Almost a quarter of house buyers are first time buyers
The percentage of homes being bought by first time buyers rose for the third month in a row in January to a high of 23% since last May – this comes after the first time buyer market slumped to a 3 year low last Autumn with many would be buyers trapped in the rental sector.
This mini boom is not expected to last too long as the two year end on stamp duty is ending next month, and returns the threshold for first time buyers back to £125,000 down from the £250,000 it had been at.
The stamp duty amnesty had been a key factor for those trying to get on the property ladder and many corners have called on the Government to extend it. HSBC said around half of the loans taken out for homes over those two years would have been liable for stamp duty under normal circumstances.
NAEA president Wendy Evans-Scott said: “First-time buyers seem to be making the most of the stamp duty holiday before it comes to an end in March. The NAEA and other property specialists campaigned hard for the Government to introduce the tax exemption to support first-time buyers, and these latest figures certainly suggest that stamp duty is a key factor for those on tight budgets purchasing their first home.
The Council of Mortgage Lenders (CML) said earlier this week that first-time buyers rushing to complete deals helped boost mortgage lending to 10pc higher than a year ago during January. Mortgage calculators have played a big part in helping people manage their potential outgoings better over this time.
The number of house hunters decreased in January however, with 260 per branch down from 294 in December. Sales overall were up however but supplies of housing did fall. This is due to reluctant sellers with concerns over the economic outlook, difficulty obtaining a mortgage and worry about not getting the best deal available.
Ms Evans-Scott said: “Our latest figures show just how fragile the housing market can be; therefore any efforts to prevent unsustainable property bubbles and unwanted house price deflation are to be welcomed.
“At the same time the Government also needs to take into consideration that requiring aspiring buyers to have even larger deposits than are currently demanded risks excluding even more young people from the market.”
What you could buy if you didn’t have a mortgage
Image via flikr By wwarby
We all know that mortgages can be killers, tying us down for decades into the future and draining our wages every month. Nobody likes paying their mortgage, so just imagine what you could do without one. If mortgages were banished to the depths of hell and we never had to hear or say that word ever again, what would you do with the extra money? Emortgage Calculator has put together a list of things you might like to do if you could get rid of the best thing in your life.
With an extra two, three or four hundred pounds in your pocket every month, you could have an endless amount of fun. Holidays would probably be top of most people’s list. Of course, where you could go in the world depends on how much you pay on your mortgage, but any holiday without the burden of a mortgage hanging over you is a good holiday.
You’d have a little less steam to run off if you had one less payment to make, but you could go climbing up the mountainsides and rock faces in the Lake District. The natural beauty of this English countryside will undoubtedly take your mind off all of life’s little worries; it might even make you wish you didn’t have a house altogether and unearth a desire to live in the hills. There are no mortgages up there.
If, however, you actually love your home, you could make it even lovelier without a mortgage in your life. Perhaps you could add an extension, maybe even a games room or a surround sound, high-def, popcorn-filled cinema room (OK, maybe that’s getting a bit carried away, but you get the idea). Home improvements are normally pretty high up on most people’s wish lists, so redecorating a few rooms will bring a new freshness to your humble abode. Of course, without a mortgage, you might even be able to afford to pay for a decorator to come and do it for you.
Mortgages are widely considered to be a necessary evil. Everybody hates them but everybody needs them at some point in their lives. They can, of course, be avoided if you did actually want to go and live in the countryside, but you’d have to put up with the unsavoury British weather. In the meantime, we’ll just have to keep dreaming of a mortgage-free world.
How to save money when buying a house
Your home will be the biggest purchase of your life and with the current economic climate many first time buyers have been putting off buying a property.
However, although it is a very costly experience there are a number of ways which you can save money and make the whole experience more affordable.
When working out how much you can afford, it’s not just the purchase price of the house you have to take into consideration. There are a number of fees which you also have to pay and these include solicitors’ fees, survey costs and payments to the Land Registry.
Another expense is the Stamp Duty, which is a tax on purchasing any property that costs more than £125,000. However, there are a number of ways you can reduce this. Until 24 March 2012, first time buyers can purchase a home costing up to £250,000 without having to pay any Stamp Duty. In certain areas of the country which the government has named as “disadvantaged”, all buyers receive Disadvantaged Areas Relief which means you can purchase a property for up to £150,000 without paying Stamp Duty.
