Friday, April 27, 2007
In January the Organisation for Economic Cooperation & Development warned Spanish house prices were overvalued by up to 30%. Since 1999 prices have risen by 15% a year.
These prices have encouraged over investment and consequently over supply.
One widely held belief in recent years, was when the Euro was introduced in 2002, may criminal organisation invested illicit cash into Spanish property before the pesata became defunct.
What does it mean?
Prices will stabilize, possibly falling until market values reach more reasonable values.
Thursday, April 26, 2007
There is also a £799 arrangement fee.
People might be able to afford the payment in year 1 but the the huge increases mean first time buyers face a huge payment shock. You're locked into using the product for 5 years, if you try to get out, you will face a redemption penalty
1 in 8 Customers claimed to have been missold a financial product.
1 in 5 Barclays customers said that money had gone astray from their accounts.
The survey was conducted by Motley Fool.
Wednesday, April 25, 2007
Independent Financial Advisers (IFA): Whole of Market advice on mortgages & insurance, think of them as Mortgage Advisers offering a greater range of services.
Estate Agents: Typically a panel of 10-15 lenders. Not whole of Market Insurance, tied to one company. Sold to you by a youth with gelled hair & a large knot in his tie.
Mortgage Broker: Check if independent, whole of market. Offers insurance from one insurer or limited range
Banks/Building Society: only offer their own limited range of products for mortgages and insurance.
Hope the differences betweeen various kinds of mortgage advisers is clearer.
Tuesday, April 24, 2007
I looked at 2 of the biggest financial institutions: Halifax & Nationwide.
In the Halifax, the adviser wasn't expecting me. He advised me to have a look at Halifax's Unit Trusts & Life funds on their website and to choose the funds myself!
In the Nationwide, I quizzed the adviser and was told he much preferred doing mortgages. He added his own money was invested in a Tracker fund which had lost significant amounts of money!
Conclusion on the Financial Advice at the Halifax & Nationwide in Swindon: Steer clear.
Recently a client approached me for financial advice. The client is moving abroad & wants to take an income from their capital.
They approached their bank and another Independent Financial Adviser (IFA). The advice they got was rather worrying. My client wouldn't be regarded as tax payer in the UK, however strangely neither the bank or IFA picked up on this.
I recommended to the client using his ISA allowance and investing in Unit Trusts/OEICs. The client wouldn't need to pay income or capital gains tax on gains.
The Bank and other IFA suggested the client invest in Investment Bonds. You pay 20% tax on any gains immediately at source...also interestingly a high commission is generated.
PS Investment Bonds can be extremely useful for Higher Rate Tax payers. Basic tax payers..no.
Wednesday, April 18, 2007
Philip Shaw, chief economist at Investec Securities, said: "Today's figures mean that a May hike is now even more of a cast-iron certainty than previously. Our forecast that rates will peak at 5.5% is under review."
Richard Woolnough of M&G expects a rise in May & one in the autumn & winter to bring rates up to 5.75%.
Conclusion: If you are buying a house or remortgaging, opt for a fixed rate option.