Money

Where can first-time buyers find value?

Christina Hoghton — 2013-05-26T03:00:00+00:00

Buying a property is a key moment in many people's lives. The excitement of purchasing your own home is enormous and the feeling of walking through your own front door for the first time very satisfying indeed.

In reality, you may not be walking into your dream property as a first-time buyer. Unless you have a lot of money it is more likely you will be buying the best place you can find within your budget, with the intention of moving on to something bigger and better one day.

But is there any way that you can make your initial homebuying budget work harder for you? And is it possible to get more value for money as a first-time buyer by choosing specific types of properties or locations?

If you are willing to think outside the box you might be able to get more for your money.

1. Auction properties
Homes under the hammer are certainly an exciting way to get onto the housing ladder and you can definitely pick up a bargain, with many first-time buyers and property investors bagging properties for well under market value.

If everything goes your way on the day, and there isn't much competition in the auction house, you could be very lucky indeed. But proceed with caution, as you officially exchange contracts on the fall of the gavel and are financially committed to the deal - usually to the tune of 10% of the agreed price.

This means you should do any investigations on the property before you bid - even though this requires a financial outlay on a house you may be outbid on. Pay for a surveyor to check out the property (assuming you can gain access) and ensure you get hold of the legal pack and get a solicitor to check it first. It is essential you know what you are buying.

If you are confident that you want the place you could end up getting a lot more for your money than on the open market. But remember, if a property is that good, you could have some competition on auction day!

2. Up and coming areas
Buying your first home in an up and coming area is a bit like winning the property jackpot. You get a decent place for a modest sum, and over the next few years the surrounding neighbourhood improves, boosting property prices and making it much more desirable to buyers.

Of course, the problem is spotting an up and coming area before it has already become popular - and in reality that means taking a gamble, because it is hard to know which places will improve.

Some good indicators are decent transport links and a busy high street - even if it is a bit rough around the edges, it's encouraging to see a community using its shops.

And of course, a small but growing community of twenty-somethings and young families priced out of posher areas can be a good guide. The presence of a couple of independent cafes, perhaps an art collective, a smattering of baby massage classes and a farmers' market are also decent clues to postcodes that are becoming gentrified.

Wendy Ravenscroft, sales manager at John Mellor estate agency in Heaton Moor, Stockport, says: "Up and coming areas tend to be in the next postcode to places that are already desirable. For example, in Manchester Whalley Range has benefitted from being next to trendy Chorlton, with a knock-on effect on house prices."

3. A 'do-er upper' home
A good alternative to finding a cheap area with potential is finding a cheap property that you can pick up for a modest sum before transforming it into a dream home.

These 'do-er upper' homes are getting harder to find, probably due the proliferation of programmes aimed at novice developers and the unwavering obsession we have with property in general.

They are sometimes the properties of people who have passed away and are now being sold by their estate, so a deal will often be done by the family members to hurry things along.

And if the property needs modernising, or more substantial work, a lot of other buyers, particularly families, will be put off.

But however appealing 'do-er upper' homes may be they aren't always easy to get your hands on, warns Ravenscroft: "It can be hard for first-time buyers to get hold of properties that need significant work, especially if they need to borrow a large proportion of the property's value, as the lender may not take into account the potential value of the refurbished property.

"These do-er upper houses are often snapped up by cash buyers, in particular experienced developers."

4. Homes with space to extend
As well as buying homes with the potential to improve, looking for properties with space to extend is also a great way to get value for money, and add value. They may not necessarily command a huge premium now, but if you can add extra living space to the home, you could significantly increase its value and its desirability.

Ravenscroft says: "Buying a home with the potential to extend can be a good idea, such as a corner plot, a place with enough roof pitch to put rooms in the loft, or a property with a large garden. Even if you don't want to do the extension yourself, the property will be appealing to future buyers because of its scope to extend."

5. Move to the North
It's tough for first-time buyers everywhere but it's common knowledge that those in the South of England, particularly the South East find it much harder to get on the ladder than those in the North, Wales and Scotland. House prices are simply so much more expensive.

For example the average house price in London in the first quarter of this year was £306,919 compared to £128,594 in Scotland, according to Nationwide.

While it might seem like a drastic measure, relocating to a new area - either further north, or even just a cheaper town in your region - could save you a fortune. It might be worth considering, particularly since cities like Leeds and Manchester are hubs for legal services, finance and creative industries, so there is the potential to make an interesting career change too.

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Payments made when banks have shut

Chris Wheal — 2013-05-25T07:56:00+00:00

Filed under: Current Accounts

Britain has become a nation of after-hours bankers. One in five (21%) of us move money at the weekend with nearly twice as many (39% making banking transactions after 5pm. one in nine people (13%) say they often make payments after midnight.

