Monthly Archives: August 2015

On the record.

On the record

Interestingly, I was looking to buy some tickets this week for the latest UK tour by eighties pop legends China Crisis, who penned such classics as “Tragedy and Mystery” and “Wishful thinking”; my subconscious triggered by financial experts on Tuesday predicting the fall of the emerging economies and the possible start of a new “global crisis” (although I wasn’t sure whether this was the new band name for the Liverpool duo looking to do a world tour). The experts called it another Black Monday, although I was hoping they would have called it Blue Monday as the legendary Peter Hook from New Order is also touring.

So the implications for the UK – well we’ve heard that predictions for an interest rate rise have pushed the month of change (Tears for Fears) back to October 2016, although no-one should rely on predictions for their financial future, and that 631,000 mortgage holders might be going to their bank to ask for a little extra time to pay off their balance as their pension funds dropped in value. According to research from Partnership the majority of 40-70 year olds have a traditional view on their debts using repayment and overpayments, but the 9% who intend to use their retirement savings to repay their mortgage might have to pay a little more interest.

The concern for some will be that 8% or 561,000 people say that they intend to rely on an inheritance and with parents or relatives living longer, then they may also be paying a visit to their lender to tell them why (Bronski Beat) the mortgage hasn’t been repaid. So now industry commentators are turning their attention to the states and are asking whether the first rate rise will be born in the USA (Bruce Springsteen) before the end of the year and that the continued rise was just wishful thinking. Whatever happens, it’s been an interesting week for us all when we look to the east, then to the west, and eventually get to the weekend where we look forward to firing up the record player once again.

Neil Hoare

Commercial Director

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Weekly Round-up, 28th August 2015.

Buy not rent.

The cost of buying a home for first-time buyers is £670 a year lower than renting, according to new research by Halifax. The average monthly costs associated with buying a three bedroom house in the UK for a first-time buyer (FTB) was £666 in June 2015, 8% (£56) lower than the typical monthly rent paid on the same property type (£722 a month).

This is in contrast to June 2009, during the financial crisis, when the average cost of buying was 16% (or £1,154 per year) more than the average rent paid. Even though the average price paid by first-time buyers for a three bedroom house is 25% higher than six years ago, the monthly costs of owning has come down as the average mortgage rate has fallen to 2.91% from 4.92%. Average rents have grown by 23% in the same period.

In the past year, with the price of a typical first-time buyer home rising by 8%, the difference between the cost of owning vs. the cost of renting has narrowed from £85 in 2014 to £56 in 2015 – a fall of 34%. This is partly as a result of average monthly mortgage costs rising by £40 while average monthly rents have only increased by £8.

According to figures from the Council of Mortgage Lenders, there were 136,100 first time buyers in the first six months of 2015. Compared with the same period in 2014, this represents a 9% fall in purchases (from 149,500) – the first annual decrease on this basis since the first half of 2011.

However, in context, with the exception of 2014, it is still the highest total for the first six months since 2009 and was 87% higher than in the first half of that year (72,700). Part of the reason for the slowdown is that supply remains restricted, with the stock of homes available for sale falling further to new record lows.

House prices resilient.

According to the Nationwide, UK house prices increased by 0.3% in August, though the annual pace of house price growth edged down to 3.2% from 3.5% in July. The annual rate of price growth was the weakest since June 2013; this partly reflects the high base for comparison, since prices increased at a particularly strong rate in August 2014.

The UK’s largest Building Society suggested that this month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%. However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates. Surveyors reported the lowest ever number of properties on their books in July (on data extending back to the late 1970s – see chart below) whilst new buyer enquiries picked up.

From the data UK house prices have proved remarkably resilient in recent years, certainly compared with many other developed economies. UK house prices didn’t fall as far during the financial crisis, and even where they declined by a similar magnitude, UK prices generally recovered their pre-crisis levels more quickly. UK house prices are currently around 5% above their pre-crisis levels, while prices are still well below their pre-crisis peaks in Ireland (-38%), Spain (-36%) and the Netherlands (-18%).

Just bricks in retirement.

