My Finances: First-time buyers struggling But even though house prices have now stopped their rapid rise, Abbey reveals today that 50 per cent of prospective homeowners think that if they do not get on the property ladder soon, they never will. This is a large rise on last year, when half the number of prospective first-time buyers felt the same pressure.
This Is Money: Pension plans doomed to fail Far from heeding calls to save more for retirement, Britons are saving less with life assurance companies, with new business premiums down from £95bn in 2001 to just £80bn in 2004.
This Is Money: Demand for shop space plummets The Royal Institution of Chartered Surveyors (RICS) painted a gloomy picture of falling demand for shop space and rising availability, particularly in second-tier shop space and retail warehousing.
This Is Money: 'The landlord who ripped us off' A LONDON landlord is charging prospective tenants hundreds of pounds before turning them down and keeping their money. Erich Kofmel, 31, demanded huge fees in advance from flat-hunters to carry out credit references.
CML: How disruptive will HIPs be? We see a combined effect of sellers listing before 1 June 2007 to avoid the cost of a HIP and buyers, particularly first-time buyers, waiting until after 1 June 2007 to benefit from the greater certainty and lower transaction costs associated with buying a property with a HIP. This is likely to lead to an oversupply of properties in the first half of 2007, and a rapid unwinding of that position after HIPs come in.
Reuters: Consumer credit weakens in December Consumers' unsecured borrowing rose by its smallest amount in five years in December but mortgage lending accelerated more than expected to a 1-1/2 year high, the Bank of England said on Tuesday.
First Rung: House prices have risen by £130 or 0.082% in the last 6 months The latest Nationwide report, on initial headline grabbing inspection, makes for disappointing reading for first time buyers. However, further investigation reveals some inaccuracies in the information with the possible suggestion that selective data has been relied on that could potentially alter opinion on the state of the current housing market.
Reuters.co.uk: House prices up in January House prices rose at their fastest monthly pace in a year and a half in January, Nationwide building society said on Tuesday, in further evidence that the property market is picking up.
ThisisMoney: House price rises 'picking up' BRITAIN'S housing market got off to a flying start in 2006, with property prices posting their biggest jump for 18 months in January. In the latest sign the market is picking up after slowing sharply during 2005, Nationwide Building Society today said the average price of a home rose by 1.4% to £158,478 this month.
BBC NEWS | Business | House prices 'pick up in January' The UK housing market made a "strong start" in 2006, with prices rising 1.4% in January, the Nationwide has said. The increase - the biggest monthly rise since July 2004 - took the annual rate of house price growth to 4.4%.
This is Money: Bank of England fears over soaring debt Soaring evidence of Britain's huge credit binge will emerge this week as banking figures show lending still rising at a breakneck pace. At the same time, results from Britain's banks due over the coming month will show a huge rise in debt write-offs.
The Business Online: UK house price bubble has not burst but shifted If there is one certainty in economics, it is that the biggest problems can be made to disappear depending on the statistics used. We may now have reached that point in the UK housing market where the problem has been made to vanish. Has not even Roger Bootle, the last pessimistic housing bear, growled in retreat and thrown in the towel?
ThisisMoney: Banks warned over family debtSPIRALLING debt is pushing an ever-growing number of families to breaking point, the City's watchdog has warned.There are signs of 'growing distress' among consumers as they struggle to cope with debt totalling £1.1trillion, said the Financial Services Authority.
ThisisMoney: New lenders to shake mortgage market Buyers with poor credit records and would-be landlords can expect to benefit from an outbreak of fierce competition in the mortgage market over the next few months.Lenders owned by names that are unfamiliar to most housebuyers are planning an aggressive move into residential home loans. They include Deutsche Bank, Lehman Bros, Bear Stearns, Citigroup and the Oakwood Group.
BBC NEWS | UK | First-time buyers 'at record low' The number of first-time home buyers across the UK is at a 25-year low, according to research. The average person has to spend five years saving for a deposit, says the study from Britain's biggest mortgage lender the Halifax.
The Guardian: MFI shares plunge as rumours fly Yesterday the shares went into freefall on rumours of an emergency board meeting, store managers being summoned to meetings and an imminent rights issue. A spokeswoman said there was "no truth at all" in the speculation.
Money Week: How 5% of the global oil supply has suddenly vanished The respected oil industry newsletter Petroleum Intelligence Weekly says that Kuwait has only half the oil that official estimates have claimed. That would mean that 5% of the global oil supply has vanished overnight, says Byron King in Whiskey & Gunpowder. But this might be just the tip of the iceberg - Saudi Arabia may well be facing the same problem...
BBC News: US growth suffers sharp slowdown US economic growth slowed to its weakest rate of growth in three years in the last quarter of 2005. The economy grew at an annual rate of 1.1% from October to December, compared with 4.1% in the previous three months.
ThisisMoney: House prices could still crash HOUSE prices are overvalued by 20% and a crash cannot be ruled out, a leading economics think-tank warned today.The National Institute of Economic and Social Research said low interest rates and strong demand amid a lack of supply had created a bubble in the property market.
Times: Leap in mortgage approvals Further evidence of a recovery in the housing market emerges with lending data showing mortgage approvals rose 28 per cent in December compared with the same time last year.
BBC News: Jobcentre staff strike over cuts Thousands of Jobcentre and benefit office workers are expected to join a 48-hour strike over job cuts. The Department for Work and Pensions (DWP) plans to axe 30,000 posts by 2008 as part of moves to modernise services.
Telegraph: FSA fears consumers can't afford debts The City's top watchdog warned banks, building societies and finance houses yesterday they could suffer severe damage to their reputations if the current turn in the lending cycle reveals "they have given credit to large numbers of consumers who are unable to afford their debt repayments".
Independent: Chancellor 'needs £2.5bn extra tax' Households face a £2.5bn tax increase - equivalent to a penny on income tax - if Gordon Brown wants to meet his "golden rule" on the public finances, an independent think-tank said yesterday.
