House prices, Lloyds, pensions and credit cards

If you’re still lamenting the fact that Christmas is over and you’re back at work, there’s some positive financial news this morning. According to Halifax, house prices increased by 6.5 per cent last month compared to December 2015. It seems that Brexit worries have yet to hit the UK housing market. Halifax also said that the average house price was £222,484 in December, up 1.7 per cent on November, a bigger rise than had been expected. For the final three months of 2016, house prices were 2.5 per cent in front. According to the BBC, Martin Ellis, housing economist at Halifax, predicts that ‘while demand will wane this year, house prices will continue to be supported by a shortage of homes on the market’. He added: ‘Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017’. In other housing news, The Telegraph reports that soaring house price growth in commuter hotspots can pay for a season ticket in as little as eight days. New research by Zoopla shows that in Esher, Surrey, property rose in value by an average of 9.25 per cent last year, the equivalent of £256.66 per day. This would cover the cost of an annual season ticket into London worth £2,080 in just over eight days. Meanwhile, figures from the latest Landbay Rental Index, powered by MIAC, show that the average rent paid for a residential property in the UK outside London hit £750 in December, rising by 2.04 per cent over 2016. Rental payments now account for over half of the average take-home pay for people living outside the capital (£1,425).

Average rents across all property sizes grew by 2.13 per cent in England (excluding London), 1.42 per cent in Scotland and 1.43 per cent in Wales in 2016, rising to £755, £721 and £634 respectively by the end of the year.

Spending The Times reports on figures from Visa which show that ‘consumer spending rose by 2.6 per cent year-on-year in December, rounding off the fastest-growing quarter for two years. Visa said that the average year-on-year growth in the final quarter of last year was 2.8 per cent, twice as high as in the second and third quarters.’ Pensions 

New figures released today from PwC’s Skyval Index show the deficit of defined benefit (DB) pension funds stood at £560 billion at the end of 2016, £90 billion higher than at the start of 2016. If companies tried to repair the additional deficits which arose during 2016 within 10 years, this would cost an extra £10 billion per year.

PwC’s Skyval Index, based on the Skyval platform used by pension funds, provides an aggregate health check of the UK’s 6,000 DB pension funds.

Tax break The Guardian reports that nearly three million UK couples are missing out on a tax break worth up to £220 a year. According to HM Revenue and Customs, since April 2015, couples in which one person pays no tax because their income is less than the personal allowance – currently £11,000 – have been able to transfer £1,100 of that allowance to their tax-paying partner. HMRC said the allowance, available to couples who are married or in a civil partnership, has been taken up by 1.3 million of the 4.2 million people it calculates as eligible. Lloyds In a stark reminder of the difference in fortunes between RBS and Lloyds Banking Group, it emerged this morning that the Government is no longer the biggest shareholder in Lloyds Banking Group after selling down its stake to less than 6 per cent. The Telegraph reports that ‘the Government has now recovered more than £18 billion, the lender said, as it continues to reduce its stake from the 43 per cent it held after rescuing Lloyds with a £20.5 billion bailout during the financial crisis’. The Government still holds 71.5 per cent in RBS. RBS and Lloydswere rescued around the same time. Credit cards

Millions of credit card holders face a New Year financial hangover because they aren’t clued up about their credit card, new analysis from MoneySuperMarket reveals today.

The research found two thirds of credit card holders don’t keep a close eye on how much they spend on credit and only check their statement at least once a month. Another two thirds have not checked their credit score in the past year, with a fifth not knowing how to do so. Meanwhile more than one in ten credit card holders have no idea how much interest they pay on their credit card.

Finally…

The BBC reports that the pound plunged to a two-month low against major currencies today after Theresa May signalled at the weekend that Britain will pursue a ‘hard Brexit’ from Europe.