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What's this?
RBS offer some relief to homeowners
RBS delays repossessions
RBS have agreed to delay repossessing houses for six months after a homeowner falls behind on mortgage repayments.
The government now have a 58% share in RBS. RBS are the fourth biggest mortgage provider, with 7% of the UK mortgage market. This move will put pressure on HBOS, the market leader to follow a similar route.
This agreement by RBS will come at some cost to estate agents who have been receiving a vital source of income from the disposal of repossessed property, and also those trying to sell may see further falls in house prices.
RBS have also agreed to return to normal lending practices.
Mortgage lending falling
The number of mortgage approvals in October has fallen further, with only 32,000 being approved. This drop represents a 74% drop since this time last year.
Sir James Crosby, former head of HBOS warns the government that in 2009 the number of mortgages approved may fall further unless they take steps to improve the bank's ability to raise funds to lend.
British consumers borrow way out of debt
PWC released report indicating that British consumers are borrowing their way out of debt, whilst those on the continent have switched to saving.
Total level of borrowing reached £1.5tn in the year, with unsecured lending up by 6%.
Report has also highlighted that many consumers are worried about whether they will be able to get future credit and whether they will be able to repay existing debt.
VAT cut today
The much talked about drop in VAT from 17.5% to 15% took shape today, with thousands of businesses dropping their prices. The move has been put in place to try and encourage consumers to spend, however with many shops slashing their prices it is unsure whether this cut in VAT will have the desired effect.
This VAT cut is expected to cost the Treasury £12.5 billion, but should lead to the average earner saving up to £170 a year.
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