Guardian: Up to 1,700 jobs to go as Rentokil shuts down loss-making laundry business Up to 1,700 jobs are to be lost after Rentokil announced it is to close its loss-making linen and workwear laundry business. The ratcatching and roller towel business said it is to shut down 25 cleaning plants and distribution offices nationwide. Together they employ 2,000 staff and there are definite alternative jobs available for only 300 of them. The shutdown will cost up to £50m, but much of that will be offset by property sales.
FT: Wall Street worried by housing weakness News of a third consecutive month of falling sales of existing homes underlined concerns that the housing market has slowed, which could undermine consumer confidence and hurt the US economy.
First Rung: Why more people are putting their homes on the line Secured loans are easier to obtain than unsecured ones. That's because the lender gets to keep your house and chuck you out on the street if you don't pay them back. So if lenders make it harder to take out unsecured debts, more people are forced to put their homes on the line if they want to borrow more money...
Reuters: Markets to test new Fed chief Ben Bernanke is poised to take over at the U.S. Federal Reserve next week just as financial markets are heading into a very volatile period for which he is untested, senior bankers said on Wednesday.
This Is Money: IBM sparks pension fears THOUSANDS of British staff working for American computer giant IBM will this week become the latest victims of the growing pensions crisis. The company has summoned hundreds of its managers to the Hilton hotel on London's Park Lane tomorrow...
This Is Money: N Rock says door is open to first-timers ...'It looks as though people who were punting in the buy-to-let market are thinking along these lines too, which means that they no longer expect a spectacular rise in asset values and are looking for more attractive investments for their money.'
Reuters: Economy grows faster than expected The economy grew at its fastest quarterly pace in a year in the last three months of 2005, helped by a pick-up in services and reinforcing expectations interest rates will stay on hold for now.
Guardian: Manufacturers cut 25,000 jobs in three months British manufacturers are continuing to suffer from weak domestic demand and sharply rising prices of oil and gas, which squeezed profit margins and forced them to cut 25,000 jobs in the past three months, the CBI said yesterday.
Independent: Manufacturing faces more cuts Manufacturers will accelerate their job-cutting programme in the coming months as rising costs continued to devastate their profit margins, the CBI warned yesterday. The employers group said its latest quarterly survey showed the gap between price rises and cost increases had widened to a near record level.
BBC NEWS | Scotland | 700 jobs go as printer site shuts Computer printer firm Lexmark is to close its manufacturing plant in Fife, with the loss of 700 jobs. Workers at the firm's plant in Admiralty Park, Rosyth, were told that 500 jobs would be cut by April with the last 200 going by the end of the year.
This Is Money: ONS data 'doesn't tick right boxes' THE Office for National Statistics has come under renewed fire after its monthly retail data failed to paint a true picture of online sales growth... The ONS pointed out it is hard to keep track of how much shops sell online. The main reason is simple - the ONS does not ask for fear of creating too much work for respondents.
FT: Gilts bubble savages pensions The health of pension funds is being savaged by what investors describe as a bubble in the gilt market: pension deficits of FTSE 350 companies have increased by £20bn this month, according to Mercer Investment Consulting, thanks to a dramatic fall in the real yield on long-dated gilts.
Investment & Business news: Pension deficit soars Pension funds reacted to the stock market collapse earlier this decade by migrating to bonds. Many bailed out at or near bottom. Since then shares have enjoyed substantial rises, but thanks to the falling long term rate of interest, bond yields have fallen, and the pension funds have seen their deficit fall even further.
First Rung: Desperate first time buyers beware By the end of this summer every local authority must have in place a development plan for its housing stock and must complete works by 2010. The government hopes this huge upgrading programme will put all local council flats in a better state of repair -some say a state ready for sale. The plan could herald the owner-occupier revolution the government wants. But in the meantime, thousands of leaseholders will be stung for sky-high service charges.
First Rung: Housing oversupply could hit land values ...given the oversupply of flat developments some urban centres are experiencing, developers are unlikely to add more stock. Housing output and density are therefore likely to fall over the next year according to this research. This in turn will threaten urban land values leading to a drop of up to 15 per cent within some city centres, the study predicts.
Reuters: Big imbalances risk market disruption - Bank's Lomax Large global economic imbalances increase the risk of financial market disruption, which could hurt economies, Bank of England Deputy Governor Rachel Lomax said on Tuesday. Lomax also warned in a speech that the impact of any market disruption could be exacerbated if it were to lead to a rise in rock-bottom long-term interest rates around the world back towards their historical averages.
AgWeb: Bank of Canada Raises Interest Rates The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 3 1/2 percent. The operating band for the overnight rate is correspondingly increased, and the Bank Rate is now 3 3/4 percent.
IFA Online: Interest in commercial mortgages on the rise Commercial First says 85% of intermediaries now receive commercial mortgage enquiries, with 50% of firms receiving such enquiries going on to process the applications themselves, and only 10% turning the business away altogether.
Reuters: RBI raises key interest rate 25 bps to 5.5 pct The Reserve Bank of India (RBI) unexpectedly raised short-term interest rates by a quarter of a percentage point on Tuesday, highlighting the risk of inflation as it lifted its growth forecast for Asia's third-largest economy.
Daily Reckoning: US Recession ahead ...the yield curve has flattened much earlier than expected. While the consensus does not seem to worry, it is a fact that in the past this has always signalled an impending recession. Why not this time?
The Times: Banks set to profit from pension crisis Chief executives of large companies struggling to deal with ballooning pension scheme deficits have contacted leading banks. Yields on gilts have been in freefall since the beginning of the year, increasing the aggregate pension fund deficit of FTSE 100 companies from £75 billion to £110 billion in 19 days.
BBC News: Ford preparing for mass job cuts Ford is due to unveil plant closures and 30,000 job cuts aimed at reviving the fortunes of its US business. The carmaker, the first to use production lines in its factories, is facing increased competition from Asian rivals such as Toyota and Nissan.
Thisismoney: High Street fears 'panic saving' HIGH Street spending could slump as turmoil in the market for British Government securities scares shoppers into 'panic saving'. Sinking returns for investors in Government bonds - gilts - mean millions will need to build up a bigger retirement nest-egg.