Just over half a million people in the UK [631,000] intend to use all or part of their pension to help repay their mortgage balance reveals new research from specialist insurer, Partnership.

While the majority of 40 to 70 year olds with mortgages intend to meet their obligations via monthly repayments (71%) and additional lump sum contributions (25%) – up to 9% [or 631,000] intend to use their retirement savings [either entire pot or tax free cash] to repay their mortgage. This is lower than the figure recorded last year [2014 – 14%] as significantly more people are looking to more traditional methods to repay the outstanding balance on their mortgages [+13% – monthly repayments].

That said, 8% [or 561,000 people] say that they intend to rely on an inheritance to repay the outstanding balance on their property and 7% [491,000] confess they don’t know how they will meet their obligations.
– See more at here.

Typ-o.

Five million people in England have blood sugar levels indicating a high risk of developing Type 2 diabetes, according to a new report published this week by Public Health England (PHE). The report, compiled by PHE’s National Cardiovascular Health Intelligence Network (NCVIN), provides the most accurate and robust estimate of how many people over 16 in England have blood sugar levels in a range indicating a high risk of developing Type 2 diabetes, otherwise known as non-diabetic hyperglycaemia.

It was commissioned by the NHS Diabetes Prevention Programme (NHS DPP), which will support people in reducing their risk of developing Type 2 diabetes by helping them lose weight, be more active and have a healthier diet.

The new estimate further underlines the need to act on Type 2 diabetes, especially as it already results in 22,000 early deaths and costs the NHS £8.8billion every year.

Lottery win?

Research conducted by YouGov on behalf of the Society has shown that a significant number of the British people have not put adequate safeguards in place to protect against a loss of earnings resulting from an inability to work.

Amongst the key findings of the survey were that 53% of workers said they would depend on the state in the event of being unable to continue to work due to illness or injury, 41% of workers think they would last less than three months before they ran into financial difficulties and 8% of workers think that they are likely to win the lottery in the future – just slightly less than the 9% who think they will be unable to work due to sickness for 12 weeks or more.

Although employment contracts will vary, workers who are off sick for four or more days in a row are entitled to a minimum of £88.45 through Statutory Sick Pay (SSP) which is paid for 28 weeks by the employer. Thereafter, the claimant has to make an application for Employment and Support Allowance (ESA). An assessment rate of £57.90 per week for under 25s and £73.10 for over 25s is paid for up to 13 weeks and then either £102.15 or £109.30 per week depending on circumstances thereafter. The current UK average earnings is £488 per week so even a temporary reliance on SSP or ESA would result in a significant financial shortfall for many British workers.

At this moment, over 2.5 million people have been unable to work for three months or more and are claiming illness-related benefits*. Britons are at risk of enduring income shortage with their ‘it won’t happen to me’ attitude and lack of either savings or financial product to protect their income.

Puns the word.

Darren Walsh, the comedian who won the first UK Pun Championship last year, scooped the prize for Dave’s Funniest Joke of the Edinburgh Fringe with a line from Punderbolt, his first hour-long show in the Scottish capital.

The 39-year-old received 23% of votes with the line: “I just deleted all the German names off my phone; it’s Hans free.” The pun beat great insight from Adam Hess such as: “Surely every car is a people carrier?”; observational humor by Masai Graham: “What’s the difference between a ‘hippo’ and a ‘Zippo’? One is really heavy, the other is a little lighter”; and travel tips by Dave Green: “If I could take just one thing to a desert island I probably wouldn’t go”.

Tom Parry was highlighted for his meteorological observation: “Red sky at night. Shepherd’s delight. Blue sky at night. Day”, and Alun Cochrane and Simon Munnery gave views on marriage and separation: “The first time I met my wife I knew she was a keeper ; she was wearing massive gloves” and “Clowns divorce. Custardy battle”.

Finally, 12 year old Grace the Child gave us: “They’re always telling me to live my dreams. But I don’t want to be naked in an exam I haven’t revised for…”.

Protecting their next steps.

For many families this week, they experienced the highs and lows of opening GCSE results. The future security of their children was at stake – would the answers the students gave on an educational fact find deliver the right outcome? The right answers could create future financial security for many years to come.

