The average rent fell by 0.8 per cent in the December

A recent survey has suggested that, in December, the price of renting a home – rather than buying a house with a mortgage – in England and Wales had fallen for the second month in a row.

According to this study – carried out by LSL Property Services – the average rent fell by 0.8 per cent in the December compared to November, to £711 a month.

Rent has been recorded as falling in all regions across England and Wales – except for Yorkshire and the Humber, the West Midlands and the East Midlands – with varying levels of decrease depending on the area in question.

The monthly falls seen in November and December are the first falls in 10 months, with rises occurring in each month prior to this.

The LSL has also stated that the seasonal decrease that has been seen is shallower than the previous year.

“The rental market was sheltered from the full impact of the seasonal lull by the strength of underlying tenant demand as many prospective renters took the opportunity to move in the run-up to Christmas at a time when the market is traditionally less competitive,” commented Mr David Newnes director of LSL.

However, when comparing this to the previous December, it would appear that the cost of renting is 4% more expensive than it was back in 2010.

LSL also added that their research had showed that, due to spending over the festive period, more tenants were getting behind on their rental payments.

They found that 10.7 per cent of all rent had either been late or unpaid at the end of December, compared to only 9.3 per cent the previous month.

But these difficulties haven’t just faced tenants, but also some landlords, according to The Association of Residential Letting Agents (ARLA).

Tim Hyatt, president of ARLA said: “It is more critical than ever to take references and conduct thorough research before signing a tenancy agreement,

“Seeking advice from a professional, licensed letting agent is the best way to ensure tenants and landlords’ rights are protected.”

Annually, rent has seen a rise in all but two regions – the South-West and North-East of England – in December.

Director of flat and house-share website Spareroom.co.uk, Matt Hutchinson, offered his comment on the current rental situation: “It may be premature to say the UK rental market has peaked and that we are about to see rents fall away. What we are probably seeing is a temporary blip, a natural cooling-off period for the rental market.

“The fact is the fundamentals have not changed. Demand is still significantly outstripping supply of new rental stock, and while December was a quieter month for the rental market, January and February are typically two of the busiest months.

“We would expect to see upward pressure on rents resume in early 2012.”

With renting looking to become more affordable over the course of the year, it is important for potential landlords to get the right buy-to-let mortgage to suit the property they wish to rent out.

The firm, which offers loans at a staggering 4,214% APR, has been forced to withdraw a page of its website that promoted its own short-term, high-interest loans over the standard student loan rate.

"The Wonga Advantage"

[Read more at Which4U]

UK savers are protected for up to £85,000 per person per financial institution.

And despite a multi-million-pound television advertising campaign designed to raise awareness about the guaranteed compensation level for savings UK deposits, only 3% of people are aware of the measures at the close of 2011, according to the Financial Services Compensation Scheme (FSCS).

FSCS Advert...? (Nope. Me neither)

[Read more at Which4U]

"Robbing the poor to feed the rich"

The ‘banking crisis’  is set to strike a new low in confidence at the end of 2011. And there is no Eurozone to blame here; it is a situation entirely of UK banks’ own making.

This week has been a decidedly poor one for banks, and has highlighted several problems endemic within the financial system.

[Read more at Which4U]

The company’s retail sales monitor saw that retail sales only grew by 0.7% last month (November), making it the weakest month for growth since May.

The BRC have suggested that one major reason why this could have happened is due to the mild weather that we have seen across the UK, which will have affected sales of items such as winter clothing and footwear.

Sales of non-food items online, by mail order and telephone have grown by 8.6% compared to the same month last year. But again, this is still the weakest growth since March.

Food sales growth has remained almost the same as this October’s five-month low, with most of the demand being seen coming from premium lines and ready meals. This has been put down to consumers wanting to save money by eating at home rather than eating out on a regular basis.

Shockingly, even the sales of products in the toiletries and cosmetics niche have also seen a fall for the first time in two years. This, again, has been put down to this winter’s milder weather, meaning less people are looking for cough and cold remedies and winter skincare products.

Director General of BRC, Stephen Robertson, has offered his comments on these low sales figures saying “Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting,

“Retailers hope that customers who’ve managed their finances carefully in recent months will still treat themselves and their families in December, unhampered by the severe weather which disrupted shopping 12 months ago.”

This information has made some experts fear that the UK’s economy may be heading back towards the recession that gripped the country over the last few years.

This may see many companies losing profits over the festive period, with a number of pre-Christmas profits warning and weak trading statements being issued by retailers in the last few weeks.

If you are looking to make those festive payments just that little bit easier this year, it may be worth while looking into a credit card. With great rates which allow you to pay 0% on purchases for upto 15 months, it could take the edge off buying all of those presents for your family and friends. Check out the wide range available with Which4U.

