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What Is The Government Doing To Protect Credit Card Holders?

Muzahed I.
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What Is The Government Doing To Protect Credit Card Holders?

Prior to 2009, credit card holders held little control over changes to their accounts. Banks could change terms, increase interest rates, charge exorbitant fees, and all without notifying their clients. If you didn’t like their approach, you only had the option to close your account. Since many people fear how a closed account will negatively affect their credit, consumers were stuck with no real options to change the relationship between them and their banks.

What has the government done to change this?

In 2009, Congress passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act. The act laid out a number of fundamental assumptions for credit card offers and terms:

  • Strong protections for consumers
  • Plain-language literature from the credit card companies
  • The ability to take credit card offers without fear
  • Greater accountability for businesses that abuse the system

These assumptions placed a number of specific restrictions on actions that the banks could take with their clients.

What does CARD mean for credit-card holders?

The CARD Act, which took effect in 2010, features various practical considerations for consumers. They include:

  • A restriction on raising interest rates in the first year of a new account
  • A minimum 21-day period from the time the bill was issued to its due date
  • Limits on the types and amount of fees that can be charged, especially for new accounts
  • A ban on retroactive-rate increases

Other applications of the law relate to disclosures and accountability. Credit card companies are required to make information clear and specific, emphasizing particular details such as interest rate changes and fees. They must notify customers of rate increases and give customers the option of closing their accounts as a result. By law, businesses now have to make the terms of their credit cards available online in plain language. Regulators hold the businesses accountable for their practices, and face higher penalties for violations.

How has CARD made a difference?

One year after the law took effect, the Office of the Comptroller of the Currency surveyed how CARD had changed the environment for credit-card holders. The results were pleasantly surprising. In one year:

  • The frequency of interest-rate hikes dropped from 15 percent to 2 percent
  • Late fees paid by consumers dropped by more than half
  • Minimum payments have risen, to help consumers pay off debt faster
  • Accounts charged over-limit fees dropped from 12 percent to 1 percent
  • 60 percent of cardholders say their credit-card terms are easier to read and understand
  • 31 percent of consumers say emphasis on certain terms has led them to take a more-active role in eliminating their debt

Various parts of the government are continually seeking new applications of the law. In 2011, the Federal Reserve Board extended the limits on fees in the first year of a new account to limit fees charged at the account’s opening, such as an application fee. After a federal court rejected this extension, the Consumer Finance Protection Bureau took over administration of the terms of the Card Act. The CFPB stresses that it will work to consistently and effectively enforce the law’s protections.

Credit card offers and terms can sometimes be confusing, but it used to be a whole lot worse. Years after the government offered some basic protections to cardholders, the balance of power is more equal and consumers can feel safer in their relationships with their creditors.

Image License:  Some rights reserved by 401(K) 2013

The Future Of The U.S. Auto Industry

Muzahed I.
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The Future Of The U.S. Auto Industry

During the great recession the auto industry was effectively restructured with two of the three auto makers being taken over by the government with bondholders and shareholders being effectively wiped out. Ford, and the two restructured auto companies (GM and Chrysler), are now facing new challenges and the future of the US auto industry is likely to be very different from its current state. This article will focus on how the auto industry arrived at this position and where it will likely head in the future as a result.

The Auto Industry in the United States

As the inventor of the automobile, US manufacturers had a significant head start on international competition and maintained dominance in the industry throughout the 50’s and 60’s. Ford had developed production line facilities and had decreased the cost of automobiles so that most Americans could afford them. American made automobiles dominated the industry and were highly regarded by critics and consumers.

In the 70’s, competition started to spring up from Japan which produced cheaper vehicles that had lower costs and very low profit margins. The US automakers ignored this low-end segment of the market and eventually these Japanese auto makers innovated, improved the quality of their vehicles, and began to increase their sales. Over a period of time, the US automakers experienced a decline in sales as a percentage of the market. US automakers attempted to revitalize their companies by innovating but were hamstrung by legacy pension costs that limited their ability to compete. The government takeover eliminated many of these concerns by negotiating with the unions and eventually making changes to these legacy pension liabilities.

