The cost of buying a home is at an all time low – state Halifax

Halifax stated this week that the average cost of buying a home has fallen to the lowest in 15 years. They state that a typical mortgage on a new home now costs an average of 25% of take-home pay, compared to a staggering 45% at the peak, before the credit crunch.

Lowering prices and lower interest rates they say are making buying a home much more affordable, with the greatest affordability being in parts of the UK where house prices have been affected the most, such as Northern Ireland. However in the South East, an average new home buyer will need to part with slightly more of their income, as lack of properties on the market, have kept prices much the same as before the credit crunch, and buyers are having to part with 32-35% of their income to finance their new home, which is still lower than 2007 when the average home buyer had to part with 56% of their income.

Buying a home is much cheaper than renting. If you are looking to buy your first home or would like to find out more about the mortgages we have on offer at Enable why not contact us on 01279 755950, our IFA's of Bishop's Stortford have access to the whole market place, and all of our fees are completely transparent.

Clamp down on companies offering ‘no win, no claim’ on PPI’s

PPI, Payment Protection Insurance has been big news, with companies normally offering personal injury and industrial injury jumping on the PPI bandwagon, left right and centre. However this week the government has announced that as from 2013 the legal ombudsman will be responsible for complaints, meaning that consumers who have been provided poor customer service could be awarded compensation of up to £30,000.

The companies offering to make claims for miss-sold payment protection insurance, take a percentage of the compensation they receive on behalf of their customers, usually on a ‘no win, no claim’ basis, however their have been several claims that these companies have been asking for money up front and that they have been making false claims to customers.

The Ministry of Justice, MoJ’s annual report from 2011-2012, stated that it had cancelled or warned 400 claims firms in the year to March 2012, and that a staggering 93% of the complaints were about financial claims firms.

The new changes in 2013, which will be enforced by the CMRU, Claims Management Regulation Unit, will change the way in which these companies are regulated, getting rid of bad practice within the industry and protecting consumers. This is potentially great news for consumers.

Increasing wealth tax, will it drive out the rich?

There has been much talk this week about the UK economy being hampered if the coalition insists in pushing up tax for the rich, although it could be argued that most rich are already contributing far more than other people to the country.

Hollande, France’s new socialist President has also taken the same tact, to increase tax on the rich, which has met fierce opposition. But the question remains, although we have offered to lay out the ‘red carpet’ to France’s super rich, are we as a country not driving out the rich too, but just in a lesser degree, as we have already seen several hedge funds moving abroad.

George Osborne, Chancellor expressed his concerns over the new plans during his visit to Sunderland, where he stated:  "I am clear that the wealthy should pay more, which is why in the recent budget I increased the tax on very expensive property transactions. But we also have to be careful as a country we don't drive away the wealth creators and the businesses that are going to lead our economic recovery."

Nick Clegg has already agreed to cut the top tax rate from 50p to 45p and has since indicated that he intends to increase wealth tax, and we will see no more increase on income tax in the UK for the time being. The coalition sentiment is that by tax the richest in the country, with it’s proposed tax on homes of £2 million and over would help the country pay off it’s deficit and improve the economic situation for the long term. We will have to wait until September to find out what the new proposed changes are going to be at their party conference.  

NHS tries to generate funds by selling our health system abroad

News this week that the NHS ‘brand’ could be sold abroad attracted immediate criticism from the Patients Association, who are concerned that with an already stretched health system, could result in specialist hospitals concentrating on getting money from abroad rather than concentrating on its UK customers.

NHS trusts, with world-wide reputation, such as Great Ormond Street, could establish overseas clinics, increasing the revenue generated for the NHS.

Anne Milton, the Health Minster stated: "This is good news for NHS patients, who will get better services at their local hospital as a result of the work the NHS is doing abroad and the extra investment that will generate," she said.

"This is also good news for the economy, which will benefit from the extra jobs and revenue created by our highly successful life sciences industries as they trade more across the globe.

"The NHS has a world class reputation and this exciting development will make the most of that to deliver real benefits for both patients and taxpayers."

