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Personal Loans: Money At Its Best
By Mary Jones
While applying for loans, there are a number of issues that needs to be taken care of. For instance, the amount you want to avail, repayment schedule, etc. If you are looking for loans that provide you answer to all these issues, then you should consider availing personal loans. These loans are flexible and can be used to take care of any personal need such as home improvement, debt consolidation, purchasing a car, wedding, vacation, pursuing higher education and a host of other needs.

You can avail the loans in the usual format of secured and unsecured form. Secured forms of the loans are collateral based and are beneficial for those individuals who are willing to pledge one of their valuable asset as collateral. Through this form of the loans, you can derive a bigger amount, as lenders advance the loans on the basis of equity value present in the collateral. As the amount is insured against a valuable asset, the levied is comparatively low. Usually, you can borrow amount that varies in the range of £5000-£75000. The repayment tenure is convenient and spans over a period of 5- 25 years.

On the contrary, borrowers who are not having any collateral or do not want to pledge any can opt for unsecured form of the loans. The amount advanced under this loan option is small and is in the range of £1000-£25000. You have to repay the amount within a period of 6months- 10 years. Being advanced without any collateral, levied on the loans are slightly higher.

Borrowers with a history of bad credit such as CCJs, IVA, arrears, defaults etc can also apply for the loans. Although the levied will be comparatively higher, ensuring timely repayment of the amount will assist the borrower to mend their credit score.

These loans now are also available online. All you have to do is to fill a simple application with details like amount required, repayment schedule along with your personal information. The lenders will then contact you and provide their quotes. Once you have compared the quotes and finalized the deal, the loan amount gets approved instantly.

Personal loans

Hope for homeowners as rates fall below 5 per cent
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/17845?ns=guardian&pageName=Money%3A+Hope+for+homeowners+as+rates+fall+below+5+per+cent&ch=Money&c3=The+Observer&c4=Borrowing+and+debt%2CFirst-time+buyers%2CMortgages+%28Money%29%2CMoney%2CInterest+rates+%28Money%29%2CProperty%2CObserver&c5=Personal+Finance%2CNot+commercially+useful%2CProperty+Mortgages+and+Interest+Rates&c6=Huma+Qureshi&c7=2008_11_17&c8=1118547&c9=article&c10=GU&c11=Money&c12=Borrowing+%26+debt&c13=&c14=&h2=GU%2FMoney%2FBorrowing+%26+debt" width="1" height="1" /></div><p>Homeowners looking to remortgage could soon benefit from some of the lowest fixed-rate deals in almost a year after the Bank of England base rate cut.</p><p>Immediately after the 1.5 per cent reduction two weeks ago, 849 mortgage products were withdrawn, according to <a href="http://www.Moneysupermarket.com">Moneysupermarket.com</a>, but lenders are now slowly reintroducing deals. Last week, Abbey was one of the first major providers to announce reduced rates on its two-year fixed-rate range, to as low as 4.49 per cent, and mortgage brokers hope other lenders will follow. </p><p>'These are very low rates,' says Andrew Montlake, from broker Cobalt Capital. 'They represent good deals, despite the fact that some fees may look high.'</p><p>Abbey's two-year fixed rate deals now start at 4.49 per cent with a &pound;995 fee (60 per cent loan-to-value), 4.54 per cent with a &pound;1,499 fee (70 per cent LTV) and 4.79 per cent with a &pound;995 fee (75 per cent LTV). Fixed-rate loans have not fallen below 5 per cent since January, when First Direct offered a 4.75 per cent two-year fix. </p><p>Cheltenham & Gloucester's two-year fixes are down to 4.89 per cent, with a &pound;1,995 fee (60 per cent LTV), or 4.99 per cent for the same LTV amount, with a &pound;995 fee. For a loan-to-value of 75 per cent, it is offering 4.89 per cent with a &pound;1,995 fee (loans up to &pound;250,000 only) or 5.29 per cent with a &pound;995 fee. </p><p>Alliance & Leicester also repriced its mortgage range last week, offering 4.49 per cent interest on a two-year fix with 60 per cent LTV. Borrowers will be charged 1 per cent of the loan in fees.</p><p>'These aren't as attractive as Abbey's new rates, but they aren't bad,' Montlake says. 'Once we have four or five lenders offering rates between 4 and 5 per cent, it will start to make a difference.'</p><p>But the best deals are only for those who have sizeable equity in their home. David Hollingworth, of mortgage broker London & Country, says: 'You have to be careful you're not at risk of falling into a higher loan-to-value bracket if your house value has dropped and the equity reduced. You may have been on 70 per cent loan-to-value before, but might now be on 73 per cent, which would push you into the 75 per cent loan-to-value bracket, where rates will be higher.'</p><p>First-time buyers also remain largely priced out as there are still very few deals above 90 per cent LTV. First-time buyer rates that remain, such as Bristol & West's First Start mortgage range, have high rates - 6.79 per cent for a three-year fix at 95 per cent LTV and a &pound;499 fee. Halifax still has a first-time buyer range, with a five-year fix rate at 7.14 per cent and a &pound;495 arrangement fee.</p><p>After the base rate cut, almost every bank and building society withdrew its tracker range. Last week, only four (Abbey, Halifax, Cheltenham & Gloucester and Alliance & Leicester) introduced new trackers and most are tracking at higher levels. 'Even though the margins are higher on trackers, and banks could potentially have passed on more of the cut to homeowners, these deals are still good,' says Montlake. 'They are still coming in at under 5 per cent.'</p><p>Cheltenham & Gloucester's tracker range starts at 1.79 per cent above base (currently 4.79) for two years, with a &pound;1,995 fee for 60 per cent loan to value. For 75 per cent loan-to-value, tracker rates start at 1.99 over base (currently 5.09 per cent) with a &pound;995 fee. </p><p>Lloyds TSB, Cheltenham & Gloucester building society, Coventry building society, Abbey, Nationwide, Halifax, Bradford & Bingley and Scottish Widows, Northern Rock, Royal Bank of Scotland and NatWest have all passed on the 1.5 per cent base rate cut through their standard variable rates (SVRs), with Nationwide's the lowest at 4.69 per cent. 'In the absence of tracker deals at the moment, SVRs are looking good,' says Hollingworth.</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/debt">Borrowing & debt</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/interestrates">Interest rates</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064850111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064850111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
First-time buyers' hopes dashed again as below-5% deals finally hit the high street
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/89010?ns=guardian&pageName=Money%3A+First-time+buyers%27+hopes+dashed+again+as+below-5%25+deals+finally+hit+the+high+street&ch=Money&c3=The+Guardian&c4=Mortgages+%28Money%29%2CBorrowing+and+debt%2CProperty%2CMoney%2CFirst-time+buyers&c5=Personal+Finance%2CProperty+Mortgages+and+Interest+Rates&c6=Rupert+Jones&c7=2008_11_15&c8=1117911&c9=article&c10=GU&c11=Money&c12=Mortgages&c13=&c14=&h2=GU%2FMoney%2FMortgages" width="1" height="1" /></div><p>This week saw a flurry of new fixed-rate and tracker mortgage deals priced at below 5% - but there was little cheer for first-time buyers, because the best deals are reserved for those able to stump up a whopping 40% deposit.</p><p>Britain's banks and building societies this week restocked their shelves with home loans after frantically withdrawing them following November 6's extraordinary 1.5% cut in interest rates.</p><p>On the plus side, there are some two-year fixed rates available as low as 4.49%. And HSBC has a base rate tracker priced at 3.99% which is selling like hot cakes.</p><p>But the best two-year fixed rate for someone with a 10% deposit is more like 6.5%. And that's not the end of the bad news. Financial data provider Moneyfacts issued research which suggests that people taking out fixed rate deals are being charged excessively high rates. It says the average two-year fix on offer today is around 6.13%, while two-year money-market "swap rates" (which determine the pricing of fixed-rate loans) are at 3.61%. "Before the credit crunch, the difference was just 0.10%. Although a bigger margin for risk is understandable, a 2.52% difference seems excessive," says a spokeswoman.</p><p>Meanwhile, separate figures show that, while lenders have little choice but to pass on base rate reductions to their existing tracker home loan customers, they are taking the opportunity of rate cuts to increase their margins on new tracker business.</p><p>Bank of England data shows that the average cost of a base rate tracker mortgage for someone with a 25% deposit jumped to 6.84% during October - up from 6.12% in September. That is despite the monetary policy committee reducing interest rates by 0.5% during the month. To make matters worse, several lenders this week upped the rates they charge on new tracker deals.