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The year has started well for borrowers. The January meeting of the Bank of England monetary policy committee has resulted in no change in the base rate remaining at 0.5%

From today the temporary stamp duty exemption on properties costing between £125,000 to £175,000 comes to an end.  The Royal Institution of Chartered Surveyors said it could have a “detrimental effect” on the recovery in areas of the UK that were lagging behind the rest of the country.

It does seem unfortunate as the predicted house price meltdown didn’t materialise and after a dip, confidence seems to have remained quite steady with home buyers, so why mess with it now? According to the Nationwide house prices are up 5.9% in 2009.

The Royal Institution of Chartered Surveyors is calling for a review of stamp duty calling for the tax not to be charged on the first £150,000 of a property’s price, regardless of the home’s value. This is a move that would be great news for all home buyers and would currently remove some first time buyers from having to pay any stamp duty on their purchase. Of course this does assume they are able to secure a mortgage to buy in the first place.

The Bank of England Monetary Policy Committee announced there were to be no changes in interest rates this week. The rate remains at 0.5%

The bank announced it was continuing with the Quantitive Easing policy injecting a further £25 billion into the economy in November, taking the total to £200 billion since the policy was announced in March 2009.

The UK Government has been in dispute this week with the board of Royal Bank of Scotland over their proposal to pay their Investment Banking staff bonuses worth an average of £85,000. This is third higher than last year and is based on profits made of about £6 billion.  The RBS board have threatend to resign if they are unable to pay the bonuses.

The goverment is reacting to publicity in the newspapers and television that angry voters are complaining about meeting the cost of large bonuses to bankers who they feel caused the financial crisis and triggered a recession.

The compromise has been suggested by Sir George Mathewson a former RBS chairman. He said: “I would hope that commonsense prevails and a solution is found that avoids destroying the value in the business for the taxpayer.” The 70%government/ taxpayer stake in the bank cost £45 billion. Sir George is urging the government to allow RBS to pay the bonuses for the future good of the business. 

RBS are saying that if they are unable to pay planned bonuses to investment banking staff they will lose many of them to rival banks. They are said to be raising investment banking basic pay by up to 150 per cent to escape the Government’s restrictions on bonuses.

The question then is who is right here?  In the opinion of the MoneyTalks team we agree with the bank’s view that their staff must be paid their bonuses rather than risk losing the best high flyers to their competitors. Why? Because for UK taxpayers who own 70% of RBS the better the bank performs, the more of the money used to bailout the company will be repaid. Something which we should all want to see irrespective of whether or not you like the idea of RBS bankers being rewarded.

As always let the team here at Loans2you know what you think. 

You will have seen in the news that the banking industry received a surprising boost this week when the  Supreme Court reversed two earlier rulings by the High Court and the Court of Appeal halting an antitrust challenge from the Office of Fair Trading to fees that banks & lenders charge customers who exceed overdraft limits .

The decision to back HSBC, RBS and six other UK lenders did come as a surprise, Corinne Gladstone from the OFT said the regulator will review the ruling and make an announcement next month.  Marc Thorley representing Barclays said that while the odds looked stacked against them following two rulings in the OFT’s favor “We wouldn’t have pursued the point to the Supreme Court if we didn’t think it was right.”

A study in 2006 found that banks earn about a third of their retail revenue from overdraft charges said to be a combined figure of over £2.5  billion per year. If the ruling had gone against the banks charges for unauthorised overdrafts would have been capped at £12. Additionally banks would have had to settle many outstanding claims from customers trying to reclaim their bank charges.

It may be the end of the road now for the OFT and for the many refund claims from bank customers that had been put on hold pending a definitive ruling. 

So are bank charges for unauthorised borrowing are fair? In our opinion yes they are, sorry! Infact they always have been. The truth is that most people simply don’t read the terms and conditions booklets given to them when they open their bank accounts. Read them and all the banks charges are clearly displayed. BUT! Yes please don’t complain yet, there’s more. Bank charges for unauthorised borrowing may be fair but how much is a fair amount to be expected to pay? Credit card fees have been capped at £12 and yet many banks are charging £30 for each transaction unpaid when customers either become overdrawn witout consent or exceed an agreed overdraft limit. This does seem excesive and still may be the target of a further investigation by the OFT in the future. 

What are your experiences of banks and bank charges? Let the Loans2you team know.