Thisismoney: Barratt's high hopes of a recovery BARRATT, Britain's biggest housebuilder, is quietly optimistic that 2006 could see the housing market start to recover, although it is making no firm predictions until the key spring selling season gets under way.
This is Money: £50,000 - no questions asked Consumer groups and charities are demanding tighter checks on credit card and loan applications. New research shows that 88% of credit cardholders did not have to prove their income when applying for credit.
FT: Not everything is rigid in a new-build scheme Given the newfound optimism in the housing market you could be forgiven for thinking that the days of property bargains are over. But paying the asking price for a new-build property may be a mug's game, judging by a shopping exercise carried out by the FT.
FT: Fears grow of bubble in gilts market Pension fund liabilities are calculated using long-dated bond yields. So as yields fall, the present value of their liabilities rises. Every fall in bond yields means the deficit grows bigger and pension funds are subsequently forced to buy more bonds.
Economics UK: Jobless rise threatens growth Mervyn King, the Bank of England governor, is concerned that current favourable conditions won't last, and that the trigger for turbulence could be a rise in long-term interest rates..."underlying joblessness" of 3.5m...
Firstrung.com: Glasgow unaffordable for 70% of workers Families and first-time buyers are being priced out of the Glasgow property market, a shock new survey reveals. It shows people on average wages can't afford 70% of homes sold across the city - compared with just 36% a decade ago.
The Motley Fool UK: Remortgaging And Getting Out Of Debt Rising house prices have meant that many homeowners now have plenty of equity in their homes and one increasingly popular method of dealing with debts is to consolidate them by increasing your current mortgage or by taking out a separate home loan with another lender that is secured against the property.
BBC News: Strong growth in mortgage lending Mortgage lending showed unexpected vigour in December, according to the Council of Mortgage Lenders (CML). The CML said that mortgage lending totalled £26.3bn, 25% higher than during the same month in 2004.
Thisismoney: Teenage debtors owe £60,000 THE average person taking out an Individual Voluntary Agreement to reduce their debt problems owes £60,000 to creditors. Research from accountancy giant KPMG showed that record numbers of consumers are applying for IVAs, which allow them to clear a large chunk of their debt without resorting to bankruptcy.
BBC NEWS | Business | Jobs go as crisp-making transfers Details have been revealed of how the final Golden Wonder crisp operation at Corby will be moved to Scunthorpe. Administrators say most own-label and Golden Lights production will move from Northants to North Lincolnshire, by the close of business on 20 January.
BBC NEWS | Business | Dixons owner to cut office jobs The owner of Dixons and Currys, DSG, is looking to cut office jobs as part of a £20m ($35m) savings drive. The firm, which employs more than 40,000 in UK and Europe, will not be calling for compulsory redundancies but will lose posts through staff turnover.
This Is Money: Brown urged to end bond crisis CHANCELLOR Gordon Brown is under increasing pressure to deal with a gilts market crisis which is worsening pension fund deficits...The deficit in schemes at some major firms is said to have widened 50% in recent weeks and industry data suggests the combined deficit of FTSE 100 members has soared £35bn in six months.
Business Money: Buy-to-let 2005 overview and 2006 in prospect Property was a hot topic for discussion in the world of personal finance last year. Mark Alexander, managing director of the Norwich based buy-to-let specialist The Money Centre, reviews what was an exciting year for property and predicts what to expect from the market in 2006.
icWales: Wales bucks trend in jobless leap Union leaders last night called for a cut in interest rates and help for manufacturers after unemployment jumped by more than 100,000 to reach the highest level in three years.
The Daily Telegraph (AUS): Home lending up, personal debt down Lending for housing was up 1.2 per cent in November but people were continuing to pay back personal debt, figures released today showed. The Australian Bureau of Statistics said total lending finance for housing reached $12.8 billion, up from $12.7 billion in October.
Money Week: Will UK interest rates be cut soon? Annual consumer price inflation fell to 2% in December, the first time it's been at the Bank of England's target rate since June 2005. Commentators immediately fell over themselves to predict continued falls in inflation, and interest rate cuts later this year – possibly as early as February. But before anyone gets too excited...
BBC News: UK unemployment rate rises to 5% The number of people out of work in the UK rose by 111,000 to 1.53 million in the three months to November, official figures have shown. The rise took the unemployment rate up to 5%, the highest rate for two years.
ThisisMoney: 1.4m cut up their credit cards BRITAIN'S love affair with the credit card is cooling as the passion for binge spending is replaced by the misery of debt. Annual spending on Visa credit cards has fallen for the first time as holders turn their backs on punishing interest rates and penalty charges.
Telegraph: 'God help us, even Tesco is suffering' Tesco warned yesterday that business costs were continuing to rise at a "horrendous" rate, as it unveiled strong Christmas trading. "Our rates bill is horrendous - though we have planned for that; fuel bills have yo-yoed all year; employee costs are rising and pension costs are on the up," said Andrew Higginson, finance director at the UK's largest retailer.
SKY News: Property Top Of Broker List Mortgage brokers are predicting property will outperform shares during the coming five years. Around 55% of mortgage brokers said they thought putting money into property would yield the greatest profits between now and 2011.
Telegraph: Dark side of living like kings in Never-Neverland For many British retailers - including Boots, House of Fraser and Next - Christmas trading turned out far better than had been feared. After all that negative talk about the high street's nuclear winter, several store-group chief executives are at last able to sleep without their double dose of Nytol.
Daily Telegraph (Aus): House price crush A RECORD number of NSW families lost their homes last year as growing numbers struggled to meet mortgage commitments...Debt advisers handling growing numbers of people seeking help with mortgage repayments branded the rise as "scary".
Sunday Times: The Market A slump in demand from buy-to-let investors means cities with an oversupply of new flats may see prices fall this year, says Jones Lang LaSalle, a property consultancy...The average new-build home fell 4% in price last year to £255,713. Smartnewhomes, a website that monitors prices, says the figure masks big regional variations: in northeast England, prices fell by 11.7%, but they rose 8.1% in the West Midlands.
