Mortgage approvals rose to their highest level since March 2008 in September, the Bank of England has reported.

The number of mortgages approved for houses purchased rose by 3,000 in September to 56,000.
Non-mortgage borrowing by individuals shrank for the third consecutive month, representing the most sustained fall since records began in 1993.

Figures released by HM Revenue & Customs show a rise in house sales to 82,000 in September, double that of January.

“Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market,” said Adrian Coles, of the Building Societies Association (BSA).

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The Financial Services Authority has ordered the GMAC-RFC mortgage lender to repay £7.7 million plus interest to 46,000 of its customers, after it imposed unfair charges on borrowers who fell behind with their repayments. The company has been charged an additional £2.4 million.

GMAC-RFC apologised and admitted some its charges had been excessive.

“In hindsight, we fully accept that for certain fees our estimates of the costs were not proportionate to the additional administration actually required,” said a spokesman for the lender.

“We will be writing to customers who incurred these specific charges when in arrears and will re-credit the charges plus interest,” he added.

Since its launch in 1998, GMAC-RFC grew to become one of Britain’s largest mortgage lenders, but it stopped offering new loans last year.

The FSA’s investigation into company activity between 2004 and 2008 revealed a series of failings, including “unfair and excessive” charges for people in arrears, the commencement of repossession proceedings before all other options had been considered, and a lack of proper training among staff for dealing with arrears cases and repossessions.

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The European Union has approved proposals to split nationalised Northern rock into two businesses, possibly heralding a partial sell-off.

One of the businesses would function as a “good bank”, containing Northern Rock’s sund assets, including most retail deposits and low-risk mortgages. The remaining “bad” bank would hold the remaining mortgages and repay outstanding government loans.

Northern Rock said the EU’s approval was “an important and positive step”.

Whilst the good bank will eventually be sold to a third party, potentially by the time of next year’s general election, the bad bank will have its assets run down until it goes into liquidation. Potential buyers include Virgin, Tesco Bank and National Australia Bank, which owns the Clydesdale and Yorkshire Bank.

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Tesco Bank is to create 1,000 jobs in Newcastle. The supermarket giant’s financial arm announced this morning the creation of a new customer service office in the city to handle customer enquiries and sales for the bank.

“Newcastle is the ideal home for our new insurance customer service centre. The north-east of England has strong experience in customer services and the financial sector, with a well-qualified and enthusiastic workforce,” said Benny Higgins, chief executive of Tesco Bank.

“The city is a great fit for our business and as it develops we will be investing even more in the region over the coming years.”

The firm aims to fill 500 posts by the end of next year, and all 1,000 by 2014. It has taken a 15-year lease on a business park site, and is receiving a grant of almost £2m from the local development agencies.

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The clocks have gone back an hour and the evenings are getting darker. With many drivers facing a dark commute to work, pedestrians and cyclists more difficult to see, and the potential for heavy rain, snow and black ice, the winter months can be dangerous for motorists.

However, there are plenty of things you can do to improve your safety during winter. RAC patrol Crackers Patel shares some tips:

• Before heading out, check that your lights and brakes are in good working order.
• Clean your lights - a quick wipe over will enable you to see, and be seen, more easily.
• Don’t forget to switch your lights off when you park your car. The RAC anticipates a 15% increase in flat battery call outs over the winter due to people leaving their lights on when their car is stationary.

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National Savings & Investments has announced large increases to the interest rates on some of its policies.

Rates for its guaranteed growth bonds and guaranteed income bonds will rise by as much as 2.95% for new savers, bringing the annual interest rate on some of its fixed rate policies to 4.6% a year before tax.

“Customers can choose to invest between £500 and £1m in our one, two, three or five-year bonds,” said John Prout, a director at NS&I.

The new rates are some of the best available for savers, and are a direct challenge to banks and building societies keen to win customers. NS&I offers the second most competitive two-year bond in the UK with a gross interest rate of 4.25% (just behind AA at 4.35%). Meanwhile a one-year bond with the state-backed institution carries a gross interest rate of 3.95%.

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The government has put forward a series of proposals to outlaw unfair credit card terms. These include stopping card firms raising interest rates on existing debts, and increasing someone’s spending limit without first asking their permission.

Under the proposals, credit card companies would also have to ensure that a customer’s most expensive debt is paid off first, and the size of minimum repayments would be raised in order that debts be paid off faster.

The UK Cards Association (UKCA), which represents British card issuers, said it would study the proposals.

“We need to be able to demonstrate what impact these would have on consumer choice and the costs to customers of using credit cards,” said UKCA chairwoman Melanie Johnson. “We will be reviewing the evidence and we expect the government to do the same.

“These proposals risk disadvantaging more customers than they protect,” she added.

The government has called on credit and store card companies to “clean up their act” with regard to “unfair” charges that are not explained properly to the customer.

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Cruise passengers have been urged to check their travel insurance after reports that a third do not have adequate cover.

A survey by insurance company All Clear has shown that around 34% of cruise passengers would not be fully covered by their travel insurance policy if they were taken ill at sea.

These passengers would also not be covered for pre-booked excursions that were cancelled due to ill-health, bad weather or changes to the itinerary.

Chris Blackman, head of product development at All Clear, said: ” A surprising number of people seem to rely on the basic medical provision on board ships. However, in all but fairly minor emergencies, this will not be sufficient.

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Lenders will have to carry out rigorous checks on homebuyers’ monthly spending habits before issuing new mortgages, under new rules announced today by the UK’s financial regulator to clamp down on reckless lending.

Homebuyers will need to prove their ability to repay the loans, by providing details of their income, outgoings and any existing loans.

The Financial Services Authority (FSA) is also expected to ban self-regulation mortgages, where borrowers do not have to prove their income.

However, the FSA has stopped short of imposing caps on loan-to-value or loan-to-income mortgages, and a ban on 100% mortgages, deciding instead to crack down on risky lending.

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Plans to restrict the sale of the controversial payment protection insurance (PPI) have suffered a setback.

The Competition Appeal Tribunal has ordered the Competition Commission to reconsider whether a proposed ban on selling PPI alongside personal loans was appropriate.

The appeal against this restriction was made by Barclays bank, which argues that the proposed restriction on the sale of PPI limits customer choice.

PPI is designed to help cover the cost of bills and loan repayments in the event that you fall ill or are made redundant. The ban on its being sold in conjunction with the issue of a personal loan follows a two-year investigation into complaints over the high price and numerous exclusion clauses in the sale of PPI, which often aren’t properly clarified to the customer.

The Competition Commission said that it would study the appeal “closely”, but pointed out that if successful, it would affect just one part of its plan.

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