Aaa home owner insurance fresh news.

Ricky Okey of mortgage advisers Charcol answers questions about buying a property.

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Peter Gent from Essex is retired and wants to buy a property in one of the Greek islands.

Should he get take out a British based mortgage or a euro mortgage on either his own house (which he owns and is worth 120,000) or the one he will buy.

Also, are there any serious pitfalls in buying a house in Greece?

If you need a mortgage on a property you are buying abroad, both the mortgage and property ideally need to be in the same currency.

Therefore if you are buying a property in Greece, the mortgage needs to be in euros.

This is to minimise currency risks, because the value of your property and your mortgage will both increase or decrease together.

Having said that, there are very few UK lenders who offer mortgages on foreign properties (quite a few English lenders don’t even lend in Northern Ireland or Scotland).

In addition to this you need a minimum deposit of typically 25-30% and the purchase expenses are significantly higher than in the UK.

Then there are the legal implications of buying abroad, which can be vastly different to buying a UK property.

Ensuring you have an English-speaking lawyer is of paramount importance.

It is for these reasons that many people buying abroad prefer to release equity on a UK property if they can and purchase the foreign property in cash.

If you are unable to finance the purchase from funds raised on your UK property, you may wish to speak to a specialist on overseas mortgages.

One such specialist is Conti Financial Service, who should also be able to advise of the pitfalls, if any, on buying a property in Greece.

You can get further details by calling 01273 772 811 or at

Helen Tait wants some assistance on a fixed rate mortgage she has taken out with the Halifax.

It’s fixed over two years but two months into the mortgage they have increased the amount without any prior notice.

She has complained and they said it was for some outstanding capital, but she thinks they are incorrect.

There is not enough information here to ascertain exactly why Halifax may have done this.

If Helen hasn’t already done so, she should ask Halifax to clearly explain in writing why there was “outstanding capital” in the first place, why she was she not advised before it was added to her mortgage and why was she not given the choice of repaying this amount now rather than having it added.

She should also ask for details of their complaints procedure.

Once she has followed their complaint procedures, and if she is still not happy with their response, she is entitled to require Halifax to refer her complaint to an ombudsman or Mortgage Code Arbitration Scheme.

For further details, you can call 01785 218 200 or visit the

Louise Marshall from Devon wants to move her mortgage to a fixed rate one. Should she opt for a really long-term fixed rate? Are there any pitfalls?

My first question to Louise would be to ask if she is looking for a fixed rate because she is concerned about the expected increase in the Bank of England base rate over the next year.

If she is, she might want to bear in mind that current fixed rates, especially those fixed for three to five years or more, have already factored in a potential future base rate increase to at least 5% by the end of next year.

Louise is talking about long-term fixes, but unless the base rate rises to well over 5%, which seems unlikely at this point, buying a longer term fixed rate means that you run a serious risk of taking a deal that may never become “good value”.

However, I do appreciate that for some borrowers, the stability of knowing exactly what their monthly payments will be over a certain period is very important.

One compromise could be a capped rate mortgage, which also offers an initial discount.

Although the initial discounted rate on these would be slightly higher than those offered on stand-alone discounts, borrowers would have the added security of knowing their rate (and therefore monthly payments) will never go above the level of the cap during the capped rate period.

One example is a deal we have with Bristol & West, which offers an initial discount in the first three years of 1.55% (giving a current rate of 4.24%), but is capped at 5.99% for the same period.

So as long as borrowers who take this deal have worked out that they can still afford their mortgage payments at 5.99%, they can rest assured that they take this deal knowing it will remain affordable even if rates increase in the future.

However borrowers should not disregard variable rate deals just because the monthly payment can fluctuate.

Even after taking into account the recent increase in the base rate, there are still many discount or tracker deals on offer with rates that are below 4%, or in some cases below 3.5%.

That compares with fixed rate mortgages currently on offer at rates between 5% and 5.5% for long term fixes from five to 25 years.

By working out how much your monthly payment would be should rates increase by, say, 2%, you would know if your payments were still affordable.

That way you would at least know if it is worth locking into a fix at today’s high prices, or taking a punt on a discount or tracker that currently offers a much lower rate of interest.