BBC: Retail activity 'falls severely' Retail activity on the UK's High Streets fell "severely" last week, according to research group Footfall. Its Retail FootFall Index for Monday, 9 January to Sunday, 15 January, was down 10.9% compared with the week before, and down 5.2% on the same week in 2005.
Guardian: Britain cuts back on credit card habit Spending on credit cards has shown a year-on-year fall for the first time, according to figures from Visa, indicating that consumers are taking on board warnings about running up too much debt.
Reuters: Oil hits 3-1/2 month high on Nigerian threat U.S. crude surged more than two percent to $65.53 a barrel after Monday's U.S. holiday then eased to $65.38. Oil is within sight of its $70.85 record of Aug 30, fired by Nigerian violence and Iran's duel with the West over its nuclear programme.
Reuters: King says house market picking up "At present, activity in the housing market is picking up and house prices are broadly stable and that's a very satisfactory position. Let's hope we can keep it roughly there," King said.
NEWS.com.au: Borrowers rush to fix As fear of interest rates grows, more and more borrowers have fixed their home loans to protect against higher rates. The Australian Bureau of Statistics said total value of finance for houses dropped to $18.3 billion during the month.
Times: Flattened dreams Plans for a revolutionary affordable housing development at the heart of Canary Wharf from the designers of the London Eye have been quietly dropped. David Marks and Julia Barfield, the husband-and-wife architects’ team, are seeking suitable land in London for their Skyhouse project.
ThisisMoney: Calls to debt lines up 40% RECORD numbers are calling debt advisory services as Christmas spending threatens to send them bankrupt. The National Debtline said it has been so overwhelmed with calls that two-thirds of them had gone unanswered in the last fortnight. Since January 3, 12,000 have phoned for help about dealing with debts, which are in some cases more than £100,000.
The Herald: Time to take an interest in rates Interest rates could fall two or three times in 2006, taking up to 0.75 of a percentage point off the cost of mortgages and the return on savings by the end of the year, dovish economists claim. With the first cut being perhaps only weeks away savers will have to work hard to get a good return on their money.
Wsws.org: US living standards in 2005 continued downward trend Millions of Americans saw their living conditions drastically decline in 2005. For the US working class, four years of a supposed economic recovery celebrated by Wall Street have translated into rising expenses, stagnating real wages and record debt.
Reuters.co.uk: House prices edge up Average asking prices on a home edged up 0.1 percent in the period from early December to early January after a sharp decline in the previous 30 days, a survey showed on Monday.
Mirror.co.uk: Nurses in pay plea Nurses are being urged to bombard Gordon Brown with emails and postcards in a pay protest. The Royal College of Nursing wants nurses across Britain to write to the Chancellor to complain at moves to peg back 2006 pay rises to two per cent.
icCheshireOnline: Profit warnings soar by 23% Poor sales and difficult trading conditions saw profits warnings soar 23% in 2005 as consumer confidence fell. Research from Ernst & Young found that there were 381 profits warnings last year compared with 294 the year before.
Daily FX: Housing Bubble Letting Out Air? One of the biggest risks to the US economy is the real estate market. These days the real estate market feels like a déjà vu of the dotcom boom with house price valuations now seen as the new form of “paper” wealth. Since 2001, real estate has accounted for 70 percent of the rise in net household worth.
SKY News: Young Couples Cannot Buy Love Nests A quarter of young married couples cannot afford to buy a home, research has shown. One in four newlyweds, who are currently living in rented accommodation, are unable to get on to the property ladder.
Independent: Wealth Check - No savings but I want to buy my own house Currently lodging with her mum, Julia Anne Nash, 29, is keen to buy her first property within the next year. With no savings, Julia will need a 100 per cent mortgage, though she intends to set up a savings account immediately. Aware that her ambition might be out of reach, Julia would consider buying with a friend.
This is Money: Which way for house prices? While the stock market roared in 2005 with the biggest 100 stocks delivering growth of 16%, the housing market floundered. Properties were slow to sell, asking prices were often slashed and, in most regions, buyers were more demanding about quality as well as price.
This is Money: DIY chain buys time with £200m deal DIY giant Focus has averted a financial crisis by renegotiating its bank loans - but at the cost of a big increase in its interest bill. The company, with 256 outlets, admitted last year that it was likely to breach its banking covenants, the financial limits laid down in loan agreements.
Telegraph: Turn the tables on so-called Best Buys Alliance & Leicester has upped the rate on its mini cash individual savings account, Direct Isa Issue 2, to 5.2 per cent gross a year. The rate includes a temporary bonus of 0.7 of a percentage point until April 30, 2007.
First Rung: Private landlords could find it harder to get mortgages Private landlords could find it harder to get mortgages as a result of the government's new licensing regime, lenders have warned. Compulsory licensing of houses in multiple occupation above a certain size will be introduced in April, along with a raft of new health and safety requirements applying to all private rented properties.
The Economist: Danger time for America Mr Bernanke...seems just as keen to slash interest rates when bubbles burst to prevent a downturn. He is likely to continue the current asymmetric policy of never raising interest rates to curb rising asset prices, but always cutting rates after prices fall. This is dangerous as it encourages excessive risk taking and allows the imbalances to grow ever larger, making the eventual correction even worse.
FT: FT index shows house prices edged up in 2005 In December, the average price of a property in England and Wales was £196,042, an increase of 2.7 per cent over the previous year...The housing market’s rise in 2005 was the lowest for a decade.
BBC News: One in five hit with penalty fees One in five consumers had to pay a penalty fee or charge on a financial product in 2005, a survey suggests. Late payment of credit card debt was the main reason for penalties being imposed, according to financial groups Defaqto and MoneyExpert.
Peterborough Today: JOBS CUTS - Hotpoint set to axe 105 on shiftShopfloor workers on Hotpoint's refrigerator production line will learn their fate on Monday, as the parent company is looking at axing 105 jobs to remain profitable. The day shift will remain the same. The firm, in Morley Way, Woodston, employs about 1,500 people in Peterborough.