</p><p>The website <a href="http://www.mform.co.uk">mform.co.uk</a> says it "defies logic" that the best fixed-rate deals for first-time buyers are currently more expensive than a year ago, when base rates have been cut so dramatically. Until first-time buyers - generally seen as the engine of the property market - start to see more of the benefit from the interest rate cuts, it is hard to see how we are ever going to see a recovery in house sales and prices. This week brought more gloomy news on the property market, with an acceleration in the rate that prices are falling.</p><p>So what sort of deals are on offer?</p><p><strong>Trackers</strong> HSBC has a lifetime tracker where you pay base rate plus 0.99% - ie, 3.99% currently. However, the maximum loan-to-value (LTV) is 60%, which will exclude many people. There is a &pound;799 booking fee to pay. Not surprisingly, it has been "selling very well" but the bank seems to think it will be available for a few more days at least.Alliance & Leicester's two-year tracker has a starting rate of 4.89%, or 1.89% above the Bank of England base rate. The previous comparable product was priced at 1.29% above base rate. There is a 1% arrangement fee, and this deal only allows customers to borrow up to 60% of the property's value.</p><p>Sister company, Abbey, (both are owned by Santander) has launched a two-year tracker with an identical rate; again, the maximum LTV is 60%, and there is a &pound;499 fee. For those borrowing up to 75% of the property's value, the rate and fee are both higher (4.99% and &pound;995 respectively).</p><p>As recently as last month, Lloyds TSB and its Cheltenham & Gloucester mortgage arm were offering a two-year tracker at 1.09% above the base rate. This week the differential stood at 1.79%-1.89%.</p><p>Lloyds TSB/C&G have a set of new two-year tracker deals with rates starting at 4.79% (bank base rate plus 1.79%). That is available on loans up to 60% and up to 75%, though in both cases there is a hefty fee attached - &pound;1,995 - and the 75% deal is only for those borrowing a maximum of &pound;250,000. There is also a deal priced at 4.89% with a smaller fee (&pound;995) where the maximum loan is 60%, and a deal priced at 4.99% for those borrowing up to 75% with a &pound;1,995 fee.</p><p>All these Lloyds TSB/C&G mortgages allow customers to switch to one of their fixed rates at any time during the deal without incurring early repayment penalties.</p><p><strong>Fixed rates</strong> A&L this week launched a two-year fix at 4.49% with a 1% arrangement fee; the maximum LTV is 60%. Abbey has a two-year fix with the same rate and the same maximum LTV, though the fee is different (&pound;995). For those who want to borrow up to 70% of the property's value, the rate rises to 4.54% (plus a higher fee of &pound;1,499). For those borrowing up to 75%, the best Abbey can offer is 4.79% (&pound;995 fee).</p><p>C&G's two-year fixes start at 4.89%. There are versions of this deal for those borrowing up to 60% and 75%, though on the latter it will only lend up to &pound;250,000, and in both cases there is a big fee attached: &pound;1,995.</p><p>Meanwhile, the Woolwich (Barclays' mortgage arm) has launched a deal which it says combines the best aspects of a fixed rate with a competitive lifetime tracker. The mortgage is fixed at 3.99% until January 31, 2010, switching after that to a tracker at 1.99% above base rate. </p><p>"As a fixed rate mortgage this is market-leading. The low rate means customers will see the immediate benefit by having cash in hand now, with the certainty of low payments fixed until 2010," it says. </p><p>That headline fixed rate certainly is good, but it only lasts just over a year. The maximum LTV is 60%; if you want to borrow up to 70%, the rate rises to 4.49%. There is a &pound;995 fee to pay, and you are locked in by early redemption penalties for three years. David Hollingworth at mortgage broker London & Country says this deal "doesn't look too bad". </p><p>The downsides, aside from the penalties, are that interest rates could start going up after the first year, and that tracker margins may start getting better. Hollingworth adds that at least there are now some new trackers on the market - and some fixed rates at below 5%. "Now I think we'll see a more general move towards cheaper fixes," he adds.</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/debt">Borrowing & debt</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064858111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064858111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Homebuyers at record low despite stamp duty boost
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/81549?ns=guardian&pageName=Money%3A+Homebuyers+at+record+low+despite+stamp+duty+boost&ch=Money&c3=guardian.co.uk&c4=Mortgages+%28Money%29%2CProperty%2CMoney%2CHousing+market+%28Business%29%2CBusiness%2CUK+news%2CStamp+duty%2CFirst-time+buyers&c5=Personal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates&c6=Hilary+Osborne&c7=2008_11_11&c8=1115898&c9=article&c10=GU&c11=Money&c12=Mortgages&c13=&c14=&h2=GU%2FMoney%2FMortgages" width="1" height="1" /></div><p>The number of homebuyers not paying <a href="http://www.guardian.co.uk/money/stampduty">stamp duty</a> doubled in September following the government's decision to raise the threshold to £175,000, figures showed today. </p><p>The temporary increase enabled 51% of homebuyers to avoid stamp duty in September compared with 22% in the same month last year, the Council of Mortgage Lenders (CML) said today.</p><p>But despite the government's efforts to kick-start the market, the number of <a href="http://www.guardian.co.uk/money/mortgages">mortgages</a> taken out for house purchases fell to a record low, with just 35,000 new loans approved during the month.</p><p>New loans for homebuyers were down 15% on August's figure and have slumped since last September when lenders approved 80,000 such deals, the CML said.</p><p>The number of house sales has plunged since the impact of the credit crunch first started to impinge on buyers last autumn. The CML said the value of mortgages approved for purchases had dropped to £5bn over the month, compared with £16.2bn in August last year.</p><p>The CML's director general, Michael Coogan, said: "While house purchase activity has reached exceptionally low levels, it is encouraging to see transaction costs lowered for a larger proportion of borrowers. The government should consider what other measures can be brought forward to enable the market to transact more easily.<br /> <br />"Banks and building societies do want to support homeowners, but they have limited funds available and are, quite reasonably, taking a prudent approach to risk. If the pricing and volume of interbank lending continues to improve, this should help the flow of mortgage lending."</p><p>Remortgage approvals also fell by 15% in September, with 62,000 borrowers switching loans compared with 74,000 in August, the CML said.</p><p>Some of the fall has been driven by lenders seeking to reduce the amount of risk on their books. Over the past few months many have pulled their larger loans, reserving their best deals for borrowers with at least 25% equity in their property and making remortgaging unattractive, and sometimes even impossible, for those with less. </p><p>The CML said the value of remortgaging in September had fallen to £8.5bn compared with £11bn a year earlier.</p><h2>House prices fall by 5.1%</h2><p>Official figures from the communities department also published today showed house prices fell by 5.1% in the 12 months to the end of September, and were down 3% over the summer. </p><p>Northern Ireland bore the brunt of the downturn, recording a 15.8% fall in prices, while in Scotland the market dropped by just 0.8%.</p><p>In England and Wales prices dropped by just over 5%. </p><p>The average price paid by a <a href="http://www.guardian.co.uk/money/firsttimebuyers">first-time buyer</a> in the UK had dropped by 7.8% over the year to £150,311, while movers paid an average of £243,161, 4% lower than in September last year. </p><p>This decline has pushed down the value of the average mortgage taken out by buyers entering the market, the CML figures show.</p><p>In September, the average first-time buyer loan dropped to £104,500, down from £108,000 in August and well below the peak of £119,250 it reached in July 2007.</p><p>Although homes are now more affordable for first-time buyers, their numbers have also plummeted - down from 28,200 in September last year to 13,400 this year.</p><p>The figures add to the picture of a housing market that has stalled as a result of the squeeze on lending and concerns about falling house prices.</p><p>Earlier today, the Royal Institution of Chartered Surveyors (Rics) said its members had seen <a href="http://www.guardian.co.uk/money/2008/nov/11/recession-shopping-property-brc-rics">sales slump to around two a month</a> in some areas of the country, and this lack of demand is likely to force <a href="http://www.guardian.co.uk/money/houseprices">house prices</a> down further in coming months.</p><p>Howard Archer, chief UK economist at HIS Global Insight, said: "Overall, the latest plethora of data and survey evidence on the housing market do little to alleviate belief that prices are set to fall markedly further over the coming months.</p><p>"Indeed, even though mortgage lenders are largely passing on last week's 1.5% interest rate cut by the Bank of England, the fundamentals for the housing market remain largely unfavourable."</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/business/housingmarket">Housing market</a></li><li><a href="http://www.guardian.co.uk/money/stampduty">Stamp duty</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064867111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064867111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Tesco boss put pressure on Bank to cut rate
