Selling endowments could help first-time buyers

An increasing number of local authorities are becoming more affordable for first-time buyers looking to get on to the property ladder, a new report has found.

The Halifax study revealed that for someone on average earnings, in 2007 only six per cent of areas were affordable. This increased to 24 per cent between 2008-09 and now stands at 39 per cent.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers had decided to sell their underachieving endowments in order to raise the cash to help loved ones with their first mortgage deposit.

Housing more affordable but still too expensive for many

Despite the improvement in affordability for first-time buyers, it still means that almost 60 per cent of local authorities are out of reach for many Britons who take home an average wage.

Parents and grandparents may want to help loved ones get on to the property ladder but are wary about dipping into their own savings or taking out a personal loan to support them.

The tightening in mortgage lending has added to the troubles of those people who cannot raise a large deposit. The economic downturn meant mortgage lenders have offered reduced financial support and are wary about taking on 'risky' customers.

According to the Halifax poll, London and Northern Ireland are the most unaffordable places for first-time buyers to purchase a home. The two most affordable regions are the north-east and Yorkshire and the Humber.

Commenting on the findings, Martin Ellis, housing economist at Halifax, said: "Housing affordability for potential FTBs has improved substantially over the past two years due to the combination of lower house prices and reduced mortgage rates. Mortgage payments in relation to earnings are currently significantly below the average during the past 25 years."

Selling endowment policies could help first-time buyers get on to the property ladder

Mr Radford, from aap, said some of its customers with children or grandchildren had decided to help them get on to the property ladder by selling their unwanted endowment policies to raise the cash to help cover the cost of a deposit.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

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Selling endowment policies may be more ideal than switching debt

The number of Britons who are transferring credit card debt to a card which offers an introductory offer of zero per cent interest has risen, a new report has revealed.

Findings from Santander Cards showed that in the first three months of 2010, £2 billion will be moved to new credit cards in an attempt to stop interest climbing on their balances.

Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment policies - said some of its customers had decided to sell their underachieving endowments in order to clear their credit card debt, rather than simply switching between products.

Switching to new deals to try and tackle debtIt was recently reported by aap that some lenders are clearing their customer's smallest credit card debts first, leaving the biggest amounts to accrue interest.

As such, Britons who are struggling to stay on top of a number of credit card repayments could find a larger proportion of their income is spent on meeting these financial commitments.

Switching to a zero per cent interest card could be seen as an ideal short-term technique for keeping interest down. However, these only last for a short while and consumers will eventually have to start paying higher interest levels again.

The Santander Cards study found that five per cent of people over the age off 55 intend to switch their credit card debt to a different product, with the majority of individuals deploying this technique below this age.

More than 4.5 million Britons will use this technique in the first three months of this year.

Emma Roberts, director at Santander Cards, said: "The number of people transferring balances has risen year on year, whilst the amount being transferred has fallen dramatically; this is a clear sign that consumers are becoming savvier when it comes to managing their finances."

Selling endowment policies could clear credit card debt

However, Britons searching for long-term financial security may want to clear their debt completely.

Mr Radford, from aap, said some of its customers had decided to sell their unwanted endowment policies in order to strengthen their financial standing for the long term.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

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