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The news that people are hardly saving any money doesn’t surprise me. As interest rates have been low for quite a few years now, there has almost been a dis-incentive to save and a real temptation to do the opposite - to borrow as much as you can.

Apparently 20 percent of us don’t bother to save at all, and another fifth only save a small amount each month and that is for things like holidays. Living for the moment is great, after all you can’t take a stash of money to the grave with you, but it would personally make me uneasy if I wasn’t building up even a small amount of capital.

According to some experts we should all have at least three times our monthly salary stashed away in case that “rainy day” does decide to visit us. As the average salary is around £25,000 in the UK, that means we should be striving to build our savings to at least £6,000.

I’m all for that level of saving, even though £6,000 doesn’t actually buy that much, unfortunately. But this news about savings published today chimes with the article on Money High Street about overpaying your mortgage, that we published yesterday.

With interest on mortgages being more costly than interest earned from savings accounts, particularly when you consider tax reductions on savings account interest, it makes real sense to start over paying your mortgage, once you have built some savings and have paid off all credit card debts.

To my mind not saving now will cause you real problems in the future - perhaps when you are earning less through retirement, changes in circumstances or a reduction in salary. At least you will have built up a valuable pot of capital that can grow, if invested sensibly. You could always treat yourself to a nice holiday from it later on, without having to borrow the money.

I was interested to read about a couple using Ebay to sell their home, which seems like a great idea.

With conventional estate agents charging at least one percent plus VAT to sell your home, many people are turning to the Internet in search of an effective, but far less costly way of finding a buyer.

The House Network, for example, only charges £398 + VAT in total for the marketing of your property that leads through to a sale, and they use major property portals such as Right Move to find buyers for you. The advantage of the House Network charges is that they are the same irrespective of the value of your house, so it could only cost £467.65 to sell a £1,000,000 house!

Selling on Ebay is far cheaper, though you don’t get the benefit of marketing on Right move, which is becoming one of the major destinations for buyers looking for property.

Ebay will only charge an insertion fee of £35 plus an additional £2 fee for setting a reserve price. So for a total of £37 you can advertise your property to the millions of Ebay users. By setting a long enough auction, prospective buyers could visit the property and even get it surveyed.

Actually, if you think about it, if the seller had prepared a home information pack too, showing local authority searches and ownership details, this could be a real benefit to bidders who haven’t got time to conduct these searches themselves during the duration of your auction.

What a lot of people don’t realise is that Ebay does not charge property sellers a final value fee, so in fact it can be cheaper to sell your home costing hundreds of thousands of pounds than, say, a car or expensive luxury item.

Don’t make a mistake, though, and place your house advert on Ebay without a reserve price as you would be legally bound to sell your house for £1 if that was the highest bid. Ouch!

Its not just houses that are for sale on Ebay. Other property items such as plans for self build houses and land for sale can also be found.

It is amusing though when you see house sellers struggle with delivery options - “pick up only” seems the favoured description. The mind boggles about that!

So if you are selling a house and the estate agents fees don’t appeal, then you might find that vital buyer on Ebay. You still need to abide by the legal aspects of house sales such as conveyancing and HIPs, but it could save you a fortune.

The news that Northern Rock will be increasing the interest rates on their fixed rate sub prime loans soon may not seem important to you at the moment, unless you have an impaired credit history and fall within the sub prime market.

However it is not just Northern Rock who are increasing their sub prime rates - other lenders such as GMAC and Kensington Mortgages are also raising their costs for sub prime borrowers.

What we are seeing is the effect of the credit crunch that I mentioned a few days ago, spilling over from America. Lenders are becoming more reluctant to loan to the sub prime market in the USA and it seems that some lenders in the UK are following them too.

So it’s starting to become more difficult for people with credit problems to borrow money, and it is often these people who need to remortgage or arrange debt consolidation loans to help get their finances back on track.

The trouble is that people are still borrowing, and today we learn that for the first time total national debt now exceeds the total national earnings.

So as we borrow more, but then struggle to repay our debts, we find that the costs of consolidation is becoming prohibitive. This can create a downwards spiral leading to severe debt problems and the risks of needing an IVA or filing for bankruptcy.

I’ve painted a bit of a bleak picture here, but we don’t want to see what is happening in the US mortgage market over here.

