Houses, Help to Buy and the UK mortgage market

The government’s Help to Buy scheme has been brought in with the aim to help first time house buyers with deposits.  A number of Banks including HSBC, RBS and NatWest are now set to implement the new scheme throughout the UK.

This comes at a time when sales are reportedly the highest that surveyors have seen in just under 4 years. Many surveyors, according to the Royal Institution of Chartered Surveyors are predicting an increase in house prices, with some believing that the Help to buy scheme could drive up house prices even further.

Danny Alexander, the Treasury Secretary disagrees with these claims, stating that “People who think that there’s a housing bubble should get out more. They should get out of Kensington and Chelsea, and go to Manchester or Birmingham, and major towns across the country.” He went on to defend the scheme saying that it supports those who do not have “piles of cash”.

The scheme is anticipated to last for 3 years, providing help to those moving house and first-time buyers, who will be able to use the scheme for properties valued up to £600,000.

However some MPs are worried that the new scheme could raise house prices without careful consideration by the government. The Treasury Select Committee said the “Mistakes could distort the housing market or carry threats to financial stability.”

They added “We continue to believe that the government of the day will face strong incentives to extend the scheme, with the attendant risk that the mortgage guarantee scheme becomes a permanent feature of the UK mortgage market.”

Mr Osborne believes that the Help to Buy scheme would allow more people to get started on the property ladder; he also added that the UK housing market is now beginning to recover.

Shadow chief secretary, Chris Leslie scrutinised the upper limit of £600,000 for the scheme stating that “Unless George Osborne acts now to build more affordable homes, as we have urged, then soaring prices risk making it even harder for first-time buyers to get on the housing ladder. You can’t tackle the cost of living crisis without building more homes.”

Halifax will soon be offering mortgages with a rate of 5.19% costing £995 in fees compared to NatWest and RBS who offer no fees for a 4.99% fixed-rate mortgage for 2 years with the deposit amounting to 5%.

The scheme provides the opportunity for many who were not able to get into the housing market due to lack of funds to purchase their first home as rates for deposits are set to drop from 20%, which was set at the beginning of Britain’s economic crisis, to more affordable levels.

Losing Weight on a Budget in 2013

Because of economic hard times, more people than ever before are looking to get by with less money. Reducing costs on household bills and vehicle expenses are mainly at the forefront of people’s minds to save extra cash, but losing weight is also an important issue, as we all look to lead healthier lives.

If you want to lose weight on a budget in 2013, then you should consider the following points:

Eat at home

While eating out can be a nice treat maybe a few times a month, going out on too much of a regular basis can have a tremendous effect on your wallet. For this reason, it’s a good idea to eat at home more, so you can cook your meals from scratch and save hundreds of dollars a month.

Coupons

In recent years, coupons have took off in a big way. There are now thousands of coupon sites where you can find great deals on food brands available at the supermarket, meaning you can significantly cut the costs of your shopping bill. Also, make sure you keep an eye on the Sunday newspapers, as there are usually some great coupon deals to be found for groceries.

Appetite suppressants

If you find yourself constantly spending money on junk food snacks to satisfy your hunger cravings, then you might want to consider an appetite suppressant supplement. For example, Garcinia Cambogia extract has been getting a lot of attention in the news and media recently, as it has helped millions of people lose weight and save money by reducing their urge to binge eat.

Canned food

Let’s face it, items such as fresh fruit and vegetables can be expensive, especially when you are buying out of season. For this reason, why not buy the canned version to save yourself some money? Not only is canned food cheaper, but in most instances it is just as nutritious as the fresh and frozen alternatives.

Walk

Why spend your hard earned money on an expensive gym membership, when you can get all of the exercise your body needs…for free. The summer is a great time to put your walking shoes on and get out in the fresh air to burn those calories.

Water filter

An important part of weight loss is drinking enough water every day so you stay well hydrated. Unfortunately, tap water is often full of chemicals, and bottled water is expensive. You can get round this by purchasing a water filter, so you can drink as much water as you want without affecting your health or breaking the bank.

Beauty on a Budget – 10 Gorgeous and Affordable Mascaras

I’m obsessed with mascara, even before I trained as a Makeup Artist I was always saving up my paper round money to buy the latest mascara. As you can imagine I’ve tried and tested every mascara on the market.

Which Mascara Is The Right One For You?

Mascara’s have a use by date of 6 months as you can get eye infections if you use one that is out of date. When you are deciding which one to buy I recommend that you check ophthalmologists test it, as if it is it will be suitable to be used on sensitive eyes. First think about what you want your eyelashes to look like.

