Mortgage lenders in Britain will have to abide by new laws according to the Prime Minister, under the new rules the lenders will have to prove that home repossession is only used as a last resort.

The new rules to be introduced are to stop lenders rushing in to repossess homes to allow them to get a better price for the property when homeowners are unable to meet their monthly mortgage payments.

As unemployment and mortgage rates continue to rise, repossession are expected to increase further, already this year it’s thought that repossession have risen 50 percent and about 45,000 homes have been repossessed.

Northern Rock came under fire recently being accused of being “inflexible” with borrower who fell into arrears and repossessing homes to fast according to debt charity Credit Action.

Under the new law, lenders will be pushed to allow borrowers to take repayment holidays of up to three months. Or they lenders are to be encouraged to change the monthly payment plan by either switching to interest only or extending the mortgage term.

Source: timesonline

Lord Mandelson the UK Business Secretary has warned a “contraction” was to be expected, but it is impossible to know how long it would last, and that the UK is on the brink of recession.
The news came just before the official figures that will show the first quarter of “negative growth” for over 16 years.

If the same contraction goes on for a second month, then Britain will officially be in recession. However the Ernst & Young ITEM club reported that the British Economy was already in recession, and that it will downsize by 1 percent next year. In the report it said that until 2010 house prices will still continue to fall.

As the employers continue to cut costs the report also predicted that the by the end of 2009 the unemployment figure could reach 2.2 million.

The average new home seller in England and Wales has now been reported at £229.691, this followed the first 1 percent rise which is the first rise for 5 months.

Source: ukgoogle

Landsbanki the failed Icelandic bank that was nationalized by the Icelandic government will be given a £100 million bailout from the Bank of England the Chancellor Alistair Darling announced today, to help its British savers to recoup their deposits from the failed bank in Iceland.

Mr Darling has been in talks with the Icelandic Authorities to help push through claims by UK local councils and charities to get the money back from the Icelandic banks.

Darling said that he will be providing to the short-term secured loan of up to £100 million to Landsbanki to maximize the returns to the UK creditors.

Icesave which is the British online arm of Landsbanki prevented its depositors to withdraw money from their accounts after the nationalization of Iceland’s second biggest bank Landsbanki last Tuesday. The Chancellor has said that the government will guarantee to cover all deposits from British savers who have deposits in Icesave. Since the nationalization of Iceland’s three largest banks the stock markets in Reykjavik have remained shut.

Source: Guardian

The UK government has been using anti-terror laws to seize Icelandic assets to pay back British savers, after the near collapse of Iceland and the crash of its banking system caused concern that Iceland will become bankrupt. It was revealed that the British government has seized £4 billion in Icelandic assets which is £1 billion over what they needed.

The estimated loss to UK charities, UK Councils and individuals stood at £3 billon. Yvette Cooper the Treasury Chief Secretary insisted that until a deal has been signed with Iceland’s authorities to give the money back to the British savers then the government will not release the frozen Icelandic assets.
Ms Cooper told the press that the government has sent a team over to Iceland to hold meetings with the Icelandic authorities to devise a plan for them to return the money back to the British savers.

A statement announced by the Treasury delegation conducting talks in Iceland said: “significant progress” had been made. It’s been hinted that no resolution has been made of yet for the larger investors although there is a plan being put in place to accelerate small payments to UK depositors.

Source: ukpressgoogle

Prime Minister Gordon Brown announced that he would take further action and seize the assets of Icelandic companies over the collapse of the Island’s banks. After the failure of Lansbanki, Kaupthing and Glitni Kaupthing a diplomatic row has began as it emerged that over 100 local authorities have money in Iceland and they are set to lose more than £1 billion. British savers are said to have more than £6 billion in Iceland and British companies could be as much as £12 billion.

It’s likely that the British tax paying the bill to bail out local councils and other public bodies if the Icelandic government does not return the cash to the UK. This would mean the British taxpayer could see steeper council tax bills, The Bank of England have already agreed to use £500 billion of taxpayers’ money in a bid to save the British banks from collapse.

The FTSE-100 closed yesterday 1.2 percent down but shares rose giving us the first sign that the Prime Ministers bail-out plan could be paying off. As of yet, no British Bank has requested any of the £50 billion that is available as part of the bank rescue plan.

Gordon Brown said that the Icelandic government failing to guarantee the return of the money to the UK is unacceptable and that the UK government is freezing the assets of Icelandic companies in the UK where in can, he added that they will do whatever it takes to recover the money the UK is owed.

Source: Telegraph
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As the UK government battle with the effects of the credit crunch and the aftermath of last week’s financial turmoil the Chancellor tells voters that he will not raise taxes, as people were already “hard-pressed”. Alistair Darling also dismissed calls from Labours left wing to a new 45 percent tax rate for higher earners. The Chancellor said “This is not the time to be imposing additional burdens.”

The Prime Minister Gordon Brown has said that the government will work towards an “international regulator” allowing them to oversee financial activity, as individual national governments cannot control alone.

Both Gordon Brown and Alistair Darling will be in the US and Europe in talks with finance ministers around the globe, the talks are to put in place measures to help prevent the problems that caused the financial crisis.

Read the full story in the Telegraph

The Chancellor Alistair Darling yesterday announced that he will suspend stamp duty on all properties costing less than £175,000.

The Treasury has done this to show the voters that the government is helping and on the side of the homebuyers, this “payment holiday” will take effect from tomorrow and comes as a time property sales are stagnated and property values have slumped.

This is to help first time buyers who are struggling to get onto the property ladder. The stamp duty required is 1 percent for properties value between £125,000 and £250,000, 3 percent on properties valued more than £250,000 and 4 percent if they are worth over £500,000.

There are different views from Conservatives and Liberal Democrats, the conservative last year said that a Tory government would abolish stamp duty altogether for first-time buyers purchasing homes worth under £250,000, and the Liberal said they feel that suspending stamp duty is as good as bribing people to buy properties in a decreasing market, and to cut taxation would be a bad move at the worse time possible.

Read the full story here at mailonsunday