George Osborne delivered his riposte today in the face of mounting pressures, but weak growth forecasts look set only to further intensify the pressure on the beleaguered Chancellor.

Headline Figures

The Autumn Statement revealed that figures from the Office of Budget Responsibility (OBR) show a significant downgrading of growth over the coming years.

Importantly, for Osborne, they do not predict a recession. Growth has been revised from 1.7% to just 0.9% for 2011, and is set to contract slightly to 0.7% in 2012, before rising to 2.1% in 2013. The OBR suggests that unemployment is set to rise over this period, even accounting for the growth measures stipulated in the report.

Eurozone & Debt

The Chancellor adopted the OBR’s assessment that the Eurozone was a signficant factor in the downgraded growth prediction. Under pressure to defend his defiance of austerity measures, Osborne sought to contextualise the current situation in the UK via the Eurozone.

Without his austerity plan in place, he argued, borrowing would have been high enough to launch the UK into the centre of the Euro debt storm. Prior to the implementation of the cuts package, he stated, the UK government’s interest rates were higher than Italy’s, whereas now they sit even lower than Germany’s. This, according to Osborne, only “makes the case stronger”. The lower interest rates elicited by the government’s austerity package have apparently reduced the cost of servicing debt alone by $22 billion.

However, it could not be masked that the government intends to borrow much more than it had previously announced. Government borrowing is set to fall from £137 billion in 2010/11 to £127 billion in 2011/12, and is set to fall at an increasing rate thereafter. Debt is set to peak at 78% of GDP in 2014/15.

But – crucially for international markets – the proposals in place mean that both of the fiscal mandates set out are still due to be met. The OBR, accounting for a degree of error seen across previous budgets, offered a 60% probability of the government accounting for its structural deficit by the end of the term as predicted.

Pay & Conditions

Public sector pay – provocatively announced the day before a one-day public sector strike – is set to be capped at 1% following the two-year pay freeze currently in place.

Pensions, meanwhile, are protected, and the 5.2% rise guaranteed from the RPI inflation measure in September will mean the largest ever cash rise for pensions in 2012, when inflation is expected to fall. The rise in the pension age to 67 has been brought forward to 2026.

State benefits will also be boosted by the same index, which could lead to a deterioration in the budget depending on the prospects for employment.

Growth

The previously announced £40 billion ‘credit easing’ scheme was confirmed by the Chancellor, as well as a separate infrastructure plan. One ambitious measure sees the government pass on low international interest rates to domestic firms. As such, the credibility gained on the global markets – as the government sees it – can now provide credit at lower rates to bolster the economy.

A £5 billion infrastructure scheme was also confirmed. The addition of pension fund investments could add a further £20 billion for public projects. Included within the list of projects is:

• The electrifying of the TransPennine Express rail route between Leeds and Manchester,
• Road access improvements to Manchester Airport,
• Upgrades to major motorways in the South-East and South-West,
• Faster development of the Tyne & Wear Metro,
• An extension of the London Underground’s Northern Line to Battersea.

An extra £1 billion was announced for the Regional Growth Fund in England, and £400 million is to go towards stalled home construction projects where planning permission is already granted.

Plans were announced to make it easier for employers to hire and fire, and 50% income tax relief was offered for start-up investors.

Banking

The Treasury have reportedly arranged an allocation system with the Bank of England governor whereby “Quantitative Easing” measures will be distributed to banks as they, in turn, lend outwards.

The Chancellor opposed the European financial transactions tax (the Tobin tax), describing it as a tax on pensions that specifically disadvantaged London. The bank levy was increased, however, to 0.088% – the third such increase made this year.

Stormy Waters

The Chancellor can be grateful for the OBR’s independent conclusions that the Eurozone has been a considerable factor in the lower growth estimates. Observers and investors, meanwhile, can have confidence in realistic growth predictions that show no sign of artificial augmentation.

As the government reveals more borrowing, we are left to consider whether the severity of cuts has proved a failure, or whether, in fact, the low cost of servicing debt and the confidence in the UK finances relative to the rest of Europe could only have been attained through the current economic path.

Undoubtedly, there are inherent risks to the international markets were the UK to be seen to deviate from the austerity measures in place. Balancing the books remains the one fixed parameter for many eagle-eyed spectators at a time of great uncertainty. Low growth estimates, after all, make it clear that a return to recession is a clear possibility. The one certainty is that the difficult political and economic decisions look set to intensify in the months ahead.

How will you be affected by today’s Autumn Statement? Will you benefit from the postponed petrol duty rise? Could small firms benefit from better business rates? Does the Shadow Chancellor, Ed Balls, provide better alternatives? Drop us a comment here (or at Which4U) and let us know!