When that has all been taken into consideration, you should use a mortgage calculator to find out how much you can afford to spend on your new home. Before the credit crunch hit it was possible to get a 100% mortgage, meaning you could buy a home without having a deposit, but lenders are now unwilling to lend out this amount of money. However, there are 95% and 90% mortgages available, so if you have some money saved up you could afford to own your own home.
The various mortgage providers offer different rates, so it is important to shop around to ensure that you’re getting the best mortgage for your requirements to ensure you’re not spending more than you need to on buying your new home.
Shop around, shop wisely and save money!
Stay on the right side of the law and save money on car insurance
British motorists mindful of obeying the new Continuous Insurance Enforcement (CIE) legislation are being reminded to avoid falling into the financial pitfall of renewing automatically with the same insurer.
If bought via moneysupermarket, cheapest car insurance policies can cost an average of £333 less and those savings can be achieved simply by shopping around and switching providers at renewal time, which is something leisure drivers in particular should take into account to avoid paying over the odds.
CIE was introduced earlier this year in an attempt to reduce the number of uninsured drivers on the roads in the UK. The new law makes it illegal to own a vehicle without valid insurance unless it has been officially declared as being off the road.
Car owners may think that remaining loyal to one insurance company is the best way to get value for money, but findings from moneysupermarket suggest otherwise.
Over seven million drivers in Britain are wasting over £2.4 billion a year by sticking with the same insurer. Four per cent of people do so to comply with the rules and regulations of CIE, seven per cent make no effort whatsoever to see if they can save money and nine per cent are oblivious to the fact that they pay too much.
Pete Harrison, car insurance expert at moneysupermarket.com, has stressed the importance of being proactive in the search of cheaper cover.
He said: “Year-on-year, our research continues to show the importance of shopping around at renewal time as motorists could, and should, be saving themselves a packet!
“With the cost of living continuing to spiral, consumers are really feeling the pinch, so it is shocking many motorists are not using this opportunity to protect their hard earned cash by finding the best car insurance deal for their needs.
“The cost of motoring is continuing to increase with car insurance prices up on this time last year and fuel prices up to near record highs but drivers can help mitigate these costs by getting online and comparing policies to see where savings can be made.”
Harrison added: “Providers rely on driver apathy at renewal time; loyalty isn’t rewarded with a cheaper premium and drivers should do their homework to check whether they can find a better deal elsewhere.
“Even if you don’t think your quote can be beaten, it only takes a few minutes to make sure you really do have the best policy to suit your needs – and if not, switch!”
Smart Money Moves
Grow your savings! Image courtesy of kenny
If you have any spare money from 2010 (lucky you) consider investing it this year. Maybe by simply putting it into an ISA, or being a bit more daring and trading some stock! Planning your gift requests can be very handy. For example, your old MP3 player just doesn’t have enough storage for all your songs, so you ask for a new one for your birthday. A generous loved one complies with your request and you get a shiny new MP3 player, leaving you with an old, unwanted one, which you can E-bay.
While we’re on the e-bay train, why not go through your clutter and see what you can sell, be it books, dvds, cds, clothes or anything you think you can sell on-line.
If any appliances need to be changed this year, or you need a new car – think green and economical. An appliance that needs less electricity is going to cost you less, like wise a car that gets you more MPG is going to cost you less.
Create a budget and stick to it! Sounds simple, but its not easy. This one takes serious will power. It’s very easy to slip into the habit of thinking “it’s only £20, it won’t hurt” but it only takes a few “£20’s” to make a real dent in your finances over a few months.
Create an emergency fund and add to it if you already have one. These can prove invaluable if something expensive needs replacing or repairing and its essential to running your house or your daily life. In short save as much as you can, then your free to enjoy it and spend it as you wish when your finances are under control and looking more than healthy. As oppose to knee jerk spending when things go wrong.
Another final tip, use a mirror in your porch to stop birds nesting in it.