You can work out what your payments might be by using the

Matt Thomas wants to buy a second home as an investment. Should he buy abroad or is it safer to invest in the UK?

Would the chance of a second home being let out to holidaymakers make it more profitable?

Matt should remember that although buying abroad is becoming more and more popular these days, in addition to the usual risks involved in buying an investment property, it has the added of risk of currency fluctuations.

When the time comes to sell the property, he could lose some of the value when it is converted into to sterling.

Whether it is likely to be more profitable than a buy-to-let in this country depends on the potential property appreciation value and how easy it will be to rent out.

With any buy-to-let, there can be void periods and prospective landlords are always advised to factor in at least two rental void periods out of any 12 months when their property could be vacant.

When buying a property as a holiday let, landlords run the risk of rental void periods over longer periods, depending on where the property is situated.

Is it in a location that is popular with tourists all year round? Or in a location that is only really popular during the key holiday season?

There are other factors to take into account such as legal and insurance implications, especially if the property is constantly let out to holidaymakers.

Also think about the management of the property. Who is going to prepare it for new guests before their arrival and deal with any problems or grumbles the holidaymakers may have?

You may need to think about hiring a manager and this will also add to your costs and potential profit.

As with any property investment, the area and potential attractiveness to future tenants of the property need to be thoroughly researched before deciding on a location.

Dave from Devon has a 200,000 house to sell and wants to take out a mortgage of 100,000 in order to buy a 300,000 house. He expects to work for another 16 years so would want a 15-year mortgage.

There’s a possibility that he would have an inheritance anytime within the next 15 years which would pay off the mortgage. Which types of mortgage would you suggest?

I notice that Dave said there is the “possibility” of an inheritance. If this is the case then I would suggest Dave looks at shorter term deals, even if they lock him in during the initial discounted or fixed rate period.

If the inheritance does come along in the future he can take a view at the time as to whether it’s worth paying the penalty to repay the mortgage there and then, or wait the short period before the penalty expires and repay the mortgage at that time.

If there comes a point when he knows for sure that he will receive an inheritance in the future, then Dave may want to look at deals that have no early redemption charges, leaving him free to repay the mortgage in full any time he likes.

In addition to this, and again if he knows for sure he is due an inheritance that will repay the mortgage in the future, he might want to convert the mortgage to an interest-only basis if he hasn’t already done so he can keep the cost of the monthly payments to a minimum.

This means his monthly payments will only cover the monthly interest charged on the mortgage, but will not repay any of the capital.

This would mean that the full 100,000 would become payable once the mortgage has come to an end.

Sue Jones has a 10-year-old Standard Life endowment policy that she wants to sell (Standard Life has valued it at less than half the amount she has paid into it if she were to cash it in).

Can you suggest a company that might be interested in buying it and who will give her at least what she’s put into it?

There is not enough information given here to say whether Sue should sell her policy on the secondhand endowment market so my suggestion to her is to discuss her options with an IFA, ensuring she takes all her correspondence with regards to her policy with her.

Anybody in Sue’s position should look at all of their options with regards to their endowment shortfall before deciding on any one solution.

Selling the policy is not the only solution - for example, she could “pay up” the policy, if it is attached to a mortgage, maybe changing the type of mortgage so half is interest-only and half is repayment.

This ensures some of the capital is repaid to cover any shortfall etc.

Although in the past it was possible to get up to 30% more by selling your endowment policy, due to increasing popularity of this market and differing views of investors themselves, these returns are in no way guaranteed anymore.

There are about 20 companies on the secondhand endowment market and the IFA should provide information on some or all of them.

The Financial Services Authority (FSA) have published a factsheet to help people in Sue’s position.

This can be obtained free on 0845 606 1234 or by visiting

Margaret Waters is a postgraduate student who has 8,000 of student loans - on which she can defer payments.

She has just started a job and her income is 29,000. She wants to buy her own place. Should she start saving for a deposit or start paying off her loans first?

Usually we would advise that it is preferable to pay off outstanding debt as soon as possible because the interest rates payable on loans and credit cards are typically higher than that received in savings accounts.

