The Office of Fair Trading (OFT) is investigating both Royal Bank of Scotland and Barclays over allegations of price fixing. Concentrating on loans made to professional services companies, the investigation into alleged anti-competitive practices covers only a very specific area of the loans market and not more widely available consumer products. Having been directly notified by Barclays about inappropriate advances to its professional services team, the OFT launched its inquiry. Confirming that it was still in the early stages of its investigation, an OFT spokesperson said: "The OFT will not be in a position to conclude whether the law has in fact been infringed until it has completed its investigation and assessed the available evidence." Both the lenders involved have pledged their full cooperation to the regulator.
02 Jun 2008
Building societies see record deposits in April
April saw the UK's building societies attract over £1,820 million in new savings, with much attributed to the rise in the personal ISA allowance. The rise in the amount saved, up from £1,351 in April last year, comes as savers are increasingly looking for a secure home for their savings. The statistics released by the Building Societies Association (BSA) reveal that whilst savings are up gross lending remained roughly the same at £3,645 million in April 2008, compared with £3,768 million in April 2007. Adrian Coles, director-general of the BSA said: "Savers are increasingly recognising the very competitive saving products that building societies offer represent excellent homes for their cash in these uncertain economic times."
02 Jun 2008
Four percent base rate predicted by next year
Howard Archer, the chief European and UK economist for Global Insight has predicted that the Bank of England base rate will drop to around 4% by the end of 2009. With the base rate currently standing at 5%, this will come as welcome news to homeowners struggling with higher mortgage repayments. Whilst stating that the monetary policy committee will tread carefully for the time being, he concludes that once evidence of wage moderation is seen, interest rates will fall. Speaking on his assertions, Howard Archer said: "Interest rates could eventually fall as low as four per cent in 2009, but it will be a gradual process."
02 Jun 2008
Bradford and Bingley confirm losses
The UK's biggest buy-to-let lender has confirmed eight million pounds of pre-tax losses in the first four months of this year. Compared with profits of around £108 million the same time last year, the beleagued lender blamed it on borrowers struggling to repay loans secured on rental properties. News that it is also selling a 23% stake to US firm Texas Pacific Group follows its recent announcement to launch a rights issue to help bolster its finances. Commenting on the trading statement, executive chairman Rod Kent said: "This is a disappointing trading update reflecting a more difficult market environment. I understand shareholders' disappointment."
02 Jun 2008
Banks target of price-fixing investigation
The Office of Fair Trading (OFT) is investigating both Royal Bank of Scotland and Barclays over allegations of price fixing. Concentrating on loans made to professional services companies, the investigation into alleged anti-competitive practices covers only a very specific area of the loans market and not more widely available consumer products. Having been directly notified by Barclays about inappropriate advances to its professional services team, the OFT launched its inquiry. Confirming that it was still in the early stages of its investigation, an OFT spokesperson said: "The OFT will not be in a position to conclude whether the law has in fact been infringed until it has completed its investigation and assessed the available evidence." Both the lenders involved have pledged their full cooperation to the regulator.
02 Jun 2008
Barclays cuts overdraft charges
Barclays Bank has announced it will cut the fee it charges to customers who go overdrawn without prior permission. Barclays is the first bank in the UK to announce such an amendment to its unauthorised overdraft charges, which will see them reduce from £35 to just £8. As part of a wider change to its overdraft policy, customers will be able to arrange a personal reserve of between £250 and £1,500 for a one off fee of £22. Speaking on the decision, Chris Walker from Which? Magazine said: "This does seem to be an admission by Barclays that its current unauthorised overdraft charges are unfair and that instead, a fee of £8 would reflect its costs and so be a much fairer price."
30 May 2008
Struggling home owners urged to act quickly
Home owners who are struggling to make their monthly mortgage repayments are being urged to seek advice sooner rather than later. In an announcement by the Financial Services Authority (FSA) that it was expanding its consumer campaign to help people stay in control of their mortgage, mortgage holders in arrears were urged to act before it was too late. The FSA has produced a checklist for people who may be struggling with their monthly payments which includes practical advice for mortgage holders. Chris Pond, Director of Financial Capability said: "Our checklist helps people plan for the best but prepare for the worst. It is designed to help ensure they have access to impartial information on what they can do to safeguard their home if things get tough."
30 May 2008
Northern Rock expand debt management team
The nationalised bank Northern Rock is to double the size of its debt management department over the course of the next year. The proposal to increase the number of staff in the department from 176 to 444 suggests the bank is expecting an increase in the number of customers who will experience difficulty in making their monthly repayments. The redeployment of staff is part of a larger restructuring plan which could potentially see over 2,000 people being made redundant over the next three years. The details of this plan, which came to light after an internal communication was leaked to the BBC, could change following union consultation, Northern Rock said.
30 May 2008
Intermediaries play vital role in mortgage market
Financial advisers and mortgage intermediaries have been instrumental in the development of a competitive mortgage market, says the Intermediary Mortgage Lenders Association (IMLA). Commenting on the Association of Mortgage Intermediaries report on the value of mortgage advice, IMLA reiterated the report's findings that intermediaries play a vital role in helping clients find the right mortgage package. Peter Williams, IMLA's executive director, commented: "Looking back 20 years, mortgages were largely the domain of building societies and the limited availability of funds often meant home loans were effectively rationed to the consumer." Roughly 75% of all mortgage applications now originate from the intermediary sector, compared with around 25% in 1988.
30 May 2008
Mortgage deals around for less than two weeks
The time that new mortgage deals are available for has dropped to just 11 days from around 30 days last year, according to a study conducted by moneyfacts.co.uk. Lenders are pulling their best rates 30% faster than this time last year with some disappearing within just six days. Speaking on its findings, Darren Cook, Head of Press at Moneyfacts.co.uk said: "Lenders with products available are experiencing unprecedented levels of demand, which impinge on their back room staff's ability to cope and on the company's capacity to provide a good level of service. To avoid this, lenders are choosing to withdraw their products quicker than before in order to clear their demand bottlenecks."
29 May 2008