Now is also the time when we start to think about our children with shops full of new school uniforms and queues at the shoe counters as feet are measured for the regulation black. How many times will parents try and reconcile the cost of bringing up children and the price of the leather needed to stop socks getting wet? Is the shoe shop the best place to remind parents about the need to protect the education of their child, and be able to afford new shoes should the worst happen?

In 2014, £3.44bn was paid to nearly 128,500 customers or families by the protection industry. Families that would have suffered had they not arrived at the right answer when completing the fact find of their lives. Unfortunately not enough people examine the consequences of a life changing event, not enough families answer the question “You’ve just been told you have a life threatening illness, discuss”. Every day, insurers pay out on average £9.4m to help more than 350 individuals and their families cope with the financial strains and worries that can be caused by a life changing event. 350 families that have opened an envelope from their insurer and got a result that whilst doesn’t answer the question, at least helps make the solution to the problem a little easier to find. Pass marks for the industry are increasing – almost 93% for income protection, 92% for Critical Illness, almost 99% for life insurance and for those insurers sitting with a whole of life policy they were just 0.02% off a 100% pass mark.

For the industry we still need to educate the UK population about the need for protection, it’s an examination all of us need to take at some point in our lives and unless we ask the right questions, our customers will never get right answers. For your homework, how do you introduce the concept of protection into an ever more positive population – discuss.

Neil Hoare

Commercial Director

Weekly Round-up, 21st August 2015.

Lending hits 7 year high.

The Council of Mortgage Lenders (CML), the body that represents the vast majority of lenders in the UK, has estimated that gross mortgage lending reached £22 billion in July. This is 9% higher than June (£20.1 billion), 14% higher than July last year (£19.4 billion) and the highest monthly figure since gross lending reached £23.6 billion in July 2008.

At £22 billion, the CML’s estimate of gross lending in July is the highest monthly total for seven years, but is in line with their expectation that lending would strengthen in the second half following subdued activity earlier in the year. The CML expects lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers. Today’s data is in line with the CML’s forecast that gross lending will rise to £209 billion this year, 3% higher than in 2014.

A sense of expectation.

According to the Markit Household Finance Report, over three-quarters of UK households (78%) anticipate a rise in the Bank of England base rate during the next 12 months, up from 62% in July. August’s survey indicated that UK households continued to bring forward their expectations regarding the next interest rate rise by the Bank of England. The proportion of households anticipating a rise in the base rate over the next six months reached 48% in August, its highest level since July 2014. Moreover, this figure has doubled over the past two months (24% in June, and 34% in July).

On a 12-month horizon, just over three-quarters of UK households (78%) foresee a rise in the Bank of England base rate, which is the highest proportion since July 2014. Moreover, this figure has jumped from 54% in June and 62% in July. By contrast, in August 2013, just after ‘forward-guidance’ was announced by the Bank of England, the survey indicated that only 33% of UK households expected a rate rise within the next 12 months.

ONS HPI.

The Office of National Statistics has said that UK house prices increased by 5.7% in the year to June 2015, up from 5.6% in the year to May 2015. House price annual inflation was 6.1% in England, 0.8% in Wales, 9.0% in Northern Ireland but were down 0.6% in Scotland.

Annual house price increases in England were driven by an annual increase in the East (9.2%) and the South East (7.7%) and, excluding London and the South East, UK house prices increased by 5.2% in the 12 months to June 2015. On a seasonally adjusted basis, average house prices increased by 0.4% between May and June 2015.

In June 2015, prices paid by first-time buyers were 5.1% higher on average than in June 2014. For owner-occupiers (existing owners), prices increased by 6.0% for the same period.

Protection pays.

Figures published this week by the Association of British Insurers highlight the vital role protection insurance plays in helping customers cope with the financial difficulties that can arise as a result of a death, serious illness or injury. In 2014, £3.44bn was paid to nearly 128,500 customers or families. This is up from £3.08bn paid out the previous year to help 98,900 individuals or families.