Monthly Thrills
I’ve recently been looking into switching mobile phone networks, and I have now become obsessed with trying to get as many minutes and texts for my money. It’s safe to say it is no longer about finding the right phone at the right price – Which I achieved a couple of weeks ago – I am compelled by my curiosity to see how far I can push it and what I can get for my money. This behaviour has no crossed into other aspects of my life and I have been looking into all of our monthly outgoings to see what we can do without, or things that we can get a better deal on. Here is a typical list of the things we (as in, everyone) pay out for each month:
- Mortgage / Rent
- Electric
- Gas
- Water
- Phone
- Broadband
- Mobile Phones
- TV License
- Cable TV
- Food
- Petrol /Diesel
- Council Tax
- Home Insurance
- Car Insurance
- Contents Insurance
I’m sure there are people out there who could add more to this list, however just at a quick glance you can see that is large amount of things to be paying for each month. The amount we pay each month will of course vary depending on the size of a family, home, lifestyle etc but despite all of these I am convinced there are ways to save money.
Mortgage
I am no mortgage expert but as always it will pay to do a little research, regardless of the stage your at with your mortgage. There are plenty of ‘cheap mortgage finders’ on-line which will track at the bank of England interest base rate, or are variable. If your keen on knowing what you’ve got going in and out each month then you should look for a tracker mortgage. However, once you have your mortgage, the key is to make sure there will be no penalties if you ever decide to switch it. Once you know you are free from any penalties you can take advantage of switching to other mortgage providers when they offer discounts or cash rewards. You may not be able to reduce your mortgage (if only!) but you can earn a bit of pocket money by moving it around. Martin Lewis at money saving expert has some fantastic knowledge and advice for mortgage seekers / holders.
Utilities
As with mortgages you can save by switching to cheaper gas and electric suppliers but that isn’t where the big savings can be made as they tend to all be as bad as each other. In terms of gas there a few easy things you can do to save; for example, loft and cavity wall insulation to keep heat in – which means reduced heating costs and how often the boiler needs to come on. Using the right size hob for the right size pan if you have a gas cooker, and even putting on a jumper instead of turning up the heating. Its easy to save with electricity: don’t leave anything on standby, only leave things turned on overnight that are essential i.e. fridge, freezer, telephone. Turn off the light when your finished in a room (how often my dad used to say this to me!) why use 4 lights when 1 one do? Regarding water bills, you won’t be able to switch supplier but you can monitor your usage – however this only pays off if your on a water metre. Things you can do to keep your water bills down include; showers instead of baths, brick in the toilet (a little old school), don’t use a hosepipe, chill water in a jug in the fridge – as oppose to leaving the tap running.
The key thing to remember when trying to save money on your utility bills is ‘Less is more’ – as in less use = more money you save.
Try this Fuel bills calculator to see how much you could save by switching suppliers
Insurance
For all types of insurance, again, it pays to shop around and when you get a renewal quote through, a company will often try to add another £50 or £100 on hoping that you won’t have chance to look anywhere else before the automatic renewal kicks in. So, whatever you do, don’t accept what they quote as the best offer and shop around and them challenge them to do better.
Go compare and money supermarket are great places to start with these types of things.
Taxes
You should check out my post about the end of the tax year to see what you can do to avoid paying too much on taxes. Things like council tax and TV license fees are unfortunately unavoidable and the only way to get a nice reduction on them is to declare yourself a student and get a university to provide you with proof! These things are unavoidable and have to be paid.
Luxuries
The other things on the list could be considered luxuries – I.e. mobile phones, broadband, food, petrol. While you can argue if some of these have become such a part of peoples lives that they can be considered essentials, is it really necessary that we use an iphone 4 to call home? or could a £20 pay as you go phone do the job just as well? Do we really need that 20Mb broadband if all we ever do is read the bbc news page and go on facebook? Do you need a branded breakfast cereal or item against an own brand product? could you walk or cycle some of your journeys? These are some useful questions that we could do to ask ourselves from time to time – Often we get into habits and don’t realise that we could save money by switching off the autopilot.
Its a bit late to make a new years resolution (and i’m not a big believer in them anyway), so lets make one together right now, to ask ourselves how we can save money in these areas, and any others you can think of.
I’d love to hear about your experiences and things you have tried, so feel free to comment as it will be useful to all my readers.
Dog Days!!
We recently bought a new dog which was a tough decision after our last and longest living, dog Maisy passed away last summer. Maisy had become part of the family, I’m sure we all have similar experiences of a dog, cat or some other family pet. The big factors around this decision were:
- Did we really want another dog, after Maisy
- Could I be bothered to walk a dog (yes, I’m no spring chicken!)