Adjustments for the Future

Two of the three auto makers therefore start out with a semi-clean slate and room to innovate as a result of the removal of these legacy liabilities. These automakers are generally making future plans to coincide with two of the larger macro trends that are expected to continue into the future; increased globalization and higher energy costs.

Globalization has been caused by increased connectivity between the world and has impacted how business operate, as well as led to a shifting of resources around the world. US automakers have been increasingly locating their auto manufacturing plants overseas to capture lower labor costs and this trend is expected to continue in future years. Further, developing countries such as China and India have been increasingly purchasing cars and vehicles are now being designed to capture the desires and needs of these market segments. Auto makers have been accommodating global demand by making cars smaller and are expected to bring out models that are further catered to international tastes in the future.

Higher energy costs are also expected to impact US automakers in the future with gas-powered vehicles being built with lighter construction materials to improve gas mileage. Further, as consumers are more and more concerned with gas mileage and the impact that their auto usage may have on the planet, US auto makers are attempting to move towards this shift in consumer taste by modifying their fleets further. Renewable energy is expected to play a part with a move towards battery operated cars or vehicles that use hybrid sources of energy.

Conclusion

Automakers in the US have experienced major headwinds in the past due to increased competition and changing consumer tastes. While US automakers have been caught flat-footed in the past, they appear to be ready for shifting global tastes by presenting vehicles that meet more globalized tastes and ecological concerns. The success of the US auto industry will likely result from how these factors are addressed in coming years.

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Amazing Recovery of Dubai Property Market

Muzahed I.
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Amazing Recovery of Dubai Property Market

True to the forecast of many real estate experts that 2013 will be the year of profound recovery for the whole of UAE as well as Dubai real estate markets is coming true. This bullish market trend is palpable across the property market segments asserting a sustained recovery from the erstwhile downturn.

Dubai Up

Mention must be made of Dubai property with its positive impact on the overall UAE economy, with demand high for properties on rent and sale. The hyper demand for property in Dubai has pushed up sales and rental prices for all types of apartments as well as villas. According to information from market research agencies, the Dubai rental prices were up by 10 percent in the first quarter of 2013 compared to the same period in 2012. Despite price rise apartments for sale in Dubai is a bullish option.

Uniform Recovery

Perhaps the best part is that Dubai’s recovery is not limited to a few areas but is spreading evenly seen by the spurt in local and international investors. Now the challenge is to sustain this boom without a feeling that this exuberance is not a bubble or another boom-and-bust cycle. Past experiences have taught that a sustained growth is far better than unsustainable growth that is short lived and triggers a market crash.

Free Market

The charm of Dubai’s property market is its encouragement for foreign buyers. There are countless high value “freehold” properties to cater to the needs of international property investors. To get a resident visa, a foreign investor needs to make a property investment of at least AED 1 million.

Experiencing an upturn

The upturn in Dubai realty market is now steady. Among the sectors which faced pangs of growth constraints, it was the real estate sector that was the worst hit. But that very same sector is now rocking and assuring that the worst is over and recovery is really solid.

Nothing asserts this fact more virulently than the launch of a slew of high value real estate projects last year. Also the villas for sale in Dubai are commanding a premium. This gradual recovery had added cautious optimism about Dubai real estate sector in 2013. That has come true.

Says an analyst, this increased activity in the property market is attested by a growing number of closed property deals and transactions in the first quarter of 2013. Now more and more investors are taking interest in Dubai properties. But the choice is always high quality or high value properties.

International investors

Enticed by the current performance of realty sector, more and more international investors are drawn to Dubai property market. Besides the stellar performance of Dubai’s property market, factors gracing this recovery and boosting investor confidence are

  • Positive economic growth
  • Rising sales and rental prices
  • Dubai’s safe-haven status

The fact that right now most of the property investors in Dubai are focusing on cash based transactions mean that the chances of a real estate bubble like the one in 2008 is unlikely.

