09/11/2013 Your Money


09/11/2013

Weekly round-up of news about mortgages, savings, credit cards, bank accounts and pensions, plus helpful tips and advice. With Declan Curry.


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house`buying. It is still complicated, and buyers are always

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under Russia to borrow as much as they can. We have got some tips to

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guide you through that. `` buyers are always under pressure.

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Hello and welcome to Your Money, taking a special look this week at

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how to buy a house, and how much you can afford to pay.

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Stressful, confusing and more than a little bit jacket. The whole

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business of buying a home can be baffling, but we have some simple

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tips to get you started. And, how much can you really afford to

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borrow? Interest rates would stay this low for ever. The experts are

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here to tell us how to protect yourself from rising borrowing

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costs. And, thousands lost their money when

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high`street shops went bust and stopped taking gift vouchers. Can we

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trust them this Christmas? The help for home buyers from the

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government, plus tea money from the bank of England have perked up the

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housing market. On Friday, one house`builder said its order book

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was the best in years. Earlier in the week, a rival builder said its

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private sales had jumped 45%. Two housing market experts are with me.

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Welcome to both of you. Jane, has there been a rush of sales spurred

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on by the cheap money and the government guarantee? Yes,

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definitely. We have had buyers ringing us for all sorts of

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reasons. People are getting these two schemes confused, but also

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because they are worried that prices will start to rise to do next year,

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and if they don't jump on the wagon now, they will lose the chance. Not

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for nothing is this help to bite scheme nicknamed the hindrance to

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buy. Kate, the chartered surveyors trade body this week said some

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things never change. One in three people who want to buy a home for

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the first time have no idea where to start. The first base to start is

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that you have got to understand that, although we talk about

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averages and house prices going up on average, the whole market is now

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made up of these tiny pockets. You could take one postcode and have

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prices going up for two bedroomed flats, prices going down 43`bedroom

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homes, and so on. The first thing you have got to do is understand

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what is happening to the local market for the specific property you

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want to buy. Secondly, advertise a property. So you advertise it for

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?200,000, in my be overpriced. Really, you should look to see how

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much those houses are actually selling for. You can go on all the

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portals and find sold prices. If you find a house you really like, you

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can pretty much find out what that vendor paid for it, and that it's

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fantastic information. Understand the difference between the asking

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price and what you might actually have to pay. Is there really much

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leeway for negotiation? I know people going through this process

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right now, looking at the price, thinking that price is ridiculous,

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but they really wanted and there are so many other people chasing it.

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With property, there is always the emotional side of really wanting to

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live in that side, and the sensible head, if you are not sure about

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paying that price. I have to say, I have always backed off if I think

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the house is too much money. Never paid too much. There is a house

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price ceiling on every road. Rarely is that ever broken over a period of

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time. Check to see what the highest price achieved for a house on the

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road, and try hard not to go over that. If you do, you need to be in

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that house for some period of time to make sure you can always afford

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to stay there. Up to ?125,000, you don't have to pay any stamp duty at

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all. You would be looking at costs of 1% ` 2% of the value of the

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property. From there up to ?250,000, you are paying 1% in stamp duty.

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Above that, you are looking at about 6% of the value of the property.

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Always remember, you has to pay your deposit at exchange to make sure

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that goes ahead. A lot of people forget that, and it might be ?40,000

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you have to put into the bank account of the solicitors. Just a

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quick thought on where to get a mortgage will stop some estate

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agents will offer a mortgage through the agency, but often that is not

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the best deal. Estate agents that work with mortgage advisory firms

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come they often own them. Estate agents are often on commission, and

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you will find that often they are not wholly independent. They will

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miss out on a lot of the smaller building societies that can perhaps

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do the niche deals that some first`time buyers need.

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With house prices going up, you might feel under pressure to get as

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big a mortgage as possible. It might feel affordable now because

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borrowing costs are relatively low, but what happens when, and it is

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when not if, interest rates go back up again? Higher gas and electricity

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bills, the cost of running the car, higher food rises, they have all

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stretched many family budgets. Even a small rise in Bank of England

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interest rate could leave 30,000 households seriously behind with

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their mortgage payments. That means those who had fallen behind would

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owe an average of ?700. How much is too much when you are

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taking on a mortgage? Most first`time buyers want to know how

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much they can borrow, not what they can comfortably afford. The best

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thing to do is look at how much you can borrow, look at your budget,

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find out what is comfortable and affordable, and then say this is how

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much you can borrow, not just spend the maximum that you can. It is all

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about affordability. Absolutely. The BBC have got a great mortgage

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calculator. I checked at the moment whether people can afford the

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mortgage levels at 7%. That is the kind of long`term rates we have seen

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in the past. 3% is not a standard rate. It feels strange to be talking

