Markit and YouGov have announced the launch of the Markit/YouGov Household Finance Index(HFI), a new survey designed to provide the earliest and most accurate indication of actual changes inhousehold finances each month. The HFI is intended to anticipate changes in consumer behaviour accurately.

The survey tracks objective “hard data” on actual month-on-month changes, focusing on household spending, saving and debt levels, but also includes several forward-looking opinion questions to help anticipate future trends.

The Markit/YouGov HFI is the first in a series of polls and indices which will combine Markit’s and YouGov’s respective experience in business and consumer sector surveys.

The survey signalled a further deterioration in finances on a month ago in June, continuing the trend that has been seen since the survey data were first collected in February. Some 32% of  respondents noted a worsening of their financial situation compared to a month ago while just 6% reported an improvement.

However, the resulting “net” deterioration in finances indicated by the June survey was less than recorded in any of the previous four months, wth the HFI for the current month rising for the third successive month to 37.5, up from 36.5 in May.

The deterioration in the outlook for finances was attributable to an increase in job insecurity, which rose compared to May but remained less widespread than in the spring.

Concern over jobs reflected a further fall in business activity at respondents’ workplaces and a corresponding drop in income from employment, which have both fallen over the five months since the survey started. However, in both cases, rates of decline were less steep than in early spring.

Building societies play an important role in the strength of an economy to show any new trends when it comes to the mortgage industry.

The Building Society Association showed, in their latest statistics, showed that gross mortgage lending by their members was roughly 2-billion pounds in June 2009. This compares to 3.2-billion pounds over the same period in 2008. This is roughly a 37-percent drop than the previous year.

Brian Morris, Head of Savings Policy at the BSA made the following comments, “Gross mortgage lending by building societies was just under £2 billion in June 2009, the highest level seen this year, and up 30% on May. Despite this, lending remains at historically low levels, and is 40% lower than in June 2008. Mortgage approvals show signs of stabilizing as they reached a year high of £1.8 billion, but are more than 30% down on this time last year.”

Their figures also showed that members withdrew some 2.239-billion pounds in June compared to an increase of 419-million last year.

He had comments about the savings issue as well, “The withdrawal experienced by the building society sector is not unexpected given the very challenging economic backdrop. With rising unemployment, subdued income growth and the official Bank Rate at an historic low, it is very difficult to attract retail savings. In addition, there is evidence households are looking to take advantage of the low interest rates to pay off debt rather than save.”

There are many banks and lenders to choose from in the United Kingdom and many of them are highly competitive in rates.

It was recently announced that the Bank of China will get involved into making loans to British homeowners and landlords to extend their base of business.

In the past, the Bank has granted loans to some in the UK but many of these were focused on lending to those who actually lived in the Chinese communities.

To start off with, mortgages from the Bank of China will be offered via four different brokers and will have a starting rate that is 2.5% above the base rate.

The folks that borrow money from the bank will have to attend a face-to-face meeting with company personnel if they wish to receive the mortgage from the bank. Current UK mortgage lending is not as great as it used to be and is approximately one-half of the level it use one year ago this month.

“While I do not believe it will re-shape the whole mortgage market in the UK, if it works here, it is a bank with sufficient scale and could potentially deliver big volumes”, said Mark Harris, managing director at Savills Private Finance, one of the four brokers offering the Bank of China mortgages.

Smartlandlord.co.uk said the Bank of China’s decision “demonstrates confidence in the UK housing market”.

“Contrary to media reports, the private rented sector is buoyant”, the buy-to-let specialist added.

The online letting portlet, Citylets, recently announced that rents in Scotland are beginning to fall and there could be many reasons behind that figure.

The recession is likely one of the factors that is behind that drop and not to exclude the unemployment rate in the area.

The latest figures from the organization shows that rents fell for the second consecutive quarter and for the period of April though June of 2009, dropped by approximately 3.3%.

High stock levels have also had a point to play in this drop as landlords are forced to secure leases at lower values. Cheaper mortgages may assist some landlords who are purchasing new properties to let in turn helping them with their bottom line.

