Mortgage Lending Continues To Slump
UK mortgage lending by the major banks has rapidly drooped, with figures showing approvals for house purchases 60% lower than a year ago, .
According to the British Bankers’ Association (BBA) the number of mortgage approvals for house purchases fell by 14% in November to a new low of 17,773.
People remain worried about the effect of the slowing economy on their personal finances, the BBA said.
As a result, the amount consumers are borrowing also remained subdued.
The number of people re-mortgaging but staying in their existing home also dipped significantly in November, with many homeowners unable to find a better deal to switch to.
This fell to 29,798, almost half of the 52,452 of the previous month, and the lowest for eight years.
Mortgage lenders withdrew a number of deals from the market and assessed what they were offering in November after the shock 1.5 percentage point cut in interest rates by the Bank of England.
Potential buyers also held off to see what effect the Bank rate cut would have, the BBA said.
With house prices still falling and people waiting to see whether mortgages would get significantly cheaper, activity in the mortgage market remained stagnant.
“People remain concerned about the impacts of the rapidly slowing economy on their personal finances,” said BBA statistics director, David Dooks.
Liberal Democrat Treasury spokesman Vince Cable said that the figures showed there was a “very serious problem” with mortgage supply.
“It is understandable that people are not willing to buy in a falling market but the figures suggest that there are people who would buy if mortgages were available on reasonable terms,” he said.
“The government and the mortgage industry will have to come up with ideas on how to restore responsible lending.”
The Conservatives have claimed the bank bail-out package is failing to revive the housing market.
With prices falling and banks demanding a bigger deposit from buyers, the average amount borrowed by home-movers has also been falling.
In November, the average amount borrowed was £117,000, down nearly 24% on a year ago.
The trends showing a lack of activity in the housing market, reported by the BBA, were confirmed by the latest provisional figures for November from HM Revenue & Customs (HMRC).
Its seasonally adjusted figures showed that residential property sales were down in November to 53,000 in the UK. That is lower than the previous month and 60% down on the same month a year ago.
Other borrowing ahead of Christmas also remained relatively subdued.
Growth in credit card borrowing was in line with the recent average, with the annual rate of growth up to 7.9%. Borrowing on overdrafts and personal loans was low, the BBA said.
But the amount of money being saved with the UK’s major banks shot up in November.
Personal deposits in UK banks went up by £3.9bn in November, having been at a monthly average of £600m during the previous six months.
The BBA suggested this reflected, in part, people receiving compensation for their savings lost in the collapsed Icelandic banks and putting that money into UK bank accounts.
Products offered by High Street banks attracted funds by savers, the BBA said.
A Bailiff Groups Email Blunder Leaks Hundreds of Debtors Information
A bailiff group has apologised for the “accidental release” of hundreds of e-mail addresses to the recipients of a debt-chasing message.
A message was sent by the enforcement recovery section of the Marston Group chasing the overdue repayment of loans.
But attached was a list of more than 600 customer e-mail addresses.
A spokeswoman for the Information Commissioner said the subject of the e-mail was sensitive and the case was a potential Data Protection Act breach.
Major business
The Marston Group, based in London’s Westminster, is one of the biggest bailiff and court enforcement groups in the UK and has a contract to collect unpaid parking fees and other debts.
At the end of last week, a group of people received an e-mail, seen by the BBC, chasing repayment to a payday loan company.
It warns that an enforcement officer would be sent to the recipient’s home in relation to the outstanding debt.
The e-mail appears to have been sent to more than 600 people as all of their e-mail addresses are visible in the “To” box of the e-mail.
The Information Commissioner’s Office said it expected companies sending out such mass e-mails to put addresses in the blind “Bcc” box so they were hidden from other recipients.
“They have got to be respectful to the sensitivity of the issue,” a spokeswoman said.
Apology
The addresses were released by accident in a test of the e-mail system, a spokeswoman for the Marston Group said.
“We are currently contacting everyone whose e-mail address was disclosed to apologise and inform them that immediate steps are being taken to prevent any re-occurrence,” she said.
She added that the incident had been treated very seriously, an investigation had taken place and steps had been taken to stop it happening again.
The company refused to explain who was on the list of names and why, citing legal reasons.
But Marc Gander, of the Consumer Action Group (CAG), said that the list included some people who were being chased for unpaid debts – and as a result it was particularly embarrassing for their names to be circulated.
“The stories of the careless handling of personal data are now a regular occurrence,” he said.
“This irresponsible disclosure of personal information by the Marston Group is just another example.”
The spokeswoman at the Information Commissioner’s Office said she was not aware of any complaints as yet, but the case could be a potential breach of the Data Protection Act.
£250m Pounds Worth of Savings Tax Left Unlclaimed
The Inland Revenue has announced it has taken £250m extra tax off people’s savings and it wants to pay it back.
Most of the people owed the money are on a low income and should not pay tax at all.
But 20% tax is automatically deducted by banks and building societies from interest earned on savings.
The Revenue is encouraging low income people with savings to check their statements and claim back any tax they are owed.
Claire Merrils of HM Revenue & Customs told Money Box on Radio 4,
“We think there is now about £250m of tax and up to three million people entitled to a share of this money.
“We know that there are a lot of pensioners who need every penny.
“So if they want their money back please claim it because it’s yours.”
There are two groups of people that may be paying too much tax.
The first group are those whose income is below the tax allowance.
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They should not be paying tax at all and can register to have it paid gross in future.
The personal tax allowance in 2008/09 is £6,035 for everyone under 65.
Older people can have £9,030 a year before paying tax and those aged 75 or more can have up to £9,180.
To qualify for the higher amount your birthday can be as late as 5 April 2009.
Claire Merrills explained what to do.
“People need to add up all their income together, pensions and so on, including the income from those bank or building society accounts.
“If the total is less than their allowance they need to fill in form R85 so they don’t get tax taken off.
“They should also contact us and we can send them a form – an R40 – and you do need one for each tax year but you can claim back to 2002/03.”
An extra 10%
The second group cannot have their income paid gross but must claim back overpaid tax.
Their income is above their personal allowance but within £2,320 of it.
Their interest should then be taxed at just 10%.
So they can reclaim the extra 10% which has been over-deducted also using form R40.
Because this is all very complicated the Revenue has two helplines.
Call 0845 980 0645 about registering to have interest paid gross.
And call 0845 366 7850 about claiming overpaid tax back.
