After August’s bounce – a 1.1% rise – house prices fell in September by 0.4% compared to September 2011, according to Nationwide building society. Based on its quarterly index, ten out of 13 British regions are showing year-on-year declines; London is the strongest region, bucking the trend with a 2.1% rise. Nationwide also noted that the rate of new construction was around 25% lower for Britain as a whole in the year to June 2012, than for the previous five years.
• Savers who bag the leading rates offered by banks and building societies should remember to move once the initial deal period runs out, says Sylvia Morris on Thisismoney.co.uk. Those with money in accounts such as Santander’s eSaver 4, Halifax Online Saver or Lloyds TSB Easy Saver “will end up earning as little as 0.08% if they fail to move their money”. If you do open an account with a ‘bonus rate’, always put a note in your calendar to ensure you don’t get caught out.
• If you’re an early bird who likes to get your Christmas shopping done early, think twice before buying gift vouchers as presents, says Martin Lewis, founder of Moneysavingexpert.com. In the current climate there’s too much risk that the issuing retailer may go bust or changehands, in which case you have “no rights”. JJB Sports is the latest retailer in administration to leave anyone who bought its gift vouchers out of pocket. Even if an issuer remains solvent, gift cards can’t be returned and many expire unused. The solution? Give cash, says Lewis: “it’s the ultimate rewards point scheme. It can be used on anything.”
• “Your pension may be 75% invested in bonds as you near retirement – bad news if they crash,” warns Richard Evans in The Sunday Telegraph. Many pension savers nearing retirement may choose toallocate a big proportion of their fund to bonds, hoping they are a safe haven. Some schemes automatically do this, reallocating away from supposedly riskier equities. But should the bond bubble burst, this strategy could backfire. As Charles Morris of HSBC notes, thanks to a flood of money piling into bonds, they are “horrendously expensive by any measure”. A good bet, according to Dr Ros Altmann, director-general of Saga, is a diversified fund that holds a mixture of shares, bonds, property, cash, commodities and alternative assets.
• Watch out if you have piled money into previously legitimate schemes as HMRC begins a crackdown on tax avoidance, says Ali Hussain in The Sunday Times. Danny Alexander, chief secretary to the Treasury, said last week that the government is on track to raise £4bn this year from tax dodgers. Ex-HMRC official Heather Self warns that “schemes that were encouraged by the government… could be found to fall foul of HMRC rules”. In particular investors in Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS) could be asked to pay up where HMRC believes a scheme has been used simply to gain a tax break. Talk to your financial adviser or accountant as soon as possible.