Five years on – and £26bn later – it’s time to call an end to the PPI farce

The Independent – by Andrew Hagger

http://www.independent.co.uk/money/insurance/five-years-on-and-26bn-later-its-time-to-call-an-end-to-the-ppi-farce-a6926391.html

Consumers have had almost five years now in which to claim compensation for mis-sold payment protection insurance, yet the regulator has indicated that this sorry saga is likely to drag on for at least another two years.

While it’s right that those who were mis-sold PPI have the opportunity to get their money back, surely half a decade is enough time to ensure this is achieved.

It beggars belief that there are people out there yet to make a claim, although in reality many probably aren’t that bothered until they get pressurised into doing so.

So far PPI has cost the banks in excess of £25bn, with around £5bn boosting the profits of the claims -management companies – yes, those same firms that have made our lives a misery with their constant cold calling.

It’s a farcical situation but the Government is in no hurry to draw a line in the sand as this stealth tax on high-street banks has injected a valuable stream of cash into the UK economy. But what has been the cost to the rest of us?

How much more reliable would bank IT systems be if those billions in compensation hadn’t made a huge hole in annual profits? How many bank staff have lost their jobs? And how many bank branches have closed while the claims companies enjoy their bonanzas?

I’m not usually one to stick up for the banks but we now have an unhealthy compensation culture in this country, with too many thinking it’s fine to make a claim against them. And remember: PPI may still have another couple of years to run but the claims- management industry already has eyes on its next pot of gold – packaged bank accounts.

How many times have you rushed to answer the phone only to find it’s yet another PPI nuisance call? And how many old and vulnerable people are now reluctant to pick up the handset even when it may be a friend or relative.

Type PPI into your search engine and you’ll be astonished by the number of vultures that have sprung from nowhere to make some easy money at the expense of the UK financial services sector.

Away from the greed and constant excuses to bash the banks every time complaints figures are published, there is a far more serious consequence of this insurance fiasco.

Clearly PPI was barely fit for purpose, but the non-stop barrage of negativity around this now-defunct product means that people are now reluctant to consider life insurance or protection of any kind.

Insurers are in a similar situation to the banks in that they too have been dragged through the mud and lost the trust of the public.

More than 10 million people have been paid compensation to date, and if you’re one of those who haven’t claimed then there are probably one of two reasons why: either you live on another planet or perhaps you are one of those consumers who actually saw some benefit in their PPI policy, which paid out when you lost your job or were off work sick.

Five years on – and £26bn and counting later – it really is time to bring this PPI mess to a conclusion and let our banks get on with running their businesses, without this albatross distracting them from doing their day job.

UK house prices accelerated in March, as lending hit nine-year high

BBC News – By Brian Milligan

http://www.bbc.co.uk/news/business-36310827

House price inflation across the UK jumped to 9% in March, as landlords rushed to beat stamp duty changes, official figures show.

The Office for National Statistics (ONS) said the figure was up from 7.6% in the year to February.

Separate figures showed the amount of money borrowed for home loans in March was the highest for nearly nine years.

The Council of Mortgage Lenders (CML) said £13.8bn was lent during the month, 59% more than in February.

The figure was the highest for any month since August 2007.

Landlords and buyers of second homes have had to pay an extra 3% in stamp duty since the start of April.

“While the increases are substantial, these supercharged levels of activity are likely to be temporary, and will fall back over the summer months,” said Paul Smee, the director general of the CML.

Landlords borrowed £7.1bn in March, an 87% increase on February.

Wages

The ONS figures show that UK house prices have increased five times faster than wages since 2011, according to the Resolution Foundation, which campaigns to improve living standards.

Its analysis of the ONS data shows that house prices have increased by 36% over the past five years.

Average weekly earnings have gone up by just 7% over the same period, it said.

The think-tank said the growth gap between wages and house prices was even more pronounced in London and the South East.

But even in Scotland and the North, house prices have risen at twice the rate of wages.

However the ONS data shows that prices in Scotland fell by 6.1% in the year to March 2016.

Recent surveys by both the Halifax and Nationwide have suggested that house price growth has already cooled since the stamp duty changes came into effect.

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The ONS said house price growth in March was particularly driven by London, where the cost of a house or flat rose by 13% over the year.

In its last survey using the current methodology, the ONS said the average cost of a home in the UK reached £292,000 in March.

Best fixed-rate mortgages: two, three, five, and 10 years

The Telegraph – By James Connington

http://www.telegraph.co.uk/personal-banking/mortgages/best-fixed-rate-mortgages-two-three-five-and-10-years/

Fixed mortgage rates look set to stay low for the year, as expectations of a rise in Bank Rate have been set back significantly.

This February the Bank of England’s Monetary Policy Committee (MPC) voted unanimously to keep Bank Rate on hold at 0.5pc, as the Bank cut its UK growth, inflation and wage rise forecasts.

Rates on two, five and 10-year fixed deals have fallen again following a surge in late 2015, when Mark Carney, Governor of the Bank of England made comments suggesting a rate rise was imminent.

However, expectations for a rate rise have slipped, with market indicators suggesting Bank Rate may not rise until 2018.

Warnings in late 2015 that rising wholesale rates (swap rates) would lead to mortgage cost increases were disrupted by gloomy economic data from around the world, which sent wholesale rates tumbling in early this year.

• Mortgage boom as interest rates fall to record lows

• If rates stay low, would I profit from a ‘tracker’ mortgage?

As a result, mortgage rates have remained low and banks are continuing to aggressively compete for business with cheap deals.

This guide tells you everything you need to know about fixed-rate mortgages and the best deals available. It is regularly updated as events change.

For up-to-date best-buy fixed-rate mortgage deals, go to our mortgage best buy tables. This shows a selection of top rates based around your requirements.