Finance Matters

Posts Tagged ‘Scotland’

The latest figures from the Land Registry show that house prices fell by 1.3 per cent in England and Wales in 2011, with the average property costing £160,384 in December.

Prices remained stable at the end of the year, with no change between November and December 2011.

The only place in England and Wales where house prices increased in December was London, where they rose by 0.8 per cent to an average of £345,298.

Over the year, property prices have increased by 2.8 per cent in the capital with estate agents reporting an increase in buyers from overseas who are exiting countries involved in the eurozone crisis, including Greece, Italy and Spain, in order to finder a safer place to invest.

Hartlepool recorded the biggest fall in property values in 2011, with an annual decline of 17.5 per cent.

For the north-east as a whole, house prices fell 7.1 per cent year-on-year in December 2011, more than any other region.

In the north-east the average house cost £99,000 at the end of the year.

The Land Registry also reported a fall in the number of completed sales in 2011.

Meanwhile, a survey by estate agent Rightmove suggests that 60 per cent of people who are moving house believe it is a buyers’ market, while just 13 per cent believe the balance of power is in sellers’ hands.

People in Scotland are most likely to perceive the housing market in this way and Londoners are the least likely.

Miles Shipside, director of Rightmove, said: “While parts of the stock-starved South, and London in particular, are feeling relatively bullish about prices, the turmoil of the last few years has wreaked havoc in parts of the buyer-blocked North.”

Rightmove’s ‘Consumer Confidence Survey’ was based on 32,111 online responses in January 2012.

Car insurance premiums increased in 2011, despite a fall in the third quarter of the year, the AA reports.

Based on its ‘Shoparound’ price index, which takes the average of the three cheapest quotes from several insurance providers, the AA says that premiums have increased by 15.3% compared with a year ago.

The average comprehensive cover has increased by 5.4 per cent to £971.40, compared with £921.38 in October 2011.

However in Scotland the shop around premium for comprehensive cover is £587, making it the cheapest place in Britain for car insurance.

In contrast, the average premium in north-west England is £1,615, which is even more expensive than London where the average premium is £1,120.

Young drivers are worst affected by the price increase and some insurers have stopped insuring drivers under the age of 21 altogether.

Premiums for young male drivers under the age of 22 increased by 15 per cent to £3,163 in 2011, compared with 2010.

Earlier this month the AA welcomed a report by the House of Commons Transport Committee into the rising cost car insurance.

The report suggested that car insurance premiums are being driven up by the compensation culture in which the number of personal injury claims has soared.

MPs are calling for motorists to have to face medical tests to prove that an accident has caused whiplash injuries.

Simon Douglas, director of AA Insurances said: “A claims culture has developed to the extent that it has become accepted that if another vehicle hits your car, you should make an injury claim.

“That’s regardless of how serious the injury is, or even if no injury has actually been suffered.

“The Transport Committee has clearly recognised that this has driven up premiums for everyone.”

Mortgage lender the Halifax claims that house prices fell by 1.3 per cent last year to an average of £160,063, their lowest level since July 2009.

According to the Halifax House Price Index, house prices fell 0.9 per cent in December, compared with the previous month.

Although prices rose in the third quarter of 2010, they fell by 0.1 per cent in the fourth quarter, offsetting the earlier quarter’s increase.

The bank expects prices to be stable throughout 2012 unless the economy falls into another recession.

The report contradicts earlier figures from Nationwide, which suggested that house prices rose by 1 per cent in 2011.

Property prices have plummeted since the onset of the credit crunch, with banks and building societies exercising extreme caution over lending, making mortgages very difficult to obtain, especially for first-time buyers.

Recent research by property valuation website Zoopla suggests that some regions have fared significantly better than others when it comes to property prices.

Zoopla recorded an overall fall in UK house prices last year, but an increase of nearly 7 per cent in Scotland, where the average house now costs £164,844.

Zoopla’s research suggests the average house price in Britain is now £221,331, significantly higher than the Halifax’s figure of £160,063.

According to Zoopla the average price in England fell 0.75 per cent in 2011, to £228,926, whilst the average price in Wales fell 0.1 per cent to £153,826, compared with 2010.

Zoopla also reported a widening of the north/south divide in England, with house prices rising in London and the south-east, but falling in the north.

It suggests the average house price in London, where demand for property is high, increased 2.3 per cent last year to £416,890, while prices fell 5.8 per cent in north-east England to £156,659.

Mortgage lending in Scotland rose by 8 per cent in the third quarter, with the number of loans increasing to 12,400, 900 more than in the previous quarter.

However, the rate of growth was much lower than for the UK as a whole, where mortgage lending increased by 16 per cent.

The data, from the Council of Mortgage Lenders Scotland, also revealed a 7 per cent increase in the number of loans advanced to first-time buyers in Scotland in the third quarter, to 4,600.

In terms of value, loans to first time buyers in Scotland grew 10 per cent compared with the second quarter, to £429m.

Again, this represents a significantly slower rate of growth than for the UK as a whole, where loans to first time buyers increased 13% by volume and 16% by value.

Kennedy Foster, policy consultant at CML Scotland, said: “The uncertain economic outlook and low levels of consumer confidence will likely result in a continuing constrained mortgage market in Scotland as in the UK in general.”

New figures released by the British Bankers Association (BBA) suggest that although mortgage lending is increasing, the market is still subdued, with prospective house buyers remaining cautious due to the current economic environment.

For October 2011, the BBA recorded gross mortgage lending of £8 billion, an increase of four per cent compared with October 2010.

The average value of a mortgage remained stable in October compared with the previous year, at around £145,000, but mortgage approvals were 16 per cent higher compared with the previous year.

BBA’s statistics director David Dooks said that the mortgage market “remains subdued and demand for unsecured borrowing is slow, reflecting householders’ caution in the current economic environment.”

New figures from Sainsbury’s Bank suggest that nearly two million credit card holders intend to switch providers over the next year, when their 0 per cent balance transfer offer expires.

A further 900,000 card holders will switch when their 0 per cent purchase deal expires, according to the bank’s latest research.

After the introductory offer on these cards ends, the percentage rate charge rises to 18.2 per cent on average while the APR on new purchases rises to around 18 per cent, so it’s hardly surprising that customers chose to move their business elsewhere.

There are several cards offering a much more competitive rate including Sainsbury’s card at 6.9 per cent and Barclaycard at 7.9 per cent, while many customers are likely to take up a new 0 per cent balance transfer deal.

However, significantly fewer people will be using a credit card to pay for Christmas this year, according to new research by Legal & General.

Around a third of households paid for Christmas with credit cards last year, but this number is expected to drop to a fifth this year.

With increasing pressure on household incomes coming for all directions, a third of households are planning to spend less on gifts this year, according to the Money Mood survey of 1,000 adults.

Sixty-seven per cent said they had enough money put aside for Christmas, while in the London and West Midlands, just 60 per cent of people said they had enough money saved for the festive season.

People in the north of England are the best prepared, with 79 per cent saying they had saved enough money to pay for what they need, while in Wales and Scotland the figures fell to 72 per cent and 68 per cent respectively.