Keith McDonald
Which4U Editor

Fixing Damage:

In the event damage occurs to a home, it might end up costing a large sum of money. In fact, sometimes the amount of money save from having insurance cover the damage and pay for repairs might even exceed the amount paid to home insurance over the years.

Fixing damage from fires, floods, hail storms or other situations that might occur is in the vast majority of insurance policies. Repairs are often expensive and might even become complicated, depending on the form of the damage, the amount and the location. The savings from the insurance company fixing the damage often pay for the cost of putting money into the policy.

Rebuilding:

On a similar note, if a house is completely destroy from any problem that might occur, such as a fire or natural disaster, it will need to start over from scratch. That often means completely rebuilding the house. Building a house is an extremely expensive project and will always exceed the amount of money put into the insurance policy over the years. In some cases, rebuilding might even cost almost as much as initially buying the house. That amounts to a large cost saving by having insurance cover most of the price.

Protecting Valuables:

Home insurance might also include content insurance or might have the option to add this type of insurance. As a result, it protects the valuables within the home in case of damage or theft to the item.

For those who have ever had items stolen or damaged, even if it was an accident, the cost of replacing the item or losing the item might be worth the amount paid extra to the insurance company. Items like valuable jewellery are hard to lose and having a company insure against problems helps prevent the loss of the monetary value or the cost of fixing damage to valuables.

Better Health:

Having appropriate insurance gives homeowners peace of mind as it relates to their home. In many cases, releasing the worries about what will happen in the worst case scenario results in lower stress levels. Stress is very damaging to the human body and causes numerous health problems. That lower stress means better health in the long run, which saves money on hospital and doctor bills.

Money paid out monthly are only one consideration when it comes to the insurance of a home. The long term financial benefits that might occur and the peace of mind ultimately make it worth paying for coverage each month.

Protect your contents, such as precious jewellery with a jewellery insurance plan. There are many to choose from with many great offers that will protect them from being lost or stolen.

With the increasing number and popularity of mobile apps, major financial bodies have been looking towards innovative new payment systems for mobile devices.

The launch of these new mobile payment systems could now spell the beginning of the end for the traditional credit card.

Commonwealth Gold, American Silver

Last month, Google launched ‘Google Wallet’, an application designed to make payments easier for consumers while offering retailers more ways to offer loyalty programs. It is developing a system using Near Field Communication technology (NFC), and is expected to reach the UK by early 2012.

In terms of development, however, they may be beaten to the chase by Australia’s Commonwealth Bank, which today launched ‘Kaching‘, an app which allows smart phones / iPhones to connect with cash registers and to make payments by email and Facebook. It will be available within two months to iPhone users with operating system iOS4 or above. This would make CommBank the first commercial provider of such a mobile payment system.

How does it work? Payments on Kaching are enabled by adding iCarte to the handset, which allows purchases up to $100 to be made by tapping a phone where MasterCard PayPass facilities are present.

It is estimated that there are 42,000 such readers and more than seven million MasterCard PayPass cards currently in circulation. For its part, CommBank claim to have over six million online banking users and that more than 16 million log-ins took place in August alone. No doubt the roll-out of this payment system will see a huge expansion of these facilities.

Meanwhile, Australian giants Eftpos, which accounts for 85% for all debit payments in Australia, has also reportedly undergone a technological revolution, which will allow customers to conduct transactions with mobile phones and contact-less terminals. It is described as the first major change to eftpos’ functionality in a quarter of a century.

Revolution, then, is, quite literally, on the cards.

Britain Bronze, or Bronze Age?

So, America and Australia are readying themselves for the next phase in transactional technology. But does it spell an end for the credit card? In the UK, political scandal continues to play a defining role in the future of British finance.

A vast majority of Brits surveyed recently were wary about using their phones as makeshift credit cards. Recent phone-hacking political scandals in the UK have unnerved consumer confidence in secure telephony, and a poll of over 1,000 consumers revealed that only 17% would be comfortable using their mobile phones as a card payment device. 44% cited the lack of security software as their main concern.

Of the UK respondents, only 11% were uncomfortable using their credit cards to make online purchases via PC, but levels of doubt more than trebled when it came to the use of phones to make payments. Many felt that a phone was more likely to be stolen than a wallet and had concerns about the robustness of security measures that could feature on a mobile device.

It is unsurprising, perhaps, that CommBank reports security as having been of paramount importance in developing their system. Kaching includes password encryption, and no personal banking information will be stored on a user’s phone.

Will Brits willingly follow the rest of the world’s economy into this new age of transactional technology? Will they be dragged kicking and screaming? Moreover, will Britain’s stubborn resistance extend the life of the trusty plastic credit card?

The demographics of the UK survey revealed that the younger generation were more keen to adapt to new technology. A third hoped to use their mobile phones as a credit card in future, while a quarter of under 18s, without credit cards, are happy to use their phones for payment instead of other means.

