FIRST-TIME BUYER NUMBERS HIGHEST SINCE 2007

Thanks in part to the Government’s ‘Help to Buy’ initiative, mortgages offered to first-time buyers rose to 28,600 in June, with an accumulative value of £4.2 billion, an increase of 7% over the previous month and the highest number seen in any one month since 2007. This was also an increase of 19% over the same period last year by volume. By value, the figures were up 11% on May’s figure and 27% up on June last year. The Council of Mortgage Lenders (CML), which represents 95% of all residential mortgage lenders, reported that the typical loan size for these borrowers was £123,865 and that, given a typical gross annual income of approximately £37,000 in June; this represents an average of 3.47 times their income. The average age of these borrowers also fell from 30 to 29 years.

With interest rates remaining at their historic low of 0.5% the Bank of England (BoE) appears sanguine about the affordability of these mortgages moving forward, as it calculates that 19.3% of their gross income will be spent on servicing the capital and interest payments on such mortgages.

On the wider front, overall gross mortgage lending across the market in June grew by 6% from the May figures and by 20% on the year to £17.9 billion. There were 66,279 house purchase approvals in July, against 61,651 in the same month last year. This represents a 7.5% increase year-on-year and is the highest monthly figure since 2007.

Whilst the introduction of the Mortgage Market Review (MMR) had slowed the approval process initially, as there was a slight dip in lending volumes seen in April and May, it appears that the bottleneck in those approvals has now been cleared and the mortgage lending recovery is now in place.

MARKETS: (Data supplied by The Outsourced Marketing Department)

Given the continuing geopolitical and military unrest in the Ukraine,Gaza, Syria and Iraq, the equity markets remained remarkably sanguine in August, with most indices managing modest gains.

Here in the UK the FTSE100, benefiting from confirmation of economic progress, saw a gain of 1.33% on the month to close August at 6,819.8 and the wider FTSE250 moving up 2.52% to 15,885.72. The junior AIM market followed suit closing at 778.97 to record a gain of 1.35%.

Across the pond the Dow Jones index continued to power ahead, closing the month out at 17,098.45, a rise in the month of 3.23%, with the Nasdaq likewise gaining 4.82% to finish at 4,580.27. Confounding many market analysts, the broader S&P500 index closed at 2,003.37; above the
important 2,000 level for the first time ever.

The eurozone also saw gains, despite reports that GDP has fallen again in Germany and France and with the whole zone teetering on a deflationary spiral. All eyes are therefore on the European Central Bank as to how they will address the crisis. However, the Eurostoxx50 index still managed to
gain 1.82% in August, to close at 3,172.11.

Unfortunately, Japan spoilt the party as the Nikkei 225 lost 196 points (or 1.26%) closing out at 15,424.59 Foreign Exchange dealers followed the deliberations of Mark Carney, the Governor of the Bank of England carefully, trying to gauge the timing of any UK interest rate rise and deciding it will be later than previously expected, and therefore Sterling fell against the US Dollar by 1.19% to $1.66, but still managed to gain a little against the Euro to €1.27. The greenback itself also improved against the Euro, to finish August at $1.31

As last month, despite the global unrest, the price of oil remained subdued; with the benchmark Brent Crude price falling 3.36% lower to $102.46 a barrel. Likewise gold, the usual safe-haven asset in times of unrest, remained pretty flat, gaining only a modest 0.55% to $1,292.9 a troy ounce.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

SERVICE SECTOR SOARS

The latest Markit/CIPS services purchasing managers’ index (PMI) reports strong growth in the UK services sector, which currently represents 70% of the UK economy and which has driven the recent improvement in sentiment.

 Their July index was recorded at 59.1, up from the 57.7 recorded in June. Given that any score above 50 represents expansion, this is very good news for the economy as a whole.

Further encouraging news also came from the construction sector where, driven by an increase in home building to its highest level for 11 years, their index was recorded at 62.4.

At these levels, it is encouraging for the July-September quarter, where its is expected that the country’s Gross Domestic Product (GDP) will match the 0.8% growth achieved in both the first and the second quarter of 2014, should this positive tr end continue.

Commenting on these findings, Chris Williamson, Markit’s Chief Economist, said: “The July PMI showed the sector expanding at the fastest pace since November, as demand for services continued to increase at a rate rarely seen in the survey’s 18-year history.”

UK INFLATION DIPS TO 1.6%

More encouraging news came from the Office for National Statistics (ONS) in mid August, as they announced that the Consumer Prices Index (CPI) had dropped to 1.6% in July from the 1.9% recorded in the previous month. This continues the trend of below 2% inflation throughout 2014, much to the pleasur e of the Bank of England (BoE).

The ONS cited a fall in the price of clothing, probably as a result of retailers extending their sales period to attract consumers, and both non-alcoholic and alcoholic drinks, particularly spirits and New
World wines. There was also a reported drop in the prices of financial services, with some major banks dropping their overdraft rates. Food sales also saw a price fall overall. Food is now 0.4% cheaper than in the same month last year including syrups, jam, sugar, chocolate and confectionery.

