Tag Archives: brexit

Home-buying in 2017

Home-buying in 2017

Buying a new home can feel like a rollercoaster ride, with plenty of highs but also a few lows.

Almost a year on from the EU referendum, and with a General Election on the immediate horizon, how confident is the UK’s housing market – and what does it mean for home buyers?

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How confident is the housing market?

March 2017 saw 48,178 loans approved for house purchase, according to the British Bankers Association (BBA), no change year-on-year, while the average approved loan rose to £186,800. House prices fell by 0.4% in April 2017, though were up 2.6% on a year ago.

However, the same month, consumer confidence in the housing market dipped to 37%, the lowest since July 2013, after widespread prediction of a surge in inflation and a fall in consumer spending this year.

This comes even as overall consumer confidence remained on the up, with a sixth consecutive month of spending increases.

What do the experts predict for the UK housing market?

Some experts suggest that a time of such economic uncertainty is bound to have an impact on the housing market.

Zoopla CEO Alex Chesterman is cautious about seeing growth in the property market in 2017, and said: “Buying a home is one of the biggest and longest term decisions that people make so they tend to hold off making such important decisions in times of heightened uncertainty.”

According to John Perry, of 2017 UK Housing Review,  more houses need to be built regardless of any changes in immigration policy after Brexit – the current target, set before the referendum, is 227,000 homes a year up to 2024. He also suggests that most non-British EU citizens tend to rent in the private sector, so that it is the area that is most likely to be hit.

It’s arguable that the fewer houses being built, the more the chance that those in-demand properties will be more expensive, especially for first-time buyers.

Nationwide’s chief economist Robert Gardner agreed that uncertainty makes it hard to predict the prospects for house prices, but added: “Low interest rates are expected to help underpin demand while a shortage of homes on the market will continue to provide support for house prices.

Will house prices go up or down?

Uncertainty about the next 12 months, and the effects on the economy, could cause the market to slow down as buyers and sellers mull over what to do next.

The economy is the major factor on the housing market, so if the pound continues to struggle in 2017, it may affect house prices negatively but if things start to improve, house prices could rise.

Investing in property to make a profit – rather than just to have a long-term place to live –  is always a risk. So, it’s important to make sure that you don’t borrow more than you can afford, and try to find the right mortgage with the best rate.

What to do before applying for a mortgage

Whether you’re planning on buying your first home, stepping up to a bigger home or remortgaging, Experian’s tips can help you feel financially prepared & confident ahead of your mortgage application.

  • Check your Experian Credit Score to help you understand how lenders may view you
  • Try not to miss credit payments
  • Try not to apply for other credit in the six months before you apply for your mortgage
  • Manage credit accounts well
  • Register to vote at your current address

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†Experian acts as a credit broker and not a lender in the provision of its credit cards and personal, car finance and guarantor loans matching services, meaning it will show you products offered by lenders and other brokers.

Experian acts independently and although CreditMatcher shows products for a range of lenders and other brokers it does not cover the whole of the market, meaning other products may be available to you. CreditMatcher services are provided free however we will receive commission payments from lenders or brokers we introduce you to. For information about the commission we receive from brokers for mortgages and secured loans click here.

CreditMatcher is provided by Experian Ltd (Registered number 653331). Experian Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 738097). Experian Ltd is registered in England and Wales with registered office at The Sir John Peace Building, Experian Way, NG2 Business Park, Nottingham, NG80 1ZZ.

Copyright © 2017, Experian Ltd. All rights reserved.

2016: the money year in review

New Year is loading nowHere we take a look back at 2016 and some of the more significant things that may have affected our finances.

January  We focused on our Millennial Me report, which found that 45% of Millennials manage to save at least a quarter of their disposable income each month, compared to just a third (34%) of 35-54 year olds.

February  With a busy year of voting ahead, we focused on National Voter Registration Drive (1-7 Feb), which not only encourages young people to register to vote to increase their voice, but also to help boost their credit profile – as lenders use the information on your credit report to help confirm your identity which could help you when you apply for credit.

March  March saw George Osborne’s final Budget  as chancellor (though he didn’t know it at the time) , and the main points we focused on included changes to the personal allowance, spending cuts, changes to savings and infrastructure projects.

April Continue reading

Brexit: What’s the latest, and how does the interest rate cut affect homeowners?

brexit-interest-rate2After the political whirlwind of the last couple of months, it appears the country’s immediate future may be becoming a little clearer.

