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A combination of higher taxes, utilities bills and rising prices are eating away at household incomes, according to official figures.
Data from the Office for National Statistics show that families saw the biggest squeeze on their budgets for 30 years as real incomes fell 2.7% in the year to the end of March 2011.
There are signs of increased activity in the housing market with a rise in the demand for property, a survey of estate agents suggests.
According to housing information specialist Hometrack, demand went up by 10.6% in June, as the market revived after a sluggish May. Hometrack’s director of research, Richard Donell, said part of the explanation was the willingness of sellers to drop their asking price to secure a buyer.
A recent opinion poll suggests that more than a quarter (28%) of us believe interest rates have risen in the last 12 months, while a smaller proportion – 17% – think they have fallen.
The poll was conducted for the Bank of England, whose Monetary Policy Committee (MPC) has actually kept Bank rate (often called “base rate”) on hold at a record low of 0.5% since March 2009.
Borrowers are keen to pay back their credit card debts, latest figures from the BBA (British Bankers’ Association) suggest.
Although consumers put £6.8 billion of new spending on their credit cards in May, more the £7 billion was paid back. Commenting on the figures, BBA statistics director David Dooks said, “Money is still tight and people continue to pay off debt rather than save or borrow.”
Homeowners could benefit from a combination of low interest rates and stable house prices – despite a sluggish performance from the UK economy.
That’s the suggestion after latest signals on rates from the Bank of England, following upbeat news on the housing market from the respected Centre for Economics and Business Research (Cebr).
Standard variable rate mortgages are coming under fire, after consumer watchdog Which? warned of a squeeze on borrowers from higher interest rates.
Standard variable rates (SVRs) are the headline rates which many borrowers shift onto when their original mortgage deal lapses. According to Which? thousands of those on their lender’s SVR could face financial difficulties when interest rates begin to rise.
Mortgage lending received a welcome boost in May, according to latest figures.
The Council of Mortgage Lenders (CML), reports that gross lending totalled some £11.3 billion, 12% up from the £10.1 billion lent in April, and just ahead of the level for the same period last year.
Bank of England governor Mervyn King has mounted a strong defence of its low interest rate policy.
In a speech to top City figures at the Mansion House, the newly knighted Sir Mervyn highlighted the role of the record-low Bank rate in keeping the economy afloat since the financial crisis. And he signalled that, with low wage-growth and restricted lending by the banks, inflation was likely to fall back – making damaging rises in rates unnecessary.
Soaring rent levels promise good returns for buy-to-let landlords, if figures from LSL Property Services are anything to go by.
According to the residential specialist’s index, average rents in England and Wales rose by 0.5% in May, leaving the typical monthly payment at £696 – 4.4% higher than a year ago. And London saw much bigger increases, with substantial rises too in the North East and East Midlands.
A closely-watched survey has given a downbeat assessment of the state of the housing market outside London.
According to the Royal Institution of Chartered Surveyors (RICS), a growing number of property professionals judged that prices in their area fell during May, while activity levels were subdued.
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