Scotsman: House prices 'to rise by 5%' House prices in the Capital are set to grow by five per cent in the next 12 months, a leading estate agent has claimed. Strutt & Parker says that the rise in Edinburgh will not be as significant as house-price growth in country properties, which they estimate will be around 12 per cent.
Creditman: UK interest rates may fall in February The decision by the Monetary Policy Committee to leave interest rates on hold at 4.5% does not rule out further interest rate reductions. I think there is a good chance that rates will be cut by 0.25% in February. And even if the Committee holds back for longer, I still see interest rates falling to 4% by the end of the year.
News.com.au: Hopes rise for home buyers First homebuyers were putting aside less of their pay to service mortgage repayments, a housing affordability report said. Home ownership is within greater reach for more first homebuyers.
Moneyweek: Why Christmas sales weren't as good as they look UK retailers have just experienced their best Christmas in four years. After a year filled with fears of a consumer meltdown, it seems that 2005 ended on a high note for the high street. British Retail Consortium figures showed that underlying sales rose 2.6% during December compared with the same month in 2004 - the best showing since December 2001.
This Is Money: Argos joy as internet sales surge by 37% Internet sales were up 37% on a year earlier, meaning the company is now selling about 13% of its goods over the net, bringing in more than £400 million a year. The bigger Argos Extra catalogue helped stave off the expected sales decline at the chain, with stores a year old or more recording flat sales.
CML Market Commentary The rising level of mortgage approvals provides a firm underpinning to the housing market and house prices are likely to be firmer over the coming months. Affordability pressures are expected to reassert themselves as the year progresses, bringing to an end the recent strengthing in demand and prices...Hometrack data show that the average time to sell a property has stabilised, albeit at a high level
First Rung: Lucky number seven? Let`s put aside the search for triggers to propel falls in property values for one moment, when looking for a pointer for the property market to correct massively in coming years it is quite simply to be found in the absent number of first time buyers. According to data recently published by the N.A.E.A., the percentage of first time buyers reached an all time recorded low towards the final quarter of 2005 to stand at close on 7%. That is down from a peak of nearly 50% in 1999.
BBC News: UK interest rates unchanged again UK interest rates have been kept on hold at 4.5% at the end of the Bank of England's January meeting, in line with market expectations. This is the fifth month in a row that the bank's Monetary Policy Committee (MPC) has chosen to keep the cost of borrowing unchanged.
Times: Times MPC calls for rates be held Growing signs of a revival in high street spending and a recovery in the property market should lead the Bank of England to keep interest rates on hold again today, The Times Monetary Policy Committee recommends this morning.
SKY News: Worst Ever Trade Deficit Britain recorded its worst-ever monthly goods trade deficit during November as the oil account slipped into the red for the fifth month running. The trade-in-goods deficit stood at £6bn in November from an upwardly revised £5.1bn in October, the Office For National Statistics said.
SKY News: Interest rate decision due The interest rate is expected to stay unchanged when the Bank of England announces its decision at midday. The Bank's Monetary Policy Committee is believed to be waiting for clearer signs on the state of the economy.
Baby joy for TV property presenter Location Location Location star Kirstie Allsopp is expecting her first baby. The 33-year-old presenter is three months pregnant by property tycoon boyfriend Ben Andersen.
ThisisMoney: Consumers suffer New Year gloom WHILE the stock market soared and the City cashed in the rest of Britain ended 2005 on a gloomy note as consumer confidence dropped. Despite an upbeat November, people's faith in the economy faltered in December and, according to Nationwide Building Society, consumer spending confidence took a record hit.
Guardian: Consumers pessimistic despite good news on employment Consumer confidence fell sharply last month as people's assessment of the economic situation and their willingness to spend tumbled, the Nationwide says today. Its latest consumer confidence index, which chimes with that from research group GfK, suggests that retailers' satisfaction with Christmas sales may return to gloom if shoppers stay away.
BBC News: Welcome to the Debt Test Loans, credit cards, mortgage payments, bills - are you worried about your finances? Our Debt Test will help you to find out whether you have - or are likely to have - problems with your borrowing.
Guardian: Blairs experience ups and downs of the property market Tony Blair's run of bad luck in the property market appears to be continuing after it emerged that the area where his constituency home is located was one of 2005's biggest house price losers. But appearances can be deceptive: the house he bought in Westminster in late 2004 seems to have had a good year and may have seen a rise of several hundred thousand pounds.
BBC News: Oil imports fuel record trade gap Surging oil imports have propelled Britain's trade deficit with the rest of the world up faster than expected, to a new record for November. The trade gap in goods and services widened to £5.96bn ($10.45bn) from a deficit of £5.05bn in October, said the Office for National Statistics (ONS).
Channel 4: N Ireland leads house price growth Nationwide said these falls may reflect the mix of properties sold during the period, as well as lower confidence due to job cuts and slightly more depressed economic conditions in the area.
SkyNews: TUC Calls For Early Cut The TUC is calling for an early interest rate cut to lessen the chances of more hardship for the manufacturing industry. The economy faces real difficulties this year, including the prospect of higher unemployment and 80,000 job losses in manufacturing firms, without a cut, it warned.
TimesOnline: House prices plunge in Blair's constituency Homeowners in Tony Blair’s constituency suffered the largest falls in house prices seen in the UK last year. According to figures published today by the Nationwide, while prices throughout the whole of England rose by nearly 2 per cent, prices in the North fell by 2.1 per cent in 2005, with the biggest local fall seen in Sedgefield, which the Prime Minister has represented as an MP since 1983.
Firstrung.com: Why house prices are still set to fall It's looking like a tough year for house price pessimists, if you believe the hype in the press over the festive period. One of the most pessimistic forecasters, Capital Economics, revised their predictions for house price falls. They now expect a decline of 5% over the next two years, as opposed to a drop of 20% over three years - quite a pullback.