Now that Theresa May has taken office as Prime Minister, she will agree the government’s negotiating position before she triggers Article 50, and officially starts the clock on the UK’s exit from the EU.

Continue reading

Brexit: how to manage your holiday spending

Summer at ocean beach with two chairs and umbrellaWhile it’s still not fully clear how our money will be affected by Brexit, one area where we are likely to notice a difference in our pockets is around holiday spending this summer.

Since the referendum result, exchange rates have dropped against both the dollar and euro. What this means is that you’re now likely to get less dollars or euros than you would have last year. At its highest point in the last year, you would have been able to exchange £100 for €143, whereas now you’ll get €119. Likewise with the dollar, at its highest point in the last year, you would have gotten $157 for £100, $26 more than £100 would get you today.

While your pounds may not go as far as they would have last year, there are some savvy ways of getting the most from your money with some simple preparation and smart decisions.

When to exchange

At the moment, it’s impossible for anyone to say for certain whether the pound will weaken again, remain stable, or strengthen – and in what timeframe. When it comes to choosing when to exchange your holiday money, you can either choose to exchange your money now to lock in today’s exchange rate in case sterling falls again – or – you can wait until nearer your departure date to see if the pound recovers.

There are no guarantees which way it will go, but keeping an eye on what the experts are saying will help you make an informed decision. The main thing to avoid is turning up at the airport and hoping for the best. Exchange rates at airport bureaux can be extremely expensive, so shop around in advance instead to make sure you’re getting the best value.

Paying by card

Another alternative to cash is to take a pre-paid currency card. This will allow you to pay by card abroad, but with an exchange rate that’s been locked in before you travel when you transfer the money to your card.

There are also specialist credit cards available that don’t charge overseas transaction fees and have special exchange rate terms. However, the exchange rate you pay on the card can still vary and you’ll be paying the current exchange rate at the time of purchase, rather than a rate you’ve locked in in advance.

The higher your credit score, the more likely you are to be accepted for the most competitive rates, so use eligibility checkers to understand what you’re most likely to be accepted for before you apply and avoid wasted applications that can negatively affect your credit score. Specialist credit cards work in the same way as regular credit cards, so make sure you can afford to pay back what you spend on the card during your holidays and that you don’t miss a payment after you get back.

Whenever you’re paying by card, whether debit or credit, it’s better to pay in the local currency than in sterling, as you can be charged an additional fee otherwise.

Savvy spending

Aside from getting the best deals you can on currency, there are some other ways to save some cash.

In advance:

• Raid your piggy bank for old currency you may have left over from previous trips. Even small coins add up, and an extra €20 could get you a free lunch at the beach!
• Think about what you’ll be doing on holiday and divide activities into a list of must-dos and things you could do without. This will help you plan where to spend your money doing things you love, while avoiding a post-holiday hangover caused by over-spending on things you could have dropped.
• If you were planning to hire a car, consider whether you really need to. If your accommodation is close to local amenities, why not walk or use public transport, and free up money to spend on meals or other activities?
• Shop around for the best deals you can get on travel insurance, rather than automatically opting for the first deal you’re offered when booking your holiday.
• Check your roaming package with your mobile phone provider. You may be able to buy a low cost overseas bundle in advance. Regular roaming and overseas data charges can be very expensive, so make sure you don’t end up with a massive bill when you get home.

At the airport:

• Don’t be lured into unplanned airport purchases. Do your holiday shopping in advance, including toiletries and sun protection, and avoid the temptation of duty-free stores.
• Food at the airport or on a plane can be costly, so consider bringing a packed lunch.

When you get there:

• Consider alternating eat-out/eat-in nights. It’s possible to enjoy the local cuisine at home too, so look for a good-sized supermarket that will have a variety of foods to choose from. When you do eat out, veering off the beaten track a little means you can often find local places, where you’ll get better quality and value than the typical tourist traps.
• Local beers and wine can often be much cheaper than more well-known international brands, which can keep costs down on poolside drinks or nights on the town.

If you haven’t yet booked a holiday overseas, you might want to avoid the uncertainty of exchange rates by planning a ‘staycation’ within the UK. We have stunning beaches, picturesque villages and beautiful countryside – so, just because you can’t get overseas doesn’t mean you can’t have a fantastic holiday right on your doorstep. Check out our latest post looking at the pros and cons of staying put versus taking flight.

