New this week

Buy-to-let record

Buy-to-let borrowing set new records in the first half of 2006, with lenders advancing 152,500 loans, worth £17.5bn, according to the Council of Mortgage Lenders.

This represents an increase of 17% by volume and 20% by value over the previous record totals, posted in the second half of 2005.

There are now 767,000 outstanding residential buy-to-let mortgages in the UK, worth a total of £83.9bn.

This year, major buy-to-let lenders raised lending limits to landlords to £10m for a portfolio of properties, and allowed more loans per individual.

Previous requirements, that rental income should equal at least 130% of the loan repayment, have also been relaxed - in many cases down to 100% of the cost of servicing an interest-only mortgage.

The recent interest rate rise may slow the market, but CML director general, Michael Coogan, says: "Fundamentally the rental market remains sound and looks set to continue to offer good long-term prospects for astute investors."
Emma Lunn

Mortgage

Halifax has launched a market-leading two-year fixed rate mortgage at 4.49%.

The only sting in the tail, is that the deal comes with a massive arrangement fee of £1,499.

Ray Boulger of broker John Charcol says the Halifax deal is very good for people with large mortgages. "The trade-off of having a low rate is having to pay a large arrangement fee, and whether it is worth it or not, comes down to the size of your loan."

The next best two-year fix on the market is Dunfermline building society at 4.69% with an arrangement fee of £699.

Mr Boulger says deals with large fees are generally good for mortgage amounts of £200,000 or more.

A good way to work out the best deal for you is to work out the total cost of the product over the fixed term by adding the fee and the cost of monthly repayments over the term together.

Meanwhile, Alliance & Leicester has pulled its 4.49% two-year fixed rate mortgage (which carried a £999 fee) after what it calls "heavy demand".
Emma Lunn

Spending

The single most expensive year of your life is age 34, according to Axa Wealth Management.

Britons, on average, have to find £32,441 more than usual for their day-to-day spending. The money goes on buying property, the cost of home improvements, paying for a car or a wedding, and having a baby.

Yet despite the burden, more than half of Britons (53%) say they have not saved ahead in order to fund all these extras.

Axa discovered that the second most expensive year was age 26. This time people are forking out on buying a car or investing in a property, and, of course, going on holiday.
Emma Lunn

Watchdog fine

The chief City watchdog this week issued its first fine against a stockbroker for using high-pressure sales techniques on retail customers. The Financial Services Authority said Hoodless Brennan must pay £90,000 "for using unacceptable sales practices and failing to treat its customers fairly". Hoodless Brennan, best-known for its execution only share dealing service, has about 30,000 customers. The watchdog accused the firm of persuading customers to buy stock in a small technology company before they were ready, and adopting practices that meant they bought more stock than they wanted. The broker says it had since strengthened internal controls.
Phillip Inman

Energy price rise

Powergen, Britain's second-biggest energy supplier, has announced it is raising domestic gas bills by 18.4% and electricity charges by 9.7% in response, it says, to soaring wholesale costs.

Powergen, which is owned by German utility E.On and has around 8.5 million customer accounts in Britain, says the price changes take effect from August 21. It is the second time this year the company has increased its tariffs, and the seventh since May 2003.

The latest increase adds £130 to the annual bills of each customer who takes both gas and electricity.

Powergen last raised its bills on March 10, upping gas by a record 24.4% and electricity by 18.4%.

Earlier in the week, E.On said Powergen's profits fell by 25% in the first six months of this year but it still recorded profits of £410m.

British Gas owner, Centrica, EDF Energy, Scottish Power, Scottish & Southern and npower have all hiked their gas and power prices twice this year, blaming soaring wholesale costs.
Miles Brignall

Cashpoints

When it comes to withdrawing cash from the cash machine, people fall into two very distinct groups.

They are the "feasters" and the "nibblers", according to a survey by the ATM network, Link.

"Feasters" tend to withdraw £100-plus, once or more a week, while the "nibblers" withdraw £20 to £30, two or three times a week.

Men are twice as likely to be "feasters" than women, and tend to carry more cash than females - 20% of men compared with 10% of women gorge on their cash.

For those who carry a lot of cash, the 5% of women who carry between £50 and £100 do so in order to avoid making regular trips to the cash machine.

However, of the 12% of men who carry this amount of cash, 72% said that they needed it to pay for their wife or girlfriend.

The survey also revealed that 12% of men, and 4% of women, admit to being too drunk to remember using a cash machine, and only becoming aware of the transaction when they later read their statement.
Emma Lunn

Mortgage rate

Nationwide building society has increased its standard variable rate (SVR) by 0.35%, despite the Bank of England base rate going up by only 0.25%.

Nationwide's SVR will be 6.24% from September 1 which, it says, is still 0.5% lower than most other high street lenders. The society has also put up its rates on fixed mortgage products.

A two-year fixed rate is available at 5.09% or 5.18%, a three-year fix at 5.38%, and five and 10-year deals at 5.33%.

All of Nationwide's fixed rate mortgages offer borrowers the flexibility to overpay or underpay during the deal period and are available to both new and existing borrowers.
Emma Lunn