Mortgage approvals reach a record low
The Bank of England yesterday released figures confirming the slowdown in the UK mortgage market continues. It said the number of new mortgages approved for house purchases in March fell to a record low of 64,000, down from 72,000 the previous month.
This was the lowest level since current records began in January 1999, and was down 44% on the figure for the same month in 2007. However, credit card and other lending increased in March from February.
The weakening market due to the global credit crunch has caused lenders to put up prices on mortgages and withdraw mortgage deals, especially for those unable to put down a significant deposit, in recent months due to them being more cautious.
Mortgage brokers are warning significant number of lenders have just pulled out of the market completely including some of the big lender groups that have actually got access to funds,
Off the mortgages that are being two-thirds now to the top five lenders compared with 56% this time last year which will likely lead to higher cost to customers due to lack of competition.
House prices
In the UK, property prices have also started to dip during 2008, according to various housing surveys some warning they could drop by as much as 30%.
“The news that mortgage approvals dropped to a record low of 64,000 is hardly surprising given that lenders have been aggressively scaling back on the provision of finance to home buyers,” said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics).
The Bank of England also reported a drop in loans approved for re-mortgaging, down 11,000 in March from the previous month at 98,000, and for other purposes such as buy-to-let, down 6,000 at 57,000.
Net lending secured on homes was £6.9bn and led to another monthly fall in the annual growth rate, down from 9.4% in February to 9.1% in March.
Lenders much more cautious
The figures come a week after the British Bankers’ Association (BBA) said mortgage approvals for house purchases in March were down 46% on the same period in 2007, the lowest monthly figure since September 1997.
In an attempt to ease banking concerns and help them operate during a global credit squeeze, the Bank of England announced a plan that would let lenders swap potentially risky mortgage debts for secure government bonds.
Lenders how ever have continued to withdraw mortgage offers for new customers, with Nationwide the latest to do so as it announced that, from 1 May, all but two mortgages would require a 10% deposit.
The Bank of England’s Special Liquidity Scheme, if it works, might stop things getting much worse. But many lenders will remain cautious until the situation improves
However the Royal Bank of Scotland (RBS), including NatWest, has moved to buck the trend. From Wednesday, it will cut all its fixed and tracker rate mortgages by between 0.1% and 0.3% for new customers buying directly from the bank’s branches, and for existing customers switching deals.
The bigger rate cuts are for those who offer a bigger deposit, but RBS is also launching a cash back deal for first-time buyers as it tries to increase its share in the mortgage market.
With mortgage deals being so tight if your planing on getting a mortgage or re-mortgage it’s more important than ever to ensure your credit file is completely accurate as the tiniest error could lead in an application being turned or an increased APR costing thousands or even tens of thousands over the term of the loan.
Sign up here for your free Experian credit report today.
Why you should obtain a copy of your credit report
It’s a simple fact some credit reports will contain errors due to the sheer amount of data now held about us all.
You may already be one thousands of us who in the past have found errors in our bank and credit card and other financial statements, some lenders do make mistakes from time to time due to simple human error.
When they report your balances and limits to the credit agencies each month, these errors can be transferred as the agencies have no way of checking the accuracy of each record – the data belongs to lenders, not them, they simply hold it and report it errors included.
For this reason you have a statutory right to have credit report errors corrected quickly and free of charge, so it makes sense to check your credit report regularly especially in the period of financial instability. Unless the information held about you is correct, you may be declined credit altogether or may pay more in interest on credit card’s loans and mortgages and as you know a higher interest rate can cost you thousands even tens of thousands over the term of your mortgage.
Checking your credit report regularly is also important tool in the fight against identity theft Britain’s fastest growing white collar crime. You can see if there are any searches or accounts that you don’t recognise as yours, and identify quickly if someone has been applying for credit in your name.
If you’ve already been declined credit you can check your credit report to see the information that a lender would see. Your credit report and the application form you submit are the main sources of information that a lender will base their decision upon.
Credit checks are also regularly performed when you apply to rent a house, flat and, in some cases, by employers when it’s required by law before giving you a new job.
Services like the Credit Expert from Experian will monitor your file and alert you of any suspicious activity that may arise, you can sign up to a 30 Day Free Trial of Credit Expert today by clicking here.
What is a credit report and how does it affect me?
Many lenders will search at least one credit reference agency’s when you apply for credit. They search your current address, and sometimes your previous address depending on how long you have been there for information relating to you. As each credit reference agency has different customers, your credit report will differ slightly , depending on which credit reference agency is searched.
Most credit decisions are made using a process know as credit scoring. Credit scoring is considered the fairest way of assessing an application for credit, because it is unbiased and treats everyone in the same way using a standard set of rules. Tests have shown that credit scores based on a search of your credit report can assess credit applications much better than human judgment can. They also take account of the fact that credit reports vary slightly from different agencies. If you wish to see your whats your credit report, Experian the UK’s number one credit reference agency provide a service know as Credit Expert which lets you view a copy of your credit report instantly online free for 30 days. And for a small fee of £5.95 they will also calculate this information into you national credit score.
Alternatively you can write to the credit reference agency’s including a fee of £2 and request a statutory copy of the information held on you which should be dispatched within 7 working days this however will only include the information held on you not you credit score.
Your credit report section by section
Your payment history – Commonly shows balances or repayment information from credit card and store card accounts, any loans you may have, mobile phone accounts and some bank accounts. Information from these are reported monthly to the credit reference agency.