There are certain areas that are being hit harder than others with the one most notable, being the student sector. There is also a high availability of apartments and houses that are rentable making the choice much more advantageous for the renter to select what they want. Another factor that is notable is that the average to to let a property is about 14 days longer than what it has been at its peak time.

Thomas Ashdown, spokesman for the Citylets Network, said “that while rental levels are falling, which will be pleasing to tenants, it is not all bad news for landlords.”

He continued by saying, “Although the continued decline may be of concern, the fact that rents have fallen by only 3.3% year-on-year during the sharpest recession in living memory and with other business sectors experiencing catastrophic collapses, I’d say this is by no means a disaster for the vast majority of landlords."

He finalized with , “That said, the full impact of fast-rising unemployment may yet to be felt, but there are positives to be taken out of this report for both landlords and tenants.”

Over a third (35%) of finance professionals would have the temptation to invest a redundancy payout in a buy to let property, this according to new research from PropertyEarth.net, the chain free property portal.

According to the research, around 30% of finance professionals would use a redundancy payout to cover everyday living costs. Property is the preferred outlet for those looking to invest their lump sum of the money that they have. This would be followed by a savings account (14.6%), gold (10.7%), FTSE 100 stock market shares (7.8%) and oil (1.5%).

The average severance package received by banking, finance and insurance professionals on redundancy is £21,300. This would be enough to cover the cost of a 25% deposit on a chain free one-bedroom flat listed on PropertyEarth.net. The cost of the flat would be on average £84,208.

The average PropertyEarth.net net rental yield at 6.59%. With that in mind, an investor could generate a rental return of £14,037 over ten years after costs. This would not take into account potential capital growth. In comparison, the 14.6% who would prefer to invest their lump sum in a savings account won’t account for the same payout.

The research also revealed that prospective investors are generally in it for the long haul. Almost 72% considering property as a long term investment. This is quite a bit difference in thinking from the pre-recession ‘get rich quick’ property investment mentality.

Dominic Toller, Managing Director, commented: “This research shows that property is still viewed as a strong long term investment, despite the recent volatility. Savvy finance professionals are taking a long term view and are attracted by the returns currently offered by the buy to let market, due to the low prices and high yields of chain-free property in particular.”

According to the company, LSL Property Services, they indicate that in June rents are running higher than ever, up over 1% compared to the month of April. They put the average figure at 649-pounds per rental. There is a difference though over the previous year when it ran upwards to 7-percent and that mainly due to inflation..

The biggest increase over the last year was in Wales where landlords have increased the rents by almost 5%.

Those falling in arrears when it comes to paying their rents seems to have fallen over the past months with the figures jumping from 557,000 to 529,000 in June which shows a much better outlook.

LSL’s David Brown had comments about the situation, “Rent arrears are second only to leaving a house lying empty for the financial pain they cause landlords. Most of the improvement in June was among those only a few days late, but there has also been a small drop in those more than a month behind too.”

He continued by saying, “Those who suffered first from the recession were those in lower-paid jobs, often the most disposable workers when employers look to cut. But the downturn is progressively affecting tenants on higher incomes as they begin to fall behind with their rent. Landlords are learning the lessons of the recession, and are quicker to act when their tenants fall behind. Opening up communication quickly with tenants is key. Landlords want to keep people in their homes – they rely on the rental income and would rather tackle arrears quickly and constructively. Using professional management services can really help in this respect.”

An increased number of consumers and small businesses will be compensated quicker based on new regulations by the Financial Services Authority. Although the final payout rules won’t become into full effect until December 31, 2010 it does mean a restructuring of the FSCS (Financial Services Compensation Scheme.)

An additional change is that in future, payouts will be made on a ‘gross’ basis, which will effectively ring fence the deposits if a depositor has savings and loans with the same firm. Currently it differs from that in the effect that a loan or debt is paid before the compensation and this would change.

According to Hector Sants, chief executive of the FSA, “To help underpin confidence in our banking system, individuals and small businesses must feel confident that their money is well protected. The new rules announced today will help deliver that confidence, build on the successful role of the FSCS to date, and aim to further minimize the potential hardship faced by depositors if an institution defaults.”

