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January in review: a snapshot of the finance stories you need to know

ClearScore rounds up January's key finance stories

Despite the grim weather and state of our post-Christmas bank accounts, January brought some great news for home owners. Last year your house price rose by an average of £18,000- the equivalent of £10 an hour.

This sharp rise was revealed by Reeds Rain estate agents, which found that house prices increased the most in Luton, perhaps due to demand from London workers looking to move out of the city. The fastest-growing house prices in general were in the South East, followed by the East Midlands. Kensington and Chelsea actually saw a fall in house prices of 14.2%, possibly due to increased stamp duty fees on more expensive properties.

Obviously, increasing house prices aren’t good news for everyone. Lack of supply and a strong demand from buyers mean the average house price is set to overtake the £300, 000 mark this year. If you’re yet to join the property ladder, this could mean an extended period of renting.

According to HomeLet, rent prices in Bristol and Brighton have skyrocketed the most, rising by 18% in 2015, while Newcastle and Edinburgh were close behind at 16%. Despite remaining the most expensive place to buy a new home, London saw a smaller increase of 11%.

Prospective first time buyers can be encouraged by the fact that shaky international markets mean a Bank of England interest rate rise is currently unlikely. This means mortgage rates should stay low, putting money in the pockets of home owners and making new mortgages slightly more affordable.

However, if you are a saver, that same low interest rate is keeping down the returns on savings too. In fact, the Bank of England has announced that savings rates have reached a new low, with the average rate for an ISA dropping to as little as 0.85%.

Halifax, Lloyds, Virgin and HSBC all cut their rates in the last two months, and Santander is set to follow in February. This means some banks are actually offering higher interest rates on current accounts than on savings accounts. It’s worth checking the rates with your own banks to see if you need to move money out of your savings accounts in order to make the most of your savings. Be cautious though- the interest on ISAs is tax free where as other accounts are not, so do your sums and work out which option actually puts more money in your pocket.

In light of the gloomy financial news this month, it’s great to see some banks innovating to help customers manage their money. This month, HSBC launched the ‘Nudge’ app, which plugs into your HSBC bank account and gives you gentle reminders via your phone when you go on a spending spree that you might want to cut back. The app also looks at your spending in relation to people with a similar income to you, and gives encouragement if you are a top saver.

Even if you are not a customer of HSBC, you can stay on top of your credit score with ClearScore’s app, which was reviewed in the Mirror, City AM, Metro and Which? Money Magazine this month.

 

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