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&#39Teps good value even if bonuses are slashed&#39

Self-employed people buy houses nearly a third more expensive than the average, says UCB Home Loans.

The average house purchase price for self-certification loan is £152,000 while the average is £111,000.

UCB Home Loans&#39 first self-employed report, published this month, reveals that London tops the regional league, with self-employed people paying around £211,000 for a property while Northern Ireland is at the bottom with an average of £105,000.

The self-starter report by the specialist lending subsidiary of Nationwide Building Society shows 3.3 million – 11.4 per cent of the working population – say they are selfemployed but this varies between regions.

London is above the average on 13.5 per cent of the total while Aberdeen has the lowest proportion at 6.65 per cent. The report says 15.4 per cent of men are self-employed but only 6.5 per cent of women.

The self-employed ration is lower in the UK than in Europe as a whole, where the average is 14 per cent. The lowest rate is found in Luxemburg where only 6.7 per cent are self-employed.

UCB says it can help self-employed people get on the property ladder as it assesses a borrower&#39s ability to manage a loan rather than basing its lending criteria on employers&#39 references or audited accounts.

Managing director Charles Reed says: “Changing working patterns, coupled with a self-employed sector that now accounts for 3.3 million people, are encouraging increasing numbers of people to use the services of specialist self-certification mortgage lenders. When you add the growing band of part-timers, contract workers and small business owners, this group of people who fall into the self-certification bracket is close to 10 million.”

Traded endowment policies still represent good value investments even if withprofits bonus rates are slashed by more than 50 per cent, according to Tep specialist Policy Portfolio.

It says that despite the much publicised bonus rate cuts, annualised growth rates for Teps for the 12 months to September are still in excess of 7 per cent. Policy Portfolio highlights a Standard Life policy on its books valued at £17,818 with additional premiums of £4,224 yet to be made until maturity on August 18, 2012. It says bonus rates would have to fall by 84.8 per cent for there to be a nil return on the investment.

Even if the rates were cut by 50 per cent, this policy would still achieve a return of 4.3 per cent, the Tep provider claims.

Managing director Brian Goldstein says: “There has been a great deal of coverage in the press regarding bonus cuts but they must be taken in context. Teps still provide good returns. The average annualised growth for all Teps bought from Policy Portfolio that matured in the 12 months ending September 2002 was in excess of 7 per cent.

“As many of the policies on our stock list show, huge bonus cuts would be needed before the investor failed to see a return. This is amazing when compared with the enormous losses that people have suffered on the stockmarket recently.”

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