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Homebuyers in London must find £80,000 deposit

London residents have to find around £81,650 as a deposit to afford an average-priced home compared with only £15,000 in 1997, according to personal finance website Moneynet.

This finding, basing affordability on someone borrowing three and a half times their salary, comes from a survey by Moneynet to track changes in finance since the website&#39s launch five years ago.

It reveals that while house prices have increased by a national average of 64 per cent over the last five years to £102,007 from £65,696, the aver-age national weekly gross wage has gone up by just 26.4 per cent to £464.70 from £367.60.

The situation is most severe in London where the average house price has risen by 90.8 per cent to £195,391 from £102,409 in 1997 whereas in Scotland it has gone up by 12.5 per cent to £66,480 from £59,070.

During that time, the average weekly wage in London has gone up by 30 per cent to £624.10 from £480.10. Despite the gap between salaries and house prices, Moneynet says the average monthly repayment eats into less of a homeowner&#39s income now than in 1997.

So far this year, the average rate of interest on a mortgage has been 4.56 per cent while five years ago it was 6.82 per cent.

Partly because of lower rates, a homeowner spends an average of 17.5 per cent of income on mortgage payments compared with 20 per cent in 1997.

Moneynet managing director Richard Brown says: “Moneynet&#39s growth in just five years led us to look at other changes that have happened in the personal finance since our launch.”


Fund firms get freedom mix

Unit trust and Oeic managers will see the majority of new funds launched classed as mixed funds, allowing them greater freedom in investing under new FSA rules on classification of asset classes.Most new funds after November 1 will be classified as mixed funds and will be allowed to hold a greater mix of assets including […]

Coventry BS appoints new general manager for marketing

Coventry Building Society has appointed Mark Murphy to its executive team as general manager, marketing. Murphy, 36, joins from Abbey National where he worked for 12 years in a number of management positions, most recently as business development director of First National Bank. He will be responsible for all Coventry&#39s marketing activities.

ScotLife tells MPs of pension tests

Scottish Life has set MPs its four pension tests to pass for a simpler system.The tests, which have been detailed previously in Money Marketing by ScotLife head of pension strategy Steve Bee, aim to ensure changes work to better the system instead of adding complications.In its response to the Parliamentary work and pensions select committee […]

Virgin helps &#39unloved&#39 NU policyholders

Virgin Money is offering a dedicated helpline for Norwich Union stakeholder policyholders who are feeling “unloved” after NU&#39s decision to concentrate on larger, more profitable schemes. Virgin says it loves every one of its customers and says companies like NU could run stakeholder as a closed book and service could suffer.

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Auto-enrolment — don’t leave it too late…

With auto-enrolment (AE) well under way for the UK’s largest businesses, over the next three years an additional 800,000 smaller employers (with less than 60 employees) will start their journey to comply with the legislation. AE mandates all eligible employees and their respective employers to make regular pension contributions into a qualifying pension scheme. To learn more about the legislation read our brief Jelf AEase — simple steps to AE compliance guide.


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