Margaret’s situation is slightly different because student loans are typically charged at nominal rates of interest.

Margaret will not be able to defer payments indefinitely and certainly not for as long as it will take to save enough money to put down a sizeable deposit on a property and cover purchase costs, especially if she is starting from scratch with no other savings.

This is not to say that it is not worth starting to save as long as Margaret manages her expectations.

She also has to realise that any outstanding debt such as student loans, personal loans and credit cards will affect the amount she can borrow, because lenders will take outstanding balances into account before deciding how much they will lend her.

If Margaret is desperate to get on the property ladder sooner rather than later, she has other options that she can consider.

She could apply for a 100% mortgage that negates the need for a deposit, ask her parents to act as guarantors or take advantage of the number of specially designed mortgage schemes (Step Ladder, Rent a Room, Newcastle Family Offset).

These are the points that Margaret should bear in mind, and it is worth talking them through with a financial adviser.

Daniel Evans is looking to buy a property in Reading. He earns 32,000 a year but even with a 13,000 deposit he says he just can’t afford to buy a decent home.

Will he ever get on the property ladder or will he be renting forever?

Although Daniel thinks that he will never get on the property ladder, there is still hope!

We can see where his predicament lies as Reading is currently an expensive area to buy property.

In fact the average flat in Reading during the third quarter of the year was 135,930, which is a little out of Daniel’s range.

But there are other things that Daniel should consider when continuing the search for a property.

Most lenders are willing to lend based on 3.25 or 3.5 times salary. This would bring Daniel’s maximum borrowing up to about 112,000.

There are some other lenders, such as Woolwich and Nationwide, who will consider borrowers for up to four times their sole income, and others who will even consider lending more.

Borrowing four times may bring him to the level that he requires based on the average price for a flat in Reading.

Of course, the higher the income multiple offered, the more stringent the criteria the borrower needs to meet in terms of their credit record, employment and address history, minimum salary and how they run their bank account.

Contrary to popular belief, lenders are not just giving money away willy nilly and they will not knowingly lend to a borrower at a higher income multiple if they do not think the borrower can afford the mortgage.

The onus is also on Daniel to be completely honest with himself as to whether he can comfortably afford the mortgage payments.

He should not let his desire to get on the property ladder cloud his judgement in any way.

It is also worth remembering that a lot of lenders are only Mortgage Indemnity Guarantee (MIG) free up to 90% and so Daniel would be liable for the rest.

Among lenders that do offer good MIG-free deals are Nationwide and Mortgage Express.

MIG is a one-off charge made on mortgages that are high in proportion to the value of the property.

It is to protect the lender should the borrower default on the mortgage in the future, it is of no benefit to the borrower whatsoever.

However, on a 95% mortgage a MIG premium can be equivalent to adding an extra 1.6% to the cost of the loan.

Daniel could also consider buying with friends or he could try and seek help from his family if they are willing. They could either act as a guarantor on a mortgage or contribute to the deposit.

Irene McLoughlin from Hampshire is a single parent with only 28,500 left on her repayment mortgage with Alliance & Leicester who are charging 5.54%.

She wants to know where she can get a get a better deal especially since she wants to repay in the next seven years?

The first thing that Irene should be aware of is that Alliance & Leicester increased their rates recently and so her payrate now would be 5.79%, which is rather high considering how long she has left to pay.

On most of their deals they also calculate interest annually and on a mortgage with such little left to pay, this will waste money.

Although Alliance & Leicester would offer her new business rates on a new mortgage, they would also charge you extra fees including an arrangement fee. This may make a new deal with them a little uneconomical.

Therefore although she will have to pay a small exit fee (about 85) it is worth redeeming this mortgage.

The best new deal to look for would be one with no fees. With such a small mortgage amount and short length of time to pay it back, any small fee could add up to 1% of your remortgage costs - not great value.

The main thing you should consider is to pick a mortgage that calculates interest daily. Don’t just look for the cheapest headline rate; make sure you look at the other parts of the deal as well.

Ben Clarke from Kent is a first-time buyer. He wants 120,000 for a flat and needs a 95% mortgage but his credit rating isn’t very good.

