Over the past few months the news has been dominated by the credit crunch and in particular the effects this has had on the housing market. Despite the Bank of England reducing the base rate of interest for home loans on three occasions since December last year and property prices reducing slowly over the same period, confidence amongst consumers appears to remain low when it comes to purchasing a new house.

To try and gain a better overview of the sentiment of the nation as a whole, with regard to the housing market, the Building Societies Association (BSA) has launched a new survey, which it intends to conduct on a quarterly basis, in order to measure consumer confidence on an ongoing basis.

The results from the first Property Tracker Survey show that, when asked only 27% of the population felt that now was a good time to buy a property, with a further 51% stating the exact opposite and that they would not buy in the current climate. The biggest reason given for the lack of confidence was affordability, with 70% of those interviewed stating that they felt they would not be able to meet the monthly repayments on even a cheap loan. The other reasons given by individuals for not wanting to purchase at present were, being able to obtain a large enough loan or mortgage for the purchase, finding the necessary funds for a deposit and concerns about continued falling house prices in the future.

With the main reason for not entering the property market being given as affordability, this shows just how much people are feeling the pinch in their disposable income and emphasises the need for individuals to obtain the most appropriate cheap loan to meet their needs.

With this new survey being conducted on a quarterly basis, the BSA hopes to be able to track how the nation feels generally about the housing market and also to monitor any changes in consumer confidence levels.

Now, perhaps I’m getting old, but I remember the days when students used to receive a grant from the local authority to help them with their finances throughout their University education and even with this assistance, we all seemed to leave college with huge overdrafts. Nowadays, of course with this Governments attitude of “Education, education, education” grants are no longer available and students have to make their own arrangements when it comes to funding.

One option which is available through local authorities is a student loan. This allows a student in full time university education to borrow up to £4405 per year for food, accommodation and, of course, beer! In addition to this the local authority will pay tuition fees (typically around £3000 per year) directly to the university, which of course is added to the loan.

There are two main benefits to a student loan, firstly interest is charged at an extremely low rate. Typically an individual will only pay a rate of around 2%, making it a very cheap loan indeed. The second advantage of a student loan is that no payments will become due on the loan until the borrower is earning at least £15,000 per annum and even at this stage, payments can be scheduled over a number of years, keeping the monthly repayments very low indeed.

The main concern with student loans is that, although they are a cheap method of borrowing, individuals are accruing a level of debt, even before they start earning a regular income and this still needs to be repaid once they start working. It is estimated that the average graduate leaves university with approximately £20,000 of debt and although this may not be of immediate concern to the individual at the time, it could impact on their finances in the future and possibly even stop them from obtaining other cheap loans or mortgages due to their outstanding levels of debt.

Whilst most students will need a loan to help them through university, it is still a good idea to limit the amount borrowed wherever possible. Perhaps use savings to partially fund college, or take a part time job to help make ends meet. Finally, once you start working, it is beneficial to yourself to clear the balance of any outstanding student loans as soon as possible, whilst you still have a high level of disposable income and before you make any other financial commitments such as a car loan or a mortgage.

In these difficult economic times following the credit crunch, many individuals in the UK are finding it hard to make ends meet with regard to the day to day running of their financial situation. Interest rates remain high, keeping the cost of loans and mortgages expensive and inflation is increasing faster than wages are, placing a further squeeze on already tight finances. In this situation many of us, especially those with secured loans and mortgages, are being forced to tighten our belts and make cut backs in our daily living expenses.

One area where people are making cuts is on protection policies for their new or outstanding loans. This includes a range of protection plans which include: life cover, critical illness cover, income protection and payment protection insurance. All of these products are designed to protect borrowers and their families in a number of ways, should anything unexpected happen, such as an accident, long term illness, disability or redundancy, but alarmingly many individuals applying for a new loan or mortgage are not taking up the option of adequate protection as they view this as an additional cost which is not necessary. Perhaps even more disturbing is the fact that many borrowers with secured loans are cancelling their existing policies in a bid to cut their monthly costs.

This is clearly false economy. Loan protection (in whatever form) is essential to provide financial stability for the borrower and their families should anything untoward happen. In very simple terms, a few pounds a month on a protection plan can make the difference between keeping the roof over your families heads, or having it repossessed and being thrown out into the street…your choice!

Many people take the attitude of “oh, it will never happen to me!” (Ring any bells?). The answer to that statement is simple, there are hospital wards and cemeteries which are full of people for whom it was never going to happen to! The question to ask yourself should not be “Can I afford the insurance?”, but “Can I afford not to take out insurance?”

We have all become familiar with the problems in the housing market over the past twelve months, with finance for mortgages and loans on a property becoming harder to obtain and prices of property falling steadily, this is having a negative effect on the economy as a whole. But it is not just home owners who are experiencing troubling times, those individuals in the buy to let market seem to be suffering also, with confidence amongst landlords at the lowest level since October 2006.

The research was carried out by BDRC, a specialist market research company and their survey revealed that only 41 per cent of landlords were optimistic with regard to the short term future of property markets and more than half those questioned said that they had suffered “voids”, where they did not have a tenant for their property and therefore received no rental income from their investment. As a result of this, 17 per cent admitted that they had missed at least one mortgage payment in the last twelve months, this is an increase of 9 per cent from the last quarter of 2007.

Some landlords however, are taking advantage of the current situation to develop their property portfolios, by purchasing properties at a reduced price or buying a house which had been previously repossessed. 6% said they had already bought such a property and the majority of those interviewed said they were looking to do the same.

Buy to let mortgages and loans are becoming harder to find at the present time however, as the rental yields generated from a property are still not adequately sufficient to support a high loan to value loan, due to property prices remaining high compared with rents. Twelve months ago it was quite common for a landlord to be able to obtain a loan to value on a property of 85 or even 90 per cent. This figure has now dropped to a maximum of around 75 per cent, which means that landlords are forced to find much larger deposits to fund their purchases.

Recent changes in the way housing benefits are paid out are causing financial problems for landlords, lenders and also tenants.

Previously, benefit payments for rent were paid directly to the landlord, cutting out the tenant altogether, thereby ensuring that the landlord received his rent in time to meet his own obligations to paying the buy to let mortgage or loan. But from April this year the system has changed. Those claiming benefits will now receive a local housing allowance paid directly to themselves, along with their other benefits, rather than rent payments being made to the landlord. The Government has introduced the new system to try to encourage those claiming benefits to take more responsibility for their personal finances.

Whilst the local housing allowance scheme has been applauded by many groups for increasing housing benefit payments to a realistic level to meet rent payments, many landlords who specialise in this area are understandably concerned that tenants may spend the money on other things and miss paying their rent, leading to an increase in the level of rent arrears. This sentiment is shared by many lenders who have similar concerns that landlords will not be able to make the monthly repayments on their buy to let loans and mortgages.

There have already been cases where problems in the system have shown up, which may not necessarily have been the fault of the tenant. In one example of this, money for the rent was paid into one individual’s bank account, which was overdrawn. The bank then closed the account, leaving the tenant unable to pay their rent.

The main worry is that landlords in this sector of the market provide a valuable service to many individuals who are not in a financial position to take out a loan or mortgage in their own name and therefore depend on renting a property to keep a roof above their heads. With these changes to the way they receive their rent, many landlords may be dissuaded from remaining in this market and choose to either sell their properties, or rent them out to a more professional type of tenant on a private basis, thereby leaving a large gap in a much needed sector of the housing market.