That's according to research commissioned to mark the fifth birthday of Faster Payments, the UK's immediate internet and phone banking payment scheme.

One minute

Normally payments sent through Faster Payments reach their destination in less than a minute, no matter when they are sent. But even in cases where they take longer (for example to allow for fraud checks to take place) payments are guaranteed to reach their destination within two business hours.

Six out of ten (60%) 25-34 year olds know how long a Faster Payment takes, compared to just over two in ten (22%) over 55s. Encouragingly, approval levels among people who use the service are outstanding - 95% of those surveyed say they are satisfied with the speed of payments.

Banks are predicting there will be nearly 1 billion Faster Payments in 2013. Growth is expected to be driven by Faster Payments' involvement in the Payments Council's new mobile payments project, which is due to launch in spring 2014.

The new mobile payments service will enable secure payments to be made directly to or from an account without the need to disclose the sort code and account number, by simply using a mobile phone number as a proxy. Eight financial institutions - representing 90% of UK current accounts - have already committed to offering the new service.

Three countries

The Faster Payments Scheme was launched on Tuesday 27th May 2008, becoming the first new payments service to be introduced in the UK for more than 20 years.

Today, payments of up to £100,000 can be moved between 90 million individual accounts in the UK, with 2.5 billion payments worth more than £1.4 trillion processed since launch - the equivalent of £54,000 for every household in the country.

The UK is one of only three countries in the world to have a service that enables customers to make and receive immediate payments 24 hours a day, 365 days a year

Craig Tillotson, managing director of Faster Payments, said: "In just five short years, Faster Payments has established itself in our busy lives as the easiest way to move money at any time, simply quickly and reliably. Making immediate payments from our computer has quickly become second nature for millions of us; the next step in the continuing success of Faster Payments is bringing payments to every pocket through the new mobile payments platform."

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Holidays: is it cheaper to stay in the UK or go abroad?

Emma Sleight — 2013-05-25T07:00:00+00:00

Filed under: Holidays

If you're on a tight budget for your summer holidays, a new report has revealed that a staycation may be the more costly option.

Holiday company Thomas Cook has released its annual Holiday Cost of Living Report and the results are surprising.
Thomas Cook compared the prices of family holiday essentials in the UK with their cost across some of the world's most popular tourist spots such as Mexico, Spain and Tunisia.

The essentials included a three-course meal, glass of wine, bottle of beer, cup of coffee, can of Coke, bottle of water, daily newspaper and an ice cream.

The daily cost in the UK worked out at a shocking £34.85, while in Mexico the total came in at £18.85, a whopping £16 per day cheaper than the UK.

In the eurozone, prices proved cheaper than the UK alternatives with a bottle of beer costing £1.28 in Portugal and £3.50 in the UK.

Wine was just as expensive with a glass costing £1.45 in Portugal and a hefty £3.50 in the UK. If you indulged in a glass a day you'd add an extra £28.70 to a 14-night break in the UK.

The cheapest destination on Thomas Cook's list was Tunisia, where the items came in at £20.23, followed by mainland Spain at £20.61 and Turkey at £22.83.

The question is would you actually save any money in the end by counting the pennies daily abroad when you've splashed on the flight price to get there?

Joanna Wild, Retail Director at Thomas Cook UK & Ireland said: "What is clear is that an overseas holiday offers exceptional value for money, whatever board basis our customers choose, given that prices in many resorts abroad are considerably cheaper than in the UK.

"The key thing is to plan your money, so we recommend that customers speak to the experts in the Thomas Cook Travel Money team, who'll be able to offer some great rates as well as research your destination before you go."

Compare travel insurance here

Are you heading abroad this summer or are you opting to save the flight money and stay at home?

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Mortgage approvals in fresh climb

Press Association — 2013-05-25T02:42:00+00:00

Filed under: Mortgages

Mortgage approvals to home buyers climbed to a three-month high in April amid further signs that activity is gathering pace, high street banks have reported.

But the British Bankers' Association (BBA) said that despite the upturn in the housing market, low consumer confidence generally means that people still lack the appetite to take on new borrowing and are making determined efforts to shore up their savings.
Some 32,153 mortgages worth £5 billion were approved for house purchase in April, marking the highest number of approvals seen since January.

The BBA said that more first-time buyers are expected to enter the market in the coming months, which should help to free up some stuck housing chains.

The market has been boosted by various Government schemes, including Funding for Lending, which has given lenders access to cheap finance to help borrowers and prompted lenders to spruce up their mortgage ranges and slash their rates.

