BSA launch research report House Price Expectations: An insight into how consumers think about property purchase

The underlying strength of the housing market was the key message from a number of renowned commentators on the market at an event to launch the latest BSA research report House Price Expectations: An insight into how consumers think about property purchase.

The research quizzed 1,000 people who have either bought or considered buying a home in the last year. It found that 88% of buyers purchase their property because they want somewhere pleasant to live rather than they are looking for a capital gain, and that 71% of them recognise that property prices could fall in the future. If prices did fall, only 2% of them would seek to sell, while a 15% fall in prices would trigger 27% of investment buyers to seek to increase the numbers of properties in their portfolios.

As a consequence, it is unlikely that there will be a significant crash in the market. Were prices to fall, the majority of people would stay in their existing property, thus restricting supply, while any substantial fall would encourage people back into the market in the hope of picking up a bargain.

At the launch event, this theme was echoed by Ray Boulger of John Charcol. He noted that with interest rates forecast to decrease towards the end of the year, affordability will increase as the cost of borrowing falls. He also commented that the high levels of stamp duty and other costs associated with moving home is now acting as a deterrent to people moving, encouraging people to stay where they are and further reducing the supply of properties coming onto the market.

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Members have their say

Building societies continued to give their members a greater say in the way they are run in 2007.

Turnout

Turnout at building societies' AGMs has improved significantly in recent years. This year over 2.8 million members cast their vote. Total turnout at the 60 societies was 18.0%, compared to 17.1% in 2006, and 14.2% in 2005.

Voting

The percentages of votes in favour also remained at the high levels set last year. In the vote on directors' remuneration, on average 94.0% were in favour, compared to 93.7% last year. The average vote in favour of the election of directors was down slightly at 96.3% compared to 96.5% in 2006. In the vote to approve the annual report and accounts, on average 98.8% were in favour, the same as in 2006, and the vote to reappoint the auditors was also unchanged at 97.8%.

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Linking CTFs to Financial Education is a welcome move

The Government’s recent announcement that the Child Trust Fund (CTF) will be used to teach financial education in schools is a very welcome step. All children born after 1 September 2002 will have a CTF and can learn with this as they grow up. The earlier children are taught financial skills, the better chance they have of managing their own finances when they are older.

The BSA also believes there is a dual benefit to this announcement. As well as educating children about money matters, talking about the CTF in schools will hopefully help to keep it in the minds of parents. As an 18 year investment it is important that parents don’t just deposit the voucher and forget about it. Regular top ups to their account will give a child a good head start when they reach 18.

FSA News: Launch of updated Pensions Calculator

The FSA has announced the launch of the updated, easy to use pension calculator on their MoneyMadeClear website at http://www.pensioncalculator.org.uk/. This is an impartial tool to help consumers calculate how much income they might get upon retirement from what they save now or in the future.

The quick and simple online tool uses some basic age, income and current pension details to show expected retirement income. It also sets out clearly what would happen to that income if pension payments or retirement date changed. The calculator deals with new contributions made through a personal pension, group personal pension or stakeholder pension. It can also deal with any personal, stakeholder or occupational money purchase pension funds already built up.

For more information on the pensions calculator please contact Anna Nicolaou (or phone 0207 066 0806).

Society News

On 28 August Natiowide Building Society successfully merged with Portman Building Society. Nationwide continues to be a mutual building society owned by and run for the benefit of its members. The merger makes Nationwide the second largest retail mortgage lender and the second largest retail savings provider in the UK, with assets in excess of £160 billion and around 13 million members.

The merger also brings together the two specialist lending brands – UCB Home Loans and The Mortgage Works – which are being retained in a dual strategy to offer intermediaries a wider and more comprehensive choice of products and services for their clients.

BSA welcomes new Associate

Legal & General, a life, pensions and investments manufacturer and distributor, have joined the BSA as an Associate.

To find out more about Legal & General check out their website....

www.legalandgeneral.com

BSA IN PRINT, MEDIA RELEASE, 20 SEPTEMBER 2007

”Building society net receipts in August were nearly double those in July. This is the highest August figure ever and the highest monthly figure since April 2005. We believe that successive increases in interest rates and subdued equity markets have encouraged savers to put more money away, and we expect this to continue while rates remain high and savers recognise the wide range of good value building society savings products available to them”