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/40599?ns=guardian&pageName=Business%3A+Tesco+boss+put+pressure+on+Bank+to+cut+rate&ch=Business&c3=The+Guardian&c4=Tesco+%28Business%29%2CBank+of+England+%28Business%29%2CBusiness%2CSupermarkets+%28business%29%2CRetail+industry+%28Business%29%2CAlistair+Darling%2CBanks+and+building+societies%2CMortgages+%28Money%29%2CProperty%2CFirst-time+buyers%2CSavings+%28Money%29%2CEconomic+policy%2CPolitics%2CMoney%2CUK+news&c5=Personal+Finance%2CInvestments%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates&c6=Julia+Finch%2CPhillip+Inman&c7=2008_11_08&c8=1114659&c9=article&c10=GU&c11=Business&c12=Tesco&c13=&c14=&h2=GU%2FBusiness%2FTesco" width="1" height="1" /></div><p>The boss of Britain's biggest supermarket chain put pressure on the monetary policy committee to slash interest rates at a private meeting with the Bank of England's governor, Mervyn King, in the days leading up to this week's unprecedented 1.5 percentage point rate cut, the Guardian can reveal.</p><p>Sir Terry Leahy, the chief executive of Tesco, outlined his concerns about the economy and argued for a big cut in the cost of borrowing to help restore consumer confidence. Details of the breakfast-time meeting in Threadneedle Street emerged as the chancellor, Alistair Darling, ordered Britain's major high street banks and mortgage lenders to slash their borrowing costs by the full 1.5 points - and most of the banks complied.</p><p>Darling summoned the bank bosses to the Treasury yesterday morning and told them the economy was on the edge of a precipice and they had to help prevent what could be the longest and deepest recession since the second world war.</p><p>Leahy also made his views clear to David Blanchflower, the economist on the monetary policy committee (MPC) who has been leading calls for lower interest rates to head off a deep recession. Blanchflower urged a cut in the cost of borrowing every month this year, but was outvoted by other MPC members. As the economy has deteriorated in recent weeks, his voice has carried more weight.</p><p>Tesco accounts for more than 30% of the grocery market and more than &pound;1 out of every &pound;8 spent on UK high streets, and Leahy is on the prime minister's committee of business leaders.</p><p>At the Treasury yesterday, the chancellor told the banks the &pound;37bn bailout of RBS, Lloyds TSB and HBOS had prevented the collapse of the banking system and it was their duty to cut their lending rates in line with the Bank of England's 1.5 point cut.</p><p>It is understood the banks protested, telling Darling they urgently needed to rebuild their finances. But the chancellor made it clear they did not have a choice.</p><p>After the meeting, Royal Bank of Scotland, NatWest, Halifax, Nationwide, and later Northern Rock, fell into line, but a senior banking source said this was the last time they would be "brow-beaten". Further moves by the Bank of England were unlikely to be passed on, he said.</p><p>The rate cut will save many homeowners hundreds of pounds a month in mortgage repayments, relieving some of the pressure on household budgets. It could also boost the retail sector, which is witnessing a huge slowdown in spending.</p><p>Around 10% of borrowers are on a standard variable rate (SVR) mortgage, while 40% have deals tied either to the base rate or their lender's SVR.</p><p>But lenders have scrambled to pull their best home loans deals this week, and tracker mortgages that follow the Bank's base rate have all but disappeared. </p><p>A new estimate suggested house prices could fall more than 50% in the current downturn. </p><p>The latest forecast from Tradition Future HPI, which uses the futures market as a guide to where house prices are heading, is its grimmest to date. It predicts the average house price will fall to &pound;114,347 by October 2011, a drop of 43% from the peak in August last year. </p><p>Lucy Neville-Rolfe, Tesco's director of legal affairs, refused to confirm Leahy's meeting with Mervyn King, but said: "The MPC did a very brave thing." She added that the banks must now be put under pressure to ensure households and small businesses feel the benefit: "Our concern is to make sure the banks pass the rate cut on."</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/business/tesco">Tesco</a></li><li><a href="http://www.guardian.co.uk/business/bankofenglandgovernor">Bank of England</a></li><li><a href="http://www.guardian.co.uk/business/supermarkets">Supermarkets</a></li><li><a href="http://www.guardian.co.uk/business/retail">Retail industry</a></li><li><a href="http://www.guardian.co.uk/politics/alistairdarling">Alistair Darling</a></li><li><a href="http://www.guardian.co.uk/money/banks">Banks and building societies</a></li><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/money/savings">Savings</a></li><li><a href="http://www.guardian.co.uk/politics/economy">Economic policy</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Business&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064912111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Business&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064912111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Big banks finally back down to pass on rate cut
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/26590?ns=guardian&pageName=Money%3A+Big+banks+finally+back+down+to+pass+on+rate+cut&ch=Money&c3=The+Guardian&c4=Mortgages+%28Money%29%2CProperty%2CFirst-time+buyers%2CMoney%2CBanks+and+building+societies%2CBank+of+England+%28Business%29%2CBusiness%2CEconomic+policy%2CUK+news%2CPolitics&c5=Personal+Finance%2CInvestments%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates&c6=Miles+Brignall&c7=2008_11_08&c8=1114657&c9=article&c10=GU&c11=Money&c12=Mortgages&c13=&c14=&h2=GU%2FMoney%2FMortgages" width="1" height="1" /></div><p>Britain's banks finally caved in to growing public and political pressure yesterday and agreed to pass on to their customers the full 1.5 percentage point cut in interest rates.</p><p>After an early morning meeting with the chancellor, Alistair Darling, the UK's biggest lenders yesterday came out one by one and said they would reduce monthly payments for customers with variable rate mortgages by the full 1.5-point cut.</p><p>Nationwide, the UK's biggest building society, began, soon followed by Britain's biggest lender, the Halifax, and NatWest/Royal Bank of Scotland group. By mid afternoon each of the banks that had sought help from the government's &pound;37bn bail-out had agreed to lower their rates. Late last night the Treasury-owned Northern Rock also bowed to the inevitable and did the same.</p><p>The two banks which have steadfastly refused the Treasury's help - Barclays and HSBC - were the only big lenders last night not to have revealed whether they would pass on the full rate cut to borrowers.</p><p>Both Abbey and Lloyds TSB cut their standard variable rate mortgage rates within hours of the monetary policy committee's surprise cut in the base rate on Thursday. In all cases the rate changes will feed through to lower repayments in time for Christmas; most by December 1.</p><p>The prime minister, Gordon Brown, welcomed the banks' decision. </p><p>Speaking in Brussels, Brown said: "Yesterday, we saw decisive action on interest rates from the Bank of England and the European Central Bank, and I welcome the fact that a number of British banks have now decided to pass on the interest rate cut to customers, to families and to businesses."</p><p>Around 1.7 million UK households have monthly mortgage payments pegged in some way to their lender's standard variable rate (SVR). After last month's half-point rate reduction half the lenders opted not to reduce their SVR, and many, including the nationalised Northern Rock, passed on only a fraction of the reduction. </p><p>Many homeowners feared the same would happen again, particularly after some bank executives claimed they were unable to cut rates further as the cost of funding mortgages remained high. </p><p>But the three-month Libor rate, the inter-bank borrowing rate on which lenders base their mortgages, dropped sharply yesterday by one point to 4.49%.</p><p>Nationwide said yesterday's move would reduce payments for a &pound;100,000 interest-only mortgage by &pound;125 a month. Graham Beale, Nationwide's chief executive, summed up the collective mood of the banks: "This is the right and fair course of action for Nationwide to take for all our borrowers at what is a very challenging time for everyone in the UK. </p><p>"Our borrowers, who already benefit from one of the lowest standard variable rates on the high street, will see their rates fall dramatically and will be substantially better off." </p><p>Ray Boulger of the mortgage broker John Charcol said political pressure had undoubtedly played a part in yesterday's moves. "There was huge pressure on the banks to lower rates. However they were also helped by the Libor rate. Today's fall was particularly welcome and I'd expect to see some more attractive mortgage rates being launched next week."</p><p>However, it wasn't all good news. Britannia, Standard Life Bank and First National heaped misery on first time buyers when they pulled what were the last remaining tracker mortgages. "The tracker market has all but disappeared in the space of 24 hours, which is almost unheard of. It's been an extraordinary couple of days," said David Hollingworth at rival brokers London & Country. </p><p>While yesterday's developments were good news for existing borrowers, savers fared less well. Almost all the fixed-rate savings products that had been offering returns of up to 7% were either pulled or re-priced downwards. Anglo Irish Bank pulled its nine-month bonds, and cut its previously popular one- and two-year fixed-rate savings bonds by 1.5 points. Last night Nationwide said it was reducing interest rates on all its fixed-rate savings bonds from today. </p><p>However, the little known Close Bros continued to offer its one-year 7% bonds to those with at least &pound;10,000 to invest. "These will be still available until Monday and at the moment we are being inundated by savers trying to grab the last decent rate out there," said a spokesman.</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/money/banks">Banks and building societies</a></li><li><a href="http://www.guardian.co.uk/business/bankofenglandgovernor">Bank of England</a></li><li><a href="http://www.guardian.co.uk/politics/economy">Economic policy</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064921111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064921111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Nationwide and RBS pass on rate cut
