Mortgages, wealth, banking and students

The fixed interest rate of mortgages could fall to less than 1 per cent next year if the Bank of England cuts the base rate again, in a move that would give the housing market a boost, The Guardian reports. Rates on two-year, fixed-rate mortgages – already at record lows – could fall even further because of tough competition among lenders to attract new customers, according to leading City analysts. Super-cheap home loans could give the market a boost after the vote for Brexit, which forced Threadneedle Street to cut rates to 0.25 per cent in August. This was the first rate-cut for more than seven years and economists expect the Bank to cut the base rate again – to just 0.1 per cent, possibly in November. According to analysts at Bernstein, which is based in the City, another rate cut from the Bank of England would drive standard two-year fixed-rate mortgages to 1.1 per cent – and to less than 1 per cent for customers with a good credit rating. Housing The prices of London’s most expensive homes will remain depressed until 2019, suffering from a cocktail of stamp duty hikes and post-referendum uncertainty, according to The Telegraph. The first post-Brexit forecast for the prime central London housing market from Savills suggested there will be a 9 per cent fall in house prices this year, followed by two years of flat prices. It said that in 2019, prices in the capital will start to rise with an increase of 8 per cent. This is far less downbeat than estimates from Société Générale soon after the referendum, which claimed that house prices in the most expensive postcodes of central London could fall by as much as 50 per cent. Wealth

British citizens have become the third-richest in the world after average wealth grew last year but it is those at the very top who have benefited most, research claims.

On average, Britons had €95,600 (£86,000) in savings, pensions and investments in 2015, after debts had been taken away – up 0.8 per cent compared to the previous year.

Thisismoney reports that the increase has seen Britain move up from fifth position in 2014 to third last year, when it was second only to Switzerland and USA in the net per-capital wealth league compiled by insurer and asset manager Allianz SE.

Banking

Forty per cent of 55,000 consumers surveyed worldwide report decreased dependence on their traditional bank and increased excitement about alternatives, according to EY 2016 Global Consumer Banking Survey. A lack of trust, changing consumer behaviors and expectations set by digital innovators and increased competition from new players are eroding traditional bank relevance. Retail banks scored just 75.1 out of a maximum value of 100 on inaugural EY Bank Relevance Index, which evaluates how customers interact with banks now and how they expect to in the future. Utility providers Employees waste an average of £210 and £310 a year on electricity and dual fuel bills respectively because they have not switched providers, according to new data from Mercer Harmonise. The data shows that, on average, employees could reduce their electricity bills by 18 per cent and their gas bills by 22 per cent. Mercer Harmonise, a service from Mercer, a global consulting company, analysed data from 330 users of its latest service, a price comparison tool  which allows employees to find the best provider across a range of services. Amazon Amazon’s algorithms encourage customers pay more than they need to for popular products and appear to give more prominence to items that benefit the retail giant, according to an investigation by ProPublica. The Guardian reports that the investigation looked at 250 frequently purchased products over several weeks to see which ones were chosen to appear in the highly-prized ‘buy box’ that pops up first as a suggested purchase. Amazon not only sells products directly itself, but also allows other retailers to sell their own products through its platform. This means that the same product – say a particular set of headphones – could be offered by dozens of different vendors at different prices and with different shipping costs. Students

As more than half a million young people prepare to start university over the next two weeks, instead of enjoying Fresher’s Week many will be preparing rent strike action and drawing up strict budget plans to stay in the black.

The latest research from SunLife reveals that despite stereotypes of blowing cash on going out, students actually budget more carefully than their parents and grandparents.

According to SunLife’s Cash Happy report, young people (18-24) are the most likely of all age groups to keep close track of their finances, with 60 per cent saying they formally budget, up from 59 per cent last year.

In comparison, among their parent’s generation and older (over 55s) just over a third formally budget.