That restriction was abandoned in 1992 and the full £6,000 can now be put into unit or investment trusts.The limits on the proportion held in cash have also been removed, as long as the cash is awaiting investment and is eventually invested.The Chase de Vere Pep Guide is available by telephoning 0800 526 091; priced £12.95 Allenbridge is offering its Pep guide free Call freephone 0800 339 999.. The gap in house prices between different regions in the UK, which seemed to stabilise in 1993, may be widening again. Over the past year, house prices in the North have been falling slightly, while remaining more or less flat in the Midlands and rising gently in the South.
House prices in the South are now about 17.5 per cent above the national average, compared with 15.9 per cent above the average a year ago. Prices in the north today are 15.3 per cent below that national average figure, compared with 13.7 per cent below average this time last year.In spite of this continuing drift, the average house price is still 2 per cent higher than it was in the spring of 1993..

Suzanne and Alan Sherry have fulfilled a dream common to many property owners by selling their first home, a small one-bedroom flat, and trading up to a spacious three-bedroom semi. Except that in the Sherrys’ case they did so while facing a problem familiar to almost a million households – negative equity.
Despite a drop in value of £18,000 on their previous property, the couple, who live in Wanstead, London, moved home thanks to a rescue package from their lender.Lloyds Bank’s negative equity scheme helps those who, like the Sherrys, want to move home but are trapped by negative equity – where the original mortgage is greater than the current value of the property.Mrs Sherry said: “This has been really helpful. We wanted to own and live somewhere that was bigger.”We were able to do so even though our first flat, which we bought for £67,000 in 1988, was only sold for £49,000 in May last year.”Research by Woolwich Building Society shows that although numbers have fallen substantially over the past two years, about 950,000 households, mainly in the South-east, still have average negative equity of £7,000.The Lloyds scheme, which was launched a year ago, allows mortgage-holders to transfer up to £30,000 of negative equity into a new home, borrowing up to 125 per cent of the property’s valuation.They must have held a current account with Lloyds Bank for five years, have held a mortgage for at least two years with any lender, and redeem the earlier loan while simultaneously completing the new purchase.Because the Sherrys, who jointly run Sherry Design, a graphic design firm in Islington, are long-term Lloyds account and mortgage-holders, these conditions meant that they were able to benefit from the scheme despite being self-employed.While a choice of repayment methods is available for the main advance, the negative equity element must be on a repayment basis. For every £100 of the negative equity £11 is added to the loan as a fee. This is roughly the amount borrowers would have to pay anyway as a one-off mortgage indemnity premium.Since the scheme was launched, Lloyds has helped about 820 of its customers with negative equity to move home. Two-thirds of these transferred their mortgage from another lender.Dennis Holt, head of personal banking at Lloyds, said: “We are delighted to have been able to help so many of our customers.”Although we expect house prices to move up slowly in 1995, a significant proportion of our householders is likely to remain in negative equity.

We anticipate continuing demand for our scheme.”Woolwich Building Society was the first to set up a rescue scheme in 1993. It also operates a separate scheme aimed at parents who want to help their children if they have negative equity problems.Halifax and Leeds, together with most large lenders, have similar packages for their borrowers.Under the terms of the Leeds package, prospective clients can borrow up to 125% of the new loan. Halifax wants its clients to reduce their overall borrowings by putting down an additional deposit.For the Sherrys this was not a problem. “We had £10,000 available to reduce our negative equity, so the loan we needed in addition to the £61,000 we paid for the new house was only £8,000,” Mrs Sherry said.However, the couple also had to pay a further £250 arrangement fee, plus survey costs and the fee on the £8,000 extra they were borrowing, making a total of £1,200.

Similar charges are levied by most lenders.This expense, coupled with the strict conditions that apply to most negative equity rescue schemes, have meant that relatively few people suffering from the problem apply to trade out of their existing homes.Although the Council of Mortgage Lenders does not have figures for the number of borrowers who benefit from such schemes, Halifax has so far helped 1,500 of its mortgagees, with another 1,500 in the pipeline.Woolwich’s package has helped 400 borrowers, a similar number to the Leeds.Bradford & Bingley last week completed its 1,000th rescue package. The society has committed £60m to its mortgage rescue scheme.For Mrs Sherry there are no doubts: “People have asked how we could afford to take an £18,000 loss on our first flat.”But without this scheme we would not have been able to move somewhere else, which is what mattered most to us.”. GUARANTEED income bonds are here again. After briefly disappearingafter an Inland Revenue decision to close a tax loophole that favoured them, they are staging a tentative comeback, writes Nic Cicutti. A survey by Chase de Vere, a firm of financial advisers, shows some insurance companies are offering bonds to savers again.
Returns on offer are not as high as they were prior to the Budget in November. But their security, and the guaranteed net income they provide, give GIBs an edge over other investments. For basic-rate taxpayers, GIBs are often a better bet.Donna O’Shea, a manager at Chase de Vere, explained: “GIB rates have been very buoyant, with some five-year rates considerably better than any other comparative fixed-interest investment.”As a result, we are finding that they are becoming more popular with investors than at any time over the past two years.”In Chase de Vere’s survey, a five-year bond from Consolidated Life pays 7.15 per cent net on sums of more than £2,000.

Premium Life, another company, offers 7 per cent net on savings above £1,000.Over three years, Consolidated Life offers 6.95 per cent net. AIG Life, a subsidiary of the US insurance giant American Life, pays 6.4 per cent net on savings above £5,000, rising to 6.8 per cent for sums above £50,000.Until November, British insurance companies could avoid paying 25 per cent income tax, minus underlying expenses, normally levied on their underlying funds, by arranging for their funds to be managed by overseas insurers.The device was used to provide higher returns for GIBs and other types of guaranteed stock market bonds until the Inland Revenue plugged the loophole.. A RISING tide of applications by flat owners who want to extend the leases on their homes could turn into a flood in the wake of a London tribunal’s decision last week. The leasehold valuation tribunal ruled that Stephanie Black, who has a 43-year lease on her flat, must pay its freehold owner £9,600 to extend the lease by 90 years.
The ruling is the first to determine a price on the extension of a relatively short lease.The decision also sets a precedent for other leaseholders who had previously found it difficult to sell their flats because their leases had so little time left to run.Ms Black’s flat in Swiss Cottage, north London, was worth £65,000 without the extension. The tribunal determined that lengthening the lease to 133 years would increase its value to £80,000.It rejected a claim by Eton College, the freeholder, that the property would be worth £110,000 with the extension.The tribunal also dismissed a claim that Eton College was entitled to more than 50 per cent of the increase in value of the property once the lease was extended.Eton’s lawyers had argued Eton College’s share of the marriage value – the extra value derived from bringing together the leasehold and freehold interests – traditionally 50 per cent, should be greater, because the short lease meant its holder would be prepared to pay more to extend it.However, the tribunal decided that Eton College deserved compensation for losing ground rent for 12.7 years, not the 8.2 years that Ms Black’s father, who represented her at the hearing, had argued for, adding to the cost of buying the extension.Tim Curran, a chartered surveyor who runs Leasehold Enfranchisement, a company that helps people extend their leases or buy their freeholds, said: “Through this ruling, a leaseholder was able to add £15,000 to the value of her flat at a cost of £9,600. There are increasing signs that previous tribunal decisions are now being quoted at new tribunal hearings.