Brexit: a week on

BrexitLast week’s vote to leave the European Union was a big milestone in the UK’s history, and, understandably, has brought with it some uncertainty. 

Here at Experian, we’ve been working with people and businesses through times of prosperity and times of uncertainty for many years.  And while we understand that uncertainty can be unsettling, our message is simple – don’t panic. In particular, don’t make rash decisions about your finances and always consider the pros and cons of any financial decision you have to make.

Many of us are wondering what might happen next, when, and how it might affect us, so let’s take a closer look at the situation.

What does leaving the EU mean?
One of the basic elements of the EU is that all the member states (of which there are currently 28) make up a ‘single market.’ This guarantees the free movement of goods, money, services and people; basically as if the EU were one country. However, beyond being simply a trade association, the EU is a form of government and so has some legal powers over its member states, so there are some UK laws that have their origin in EU law.

Last Thursday’s vote was specifically for the UK to leave the EU. However, the decision does not rule out the possibility of the UK having access to the single market for trade purposes (European Economic Area). The Government could, for example, opt to try to negotiate a similar model to Norway, which is not part of the EU but is part of the EEA which gives them access to the single market.

It is in the interests of the UK and the rest of the EU to negotiate a compromise that works for all countries, but at this stage – and until the new leader of the Conservative Party is elected – all options are on the table from the UK’s side.

What’s next?
For the formal process to begin for the UK to officially leave the EU, the UK Government must invoke Article 50 of the Lisbon Treaty . Article 50 effectively starts the clock on a two-year countdown, after which the UK leaves the EU. During this time, the UK and the EU negotiate the details of the UK’s new relationship. However, following David Cameron’s resignation the country first needs a new Prime Minister in place to lead these negotiations.

A Conservative leadership election is now underway with the candidates confirmed as Theresa May (Home Secretary), Michael Gove (Justice Secretary), Stephen Crabb (Work and Pensions Secretary), Liam Fox (Former Cabinet Minister) and Andrea Leadsom (Energy Minister). A new leader of the Conservative Party and Prime Minister is expected to be announced on September 9th. The new Prime Minister is then at liberty to begin the Article 50 process.

What to keep an eye on
The next few months are going to be very interesting and that’s before we even begin formally negotiating to leave the EU. There are a number of key things that we can all keep a close eye on over the coming months that may affect us and our finances:

  • Interest rates could be affected. Whether they rise or fall will impact different people in different ways.  For example, lower interest rates might mean better deals for borrowers, but savers might suffer, earning less interest on their money. If you have a tracker mortgage, you might find your mortgage payments fall if interest rates come down.  If you are about to get a mortgage or re-mortgage, or apply for a large loan, ensure you are getting the advice you need and check your credit report early to make sure it’s accurate and up to date and paints the best possible picture of your financial situation.
  • Exchange rates change regularly, and are likely to continue to do so, meaning you’ll get more or less for your pound depending where you travel.  Since the referendum result, the pound has weakened against the Euro and the Dollar; however, there are still many countries that offer good exchange rates for British people travelling abroad. Wherever you choose to travel, make sure you shop around before you go on holidays and secure the best rate you can in advance, rather than just turning up at the airport and hoping for the best.
  • Inflation may rise, which could mean changes to the cost of living, which could affect your disposable income. Make sure you know how and where you’re spending your money. This will help you understand if there are areas you can cut back on so you can confidently manage your finances and put some money aside if you can afford to.
  • Property prices could change in time; however, in the immediate future, it’s looking unlikely that property prices will rise, which could be good news for first time buyers looking to get on the property ladder.

We think we should use this time as an opportunity to take stock of our finances.  It’s the simple things like checking how much you have coming in and going out each month, what you’re spending money on, and knowing the interest rates on your mortgage, loans and credit cards. By doing this, you can get an overall picture of where you stand now, which will help you make better, more informed decisions. Things will eventually become clearer, and we’ll be here to support you every step of the way.

Most of us have lived through periods of uncertainty, both in the UK and in other parts of the world, and we’re fully confident we’ll come out the other side. It will take a while for things to stabilise, but we have no doubt we’ll get there. And during the good times and periods of uncertainty, our commitment to you and all of our customers will remain the same as it’s always been: to help you understand, manage and improve your credit report and help you get access to the best financial deals you can afford, whatever unfolds in the future.