Car Insurers Debate Over Future Profits

UK car insurers have been running an unprofitable business for 14 years. Independent market analysts, Datamonitor, say 2009 looks to be a profitable year despite the doubts

March 13, 2008

Budget Report Expectations

Chancellor Darling's Budget Report is expected to raise taxes on alcohol, fuel emissions, flights and many other issues concerning the economy. Tax burdens expected to increase on poorer families

March 12, 2008

Card Fraud Rises Again

Card fraud has increased over past year. Whilst chip and PIN technology has been successful in the UK, criminal activity overseas has increased 77 per cent

March 12, 2008

Tax Cuts Needed To Restore Confidence

Appeals for corporate tax cuts are submitted to the Treasury as it prepares its Budget report this Wednesday. Business and banking sectors are worried about the direction of the UK economy

March 10, 2008

First Time Buyers Take Hit From Stamp Duty

Stamp duty tax has not kept up with the rate of increase in house price inflation over the past decade. Yet another hurdle first-time buyers must leap over to get on the property ladder

March 10, 2008

Read all Finance News

Northern Rock Continues To Lend Controversial Mortgage

Northern Rock is struggling to win new mortgage business and despite its financial difficulties and precarious situation, it refuses to discontinue its high risk lending rules. They are still permitting home buyers to borrow as much as to six times their annual income. The ailing Newcastle-based bank will continued to sell its controversial 125% mortgage and personal loan package, despite criticism from mortgage brokers.

One broker said he believed the bank would need to maintain its high lending multiples "to offset the damage done to its brand and the higher rates on its previously best-selling products".
High street mortgage and loan lenders recently tightened their lending criteria in response to Northern Rock's bailout. This is putting their clients at risk of facing higher interest rates and fees when the bank is taken over.

Some sub-prime lenders, who lend to home buyers with a poor credit history, have already discontinued their high risk loan and mortgage products. Mainstream banks and building societies are now focusing on customers with higher credit scores.

Northern Rock sales staff can sanction mortgage offers of more than five times earnings to customers with salaries of £100,000 or more. If the customer agrees to a five year fixed rate deal they can qualify for a loan worth six times their income, said mortgage broker London & Country.

Some believe Northern Rock is trying to keep their company healthy by increasing their mortgage and loan base.

Northern Rock said in response: "The company has received a number of approaches regarding a variety of potential transactions, including the possibility of an offer being made for the company, although no price has been referred to. The company is in preliminary discussions with selected parties but emphasizes that there can be no certainty as to the outcome of such discussions."

Published on October 1, 2007

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