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Second charge mortgage business down 84%

The latest statistics released by the Finance and Leasing Association show that second mortgage business has been significantly hit by the credit crunch with new business 84% lower in January compared with January 2008.

The downturn comes at a time when home owners are choosing to improve their property rather than move house.

Fiona Hoyle, head of consumer finance at the FLA, says: “Second mortgage new business fell significantly in 2008 as a result of the difficulties facing companies trying to secure funding in the commercial markets.

“This has continued into 2009 with our figures showing that FLA members wrote £53m of new secured loan business in January 2009, compared to just over a third of a billion pounds in January 2008. The change is marked.”
 
The Government review of the second charge mortgage market last year found no systemic problems with the market and FLA members have published good practice guidelines that have been warmly welcomed by BERR, the Treasury and Office of Fair Trading.
 
Other sectors also showed a weak performance, total finance provided to consumers in the 12 months to January 2009 by FLA members was £59.2bn, down by 10% on the 12 months to January 2008.

Direct unsecured personal loans fell 28% in the 12 months to January 2009 compared with the previous year.

New credit card business was down 12 per cent in January compared with January 2008.


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Strong dollar can be a powerful driver of UK dividend growth in 2015

By Robin Geffen, fund manager and CEO 

This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

In our view, this trend is much more than simply a one-quarter phenomenon. It is actually the most profound issue to get right as a UK equity income investor in 2015. We believe that the US dollar will continue to strengthen significantly from its current level. This is due more to the US economy’s demonstrable de-coupling from the rest of the world than to a view on the UK. The US has a strong chance of tightening monetary conditions this year without jeopardising growth or de-stabilising its housing market. The same can unfortunately not be said about the UK.