Tread carefully in the mortgage market
Tim Bennett rounds up this week’s personal finance news, including the reality behind the rising housing-market figures, and how to avoid getting fleeced on rental car charges.
The property bulls are out in force again. The Royal Institution of Chartered Surveyors (Rics) this week reported that in April a majority of their members saw a rise in house prices for the first time since June 2010.
According to property website Rightmove, the number of house hunters has hit its highest level for three and a half years. The reasons? Rock-bottom interest rates and headlines about government schemes such as Help to Buy', which are designed to help new buyers onto the property ladder.
There's only one problem as far as we can see but it's a pretty big one. Outside of the casino that is London and the south east, where the market is being boosted by hot foreign money seeking safe haven' assets, prices are falling.
In Scotland and the north of England, they're falling fast. So even if you can get a mortgage because you have a sizeable deposit, it's worth remembering that you may well be buying an asset that's likely to fall in value. And if you only have a small deposit but manage nonetheless to get a loan, you take the risk of being plunged into negative equity.
Don't let hidden car rental charges "drive you round the bend" this summer, warns Sarah Pennells in The Independent. She has five tips to avoid getting fleeced.
Shop around: the difference between the cheapest and most expensive firm offering a mid-sized family car for one week in Malaga, Spain in August was £600.
Second, always fill the petrol tank up before returning the car, as the charge for not doing so can be eye-popping.
Third, don't add last-minute extras on arrival car seats, satellite navigation, and other extras can easily cost £15 a day or more. Fourth, buy insurance in advance and consider a standalone policy (try Insuremycarhire.com or Insurance4carhire.com) to cut the cost of pricier options offered on arrival.
Finally, double check the cost of dropping off the car at a different location before you arrange anything this can be very costly.
The amount of money being saved into tax-free cash Individual Savings Accounts (Isas) has fallen for the first time since the plans were launched in 1999.
As Emma Simon reports in The Sunday Telegraph, savings experts agree that the government is "destroying our once-strong savings culture" through record low interest rates, quantitative easing (money printing) and policies such as Funding for Lending that allow banks to access cheap funding and therefore cut savings rates.
In short, savers (including many pensioners who rely on savings income) are being sacrificed in a bid to bail out the indebted. No wonder Isa sales are down.
Watch out for currency sales' that could get you a better exchange rate on your holiday money. This week, Asda ran an online sale with rate improvements representing up to a 10% saving on ten currencies, including the US dollar and the
euro. Buy currency before you get to the airport, ideally online (at Mytravelmoney.co.uk, for example). The rate will usually beat the high street or airport deals.