Homeowners are spending a fifth of their takehome pay every month, according to figures published by provider Woolwich, reports The Daily Telegraph.
The figure has been obtained by looking at wages paid into about 5 million Barclays bank accounts, then looking at how much has been paid out to mortgage lenders. The average figure for May was £499, or about 20% of average household takehome pay, the paper notes.
Woolwich says the figures underline its stance that fears of affordability dropping in the current housing market are overdone. London remains the most expensive place to own residential property according to this method of calculating affordability, but mortgage payments as a share of takehome pay have a fallen by 0.4% since November 2004, Woolwich’s figures suggest.
ALSO ON THE ISSUE OF mortgages, Alliance & Leicester takes a different view to Woolwich, suggesting that according to its latest business figures sales are falling of household and life insurance linked to sales of homes, reports The Times.
More of the market has fallen to remortgaging rather than people coming into the market for the first time, meaning A&L is set to report sales of so-called “partner products” down in the first three months of 2005 against the same period last year.
A&L otherwise says its mortgage lending business is on track to meet targets set last year.
GOVERNMENT FINANCES have sparked some headscratching after publication yesterday of Office for National Statistics figures on public sector borrowing, reports the Telegraph.
A figure of £8.7bn recorded for June was far greater than expectations in the City, “reversing two good months in the fiscal cycle, when it looked as if the chancellor had got the public finances back under control,” the paper writes.
One major problem is the downturn in VAT receipts as spending has slowed on the high street, limiting tax revenue growth to 4.2% in May, compared with the 8.5% annualised rate the Treasury needs this year in order to hit target, the paper adds.
QUALITY OF AUDITING WORK done in the UK is under scrutiny today after a warning from the Financial Reporting Council – the industry’s regulator – that its first ever independent review has found conflicts of interest and poor legal compliance, the FT reports.
Out of a study of 27 audited company accounts, the FRC has referred two of FTSE 350 companies to its review panel. In neither case do the questions raised indicate damage to profits the FRC says.
The Council is keen to stress it has so far not found any systemic errors affecting all accounting practices, but has already pointed out areas the big four accountants – PricewaterhouseCoopers, Deloitte, KPMG and Ernst & Young – could improve.
PROBLEMS WITH TAX credit continue to dog the government following the publication of the Inland Revenue’s ombudsman’s annual report, The Guardian reports.
According to the ombudsman, the £14bn system is still failing by leaving vulnerable people “worried and distressed” by the errors committed by HM Revenue & Customs. Last year the ombudsman took up more than 500 complaints out of more than 4,300 received – 86% were upheld in favour of the complainants.
Of particular concern has been the system for clawing back overpayments, which has been applied without sufficient flexibility on the part of staff, while some taxpayers have been given misleading or incorrect information via the tax credit helpline.IFAonline
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