less than £15,000.
A DRO is simpler, doesn't involve going to court and it's cheap. Surprisingly enough, some people simply can't afford to go properly bankrupt because of the fees involved.
A closer look at the latest insolvency figures shows a revealing trend. There was a sharp drop in bankruptcies in the last three months of 2010 compared to the year before, accompanied by a rise in DROs.
It could be a positive development: more people finding an easier way to make a fresh start.
The number of bankruptcies was still very high. In three months, 12,000 individuals were marooned on a financial desert island. They had to endure shame and heartache. Some of their creditors may have been brought down by the shock as well.
Insolvencies are running at more than twice the level of five years ago and we could see more horrific totals. But, of course, they are doing the job they were designed for. They are clearing a way.
When I spoke to a friend who went to court last week to have his bankruptcy rubber stamped, he explained how much of a relief it was to complete the process. He can get on with working and earning.
It's hard to find a bank which will open him an account, but soon he will be able to borrow again and start to rebuild his financial reputation. In 6 years his credit reference will be clear.
His own personal recovery is underway.
Maybe we are seeing the beginnings of a more general recovery. Maybe you can spot it in these insolvency figures and the agonising method the economy uses to turn itself over, trying to find a more comfortable position in which it can carry on.
And the climate is getting even more hellish: the average household owes £57,000, prices are rising, incomes are being squeezed.
So insolvencies could be even worse this year.
This is the grim analysis which you have seen all over the papers. And yet, there may be something positive hiding in the figures.
Remember first why we have insolvency procedures. There is the debtor who can't afford the repayments and the creditor who isn't getting the debt serviced or returned. It's a dead end: no one can go anywhere.
So we have a set of tools to clear the way. They range from informal negotiations, right through to bankruptcy, which has to be sanctioned in court.
The debtor can start again, after meeting strict conditions over a set period. The creditor may retrieve some of the borrowings, or possibly nothing at all. But the financial position is crystallised.
The newest tool is the Debt Relief Order. It is a mild form of bankruptcy, designed for people with virtually no assets and debts of less than £15,000.
A DRO is simpler, doesn't involve going to court and it's cheap. Surprisingly enough, some people simply can't afford to go properly bankrupt because of the fees involved.
A closer look at the latest insolvency figures shows a revealing trend. There was a sharp drop in bankruptcies in the last three months of 2010 compared to the year before, accompanied by a rise in DROs.
It could be a positive development: more people finding an easier way to make a fresh start.
The number of bankruptcies was still very high. In three months, 12,000 individuals were marooned on a financial desert island. They had to endure shame and heartache. Some of their creditors may have been brought down by the shock as well.
Insolvencies are running at more than twice the level of five years ago and we could see more horrific totals. But, of course, they are doing the job they were designed for. They are clearing a way.
When I spoke to a friend who went to court last week to have his bankruptcy rubber stamped, he explained how much of a relief it was to complete the process. He can get on with working and earning.
It's hard to find a bank which will open him an account, but soon he will be able to borrow again and start to rebuild his financial reputation. In 6 years his credit reference will be clear.
His own personal recovery is underway.
Maybe we are seeing the beginnings of a more general recovery. Maybe you can spot it in these insolvency figures and the agonising method the economy uses to turn itself over, trying to find a more comfortable position in which it can carry on.
Friday, 4 February 2011
What if you had to repay student loans while still studying?
Part-time students might have to start repaying loans while still studying! That's after their new student loan scheme starts in 2012-13.
Part-time students will have to start repaying their student loans three years after they start a course, the government confirmed today. This means that in theory a part-time student might have to start repayments while still studying. However, that would only occur if the student's earnings had reached £21,000.
BIS has published full details this afternoon of the new loan scheme for part-time students, much of which had already been revealed.
Part-time students will have to start repaying their student loans three years after they start a course, the government confirmed today. This means that in theory a part-time student might have to start repayments while still studying. However, that would only occur if the student's earnings had reached £21,000.
BIS has published full details this afternoon of the new loan scheme for part-time students, much of which had already been revealed.
Money Mule - one woman's narrow escape.
Money mules use their private bank accounts to launder dodgy money for fraudsters. The funds often come from phishing scams, where criminals based overseas send fake emails to online bank customers. They trick the customers into parting with their account details.