Every day, insurers pay out on average £9.4m to help more than 350 individuals and their families cope with the financial strains and worries that can be caused by a life changing event. In particular, these figures show that almost all (99.98%) of whole life insurance policies are paid out, worth £540m up from £450m in 2013.

The average claim paid in 2014 for individual income protection (IP) policies was just over £10,000, paying out on average for 204 weeks (nearly four years), worth £39,200, to help those unable to work. The average pay-out in 2014 on a critical illness (CI) insurance policy was £67,000. The percentage of CI insurance claims being paid continues to rise, with 92% paid (up from 80% in 2005). For a life insurance policy this figure was £60,900 with 98.7% of claims being paid. In 2014, insurers paid out more than £1.5 billion in claims and for whole life insurance the average claim payment was £7,400 with almost all (99.98%) of claims paid. In total £540 million was paid out in 2014. Total Permanent Disability claims averaged £73,200 with 64.1% of claims paid in 2014, up from 50% in 2009 when the ABI introduced the Statement of Best Practice which has meant that the share of declined claims has steadily fallen. This trend will continue as all new TPD policies are tested against the industry standard set by the ABI.

And finally..day dreaming.

In a study where you wonder why you’ve read it, apparently forgetting what day of the week it is may be the result of associating Monday with misery and Friday with fun, say psychologists.

The two ends of the working week both have strong identities, pushing “non-descript” Tuesday, Wednesday and Thursday to the back of our minds. Asked what words they strongly associated with different days, study volunteers attached more mental representations to Monday and Friday.

While Mondays mainly prompted negative words such as “boring”, “hectic” and “tired”, Fridays were associated with positive words including “party”, “freedom” and “release”. Almost 40% of the participants said they sometimes confused the current day with the previous or following day, mostly during the middle of the week.

Even more confusion reigned during a Bank Holiday week, with people often feeling they were a day behind. In a statement many of won’t understand, lead researcher Dr David Ellis, from the University of Lincoln’s School of Psychology, said: “Our research implies that time cycles can shape cognition even when they are socially constructed. The Bank Holiday effect implies that apparent weekday is not determined solely by the seven-day period of the weekly cycle: transitions between the working week and weekend also play a role”.

From the team at HLP, a happy party fueled Friday to all our readers – remember to release the freedom.

Time for a ‘payment secure’ strategy?

Is a week where we have seen the TSB and Nationwide increase product rates in a market where the traditional direction of travel has been down, down, down a reaction to the Bank of England’s monetary policy meeting or a simple question of supply and demand?

For the past year homeowners have been encouraged to take advantage of the low interest rate environment and with, as data suggests, two thirds sitting on standard variable rates now would be the time to seek a more “payment secure” strategy. And it appears from the Council of Mortgage Lending press coverage that the message is finally getting home.

Emerging from the dark months of January to March we have seen first time buyers increasing and lending to them up by over 20% although these numbers still aren’t as high as the same quarter in 2014 probably down to availability of stock. A similar picture emerges for home movers but the real story is in remortgage, up 31% month on month and up 34% when compared to the value of lending in June 2014.

So if there are more people wanting your product then you can increase your margin and, if this is the case, is the rhetoric around a base rate rise creating a price rise? Are we starting to see that half a percent or “50 bips” rate rise that everyone is talking about being of introduced early but not as a result of the decision of the Bank of England? The press speculate much about the impact on mortgage repayments of a change in the MPC’s stance but, since the financial crisis where lenders moved quickly to disconnect their SVR wherever they could from the base rate, there is no guarantee that a base rate rise will affect an SVR unless the lender elects to.

It will be interesting to see how a bank could justify passing on a rate rise when the difference between SVR and base rate has been so large and the interest paid to savers so small – you would probably expect to see a quicker alignment of savings rates as a result of a rising interest rate market than an increase in mortgage rates especially with the Government’s willingness to keep us spending our way through recovery. So back to basics, more demand for remortgage means higher prices for product and less competition as all lenders fulfil volume. Come on Bank of England keep the PR ball towards that first rate increase rolling.

Neil Hoare

Commercial Director

Weekly Round-up, 14th August 2015.

Keep on moving.