Other initiatives called NewBuy and Help to Buy have been launched specifically to give people with smaller deposits a helping hand.

The Council of Mortgage Lenders (CML) reported earlier this week that April was one of their strongest months since the financial downturn, with lending up by one fifth year-on-year. Surveyors and property websites have also been reporting evidence of confidence returning to the housing market, helped by a pick-up in buyer demand.

However, the BBA's statistics director David Dooks said that consumer confidence remains subdued, despite the signs of life returning to the housing market as banks offer more competitive rates and products. He said: "Low consumer demand is depressing demand for new borrowing and consumers are continuing to save, with deposits rising by 5.5% over the year to April."

The BBA's figures showed that net borrowing by non-financial businesses decreased by £2 billion in April, while for financial businesses it fell by £3.7 billion.

The report said firms are continuing to hold back while they wait for more certain trading conditions and prospects for investment.

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How safe is your bank's phone security?

Sarah Coles — 2013-05-24T11:37:00+00:00

Filed under: Savings & ISAs

David Cheskin/PA Wire

Which? has been testing the security of telephone banking services. It made more than 100 calls to nine British banks to see how easy it was to break through the security procedures.

Some banks saw off all attempts, but some of the biggest names fared worse than others.

In the calls, the researchers had not set up passwords, PINs or codes, so the banks were relying on their security questions. The aim was to see how easy it was for a caller to discover details of the account balance or overdraft limit.

Some banks were incredibly robust. First Direct took the top spot. Not only did they ask high-grade security questions, they also asked the caller to go somewhere quiet so they wouldn't be overheard.

Others were less stringent. Which? said that in one in five calls they were only asked the kinds of questions that could be easily answered by someone who had stolen your bag or wallet.

Concerns

Two banks were highlighted by Which? as having fallen short of their expectations. In one call to Santander, they were asked for nine pieces of information - but the researchers insisted that they were things that would be very simple to get hold of.

In a call to Halifax, the caller gained access to the account with just the card details and their date of birth.

The banks highlighted that different levels of security apply depending on what you are trying to do. It is easier to gain information on the overdraft limit - for example - than withdraw the entire balance of the account.

Santander emphasised that it has two levels of security and that the caller only cleared the first one. If they had wanted to carry out any other tasks, they would have had to complete the second level.

Halifax told Which?: "We take security extremely seriously and operate a consistent approach to telephone banking security across the Group's brands. Many of our measures are fundamentally non-visible, and would not be identified in a simple research exercise such as this".

So should you be worried?

The good news is that phone banking fraud is declining. The most recent figures show it fell 21% in six months. Clearly there are still some criminals getting through, but the decline shows that in by far the majority of instances, the security checks are protecting customers.

The banks are also making strides in developing telephone banking security. In its wealth-management and investment arm, Barclays is set to roll out voice recognition technology which can recognise a client in 30 seconds from normal conversation. In tests, 95% of people were recognised first time, but if it fails, traditional security methods can be used.

Protect yourself

Neither of these things means you are entirely secure. If someone takes your bag or wallet, it is vital to contact your bank immediately, to prevent them taking advantage of any information or using your cards.

You should also follow sensible security steps. Which? recommends making sure you cannot be overheard when you are telephone banking, never writing down your password or any security information, never responding to an email, call or letter asking for your password, account number or PIN, and checking your statements carefully for anything unexpected.

If you take these steps, you should help protect your account, and can also be confident that if someone was to gain access to your account, your bank would ensure you did not lose out financially.

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The day we nearly ran out of gas

Sarah Coles — 2013-05-24T10:38:00+00:00

Filed under: Utilities

Andrew Milligan/PA Archive/Press Association Images

It has emerged that in March this year we were closer to running out of gas than anyone suspected. One official has confirmed that at one stage we had just six hours of supply left.

So how did it happen, and could it happen again?

Running out

Reports at the time estimated that we could have as little as 36-hours-worth of gas left in the reserves. However, Rob Hastings, energy and infrastructure director at the Crown Estate, has confirmed in an interview that in fact there were only six-hours-worth of supplies left.

He told the Financial Times that if the levels had fallen any further it would have caused interruptions in the supply.

Why?

The crisis was largely a result of unexpectedly cold weather. It means that far more people put the heating on than the experts had predicted, so stocks were eroded very quickly.

At the same time, Sky reported that there were problems with a processing plant in Norway which provides gas via a pipeline to the UK. Meanwhile, the pipeline under the sea between the UK and Belgium shut down unexpectedly. It meant we had to rely on stored gas - and that started to run out.