Image License All rights reserved by imredubai

Market Your Small Business Effectively

Muzahed I.
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Market Your Small Business Effectively

Your small business has a huge advantage over the faceless corporations people equate with “big” business. A small business has a friendly feel, the potential to develop a relationship between you and your customers, and the opportunity to prioritize wisely at the beginning of your business growth. Big business has big budgets; small business has considerably less to spend, but can invest in marketing effectively by remembering the basics.

Build on a solid foundation

The solid bedrock of any business is the quality of product or service being delivered. If you don’t have that, any amount of marketing is futile because the challenge becomes getting new customers to replace the previous customers who no longer want to be involved with your business. If you are giving them what they want, they will come back for more and bring friends.

The type of quality you offer is important, however. As Seth Godin points out in his blog, misunderstanding quality is what caused Kodak to drop the ball for the common customer. Kodak focused on developing a high-end professional film but most folks just wanted to take quick, cheap pictures of their family and friends. Learn what your customers want and give it to them.

Get advice and support 

Seth’s Blog and Small Business Mavericks are two excellent examples of marketing blogs geared to give you small daily doses of effective marketing advice. Some days may not seem to apply to your specific needs but they will gradually accumulate painlessly into a bigger perspective on your marketing options. For example, Small Business Mavericks recently posted on how to make your marketing more visual. These are only two of many worthy blogs you can read on small business marketing.

Join groups in your area for local businesses. The Chamber of Commerce may seem like a boring lunch once a month but it gives you a chance to network and be part of a community. Look for opportunities to be part of your local business climate and reap the benefit of group effort.

Give people a way to connect with you

Facebook has exploded because people want to feel connected. When a small business has a facebook page, twitter feed, etc. they have given the customer a way to connect. Start your own blog and respond to comments. Run contests on facebook and join with other businesses to make the pot sweeter (and bring all their contacts into your sphere). Every type of social media has a potential for connecting with customers if you look for it, and often those connections will mean new business as the friend-network expands.

Offline, you can have QR codes on print ads with easy-to-remember website addresses and get smartphone scanners connecting instantly or folks remembering what to type when they get home.

Design for memorability and easy communciation

Have colors associated with your business. Just as sports teams are known for their colors so can your business be identified if all your stuff reflects the same design and color. Choose a logo that indicates what you do and who you are; it helps people remember when they see it.

Your website should carry the same theme and be easy to use. A good test would be to have some non-techie friends try to find you on the net, then try to figure out how to get your product or service. If someone who is unfamiliar with computers can figure out your site, you are good.

Respect the limits of technology

It might seem like everybody has a smartphone and broadband internet, but that isn’t the case. Your website needs to be available to those on slower lanes of the web, too. That means less fancy stuff or customers with dial up may give up. It’s better to have a secure site with no errors than a dancing mascot skittering across the page.

No spell-checker replaces the human. Proofread all your material and check your links. Update your site regularly, perhaps with blog entries or the latest developments. If you add links to articles and information pertinent to your customer, you will develop a reputation for authority but if your site has “too” where it should have “to” or “loose” instead of “lose”, you lose credibility.

Give your customer service reps the power to fix the problem

There is nothing that is better marketing than good customer service. Treat your customers the way you want to be treated when you call someone else. The novel experience of getting the problem fixed by the first person they spoke to will be talked about and is worth investing in. It is far better to keep your old customers happy and telling the world how great your business is. That will bring new ones knocking at your door!

 

This post was written by Jeff Shjarback.  Jeff Shjarback, MBA is a Digital Marketing Consultant, Writer and Blogger that enjoys blogging about online marketing, small business, lead generation, economics, innovation & emerging technology, future trend analysis and business philosophy.  To learn more about Jeff, you can visit his Google Author Profile.

Image License All rights reserved by CityWebCompany

5 Useful Tips For How To Survive A Tax Audit

Muzahed I.
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5 Useful Tips For How To Survive A Tax Audit

Nowadays, there is nothing as scary as a convincing IRS that you reported all of your income and were entitled to all deductions, credits and tax exemptions. Tax audit is generally time consuming, stressful and potentially expensive, particularly for small business owners like restaurants where mistakes are very common. They are usually triggered by the difference between the tax money that should be paid and the amount paid, also known as tax gap. Filing errors such as underpayment of taxes, failure to file altogether and underreporting of income are also some of the things that can warrant a letter from IRS.

