Mortgage availability continues to rise
Since the collapse of the housing market and plummetting property values filled the mortgage companies with fear of taking on the risks of buyers defaulting on the their home loan, the number of mortgages available to buyers also fell. But over the last year the trend in both house prices and mortgage availability has been promising.
More mortgages are now available with lower deposits (higher loan-to-value) than a few months ago, and some lenders are prepared to risk more with first time buyers. All of this is good news if you are looking to buy a house, and although prices have recently fallen slightly, the overall trend is still for prices to increase. Increased mortgage availability should help more buyers into the market, increasing demand and pushing prices up.
But a note of caution – with house prices returning to the value current occupants bought at, more and more owners will feel ready to sell up – more houses on the market increases supply and therefore lowers the price. Some analysts think that this effect will start to work harder against the increasing demand, slowing growth in house prices, but not actually pushing prices back down.
April 2010 rates applied
It’s that time of year again – The Salary Calculator has been updated with the latest tax information which takes effect from 6th April 2010.
As reported at the end of last year, for most people there’s actually no difference between the 2009 figures and the 2010 ones. Personal allowances are staying the same (whereas they usually go up), as are National Insurance payment thresholds.
However, there are some changes for those earning over £100,000 – personal allowances are reduced by £1 for every £2 your salary goes over £100,000, and there is a new 50% tax rate for taxable income over £150,000. So while most of the population will find their payslips unchanged come April, the highest earners will find themselves significantly worse off.
To see how you’re affected, try out The Salary Calculator with your salary. The details of the figures used by The Salary Calculator are available on the About page.
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Debt consolidation loans
I’m sure you will have seen adverts on TV and online for debt consolidation loans, which are meant to make it easier for you to handle debt. But could such a loan help you? Is it worthwhile? Fortunately The Salary Calculator can help you find out.
If you have multiple debts, like credit card balances, overdrafts, car loans or store cards, it can be difficult to keep track of them all and to make sure you make the right payment each month. Some of these debts may have high interest rates which mean it will take you even longer to pay them all off. A debt consolidation loan is designed to put all of those debts into one overall debt, with one interest rate, and one monthly payment. If the interest rate is low enough, your total monthly payment can be lower than it was when you were paying separately. How low does that interest rate have to be? The Debt Consolidation Calculator can help you work that out.
Enter the details of your outstanding debts, like the amount you owe and the interest rate you’re paying on each debt. Then choose how quickly you’d like to pay them all off, and click “Go!”. The calculator will work out what your total monthly payment would be if you were to pay them all off individually – and also the overall interest rate you’re paying. This means that if you can get a debt consolidation loan at a lower interest rate, it would save you money each month (please note this does not include any charges the loan company may apply).
There are other things to consider, so before finding and using a debt consolidation loan, talk to an expert advisor like those at thinkmoney. Their website has plenty of useful information like debt consolidation pros and cons, and the first consultation with them is free. With a bit of help, you could save yourself a lot of money!
UK economy turns around
So finally, the news we’ve been waiting for – the UK economy has come out of the longest recession since records began. In the 3 months to the end of December, the GDP (Gross Domestic Product) of the UK grew by 0.1%. This is only a very small growth, but it’s growth nonetheless – for the previous 6 quarters UK GDP had been shrinking.
This is a very encouraging sign, especially since the UK was one of the last major economies to still be in recession, others having returned to growth some months earlier. However – before we break open the champagne we should note that these are only preliminary figures – often GDP figures are corrected up or down at a later date, as explained here. Also, 0.1% is only a low growth rate and most analysts are predicting slow growth for the rest of 2010.
Still, after the recent turmoil a few quarters of good, solid, sustainable growth should stabilise the economy and see the job market (and mortgages and loans) pick up as confidence increases. A stronger national economy should also help the Pound make back some of its recent weakness against other currencies – although, again, this is likely to be a slow process.
Superfreakonomics
I’ve previously mentioned the book Freakonomics as an interesting read which explains how economic thought can be applied to many different (and unusual) areas of the world around us. Well, the same authors (Steven D. Levitt and Stephen J. Dubner) have recently released a follow-up book, Superfreakonomics.
This book covers in quite some depth topics such as finding solutions to global warming, using statistical analysis to find terrorists (particularly relevant at the moment) and why the solutions to big problems are often simple. I personally found that a few of these chapters strayed further from the economics-based descriptions that defined the first book – concentrating more on the details of possible solutions to global warming than the economic forces working on those solutions, for example.
Having said that, the chapter about the economics of prostitution is very much like the previous book’s chapter on drug dealing – because the relevant studies the authors were reporting on were done by the same researcher. It offers some of the detailed analysis that I felt made the first book accessible – explaining why the data gathered (and the methods used to gather the data) can tell you things you wouldn’t otherwise find out.
A very entertaining read which unfortunately is over too quickly – but the epilogue is my favourite part of the whole book, where they explain briefly the impact of explaining to monkeys the concept of money!
Click on the link to the right to buy the book from Amazon, and you’ll be doing your bit to support this site!
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