Firstrung.com: NAEA attempts a charm offensive Following the Chancellor's shocking revelation that residential property will no longer be allowed as part of a Self Invested Personal Pension (SIPP), according to the NAEA, the upside is that first time buyers have been spared an intense battle with UK buy to let investors.
Property in Spain: Bank of Spain warns on house prices The risk of a sharp fall in house prices is increasing and could halt Spain's economic growth, the governor of the Bank of Spain warned. The bank's governor Jaime Caruana said: "The longer the current high rates of house price inflation are maintained, the higher the risk of a more abrupt or disorderly correction in the future." He repeated the European Central Bank's claim that Spanish house prices are between 24 and 35 percent overvalued.
This is Staffordshire: Demand for action over empty homes Families are calling for the council to get tenants to move into boarded-up homes in their street amid fears house prices are being devalued. Eight of the homes in Chatsworth Place, Meir, are currently boarded up as the city council enters talks with local councillors to try to overcome the housing problem.
Manchester Evening News: Unions in rate cut appeal The economy faces the prospect of higher unemployment and 80,000 job losses in manufacturing firms, without a cut in interest rates, the TUC warned today. The union organisation called on the Bank of England to act early in 2006 by reducing rates, otherwise the economy could "hit the rocks".
Yorkshire Today: Property prices beat UK average House prices in Yorkshire continued to rise above the national average, new figures reveal. However, price growth for 2005 was the lowest it has been for 10 years. House prices in the region rose by 8.4 per cent over the year, compared to a national average of just 5.1 per cent.
NAEA: Property Market Enters 2006 On A High The average difference between asking price and sale price rose in December from 3.9% to 4.0% demonstrating a slight increase in unrealistic pricing by sellers over the Christmas period...The number of first time buyers decreased in December with their share of the market dropping from 8.4% to 7.0% – one of the lowest figures recorded by the survey yet...Forecasts: 100% price rises over next 10 to 15 years
Economics UK: Three members of the shadow MPC vote for rate cut The results of the latest Shadow Monetary Policy Committee (SMPC) e-mail poll for The Sunday Times are set out below. Members of the Institute for Economic Affairs’ (IEA) SMPC speak in a personal capacity and their contributions are arranged in alphabetical order.
Channel 4: Rates 'set to stay on hold' Economists expect borrowing costs to stay on hold at 4.5% this week as attention switches to whether new splits emerge on the key rate-setting committee of the Bank of England.
Channel 4: Britons seek debt advice More than one in 10 people are considering getting professional advice this year to help them get out of debt, new research shows...while an estimated 203,000 are considering declaring themselves bankrupt, according to debt solutions firm One Advice.
First Rung: Flood of apartments continues to depress new homes market The average price of a new home in November was £255,751, down 4.8% on the same month in 2004, according to a new report from Smart New Homes, a property website covering 85% of new homes in the UK...the new homes market is seeing prices decreasing more than the wider market as a surplus of cheaper apartments drags down average prices.
FT: Soros sees chance of US recession in 2007 George Soros, the US financier, on Monday predicted that the US economy could suffer a recession in 2007 due to falling housing prices as the US tightens interest rates, with a “reasonably significant chance” that the global economy could slow as a result.
BBC News: Golden Wonder in administration Crisp manufacturer Golden Wonder has been placed in administration, putting about 850 jobs at risk. The firm, whose brands include Golden Wonder, Nik-Naks and Wheat Crunchies, has suffered falling sales and fierce competition in recent years.
View London: Consumers braced for interest-rate rise UK consumers are predicting an increase in interest rates, despite indications that inflation forecasts for 2006 have dropped sharply. According to Lloyds TSB Financial Markets consumers still expect interest rates to rise, although oil price-led inflation is thought to have peaked.
LA Times: A Home Boom Busts Shanghai's hot housing market has fizzled after a run-up fed by speculators, threatening a significant part of China's economy. Once one of the hottest markets in the world, sales of homes have virtually halted in some areas of Shanghai, prompting developers to slash prices and real estate brokerages to shutter thousands of offices.
BBC News: 'Modest recovery' in house prices UK house prices rose by 2.1% in the final three months of 2005, confirming a "modest recovery" in the latter part of the year, the Halifax has said. During December house prices rose by 1%, the bank said, taking the annual increase to 5.1% - the smallest annual rise for 10 years.
BBC News: High Street 'to recover in 2006' A retail recovery will mean a brighter year for the UK economy in 2006, a report has said. Accountancy firm BDO Stoy Hayward says consumer confidence and spending will recover, aided by cooling oil prices and a stabilising housing market.
Residential Landlord: Action being taken on new build valuations Andrew Smith of RICS: ‘When prices are rocketing, if a house is overvalued the market catches up quickly enough anyway. With the market stagnating, the problem quickly becomes apparent. ‘But we can't stop developers offering the cash deals and fairly large discounts that they currently are’
Investment & Business news: House Prices: is the market safe? The soft landing brigade reckon they have won the argument. House prices did not crash in 2005, and November and December appeared to indicate a significant improvement. Even the RICS score, the barometer index, which had been in negative territory since August 2004, finally went positive...There are flaws in these optimistic arguments, however...
ThisisMoney: Trapped by 367% interest loan WHEN Peter and Vivien Gudgin borrowed against their home, they thought they were buying financial freedom in their retirement. Now, only a few years later, they are left bitterly regretting their decision.
Guardian: Scaling the red mountain After the Christmas and New Year sales spending splurge comes the January hangover - and one in eight of us has no idea how to settle the bills. Two million people who used credit cards to buy presents are still paying off their 2004 Christmas bill.
Credit Action: Debt statistics - January Total secured lending on homes in November 2005 was £956.3bn. This has increased 10.3% in the last 12 months. Total consumer credit lending to individuals in November 2005 was £192.1bn. This has increased 9.8% in the last 12 months.
firstrung.com: First time buyers think outside the box Despite the glut of studio, one bed, and two bed apartments available, terraced houses are continuing to increase in popularity with first time buyers, further narrowing the gap that separates them from detached and semi-detached properties.