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/4649?ns=guardian&pageName=Money%3A+Mortgage+lenders+begin+to+pass+on+rate+cut&ch=Money&c3=guardian.co.uk&c4=Mortgages+%28Money%29%2CProperty%2CBanks+and+building+societies%2CMoney%2CUK+news%2CFirst-time+buyers%2CSavings+%28Money%29%2CPolitics&c5=Personal+Finance%2CInvestments%2CNot+commercially+useful%2CProperty+Mortgages+and+Interest+Rates&c6=Hilary+Osborne&c7=2008_11_07&c8=1114375&c9=article&c10=GU&c11=Money&c12=Mortgages&c13=&c14=&h2=GU%2FMoney%2FMortgages" width="1" height="1" /></div><p>Mortgage lenders have begun to react to the call to pass on yesterday's interest rate cut, with several of the UK's largest providers announcing price cuts, including the government-owned Northern Rock. </p><p>The country's largest <a href="http://www.guardian.co.uk/money/mortgages">mortgage</a> provider, Halifax, said it would pass on the full 1.5% rate cut to its customers, following hot on the heels of rivals Nationwide and Royal Bank of Scotland. Northern Rock, which was nationalised after its near collapse last year, will also reduce borrowing costs by the full 1.5%.</p><p>The cuts, which were welcomed by the prime minister, Gordon Brown, follow pressure from the government for lenders to reduce mortgage costs following yesterday's <a href="http://www.guardian.co.uk/business/2008/nov/06/interestrates-interestrates2">shock 1.5% reduction in the Bank of England base rate</a>.</p><p>This morning the chancellor, Alistair Darling, met with heads of some of the UK's biggest banks and is reported to have told them to pass on the rate cut "as quickly as possible".</p><p>Around 10% of borrowers are on a standard variable rate (SVR) mortgage, while 40% have deals tied either to the base rate or their lender's SVR.</p><p>After last month's 0.5% rate reduction around half of lenders opted not to reduce their SVR, and many, including Northern Rock, passed on only a fraction of the reduction.</p><p>The banks argued they were unable to cut rates further as the cost of funding mortgages remained high. But the three-month Libor rate, the inter-bank borrowing rate on which lenders base their mortgages, dropped sharply today by 1% to 4.49%. </p><p>Halifax, which only reduced its SVR by 0.5% in October, today said it would cut it again by the full 1.5%. From December 1 it will drop to 5%, benefiting all customers who are paying the SVR or have discount deals linked to it. A customer with a £150,000 repayment mortgage will see their monthly repayments fall by around £138.<br /> <br />At the same time, HBOS's other brands, which include Bank of Scotland, Intelligent Finance and Birmingham Midshires, will also reduce their SVRs by 1.5%.</p><p>Halifax's announcement came moments after RBS said it would also pass on the full 1.5% cut on its own mortgages as well as those available through NatWest, which it owns. The two banks' SVRs will be cut to 5.19% from December 1.</p><p>Northern Rock will reduce its SVR to 5.84%. Last month it passed on just 0.15%. </p><p>The UK's biggest building society, Nationwide, also announced a 1.5% reduction in its base mortgage rate, bringing it down to 4.69%. Customers with rates linked to this will see their repayments fall in line with the 1.5% cut.</p><p>Some major lenders are still reviewing their rates following yesterday's cut. Lloyds TSB, Abbey and Scottish Widows Bank have already announced they would pass on the cut, but HSBC has not yet made a decision.</p><p>The Libor change should ultimately allow lenders to offer cheaper loans to would-be buyers. In the meantime, however, borrowers are faced with a limited choice of deals as lenders work out how to reprice their loans.</p><p>Many of the tracker mortgages available earlier this week <a href="http://www.guardian.co.uk/money/2008/nov/07/mortgages-interest-rates-lloyds">have disappeared</a> and fixed-rate deals have also been pulled. Last night, Halifax withdrew all of its fixed-rate loans.</p><p>Meanwhile, there have also been signs that yesterday's cut will have an impact on <a href="http://www.guardian.co.uk/money/savings">savers</a>, with banks and building societies pulling some of their best-buy accounts, and National Savings & Investments slashing the rate it pays on one of its most popular accounts. The rate on its Direct Isa has been cut from 4.8% to 3.3% with immediate effect.</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/banks">Banks and building societies</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/money/savings">Savings</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064928111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064928111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Abbey launches First Home Saver account for first-time buyers
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/34650?ns=guardian&pageName=Money%3A+Abbey%27s+new+saver+is+strict%2C+but+it%27s+still+lending+a+lot&ch=Money&c3=The+Observer&c4=First-time+buyers%2CSantander+%28Abbey+National%29%2CBanking+sector+%28Business%29%2CSavings+%28Money%29%2CMoney%2CObserver%2CMortgages+%28Money%29&c5=Personal+Finance%2CInvestments%2CNot+commercially+useful%2CProperty+Mortgages+and+Interest+Rates&c6=Jill+Insley&c7=2008_11_03&c8=1110786&c9=article&c10=GU&c11=Money&c12=First-time+buyers&c13=&c14=&h2=GU%2FMoney%2FFirst-time+buyers" width="1" height="1" /></div><p>Abbey was last week presenting itself as a promoter of prudence to first-time borrowers, while coming under attack for risky lending practices.</p><p>The lender announced that it wanted to encourage traditional saving and borrowing habits through a new high-interest savings account targeted at first-time buyers. The First Home Saver account, which pays 8 per cent AER, is available only to aspiring home owners aged 16 to 35 who want to build up a deposit.</p><p>But at the same time the bank is coming under fire from potential borrowers and politicians for continuing to offer loans equivalent to five times a borrower's income to those with good financial records.</p><p>Customers who open a First Home Saver account (through branches) must deposit from &pound;100 to &pound;300 a month by standing order, starting with an opening balance of between &pound;100 to &pound;5,000, and can save up to a maximum of &pound;50,000. Savers who miss a payment or fail to deposit the minimum &pound;100 will have their interest cut to 0.1 per cent for that month. No partial withdrawals are allowed and, on closing the account completely, the saver must have an interview with an Abbey mortgage adviser, although the saver doesn't have to take out an Abbey mortgage. </p><p>The deal smacks of the conditions laid down by building societies in the Seventies, when borrowers had to save for long periods before being 'granted an audience' with the branch manager to ask for a mortgage. </p><p>Mortgage brokers are unenthusiastic about the scheme. Richard Morea of London & Country says: 'The interest rate is attractive, and [the maximum] &pound;50,000 [would be] a healthy deposit for a first-time buyer, but the other details are restrictive.' </p><p>Abbey says it is not charging penalties for savers who don't choose an Abbey product as it is 'confident it will have the best mortgage available for first-time buyers at the time of withdrawal'. But Morea says: 'Abbey's best deals are only available for those with a 40 per cent deposit. If you had the &pound;50,000 maximum saved up, this would only allow you to buy a home costing &pound;125,000 - quite limiting in most areas, even with prices falling.'</p><p>Any attempt to encourage borrowers to save more before buying a home will be welcome to the government, which announced a 70 per cent rise in repossessions last week. However, Abbey is one of the few lenders still prepared to lend five times a borrower's income. Last week, Vince Cable, Liberal Democrat shadow Chancellor, said the next group of borrowers to face financial difficulties were likely to be those who have borrowed high amounts compared to their income: figures released by the Bank of England indicated that more than a third of UK borrowers are in this position.</p><p>Abbey protests that it bases its calculations on affordability, including the borrower's debts, outgoings, children and whether they have a non-working spouse. It says this is more realistic and can often result in a smaller loan being given than if the borrowing had been based purely on income. Only those with clean credit records, no dependants or little debt would be allowed big loans.</p><p>But Cable describes Abbey's willingness to lend at these levels as 'quite bewildering and completely mad'. 'In the US, one of the definitions of sub-prime lending is where someone is borrowing more than three-and-a-half times their income,' he says.</p><p>An Observer reader, who prefers to remain anonymous, was provisionally offered an Abbey loan of more than &pound;500,000, based on a joint income of &pound;100,000. Her mortgage adviser warned that the loan was dependent on a credit check, and that because she and her partner were only putting down a 10 per cent deposit, the interest rate would be 'really high'. She refused the loan: 'If we had paid what they wanted every month, all we would have been left with was subsistence money.' </p><p><a href="mailto:j.insley@observer.co.uk">j.insley@observer.co.uk</a></p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/business/santander">Banco Santander</a></li><li><a href="http://www.guardian.co.uk/business/banking">UK banking sector</a></li><li><a href="http://www.guardian.co.uk/money/savings">Savings</a></li><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064936111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064936111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Snooping around: Homes near nightlife