An estimated 155,000 people moved home in the first six months of 2015, according to the latest Lloyds Bank Homemovers Review. The number of homemovers in the first six months of 2015 was 9% lower than in the same period in 2014.

Despite this decline, the number of homemovers in the first half of 2015 was almost a third (32%) higher than in the same period in 2009 at the depth of the housing market recession. The rise in house prices over the past few years has boosted homeowners’ equity in their current homes making it easier for them to fund a deposit towards the purchase of their next property.

Notwithstanding the improvement since 2009, the number of homemovers in the first half of this year was less than half the total in the first six months of 2007. The percentage decline in the number of homemovers between the first halves of 2014 and 2015 was closely in line with the 10% fall in first-time buyers. First-time buyer numbers have, however, risen significantly more quickly than homemovers over the last few years. As a result, homemovers have declined as a proportion of all new mortgage financed home purchasers from 72% in 2004 to 54% in 2015.

The average deposit put down by a homemover in 2015 was £87,954; 8% higher than in 2014 (£81,549). This equates to 34% of the average price paid by homemovers of £261,524. Nationally, the recent changes to the Stamp Duty system have saved the average homemover £4,769, reducing the tax bill for someone buying the average priced homemover property of £261,524 from £7,845 to £3,076. The proportion of homemovers paying Stamp Duty nationally stands at 83% in 2015 (compared with 76% in 2005), varying regionally from 100% in London to 66% in the North.

The average age of a homemover is 39 years old; down from 41 in 2005. This fall may be due to a reduction in the number of total home moves being made over a lifetime with fewer people over 40 now moving. Nationally, homemover purchases are fairly evenly split between three main property types: semi-detached (30%), detached (27%) and terraced homes (25%). This is in stark contrast to first-time buyers who buy far fewer detached properties (8%) and a lot more flats (23% against 10% of homemover purchases).

What’s in a name?

Properties situated on ‘Lanes’ are worth over £100,000 more than those on a ‘Street’ according to new research by Barclays Mortgages. The data, generated by findings provided by property market specialists Hometrack shows that the first line of their address really can say something about the value of a home.

The results show that while homes on ‘Lanes’ come in with a resounding victory at an average property value of £245,906 (22 per cent higher than the national average), homes on ‘Streets’ come towards the bottom of the list, with properties averaging £142,374 (29 per cent under the national average – and a whole 42 per cent lower than ‘Lanes’) across the UK.

Just behind ‘Lanes’ are the ‘Ways’ and ‘Roads’, with average values of £218,742 and £212,717 respectively, followed by ‘Closes’ and ‘Avenues’ at £204,964 and £192,344.

Regionally, there’s also some significant variation revealed by the figures. The biggest divide in direct cost between street name prices occurs in the South East, where properties on ‘Lanes’ are an average of £137,145 more expensive than those on ‘Streets’ – while the most pronounced gap in price in relative terms is actually in Wales, with properties on ‘Streets’ barely reaching half the value of those on ‘Lanes’ (53 per cent).

Seven Seven.

Seven Families has revealed the seventh family to benefit from the campaign, the Knights from Newcastle. Melanie Knights formerly worked as a midwife, but lost her job in 2014 after prolonged absence from work caused primarily by arthritis, and lives with her three children and husband, and spaniel Oscar.

She also has been diagnosed with degenerative disc disease and Ehlers-Danlos syndrome, a disorder of the connective tissue affecting the movement of joints.

Knights will receive £1,500 per month from Seven Families, as well as advice to help improve her home life, aid rehabilitation and if possible support a return to work. Arthritis Research UK figures show about 8.75m people in the UK have sought treatment for osteoarthritis while musculoskeletal conditions account for 42% of reported workplace sickness.

Remortgage Boost.

According to the Council of Mortgage Lenders, the representative body for the majority of Lenders in the UK, in June first-time buyers saw a large month-on-month increase in activity compared to May, but little change when compared to June 2014. Home mover lending also saw substantial monthly increases and slight yearly increases in volume and value.

Interestingly home-owner remortgage activity increased by over a third month-on-month and year-on-year and buy-to-let continues to grow year-on-year and month-on-month, mainly driven by buy-to-let remortgage activity.

