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more than we can afford but it won't just affect people looking for a new
mortgage, it may affect those on mortgages already. That's what we
are looking at this week. This is your weekly guide to making
the most of your cash. New curbs on mortgages, but people who have a
mortgage already may be caught out. We will tell you who it affects.
Getting back the money that the banks should never have taken in the
first place, we will see how the financial ombudsman service is
dealing with PPI claims. And the superb ISA, we will tell you how the
new account will work and how we can make the most of it.
up over 18% in London over the last year,
That explains why the Bank of England has told
the mortgage lenders to rein in their galloping horses.
The Bank of England says it wants mortgage lenders to check
that borrowers could afford to pay back their loans, even
if interest rates rose by another 3%.
And it wants to cap the proportion of risky mortgages that
dwarf people's salary, the Bank says no more than 15%
of all mortgages should be risky mortgages.
That's mortgages where the loan is 4`and`a`half times bigger
The lenders are way, way below that target across the UK,
House prices may be up by more than 18% in London, but they
rose by less than 1% last year in the north east of England.
They fell by nearly 1% around Hull and the Humber.
It shows what a challenge the Bank of England and the financial
watchdog face, trying to control what's effectively a regional boom,
with financial tools that apply to the nation as a whole.
David Hollingsworth joins us from Bristol. Of course the mortgage
lenders have already brought in new tougher checks on affordability.
What impact has that had already? That's right, they are still bedding
in, if you like. The affordability test is at the heart of the lending
decision and it has got tougher, so lenders are looking at doing, and
outgoings. It remains to be seen how bad will hold back the level of
lending. So this measure doesn't really have an instant impact, it
will be in the background to prevent any slide in the future. When you
hear about curbs on lending, you think it is new loans, to new
borrowers, but some of this may affect people who have a mortgage
already but will need to renew the mortgage when their existing deal
runs out. Year, when they come to look for a new deal, they will go to
a new lender, they will have to go through the new rules that came into
place because of the mortgage market review. That will be new lending,
feeding into the figures that are going to be monitored by the bank to
prevent a slide towards more borrowers ring higher multiples. It
is mainly in London and the south`east that people are
affected, that is where the house price increases are the highest of
all. The bank really can't control what the house prices are, but it
can look at trying to minimise a move towards higher and higher
levels of debt. Those who are demanding bigger and bigger more ``
mortgages are likely to pay more in the housing market and that is
currently London and the south`east. A balancing act because in the
regions we are not seeing anything like the kind of rises that London
is. The head of mortgages at the building societies OCH and was on
breakfast this week and he raised the concern that limiting mortgages
to 15% of the total loan book could actually stop people who could
easily afford to repay a big mortgage, could stop them getting
the money in any case. At the moment the expectation is that there will
be no immediate change because the banks are well within the 15%. More
like 10% currently. Borrowers shouldn't expect a change next week
from this. The risk is still with the lender, the decision remains
with them and you can still borrow 4.5, or more. This puts a safety
break in place, so if there is a move to a slacker lending policy and
more always take higher multiples, this will kick in and prevent higher
levels of indebtedness Thank you for joining us.
The cost of taking the driving test is going
to fall in October, says the Driver and Vehicle Standards Agency.
The cost of car and motorcycle theory tests will
fall by ?6 to ?25 with a further cut of ?2,
The practical car test still costs ?62 on a weekday
Selling us insurance to cover our loans and credit cards
if we fell sick or lost our jobs, insurance that we didn't need or
It's one of the biggest, and most expensive,
If you want to claim the costs of that insurance back, the first
place you ask is the bank that sold it to you in the first place.
But not all those PPI claims go smoothly,
and many end up in the hands of the Financial Ombudsman Service.