The best rate he has been offered is 7.1% with a two-year lock-in. Should he take it?

A bad credit rating does not necessarily mean that borrowers are doomed to sub-prime mortgages charged at extortionate rates of interest with hefty lock-ins.

More and more High Street lenders have become sympathetic to borrowers with a less than perfect credit record.

My first tip to Ben is that he should not automatically seek advice from specialist lenders and brokers in the sub-prime market, but speak to an independent mortgage broker or financial adviser who has access to the entire mortgage market.

Lenders such as Chelsea Building Society and Bristol & West may both consider lending to Ben, as would Birmingham Midshires, who also offer sub-prime lending at reasonable rates of interest.

Although Ben states that he has a bad credit rating, the fact that he has been offered a 95% mortgage suggests that his rating may not be as dreadful as he thinks.

Many sub-prime lenders would not even consider lending this amount and so his finances cannot be as bad as first thought.

From what Ben says he has been offered a one-year discounted mortgage with a two-year lock-in. This means that although he would have an initial payrate of 7.1%, this could rise to as much as 10%.

Ben needs to consider whether he could afford a rate as high as this.

In effect, Ben is paying double the rate that he would pay if he had the pick of the ordinary mortgage market. Is it really worth taking this rate?

If Ben gave himself six months to improve and stabilise his credit score, then it is likely that he could have a better choice of lenders and deals.

He should aim to pay off any county court judgements or other debts and look to increase his deposit. Within a year, he should have enough to get a much better deal then he is currently offered.

Mrs Reid is interested in equity release schemes but is confused at the different information that is given out. Where can she go to get independent advice about it?

I can appreciate Mrs Reid’s predicament. Equity release mortgages (or lifetime mortgages as they will be known once mortgage regulation comes into force next year) can seem confusing and daunting.

The Council of Mortgage Lenders have produced a guide on equity release for consumers. You can order a copy by calling 0207 440 2255 or get one by clicking on publications and information and then consumer information at their website,

It is strongly recommended that you speak to a reputable, fully independent, financial adviser before making any decisions.

To find one local to your area, contact IFAP (IFA promotions) either by calling them on 0800 085 3250 or logging on to

One final thought; anybody considering equity release mortgages should also seek legal advice, as their ultimate decision not only affects them but their whole family, too.

Tony Richmond has a capped mortgage on his property which he currently rents out. He would like to get another cheap mortgage when it comes to the end of the fixed rate. Does he have to go for a buy-to-let mortgage?

If Tony originally took out his mortgage while he was still living in the property he should have got his lender’s permission before he let it out.

Lenders will have differing views on this; all that may happen is a slight increase in his interest rate, or an extra admin charge to change the type of mortgage.

But ultimately, if he has not advised his lender he should do so immediately.

There are also insurance implications now that he rents out his property so he should also advise his buildings and contents insurer of his property’s change of status. Honesty is always the best policy.

When the time comes to remortgage, he will certainly have to apply for a buy-to-let mortgage.

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The opinions expressed are Ricky’s, not the programme’s. The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.

Originaly from Source

Japan’s government is to press ahead with the sell-off of the multi-trillion dollar postal savings system.

Prime Minister Junichiro Koizumi has signed off on a programme starting in 2007 and lasting a decade.

The plan has been watered down in the hope of calming ardent opposition from his own MPs, who fear mass lay-offs.

The system’s 350 trillion yen ($3.2 trillion; 1.7 trillion) in assets have provided a source of spare cash for politicians’ pet projects.

Mr Koizumi made privatisation one of his earliest priorities when he came into office in 2001.

The system has long been popular with Japanese savers, accustomed to rock-bottom rates of interest.

But it has therefore kept savings away from the private sector.

Rivals

There are about 25,000 post offices nationwide selling the system’s savings and insurance products, as well as regular postal services.

It will be a godzilla bank Jesper Koll, Merrill Lynch

In contrast, the seven main national banks have only 2,600 branches between them, although that figure does not include the dozens of regional banks also offering financial services.

A key fear is that its size will give it an unfair advantage over its existing private-sector rivals, and that the reforms will fail to regulate it sufficiently.

