May 7

Icelandic bank, Kaupthing Edge, has announced that its savings interest rate is to remain unchanged yet again following this week’s Bank of England base rate cut. After the February rate cut the bank announced that it was leaving its savings account interest rate at 6.5%, putting at the top of the best buy tables. Officials from Kaupthing have now announced that the rate will remain at 6.5% even though the Bank of England has now cut the base rate to 5%.

The decision to keep its savings interest rate on hold will mean that Kaupthing put pressure on other financial institutions with regards to their savings interest rates. Kaupthing Edge is one of the newcomers to the UK market, and is looking to build on savings deposits and customers by offering this impressive rate of interest, which is likely to result in a lot of interest from savers that want to get the best return on their savings.

Following the Bank of England announcement with regards to the cut in the base rate an official from Kaupthing Edge stated: ‘Today’s decision to lower the base rate is likely to cause a flurry of rate adjustments within the savings market, which does include some interest bearin current accounts. Savers should grab this opportunity and review their savings to ensure that they are still getting a competitive deal on their money.’

There has been controversy lately over the stability of the bank after reports that its borrowing costs had increased by 400% in a year, and that it was over seven times more likely to default than any other European bank. However, industry officials have reminded consumers that they have a 100% guarantee on their savings up to £35,000.

May 7

According to recently released figures house prices in the UK have fallen for the seventh straight month, with the average house price now falling to £184,798. Figures show that the annual increase was 3.6% in March, and this compared to an increase of 5.3% in February. The data shows that month on month property prices in England and Wales fell by 0.4%. A number of surveys have indicated that March saw house prices fall for the seventh month, although the level by which prices fell have differed from one report to another.

These latest figures have come from the Land Registry, which uses actual sale prices of properties rather than basing figures on data received from mortgage lenders. Data has also shown that there has been a sharp drop in the number of properties being sold, with a 26% fall in the number of homes sold between October 2007 and January 2008 compare to the same period in 2006/2007.

The housing market continues to cool as a result of the global credit crunch, which has affected affordability as well as the ability of consumers to get mortgage loans in order to purchase a property. Lenders have tightened up on their lending criteria, and have also hiked up the cost of mortgages, making it increasing difficult for many people to get affordable finance.

First time buyers have also been hit hard, as despite the house price falls, which would have been good news for first time buyers, they are now having to find larger deposits in order to get a mortgage, have no access to 100% mortgages any longer, and have to meet the strict eligibility criteria now put into place by lenders.