Our reporter got an exclusive behind
the scenes look at how the Ombudsman is dealing with those claims. Also
tonight: Banks facing huge compensation pay`outs... We
remembered the headlines, payment protection insurance, PPI, was
mis`sold to hundreds of thousands of people. Since the start of 2011 a
staggering ?14.7 billion has been claimed, but not all of the cases
are straightforward. If you've made a compliment about payment
protection insurance and didn't the result you are after, the
chances are your next step would be to get in touch with
ombudsman service. We have been given exclusive access to see how
they deal with your complaint. Most people call into the financial Burns
service to start the process. they deal with your complaint. Most
people call into the Then you get they deal with your complaint. Most
people call into the Then advice on filling out the complaint form. How
can I help? You will be talking to an adjudicator. Most appeals are
settled by the adjudicator. There are cases that are appealed again,
or are more, gated. These are passed on to the ombudsman. Steve told me
how he came to a decision on a case. The consumer was
self`employed. The policy I have here has some clauses that make it
really difficult for a self`employed person to claim. My conclusion at
the end was that although yes, the business gave him a choice and they
were right on that particular area, because of the terms within the
policy, the detail I've gone into, I can actually say that the policy
wasn't really suitable for that client. So I'm going to uphold the
case and I will get compensation. So how busy is the financial ombudsman
service? They've received over 1 million complaints, half in the last
18 months. At its peak they were getting 12,000 calls a week. They
are still getting 5000 a week. It isn't just mortgage PPI, and credit
PPI. 5000`10,000 claims have been made against retailers who have sold
the likes of cars and fridge freezers on credit. Many people use
a claim management firm to get the money back but that isn't always
necessary. It isn't difficult to make a claim directly. You don't
need to use a claims management company who are usually the people
sending texts. If people want to use them, great, but you don't have too.
My advice would be to have a think about whether you may have a policy.
Many people down there lies that they did. The volumes of claims that
the ombudsman deals with are still very high and some have been
critical of the speed so it has taken on more people. Due to the
number of staff who deal solely with PPI claims, the organisation is now
twice as big as it was before the beginning of the scandal.
From next week, we'll pay less to make or receive
calls on our mobiles when we're travelling in the European Union.
The maximum charge will be around 15p a minute.
Sending on will cost a maximum of around 5p.
Browsing the web, getting and sending emails, that
There is an overall spending cap on all these charges, it's
If we go over this limit, our data roaming facility will be
cut off, unless we tell your mobile company it's ok to spend more.
But old friend of this programme, Sarah Pennells, Editor of the Savvy
woman website, warns those text charges are just for text.
Watch out if you're sending pictures, the
From next week, we can keep more of our savings,
The new, bigger, super ISA savings account is launched.
We'll be able to put up to ?15,000 into one
Fine if you've got that a year to spare .That's all from
It is another roughly ?3000 per person, and don't forget that if you
are in a couple, that is ?15,000 each, so actually you can save up to
?30,000 and avoid tax on that. That is as a couple, as an individual,
you are only allowed one of these a year, is that right? It is a bit
more, located than that, I am afraid. You can have a cash Isa, and
a stocks and shares Isa. I thought the point of the new rules was to
get with that distinction? Yes, that this tension has gone, so you can
have one ISA. The flexible to that will be attractive. `` the flexible
at the foot of you used only be able to move from cash into stocks and
shares, now you can go in both directions. When we talk about
moving money between accounts, we don't mean going in and the cash,
because there is a limit on how much you pay in... And if you take the
money out, you lose the protection and you can only put as much in as
is allowed by your allowance. So the magic word is transfer, rather than
withdraw. Exactly right. The text year started in April, what happens
if you opened an old ISA account after April but before these changes
click in? What you can do between now and the end of the current tax
year is to top it up to the limit. If you put in the full ?11,880, you
can put in the extra to take up to ?15,000. You can keep it all in cash
if you want to, if you don't want the risk of investing in the stock
market, you can put some of the money into shares, depending what
accounts are available, what about other investment types? The amount
of investment types has expanded. You have mentioned cash, you have
mentioned individual shares. Of course, you can put funds in there,
but also there are more types of shares. For example, the smaller
alternative investment market, you can put those in and I say now, and
in fact there is a consultation `` in an ISA now. What about things
like bombs or gilts. `` bonds. There was a limit on the type of bonds you
could put in. You are betting on the 3.20 at Aintree, that still doesn't?
Absolutely not, this is a long`term savings mechanism! If you have never
done this before, where do you go, who do you talk to? It depends on
what type of ISA. Banks and building societies will offer those, but if
you are in shtick in moving between cash and stocks and shares, then a
stockbroker or a fund provider will help you out there. I just wonder is
it worth it? If you are keeping your money just in cash, looking at the
interest paid on it, and it barely keeps up with rising prices, even
with the tax break. ISAs, certainly for cash ones, have been a pretty
poor investment in recent years. That is the point, keeping your
money in cash in the medium to long term is not a good idea, because of
the low rates, and it being eaten away by inflation. So this new
flexibility of being able to move within cash and stocks and shares
within one ISA is really helpful. That is it for this week's Your
Money. You can follow us on social media. More again next week, thank
you for watching today. European leaders offer
an olive branch to David Cameron following his defeat in the vote
on the new Commission President. The United States has started to fly
armed, unmanned aircraft over Baghdad,
saying it needs to protect American
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.