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about the possibility of the Bank of England putting up England ``

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interest rates. It probably won't happen for a couple of years, and

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mortgage rates have not been influenced by the Bank of England

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rate for some time. Fixed`rate money comes from sources other than the

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Bank of England. That is why your mortgage may not be affected by the

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base rate. Any movement in bank base rates will be relevant for sum. Is

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there a danger in fixing your rate now that may become too expensive in

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a couple of years time? For most people who want to avoid

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full ability in the market, fixed rates are still a good idea. It is

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unlikely they will fall a lot further. If they did, we can

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calculate if it is worth paying the early redemption penalty. Fixed

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rates are still the best way forward if you want to set this out. All

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this talk about people falling into debt with their mortgage, just

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because you are behind with your payments does not necessarily mean

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you will lose your home. A lender is obliged to sit down with their

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customer and work out a plan. It is not in any one's interest to have a

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glut of repossessions hit the market. So the best advice seems to

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be that if you are in debt with your mortgage, you must talk to your

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mortgage lender. The first rule is talk to your mortgage defend Klay

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lender before you default. You could always rent out a room tax`free.

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There are lots of ways that you can help yourself through difficult

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times if you are having trouble with affordability. And it is in the

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mortgage lender's interest to keep you. Yes, and there are rescued

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steams available `` rescued schemes. The Thames water demand for higher

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bills has been flushed down the toilet. They had wanted an extra 8%

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on bills next year. ?29 in real money. The cost of running its

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business has gone up. The watchdog said Thames Water had to stick to an

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earlier smaller price rise. If you look at `` live outside London, the

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next round of price rises for all the water companies comes in in

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2015. If you have lived abroad in the last three years, you won't be

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able to get a mortgage from the nationwide.

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It has changed its rules and says you must have been resident in the

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UK for the last three years to get a home loan. It says it needs the rule

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to keep its new computers happy. Have you loaned money from the

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Co`operative Bank? If so, it you will decide its fate. They will give

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details of the latest rescue plan shortly. If you want to vote on it,

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you have until the 29th of November to do so.

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Barclays Bank says it will move four of its branches into the low`tech

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billing macro local Asda supermarket. Cash and check machines

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can be used while the supermarket is still open.

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Just seven shopping weekends left till Christmas. That is the reaction

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that you want on the day, isn't it? Did anyone ever look that happy when

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they opened and envelope when they found vouchers inside? Are they ever

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safe to buy? Like it or not, Christmas shoppers

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are already out. As they examine those seasonal temptations, there is

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a reminder that last year delivered one or two less welcome surprises.

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When HMV, Blockbuster and, it collapsed, for a while at least,

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their gift vouchers became worthless. In the in the case of

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Jeffords, thousands of customers who had vouchers were left out of

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profit. Some did eventually receive compensation in the form of free

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gifts, but there is still no guarantee that your money is safe.

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As a result, some campaigners want a change in the law. This lady set up

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a website to try and get voucher money ring fenced. Any retailer

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going bust would then have to honour those vouchers. If I give you ?10, I

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expect to be able to spend ?10. Not be told that actually your voucher

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has expired, you can't use it, and by the way, we have just gone bust

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as you definitely can't spend it. Amongst the options now being

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considered to protect consumers is that idea of ring fencing voucher

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money, or extending the consumer credit act. Either idea would be

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painful for retailers. As far as the business is concerned, all these

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options are quite difficult to administer, and they are also quite

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costly. Taking cash flow out of a business in the current economic

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climate is difficult. At the moment, customers with gift cards come near

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the bottom of the list of creditors. They are amongst the least likely to

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get their money back. Those representing the industry wanted

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changed. Consumers are currently at the mercy of administrators. There

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is no guarantee that consumers can get their money back? No guarantee,

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but if a retailer goes under, that is down to the administrator. Most

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customers should be fine, but they are being warned to be careful about

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where they buy their gift cards. One thing you can guarantee is that

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we will bring you the gift of news all week long on the Your Money

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pages of the BBC News website. You can follow us on Twitter. Back again

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next week, see you then, thanks for watching us today.

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You are watching BBC News, the headlines this morning: A major

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relief operation is under way in the Philippines, at least 120 people are

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confirmed dead following one of the most powerful storms ever recorded.

:14:17.:14:22.

William Hague says progress at talks over Iran's nuclear programme, there

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is progress, but there are still important issues to be resolved.

:14:28.:14:33.

BT Sport have won the exclusive rights to televise live Champions

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League and Europa League matches in a deal worth nearly ?1

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Weekly round-up of news about mortgages, savings, credit cards, bank accounts and pensions. Helpful tips and advice on how to get the best deals, consumer rights and making your money work harder for you. With Declan Curry.


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