Its 227 trillion yen in savings deposits dwarfs those of its nearest competitor, Mitsubishi Tokyo Financial Group, which has 67 trillion. The system’s 122 trillion yen in insurance assets are also scaring the insurance business.

“It will be a godzilla bank,” said Merrill Lynch’s Jesper Koll.

“It will be the beginning of an era of fierce competition with private financial institutions.

Fight ahead

Opposition within the ruling Liberal Democratic Party to selling off the system remains fierce.

One key concern is the fate of the 300,000 or so staff.

Another is the fact that in many rural areas, postal savings offer the only easily-accessible financial services available.

To stem that concern, Mr Koizumi has back-tracked on one key reform, and promised that the system will have a duty to offer nationwide services even after it goes private.

Branches will also have to continue offering both savings and insurance across the board, rather than being able to cherry-pick.

Despite the concessions, the LDP will lose access to the pork-barrel possibilities of the 350 trillion yen lodged in the system

The sell-off will first see a holding company take control of the system, with separate units for savings, insurance, postal services and a fourth for personnel and property management.

From 2007 on, each will gradually be sold off, but the savings and insurance sides will be allowed to continue cross-shareholdings to protect them from takeovers.

Originaly from Source

Until recently, a natural catastrophe costing $60bn (32bn) was inconceivable except in Hollywood disaster films.

Hurricane Katrina, which hit the US on 29 August last year, changed all that.

Some 1,300 people were killed and thousands were - and remain - displaced.

"Katrina acted as a wake-up call," says Chris Walker, managing director of greenhouse gas risk solutions at re-insurance giant Swiss Re.

The event caused the single largest insurance loss recorded so far, costing more than $40bn in six states. Claims remain unsettled one year on.

 

Industry overhaul

Today the insurance industry is preparing for something far worse.

 

Insurance market Lloyd's of London has developed a $100bn scenario which imagines two simultaneous hurricanes of the severity of Katrina.

In June, the group issued an unambiguously-titled report called Climate Change, Adapt or Bust.

"Investment in research and a change in industry behaviour is long overdue," the report says.

"It is clear that the frequency and severity of natural catastrophes is increasing", says Julian James, Lloyd's of London director of worldwide markets.

 

 

Lloyd's says the industry needs a new approach to underwriting by looking ahead rather than at historical data.

"If we don't take action now to understand the changing nature of our planet and its impact, we will face extinction," says Rolf Tolle, Lloyd's franchise performance director.

For the first time, Lloyd's is sponsoring two climatologists to complete doctorate degrees.

Addressing a packed Lloyd's-sponsored event on climate change, Bill McGuire, a geohazard professor at University College London, warned audience members "you haven't seen nothing yet, climate change will come to dominate everything we do".

 

Disagreement might remain over the degree to which climate change is the result of human activity. However, "denial about the existence of climate change is pretty isolated", says Mr Walker.

The property paradox

 

 

Climatic events that were previously thought likely to happen once a century could now occur once every 25 years, inevitably pushing up insurance premiums.

Paradoxically, some of the most desirable residences are also often those most exposed to floods and storms, says Robert Hartwig, chief economist with the Insurance Information Institute.

 

But state insurance programs have failed to reflect this, he says.

"Millionaires on the coast have been subsidised by people in trailer-homes," he said.

State-run schemes demand everyone pay into such schemes, regardless of exposure.

Mr Hartwig and others argue that the riskier the property, the more expensive the premium should be.

"The myriad of government and state federal programmes should be dramatically overhauled," he says.

Many state insurance schemes now face bankruptcy after underwriting properties that should never have been given insurance, says Mr Hartwig.

Devil in the detail

One of the most complex aspects of resolving claims from Katrina lies in the detail and the scope of the claims.

Many claimants thought they were covered, while insurance firms said they were not.

Arguments have often hinged on whether destruction to a property was caused by wind or flood damage in the final instance.

 

Insurance professionals say policies will be clearer in future to avoid any confusion.

"Policies will be more black and white," says Mr Hartwig.

But it is not just consumers for whom clarity is desirable.