For instance you might already have long lashes so prefer an original thick wand or if you have thick lashes and would rather give length to your lashes you would be better using a longer wand or if you simply want separation, a plastic wand will be perfect for you. As a Makeup Artist in Manchester I have mastered the technique of applying mascara by placing the wand at the root of the lash for the greatest volume at the root and wiggling the wand. Then for maximum length to the tip of the lash I use a zig zag motion.

budget mascaras

You don’t have to spend a fortune on mascara to achieve a great result

I go through a least one mascara a month, as I prefer to build up the lashes rather than using strip lashes on my clients. I think it looks more natural and most clients are surprised at how long there lashes look, therefore It’s important that I stick to a budget. Here’s a list of reasonably priced effective mascaras so you don’t have to break the bank.

The Top 10 Mascaras You Can Buy For Under £20!

1. L’Oreal Double Extension, it has a primer at one end, a great buy – £11.29
2. Maxfactor False Lash Effect – £7.99
3. No7 Exceptional Definition – £11
4. Maybelline Great Lash – £4.99
5. Stila Glamour Eyes – £15
6. Benefit BADgal lash – £17.50
7. Clinque Doubling – £16.50
8. Bare Minerals Flawless Definition -£16
9. Rimmel Volume Flash Max – £6.99
10. Smashbox Bionic – £17

From the list of mascara the one that I use the most is the L’oreal Double Extension. You can save more money if you collect Boots Advantage Points or shop at the airport duty free. I also like to buy the packs of Lancôme Hypnose Mascara for £29 when they are on sale, so I’m only spending an extra £7 for an extra mascara. There it is, the top 10 affordable mascara’s that give you beautiful lashes – on a budget!

Guest Author Bio: Emmalene Sophia is a Makeup artist based in Manchester, she performs bridal, occasional and TV make up as well as makeup lessons in Manchester and the surrounding area. She regularly blogs at ExpertMakeUpArtist.com as well as other websites.

Survey Says UK Families are Positive About Future Finances

Financial information company Markit noted that its Household Finance Index (HFI) has reached a higher level in three years. This means that UK citizens are more positive about their household finances since the year 2010.

The HFI’s index, which hit 40.8 in June, signifies a very high number but because it is still below 50, many people found a decline in the standards of living. Anything above 50 is a sign of improvement.

Job security expectations have also improved in the next few years, but many still expect the economy and their financial situations to get worse. Workplace activity indexes fell from 53.3 to 52.8 in June, indicating people are less confident about job security. However, being above 50 in its fifth month indicates people expect more jobs to be stable and only concerns about finances are left.

Analysts said that the labour market condition’s improvement helped increase upturn in household financial expectations in June. Workplace activity had reached very high levels, indicating a decrease in job insecurities.

However, the UK remains having a high unemployment rate, significantly affecting those in the younger age group. The OECD warned that the younger generation spend more time out of work, spending 2.3 years unemployed, because they lack the skills or requirements needed for many occupations.

The Benefits of Starting a Pension as Young as Possible

When a person is in their twenties, paying money into a pension fund is often seen as a waste of money and completely unnecessary. On top of that millions of young Britons in the 20 – 29 age group seem to know very little about this very important aspect of financial planning – planning for retirement. A recent poll conducted by ICM for financial services company MRM found that 33 per cent of young people know how to say ‘How old are you?’ in French, while only 10 per cent know the meaning of the word ‘annuity’.

It is probably safe to assume that most of these young individuals also do not know or understand the concept of time value of money. They are simply not aware that if one starts investing £150 per month at the age of 25 this could grow to £395 000 by retirement age (with a yearly growth rate of 7 per cent).  Starting only five years later, at 30, will bring down this amount by £125 000 to only £270 000. And starting another five years later will reduce the balance of the fund to £183 000 by retirement time.

The earlier one starts a pension the more tax breaks can be enjoyed over the lifetime of the pension plan. Depending on how much the taxpayer earns, as much as 45 per cent of the amount invested could be deducted from income tax. That means the individual could end up paying only 55 per cent of the monthly amount invested in the fund out of his or her own pocket.

Another reason to start early is that people nowadays are living longer, which means they need more money to fund their retirement than years ago.  Twenty per cent of people living today are projected to live until they are a hundred or even older.

Contractors are often guilty of neglecting their retirement planning until it’s too late. If he or she works for a large company, they will usually have a pension plan, but contractors absolutely have to make contributions to private pension plans to save for their retirement.

An umbrella company could take care of this very important aspect for contractors. The company handles all payroll functions, including paying over pension fund contributions to the contractor’s chosen pension fund. These contributions are usually structured as an employer’s contribution and paid over directly, making it easy and affordable for a contractor to have a pension fund of his or her own.