For the scam to succeed, the fraudster needs a UK-based mule to receive money into his or her bank account, then withdraw it and send it overseas using a commercial money transfer service.
The banks have put out a fraud alert in the London Borough of Newham (see my BBC report), where they are monitoring over 1,500 suspicious bank accounts. They could belong to money mules.
23 year-old Barbara Gyami from Newham told me how she had a lucky escape...
"I am currently unemployed and I registered with jobsites and agencies. I received junk email. Six or seven were from a particular address. They said they had a particular job and that I would have to give them my bank account details.
I would only be working for 5 to 6 hours a week and I'd be paid between £1,500 and £2,000 a week. It sounded too good to be true. They had said that I would have to handle £6,000 a week in my account.
I emailed them back and they replied with a contract attached. Then I contacted my job adviser. She said I should be very vigilant.
I phoned their number and no one answered. I thought: how come you haven't got any offices or anyone to answer the phone?
I didn't know what they might have done with my account. They're still sending me emails.
Then Newham Council called me. They were doing a survey about these people. They told me it was illegal."
For the scam to succeed, the fraudster needs a UK-based mule to receive money into his or her bank account, then withdraw it and send it overseas using a commercial money transfer service.
The banks have put out a fraud alert in the London Borough of Newham (see my BBC report), where they are monitoring over 1,500 suspicious bank accounts. They could belong to money mules.
23 year-old Barbara Gyami from Newham told me how she had a lucky escape...
"I am currently unemployed and I registered with jobsites and agencies. I received junk email. Six or seven were from a particular address. They said they had a particular job and that I would have to give them my bank account details.
I would only be working for 5 to 6 hours a week and I'd be paid between £1,500 and £2,000 a week. It sounded too good to be true. They had said that I would have to handle £6,000 a week in my account.
I emailed them back and they replied with a contract attached. Then I contacted my job adviser. She said I should be very vigilant.
I phoned their number and no one answered. I thought: how come you haven't got any offices or anyone to answer the phone?
I didn't know what they might have done with my account. They're still sending me emails.
Then Newham Council called me. They were doing a survey about these people. They told me it was illegal."
Why have bankruptcies fallen so sharply?
There were just over 12,000 bankruptcies in the last three months of 2010. While this is a large number, it is nearly 2,000 fewer than the previous quarter and 5,000 fewer than in the same period one year before.
Why the drop in the run-up to Christmas and year-end 2010? Several reasons are being suggested to me.
1. The cold weather. People couldn't get to court and courts were closed. People couldn't even travel to Citizens Advice offices to talk about bankruptcy, Individual Voluntary Arrangements, Debt Relief Orders or less formal repayment schemes.
2. The shift to the new Debt Relief Orders from bankruptcy. DROs cost less and are suitable for people with debts of up to £15,000 and hardly any assets. They too were down on the quarter but they were well up on 2009.
3. Some lenders are being more lenient, realising that in the current climate they stand to gain very little when a client goes bankrupt. So they are negotiating less formal repayment schemes. It might seem more sympathetic but it perpetuates the debt problem.
4. This winter, more than ever before, people have been putting off dealing with their debt problems until the New Year.
The downside of all these explanations is that none of them points to unmanageable debt becoming much less of a problem. Insolvencies could even bounce back in the current three months. It would be brave to bet against them staying at or near record levels throughout 2011.
Why the drop in the run-up to Christmas and year-end 2010? Several reasons are being suggested to me.
1. The cold weather. People couldn't get to court and courts were closed. People couldn't even travel to Citizens Advice offices to talk about bankruptcy, Individual Voluntary Arrangements, Debt Relief Orders or less formal repayment schemes.
2. The shift to the new Debt Relief Orders from bankruptcy. DROs cost less and are suitable for people with debts of up to £15,000 and hardly any assets. They too were down on the quarter but they were well up on 2009.
3. Some lenders are being more lenient, realising that in the current climate they stand to gain very little when a client goes bankrupt. So they are negotiating less formal repayment schemes. It might seem more sympathetic but it perpetuates the debt problem.
4. This winter, more than ever before, people have been putting off dealing with their debt problems until the New Year.
The downside of all these explanations is that none of them points to unmanageable debt becoming much less of a problem. Insolvencies could even bounce back in the current three months. It would be brave to bet against them staying at or near record levels throughout 2011.
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