Fortunately, tax audit doesn’t have to be a painful, endless and invasive process because you can even emerge without owing more money. Additionally, the following are some smart tips for how to survive a tax audit that will certainly help you.

1. Prepare for the audit (get tax-related documents)

Preparation is one of the best survival tactics, especially for businesses with complex documentations. The rule of the thumb is to collect any relevant paperwork, such as bank statement, 1099 forms, W-2 forms, loan records, cancelled checks etc. In most cases, tax-related documents that are three years’ worth from the date a return was filed are some of the paperwork that you should keep in order, so the auditor can quickly and efficiently find the required information.

However, if you cannot find the documentation you need in your files, then you can ask for more time to reconstruct them. Early preparation enables you to get the proof of what IRS is asking if you want to stand a good chance of any unsupported claim on your return being overruled.

2. Get help from a tax professional 

It is highly recommended that you hire outside help, especially for correspondence audits with up-front requests given that you’re entitled to have representation with you. For instance, if the subject of tax fraud arises during the audit, do not try to handle it yourself, but instead consult a tax professional for advice on how to respond. You can also ask to speak to the auditor’s manager in case of any unfair treatment.

3. Provide exactly what the auditor asks for

You should try as much as possible to resist the urge to volunteer information that you don’t have to offer by providing not less than what the auditor asks for. This is actually the best way to get an IRS tax audit over with quickly, answer the questions asked in a straightforward manner, but don’t come up with unnecessary excuses. Volunteering to offer additional information might raise issues that might contradict your current stand.

4. Negotiate

Liaise with the auditor about the disallowances he/she is considering, and defend your position. Nevertheless, you shouldn’t try to negotiate the amount of taxes to be paid but instead, negotiate the tax audit issues. Bear in mind that it is the auditor’s concern to prove that there was no clear intent on your part to dupe the government.

5. Appeal the result

Call the auditor if you don’t understand or agree with the tax audit report. However, if you cannot reach a compromise with him/her or rather if you cannot live with the audit result, then you can go to the Tax court or appeal within the IRS.

Image License Some rights reserved by 401(K) 2013

How To Find The Cheapest Gas And Electricity Suppliers In The UK

Muzahed I.
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How To Find The Cheapest Gas And Electricity Suppliers In The UK

Home energy bills have doubled for many households over the past decade, and the costs of gas and electricity have risen far above the rate of inflation. There are many reasons for this, including the rising cost of raw materials used to generate electricity and the increasing costs of distribution networks. Gas suppliers rely on wholesale prices, and increases are generally passed on to the consumer directly. UK gas suppliers are increasingly reliant on global energy markets as North Sea gas supplies are now extremely low.

Rising energy costs have had a particularly severe impact in the UK due to increasing rents, rising food prices and other strains on the household budget. Finding the cheapest gas and electricity suppliers has become essential for many people. Energy companies have been criticised for increasing prices and for not making tariffs clear to customers, but they operate in difficult markets and are generally committed to fair pricing.

The following four step process will help you to reduce your home energy bills.

Understand Your Energy Bills And Pricing

The first step to getting a fair deal on gas and electricity is to understand how your energy bills are calculated. Most UK energy suppliers apply a standing charge on a daily basis. The standing charge is a fixed amount which pays the costs of supply and the maintenance of metering and distribution. Standing charges vary by region and how you choose to pay for your energy. The total cost of your energy is a combination of your energy tariff and the standing charge.

Energy tariffs can be confusing to understand, but it’s worth investigating the best option for your household. Fixed energy tariffs can protect you from sudden price rises, and are great for people who like to manage a stable budget without nasty surprises. Capped tariffs are a little higher than standard, but they guarantee energy bills won’t rise above a certain level. Some suppliers also offer green tariffs, special rates for customers who manage their accounts online and dual fuel tariffs.