Finally, petrol and diesel fuel also saw a decline in price. Currently the average price of a litre of petrol is £1.31, against a price of £1.35 seen at the same time last year.

Whilst good news for the economy, it is not such good news for savers, as they will now need to find a home for their non-ISA savings paying at least 2% (or 2.67% for higher-rate tax payers) to counter the effects of both tax and inflation on their savings.

Meanwhile, the wider Retail Prices Index (RPI) remained static at 2.5%. This is a more closely followed statistic, as many other prices are measured against it, including train fares. The Government has stated that the train operating companies can increase next year’s prices by the RPI rate calculated in July of each year, plus an average of 1%, with flexibility within that for some fares to rise a further 2%. Therefore, some commuters could see their tickets rise by up to 5.5%; well above
the current inflation rate.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Women Financial Advisors

Last year the number of women training to be advisers doubled over the years financial advice has traditionally been a male-dominated profession but Enable of Bishop's Stortford are pleased to see the number of women training to become advisers has increased sharply since 2011.

The ifs School of Finance reported that in 2010 women made up only 12 per cent of the total number of people studying for its diploma for financial advisers but by 2013 women account for 22 per cent of the number of people enrolled in the course. The ifs says it expects the proportion of women registering for the course to continue to increase and says this is evidence that financial advice is starting to appeal to people outside its traditional areas of recruitment.

Chief executive Anne Kiem says: “These figures show that the sector is becoming more appealing to people from different backgrounds. In the long term, an increasingly diverse and highly qualified workforce will ultimately be to the benefit of both the industry and the consumer seeking advice.”
AM Mortgage & Financial Services financial planning consultant Angela Melanophy says: “Having set up my own independent financial adviser practice nearly 15 years ago, with the specific service proposition of catering for female retail customers, it is especially pleasing to see these figures showing the increasing diversity of the sector.”

Enables IFA’s in Bishop’s Stortford know that the provision of independent financial advice in the UK is still dominated by men and that is surprising when it is obvious that around 50% of clients of financial advice firms are women but we aim to make sure women and men clients feel listened to rather than be talked at when they seek our clear, understandable financial advice.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

What about pension options for women?

Enable’s Independent Financial Advisors inBishop’s Stortford have been surprised by a recent survey that suggests that, “Women are less likely to make informed decisions about their retirement due to a lack of understanding and disinterest in seeking advice”. One of the big retirement solutions organisations MGM who specialises in income retirement solutions and offer a flexible income annuity and an enhanced annuity, with these products holding a 16.58 per cent and 4.29 per cent market share respectively recently published their study. The research, which was collected from the views of over 2,000 men and women over 55, suggests that only 40 per cent of unretired women aged 55 and over said they would value expert financial advice at retirement, compared to 52 per cent of men. The study also reveals that women are worse at predicting how long they will live. Women approaching retirement age underestimated their life expectancy by 10 years, compared to 5 years for men.

 Shockingly “Nearly half of the women surveyed also admitted to having no knowledge of retirement products and services, while just 34 per cent of men said they were unaware of their options”.

As a result the study concludes that women will be “hardest hit” by the Budget reforms, which place a greater onus on individuals in making decisions about their retirement options. Andrew Tully a pensions specialist said in response: “The recent reforms have given retirees more freedom and increased their choices, but this means decisions are more complex so understanding the options available is more important than ever.” Enables IFA’s are more than happy to talk to women about their financial options before during and after retirement.

 Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Is Help to Buy Helping?

Enable’s IFA’s in Bishop’s Stortford wonder where the Help to Buy scheme will lead as it is having more and more of an influence on the housing market. Recent treasury figures reveal that the scheme has been responsible for 6.6 per cent of all house purchase transactions since April 2013 - up from 4 per cent in May.

Some 29,829 new-build homes have been bought through the equity loan scheme and a further 18,564 properties have been acquired by a mortgage guarantee through Help to Buy mortgage guarantee scheme, which launched last October. First-time buyers make up the vast majority of transactions through Help to Buy, with 85 per cent of Help to Buy 1 and 85 per cent of Help to Buy 2 borrowers purchasing their first home using the schemes.

Help to Buy was the flagship policy of last year’s Budget and aims to boost the availability of 95 per cent loan to value mortgages. The scheme works in two parts; the first part came into effect in April as a shared equity scheme for new build homes. The second part, a £12bn mortgage indemnity scheme with the potential to support up to £130bn of lending, which was launched by Mortgage Strategy in February last year, came into force in October for all properties worth up to £600,000.

Chancellor George Osborne says: “It’s great to see that nearly 40,000 first-time buyers have been helped onto the housing ladder by the Help to Buy scheme. Importantly, Help to Buy is also driving a big increase in house building in Britain, boosting the construction industry and increasing housing supply.” Enable’s IFA’s are always pleased to see schemes that help first time buyers to get their feet on the housing ladder but what is the scheme overall doing to house prices?

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE