However, when figures were actually released recently they showed that in fact Britain had once again seen economic output shrink, placing the nation firmly in the longest recession on record.

To make matters worse many other major economies have come out of recession, leaving Britain lagging behind as it struggles to free itself from the tangled net of recession. Even the United States has recently revealed that its recession is now officially over, but in Britain all that consumers and officials can do is wait in the hope that the end of the year will bring better news.

The Prime Minister Gordon Brown made a recent speech via podcast where he made a bold and ambitious promise to ensure that Britain was out of the recession by the end of this year.

He outlined some of the measures that he was proposing to help make this happen, but his promise has been met with severe scepticism by many industry groups and individuals, who are now convinced that the economic output in Britain will continue to fall, at least for the remainder of this year.

The desperation of the government to try and revive the economy is obvious and can be seen in some of the measures that it has been taking. For example, a decision has been made to keep the base interest rate on hold at its all time low of just 0.5 percent for the eighth month in a row.

Even more surprising was the decision of the Bank of England to extend the quantitative easing programme by a further £25 billion, which means that the total amount spent via quantitative easing now comes to £200 billion as opposed to the £150 billion that had initially been proposed.

In order to get permission to allocate the additional £25 billion the governor of the Bank of England, Mervyn King, had to write to the Chancellor, Alistair Darling. In his letter the governor stated: “Households have reduced their spending substantially and business investment has fallen especially sharply. A number of indicators of spending and confidence, however, suggest that a pickup in economic activity may soon be evident.”

After hearing about the shock figures regarding economic growth the chancellor, Alistair Darling, said: ‘I’ve always been clear that growth will return at the turn of year, as my Budget forecast confirmed. We’re facing the worst global financial crisis and recession in 60 years. We’ve always said that we remain cautious as a result of the high degree of economic uncertainty.’

As a result of the shrinking economy some had expected an addition £50 billion to be allocated to quantitative easing, although many had expected no extension at all.

Prior to the announcement of the £25 billion extension one official said: ‘Worryingly from sterling’s perspective is the fact that the UK may be the only major economy to have contracted in the third quarter of this year. This clearly suggests that the likelihood of an expansion in QE by £50bn or so over the next quarter is rising, although is not a forgone conclusion.’

Britain continues to languish in recession is a post from: Glitec Loans

Property prices have plunged since their peak in 2007, and with mortgage lending becoming increasing restricted the sale of properties almost ground to a halt at one point, with many homeowners finding that they were unable to sell their properties due to factors such as negative equity resulting from falling property prices or because potential buyers simply couldn’t get the mortgages that they needed.

Over the past few months, however, there has been much talk of a recovery in the property market. Property prices are said to have slowly increased over recent months, although they are still far lower than they were at their peak.

Some have also suggested that mortgage lending is becoming more freely available to some buyers, particularly those that are able to raise a substantial deposit. There have also been reports that an increasing number of people are showing interest in purchasing property after a very slow period seen earlier this year.

A number of industry groups have viewed recent figures relating to matters such as property prices, buyer interest, and mortgage lending activity as highly encouraging, and these reports have sparked speculation over whether the troubles that the housing market has experienced over the past couple of years have finally come to an end.

However, this is not a view that is shared by all industry groups, and some are convinced that this is simply a temporary blip, and that the downward spiral will recommence next year.

The National Association of Estate Agents has said that the housing market has managed to weather the traditional slowdown that is usually seen in the summer months, and this is further evidence that the market is on the way to recovery and that the only way now is up. The association said that in September property sales levels and the number of potentially interested buyers registering with estate agents had increased compared to the previous month.

However, the credit ratings agency Fitch insists that the encouraging data is only a temporary blip, and that this is simply a false dawn that is being blown out of proportion. The ratings agency is certain that rising unemployment and lack of mortgage finance will see property prices fall further, and has predicted that there will be a further fall of 17 percent in house prices in the UK.

An official from Fitch Ratings said: “Despite the fact that a global economic recovery is under way, the economic fundamentals do not auger well for a sustained strong recovery in the UK housing market.”

A number of other industry groups have mirrored this opinion, and have said that whilst data over the past few months might have been encouraging there was little evidence to show that this recovery could be sustained.

Mixed reactions to recovery of property market is a post from: Glitec Loans

However, it is a great time in your life and one that you should thoroughly enjoy.

The first thing to do when you decide to purchase a home is to figure out how much you can afford to spend. This is basically how much money you can afford to borrow, Do your homework by finding the areas in which you want to live and then searching the prices of homes in these neighbourhoods.

At the present time the interest rates are the lowest they have been in quite some time, which means that your mortgage payments will be lower. You do have to keep in mind that once the recession is over, interest rates will start to climb and that will mean higher monthly payments, even if you do lock your mortgage in for a period of time.

Making a budget is an important part of the planning process when buying a home for the first time so that you can see how much money you have to work with each month. This is one essential part of the application process because lenders will scrutinize your finances to make sure you can afford the house you want to buy.

There is more to buying a home than just taking out a mortgage for the purchase price. First of all, lenders will not give you a mortgage for the full purchase price. You will be expected to make a deposit of about 25% percent of that price although there are lenders who have more lenient terms for first time home buyers. However, there are none that will finance 100% of the price.

In addition to coming up with the deposit on the mortgage there are other fees involved. These are called closing costs and include the solicitor’s fee and the administrative fees charged by the lender. You can choose to pay these on your own or have them included into the amount of your mortgage, which will increase the amount of money that you owe and on which you must pay interest.

Then comes the cost of home insurance. In order to sign the final papers and receive the keys to your new home, you must show proof of having home insurance. This is another expense that you may not have thought of or budgeted for. After you move in, depending on where you live, you will also have council tax to pay, water rates, gas and electricity bills and perhaps ground rent. You do have to budget for all these additional expenses.

When you plan to purchase a home for the first time, it is wise to research the lenders to find the one with the best interest rates and arrangement fees. Once you have initial approval for a mortgage, you know the price range in which you can look at houses. When you find one that you like, have someone used to buying homes view it with you. This person may be able to spot a defect that you wouldn’t recognize and save you from having to make costly repairs shortly after you move in.

You do have to make an offer to the seller and this is usually lower than the asking price because you want to save some money wherever you can. If your bid is accepted then you have to start making arrangements with a lender for the final approval of the mortgage. It usually takes about a month from start to finish once you place a bid, have it accepted and be able to move into your new home.

Tips for First Time Home Buyers is a post from: Glitec Loans

With the financial and economic climate in such a state consumers have needed the protection of the FSA more than ever before over the past couple of years, but a group of MPs has claimed that the agency has let consumers down and has failed to protect them from aggressive mortgage lenders in the ongoing difficult climate.

MPs on the Treasury Select Committee have accused the FSA of taking a far too leisurely approach to the soaring level of repossessions, and has stated that the agency has taken a lax approach when it comes to ensuring that consumers are being treated fairly by lenders, which has contributed to rising repossession levels.

The MPs said that at a time when so many homeowners were struggling with their finances many aggressive banks – including those which have been bailed out by taxpayers – have moved in and preyed on these people through actions such as charging extortionate fees and by taking repossession action.

Sub-prime lenders were identified as the worst offenders, and the MPs said that the FSA needed to step up to the mark and start protecting the public. One committee member said: “We suspect that the small number of cases being brought against lenders making excessive arrears charges are merely the tip of the  iceberg. This is why it is so important that lenders  are compelled to open up their books and justify their charges, while the FSA must be  prepared to take decisive action where it finds evidence of wrongdoing.”

He added that the committee was very concerned about what was going on, and about the lack of action that was being taken by authorities, and said: “The FSA and the OFT must get a grip on this problem and crack down on lenders who are breaking the rules and mistreating customers in arrears.”

He also said that in 2007 the FSA had indentified that fact that some banks were treating consumers unfairly with regards to mortgage arrears, but two years later the agency had taken action against just four such firms, indicated a very lax approach to the problem.

He stated: “The seemingly leisurely approach of the FSA in terms of completing its mortgage arrears review and enforcing possible breaches in the rules in the area of mortgage arrears is a matter of grave concern. We call upon the FSA to spell out clearly how it will improve its performance in terms of bringing miscreant firms to book.”

However, the FSA has naturally denied these claims and has said that it needs to look more closely at the situation before making any regulatory changes, with one spokesperson stating: “We take a robust position with firms as soon as we have evidence of wrongdoing and also to ensure borrowers are treated fairly throughout the lifetime of their mortgage.”

However, a committee member said: “It is clear the behaviour of some mortgage lenders towards vulnerable homeowners has been completely unacceptable – yet the FSA has failed to intervene effectively.”

Is the FSA failing to protect homeowners from lenders? is a post from: Glitec Loans

The first rise in domestic burglaries in six years was seen in the year to March, with an increase of 1 percent compared to the previous year according to recently released figures, with nearly a quarter of a million domestic burglaries during that period.

The first three months of this year saw insurance firms hand out over £100 million to settle claims for theft, making it the most expensive quarter for burglary claims in the past five years, and reflecting the extent of the problem in the current climate.

One insurance expert said that households needed to put off potential burglars by ensuring that their properties were as secure as possible, as this could help to deter an opportunistic burglar.

He said: ‘Now is the time to do a review of home security and make sure things are as good as they can be. It may seem selfish, but if you make it difficult for burglars they will simply go elsewhere.’

Another said that it was important to ensure that valuable items were not left on display as this made it easier for burglars that did manage to get in. He said: ‘If customers are aware of the dangers, they remove the easy pickings for the opportunistic burglar.’

Insurance experts have put together a range of useful tips to help those that want to make their homes more secure and protect themselves against becoming victims of this sort of crime, and some of these tips are outlined below.

Fitting locks on doors and windows: Consumers should ensure that they have good quality locks on the doors and windows of their homes, and that they use the locks as they are there for a reason! There are many different high security locks available these days, all designed to make life more difficult for burglars. An insurance expert said: ‘Good security is about adopting the right lifestyle too. Get into the habit of checking all doors and windows before you leave the house or go to bed.’

Don’t forget about the outside areas: It is important to ensure that outside areas such as garages and sheds are also secured, as thieves have no qualms about breaking into these areas to take whatever they can get their hands on. This could help to save damage or theft of tools and even your car.

Don’t make it obvious when you are out: If you are out of the house you don’t want to make it obvious to thieves, so make sure you make it look as though there is someone in the home. This means cancelling papers and milk, which can be obvious signs that someone is away, and perhaps asking a friend or neighbour to come and open and close curtains and switch lights on and off.

Also, avoid using social networking sites and blog sites to tell the whole world that you are heading off on your holidays, as it is not only your friends that will see this information!

Increased protection for homes is vital is a post from: Glitec Loans

Many first time buyers – the ones lucky enough to be able to get a mortgage in the current climate – decide to look at new build properties, as in some cases building firms who are desperate to sell their homes in the current climate offer a range of incentives such as covering legal fees and other costs.

However, considering that for the average new build two bedroom house buyers would still be looking at paying an average £145,000 based on area, the cost can still be very high.

Worse still a recent report has shown that the new build properties in the UK have amongst the smallest rooms in the whole of Europe, suggesting that not only are buyers having to shell out a fortune for these new properties but that they are paying all this money for what has been described as nothing more than a ‘rabbit hutch’.

Recent research into new build properties in the UK have shown that these properties are getting smaller and smaller in the UK, and the ones built over the past few years have rooms that are amongst the smallest in the whole of Europe. This often means that those moving into the properties do not have the room to relax properly, entertain, socialise, and in some cases for their kids to play safely.

Whilst the average household size in the UK has been falling over the decades the Commission for Architecture and the Built Environment has said that this has no bearing on the tiny size of rooms in today’s new build properties, and that many properties simply were not suitable for everyday living.

Kitchens are often too small to move around in properly never mind have a table in them to dine at, living areas having little room for anything other than the basics, and some bedrooms are not even big enough to actually get a bed into.

A survey was carried out amongst homeowners who had purchased new build properties between 2003 and 2006. Out of the 2249 people that were polled around 44 percent said that there was not enough space for children to play safely whilst cooking was going on in the kitchen.

Close to 50 percent of those polled said that the properties were not large enough to fit their furniture into. Over one third said that the kitchens were not large enough to house kitchen appliances.

However, it is not just the cramped conditions that some officials are worried about. Some have said that these conditions could result in an adverse impact on health, well being, and family interaction. For instance, it is often recommended that families interact by all sitting down and dining together at the table rather than eating on laps whilst watching television, but in newer properties there is not enough room to do this.

Also, some children that cannot have their friends inside the house due to limited space will often end up going outside with them without any supervision.

A recent report stated: ‘The findings raise the question of whether many new homes are fit for purpose, and whether they are built to the standards required to meet the needs of the people living in them. To build housing that is tolerated only during a property-based economic boom is to build housing that does not stand the test of time.’

Are Brits paying out a fortune for properties that are too small to live in? is a post from: Glitec Loans

These schemes include:

Mortgage Rescue

The Mortgage Rescue Scheme permits a homeowner who is having difficulty making mortgage payments to sell all or part of the property to a landlord and then become a tenant by renting the property. In this way, the family does not have to move and prevents them from losing their home and damaging their credit rating. However, only six homeowners have been able to benefit from this program since it was initiated in January. The government defends this low number by saying that there are many applications and it takes time to process them. They have recently included those who are in a negative equity position to take advantage of the scheme.

Home Owner’s Mortgage Support Scheme

With the recession and the unprecedented numbers of people who are unemployed, there are many in the UK who have recently suffered a drastic reduction in their income. Under the Home Owner’s Mortgage Support Scheme any households who have had a major reduction in their monthly income can switch to an interest-only mortgage. This plan gives them reduced mortgage payments of up to 70% for a two-year period.

Although many home owners are praising this scheme, critics claim that unless the economy makes a fast turnaround, repossession rates will reach an all-time high at the end of this two-year period. There are also fears that people who take advantage of this scheme may also run up significant debts during this time frame and be unable to make their monthly payments even if they do have a rise in their income.

While there are lenders who did agree to this scheme, many of the major UK lenders declined to take part and decided to put their own initiatives into place.

Support for Mortgage Interest

Taxpayers in the UK can now claim support for mortgage interest on mortgages of £200,000 instead of £100,000. The waiting period has also been reduced to 13 weeks from 39 weeks. Critics do applaud the government’s action but suggest that the individual income of the homeowner be used as eligibility criteria rather than the total of the household income.

Pre-Action Protocol

In order to keep as many families as possible in their homes, the government instituted the pre-action protocol for judges in November. Under this scheme, judges must make sure that everything possible has been done to stall repossession of a home when they are asked to grant a repossession order. Since this came into force, there has been a reduction of about 50% in the number of repossession orders that have been approved.

Free Legal Help

Homeowners facing repossession orders in the courts of the UK are entitled to free legal help. This also applies to those facing eviction orders. This scheme allows homeowners to have legal representation to help them fight their battles in court without having to add to their already mounting debts.

Preventing Repossession Fund

£20m has been set aside for local authorities to provide help to struggling homeowners in the form of small loans and one-time payments when they are having difficulty being able to make their mortgage payments.

Government Schemes to Help People Keep Their Homes is a post from: Glitec Loans

For most people this involves seeking the help and advice of a professional in the equity release market, and there are some advisors that specialise in this field and are apparently trained to offer sound and sensible advice to those looking to opt for equity release.

However, a recent worrying report showed that in some cases these advisors are offering poor advice and failing to follow proper procedures when dealing with equity release customers, which is quite worrying given the increasing popularity of the equity release option.

In fact, a recent mystery shopping exercise was carried out by the consumer campaign group Which? and showed that two thirds of financial advisors failed to pass its benchmark tests, indicating that two thirds of advisors are not up to scratch when it comes to offering advice and assistance in this sector.

Like any other financial product choosing the right equity release plan is vital to homeowners, and this means getting the right advice and the right product, which is where trained financial professionals are supposed to come in.

However, the tests showed that many advisors were failing on a range of things, from failing to recommend the product that was best suited to the client to failing to carry out proper checks such as income checks before recommending a product. Many did not do the proper fact finding searches before recommending a product, and many failed to point out the risks associated with equity release programmed to their clients.

One official from the consumer campaign group said: ‘If you’ve been hit by plunging pensions, it might be tempting to release some much-needed money using your home. However, opting for an equity release plan is a big decision and it’s not one that should be taken lightly.’

Another official from the group said that some advisors had not been providing information on how quickly debt could grow with these schemes. He said: ‘One IFA said there was no chance of using up all the equity in the ‘customer’s’ home ‘unless you live to 150′.’

However, Ship, which is the professional body for advisors in the equity release sector, stated: ‘We believe that when you look at this piece of research, you need to look at what has been excluded as well as what has been included. Which? has criticised the process for advice, but not the actual fundamental outcome of that advice, nor the products themselves. This is a step forward from last year when they branded equity release a ‘product of last resort’.

It added: ‘But continuous improvement is needed. Although there are estimated to be over 7,000 people who have taken the specialist equity release exams, the fact that Which? has found issues with the processes of some of the 40 advisers reviewed shows there is absolutely no room for complacency. Advice is a crucial step in the equity release process – and with each client’s needs being highly individual and unique – one that should be closely monitored to ensure consumers are getting the best help possible. We know that the specialist advisers are acutely conscious of the need for high standards, and that many more generalist advisers are looking more and more closely at equity release, and completing the specialist qualifications. We believe that many of the shortfalls that Which? have found could be due to the process of explaining the product rather than to significant gaps in advisers’ knowledge.’