Night owls and cityphiles should apply within; these homes are expertly urban
House prices slump by 14.6%
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/82331?ns=guardian&pageName=Money%3A+House+prices+slump+by+14.6%25&ch=Money&c3=guardian.co.uk&c4=House+prices+%28Money%29%2CProperty%2CFirst-time+buyers%2CMoney%2CHousing+market+%28Business%29%2CBusiness%2CUK+news&c5=Personal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates&c6=Hilary+Osborne&c7=2008_10_30&c8=1109027&c9=article&c10=GU&c11=Money&c12=House+prices&c13=&c14=&h2=GU%2FMoney%2FHouse+prices" width="1" height="1" /></div><p><a href="http://www.guardian.co.uk/money/houseprices">House prices</a> have slumped by 14.6% since last October after 12 consecutive months of falls, Nationwide Building Society said today.</p><p>Figures from the UK's largest society show the average price of a home in the UK has fallen to £158,872 - almost £30,000 less than a year ago. Prices have been driven down by falling sales volumes.</p><p>Although the monthly fall of 1.4% was slightly lower than in September, when prices dropped by 1.5%, the annual rate of decline has increased from 12.4% last month and is the largest drop ever recorded by Nationwide.</p><p>The figures are in sharp contrast with October last year when Nationwide last reported a monthly price rise. At that point annual price growth was running at 9.7% and the impact of the <a href="http://www.guardian.co.uk/business/creditcrunch">credit crunch</a> was only starting to be felt by would-be buyers. <a href="http://www.guardian.co.uk/money/mortgages">Mortgage</a> approvals were also running in line with their long-term average and 40% of <a href="http://www.guardian.co.uk/money/firsttimebuyers">first-time buyers</a> were borrowing more than 90% of their home's value.</p><p>Now lenders have pulled back from offering large loans and withdrawn many of their most competitive deals, and housing activity has plummeted. <br/> <br/>Nationwide said the number of completed house purchase transactions as a proportion of the total stock of mortgages was now at its lowest ever level since records began in 1974.</p><p>Meanwhile, other data shows the time taken to sell a property has increased by more than 60% in the last year, to almost 12 weeks. Nationwide said the housing market had stalled because buyers and sellers had reached a stalemate.</p><p>The society's chief economist, Fionnuala Earley, said: "The sharp falls in prices recorded by the main transactions-based measures of house prices has not yet led to an increase in market activity. </p><p>"One possible explanation for this is that it is only those sellers willing to negotiate on price that are seeing sales go through. While others refuse to cut their price, the levels of activity are constrained."</p><p>She added: "Asking prices have fallen this year, but the rate of decline has been significantly behind that of other measures. Consumers still expect prices to continue to fall into 2009 and will therefore be reluctant to trade without some discount on the asking price."</p><h2>Fewer forced sales</h2><p>Earley said the fact sellers felt they were able to hold out on price suggested there were fewer forced sales than during the last crash of the early 1990s, when interest rates were more than twice today's level. </p><p>However, she said the weakening economy could force some people to reassess their needs and lower their expectations and prices.</p><p>"As the economy weakens further there is likely to be more movement on asking prices as sellers adjust to the prevailing conditions and reassess their own needs," she said.</p><p>"Some may choose not to sell after all, thus reducing supply, but others will adjust their prices accordingly. A looming recession and continued financial market instability have uncomfortable implications for the housing and mortgage markets, and will undoubtedly affect the pace of recovery in house prices."</p><p>Daniel Lee of property website Globrix said that in some towns and cities homeowners were finding it "almost impossible" to sell. </p><p>"It's gridlock. I can't see things improving in the near term, either. Buyer confidence is shot to bits, mortgage finance is a lot tougher to secure and many sellers still aren't dropping their prices to realistic levels. </p><p>"They're in 2008 but have a 2005 mindset."</p><p>Howard Archer, chief UK economist at IHS Global Insight, said there was a strong chance prices would fall for at least another year. </p><p>"Although the monthly rate of decline in house prices has slowed marginally over the last couple of months, it is still pretty hefty and the housing market fundamentals remain largely ugly," he said.</p><p>Nationwide's figures will make grim reading for borrowers who bought properties at the peak of the market last summer. Earlier this week the Bank of England said around 500,000 homeowners held mortgages that were bigger than the value of their property and that a further 15% fall in prices could result in 1.2 million borrowers facing negative equity.</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/houseprices">House prices</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/business/housingmarket">Housing market</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064947111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064947111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
House sales slump by more than 50%
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/10351?ns=guardian&pageName=Money%3A+House+sales+slump+by+more+than+50%25&ch=Money&c3=guardian.co.uk&c4=Property%2CHouse+prices+%28Money%29%2CMortgages+%28Money%29%2CFirst-time+buyers%2CMoney%2CHousing+market+%28Business%29%2CBusiness%2CUK+news&c5=Personal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates&c6=Hilary+Osborne&c7=2008_10_21&c8=1104463&c9=article&c10=GU&c11=Money&c12=Property&c13=&c14=&h2=GU%2FMoney%2FProperty" width="1" height="1" /></div><p>The number of homes changing hands has dived by 53% over the past year, figures showed today.</p><p>Just 59,000 residential <a href="http://www.guardian.co.uk/money/property">properties</a> worth more than £40,000 were sold during September, the lowest level since HM Revenue & Customs began issuing figures in this format in 2005.</p><p>The number was well down on the 126,000 homes sold during September last year (on a seasonally adjusted basis), and just over a third of the high of 154,000 transactions completed in December 2006.</p><p>The figures confirm that the government's move to <a href="http://www.guardian.co.uk/politics/2008/sep/02/economy.houseprices">increase the stamp duty threshold to £175,000</a>, announced in the first week of September, failed to kick-start the housing market.</p><p>Instead, transaction levels, which have been declining since the start of the year, carried on falling as would-be buyers struggled to raise <a href="http://www.guardian.co.uk/money/mortgages">mortgages</a>, while those that could find funds were deterred by falling <a href="http://www.guardian.co.uk/money/houseprices">house prices</a>.</p><p>Over the past three months the number of properties bought and sold fell to less than half of last year's level.</p><p>Between July and September there were 188,000 transactions on a seasonally adjusted basis compared with 363,000 in the same period last year and 255,000 in the second quarter of this year.</p><p>So far this year 747,000 homes have changed hands compared with 1.2m in the first nine months of last year, and despite government moves to free up the mortgage market it looks as though the total for the year will be well below last year's 1.6m transactions.</p><p>Recent figures from the Council of Mortgage lenders have shown a <a href="http://www.guardian.co.uk/money/2008/oct/20/mortgages-property">continued slowdown in mortgage approvals and advances</a>, suggesting transaction levels will remain low for some months to come.</p><p>"While the data are a lagging indicator as they relate to completed sales, they nevertheless provide yet further evidence of the dismal state of the housing market," said Howard Archer, chief UK economist at Global Insight.<br/> <br/>"Credit conditions are still relatively tight, and even if the government measures to tackle the financial crisis work on a sustained basis, it will undoubtedly take time for confidence to improve and mortgage lending to pick up significantly."</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/houseprices">House prices</a></li><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/business/housingmarket">Housing market</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064954111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064954111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Lending for homebuying hits record low in August