Testing the Waters

There could be merits in scepticism. Other economies and major financial institutions will no doubt become interested spectators when commercial mobile payment systems begin operating, eager to see what teething problems and security issues will arise. And the recent UK phone-hacking scandal has highlighted the vulnerability of standard mobile phones to third parties.

Google, who appear to be the first conglomerate wishing to unveil a mobile payment facility to the UK, will need to work hard to convince and reassure a majority of UK consumers that mobile payments feel as secure as the material plastic credit card tucked safely away in the wallet.

Does this foretell the end of the traditional credit card? Do you feel comfortable about this turn to mobile payments? Drop us a comment and let us know!

Keith McDonald

Editor, Which4U

Recently, Google launched their own social network Google+ as a rival for the king, Facebook, and “people are flocking into Google+ at an incredible rate” according to head of Google, Larry Page.

Mr Page, one of the co-founders of Google, replaced Eric Schmidt as the CEO back in April of this year.

These recent profit figures are well ahead of market expectations, and shares in the company have risen by 6 per cent in trading after the market closed.

“The real interesting thing here is the expenses weren’t as high as the Street was anticipating,” commented analyst for UBS, Brian Pitz. “This is the fourth quarter in a row the company has accelerated their revenue on top line.”

Revenue for the company rose 33 per cent to $9.72bn – making it just shy of a having a quarterly turnover of $10bn.

Mr Page announced that Google “had a great quarter. Google+ is now open to everyone and we just passed the 40 million-user mark.”

However, it will still take a lot of catching up to rival the 800 million users that Facebook has amassed in the 7 years since its launch.

However, social networking is not the only thing that Google is making money on. They still amount a large sum of money each year through advertising based on their search engine, and their mobile phone operating system, Android, is proving to be a very popular alternative to Blackberry or Apple’s systems.

In related news, Google look set to launch their version of iTunes in the very near future.

If Google+’s success is anything to go by, Music Beta looks to be a strong contender in the fight for dominance over the music industry.

This will be put in direct competition with Amazon MP3 which, like Music Beta will allow users to store music online, rather than storing files on their PC. This allows them to listen to their music from any computer or enabled device (running android).

And with Apple having sold well over 10bn songs since its launch, this could result in a further increase in the profits for Google and further increase their grip on the technology sector.

With regards to how this company affects a critical illness insurance provider, it generally compares the majority of the insurance providers in the market within the United Kingdom. It looks at the level of covers that are offered by each individual insurance provider and assesses them and then they award the company with a star rating. This generally ranges from 1 to 5.

Not only does defaqto look at insurance companies, but they are responsible for comparing and researching, bank accounts, loans, mortgages and many others. They even have their own website to what show you what exactly they cover and exactly what they do not.

The scoring system that Defaqto uses to score critical illness insurance policies is called Data Numerical Analysis or for short DNA. Defaqto look at least one hundred and one features, benefits and parts of each cover provided. These are then scored from 1 to 5, 1 of which is the lowest level of the scoring and 5 of which is of the highest end of the scale. The reason behind this being done is to help customers decide upon which cover and provider best suits their needs.

There is however one thing to take into consideration, defaqto does not look at the premium of the plan because an applicant’s age, sex etc can affect this and this will of course change from one person to the next.

The Defaqto’s main aim is to be there to aid consumers and financial advisers in their decisions on looking for and choosing a provider when it comes down to financial aspects, these can be products such as mortgages, insurance etc. This will allow them to look before they actually buy a product and being able to see what they offer and if it suits theirs or their customers needs. If a customer is unsure about what cover they need or the insurance provider to go with, the defaqto star rating can help with their decisions because it rates the companies in accordance to how they fit into the financial market.

So if you have seen whilst possibly looking around for a form of critical illness insurance, even if it is on your existing policies paperwork or whilst shopping around for other type of products as mentioned above and if the provider you are looking at has a certain amount of stars then this is why. Defaqto have graded their policy that they offer and awarded it how they feel necessary the relevant star to coincide with the product they sell and have on offer. Defaqto are not a company that offers advice or can point you in the direction of where you need to go, however they can in fact provide you with factual information to enable you to make your own mind up on which insurance company to go with and which not to.

The aspects that Defaqto take into consideration when rating an insurance provider’s insurance are:

• The range of conditions that the provider covers.
• The exclusions that they have in force. The amount and type of standard exclusions that are applicable to all applicants that are in force are taken into account.
• If waiver of premium is available on their policy or not.
• If any buy back options are available by that specific provider.
• The services that insurance provider has available. These are support services such as a claims support line to help people cope with their illnesses.
• If they offer a guaranteed insurability option.
• If they offer sum assured indexation on their plans.