However the proof is in the pudding, and it will be interesting to see whether tax payers will appreciate sending our most valuable specialist service abroad, and whether as the Health minister states will increase jobs and boost the economy.

Public Pensions – Armed forces forced to retire 5 years later…

News this week that Armed forces could see their pension age rise from 55 to 60 under new government plans, has caused concerns to army personnel. 

The proposed changes will affect all service personnel under the age of 45, this is part of the government shake up to reduce the cost of public pensions.

Currently the armed forces have two main pension sections, for those who started between 1975 and 2005 and those who joined after that date. However in both sections, the retirement age was 55.

The government has stated that pension rights accrued under the exiting schemes will be protected, and the unique early retirement feature of the scheme will also remain. This is in the form of a lower level pension, and a lump sum is paid to service personnel with at least 18 years service, aged 40 or over. The length of time in service will rise to 20 years.

David Marsh secretary of the FPS stated: "This will mainly affect officers who tend to join after university rather than the other ranks who join about the age of 20," said David Marsh, pensions secretary of the FPS.

However the rest of the public sector pension ages are going to rise from 65 to 68, in line with an increased life expectancy. 

If you are in the armed forces and are concerned about the amount of pensions you will receive then get in touch with one of our IFA's. 

Which? states 'free' banking doesn't exist…

Which? the consumer group states that there are still large variations in the cost of current account charging to consumers, and the idea of ‘free’ doesn’t exist.

In its latest analysis of some of the main banks in the UK, it stated that the UK banking system ‘shatters the myth’ of free banking. Which? states the cost of going overdrawn without permission for two days could cost customers as much as between £120-£900 per annum.

However the British banking system have retaliated stating that the report is not correct as many customers could still access free banking in the UK – well as long as they don’t go overdrawn.

Which? chief executive Peter Vicary-Smith stated: "When some people are paying up to £900 a year in bank charges it completely shatters the myth that banking is free."

He added: "It's a disgrace that the very people who bailed out the banks are being asked to pay more for the most basic accounts, while the industry continues to be rocked by scandals like PPI mis-selling, Libor rate-rigging and IT failures.

"Banks must be far more transparent about their fees and charges so that people can clearly see what they already pay."

If you are unsure about your financial situation why not get in touch, we will be able to give you a review of your financial circumstances. 

So what's really happening on the job front...

The Office for National Statistics (ONS) released data this month that showed the UK unemployment level falling to 2.58 million (a reduction of 61,000 people) in the three months to May 2012. This represents a rate of 8.1% against a figure of 8.3% reported in the previous quarter.

Details reveal that the number of people now in employment rose by 181,000 to 29.35 million and, encouragingly, unemployment among 16-24 year olds fell to 1.02 million, a reduction of 10,000.

Self-employed people (both full and part time) rose by 32,000, which was an increase of 0.8% on the quarter and represented an increase of 166,000 to 4.16 million, or 4.2%, compared to the same period a year ago.

On the negative side, the number of people who have been unemployed for more than two years increased by 18,000 to a total of 441,000. This is a 15 year high. Also those claiming Jobseekers Allowance increased by 6,100 to a total of 1.6 million.

Regionally, the picture was mixed, with about 50% showing negative figures. An example of this is Wales, which saw unemployment increase from 8.8% to 9%, and Yorkshire and Humber, which saw unemployment rise from 9.3% to 9.7%.

Whilst Scotland saw their rate fall by 0.2% to 8% and the North East’s unemployment rate fell from 11.2% to 10.9%, the latter remains the region with the highest unemployment rate in the UK. The South West was the best region, reporting an unemployment rate of just 5.9%.

Commenting on these figures, Chris Grayling, the Employment Minister, said that unemployment was: “still much too high.”

He went on to say: “But, I’m at least encouraged, in what are difficult times economically, that we are seeing improvements across the board.”

Adding further encouraging prospects, the forthcoming London 2012 Olympics should further boost the short-term employment picture.

A spokesman for Commerzbank, Peter Dixon, stated that it was: “entirely possible that there will be a temporary boost due to the Olympics, possible that there will be more to come, but if this is Olympic-related temporary hiring, it is likely to be unwound again later in the year.”