How good is your equity release advisor? is a post from: Glitec Loans

For the decade leading up to 2007 many first time buyers found that they simply could not afford to get a property because of soaring property prices that put the prospect of getting a home way out of reach for many first time buyers. However, in the autumn of 2007 some first time buyers thought that their luck had changed.

October of 2007 saw the house price bubble burst, and having peaked house prices in the UK started to plummet, much to the delight of first time buyers. For many this marked the chance to try and get onto the property ladder after years of waiting, and many thought that a few more months of waiting could see property values fall to levels that they may possibly be able to afford. They were right, in that property prices did start to fall month on month, and with each cut in value came an increased likelihood of affordability for the average first time buyer.

However, what many first time buyers had not been expecting was the dire effects of the global credit crunch, which also gripped the UK that same year. Within months banks had tightened their lending criteria and amongst the groups that were set to suffer were first time buyers. The new stringent regulations by banks meant that getting a mortgage loan was far more difficult, and marked the end of the days of easy credit, which had been seen for the past ten years.

Many of the mortgages that had been popular with first time buyers, and had given them a helping hand onto the property ladder disappeared, such as the 125 percent and the 100 percent mortgages, which many had relied on because they had little or nothing in savings to put down as a deposit on a property. This immediately left many first time buyers out in the cold. Then came even worse news as the once traditional 95 percent mortgage started to disappear. All of a sudden lenders started to demand extortionate deposit levels such as 25 percent and even 40 percent of the property value in some cases.

It seems that first time buyers are in a no win situation. At the time when property prices were too high to afford they could easily get finance for 125 percent or 100 percent of the value of the property but could not afford to take out such a big mortgage due to the repayments. However, just as property prices plunge to affordable levels and the base interest rate falls to its lowest level in history, at just 0.5 percent, first time buyers have found that lenders are no longer prepared to offer them finance, and those that are demand a far higher deposit than the average first time buyer can afford.

How first time buyers are faring in the current climate is a post from: Glitec Loans

Many banks have now had to be bailed out using taxpayers’ money, but although one might think that there would be some gratitude from the banks for this bailout from the public purse rather than being sympathetic to the needs of consumers, banks seems to be using them to try and recoup their own losses.

There are a number of ways in which the taxpayer has ended up paying for the mistakes that the banking industry has made, and in one way or another most of us will find ourselves suffering in some way whilst the banks do all they can to claw back revenue and shore up their own finances. Some of these are outlined below:

Borrowing

Borrowers have really suffered as a result of the blunders that the banking industry has made.

Whilst banks are being encouraged to stop lending irresponsibly, which is partly what got the industry into the mess that it is in, they are also being encouraged to start lending again the eligible consumers and businesses in order to help the economy to recover.

However, recent reports have shown that in order to shore up their own finances banks are strictly limiting the amount of money that they will lend out on things such as mortgage, and once the allocated funds have been used those that apply for finance afterwards are likely to be turned down even if their credit rating is excellent.

In the past someone with good credit would have no problem getting finance, but these days it seems to depend on the time of day that you apply and whether or not the banks has used its daily allocated funds by then.

Loans and mortgages

Over the past five months the base interest rate has been at an all time low of just 0.5 percent, which is just a tenth of the level that it was at just over a year ago. However, despite this rock bottom base rate the interest rates that lenders seem to be charging on loans and mortgage seems to have no link to the base rate.

One industry official summed it up by stating: ‘Reducing interest rates to these low levels was intended to make borrowing cheaper, to help kick start the economy. Evidence shows that this is just not happening.’

However, the British Banker’s Association states: ‘The cost of borrowing reflects more than the Bank of England base rate. Various factors affect the price of lending. Banks’ costs have gone up, and there is less left to lend. More people default in recessions and banks can take longer to get their money back as they help customers by rescheduling repayments. They are paying relatively more for their money as a result of both competition for savings and scarce and expensive wholesale funding.’

Credit cards

Credit card customers have also been affected by banking blunders. Some cardholders have seen their interest rates rocket, others have seen their credit limits slashed, and some have even seen their accounts cancelled. Getting a credit card has become increasingly difficult even for those with pretty good credit. Also, banks have been increasing various fees on credit cards, such as annual fees, cash transaction fees, foreign fees, and a range of other charges as they see fit.

In addition to this banks have acted cunningly by reducing the minimum required repayment for some cardholders. Although this may seem like it is designed to help consumes in the current climate, what it actually means is that you will spend far longer paying off the credit card debt and pay far more in interest to the lender.

Some of the ways in which banks are getting more money from consumers is a post from: Glitec Loans