Daily Paper Summary: 11th November


Over 2,000 people have put in offers on homes during the first month of the Help to Buy scheme, under which the taxpayer guarantees up to 15% of mortgages. David Cameron will welcome today the early interest in the scheme. On average applicants have requested to borrow £155,000 but only three quarters are first-time buyers. In the Times, it has been reported that almost a quarter of those using the scheme are trading up rather than buying their first home. Though the rules do not enable homeowners to purchase a second home, the mortgage can be used to buy a more expensive home with loans that require a deposit of between 5% and 20%. And the maximum value of a property bought with a help-to-buy mortgage is £600,000. The majority are couples applying with a joint salary of under £50,000 to borrow about £159,000. What is surprising is that 31% of people in Britain spend more than a third of their income on mortgage or rent, according to a poll commissioned from Ipsos Mori for BBC One’s Panorama. If people spend 35% or more of their disposal income on rent or mortgages that means they may not be able to afford other basic needs such as food.

Personal Finance

The coalition is  searching for new ways to find £1.6 billion a year by means of tax rises or spending cuts to fund measures to reduce household energy bills. George Osborne is thinking about shifting the cost of government-backed insulation schemes away from bills in a step that would reduce household energy prices by up to £75 a year. However any decision to instigate the switch with the Energy Companies Obligation (Eco) and the smaller Warm Home Discount off bills will require £1.6billion a year to fund it. The issue is said to be brought into the limelight in the Mr Osborne’s Autumn statement in early December which will discuss his announcements in more detail. It’s clear the coalition is under pressure to identify measures to cut household bills after Ed Milliband’s pledge to freeze energy prices if Labour wins the forthcoming election.


A handful of official data, positive surveys and reports are due out today, offering further evidence that the business community is increasing its sights and pushing Britain on track to run the US close to achieving the fastest rate of growth in the world’s developed economies next year.  There are fresh new signs of recovery: rising business confidence, a boost in economic growth, a further fall in unemployment and an expected slowdown in the inflation rate. These factors are expected to offer further light and optimism for the Chancellor and the Bank of England to be more upbeat about the outlook for the economy. Lloyds Bank is reporting a record rise in business activity in the English regions among its customers and a new peak in job creation in both England and Wales. Official figures tomorrow are thought to show the consumer price inflation rate down to a six month low of 2.5% followed by an appreciable fall in employment on Wednesday.  Lloyds bank showed that in a recent survey that job creation remained robust in England and Wales last month to reach a 13-year peak and five regions reported record growth in new business.


The UK’s short-term jobs outlook is at its strongest for five years a survey of 1,000 employers has found as the Bank of England gets ready to show a faster fall in unemployment this week. Optimism for employment prospects is highest in manufacturing and retail, among small and medium sized companies and in southeast England according to the Chartered Institute of Personnel and Developments quarterly labour market outlook.


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