Over the course of the past two months we have seen a dramatic cut in the Bank of England base rate of interest.

In October there was a reduction of 0.5 per cent, followed this month by an astonishing cut of 1.5 per cent and after much discussion and not to mention a certain amount of pressure from the Government, the majority of banks and building societies, particularly the larger organisations, have been forced to pass on some, or all of these savings onto those customers with home owner loans and secured loans on their properties.

The latest economic outlook for the housing and mortgage loan markets from Capital Economics, has now predicted further cuts in interest rates are to follow over the next few months, despite the recent decreases and estimate that by the end of next year, borrowers applying for a new secured loan could be looking at interest rates of around 3 per cent.

However, this may not be the case for everybody who already has a home owner loan secured on their property. Although existing borrowers are likely to see further reductions in the monthly cost of their loan repayments, many lenders, particularly those offering tracker rates, have applied a collar rate to their products.

This means that the interest charged on a loan will not fall below a certain level, regardless of what the base rate does, although not all lenders have applied this criteria and the level varies significantly across those who have done so. It is therefore worth checking the small print on your home owner loan offer in order to see what applies to your own loan.

At around the same time as Novembers interest rate cut, practically all lenders withdrew all their tracker rate products, until they knew what was going to happen. A couple of weeks later and we are slowly starting to see tracker rates return to the market, although many of these are now set at a higher margin above base rate than they were previously.

Although lower rates are now making secured loans cheaper, unsecured loans still remain relatively expensive and it may still be some time yet before we see these rate cuts filter through to the unsecured lending market.

The Halifax announced yesterday (Wednesday 12th November) that it was to cease offering unsecured loans to borrowers via the intermediary market, which includes loan brokers and financial advisers.

As from the 30th November this year, the lender is withdrawing from the broker market and the only way to obtain an unsecured loan from the Halifax will be to apply directly to them, either in one of their branches, or online via their website.

For someone who may have already applied for an unsecured loan via a broker, this will be unaffected by the decision and the loan will be processed in the normal manner, likewise new broker generated applications will be accepted up to the end of this month.

The decision does not come as a complete surprise, as the Halifax stopped offering new agencies to intermediaries at the beginning of October, although existing brokers were still able to submit loan applications.

A spokesperson for the Halifax explained the decision by saying that the lender was streamlining its operations within its lending business and this move would allow better support for brokers to deal with more complicated areas of finance, such as home owner loans, secured loans and investments, all of which will still be available to brokers and advisers via the Halifax.

Heather Scott of the Halifax said “Intermediaries core business is in the provision of advice for complex personal financial needs. By streamlining in this way we can more closely focus on the core broker advice business, mortgages, pensions and investments.

We continue to offer one of the broadest mortgage and wealth management ranges available via the broker market. Simple personal loans continue to be available either online or direct.”

The total number of house sales completing fell once again throughout the month of October, according to the latest housing market survey from the Royal Institute of Chartered Surveyors (RICS).

The average price of a house also fell once more during the month, suggesting that vendors are finally starting to accept a realistic price if they want to sell their house, although the rate of decrease is slowing down according to the report from surveyors.

The main reason given for the continuing slow down is due to the fact that there is still a severe lack of available funding through home owner loans and secured loans, as banks and building societies continue to withdraw their products from the market and tighten their lending criteria for anyone applying for a new loan.

However, the report from RICS also states that it expects to see an increase in activity over the next three months, as new enquiries from potential buyers rose to the highest level seen in the past sixteen months, coupled with the fact that vendors are now asking more realistic prices and that we should see an improvement in the mortgage and secured loan markets, following the Government’s intervention into home owner loan providers and the recent cuts in interest rates.

All these factors should hopefully restore some level of confidence in the housing and secured loan markets and provide a welcome boost for those involved in them.

A spokesperson for RICS said “Last weeks interest rate cut should certainly help to support the market now that lenders have agreed to pass on the reduction to borrowers. Even so the general lack of mortgage loan finance remains a major blockage in the housing market for a large majority of would be buyers.

Fortunately, many vendors have finally started to accept current market conditions and are dropping their asking prices to achieve a sale. Sales should increase in the coming months as more and more sellers understand that greater realism is the only way to make the long desired move.”

A large number of people living in the UK are currently finding it increasingly difficult to keep on top of their financial situation, following the credit crunch and subsequent economic slow down and many individuals are starting to fall behind with the repayments on their homeowner loan, or other secured loans.

With Christmas now looming on the horizon, many people who have seen their disposable income deteriorate over the course of the last twelve months are starting to panic about how to pay for their family gifts and celebrations and are looking for various ways to raise enough cash to be able to make ends meet.

With this in mind, the Consumer Credit Counselling Service (CCCS) has issued advice and suitable guidance for those individuals who may be struggling with their secured loan repayments and other debts, to try and help them avoid further financial problems and be able to manage their money more effectively.

Rather than attempting to generate extra cash for short term needs, it is more important for someone to set out a realistic budget planner, taking into account all their monthly committed outgoings such as secured loans, credit card payments, household utility bills and insurances. By cutting back on unnecessary items of expenditure and luxuries, it should be possible for most individuals to balance their finances and continue to keep up with their essential outgoings over the longer term.

The CCCS has advised people who are looking to make cuts in their expenditure not to cancel any income protection policies or life insurances they may be contributing to currently, as these should be considered as essential items, especially in financially uncertain times. People should also check to see if they have any entitlement to things such as tax credits or other state benefits and if they are already receiving these, to make sure they are receiving their maximum allowance.

For those individuals who constantly have an outstanding balance on their credit card, there has been a tradition over the past few years of being able to transfer the whole balance amount to a new card provider and be charged zero per cent interest on the sum transferred for a specific period of time, usually between six and twelve months.

There is usually a fee charged for the transfer of around 3 per cent of the balance, but despite this, it is possible to save a large amount of money on the interest that would have been paid to the previous provider. The problem faced by most people who adopt this approach is that they fail to clear the balance which has been transferred before the interest free period ends and they end up either paying interest once more, or more likely, transferring the balance to yet another provider offering 0 per cent interest.

However, it would appear that credit card companies are finally starting to clamp down on balance transfer deals, as the number of providers offering such services has reduced by 7 per cent over the past few months. Of those card companies who still offer balance transfers, the term is generally becoming shorter, for example six months rather than twelve months.

Once the initial period has expired, the rate of interest charged is now at a much higher rate than it would have been twelve months ago. This shows the more cautious approach which is now being adopted by card companies and their reluctance to take on new borrowers.

For those individuals who use this system, it may be time to alter your strategy and clear the balances of your cards whilst you can do so at cheap rates. For those who are unable to clear their credit card debts, one solution could be to shop around for a cheap loan to repay their card balances.

A debt consolidation loan can work out at a much cheaper rate than that of a credit card and the balance is actually being repaid over the term of the loan. For those with smaller card balances, an unsecured loan may be sufficient, but for a home owner with larger card debts over a number of cards, a secured loan may be more appropriate.