This is why it is highly beneficial for contractors to make use of an umbrella company such as www.crystalumbrella.com. Depending on the individual’s tax rate, he or she could end up spending only £51.46 for every £100 contributed to an approved pension fund. This is partly because the contribution is tax deductible, but also because it is exempt from employees and employers National Insurance deductions.

When choosing an umbrella company, it is very important to make sure that the company allows an employee to transfer his or her pension fund to another employer should the need arise in future.

Google Targets Payday Loan Ads That Break The Rules!

The internet giant Google have announced that they will be paying very close attention to advertisements by payday loan companies on their AdWords network. If any of these ads are found to be breaking the rules, then they face an immediate life ban.

This move comes after it was revealed that Google have been under increasing pressure from government agencies and consumer watchdogs who want to see tighter advertising regulations imposed on the payday loan industry.

Due to this, Google announced earlier this year that payday loan lenders using the AdWords network needed to be clearer about exactly what was on offer, with fees, interest rates, and penalty charges being more visible to potential borrowers.

Despite these warnings from Google, there were many payday lenders that did not adjust their advertising materials, which means they now face being banned from the AdWords network for life.

A spokesperson for Google said, “we have strict policies for those advertising short term loans, and we make it very clear that advertisers need to comply with regulations and be transparent about their fees. If we discover sites that are breaking this policy we will take immediate action.”

In recent years, there has been thousands of new payday lenders appearing online, with many of them getting substantial traffic from the Google AdWords network and search engine.

This message from Google sends a clear message to the lenders, letting them know that they need to play by the rules or run the risk of losing traffic from the AdWords network.

Further information about payday loans…

Despite the payday loan industry getting a bad name, there are those that argue they fill a valuable need that is not offered elsewhere.

For example, when people are struggling to pay the bills or need urgent cash to pay for a medical expense, where else are they going to get the money?

Many people don’t have thousands stashed away for a rainy day, and getting a loan from a bank these days is no easy task. With all this in mind, it’s clear to see that payday loans can offer a valuable service, as many borrowers would be in a worse position without them.

However, these type of loans are also open to abuse, as there are a minority of people who get into financial trouble after getting payday loans that they can’t afford to pay back.

Conclusion

Ultimately, Google targeting payday loan ads is a good move. Consumers should be fully aware of what they are getting themselves into before applying for a loan, and advertisements which are more clearer will go a long way to achieving this.

Rising Inflation – Flat Wages

Its no surprise now that wages are in general terms flat, with very few among us seeing the small annual pay rise that was common pre-recession.  Even more sadly, apart from those with pay frozen, there are those with wage cuts and redundancies… let alone the queues at the job centre.  Add to the mix that inflation is increasing at an alarming rate (that 2pint milk now costs 50% more than it did 10 years ago), its evident that the gap between spending and income is widening.

In the fourth quarter of 2012, the Office For National Statistics (ONS) found that real income per head had fallen by £13 to £3,767. Meanwhile, expenditure per head has increased by £4. As a result, household saving had fallen as household must now spend more.

While demand hasn’t really increased and people have been careful with what they have recently, with incomes rising more slowly than inflation, its having a catalytic effect and many ordinary people are now being forced to borrow money in order to get by.  When in need of instant cash borrowing, payday loan providers are who many people are turning to, usually if they don’t have very good credit and can’t access loans in the form of bank loans or credit cards.

There are two effects of the increased borrowing and the widening gap between real income and rate of inflation. Firstly spending will be low, this will counteract all off the government’s attempts to increase spending as a means to stimulate economic growth.  As a result to the fall in spending, firms will see fewer profits, leading to more people becoming unemployed. Homelessness charity Shelter has stated that 8 million people are on the verge of losing their jobs. With no way of being able to save, this is a very worrying situation; being dubbed as ‘the British saving crisis’.

The government need to act and are likely to do so in another attempt to increase spending. Ironically, a likely policy to increase spending could be to encourage borrowing, further widening the gap between income and spending. More borrowing would mean more spending, as people have more access to money, however incomes will not be changing.

To increase economic growth, the most effective method would be to increase spending, but when we take into account that the bad financial standing Britain is as right now was caused by unsustainable borrowing, it wouldn’t make sense to encourage such a thing. In the short run, while borrowing might increase economic growth, in the long run it will come back and burden Britain once more.

A more concrete solution must be thought of as opposed to borrowing, inflation needs to be slowed down and real wages need to catch up fast.

HSBC Loses Out on Profit in Compensation Payouts and Fines

HSBC has had to set aside more than $1.4bn in order to compensate British victims who were mis-sold payment protection insurance. Money laundering issues have also led to the bank paying out nearly $2bn in fines to the United States.