Firms that face huge potential risks of interrupted business following natural disasters also crave predictability.

Ultimately, insurance remains an inexact science based on risk assessment.

However, as "the risk bearer of last resort… reinsurance firms need to be anticipatory regarding the impact of climate change," says Swiss Re's Mr Walker.

 

But as Lloyd's of London chairman Lord Levene told firms, scientists, entrepreneurs and government officials, quoting Edmund Burke: "Nobody made a greater mistake than he who did nothing because he could do only a little."

Originaly from Source

Almost a third of UK firms blame yob culture as a root cause of crime against businesses, according to research by Axa Insurance.

Drug taking and binge drinking was perceived as the biggest threat to small and medium size businesses.

However, Axa said that crime-related business insurance claims fell 24% in the three months to the end of March, compared with the previous quarter.

Birmingham saw the most crime against small companies, the firm said.

At the other end of the scale, Liverpool was found to have the least crime against small companies, with just 12.8% of insurance claims relating to criminal activity.

“Although our figures show a decline in the number and total cost of business crime, this is still a serious problem that is costing small and mediums size businesses well over 700m a year,” said property insurance manager Neil Mercer.

Types of criminal activity most commonly linked to drink and drugs - theft and criminal damage - made up more than 95% of all insurance claims.

Asked to pinpoint the cause of offences against their companies, 44% of business owners cited drug abuse and 31% blamed binge drinking.

While arson is the most damaging to a business, it accounted for just 3.8% of claims, Axa said.

All data was based on Axa’s claim figures.

Originaly from Source

A pilot scheme to help protect homes in England and Wales from flood damage has been launched by the government.

Grants worth 500,000 will be made available as climate change is expected to put low-lying areas at greater risk.

They will pay for measures including temporary door guards, waterproof render and water-resistant walls.

The government says some 470,000 properties in England and Wales are currently in danger of flooding, including 393,000 homes.

Ian Pearson, minister for climate change and the environment, said the fund “will help some of the most vulnerable households put flood resilience measures in place”.

Flood risk has always been significant in the UK but climate change will make it much worse Jane Milne Association of British Insurers

He launched the scheme at a workshop in London hosted by the Association of British Insurers (ABI).

It will fund home modifications to stop water getting indoors, as well as others to minimise damage, such as raising electrics.

Payments will be limited to 5,000 per property.

A pilot study will also examine the cost of “flood resilience” to customers, and how the Government can offer better advice to householders.

Mr Pearson said: “With climate change, it’s more important than ever that householders know about, understand and can access the options that are available to them to help minimise the damage that can be caused by flooding.”

The ABI’s head of property insurances, Jane Milne, said: “Flood risk has always been significant in the UK but climate change will make it much worse over the next 30 to 40 years.”

Originaly from Source

Chancellor Gordon Brown will deliver the pre-Budget report on Wednesday. The changes outlined in the report could have an impact on the personal finances of millions of Britons.

BBC News sets out what we already know will be in the report.

In addition, the BBC canvassed leading accountancy firms to find out what initiatives they think may be in the report.

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The chancellor may confirm that Individual Savings Accounts (ISAs) will continue beyond 2010.

The popular savings vehicle - some 16 million Britons have an ISA - allow people to save or invest up to 7,000 tax free each year.

Treasury Minister Ed Balls, a close ally of the chancellor, indicated last month that ISAs were here to stay at an investment conference.

But campaigners who hoped that the 7,000 annual ISA threshold, first set in 1999, would be raised are likely to be disappointed.

Real Estate Investment Trusts (REITs), which have been trailed in the past three pre-Budget reports, are set to be introduced in January 2007.

REITs operate as stock exchange-quoted companies which directly own property, providing an easier and lower-cost way for people to invest in real estate.

Adding to their lure is the fact that REITs are free of corporation tax.

The chancellor may use the report to remind people of their advent and perhaps undertake some minor tweaks.

The pre-Budget report is traditionally when the income tax and national insurance allowances are set. In short the chancellor tells you how much can be earned before tax or national insurance becomes due.

In recent years, allowances have risen in line with inflation, but as wage increases often beat inflation this has caused a phenomenon called “fiscal drag”.