FT: Estate agents admit to pushing up values Estate agents, members of a profession not especially known for frankness and honesty, have confessed to a practice long suspected by homebuyers and sellers: overvaluing people’s homes. The National Association of Estate Agents on Friday conceded that housebuilders’ accusations of “aspirational pricing” by estate agents, which they claimed had contributed to the stalling of the market last year, were mainly valid.
This is Money: Switch from gas fuels petrol crisis A number of recent sharp increases have forced many power stations to switch to oil to keep running. But with oil supplies already stretched after last month's explosion at the Buncefield oil depot, there are concerns that there will not be enough to go around.
This Is Money: Pensions deficit grows by 24% THE pensions deficit facing Britain's 350 biggest public companies grew by a record 24% last year. They are now struggling with a black hole of £93bn - equal to the whole of the South African economy.
This Is Money: Prescott's homes plan is rubbished JOHN Prescott's plans to build 1m houses in rural England is rubbished by Tony Blair's favourite think-tank today. It says homeowners do not want to live in the 'affordable' properties the Deputy Prime Minister will build.
This Is Money: Base rate cut hopes put on hold HOMEOWNERS hoping for an early cut in interest rates look set to be disappointed when the Bank of England makes its first base rate decision of 2006 next week...'Our view prior to this data was that the odds on a February rate cut were 60-40 against - this morning's release makes that look more like 75-25'
Money Week: The mess Alan Greenspan leaves behind ...The result of this has been to increase the willingness of investors to participate in speculative bubbles because they know that if things go wrong and they are unable to get out before the bubble burst, their good friend Alan Greenspan will bail them out and limit their losses...Greenspan's policy of inflating bubbles to counter the negative effects of the bursting of previous ones is like someone who remains on a sinking ship because he doesn't like to swim.
Money Week: US interest rate optimism may be premature ...As usual though, the market has been hyper-sensitive following the latest Fed statements. Right now, markets are eurphoric in their conclusion that the end is near for rate hikes. This could be a case of cracking the champagne open to early.
Money Week: The truth about housing? The party’s over The “real story is the amount of stock that has come on to the market”, Ian Springett, chief executive of website Primelocation.com, told Catherine Riley in The Times. Springett says the level of unsold stock is 50% higher than a year ago, and rising. The property sector needs “a reality check on prices”, he added.
This Is Money: The great house price mystery ...This means Halifax, the UK's largest mortgage lender, has an especially strong pull in the North and Scotland, where house price inflation is outperforming other areas of Britain, perhaps a reason why its price rises exceed the Nationwide's.
FT.com - Fingers crossed for a housing crash: "The new year is always a good time to review your personal finances. This year I have entered into the spirit of financial spring cleaning in spectacular style: I have sold my house and, for the moment at least, I have no intention of getting back on the property ladder. "
FT.Com: Brown faces EU censure over deficit Gordon Brown, the UK chancellor of the exchequer, faces embarrassing censure from the European Commission next week, when Brussels will recommend the launch of an excessive deficit procedure against Britain for its failure to keep public borrowing below 3 per cent of gross domestic product.
Reuters: JJB Sports sees profit below expectations Sportswear retailer JJB Sports (JJB.L: Quote, Profile, Research) said on Friday that continuing tough competition would see full-year profits fall below current market expectations, despite a recent lift in sales.
ThisisMoney: The equity release nightmare EQUITY release schemes were today labelled 'the lifestyle dream that can turn into a nightmare'. Consumer organisation Which? warned that raising even a comparatively small sum could leave pensioners owning hardly any of the value in their home.
ThisisMoney: Fragile economy sparks slump NEW figures have revealed that despite the stock market riding high the number of firms collapsing hit its highest level for three years in 2005 - and there are fears the figure could rise even further in 2006.
ThisisMoney: Wimpey woe on completions and prices HOUSEBUILDER George Wimpey warned today it will miss ambitious City forecasts for 2005 as it admitted house sales fell by volume and value. It blamed a 'very tough' year when buyers were unnerved by doom merchants.
Independent: Spending by plastic hits 11-year low Consumers' appetite for debt fell to its lowest level for 11 years in the key pre-Christmas month of November, according to figures that will strike fear into retailers' hearts but may allay fears over mounting debt levels.
Guardian: Service sector upturn dampens hope of early interest rate cut Britain's service sector ended 2005 on a high note as healthier order books and rising employment pushed business activity to its highest level in more than 18 months, it was revealed yesterday. The Chartered Institute for Purchasing and Supply reported a hefty expansion in the economy's biggest sector last month, dampening City hopes of an early cut in interest rates from the Bank of England.
BBC NEWS | Business | Increase in UK company failures Corporate insolvencies in the UK jumped by 11% in 2005, according to financial data firm Experian. The firm said the slowdown in consumer spending, high energy costs and rising red tape contributed to the increase.
BBC NEWS | Business | Car sales hit by frugal consumers Sales of cars in the UK dropped by 5% last year to less than 2.5 million as consumers steered clear of showrooms, according to industry figures. The Society of Motor Manufacturers and Traders (SMMT) said the total amount of cars sold during 2005 was the lowest since 2000.
Channel 4: Pension warning from High St giants The Co-operative group is to scrap its final salary pension while fashion group Arcadia has told workers they must work a further five years for theirs. It comes amid warnings by industry groups that pension plans must be reformed to avoid shutting them down altogether.
Channel 4: New powers to weed out bad debtors New measures to stop bad debtors being given credit will come into force later this year, it has been confirmed. Credit reference agencies will be able to check High Court debt judgments from April 6.
Money Week: Company pension fund deficits rise again Pension deficits among the UK's leading firms jumped by nearly a quarter to £93bn last year according to the latest survey from pension consultant Mercer. The increase is despite a strong rally by many of the world's equity markets, which had little impact on the size of the shortfalls.
Reuters: Big energy users urge price hike restraint The country's biggest gas and power users said on Thursday that businesses already struggling under a series of steep power and gas price rises would be forced to close if bills are hiked again this year.
