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Monthly News Roundup – September

Within this feature we like to recap the previous month, looking at the top personal finance news from around the UK and how it might affect you. This month we look back at September, and highlight the hot topics raised throughout the month.

Mortgage and Property news

Property prices and mortgages really were the hot topics throughout September. There has been no secret made of the fact that house sales have picked up and prices have continued to increase since the beginning of the year, and there was no change last month

First we heard the news that first time buyers we up 45pc year-on-year, mainly as a result of the government-led Funding for Lending scheme, before more news that house price inflation in the South is moving faster than the North, and that the gap between average prices in the two regions has surpassed £100,000. The biggest bit of news though, and some that could have big implications on the property market in the coming years, was the launch of Help to Buy, three months before the government initially planned to open the scheme to the public.

For many, Help to Buy represents a chance to get on the property ladder, but critics think it could end in disaster as house prices are driven up aggressively making the scheme unsustainable. In this case it would take the option of buying a house out of the reach of those who the scheme was set up to support; those with a low initial deposit.

Others think the scheme will simply offer those who already have property the chance to buy more property on a buy-to-let basis, expanding the rental market, and creating more competition for those who are looking to buy first homes. Again, this would likely give prices a push north.

Help to Buy is certainly one to watch closely. The effects of the scheme remain to be seen, and opinion is very much divided, but you get the feeling it is something the current government could either live or die by.

Pension news

Pensions have had a tough year so far in the eye of the public. Annuity rates have been constantly scrutinised, and much of the results have pointed to a market that is giving, and is going to be providing, very poor value.

There was more bad news for savers in September too, as the Office of Fair Trading announced a review into pension charges on the basis that they are significantly harming the value of pension funds, particularly in the earlier years of saving.

However, another government scheme, the auto-enrol pension scheme, received a positive response, as fewer than expected opted out of the scheme. The aim of the scheme was to get more people saving for retirement, to raise awareness of the importance of doing so and to get people thinking about this at a younger age. Time will tell whether the scheme will meet all of these objectives, but the early signs are positive.

Savings news

It’s the wrong time of the year for savings really, with the first quarter of each year bringing the market to life. September didn’t provide us with too much to talk about in terms of personal finance, but we were told that the Financial Conduct Authority are set to review introductory rates on savings accounts after it was claimed they take advantage of consumer inertia.

What this might mean is that providers are forced to make it clearer how long the rate lasts for. Usually, when you take out a product such as a cash ISA, the advertised interest rate will last for 12 months, at which point it will be reduced to a much lower rate. The problem is not really the product, in that this is not a case of mis-selling, but more the lack of knowledge the consumer has of the product. Again, this is something that we will have to wait on, and it seems unlikely that there will be any major changes to savings product before the end of this tax year.

Bank Account news

Some apparently good news for current account holders, as we were told that switching your account to another provider is going to be made faster, with banks offering ‘7 day switching’.

Currently it takes as long as 30 days to switch accounts, so any improvement is positive. Shop around though, some banks are offering a cash reward for switching, and others offer accounts that pay variable rates of interest as well as cashback on direct debits, so there are deals out there to take advantage of.

Got any questions?

If any of this news affects you and you have any questions related to it, contact one of our financial advisors who will be able to assist you.

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