Last updated at 09:50, Thursday, 08 January 2009

WITH 2009 predicted to be one of the grimmest in years a host of financial experts today share their tips for surviving the financial storm.
JO DAVIES reports

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THIS period of sobriety after the over-indulgence of the festive period is a chance for everybody to take stock.

Vows to “cutback at Christmas” are now vague recollections in the hangover of the new year.

Despite the big financial crises of 2008 most people probably spent as much as they did in previous years – and 7,000 still managed to finance a trip to Middlesbrough.

Although consumers are now waking up to the reality of their borrowing, at least they’re facing 2009 with their eyes wide open.

And – after a year that none would have predicted 12 months ago – be warned that 2009 is being billed as one of the grimmest in years.

Today the Evening Mail offers a medley of tips for surviving 2009.

It seems the number one tip is to be proactive.

Whether it’s dealing with debt, switching mortgages or saving on energy bills, those on top of their personal finances will be in a far better position.

Savvy consumers should find some great deals if they are prepared to shop around.

Managing director of Ross Estate Agents, David Sharpe, said: “The thing of comparing the whole market is there are different savings to be made, but it does require putting some time and effort in. Now, more than ever, if people can be bothered, you can make savings. Even if you’re not moving house, look at what you’re paying on your buildings insurance and contents insurance.”

Customers should also seek savings on utility bills. Last year brought record price increases on gas (48 per cent) and electricity (28 per cent).

Prices could plummet again around March, depending on how tough government is with suppliers, so it could pay to swap suppliers.

Customers should also look to save on home and car insurance by shopping around. While savers and careful investors who usually come out well in a recession are carrying the can and showing hefty losses, 2009 will be the year for the first-time buyer – particularly those with deposits and good credit ratings.

Furness Building Society chief executive Rob Cairns says: “This could be the year for first-time buyers to get on the housing ladder.

“Mortgage affordability has not been as good as it is now for many years, mortgage rates tend to be at an all-time low and I feel house prices might still fall a little. I would therefore advise first-time purchasers to start looking and keep looking until they find a suitable, affordable property and, in the meantime, open a Homesaver account with ourselves, in which to save their deposit and earn an extra two per cent bonus if they then take out their mortgage with the Furness.

“For savers, the news is not too good, as we expect at least one further reduction in the Bank of England base rate. However, at the Furness, we will attempt to keep our savings rates as high as we can and I would advise all savers to remain with a traditional building society like the Furness, rather than go to riskier organisations offering tempting higher rates of interest.”

Independent mortgage adviser Martin Bellamy, of Poole Townsend, agrees: “Mortgages and Equity Release Mortgages at the moment are really good. They’re really low.

“The Bank base rate is two per cent and they reckon it could hit one per cent or less in the near future.

“Mortgage rates are at an all-time low. Now is the best time to be buying a house, and you can get bargains on houses at the moment. But it’s having the deposits really.

“There’s no such thing as 100 per cent mortgages. You’re looking at a minimum of 10 per cent deposit. But to get the best mortgage rates you need 20 to 25 per cent deposit. If you can get to the stage where you’ve got a good deposit and credit rating you can get locked into a very good mortgage deal.”

Mr Sharpe, of Ross Estate Agent, advises homebuyers to act now rather than waiting for the market to bottom out.

He said: “If you want to start owning a property the best time to do it is when you can get a 25-year mortgage and start paying it back for as little as possible. What young couples are forgetting is if they get on the housing market now they can start paying off that mortgage at a very low rate of interest and that’s being overlooked. No-one wants to buy something and go into negative equity, which is over-shadowing things at the moment.

“The government needs to get building societies lending at 95 per cent. Interest rates are going to stay low for the foreseeable future. The quicker they get in the quicker they start paying off their mortgage. We could have three to five years of incredibly low mortgage repayments.”

In a market where selling property is difficult Mr Sharpe suggests home owners consider the rental market. “Generally we do six-month tenancies but now we are seeing people who want a property for a couple of months,” adds Mr Sharpe. You can marry the two things up and people can earn a bit of money for a couple of months. It’s about making the best of what you’ve got.”

This brings us to equity release, which is predicted to catch on this year as older homeowners turn bricks and mortar into ready cash.

Mr Bellamy recently qualified as an Equity Release adviser. He said: “Equity release is a thing a lot of pensioners should be looking at. A lot of them are asset rich but skint. Why sit in a house worth £100,000 if you can only afford to heat one bar on the fire?”

Age Concern, meanwhile, suggests that the over 50s shouldn’t be afraid to spend – or at least accept the benefits owing to them.

Manager of information and advice for Age Concern South Lakeland, Hugh Tomlinson, said: “We live in an area where people have a stiff upper lip and don’t want to take, what they term, as hand-outs. What they have to understand and recognise is these are government benefits they are entitled to. They’ve paid into these things all their working life. It’s time they got something back.

“You wouldn’t expect to pay into a pension all their life and not take anything back. They should be looking for pension credit if they’re eligible and money available to help them look after themselves at home. Importantly, don’t suffer in silence, there’s always help available. If it’s worrying you, discuss it with us. It’s always in confidence and completely free.”

Ralph Spours, of Ralph Spours Estate Agents in Ulverston offered a somewhat more holistic approach. His advice for surviving 2009 is “for everybody to lighten up”.

Mr Spours added: “Everybody should learn to be nice to each other and learn to get through. Enjoy life every day. Life is for living.”

First published at 11:50, Wednesday, 07 January 2009
Published by http://www.nwemail.co.uk