The Week Unzipped: Property prices set for further slump as government spending cuts bite

NATIONWIDE has warned that house prices could fall further in the coming months. The lender blamed government public spending cuts for deterring potential buyers. UK house prices have dropped 3 per cent since June, according to the UK's biggest building society.

Nationwide said price declines would not be as dramatic as in 2008. Historically low interest rates will restrict mortgage arrears and repossessions.

The society also predicted that the base rate will remain on hold until late 2011 to offset the dampening impact of spending cuts.

Sales as well as prices are facing a new downturn according to figures from HM Revenue & Customs.

In October UK property sales fell 11 per cent compared with a year ago. The number of sales last month was up 1,000 from September but 10,000 lower than in October 2009.

Elsewhere, the Halifax has increased its standard variable rate for customers who take out a mortgage from the beginning of next year. This is known as the revert rate, and is the rate on to which homebuyers will move when any special deals come to an end.

The new Halifax homeowner variable rate, at 3.99 per cent, is 0.49 per cent higher than the standard variable rate for existing customers.

The Halifax says customers will not revert to the new variable rate before January 2013 at the earliest. In introducing a higher revert rate, it is following other lenders, including Cheltenham & Gloucester and Nationwide, who introduced new revert rates for new customers in the past year.

Debt collector criticised

A DEBT collection firm has been censured for taking action against the wrong person.

The Office of Fair Trading told Aktiv Kapital it must investigate properly when the person they are pursuing tells them in writing they do not owe money.

The problem stems from creditors passing on wrong details to another debt collector. The OFT also warned the firm not to send letters or make phone calls that are threatening or constitute unreasonable pressure. The company could face a 50,000 fine for further breaches of the rules.

Santander deadline

CURRENT account holders have two weeks left to switch to a Santander current account and claim a 100 cash gift. As well as the bonus, the accounts all pay 5 per cent credit interest on up to 2,500 for the first 12 months.

Airmiles offer takes off

LLOYDS TSB is offering its credit card customers the chance to collect ten times more Airmiles in the run-up to Christmas.

New customers who take out an Airmiles duo credit card account can collect one Airmile for every 1 spent, rather than 10, for the first three months. The promotion runs until the end of March 2011.

The card has a typical APR of 15.9 per cent.

Pet project

ANYONE planning to take out Sainsbury's pet insurance to take advantage of the three-months-free offer must do so before Tuesday when the offer closes.