In essence, fiscal drag means that increasing numbers of people are falling into the top rate tax bracket and paying tax at 40%. This is because incomes are rising faster than tax allowances.

If the chancellor follows the pattern of previous years; personal allowances should rise by about 150. This would take the annual personal allowance for under-65s to about 5,200.

The chancellor is under pressure to reform inheritance tax (IHT).

Because of rising house prices an increasing number of people are finding that their estates are worth enough to be potentially subject to IHT.

Ernst & Young have suggested that the chancellor may decide to dispense with the current arrangement where everything over a certain threshold (285,000 in the 2006-2007 tax year) is taxed at 40%, in favour of a system of tiered rates.

Therefore, people who just break through the IHT threshold may be subject to a lower rate of tax than the super-rich.

Environmental or “green” taxes are one of the hot issues of the moment, with the government keen to respond to the Conservative opposition’s “vote blue to go green” pitch to the electorate.

Petrol duty may rise

Accountancy firm PricewaterhouseCoopers predicts that Gordon Brown, in what is likely to be his last pre-Budget report, may well tinker with the tax system to encourage more environmentally-friendly behaviour.

In recent months world oil prices have fallen, and this may give the chancellor the breathing space to raise petrol duty. Increases in petrol duty have been small and sporadic ever since the fuel protests of 2000.

Holidaymakers may find that their flights become more expensive if Air Passenger Duty is increased.

But there may will be some carrot as well as stick with increased grants for home insulation or tax breaks on solar panels.

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Hard-pressed first-time buyers may find little to cheer in the report.

In March 2005 the chancellor raised the starting rate of stamp duty from 60,000 to 120,000. A further rise to 125,000 was announced in the last Budget.

But any substantial increase to the stamp duty threshold could be seen as fanning the flames of house price inflation.

So far in 2006, house price inflation - particularly in London - has exceeded expectations and is concerning the Bank of England.

With the average price of a house approaching 200,000, the vast majority of transactions incur stamp duty.

More details are expected on the proposed planning gains supplement.

Outlined in last year’s pre-Budget report this would see introduction of a windfall tax on the profits made from selling land.

The government wants to stimulate housebuilding

In return, new planning guidelines will be introduced to encourage local authorities to accelerate planning consent and bring forward development of brown field sites.

In theory, this should free-up more land for development. Long-term this may help ease chronic under-supply of property, which in the south east at least, is presumed to be a major factor in booming property prices.

The planning gains supplement is not expected before 2008.

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The increase to the state pension for next year has already been announced. At present, increases are linked with inflation.

As for the winter fuel payment, this was set at 200 in March’s Budget and guaranteed for the duration of this parliament.

This arrangement may be re-announced in the chancellor’s pre-Budget speech.

Major changes to the pension system came into force in April, many observers believe that the chancellor will tweak the new regime.

In particular, the requirement on people to use their pension pot to buy an annuity - income for life - at age 75 may well be re-imposed.

Originaly from Source

The first trial in the UK of a new flood defence system, along the River Severn, has proved successful.

A 200m section of the K system barrier was put up in Shrewsbury, between Coton Hill and Chester Street.

After drainage work is completed, the portable system will be ready to be used at the site of flooding risk.

The barrier should enable local properties to get insurance and keep two main roads open in a flood, said an Environment Agency spokesman.

The temporary and demountable barrier, made of steel and aluminium, differs from other flood defences as it does not need any foundation work and can be put up elsewhere.

‘Reduce impact’

“The trial went really well, the system was easy to handle, we expected to put it up in five hours and we got it up in three,” said Environment Agency engineer Anthony Crowther.

“This should reduced the risk of flooding for 20-30 homes and businesses in the area, which means they should be able to get insurance.

“And it should mean we can keep two main roads open in to Shrewsbury in flooding,” he said.

“That will keep traffic coming in to town so the town centre keeps operating as normal, reducing the impact of flooding on businesses.”

Originaly from Source

Profits at French insurance group Axa have tumbled as a result of the weak US dollar and heavy damage to its investments, the group said on Tuesday.