Reuters: Services growth surges and dampens rate cut talk The report, which is the most timely measure of Britain's services sector outside of retail and gets plenty of attention from the MPC, said that the rise in prices charged "suggested a marked improvement in companies' pricing power".
Reuters: Shell Rotterdam refinery forced to scale back output A reduction in supply from Europe's biggest refinery could drive oil prices higher as markets zero in on potentially short supplies of gasoline and other oil products in the United States in 2006. Crude prices were near a three month high on Thursday.
icWales: Many estate agents struggling as financial storm clouds gather A recent survey of the UK estate agents industry suggests that in excess of 33% of companies are currently rated as being under threat and face failure in 2006. Many have pre-tax margins of less than 4.5%, with retained profit at a miniscule 2% or less and crucially their proportion of debt as a percentage of sales exceeds 90%.
Money Week: Has the inflation monster really been captured? Why should inflation be targeted at 2%, not 1% or 3%? Why should any inflation be targeted at all? Even if it were for some reason smart to target prices, can prices really be measured accurately? What do central banks do to overcome lag effects of monetary tightening and loosening?
CEambridge Evening News: Flat sold for record £1.5m A three-bedroom flat in an area described as an "unplanned, soulless, multi-storey mess" has been sold for £1.5 million. The hefty price tag makes the penthouse, which occupies the top two floors of the new Highland Homes Belvedere development, Cambridge's most expensive flat ever.
Guardian: Thorntons admits to a bleak Christmas The chocolate maker Thorntons yesterday claimed the dubious distinction of becoming the first retailer to warn that it had suffered a dismal Christmas. In an unscheduled trading update, Thorntons said sales had extended their autumnal decline into the crucial festive season, which accounts for as much as 60% of the group's first-half sales.
This Is Money: Bogus tenant stole my ID and £207,000 A bogus tenant used a false driving licence and some stolen utility bills to remortgage Mr Hawthorn's home for more than £200,000, less than a week after signing the tenancy. He fled with the money without making any repayments...
Reuters: Factory growth inches up as costs jump The manufacturing sector expanded at a slightly weaker pace than expected in December, while surging energy and materials costs drove input prices to a nine-month high, a report showed on Tuesday.
Reuters: Mortgage equity withdrawal falls Mortgage equity withdrawal fell to 8.276 billion pounds in the third quarter of last year from 10.001 billion in the second quarter, the Bank of England said on Tuesday.
BBC News: 'Sudden slowing' of festive sales The first week of post-Christmas sales ended with an alarming drop-off in shopper numbers, according to retail research group SPSL. Despite the rush for Boxing Day bargains which saw shopper numbers up 17% on last year, numbers for the week to 1 January slumped by nearly 8%.
ThisisMoney: Gas crisis could shut factories FACTORIES could be forced to shut down as the eepening international gas crisis sends prices soaring in Britain. The warning came from industry leaders as the effects of Russia's decision to cut supplies to Ukraine spread rapidly westwards.
Independent: Britons in debt to the tune of £1.13 trillion * 66,000 people predicted to go bust this year; * Average household debt is £7,650 (exc. mortgage); * Two-thirds of EU credit card debt is British; * One in five students owes at least £15,000; * 40% of women keep debt secret from partners; * Half of all heavy debtors suffer from depression
BBC News: 'Sudden slowing' of festive sales The first week of post-Christmas sales ended with an alarming drop-off in shopper numbers, according to retail research group SPSL. Despite the rush for Boxing Day bargains which saw shopper numbers up 17% on last year, numbers for the week to 1 January slumped by nearly 8%.
The Desert Sun: Year of the 'perfect economic storm' around the bend 2007 will be the year of the "perfect economic storm." It is the year that $1 trillion of adjustable rate mortgages and interest only mortgage loans come due for conversion to fixed rate mortgages...There never has been a number like the $1 trillion to hit our banking system. Never - not even close. [US]
The International Forecaster: The end of the US housing bubble The housing bubble is in the early stages of implosion. We do not know for sure how long the adjustment will take or are we sure how deep it will be, but we do know it has to happen and that the risks to our economy and the world economy are enormous.
First Rung: A Property Market on Ice The Domino effect that could be caused by this action could wreck the saving plans of many private investors who saw property bonds as a safer haven for their savings than the stock market or owning their own home. Many U.K. based Buy to Let investors had predicted that Germany could be the next hot property spot in Europe as in real terms, or in comparison to the U.K. property does appear to offer good value for money.
Guardian: Icy snap kills off zest for bargains The icy aftermath to Christmas has seen the usual flood of bargain hunters at the annual shop sales melt away, according to retail monitors in high streets and malls. Customers landed with unwanted gloves or misjudged toys have doggedly queued at return desks, but the usual zest for cheap offers lost out to sub-zero temperatures between Boxing Day and New Year's Eve.
Independent: Treasury foresees base rate cuts to boost growth The Bank of England will be forced to cut interest rates to shore up the slowing economy this year, most City economists believe. A slim majority of finance houses in the Square Mile expected rates to come down this year, with a couple forecasting they would fall back to their 50-year low of 3.5 per cent.
TimesOnline: Whitehall job cuts body needs more staff – to cut jobs THE government department that is meant to slim down the Civil Service has ballooned in size because of its dependence on external consultants, The Times has learnt. The Treasury offshoot charged with fulfilling the key manifesto commitment says that it needs extra staff in order to carry out the Chancellor’s efficiency programme.
Reuters: Rates seen rising twice this year Interest rates in the United States and the euro zone are set to rise twice during 2006, as the Fed brings its rate cycle to an end and the European Central Bank tightens cautiously for fear of choking the economy.
Guardian: Time to pay the bill Britain is up to its eyes in debt and 2006 could be the year we all feel the pinch. First, the good news. If you are a multi-million pound lottery winner, or a member of that small band of City executives and senior business people who get to write their own salary and bonus cheques, 2006 will be a very good year indeed.
Scotsman: Time to consider remortgaging The new year is a good time to dust down your mortgage and make sure you are not paying over the odds. Although interest rates are at historically low levels, loans tend to be huge, so just a small rate adjustment can save a mountain of cash.