- Could we afford to keep a dog
'The Old Girl' A.K.A Maisy
I list these concerns in my perceived order of importance, and therefore how they might impact on our decision to get another dog, after all Maisy lived until she was the ripe old age of 16! If this dog lived for that long would we still befit enough to walk it every day like we did with Maisy. However, to my surprise, I got the order of importance all wrong and after looking into the costs of a dog it really opened my eyes! Maisy lived for a long time, and until her final months she did not need any sort of healthcare, or trips to the vets and so we never bothered with pet insurance or the like. But it is all so expensive, and now that I am semi-retired, we decided it is too expensive. I did have a good look around at different pet insurance providers and thought it would make a good post for anyone who does have a pet and is looking to cut the costs of keeping it as an alternative to giving it away. I’ll try to include some other useful suggestions and resources with the same aim.
There is a great number of places offering pet insurance; Direct Line, Sainsburys and RSPCA to name just a few you can also cut the cost of feeding your pet by searching on-line for ‘cheap pet food’ or similar. There is also a few really useful web based pet superstores, which you will find cheaper than retailers that have high street stores, as they do not have to pay the expected overheads that go with running a physical store.
However, even with all these useful sites and advice, I’m sorry to say my finances only just stretch to another family pet in these lean times, and to be honest my body isn’t pleased with me for letting it get pulled around by yet another dog!
The End of the Tax Year
Its the most wonderful time of the year….Yes its the end of the tax year, the time when businesses large or small and those of us that are self employed look to with an eye to avoiding paying unnecessary tax and try to save what they can for themselves.
You can save on your taxes
For those of us that are unsure about what the deadlines and tasks we have thrust upon us then a a quick visit to HM Revenue & Customs will point you in the right direction. There is a really useful list of things to help with your taxes and how to make sure your not paying more than you should. If you run a small business, your probably well up on what needs to be done at this time of year. Hopefully your well on top of things by now, otherwise – get a move one! Jill Insley from the Guardian has written a brilliant articleon end of year tax perks. There are many different ways of making your money work for you, and ultimately keep it in your pocket, and not the robbing treasury.
- Inheritance Tax
You can ‘gift’ up to £3000 a year to a loved one (i.e. spouse/partner) and keep the money in your family without having to pay tax on it. Furthermore, if you don’t ‘gift’ the full £3000 the remainder rolls over into the following year. This extra amount only lasts for that year however.
- Income tax
The same can apply with Income tax. provided your spouse/partner doesn’t go over the new tax threshold.
- ISA’s
Your money in an ISA if out of the tax mans reach – but benefits from a higher rate of interest versus regular savings.
These are just a few ways that you can not only keep what you earn, but make your money work for you.
If this post has arrived a little late for you to try these things this year, prepare yourself for this next time round and see how much you can save and make!
Where has the Budget Left You?
According to George Osborne, the recent budget is about reforming the economy and not about raising taxes. With that in mind, let’s reflect on how people perceive the aims of the latest budget and how it has, or will, affect their everyday lives.
Osbourne...George, not Ozzy
A big prediction of the budget is that unemployment is expected to peak this year, which is both good and bad. While large scale job losses may not be occurring as regularly as they have been there is no guarantee that unemployment will decrease towards the back end of the year and into 2012. Therefore, for those people who have lost their jobs as a result of the economic downturn are no better off, while those of us lucky enough to still have work, can breathe a small sigh of relief. If these predictions are accurate.
The thing everyone wants to know when it comes to the budget is; how is it going to affect me? Well personal tax allowance is set to rise by about £600 from £7,475 to £8,105 and there is no changes expected for alcohol and tobacco duties. Another point of contention is fuel duty, which has been cut by an astonishing 1p. Don’t hold back George! Perhaps the more meaningful point is that inflation based rises in fuel duty have been delayed until 2012 – by which time the budget will have made us all rich enough to drive to work again.
Some other major talking points about this years budget include:
- £250m to help first time buyers
- Mortgage interest scheme extended for a year
- Planning bodies to prioritise growth
- Funding of 40,000 new apprenticeships
- New single tier pension, equalling £140 per week
- Possibility of an automatic mechanism for future increases in stat pension age – to be regularly reviewed.
Are you better off after this years budget? Do you think this budget goes far enough to create a thriving economy? Feel free to comment below.