Looking over a 3 month period, and coming out of the first quarter seasonal dip, first-time buyers increased in number and amount advanced by over 20% but there was a year-on-year decline in lending when compared to the same quarter in 2014.

Home mover lending saw similar quarter-on-quarter increase but year-on-year decline whilst home-owner remortgage activity rebounded to higher volume and value compared to the first quarter of the year and the second quarter of 2014.

Buy-to-let has increased compared to the second quarter last year in both volume and value. This was mainly driven by the remortgage activity.

Creative with the truth.

Children ask “why?” eight times a day but parents are unable to respond more than half the time, a survey has found.

Almost half (47%) of parents with children aged three to 10 noticed an increase in the number of questions during journeys, according to research by Read On. Get On, an organisation promoting literacy.

Parents find “how long will it take?” and “what happens when you die?” the most challenging questions to answer, followed closely by “where do babies come from?”, often prompted by the birth of a sibling.

Science also presents a challenge. A quarter of parents admitted they were flummoxed by questions from budding Einsteins, including “why is the sky blue?” and “how many stars are there in the sky?”.

But while nearly half (48%) of parents took the time to look up answers to their child’s queries with them, one quarter (26%) admitted to being creative with the truth.

Weekly Round-up, 7th August 2015.

The Property Market.

According to the Halifax, house prices in the latest three months (May-July) were 2.4% higher than in the preceding three months (February-April). The quarterly rate of change eased from 3.3% last month. Prices in the three months to July were 7.9% higher than in the same three months a year earlier. This was lower than June’s 9.6% and was the lowest since December 2014 (7.8%).

House prices saw their first quarterly decline since February this year as they fell by 0.6% between June and July. However confidence in the outlook for house price growth hit its highest level in four years following the General Election in May, but dropped back in June, according to the Halifax Housing Market Confidence Tracker.

The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 3% in June. Approvals in the three months to June were 8% higher than in the preceding three months (January-March) and 4% higher than in the same three months last year. (Source: Bank of England, seasonally-adjusted figures).

The stock of homes available for sale fell for the third successive month in June to another new record low. New instructions also dropped in June, marking the tenth decline in the past 11 months, contributing to the very low levels of supply. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report).

UK home sales increased for the second consecutive month, rising by 5% between May and June to 104,590. This was the first time that monthly sales have exceeded 100,000 since September 2014. Sales were 3% higher than in June 2014; the first annual rise this year. (Source: HMRC, seasonally-adjusted figures).

Confident about Debt.

The second Lloyds Bank Lending Report shows that people surveyed continue to feel upbeat when it comes to the future of their finances. Confidence levels in paying off unsecured debt remain high, with four in five (83%) of those surveyed feeling confident or very confident that they will meet their future repayments.

There has also been a rise amongst those who are able to keep up with their current debt repayments at 84% for quarter 2, (from 81%) compared to the first three months of the year. Fewer people have missed payments compared to the beginning of the year, with only one in ten (11%) saying that they had missed at least one payment in the last 12 months, compared to 13% in the first quarter of the year.

The top reasons people have taken out a personal loan include consolidating debts so that they are all in one place (31%), and purchasing a car or bike (28%). However, unsecured borrowing to making home improvements saw a decline (15%), a fall of five percentage points.

Of those who used lending to fund a special occasion, nearing half (45%) took out a loan to fund someone else’s birthday. While those who fund an anniversary (15%) remains static, 19% of men are planning to use a loan to fund an anniversary, where as only 11% of women are planning to do the same.

Slowly does it.

The Bank of England’s Monetary Policy Committee (MPC) at its meeting ending on 5 August 2015, voted by a majority of 8-1 to maintain Bank Rate at 0.5%. As the Consumer Price Index inflation had fallen back to zero in June from unusually low contributions from energy, food, and other imported goods prices, there was little appetite to increase rates in the very short term.

The majority of MPC members judged it appropriate to leave the stance of monetary policy unchanged at present although one loan voice – Ian McCafferty preferred to increase Bank Rate by 25 basis points, given his view that demand growth and wage pressures were likely to be greater, and the margin of spare capacity smaller, than embodied in the Committee’s collective August projections.

