AS THERE'S so little of it around, you can understand the desperation to squeeze every last drop out of anything that looks like good news. Take, for example, this week's Nationwide house price report, which revealed that Scottish prices were down just 8.1 per cent over the year, compared with a UK-wide 14.7 per cent decline. The average price in Scotland actually rose in December, by 0.1 per cent, said Nationwide.
This was taken as proof in too many quarters that things north of the Border are fine. In many cases, that perception is stretched further by comparison with house prices in London and the south-east of England. Frankly, for all the merits of compari
ng Scotland with London we might as well compare Scottish prices with those in Nova Scotia.
The fragility of the good news offered by the Nationwide figures was brought home by the Edinburgh Solicitors Property Centre's (ESPC) figures for December. It said the average house price in the capital had fallen to £193,354, quite different to the £241,617 average put forward by Nationwide. The ESPC figures, based on sales recorded by its members, is the more credible figure and the group's overall picture is more realistic than the one the Nationwide stats paint.
The ESPC and its west coast equivalent, the GSPC, agree that house prices are unlikely to start rising this year and it's hard to argue with that. Scotland may not experience some of the falls witnessed south of the Border, but with sales down massively, it's too early to look towards the housing market for good news.
THE Financial Services Compensation Scheme (FSCS) has had to prove its mettle in recent months, most notably following the collapse of IceSave. Unsurprisingly, the focus on the scheme has highlighted some glaring weaknesses. One is that your savings can be used to offset any debts you have with the same bank, including mortgage debt. This has been addressed, with the Financial Services Authority (FSA) proposing that individuals get all their savings back (up to the £50,000 limit) even if they have a debt with the same bank.
Secondly, it proposes that savers with a bank that fails should get their money back after seven days. The last big proposal is to require banks to explain to customers the rule that means compensation is only per institution, not per brand.
And this is where the FSA has undone so much of its good work, just when it looked so promising. Back in October, when the spectre of bank failures prompted every saver and his dog to wonder how much of his savings was covered by the FSCS, this rule was the root of the most confusion. But with more consolidation likely in the banking sector, relationships between different brands will only become more complicated. Some have retained separate licences that means savings with each are considered separate, such as the Scarborough and Skipton Building Societies, which are in the process of merging. Others have not, including Halifax and Bank of Scotland under the HBOS (imminently the Lloyds) roof. Surely it would be easier to change this rule than to add to paperwork given to savers when they open an account?
THE devastating impact that personal debt and bankruptcy can have on an individual is typically reported on a practical level only. Less well documented is the emotional impact, how it can foster fear, shame and guilt. It takes someone who has been through it to detail the despair and how they took control of a situation that drives many to suicide. Kate Judge has done this with her book, Fantasy Island Finances – shamed by credit, aimed at debtors setting out on the road to taking financial responsibility. Facing up to financial reality is the subject of Kate's article on page 46.
