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Low interest rates good news for some

Thursday, August 11th, 2011

City experts were split over the effects of the latest inflation figures released by the Bank of England (BoE) but at least in the short term homeowners can expect to see little change in their mortgage interest rates. How and where savers can find a safe haven for their money, however, becomes more complicated by the day.

Inflation and growth overestimated

The report suggested that the BoE’s prediction for growth in the economy and the inflation rate may both have been too high and they now forecast both to be less than they first thought. Following on from the announcement of the USA’s federal bank’s assumption that low interest rates will be around for at least the next two years the BoE seem to be suggesting the same thing in the UK.

Borrowers will benefit

This is good news for homeowners who have held mortgages for some years and have benefited from the low interest rates that currently are attached to their mortgage. It is also good news for those looking for a home insurance quote on a new home if they have the wherewithal to find the huge deposits that lenders are now looking for. It is not such good news for savers who seem to be running out of options for safe places to put their money.

Riots will make investors think again

The riots in London and other Provincial cities will have caused many homeowners to make household insurance claims; the same will apply to landlords and property investors. The letting and housing sector in London has been booming for the last 12 months and much of the investment in the housing market has come from savers who have been looking for a good return on their cash.

Banks have only offered miserly interest rates for over two years now and the uncertainty of the currency exchanges has ruled them out for all but the boldest of investors. Gold has been a safe haven in times of trouble down the ages but the current price of gold means that opportunity has now passed. That left property and the stock markets as the best two choices for the average investor. The astounding fall in share prices across the globe last week may have decided many global investors to turn their wallets towards the London property markets, the disturbances of the last four days will have ensured that idea is put on the back burner for many, and investors and savers across the world must be wondering just where is a safe place for their money.

Tags: Home Insurance Quote, Homeowners, Mortgage, property market
Posted in Home Insurance | No Comments »

Wallpaper or paint?

Tuesday, June 28th, 2011

With many homeowners accepting that a proposed house move is now out of the question because of the current stagnation in the property market, they are turning instead to improving their current home to make it more suitable to their needs.

Fresh outlook created quite easily

It is surprising what a coat of paint or a roll of new wallpaper can do to a house and a room facelift will often leave homeowners wondering why they wanted to leave in the first place. It doesn’t have to cost a fortune and it allows homeowners to experiment with new ideas, although it is always best to check ones home owner insurance if the new ideas are quite radical.

Wallpaper makes a big impact

Wallpaper is generally considered more aesthetic than paint. It adds so much character to a room and a Victorian style house without wallpaper would be just unimaginable. It has a nice and warm texture that is incomparable. However, as it is so characteristic it can dominate the room and sometimes it may be difficult to arrange or change your furniture, accessories or even pictures. Remember though that wallpaper is not strongly associated with a contemporary look so it may not be considered “the in thing” at the moment. It does add value to your home but may not be everyone’s cup of tea.

Paint is an easy option

Paint may not be as aesthetically strong or pleasing as wallpaper but simple wall decoration is more flexible and easier for interior coordination. This is why paint is the most popular and practical wall treatment at the moment. If you would like some texture you can apply textured paint or faux finishes. Many decorators will choose to go with an “accent wall” by painting one of the walls in the room a different colour. You can even have a mural wall or two if you wish.

Which method is the most economical?

Wallpaper is more costly and time consuming to apply than paint. However, it may prove more cost effective in the long run as once applied it should last up to 10 to 15 years, while paint may need more frequent applications. Wallpaper application must be precise as the patterns need to match. It can be easily soiled or damaged and may peel in humid conditions. Once damaged it can be costly to replace unless the accident is covered by household insurance.

Background or forefront?

With paint it is easy to hide imperfections and if part of the wall is soiled or damaged it can be quickly repainted and fixed. You can change colours as you like, it can give your room an instant makeover. The important point to remember is that in many cases the purpose of paint is to be almost invisible while the purpose of wallpaper at all times is to be on display.

Tags: Home Insurance, interior decor, property market, wallpaper
Posted in DIY | No Comments »

Adam Posen the right questions

Tuesday, March 29th, 2011

As homeowners across the UK try and digest what the latest budget offering from George Osborne will do to their domestic economy situation, one man who could have an even greater effect on their finances has better news to offer.

Stable base rate

As homeowners nervously calculate their monthly outgoings, from home insurance to home delivered fast food, the one constant they have had over the last two years has been a steady mortgage rate. It has been, for many people the difference between hanging on to their home and applying to join a Council house waiting list. The lowest ever bank rate since its inception in 1694 of 0.05 has kept the lid on the recession, it has been the difference in keeping home repossessions down to much lower figures than they were in other downturns over the last generation.

Inflationary pressures

The rate is now under more pressure than at any time in those two years. Inflation is now racing ahead at over 4% and with the promise of even dearer fuel and energy charges still in the aptly named pipeline, the hawks in the Bank of England Finance Committee are circling and screeching ever more loudly for an increase in the base rate.

Any increase in the base rate would be seized upon by bankers and mortgage providers alike. Within minutes of an increase being announced mortgage rates will be on the way up and no-one can help the poor old homeowner then.

Cometh the hour…

Well perhaps one man can. Adam Posen is a member of the Bank of England Finance Committee and he is far from convinced that a rise in interest rates is necessary. Indeed he sees several reasons why they should stay as they are and fortunately for many he is not shy about making them public. Posen believes that once the effect of fuel and energy prices have worked there way through the system, inflation will fall below the stated target of 2% by next year.

Time will tell

He says that the wait and see approach adopted by the majority of the committee will show that an increase in wages and wage demands which would really put pressure on the inflation pedal will not materialise. He believes the job cuts coming through will weaken Trade Unions enough to quell actions from the shop floor to back up wage demands. If the banker is right then homeowners across the country can breathe just a little easier and still afford to look around for good home insurance offers and perhaps even splash out on the occasional take away meal.

Tags: banks, Base Rate, Home Insurance, property market
Posted in Home Insurance | No Comments »

Negative outlook for a few more years in store for some

Friday, September 3rd, 2010

Homeowners in Huddersfield who find themselves caught in the negative equity trap are looking at a long wait before they will see a profit on their homes. Estate agents in the area have agreed with the figures from the National Housing Federation; who say that those homebuyers who bought when the housing boom was at its peak in 2007 will have to wait at least four years before they turn the corner.

Negative equity occurs when the value of a property falls below the value of the loan that was used to buy it. Independent forecasts show that people who bought at the height of the boom paid an average of £216,800, it is predicted that this average will rise to £226,900 but not until 2014.

This picture is all too familiar to Paul Keighley, who is a partner at an estate agent in Huddersfield. He said “People in Huddersfield are in a similar situation. Anybody who bought at the peak in 2007 saw a 15% or 20% drop, so for them to get back into positive cash flow on their property it could take that long. It’s difficult to put a definite figure on how many people in the area are in that position. There are some good signs in that there are people who are waiting to move and repossessions seem to have slowed. Until the banks start lending to first time buyers at reasonable rates, it will be hard for the market to get going. The situation for those people is a minimum 10% deposit, but add to that legal and survey fees and arrangement fees for the lenders the cost could run into four figures in certain cases.”

The level of borrowing against the value of a house in Huddersfield is less than the national average. A property is not just a home it is also an investment which can be protected by household insurance. The figures which have been released will be dominated by properties in the south which could cause nervousness in some quarters, but in Huddersfield and surrounding areas homeowners look at things long term

Tags: household insurance, negative equity, property market, tenants
Posted in Home Insurance, Saving Money | No Comments »