11:17 13 July 2013
Experts predict that housing prices would at least be stable for 2013. If ever there would be movement, perhaps expect at most some 2per cent growth. However, as we see house prices rising, property market experts are in a hustle to update their forecasts. From December of 2012 till end of June, the latest information shows that housing price index has already risen to an average of 4per cent.
Two government initiatives aim to help prospective home buyers – the Funding for Lending, which was offered August of last year to make mortgage more accessible, and the availability of equity loans for newly constructed homes, which was launched April of this year.
Still, even with these incentives, low to middle income earners could still find it extremely challenging to own a suitable home considering the ever rising housing cost and the initial cash outlay needed. What could save the day for us mere mortals?
If one has some savings stashed up somewhere, this could cushion the effects of rising prices and help one survive the price crunch and pay off mortgage.
Today, financial institutions offer numerous savings facilities. You can look at the tax-free Individual Savings Account which comes in the form of shares or cash. Returns are not taxed and could be the best way to retain shares. Choosing the right ISA for you is important though.
You can opt for the straightforward cash ISA offering the best interest rate and accessibility of your cash. Shares ISA could be more complex as you will have to deal with certain risks in choosing where you will invest your money – local, abroad, green funds, emerging markets. You could make use of the expertise of fund managers here.
There are other ways to save hard-earned money however. Just a precaution, you should spread your savings to a number of institutions. You could perhaps put one amount per institution; that way, if one of your banks goes bust, having part of your savings in another bank lessens the risk.
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