This year continued where 2011 left off, with consumers feeling the pressure of the rising cost of living and further austerity measures for the nation’s finances. With 2013 just around the corner, experts from comparison site, MoneySupermarket.com offer their predictions for the year ahead.
- Consumer finances will continue to be hit by rising costs, changes in benefits and further austerity measures;
- Savers should look to find the best savings rates possible, as rates continue to fall;
- 2013 will be the year for improved switching of bank accounts;
- New technology will play a bigger part for Credit Cards in the year ahead;
- Funding for Lending Scheme will continue to benefit borrowers, but interest-only mortgage “time bomb” set to be a big story in 2013;
- Consumers will benefit from attractive loan rates as a result of Funding for Lending scheme;
- Payday loans set to continue to be popular in 2013, but regulation should tighten up the market;
- Effects of regulation changes will impact car insurance pricing in 2013;
- Energy efficiency will be key focus for Government and households.
Mortgages
Clare Francis, site editor at moneysupermarket.com said: “There was a slight improvement in the mortgage market in 2012 with the Funding for Lending Scheme (FLS) appearing to be helping the availability of mortgages for those with smaller deposits and rates have become more competitive. With the FLS continuing through 2013, I’d expect to see the impact of that filter through further to the residential mortgage market and that will hopefully mean more lenders offering competitive 90 per cent LTV products.
“However, while mortgage rates look set to remain low in 2013, and could nudge even lower because of the availability of cheap funding via the FLS, I think the trend for higher fees will continue. It’s therefore really important that people don’t get blinded by the headline rate when comparing mortgage deals and that they factor in the impact of the fee as well.
“Finally, I think interest-only mortgages will be a big story in 2013. The Financial Services Authority has said it thinks interest-only mortgages have a role in the market, albeit as a niche product, but with a number of lenders having already clamped down on the availability of interest-only loans, and some having stopped offering them altogether, there are real issues for many existing borrowers who have them. For some it’s the question of how they’ll ever repay the mortgage debt, while for those who are managing their mortgage well, there’s the issue of what they’ll do when their current deal ends as they may struggle to remortgage if they want to stay on interest-only. The FSA is currently looking into these issues so it will be interesting to see its conclusions and recommendations when its report is published.”
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