The group made a profit of 209m euros ($237m; 148m) in the six months to June, down 75% on the previous year.

The main culprit was a 1.1bn euro charge to compensate for the way weak stock markets around the world had hit its investments, more than five times the level it had to show in 2002.

But it promised that it was on course to meet profitability targets by the end of this year.

It also said its profits before one-off charges in property and casualty insurance were up 76% - although life insurance, which is proving troublesome for many companies, and savings insurance saw a 23% slide in profits.

9/11 suit

Deutsche wants the old Bankers Trust building demolished

Axa may yet face another roadblock in its efforts to rebuild its profitability, according to the Financial Times newspaper.

The paper reported on Tuesday that Germany’s Deutsche Bank is planning to sue both Axa and its German peer Allianz over its former headquarters in New York, damaged in the World Trade Center attack of 11 September 2001.

Deutsche says the claims by the two insurers that the building can be repaired are unrealistic.

It is demanding half the $1.7bn coverage its insurance policy includes.

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A major textile retailer has donated thousands of pounds worth of bedding and linen to be distributed to flood victims in Yorkshire and Lincolnshire.

Officials at Rosebys, which started as a market stall in Grimsby, acted after seeing the flood aftermath.

Sarah Cheetham, from the company, said their buyers compiled a stock list.

“They came up with a list of 60,000 of bed linen and curtains both of which are likely to have been completely ruined [in flooded homes].”

Some flood victims could be housed on caravan sites dotted around Hull.

Insurance firm Norwich Union has already got 200 static caravans in place in or near the driveways of people with uninhabitable properties.

The insurer has an option on the possible deployment of another 600 static caravans across the city.

A converted ferry could also be moored in the port to house flood victims.

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Wintry weather is set to follow the storms which killed 11 people and left thousands of homes with no power.

Gales are continuing across Scotland and northern England following one of the UK’s worst day of storms in 17 years on Thursday.

The BBC Weather Centre reported strong winds in other areas, and predicted a UK-wide cold snap on Monday.

A wind change bringing cool air from the icy North Atlantic will cause the drop in temperatures.

Warnings of a freeze come as thousands of homes remain without power, while several flood warnings are also in place.

Insurers say the bill for storms, involving gusts of up to 99mph, could reach hundreds of millions of pounds.

Winds of up to 60mph are expected across England and Wales on Saturday night and Sunday morning.

The Environment Agency has four flood warnings in place for the Midlands, three in north-east England, two in north-west England and five in Wales.

Power cuts

Snow is expected on higher ground in Scotland and northern England, with temperatures dipping sharply across the UK.

On Thursday and Friday, high winds and heavy rain blew roofs off buildings, brought down trees and walls, damaged cars and lorries and flooded homes.

Many homeowners will be able to claim on household buildings and contents insurance to cover repairs to property - although fences and gates are not usually covered.

Head of property insurance at the Association of British Insurers, Jane Milne, said: “This sort of event is obviously dramatic and difficult for the individuals who have suffered damage… but it’s not a problem as such for the industry,”

She said that in 1990 the bill for the severe January storms had come to 2bn.

HAVE YOUR SAY I finally got home after seeing abandoned cars, crashes, trees down and floods three-and three-quarters hours later Amanda Downey, Wigan Send us your comments

Many homes have been affected by electricity blackouts in the wake of the storms.

Scottish Power said 2,000 customers in Wales were still without power on Saturday.

About 19,000 households in the east of England alone still had no electricity on Saturday, although EDF Energy said it had reconnected about 10,000 customers in the previous 24 hours.

Another 5,000 homes in southern England were still without power.

Central Networks said many people in the West Midlands would remain without electricity “into the weekend”.

Meanwhile, British container ship the MSC Napoli, which became stricken in the English Channel 40 miles off the Cornwall coast after its engine room flooded in stormy seas, is to be beached.

The Napoli’s 26 crew were all rescued by helicopter after it was stranded on Thursday.

The 62,000-tonne vessel, which is being towed towards Portland, has been sheltering in Lyme Bay.

It has “serious structural failure”, and with winds of severe gale force 9 predicted, the decision has been taken to beach the vessel east of Sidmouth.

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