Could it happen again?

The risks remain. The problem is two-fold. First, we only produce about 45% of all the gas we need, so we rely on imports. This relies on the technology of supply working, and is also dependent on a lack of political interference. Previous issues regarding the Russian pipeline raised awareness of just how much we depend on a peaceful political balance for energy.

Second, we just don't have much storage capacity in the UK. According to the Daily Mail we can store enough for 20 days. This compares to Italy which can store enough for 70 days, France which can store enough for 103 days, and the US, where stores could last six months.

This isn't as bad as it sounds. We will only call on those stores if all other supplies dry up. We import gas from a variety of different places, so we would be very unlucky to lose it all at the same time. In addition, we still have domestically-produced gas, so stocks will last far longer than 20 days even in the worst case scenario.

However, this lack of storage does leave us very much more vulnerable than other countries to interruptions of supply from overseas.

We came very close to interruptions in the gas supply in March. How long before we have to get used to the very real threat of running out of gas?

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10 of Britain's self-made millionaires

Hannah Ricci — 2013-05-24T10:00:00+00:00

Filed under: Career

Dominic Lipinski/PA

The rich twenty-something stars of Made in Chelsea may be winning BAFTAs and viewing figures, but squandering family fortunes does little to inspire entrepreneurship.

So we take look at the wealthy that have made it on their own through inspired ideas, shrewd business moves and dogged hard work.

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EU slips on oil jug ban after public anger

Adrian Holliday — 2013-05-24T09:30:00+00:00

Filed under: News

Public anger across Europe has forced Brussels to bottle out of plans to ban olive oil jugs in restaurants and cafes. The plans originally had been dreamt up by the European commissioner for agriculture, Dacian Cioloş.

Cioloş wanted new "hygienic" nozzles attached to the jugs, plus printed labelling on each bottle. A plan virgin on the ridiculous?

Public loathing

Very much so. In the end Cioloş - formerly a Romanian engineer - agreed that his plans had received a cold pressing from the public. "It was a measure intended to help consumers, to protect and inform them but it is clear that it cannot attract consumer support," he said, quoted in the Telegraph.

However it transpires the Coalition did not oppose the plans, which were part-aimed - allegedly - at stamping out restaurant 'fraud' (though no evidence was produced).

The move also exposes how Brussels law-makers can introduce legislation straight onto the statue book without the need of full, majority support from EU members. One farming association, Copa-Cogeca, is not pleased about the plans being stoppered.

U-turn

"It is totally unacceptable," Copa-Cogeca secretary-general Pekka Pesonen said in a statement, "that the Commission has done a complete U-turn and has succumbed to political pressure like this without any discussion with Member States and Industry. I urge the Commission to revise its decision."

However Pesonen has been outmanoeuvred. The EU has no plans to bring in similar regulations for butter, salt or other restaurant table basics - for the moment.

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This week's discounts, deals and freebies

Sarah Coles — 2013-05-24T08:39:00+00:00

Filed under: Shopping & Deals

AOL

Welcome to Freebie Friday, a weekly round up of the very best discounts, deals and freebies around.

This week we're getting ready for summer, with great deals on bike accessories, sunglasses and toiletries. And because this is a typical British summer, we have plenty of options for staying indoors too.

Free bike lock

O2 priority moments is a good source of offers. It's only available to O2 customers, but if you get an O2 SIM card, you can get access at low cost. Users of hotukdeals.com have highlighted one offer at the moment: a free bike lock from Halfords. It's worth £6.99 and some users are reporting it can be combined with a deal for a free bike service - so you're ready to head out on the road for the Bank Holiday.

Cheaper toiletries

If you're planning a holiday, sun lotion and after-sun, insect repellent, and holiday sickness remedies can set you back a small fortune. Myvouchercodes has a code for £10 off orders over £70 at Boots - which should take some of the sting out of the cost. It's valid until Sunday.

Reduced sunglasses

If digging out the sunglasses takes you back to the 1990s, then it could be time for an update. Myvouchercodes has an offer of 12% off plus free delivery at the Sunglasses Shop - which is valid until the end of the month.

Half price petrol

If you're prepared for a bit of a complicated deal, you can get £20 worth of petrol for £10. You'll need to buy a Shell Drivers' Club loyalty card with £20 worth of points from Mightydeals by 27th May.
It will be posted out to you by 11 June, and it needs to be registered online by 30 June. After registering you need to go to the 'rewards' section and select money off fuel vouchers. You then have a further three months to spend the vouchers - although you have to spend them all in one go.