As a result, HSBC has had a 6% percent decline in annual profits. The bank made a pre-tax profit of $20.6bn (£13.7bn/€15.8bn) in 2012.

According to the bank, the underlying profit rose 18% to $16.4bn. Underlying group revenues also increased 7% to $63.5bn due to a 10% to $18.2bn from its global banking and markets division. The bank was also faced however with $5.3bn accounting charge due to the rising value of its own debt in the financial markets.

The Chief Executive Officer, Stuart Gulliver said “HSBC made significant progress in 2012.”

“Based on our current understanding of the capital rules we are extremely well-placed with regard to Basel III compliance, re-establishing our position as one of the best capitalised banks in the world. This provides a firm base on which to keep growing the business organically and allows us to increase dividends to US$8.3bn”, he added.

The bank has said that Gulliver’s pay for the entire year will total to $7.4m, with a $1.95m bonus although overall bank bonus payments fell back 15% to $2,9bn.

The two major assets which have assisted the bank are the Capital One Financial, the US credit Card division and Ping An, a China-based insurance group. Both together have provided the bank with a further $12bn.

Overview of George Osborne’s Budget 2013

The Chancellor of the Exchequer George Osborne recently released his 2013 budget which detailed his plan for the coming year 2013-14.  The new budget sees benefits for some groups and drawbacks for others – an overview is provided here:

For public sector workers, excluding the armed forces, once again pay scales will be restricted and pay rises will fall beneath inflation by 1%.  For many workers in the sector, this has been going on for 5 years.

Groups interested in climate change may be disheartened to hear of the new plans to harvest gas from new sources recently found. This is part of an initiative to help the public by obtaining more fuel and increasing energy investment.

There will also be some amendments to housing benefit, as the building of social houses will take longer, therefore no improvements have been made to waiting times. Although with right-to-buy schemes, the length of time required to have occupied the home before being able to purchase the property has been reduced to 3 years. This will hopefully help tenants who want to buy their home.

In a measure to establish more income from tax evaders, steps will be taken to deter businesses from purchasing companies at a loss to reduce tax. This has the potential to generate approximately £4.8 billion over the course of 5 years.

On another note the budget does have some positive aspects for drivers with the expected fuel duty rise cancelled. This is a welcome decision for many drivers who found the rising fuel costs to become a burden.

Those seeking to purchase a home will benefit from the help-to-buy scheme which will enable them to receive 20% of the value of their property as long as they have 5% that they can put down as a deposit first. Homeowners will also benefit as property prices are set to rise.

Beer duty has seen a reduction by 1p in an attempt to boost British pubs. In contrast to this wine, spirits and cider have all seen a rise in duty tax with wine now costing 10 pence more, spirits 38 pence more and cider 2 pence more.

Options When it Comes to Debt Management

People who want to clear the debt that they have accumulated have a number of different options. Each set of circumstances is individual and the method you use to reduce your debt will depend on how much money you owe and the income that you have available.

For some people, it can be as simple as learning to budget more strictly and following the mantra of spending less than you earn. If you find that you are just falling short of your payments each month, look at where you can make some savings on regular expenses, such as utility bills, grocery bills and consider switching your mortgage if you can find a better deal with another provider.

It may be that you have more serious debts to contend with and that budgeting alone won’t be enough to clear them. In the UK debt help comes in a variety of forms, depending on the level of debt you are faced with. There are many different debt management companies and financial charities that you can contact for an initial consultation.

Common debt solutions include:

Debt management plan

This is where you agree a monthly repayment for all your creditors, but it goes to the debt management company which then redistributes it on your behalf. A debt management plan can help in terms of administration for multiple debts and the debt management company may be able to negotiate a lower interest rate for you.

Debt consolidation loan

An alternative to a debt management plan is to take out a new loan to cover your existing unsecured debts. You then have one single payment to make each month, and debt consolidation loans usually have a lower rate of interest than credit or store card bills. You need to be strong-willed enough not to be tempted to start spending on credit cards, etc, until your debt consolidation loan is paid off, otherwise you could end up back in the same position you started in.

IVA

In the UK, people with debts greater than £10,000 owing to three or more creditors can enter into an Individual Voluntary Arrangement (IVA) which is a legal agreement drawn up between the person owing money and their creditors and passed by the court. Creditors aren’t obliged to agree to this, but usually do as it strengthens their chances of recuperating their money. When people seek bankruptcy advice, they will often be informed about taking out an IVA instead. IVAs can be a better option than declaring bankruptcy as your assets will not be put at risk.

These are just some of the options available to someone in debt, but before going ahead with any of the debt management solutions offered by third parties, you should seek independent financial advice.