I see the move by Northern Rock and the other lenders as a warning. Lenders who once welcomed people with credit problems, are now changing their tune. If they don’t want to lend to those with debt problems, we all should consider whether high levels of debt is sensible.

When I heard about home information packs (HIPs) being extended to 3 bedroom houses on Radio 4 news last Friday lunchtime. I had to chuckle.

I wasn’t chuckling about HIPs affecting more house sellers (far from it), but it was the fact that the newsreader actually said “Home Improvement Packs” when reading out the news item.

I understand this error as I’ve had to stop myself typing “improvement” rather than “information” many times recently.

I’m not the only one though.

See how many other sites make this error with this Google search for home improvement packs

There are quite a few respected sites in that list, including a Communities and Local Government press release!

Variable rate mortgages are being chosen by many people now instead of fixed rate mortgages. In fact 55 percent of mortgages taken out in July were for variable rate mortgages.

When interest rates rise, most people feel safer with a fixed rate mortgage, but of course this can become a liability when rates start to fall. So this news about the popularity of variable rate mortgages points to the fact that an increasing number of borrowers feel that interest rates have peaked.

This confidence is being mirrored by some mortgage lenders at the moment. The Nationwide, for example, will be reducing some of its fixed rate mortgages slightly from August 23rd. Also the cost of long term inter bank loans is reducing slightly too, illustrating that the money markets are not anticipating further interest rate rises.

There are actually benefits to variable rate mortgages and perhaps more borrowers should at least consider them when chosing a mortgage.

Here are a few benefits you may not have thought of:

• No arrangement fees
• No overpayment penalties
• No lengthy early redemption periods and penalties
• Benefit instantly from falls in interest rates, (but instantly pay more when rates rise)

In a word, taking out a variable rate mortgage gives you flexibilty.

This means that you could always switch to another type of mortgage such as fixed rate or tracker if interest rates change significantly, however there may be arrangement fees and other costs associated with these types of mortgages.

Remember that you must always seek professional advice about the best mortgages for your needs and financial situation. I am just stating my opinion in this post.

House prices in Chelmsford, the main town in my area, seem to be static at the moment and I’ve noticed that a lot of houses that have been been on Right Move for at least three months, are still unsold. Some houses in Chelmsford that had sold are now back on the market again.

So in this part of Essex, at least, we are seeing a general slowdown in house prices and sales.

Of course August is a slow time of year as many people go on holiday, but as we reported on Money High Street yesterday, house prices in London have actually fallen in August and that is the first time that has happened for a year.

Couple that with news about the number of first time buyers falling too and it isn’t difficult to see a trend appearing. For the next few months, at least, we will see almost zero growth in house prices.

Some will probably be gloomy about this, but I think it is actually good news for all of us as the Bank of England can also see the cooling property market. Their strategy of turning down inflation by increasing interest rates looks like it is working. Hopefully they will delay, or even cancel, another interest rate rise and that would be good news, except for those with more savings than borrowings, of course.

It is important for major builders to be aware of economic and market trends so the news that Persimmon is still upbeat about the property market should calm the fears of people fearing a crash in house prices. Maybe, they are right to feel confident, though, as they will benefit from Gordon Browns plans to build 3 million homes over the next 12 years.

So we shouldn’t be too upset if the value of our homes don’t increase for a while. At least we won’t be paying more for our mortgages.

I rate Dell computers quite highly. Although they may not be the most sexy PC’s available, I’ve always found them to be reliable with pretty good performance. I particularly like their warranty and support plans, and on the very few times that I have needed hardware repairs, Dell have always worked hard and quickly to rectify any problems.

So all in all, in my opinion, Dell computers (including their excellent servers) are a good bet.

There is something to be very wary of, though, and that is their shipping charges, which are a complete rip off.

I need a new laptop and saw that Dell had some great offers at the moment. I was just about to place an order with them, but almost fell off my chair when it came to viewing the shopping basket on their web site.

£60 (£51 + VAT) for the shipping costs of a laptop!

This is about 8% of the total purchase costs, including three year on site hardware warranty. How can Dell justify such high shipping costs?

So I did a bit of investigation on their web site. I specified out a Poweredge PE6800 tower server and then added it to my cart.

Now this server weighs 55.39Kg (122 lbs). Its a 6U form factor and is a two man lift. The shipping cost for this weighty beast is £57.68 (£49 + VAT)!

So Dell will charge you less to ship a 122lb server than a 5lb laptop!