Holiday spending.

Despite a poll showing that the UK spends an average of £1,900 going on holiday, nearly a quarter of people (23%) return back home more stressed than when they started. Additionally, one in four Brits (26%) take two to three days to unwind while around four in ten (38%) feel rundown or ill while away – denting the notion holidays are entirely relaxing.

In fact, it appears that vacations are laden with worry, according to the Nationwide Building Society poll as more than a third (34%) of people claim they fret about being covered for things like travel insurance if plans go awry. While four in ten (39%) get fidgety about getting to the airport on time and forgetting something (40%).

According to Nationwide’s poll, which surveyed more than 2,000 UK adults, the average holiday taken lasts for nine days. And while more than a quarter (26%) of people take two to three days to truly unwind on holiday, one in ten (10%) take between three to four days to relax – equating to nearly half of their holiday, or the equivalent of a long weekend away.

And finally…The formula for happiness.

It sounds cheesy enough – the makers of a brand of cheddar claim to have measured “true richness” in people’s lives. Scientists were asked by Anchor Cheddar to come up with the formula, which is said to reflect a concept “integral” to its brand values.

And, surprise, surprise, the findings showed that money cannot buy happiness and fulfilment.

Applying the results of a survey of 2,000 people revealed that those earning less than £35,000 a year were higher up the “richness scale” than earners with £200,000 salaries. Fishermen and foresters – but notably not dairy farmers – were said to lead richer lives than business and finance workers.

People with “rich” lives included those over the age of 65 and residents of Wales, the South East and Yorkshire, as well as married couples with two children, and earners with an income of between £20,000 and £34,999. Low on the richness scale were 35 to 44-year-olds, singletons, bankers, those earning between £150,000 and £199,000, and London residents.

Psychologist and author Dr David Lewis, who was commissioned by Anchor Cheddar, said: “We used quadratic mathematical modelling to find the ‘formula for true richness’, or in other words, what combination of attitudes towards life is found in the happiest people. During the interviews, 59% of people said the best things in life are free, citing their families and happy memories as their most treasured possessions.”

Remortgage, remortgage, remortgage.

When you talk about 8 to 1, I’m not sure whether it’s the bowling stats for Stuart Broad against the Australians in the 4th test at Trent Bridge, or the voting outcome for the monetary policy committee. Those watching the cricket yesterday would have been glued to their TV sets as the drama unfolded, so glued possibly to be unable to pick up the phone and start the remortgage process as the chancellor signalled the end of lowest bank base rate in history and a move to a slightly higher but still low position.

The Bank of England has a difficult path to follow trying to maintain the UK’s competitiveness in Europe with a weak Euro, a rise in interest rates will probably see the pound strengthen further. We all know that competitive pressures in the mortgage market will keep rates low as savers continue to pay for the recovery; what will happen in the credit card market is anyone’s guess as this sector is more sensitive to rate movements, and how a base rate rise will play out in the car market with so many new cars sold on personal finance plans is yet to be understood.

The question for me is: with all the talk about a base rate rise, why is the remortgage market still falling short, why are customers not talking about fixing their monthly payments for the next few years? The phrase “rate shock” has been long gone from our vocabulary, although it should have been on the customer who is sitting on an SVR, not in terms of how much more they have to pay, but the surprising amount of money a customer could save each month by sitting down with an adviser who knows their products. The shock of going from 3.99% to less than 2% is palpable. The question remains: why don’t more people take the plunge? Half of homeowners took their mortgages out through the bank and haven’t experienced the work of a financial adviser so do we need to promote our services better? Many first time buyers in the past 5 years won’t have experienced a remortgage so maybe there is an education requirement. And finally, many people don’t react until it’s too late as their lives don’t give them time to sit down and reflect on the impact of change, which suggests communication in annual mortgage statements is not prominent enough. Is it time to put “rate shock back” in the dictionary and encourage remortgage reviews before it’s a big fat yes from the Britain’s got a Base Rate Rise panel.

Neil Hoare

Commercial Director