The electoral roll – Quite simply displays any information about you held on the electoral roll.
Court information – This section will show insolvency records and any CCJ(County court Judgments) Registered against you.
Other Information – The final section of the report may contain gone away warnings and fraud warnings as well as the information on any company’s that carried out a check of your file.
As many lenders share your information with more than one credit reference agency, there’s little difference in your credit rating, no matter which credit reference agency is used. Each of the three credit reference agencies usually has enough information about you for a lender to make a well informed decision on whether its a good idea to offer you credit or there service.
How to Obtain Your Statutory Credit Report
It is your right to be able to obtain a copy of your statutory credit report by post from any of the credit reference agencies below.
Send a cheque or postal order for £2, and your name, full current and any previous address, and your date of birth to:
Callcredit Ltd Consumer Services Team, PO Box 491 Leeds LS3 1WZ
Experian Ltd Consumer Help Service PO Box 8000 Nottingham NG80 7WF
Equifax Credit Report Advice Centre PO Box 1140 Bradford BD1 5US
A copy of your statutory credit report should then be sent to you within 7 working days in the post.
If you want to dispute information on a credit report you recieve (You should first try to sort the problem out with the lender, were appropriate), If this fails you can write to the same address detailing all the informationt that is wrong and request your file be amended.
200 Percent Increase in Phishing Incidents During January to March 2008
APACS, the UK payments association, has published figures showing a 200 percent increase in the number of phishing attacks in the UK. During the period January to March 2008 there were a record 10,000 reported incidents.
Phishing is the name given to false emails that claim to be from your bank or other financial institutions but are actually sent to you by fraudsters. These emails typically tell you to click on a link that takes you to a fake website identical to the one you would expect to see. You are usually then asked to verify or update your personal security information but, by doing so, you are actually giving your information to the fraudster who has created the fake website. The fraudster then uses the details to access your real online bank account and take your money.
Number of reported phishing incidents* targeted against UK banks and building societies Q1 2006 – Q1 2008
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
|
|
2006 |
2,369 |
2,738 |
3,967 |
5,102 |
14,156 |
|
2007 |
3,394 |
3,830 |
8,931 |
9,642 |
25,797 |
|
2008 |
10,235 |
- |
- |
- |
- |
A typical phishing incident, involves thousands or even million’s of emails are sent out blindly by fraudsters, in the hope of trying to dupe people into clicking on a link that will send them to a fake website. The criminals’ objective is to fool people into thinking it is a genuine site so they will enter their online banking security information.
Sandra Quinn, director of communications at APACS, says:
“Although online banking fraud losses fell last year the fraudsters clearly aren’t giving up. Phishing scams are continuing to rise and they are becoming ever more sophisticated, which is why we want to remind people to remain wise to them. The advice is quite simple: just remember that your bank will never send you emails asking you to disclose PIN numbers, login details or complete passwords – if you receive an email of this nature you should delete it. If you think your details have been compromised you should contact your bank immediately.”
APACS research shows that although the number of people either deleting or taking no action when receiving a phishing email has increased from 75% in 2006 to 82% last year, there are still nearly one in five people who don’t follow these common sense precautions. Also, although 93% of people have anti-virus software on their PC, almost one in three people (29%) don’t have any anti-spyware software on their computer.
To avoid phishing scams, we advise you:
- Always be suspicious of unsolicited emails that claim to be from your bank; delete any phishing emails that you receive your bank will never send an email asking for sensitive account information.
- Never give your login details, PINs or passwords in full by email – banks will never request these in this way as email is not secure way to transmit account data online.
- Always access your internet bank account by typing your bank’s web address directly into the address bar on your web browser;
- Ensure that there is a locked padlock or unbroken key in the bottom right of your browser window when accessing your bank’s website. The beginning of the bank’s internet address will also change from ‘http’ to ‘https’ when a secure connection is made.
- Make sure PCs you use for any online transactions are equipped with up-to-date security and virus protection.
- Take extra care when using an internet cafe or public computer for online banking if possible avoid using a public network when making financial transactions online.
- Phishing emails can be reported directly to most banks via their website or to APACS at reports@banksafeonline.org.uk.
HSBC loses disk with private details of 370,000 customers
The disk went missing in February, three months after Paul Gray resigned as chairman of Revenue & Customs over the loss in the post of two child benefit information disks, which contained data on every child in Britain and the bank and national insurance details of their parents.
A spokesman for HSBC said an internal inquiry began as soon as the bank was told the disk had not arrived at its destination.
But Royal Mail said it had not been contacted about the lost disk. “If HSBC requests it, we will of course help with any investigation,” a spokesman said.
The City regulator, the Financial Services Authority, was informed only last week, HSBC admitted.
The bank said the data loss had come about because of a “unique set of circumstances”, blaming the failure of a secure encrypted digital link between HSBC’s Southampton office and reinsurer Swiss Re in Folkestone, Kent. It said the information had been required urgently by Swiss Re and, when the secure link failed, it had been burned on to a disk and put in the Royal Mail’s business post. No courier service was involved, HSBC said.
The FSA has signalled its determination to clamp down on firms not taking reasonable care of customer data. It has imposed heavy fines on companies failing to own up to breaches in data security.
Last December the FSA fined Norwich Union £1.26m for lax security which allowed fraudsters to target life insurance policyholders. The regulator criticised the insurer for failing to address deficiencies swiftly.