Thinking about that excellent three year hardware warranty, I didn’t really want to buy a laptop from another supplier so I decided to phone Dell and negotiate away the shipping charge.

In my experience, Dell will always negotiate as long as you can substantiate your facts and are reasonable. After a bit of persuasion (me saying I’m going to buy a laptop today, so its either a Dell or another make), their sales woman reduced the overall system costs, thereby getting rid of their rip off shipping charge.

So buyers be wary. Those great headline deals on the Dell web site may be hiding unreasonably high shipping costs.

This article about HIPs assessors has got me thinking.

This is the quote from a HIPs assessor that caught my eye:

“There was plenty of talk about the potential to make plenty of money, but there were no guarantees,” she said.

Nonetheless, there is only so long she will be able to wait.

“If the work doesn’t come in, then I will really have to re-think whether I can stick with this,” she said.

“I can afford to wait another month or so but there are an awful lot of people who gave up their jobs in June (when the packs were initially due to come in) and aren’t in that position.”

When the government delayed HIPS until August, it caused major problems for all those HIPs assessors who had given up good jobs and spent a fortune on their training.

The trouble for them is that four bedroom houses only form 17 percent of the market - there just isn’t enough work for them at the moment. They can’t wait another three or four months until the government extended the scheme to three bedroom houses. They would run out of cash.

Running out of cash, and severely out of pocket from the training costs, the almost redundant HIPs assessors would have been forced to look for work elsewhere. Their numbers would have dwindled and the poor morale and prospects would have deterred new assessors from entering the industry.

The government must have been convinced by the Association for Home Information Providers that this delay put the whole home information pack scheme at risk.

So was the government forced to extend the HIPs scheme to three bed homes early? It looks very much like it.

It was only a few days ago that I was predicting that home information packs will be extended to three bedroom houses soon, but I thought it would be more towards the new year given the need for more energy assessors.

I was wrong with the timing as the Government announced today that home information packs will be required for three bedroom houses from 10th September.

This is going to have a very interesting affect on the housing market as people with three bedroom homes, who were wondering about selling, will rush to put their property on the market before the 10th September deadline.

As 60 percent of the house market will now be affected by HIPs, a sudden flood of newly marketed properties before mid September is going to create a buyers market. Couple that with an already slowing property market which is starting to respond to the recent interest rate rises, and you are looking at some major discounts in the three bedroom sector.

Would I try and sell, or at least market, a three bedroom property before September 10th? Probably not, as supply will outstrip demand and you’ll be forced to take a low price for your house.

Unless you have to sell your home now, it would probably be better to wait until the market settles down in a few months time and just suffer the costs and inconveniences of the HIP.

Hopefully with the surprise fall in inflation rate, the Bank of England will not need to put up interest rates again for some time (though I do wonder if this is a temporary blip in the inflation figures) and this will help stabilise the property market, counter-acting any negative effects of the home information packs.

One thing is becoming apparent, though. The Government is serious about HIP’s.

Home information packs are here and they are here to stay, so whatever you think about HIP’s you’d better get used to them.

Whilst writing our article about the importance of a good credit history for newly graduated students on MoneyHighStreet yesterday, it struck me how difficult it must be for students these days.

With it costing around £13,000 per year to go to University, including the tuition fees, money and debt must feature heavily in most students minds when they should be having fun finding out about the world and I guess doing a bit of studying here and there too.

To spend time and energy worrying about money and an ever increasing debt burden, must take some of the edge off the experience of university. No doubt this is why so many students do part time jobs during term time and then work for most of the holidays.

That’s a shame because there is plenty of time (hopefully) after graduation to tie yourself down with work and committments. That golden time between school and becoming a “proper” adult is an opportunity that probably won’t be there again.

Maybe, though, having to pay and borrow to be at university means that you value it more and work harder. I guess that is good in some ways, though it makes university more of a apprenticeship rather than an opportunity for learning and discovery in its widest sense.

Then to graduate with debts of around £17,000.

Its hard enough as it is finding a deposit to buy your first place, or the money to buy a reasonable car. To be saddled with a £17k debt at that stage in your life must be very difficult, and is probably why so many graduates cannot afford to buy property until their early thirties.

I admire the students undertaking these costs and debts to further themselves, but I think it is a tragedy that this is forced on them. Money and debt problems will be plaguing them enough during their life after university, without it marring their experience whilst studying for a degree.

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