British Gas offer a ‘Clear and Simple’ tariff designed to reduce confusion. The company’s website includes an online calculator which allows you to select your energy type and area to see a breakdown of tariffs depending on your payment method. The calculator also displays typical monthly bills based on an average energy user.

Contact Your Suppliers To Switch Tariff Or Payment Method

Once you understand your energy bills, you can make an informed decision about the best tariff or payment method. Switching to monthly direct debit payment is often the quickest way to reduce your annual energy costs.

Ask your suppliers about fixed and capped tariff options, and make a note of the options available. Fixed rates are typically available for one or two years, and your personal circumstances will determine which is best. Households with a tight budget may choose to fix prices for a longer period to reduce the risk of price rises.

Compare The Market And Consider Switching Suppliers

The third step in finding the cheapest gas and electricity suppliers in the UK is to shop around and compare companies. Your existing suppliers may be able reduce your bills by switching your tariff, but competitors may offer even better deals.

There are thousands of tariffs and deals to compare, and this step is daunting for many people. Fortunately, most of the work is now done by online comparison services, and it’s possible to find the best rates in a couple of minutes. As well as the established companies such as Southern Electricity and British Gas, there are many new competitors keen to attract new customers.

Switching gas and electricity suppliers is an easy process, and most companies have customer service teams dedicated to the task. Don’t be put off by switching, as you may be able to reduce your home energy bills by hundreds of pounds.

Review Prices Every Three To Four Months

The UK home energy market is extremely competitive, and there are new deals and offers appearing all the time. If you have opted for a fixed tariff, penalties will apply if you switch before the period expires. However, there’s nothing to stop you switching several times a year if you aren’t locked into a contract period.

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Top 5 Rules For Maximum Forex Profits

Muzahed I.
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Top 5 Rules For Maximum Forex Profits

Making huge profits in the forex market is a possibility that happens every day to many retail traders. However, you are mistaken if you think such fortunes are a result of luck. One thing all successful forex traders have in common is that they do not depend on luck. They take time to study the market, analyze price movements, follow forex news feeds, and generally deeply involve themselves in their trade. To attain any kind of forex market success, there are some 5 very basic rules you need to adhere to.

Understand Market Basics

If you want to be successful in anything, you first need to learn the basics of that particular field. For that reason, any aspiring forex trader should first take time to learn all about currency trading in order to profit from this highly lucrative business venture. You need to know the different traded currencies, the reasons for their value fluctuations, the different kinds of market orders, and how to profit from different market conditions. Know the best times to trade and the best strategies to adopt before you invest your money in this market.

Have a Trading System

As a beginner, you should get a tried and tested profitable trading system. You can develop one yourself or get one made by a professional trader. You may have multiple strategies over time but when just starting out you need to master only one profitable strategy. Know its ins and outs, identify its strengths and weaknesses, and make wise and profitable use of its advantages and disadvantages.

Develop a Trading Plan

Over time, you will get a better grasp of the market and will easily identify what works for you and what doesn’t. Use this information to develop a well thought out forex trading plan. This plan should have very clear rules on when to trade, how frequently you should trade, what currency pairs to trade in, how to enter and exit trades, and the market conditions that have to be met before you enter any trade positions.

Stick To Your Trading Plan

A forex trading plan is only as good as how strictly it is used. You are very likely to fail if you are prone to making trade decisions on impulse. You need to have the discipline to strictly adhere to the guidelines set out in your trading plan to achieve long term forex success. Improvising on your plan without careful analysis is a mark of a gambler, not a successful investor, and that should be avoided at all costs.

Control Risks

The forex market is the biggest and most profitable financial market worldwide. Unfortunately, it is also one of the most risky. To ensure that you survive during the learning process and emerge as a long term successful trader, you need to learn from very early on to manage your risks. This will enable you to manage your losses, protect your forex account, and grow your profits.

The forex market can be a confusing maze filled with traps if you approach it unprepared. To make the best of your financial investments, you need to follow the above 5 simple forex trading rules that will lead you to high profits consistently and over the long term.

