This is Money Blog

Why mortgage borrowers are helping savers

We can't go back in time, so savers need to realise mortgage borrowers are helping them out and bury the hatchet.

Savers have much to complain about at the moment and the target of many, especially those with a paid-off mortgage or renting, is homeowners.

If it wasn’t for these dastardly home-owning types, especially those unlucky enough to have been born too late to buy a reasonably priced home, the Bank of England wouldn’t have had to turn the base rate into a bargain basement rate of just 0.5%. And it should teach them a lesson by sticking rates back up.

However, this view – which I have simplified but is expressed with some regularity - does miss the point slightly.

Is Halifax deliberately trying to lose customers?

Are Halifax’s new overdraft charges a ruse to get rid of customers?

The thought that there may be a cunning mastermind rather than an accident prone goon, somewhere behind Halifax’s decision to court public fury by whacking up overdraft fees, occurred to me the other day.

Lloyds Banking Group, the parent of Halifax, needs to trim back its share of the UK current account market from 30% to 25% to please the EU.

This is just one of the moves the hastily created banking giant – conjured up by an inept merger of Lloyds and HBOS – may have to make in return for state aid.

The interest-only mortgage timebomb

Forget affordability, income multiples and self cert, interest-only mortgages are the real elephant in the room of the UK property market.

The chart below is hidden deep in the FSA's mortgage market review, which has been grabbing the headlines today.

It shows the rise of interest-only mortgages as house prices boomed from 2002 to 2007, from 13% of those taken out to 33%.

Inflation could hit 3% by January

The argument over inflation vs deflation highlights the difficulty in making successful economic forecasts.

Economists are split as to which one poses the biggest threat to the UK economy and that’s a pretty big division of opinion.

Despite prices falling on the Retail Prices Index and price rises easing on the Consumer Prices Index, it has been the inflation worriers that have had the upper hand – pointing out how inflation has not fallen back by anywhere near as much as expected.

Today’s inflation figures from the ONS though turned up a rare occurrence: CPI inflation (The UK’s official measure) actually eased back by more than expected, coming in at 1.1% compared to a consensus 1.3%.

So, is the inflation threat really receding? Simon Ward, chief economist at fund manager Henderson doesn’t think so and he has boldly forecast CPI to be back up at 3% in the New Year.

Is Britain becoming a nation of savers?

Is Britain becoming a nation of savers? Slamming the stable door firmly shut after the horse bolted, we're now saving more money and paying off debts.

The ONS says the household savings ratio is up to 5.6%, the highest since 2003, while according to the Bank of England we also paid off £300m of consumer debt in August.

Despite the obvious problem of trying to get out of recession, this flirtation with thrift needed to happen.

But we've got a long way to go: the long-term average savings ratio is 8% and there's the small matter of a £1.5trillion personal debt pile that is less of a mountain and more of an alpine range.

When did an £800k two-bed flat become a bargain?

Here's a gem from today's Homes & Property section in the Evening Standard. Now Homes & Property is a fairly aspirational section and being in London's newspaper, prices can seem fairly detached from the real world.

But this just goes to show the difference between them and us – the them being the people who can afford to pick and choose where they live in the capital.

In an article on where to find value for money property, Hampstead bargains are highlighted.

It says: ‘Hampstead has always been sought-after, but Peter Brookes, of Savills, says the recession has brought it in reach of more people. ‘The feeling is that now prices have dropped buyers want to have a go at this area.’ A ‘mainstream’ two-bedroom flat in the village will cost about £800,000.

Need I say more?

- Simon Lambert, assistant editor, This is Money

Buy-to-let: Landlords get squeezed even harder

The property market may be being talked up in many quarters but buy-to-let landlords are finding it even harder to get a mortgage.

Buy-to-let specialist Paragon’s latest Trends research suggests more than half of the professional landlords surveyed have attempted to secure a new mortgage in the three months to the end of August and nine out of ten of them said doing so was getting tougher.

And this provides a vital counterpoint to all the stories of cash rich buy-to-let investors snapping up bargain homes, or landlords enjoying super-low tracker mortgage rates.

Paragon says there were just 196 buy-to-let mortgages available at the end of August – a colossal 94.4% down on August 2007 and a slip from the 218 available in May.

StockTwits: traders turn to Twitter

Even stock markets aren’t safe from Twitter. StockTwits is apparently the place to be for traders looking for the latest gossip.

It should probably come as no surprise that traders are taking to social networking phenomenom Twitter.

A service that enables them to brag about prowess, gossip about stocks and trading systems and try to start a stampede or chase the herd, all in short sharp bursts, was bound to be popular.

Today’s FT reports that 90,000 traders from New York to London have signed up and are tweeting stock tips, trading tips and general opinions. They simply tweet their opinion, the stock’s ticker and a dollar sign, which is then picked up and displayed on the StockTwits website.

The footballer who turned his back on the money

Footballers have got it all no? Not according to former Ipswich goalkeeper Shane Supple, who has turned his back on a game he no longer enjoyed and the riches it brings.

In a fascinating interview in yesterday's Daily Mail, Supple told a story that chimes with many football fans tired of the game's excess even while they are thrilled by its excitement.

Supple has headed back to Ireland, where he wants to become a policeman.

Among the choice quotes, Supple says: 'Even if I could have afforded to drive a Bentley, that’s not what I was in it for. Some seem to think it’s about flashiness, the big house, big money, cars. That wouldn’t be my take on things.'

House prices: a false dawn in a mini-bubble

It’s rare that you hear some common sense surrounding the property market. Usually the bulls and the bears simply compete to outshout the other, grabbing anything they can to back up their view. 

Often you simply have to take a quick look at what the vested interest is to easily disregard the comment.

Today though I saw a rare pearl of common sense. It came from Keshav Thukaram, managing director of buy-to-let website Smartlandlord.co.uk.

Commenting on the Halifax house price figures and suggestions the property market is staging a startling turnaround, he said: ‘Property prices are definitely recovering but only in the short-term - the economy isn't out of the woods yet. 

‘We are in the middle of a recession not a sustained recovery.  This is a false dawn in a mini-bubble.