Wriglesworth newspaper summary: 10th January 2014

Personal finance

Large families are losing up to £400 a week since the introduction of the Government’s weekly benefit cap, which has affected 31,000 households. Figures from the Department for Work and Pensions show that by November more than 2,600 households had lost more than £150 a week or £7,2000 a year. The Times, page 16. The Daily Mail has taken a different view of this – prior to the cuts 33,000 families had “hit the jackpot” under Britain’s “generous” welfare system. Front page. Also page 5, Daily Express …

Property

Francesca Steele looks ahead to 2014 in the Bricks & Mortar section of The Times. On the government pledge to pump £1 billion into infrastructure to unlock housing projects , Stuart Law CEO at Assetz, comments that this pledge is welcome and a boost to supply, creating homes and jobs, is to be welcomed. Forecasts around property prices are also buoyant with Knight Frank predicting an 8.4% rise in property prices this year. According to Mortgages for Business buy-to-let lending will reach £25 billion by the end of 2014 but investors should watch out for the “hidden” amendment to the CGT final exemption period. The Times, Bricks & Mortar, page 6-7.

Thousands of people have wrongly been identified as liable for bedroom tax, including some who now face eviction or have been forced to move to a smaller property as a result of an error by the Department for Work and Pensions. Housing experts believe that as many as 40,000 people could be affected by the mistake. The Guardian, pg 1.

Economics

Yesterday three of the UK’s biggest retailers (Tesco, Morrisons and M&S) admitted that their profits had been hit by poor Christmas sales. They blamed a squeeze on shoppers’ spending power and unseasonal autumn weather for falling underlying sales and lower than hoped for profit margins. The Guardian, pg 30, and pretty much everywhere else. This also highlights the changing nature of consumer spending habits with more online shopping and shoppers buying from small convenience stores.

Recruitment

Clifford Chance has adopted a radical approach to recruiting graduates in an attempt to break the “Oxbridge recruitment bias”. Staff conducting interviews are no longer given any information about which university the candidate attended, or whether they came from independent or state school. This scheme is currently the only one in the UK. In its first year, the scheme saw candidates come from 41 education institutions.  Independent, page 9.

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ERSA: Confidence in equity release rises 23% in a year

The number of UK adults who would consider equity release has risen by 23% over the past year according to research from the Equity Release Solicitors’ Alliance (ERSA).*

The percentage of who would consider equity release as part of their retirement planning has increased from 54% to 77% while the percentage of consumers with a negative view of equity release has also fallen from 42% to 23% in the same period. 

The research also asked consumers what measures would increase their confidence in the equity release sector. The most popular measure was a recognisable mark of excellence among equity release professionals which membership of trade organisations such as ERSA and the Equity Release Council provides. Forty two percent of people identified this measure.

Of other measures to increase confidence, over a quarter (26%) said specialist legal and financial advice would improve their perception. Twenty eight percent cited government endorsement and 25% said word of mouth recommendations would help. Just 10% thought high street firms entering the market would boost their confidence.

Claire Barker, Chairman of ERSA comments,

““It is really positive to see perceptions of equity release are continuing to improve and consumer confidence is growing.  However, there is still work to be done. Clearly specialist advice and recognisable signs of quality are a very important part of this which is why trade organisations are so important.   The grouping of specialists under a banner signals quality and expertise to consumers, and we in the industry need to ensure we continue to promote specialist organisations such as ERSA and The Council and seek to recruit new members.”

Specialist Advice

While specialist advice and a recognisable mark of excellence are seen as ways to improve confidence, 30% of people admitted they wouldn’t know how to judge if someone was a specialist equity release adviser or lawyer. Additionally, 40% expect specialist advice to be more expensive than non-specialist advice. However, it is often the case that specialists are cheaper as their expertise means it takes them less time to complete each case. For example, ERSA members tend to complete an equity release case in around two – three  weeks, post-offer on average.

 Claire Barker adds:

“That people don’t know how to identify a specialist, and that there is a misperception that expert advice is more expensive suggests some people aren’t managing to find the quality of advice they require. For these people, the continued promotion of industry organisations should help, as well as the message that expert advice is often cheaper than non-specialist advice. Equity release is a complicated transaction and significant undertaking, and specialist advisers and expert lawyers are fully equipped to ensure all parties understand the long-term nature of the agreement.”

*Current research conducted among 1,028 consumers by Wriglesworth Research between March 8th and April 15th 2013. Tracking research conducted by Wriglesworth Research between 6th – 25th June 2012 among 1,113 UK adults.

Wriglesworth Vlog: Paper Summary for 14th May 2013

The key macro-economic, personal finance, property and recruitment stories from today’s papers, read by Wriglesworth Account Executive Rishi Banjeree

Wriglesworth Vlog: Paper Summary for 19th March 2013

The key macro-economic, personal finance, property and recruitment stories from today’s papers, read by Wriglesworth Junior Account Executive Flora Spens

Wriglesworth Vlog: Paper Summary for 25th February 2013

The key macro-economic, personal finance, property and recruitment stories from today’s papers, read by Lee Blackwell

News Headlines: 24th December

Economics:

The chancellor is expected to bring forward a bill in 2013 to ringfence retail banking as proposed in the Vickers report. A cross-party banking commission has also proposed giving regulators powers to impose legal duties on bank directors to prevent them from finding holes in the ring fencing, as well as a reserve power to break up banks completely if ring fencing fails. FT, p.1.

Property:

House prices in England and Wales are set to decline in 2013, according to Hometrack. The firm has recorded six consecutive months of price falls, and as a result prices fell in two thirds of postcodes in 2012. However, the capital continues to buck the trend, and the average London house price is now 10% above its 2007 peak. Times, p.33, FT p.3

Personal Finance:

The Express has taken an untypically negative view on mortgages, arguing that mortgage costs are likely to soar next year because of a potential rise in interest rates. They state that many economists are penciling in a rise at the end of 2013 – 18 months earlier than anticipated. A rise of 0.5% would add £500 to annual repayments on a £100,000 mortgage. Express, p.4

Recruitment:

Businesses have turned to temps in the place of permanent staff in 2012 according to the Association of Professional Staffing Companies. They calculate that permanent placements fell by 2% in the year, while temporary roles picked up the slack, rising by 4%. IT proved the most active sector, with temporary hiring up 6%. Media and marketing saw permanent placements fall by 15%, although temporary hires were up 8%. Times, p.35