 Image courtesy of worradmu / FreeDigitalPhotos.net

How To Position Your Business In Under One Minute

Muzahed I.
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How To Position Your Business In Under One Minute

Wouldn’t it be wonderful if you could position your business in under one minute? If in the time it takes to read this paragraph, you could present to your potential customers what your company does, and why it does it better than anyone else, without any unreasonable doubt? Imagine this is your once in a lifetime opportunity to make or break your business: you could become the next super brand, and make more profit than you could ever dream of, or simply become another great idea that just didn’t cut the mustard. With only 30 seconds to go your minute is almost up; if you’ve yet to convince anyone about what differentiates you from all the other companies in your overcrowded sector, let alone make them believe that they won’t be able to survive without your brand, then keep reading and find out how you can successfully position your business in under one minute.

Head For The Penthouse Suite

There are many different techniques for successfully positioning your business; however, nothing delivers this in a more focused way than the “Elevator Pitch.” This gives you the time it takes to get from the ground floor to the penthouse, to communicate your company’s message to someone who potentially knows nothing about it. The success of the Elevator Pitch depends on your ability to get straight to the point of your business, and its specific differentiation. With this in mind, you must make sure that you perfectly understand your audience, as addressing their explicit needs and using their language is imperative to ensure they fully identify with you. Remember to avoid using technical speak with the man on the street: although it’s easy to become immersed in company lingo, this will isolate and confuse your potential customers. The perfect pitch needs to speak directly to the audience: it should be a quick, succinct summary that encapsulates everything your business stands for, leaving no room for ambiguity.

Tell a Different Story

Should you not be able to find enough cues for differentiation within your business, you can look at what your competitors are saying about themselves, and then use a different angle. No matter what your business offers, you can always rely on this strategy just by using your own personal story. Using your own experiences and being transparent about how and why you have succeeded can be endearing and engaging to customers. TeaPigs cleverly use their personal love of tea to position their brand, telling the audience how they wanted to improve their favourite tipple so much that they developed a passion to build their entire brand.

Three Steps to Heaven

To streamline your elevator pitch even further, you can use digital strategist Mark Pollard’s “For, Only, Because” method. Mark believes that his three-step method should be interesting and differentiated: “people should be able to get it straight away, but most importantly, it should be something you can build your business around for a long time.” You can apply this approach to your company by following the simple steps:

For: Do you know who your customers are?

Only: What is the one thing that makes you different than your competition?

Because: Why should your customers believe in your Only statement?

See the theory in practice below with the two examples for Teapigs, and online contact lens retailer Lenstore:

Teapigs

For people who are passionate about tea and want to drink the best

Only TeaPigs supply top quality whole leaf tea

Because they believe people deserve better than regular tea

Lenstore:

For people who want to buy contact lenses online at low prices

Only Lenstore.co.uk goes further to deliver quality customer services

Because of its online Optical Advice Service and same day delivery options

This process will give you a great platform to build from, allowing you to create your position in the market. Although it’s not necessarily going to be a quick process, it will reap large benefits once completed

Using a combination of the techniques outlined above will give you the ability to position your business in a clear and digestable soundbite, which will define everything you need to know into three simple sentences. Once you’ve mastered your one minute definition, you can take the elevator with confidence, safe in the knowledge that no matter who walks through those doors, you’ll be prepared.  Try it yourself, and see if you can position your business in less than one minute.

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Six Reasons Why Public Relations Is A Great Career Choice

Muzahed I.
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Six Reasons Why Public Relations Is A Great Career Choice

Whether you’ve just left school, you’re studying for a degree or you’re looking for a career change public relations isn’t a bad choice. Working in public relations is fast paced, demanding and challenging and is perfect for anyone with a lot of drive and ambition. Think public relations might be the right career choice for you? Here are six reasons why it’s a great choice-

High Demand

Currently PR is something that is in high demand and will be for years to come. Because of this there are lots of opportunities in public relations and as an expert your knowledge will be highly sought after. In the current climate many businesses are struggling and this is where PR comes in, helping build businesses back up starting with the public, reputation and relationships.