He continues by saying,”The FSA, along with HM Treasury and Bank of England, have set the FSCS a challenging target of delivering payout in seven days. The systems requirements that the rules introduce for banks are crucial to enable the FSCS to deliver fast payout.”

Some of the key changes include widening of the scheme to include more individuals and introducing a requirement where as the deposit takers must disclose that an FSCS exists and familiarize customers with the meaning of the document.

Recently, the National Association of Estate Agents released their housing market report for June 2009.

In that report, it showed that the number of sales by each of the agents, generally, remained high for the third straight month in a row. The average per agent was approximately 9.5 sales during the month of June. This is double the amount of sales when the market was at its worst in August of 2008.

The report also states that the number of properties decreased during this time per salesperson when it had been 69 in May and in turn 64 in June.

It also said that the number of those seeking a home decreased during the same period with the number of house hunters per agent dropping some 3%.

The report indicates that many buyers are willing to pay in line with what the agent is asking for the property. The difference between prices is only 1.9% which is a substantial drop over the same period in May.

Gary Smith, the NAEA President was quoted saying,”The housing market is in a far stronger position than it was 12 months ago. After several months of continuous improvement the market stabilised in June, ahead of an expected seasonal dip throughout the summer.”

He continued, "It is in the interests of the UK as a whole that the upturn in the housing market that has been noted in the first half of 2009 is sustained and nurtured into a full recovery. The Government must do more to ensure that money that has been given to banks finds its way through the system and into the housing market."

It was announced that sale and rent back (SRB) landlords have until the end of this month to file for permission to operate and receive interim permission to do so. SRB companies and landlords are under new regulations set up by the FSA.

According to the regulations, it is to make sure that they are fit to operate. According to the National Landlords Association of the UK, this makes sure that they will now be required to “treat customers fairly, making clear important details, such as the length of time they can stay in the property, before they make their final decision on whether to sell.”

The regime will also require applicants to provide a sustainable business plan which shows funding streams and evidence that the funding will continue. The FSA will be looking to see that applicants have access to funds in order to complete purchases.

John Socha, Vice Chairman, National Landlords Association, speaking about the interim regime, said,

“The clock is now ticking if companies or individuals want to continue with sale and rent back transactions. Ethical sale and rent back must be an option for some consumers. It provides flexible tenure and the ability to remain in their property for those who can no longer afford the costs of home ownership.”

“In the current economic climate, more and more people will be facing financial difficulty including keeping up their mortgage repayments. Although sale and rent back will not stop repossessions, ethical sale and rent back could be a way for homeowners to remain in their properties but become tenants. Only when sale and rent back operators are within a more regulated environment can we be confident that consumers will be treated fairly.”

Exact Mortgage Experts recently held a poll with mortgage brokers in mind. Out of that group, approximately 54% of them say that Buy-To-Let (BTL) should be regulated by the FSA.

Their researched was included with 549 mortgage inter. It showed that approximately 40% of the brokers survey felt that 90% of their BTL clients were amateur landlords which could have an effect on the market. Another 63% of the brokers also felt that more than 75% were amateur investors as well.

The managing director of Exact, Alan Cleary, said that “BTL should have been regulated. The ready availability of mortgage finance and credit up until two years ago opened the door for a lot of amateur investors.” He also stated that due to the lack of regulation, many amateurs, without a commercial head on their shoulders, could easily join into the BTL market.

He also feels that it was a mistake to assume that BTL could be left unregulated even though it was a general commercial endeavour. The number of landlords who are well under water generally shows that this could have been a mistake with their sizable portfolios.

It should be noted that BTL rates are above the market average, this according to the statistics. They also show that more than four-billion pounds are invested in this particular market. And that a large percentage of these BTL loans are in arrears. This was caused by a few borrowers who invested unwisely when the market was at its highest.

Cleary also states, “The lack of regulation has definitely contributed to higher arrears rates in the sector. But, there’s a larger issue than treating buy to let landlords who are in financial difficulty. If landlords get behind on their mortgage payments, their tenants can be in danger of being turfed out if the property goes to possession.” He feels that the lack of FSA regulation in the sector will make it harder for the government to protect these group of individuals that are living in the BTL housing. Cleary thinks that mistakes need to be corrected.