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/21935?ns=guardian&pageName=Money%3A+Lending+for+homebuying+hits+record+low+in+August&ch=Money&c3=guardian.co.uk&c4=Mortgages+%28Money%29%2CProperty%2CFirst-time+buyers%2CHouse+prices+%28Money%29%2CMoney%2CMortgage+lending+figures+%28Business%29%2CHousing+market+%28Business%29%2CBusiness%2CUK+news&c5=Personal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates&c6=Sandra+Haurant&c7=2008_10_14&c8=1100705&c9=article&c10=GU&c11=Money&c12=Mortgages&c13=&c14=&h2=GU%2FMoney%2FMortgages" width="1" height="1" /></div><p>The number of people borrowing money to buy a <a href="http://www.guardian.co.uk/money/property">property</a> fell in August to a record low of 42,200, while the value of the average UK home has fallen by 3.4% over the past year, figures showed today.</p><p>The value of <a href="http://www.guardian.co.uk/money/mortgages">mortgages</a> approved for house purchases was £6bn, according to the Council of Mortgage Lenders (CML) the lowest level since the association began collecting data in January 2002 and £10bn below last August's figure. Gross lending fell to £19.7bn, a drop of 20% compared with July and 42% down on August 2007. </p><p>Around 15,600 mortgages were for <a href="http://www.guardian.co.uk/money/firsttimebuyers">first-time buyers</a> who borrowed an average of £106,754, the lowest amount since May 2006. </p><p>In August last year, first-time buyers borrowed on average 3.39 times their income, and 90% of the value of the property, but lending restrictions introduced since the credit crunch began have forced these figures down. This August, people buying a property for the first time typically borrowed 84% of its value, and 3.18 times their income. </p><p>The number of people borrowing to move home plummeted by 61% to 26,600 compared with last August, and at £4.1bn the value of loans taken out was 64% lower than the same month last year. </p><p>Movers borrowed an average of £126,000, the smallest average advance since June 2006. </p><p>According to the CML, the majority of borrowers were opting for fixed rates to shield themselves against any future upward movements in the Bank of England base rate. </p><p>However, while 58% of borrowers fixed their mortgage rate in August, the proportion has fallen back from 64% in July. The proportion of people deciding on a tracker mortgage, which follows the rise and fall of the base rate, increased from 28% to 31%. </p><p>The communities and local government department said today that <a href="http://www.guardian.co.uk/money/houseprices">house prices</a> were 3.4% lower in August than in the same month last year. The average house price was £211,410 in August compared with £217,171 in July. First-time buyers paid an average £155,409, a fall of 4.5% compared with the same time last year.</p><p>Today's announcement from the Royal Institution of Chartered Surveyors that its members have been selling an <a href="http://www.guardian.co.uk/money/2008/oct/14/mortgages-houseprices">average of less than one property a week</a> backs up these snapshots of a faltering housing market.</p><p>Michael Coogan, director general at the CML, said the government's £37bn bail-out plan for British banks announced yesterday would help kick-start the market in the long term. </p><p>"The package of measures announced yesterday will have a positive effect, but it will take time for it to feed through to the mortgage market," he said.</p><p>Commenting on today's figures and the impact yesterday's announcements would have on the housing market, Howard Archer, economist at Global Insight, said: "Even if the bold government measures to tackle the financial crisis work on a sustained basis, it will undoubtedly take time for confidence to improve and mortgage lending to pick up significantly. </p><p>"This is despite the fact that the government has made RBS, Lloyds TSB and HBOS promise that mortgages will be available at 2007 levels for at least the next three years. Meanwhile, demand for mortgages is likely to remain muted for some considerable time."</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/money/houseprices">House prices</a></li><li><a href="http://www.guardian.co.uk/business/mortgagelendingfigures">Mortgage lending figures</a></li><li><a href="http://www.guardian.co.uk/business/housingmarket">Housing market</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064963111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107064963111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Snooping around: Calling all first-time buyers
Dedicated solely to those seeking a first foot on the ladder
Property: Estate agents, mortgage brokers and movers speak out
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/73617?ns=guardian&pageName=Money%3A+%27Falling+prices+have+been+great%2C+but+getting+funding+has+got+harder%27&ch=Money&c3=guardian.co.uk&c4=House+prices+%28Money%29%2CProperty%2CMortgages+%28Money%29%2CFirst-time+buyers%2CMoney%2CHousing+market+%28Business%29%2CBusiness%2CUK+news&c5=Personal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates&c6=Hilary+Osborne&c7=2008_10_09&c8=1098390&c9=article&c10=GU&c11=Money&c12=House+prices&c13=&c14=&h2=GU%2FMoney%2FHouse+prices" width="1" height="1" /></div><p>Today's news that <a href="http://www.guardian.co.uk/money/2008/oct/09/house.prices.property">house prices are continuing to fall</a> has come as no surprise to those involved in the housing market. We asked how the slump was affecting the main players.</p><h2>The estate agent</h2><p><strong>Tim Barton is partner at Hampshire estate agency Dreweatt Neate</strong></p><p>"There are still <a href="http://www.guardian.co.uk/money/property">properties</a> selling; there are still deals being done. Parts of the market are more difficult than others, as ever. Our Newbury branch is seeing an oversupply at the bottom of the market where <a href="http://www.guardian.co.uk/money/firsttimebuyers">first-time buyers</a> and investors tend to buy. </p><p>"There are a devil of a lot of apartments for sale and very few buyers. But in Winchester where the properties are a bit more individual and a bit different, in the past month they have seen a handful of places go to best and final bids.</p><p>"There are still people looking - not as many as usual for this time of year - but not many are willing to sign on the dotted line and buy somewhere. People are saying to us: 'Why should I buy now when if I wait until next year prices may have come down?'</p><p>"What we all need is confidence - it's confidence that is affecting the market, not really the cost of money. Cutting rates by 0.5% will not in itself affect the housing market, but I think the steps [the government] have taken to restore confidence in the banking system is what we all need at the moment."</p><h2>The mortgage broker</h2><p><strong>Rob Gill is a consultant at Cobalt Capital</strong></p><p>"The biggest impact of falling house prices has been on our <a href="http://www.guardian.co.uk/money/mortgages">remortgaging</a> business. Lenders want borrowers to have more equity in their homes and are offering their best rates to those who have at least 25% to put down. If someone comes to us and says their home is worth £300,000 and they want to borrow £225,000 then that means we can get them a good rate, but if their valuation comes back at £275,000 then there is a problem. </p><p>"There is a case that people are being slightly over-optimistic about how much their homes are worth, but what is also happening is that surveyors are being very cautious in their valuations. I recently saw a case where the homeowner said his property was worth £550,000, but the surveyor only valued it at £400,000. He then sold it for £510,000 - and this all happened within a matter of weeks. It is much easier for surveyors to be over-cautious about remortgage valuations because no one really challenges them.</p><p>"I have had a couple of incidents where I have been unable to help people who wanted to remortgage. Someone was looking for a 95% remortgage and I had to tell them I couldn't help."</p><h2>The mover</h2><p><strong>Dave Haste recently exchanged on a property in Clerkenwell</strong></p><p>"I own a flat on the Isle of Dogs. The original plan was to sell that and make a conventional move. The problem was that it was impossible to sell my flat. I put it on the market at what I thought was a pretty good price - it was less than other flats in the area - but it was right at the point when everybody stopped buying. In two months I didn't get a single viewing. I was hoping to get an offer I could work with, but no viewings meant no offers. </p><p>"I took the flat off the market and remortgaged it on a buy-to-let basis, releasing some equity to put into my new place. When I move I will rent it out. The rates on <a href="http://www.guardian.co.uk/money/buyingtolet">buy-to-let</a> deals were higher than I expected, but the broker said that is the way it is now.