Move Up The Ranks

In PR it’s possible to move up positions if you work hard enough. Whilst some PR agencies ask that you have a degree to work for them many offer an internship or a starting salary and can train you as you work and learn. In senior positions such as PR director you can earn between £40,000 and £100,000 a year. If you’re ambitious PR could offer the room to work your way up that you’re looking for.

Variety

A career in public relations can offer a lot of variety from day to day but also in the long term too. As a PR professional you might work for an agency when starting out but then move on to working in house for a company or maybe even freelance for yourself.

Events

Through your public relations work you will help promote events for your clients and in some cases help plan them to. Either way you will have some input into events during your career in public relations. This is interesting work but the real perk is getting to attend the events. Of course this will all in the name of PR so you can report on the event afterwards and respond to any comments made afterwards, but that doesn’t mean you can’t enjoy yourself at the same time and make the most of attending the event.

Specialised Areas

Within public relations there are lots of options when it comes to the type of PR you do. You could work for an agency that offers PR to a wide variety of clients or you could work for a specialised agency. If there is something you feel particularly passionate about or interested in working for a specialised industry could help you further your PR career. From beauty to technology PR there is a wide variety out there. Being passionate about the companies you’re working for and having a strong knowledge of the industries will help you along the way.

Social

Public Relations is a very sociable career option as a large part of the job is about building and maintaining relationships. If you’re a sociable person then PR might be right for you. Social media recently has began to play a strong part in almost every PR strategy and campaign. If you’re a social media addict you’ll already be a good candidate for a public relations professional. Social butterflies would do well in this competitive industry.

 Image courtesy of cooldesign / FreeDigitalPhotos.net

Home Affordability Improves For Second Steppers And Deposits Fall In The UK

Muzahed I.
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0
Home Affordability Improves For Second Steppers And Deposits Fall In The UK

New research from Lloyds TSB has shown that the average price of a home has fallen by 10% since 2008. In addition, the average deposit was £70,540 in 2013, just 6% higher than in 2003 according to the report. Affordability for second steppers on the housing ladder has improved over the last year but has fallen over the last ten years.

The average price paid by a home mover has fallen by 10% over the last year, while home mover property prices actually grew nationally by 3%. London has seen the highest rise in house prices and the figures reflect this. Home movers in the capital put down the largest average deposit at 34% of the average property value, which amounts to approximately £126,528. In comparison, the price of the average deposit in Northern Ireland amounted to £36,912. This is also the lowest deposit price in the UK.

Despite the improvement in affordability, the average age of a home mover is now 40 years old whereas it was 37 in 2002. This indicates that many are still finding it difficult to raise the money for a deposit on a new home. The average mortgage advance for a home mover is now £142,046 whereas it was £101,472 over ten years ago. However, average mortgage repayment costs have fallen since their peak in 2007. Now, a home mover (those already on the property ladder) can expect to pay 31% of their average gross disposable earnings on mortgage repayments whereas, in 2007, home movers expected to pay 52% of their disposable income. House prices are currently lower than they were in 2007 despite the recent rises and mortgage rates have also decreased significantly therefore both factors are likely to have contributed to this improvement.

Despite the improvements for second steppers, many are still finding it difficult to afford to move. Several home buyers made their purchase during the house price peak in 2007 but, because of the decline in the housing market thereafter, may now be finding it difficult to make a second step on the property ladder due to low or negative equity in their homes. This could explain the rise in first time buyers when compared to second steppers. There are variations in home affordability between regions with the North being more affordable for second steppers.

This also means that sellers are more likely to sell their house fast in the North due to lower house prices. This of course plays into the hands of second-time buyers for whom it is an opportunity to take a step up on the property ladder.

Meanwhile the rise in first-time buyers can also be explained by the fact government schemes like the Right To Buy Scheme which make it easier for people with lower incomes to step on to the property ladder.

This activity on the housing market means the market is on the way to recovery, what’s more economists have confirmed there is no longer a risk of there being a property bubble.

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