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

House Prices Fall Again In February

The latest survey published by Nationwide Building Society confirms that house prices yet again fell in February by 0.5%.

A string of other surveys recently carried out have also shown a marked decline within the housing market dating back as far as last summer. Just this week a survey published by the Land Registry produced figures showing a drop in the annual rate of house price inflation by 2.7%, the lowest rate since November 2005.

The average house price is now estimated to be £179,358 down from £180,473 and marks the fourth month in a row that property prices have slipped.

Fionnuala Earley, chief economist at Nationwide said:

"The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year."

Nationwide is predicting flat house prices for 2008 but the building society warned against gloomy predictions for the housing market, claiming that recession was "a remote risk for the UK economy."

Ms Earley added, "It should not be surprising that we are entering a slower phase. It is encouraging that the outlook is one of just that, slower economic growth rather than recession."

"The reluctance of buyers given the current uncertainty in the market is not a surprise, but conditions for the UK housing market are perhaps less gloomy than some would have us believe."

Despite the Bank of England's two recent cuts in the interest rates over the past three months, any further drops now look unlikely in the immediate future.

It is no surprise that the slowdown in the housing market has also affected consumer spending. Earlier this week a survey revealed that consumer confidence fell in February to its lowest level in over 13 years. Significant rises in energy bills and food prices have added further pressure on household finances. People are now reluctant to make big purchases on their credit cards for fear of defaulting on their repayments.

In addition, the crisis within the banking industry has caused lenders to tighten their lending criteria. We have already seen the termination of 125% mortgages which has left many first-time buyers in a financial predicament.

The Bank of England current interest rate stands at 5.25%.

Published on March 3, 2008

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