</p><p>"I had been sizing up the market in Clerkenwell but I didn't want to start viewings until I had an offer. Once I had decided to rent my flat I started looking. The first thing I noticed was that there were a lot of good properties on the market that were staying on the market. Some had been reduced several times by £20,000-£30,000 a time."</p><h2>The <a href="http://www.guardian.co.uk/money/firsttimebuyers">first-time buyers</a></h2><p><strong>Matt Hussey and his partner Lucy Foster are about to exchange</strong></p><p>"We started looking in December last year - we were searching online to get an initial idea of what was out there, then we contacted the estate agents and started looking round. It hasn't been through lack of trying - there was a six-week period when I spent every night looking at places, but there has been a very marked decline in the number of people wanting to sell. I was sending Lucy a list of links to places we could look - when we first started there would be about 25 links, but by the end of the summer there were just two or three. </p><p>"Prices dropping have been great for us as it has enabled us to buy somewhere that would have been out of our price bracket, but getting funding has got harder.</p><p>"If we didn't have the support of our parents and a good deposit it would have been really difficult. We applied for a mortgage in June on a purchase that fell through, and the second time there was an incredible amount of hoops to jump through - we had to dig out more payslips and our parents had to send legal letters about the deposit. The lender also tried to put the rate up from 5.75% in June to 6.17%, but we were able to show that the original offer had not expired.</p><p>"Pretty much since the beginning we have wondered if we were buying on a slippery slope. Every time we have seen a property we liked we have wondered whether we should buy it or wait six months. But I don't think things are going to change in the next year, and we are planning to live there for five, six, seven years, so we hope by that time it might be worth a bit more."</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/houseprices">House prices</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/business/housingmarket">Housing market</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107065082111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107065082111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
Q&A: The interest rate cut and me
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/28982?ns=guardian&pageName=Money%3A+Q%26amp%3BA%3A+The+rate+cut+and+me&ch=Money&c3=guardian.co.uk&c4=Mortgages+%28Money%29%2CSavings+%28Money%29%2CPersonal+loans%2CBorrowing+and+debt%2CConsumer+affairs+%28Money%29%2CProperty%2CFirst-time+buyers%2CMoney%2CInterest+rates+%28Money%29&c5=Personal+Finance%2CProperty+Mortgages+and+Interest+Rates&c6=Hilary+Osborne%2CSandra+Haurant&c7=2008_10_08&c8=1097687&c9=article&c10=GU&c11=Money&c12=Mortgages&c13=&c14=&h2=GU%2FMoney%2FMortgages" width="1" height="1" /></div><h2>What does the <a href="http://www.guardian.co.uk/business/2008/oct/08/marketturmoil.creditcrunch">interest rate cut</a> mean to my mortgage?</h2><p>It depends what type of deal you have. The 56% of borrowers on fixed-rate <a href="http://www.guardian.co.uk/money/mortgages">mortgages</a> can be certain they won't benefit from the cut, while the 36% on tracker deals can be sure they will.</p><p>"If you have a tracker rate then it's happy days," says David Hollingworth of mortgage broker London & Country. "That's quite a substantial cut and you will feel the benefit of it from <a href="http://money.guardian.co.uk/calculator/form/0,,603156,00.html">next month's payments</a>."</p><p>If, for example, you are paying 0.5% above the base rate, your interest rate will fall from 5.5% to 5%, knocking £35 a month off the cost of a £120,000 mortgage.</p><p>Those on other variable rate deals - either on their lender's standard variable rate (SVR) or a discount deal linked to it - may have to wait and see. "A lot of lenders have discretion over what they do with their variable rates," says Hollingworth. "Borrowers will have to wait to find out how much - if any - of this cut is passed on."</p><p>Some lenders have a commitment in their terms and conditions to keep their SVRs within a certain margin of the base rate. These include Halifax and Cheltenham & Gloucester, which have both dropped their SVRs to 6.5% with effect from November 1.</p><h2>How much do borrowers stand to save?</h2><p>If lenders do pass on the full cut, borrowers could save hundreds of pounds a year. A homeowner with a £150,000 repayment mortgage on a rate of 6% will see their monthly payments fall by £45 to £921 if their rate is cut to 5.5% - a saving of £543 a year. Someone with a debt of £250,000 on the same rates will see monthly repayments fall by £75, and their annual cost fall by £906. </p><h2>Will new mortgages be cheaper?</h2><p>Tracker deals that were available before today will be cheaper, but you will have to act fast to snap them up. Lenders can pull these deals and change the margin on them whenever they want, and in recent days they have been repricing their tracker mortgages upwards. Late last week Halifax increased the cost of a three-year tracker by 0.16%, so instead of paying 0.89% above the base rate new borrowers will be charged 1.05% above it. </p><p>"In the past, as bank rates have fallen lenders have tended to increase their margins," says Ray Boulger of mortgage broker John Charcol. "If you are considering a tracker then you need to act fast." </p><p>On the plus side Boulger says fixed-rate deals could start to come down soon after a drop in the cost of money market funding. However, he thinks the margin between the cost of mortgages of up to 75% of a property's value and above will continue to increase.</p><h2>Why is that?</h2><p>Although the package announced this morning to free up lending between banks is intended to make it cheaper for lenders to fund mortgages, Boulger says banks are still "very focussed on risk", and as a result will target their best deals at customers with the most equity.</p><p>So <a href="http://www.guardian.co.uk/money/firsttimebuyers">first-time buyers</a> will continue to struggle to find mortgages, and they will pay more to lenders who are willing to help them out. "I think in the short term they are not going to see any improvement in availability," says Boulger. "Things will improve in due course but they shouldn't hold their breath."</p><h2>What will happen to loan rates?</h2><p>Most customers with a <a href="http://www.guardian.co.uk/money/loans">personal loan</a> will be on a fixed rate so will be unaffected by the change. If recent events are any indication then rates for new customers are also unlikely to fall.</p><p>"I would seriously doubt interest rates on personal loans will be affected," says Tim Moss, head of personal loans at moneysupermarket.com. "The base rate has been coming down but the effect on loan rates has been quite the opposite."<br/> <br/>Moss says pressure on banks to cut sales of PPI products means they are looking for other ways to make money. "Rates were extremely low but were effectively being subsidised by PPI sales. Now loans are being priced more realistically and I would not be surprised if rates reached the levels we saw three or four years ago - around 9.9% rather than the 6.2% that we were seeing only a year ago."</p><h2>What will happen to savings rates?</h2><p>There could be good news for <a href="http://www.guardian.co.uk/money/savings">savers</a>: banks are so desperate to have deposits on their balance sheets that they are unlikely to deter people by dropping rates. "Normally a cut like this would be bad news for savings, but these are anything but normal times and I think savings rates are going to remain competitive," says moneysupermarket.com's Clare Francis. </p><p>"However, savers should not rest on their laurels. Banks will be concetrating hard on their acquisitions - in other words the products that attract new customers. Where they will cut rates is on the older accounts. Existing customers will need to keep an eye on their rates as they may find the cut has been passed on."</p><div style="float: left; margin-right: 10px; margin-bottom: 10px;"><ul><li><a href="http://www.guardian.co.uk/money/mortgages">Mortgages</a></li><li><a href="http://www.guardian.co.uk/money/savings">Savings</a></li><li><a href="http://www.guardian.co.uk/money/loans">Personal loans</a></li><li><a href="http://www.guardian.co.uk/money/debt">Borrowing & debt</a></li><li><a href="http://www.guardian.co.uk/money/consumeraffairs">Consumer affairs</a></li><li><a href="http://www.guardian.co.uk/money/property">Property</a></li><li><a href="http://www.guardian.co.uk/money/firsttimebuyers">First-time buyers</a></li><li><a href="http://www.guardian.co.uk/money/interestrates">Interest rates</a></li></ul></div><div class="guRssAdvert"><a href="http://ads.guardian.co.uk/click.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107065090111915042437594"><img src="http://ads.guardian.co.uk/image.ng/richmedia=yes&site=Money&country=gbr&spacedesc=rss&system=rss&transactionID=1227107065090111915042437594" border="0" /></a></div><a href="http://www.guardian.co.uk">guardian.co.uk</a> &copy; Guardian News & Media Limited 2008 | Use of this content is subject to our <a href="http://users.guardian.co.uk/help/article/0,,933909,00.html">Terms & Conditions</a> | <a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html">More Feeds</a>
How to cope with the crunch: a guide for young and old