Discounted furniture

For those expecting to spend more time indoors this summer, you can get a discount on new furniture to brighten up the drizzly days. The code FURNSAVE from Offeroftheday.co.uk will get you £20 off indoor furniture over £150 - valid until 28 May.

Cheaper tablets and games

And if you're looking for something to make your time indoors more exciting. Tesco Direct has a couple of discount codes at the moment. You can get £10 off when you spend £75 on electricals and gaming with the code TDX-TFNG. Alternatively you can get £20 when you spend £200 or more on tablets with the code TDX-TXHW. The tablets also come with free delivery, although you'll need to shop before Monday.

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The pensioner who lost thousands to cold-calling scammers

lovemoney.com — 2013-05-24T08:30:00+00:00

Filed under: Scams & Fraud

No one should ever engage cold-calling investment salesmen (invariably male) in a dialogue. Just slam the phone down hard as soon as you hear the boiler room's background buzz. Otherwise, they will catch you, play you, rip you off for as much as they can - and then try over and over again to squeeze you for more.
If you don't believe me, then read about Mrs SJ and her 13 year ordeal at the hands of fraudsters. Despite her long, expensive financial abuse, the authorities have done nothing to protect a vulnerable elderly woman. Her son, who asked for anonymity for the family, sent me her case notes.

Targetting the elderly
She was first approached in June 2000 when she was 72 by Goldman Williams, a fly by night firm which sold her six half cases of wine over the following 18 months. What exactly she was sold is unclear due to a large number of handwritten corrections on her documentation. Goldman (no relation to Goldman Sachs) worked out of a "suite" in a "business centre" - an address which would have caused my alarm bells to ring.

Her last purchases were some £4,000 of wine on 27 November 2001. Two days later, the official receiver was appointed in the public interests to Goldman Williams and associated firm City Vintners in order to wind them up. In all, she spent £8,208.

Two of the six cases were real and were later discovered in a bonded warehouse. They were worth around £3,900 but she had to pay regular storage fees.

Once bitten, twice shy?
It should have been a case of once bitten, twice shy. But that's not how it works. Phone fraudsters know that someone who has fallen for their story will be susceptible to a repeat version. So Mrs SJ was "re-activated" in November 2007 by a firm in Malaga, Spain. The paperwork was meaningless but the money - another £3,500 - was real. This firm changed addresses several times and then disappeared.

Fast forward to September 2012 when the Goldman Williams liquidators sent her an update. Needless to say there was no joy here. But this legitimate letter served as a prompt for someone to call her. Remember, this is an elderly woman living alone.

The caller got her to transfer ownership of the remaining wine in bond to another company, again operating out of a mailbox address. This new concern persuaded her to hand over what seemed to be her wine holding - now apparently worth £4,900 (assuming the wine was genuine), compared with an original spend of nearly £12,000 - in return for carbon credits.

So she exchanged an item of some value for worthless paper in a scheme which is, according to regulators, doomed to failure. This led to a second carbon credit merchant, who informed her the wine was worth £5,400 but - as a goodwill gesture - offered a swap into carbon credits apparently worth £7,650 via an "asset exchange".

It gets worse. Either the wine did not exist or the first "recovery" company stole it, but the second carbon company billed her for the full £7,650. It seems likely that these two companies are acting together to get as much as they can. According to her son, who has power of attorney for his mother, Mrs SJ, who suffers from some memory loss, cannot recall any of this.

Free guides:

From wine to carbon credits to coloured diamonds
The second company then sold her a coloured diamond for £25,000. The coloured diamond market, as readers know, is largely a nonsense. Read The coloured diamonds scam.
In her confusion, she sent three cheques - £25,000, £25,000 and £10,000 - all of which bounced. But the coloured diamond/carbon credit company had no intention of giving up, despite pleas from the son.

The dodgy diamond company's phone number is now permanently "out of order" although the son tracked down an ex-director who turned out to be a 21 year old who begged "don't tell my mum and dad about this job".

The diamond firm's website seems now to be closed. But the guy behind it is already in negotiations to come up with a new one.

Meanwhile, the son contacted the police and trading standards. However, he warns: "It is very frustrating to find out how limited and passive the authorities appear to be in this area of fraud. It would seem on the face of it that, with just a little bit of wit, they could easily get ahead of the game and try to anticipate some of it.

"The internet is making it easy for the fraudsters but, equally, it could also easily be used against them; for example, internet searches on known serviced office addresses and carbon credit/diamond trading etc. I have just tried this for interest sake and several dodgy sites appear immediately. Until I became involved on behalf of my mother, I would never have believed how people carrying out this kind of fraud appear to be able to act with almost complete impunity."

What to do if you're retired and in debt

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