<div><img alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/94267?ns=guardian&pageName=Money%3A+How+to+cope+with+the+crunch%3A+a+guide+for+young+and+old&ch=Money&c3=The+Observer&c4=First-time+buyers%2CMortgages+%28Money%29%2CFamily+finances%2CMoney%2CPensions%2CHousehold+bills%2CInvestments%2CSavings+%28Money%29%2CObserver&c5=Personal+Finance%2CInvestments%2CNot+commercially+useful%2CEnergy%2CProperty+Mortgages+and+Interest+Rates&c6=Lisa+Bachelor%2CHuma+Qureshi&c7=2008_10_06&c8=1095825&c9=article&c10=GU&c11=Money&c12=First-time+buyers&c13=&c14=&h2=GU%2FMoney%2FFirst-time+buyers" width="1" height="1" /></div><p><a href="http://www.guardian.co.uk/money/houseprices">House prices</a> are tumbling; it's easier to get blood from a stone than borrow a <a href="http://www.guardian.co.uk/money/mortgages">mortgage</a> at a decent rate; stock markets around the world are on a rollercoaster ride; and inflation is still expected to rise for another month or two yet.</p><p>The current economic situation is a nightmare scenario for many of us. But the extent of the impact of the credit crunch on your finances differs dramatically according to how old you are. If you are young, in a reasonably secure job and <a href="http://www.guardian.co.uk/money/firsttimebuyers">hoping to buy your first home</a> sometime soon, the current turmoil could actually be a good thing. But if you are close to retirement, have student children who depend on you for funding and still have <a href="http://www.guardian.co.uk/money/debt">debts</a> of your own to pay off, it is likely to be a disaster.</p><p>This week, we will examine the problems that the credit crisis can cause people in their twenties and thirties. Next week, our experts will tackle the difficulties facing those nearing retirement age, and those who have already stopped working.</p><h2>Twentysomethings</h2><p><strong>First-time buyers</strong><br/>For at least the past five years, rising house prices have made it almost impossible for first-time buyers to purchase a home - particularly in central London. </p><p>But with prices falling 10 per cent on average since last year, according to the Nationwide, property is becoming more affordable. Homeowners with a deposit could secure a good deal, particularly with the government's waiver of stamp duty on properties up to &pound;175,000 until next September.</p><p>Simon Roberts, of Roberts Newby estate agents in Buckinghamshire, says: 'Many homeowners are taking a very sensible and realistic view of the market and are adjusting their asking prices accordingly, while new-build developers are slashing their guideline prices, which will allow first-time buyers a chance to enter the market. If first-timers are prepared to take the chance, there may never be a better time for them to buy.</p><p><strong>Savings</strong><br/>Falling property prices might be a bonus, but if you can't get a mortgage then you won't be moving anywhere. There are no 100 per cent loan-to-value deals left, which means first-time buyers must save up enough money for a 10 per cent deposit, if not more. Andrew Hagger, of price comparison site <a href="http://www.Moneynet.co.uk">Moneynet.co.uk</a>, says: 'Saving isn't easy, but if you really knuckle down and save hard, then this time next year you might have a deposit in place to help you buy that home - particularly if the price of property continues to fall.' </p><p>Hagger says you should make the most of your tax-free options by saving into an Isa first, such as Manchester building society's Premier Isa, which pays 6.5 per cent interest. But he adds: 'If you are saving for something major like a house deposit, then go for a notice account, as you'll get a higher rate of interest. Or you could pick a fixed-rate bond and easily earn over 7 per cent interest on it.'</p><p>You'll also need to build up a good credit history before banks and building societies will lend to you. Make sure you're on the electoral roll, that all your bank accounts are registered at the same address (and not split between your parents' address and your rental address, for instance), and pay your mobile phone bill on time. This will build up a your profile as low-risk in the eyes of the banks and may make it possible for you to get a credit card or a mortgage.</p><p><strong>Pensions and investments</strong><br/>The stock market may seem a frightening place to put your money right now, but Tom McPhail at asset management specialist Hargreaves Lansdown says twentysomethings should jump right in, so as to make gains when the markets recover from the credit crunch. 'When you're young, you can take the kind of investment risks that you simply can't in your fifties. It doesn't matter so much if your investments go down in value, because you've got time on your side for them to go up again. By making regular investments into the stock market now, you will be able to capitalise on the credit crunch. There's no point sitting on the sidelines and then trying to jump in when conditions start improving. By then, you'll have missed the upsurge.'</p><p>McPhail also urges young people to do something about a pension. 'If your employer offers you a pension scheme, don't opt for the default investment fund. It's much better if you choose where you want your money to go and make active decisions about your own money. The worst thing you could do is let your money sit in a low-risk or cash fund - that's what you should be thinking about when you're 60, not in your twenties. A good pension doesn't happen by accident and sooner or later you're going to have to get to grips with your long-term finances.'</p><p><strong>Work</strong><br/>Graduates who were expecting lucrative, high-paid jobs in the banking sector may have to think again - this year's 'milk round' (the annual recruitment drive by companies visiting universities to snap up new employees) has already shrunk. </p><p>Dee Pilgrim, editor of student careers magazine Real World, says: 'A lot of companies have already said they're not going to be recruiting graduates for next year's intake, or that the number of graduates they will hire will be curtailed. The milk round will certainly get tougher and even more competitive. Times are tough, and you will have to prove yourself.' </p><p>To improve your chances, get as much work experience in your chosen field as you can - with more competition for jobs, you'll need an outstanding CV.</p><h2>Thirties and forties</h2><p><strong>Mortgages</strong><br/>The big concern for this age group is whether they can remortgage. If you bought a couple of years ago, it could be that your property is worth less than you paid for it and you may struggle to get a loan. Some homeowners will also have bought with friends or even strangers a few years ago and will now be coming up to remortgage. This could be problematic if one of those on the mortgage contract has changed his or her mind and wants to move out. </p><p>Where more than one person applies for and is offered a mortgage, the loan will be made on the basis that the applicants are 'jointly and severally liable'. Simply, this means that each of them is liable to repay the whole of the mortgage if the others are unable or unwilling to do so. 'People who buy together should draw up a legally binding agreement outlining what happens if one wants to leave the property,' warns Richard Morea of mortgage brokers London & Country.</p><p>James Cartlidge of shared mortgage specialists Share To Buy says he has seen some people getting around the problem by switching names on the mortgage contract. 'We've had two cases recently of children replacing their divorcee dad on the mortgage and others where two friends have bought the third friend's share of the property,' he says. 'Others are finding lodgers when someone sharing their mortgage leaves.'</p><p><strong>Families</strong><br/>For many people in their thirties, starting a family is a priority. If you are planning to have children, it could be wise to consider moving somewhere that has a decent state school. </p><p>Private education can be cripplingly expensive - 14 years of day schooling will typically set you back over &pound;140,000, and if your child is boarding, fees can exceed &pound;20,000 a year. In real terms, private school fees have risen by 20 per cent in the past five years, according to the Halifax, bringing the average annual fee to &pound;10,239. The result of this is that, this year, there are just 18 occupations in which the average worker could reasonably afford to send their child to private school, compared to 30 in 2003. </p><p>The other option is to get saving now. 'If it costs &pound;10,000 a year for a private day school today, be prepared to pay &pound;18,000 [or &pound;14,000 in today's money] in 10 years' time,' says David Kuo, head of personal finance at money website Fool.co.uk. 'To generate &pound;14,000 a year for seven years you will need to save &pound;530 a month for 10 years to produce a pot of around &pound;98,000, assuming, rather optimistically, that your investments grow at 8 per cent a year. In reality, though, you can get away with less because you won't need the entire pot in 10 years.'</p><p>However, if your family plans mean you will need a bigger home, you could actually benefit from the current property price slump, argues Trevor Britton, managing director of Belstone Homes. He claims that higher-price properties are dropping more in value than cheaper properties, reducing the gap between them and making it easier for buyers to trade up.</p><p><strong>Pensions</strong><br/>The stock-market turmoil of the past year has hit pension funds hard. The worst case scenario is that markets take as long to recover as they did during the Great Depression - 20 years - which would mean t