Winners and losers: expert advice to help even the odds in 2020

An expected rise in house prices is bad news for homebuyers, although mortgage competition is keen. Picture: PA
An expected rise in house prices is bad news for homebuyers, although mortgage competition is keen. Picture: PA
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The start of the New Year is traditionally a time for many people take stock of their finances. So whether it’s for better or for worse, here is a look at what 2020 could hold for you, with some advice from the experts.

House prices could increase by around 2%

Some commentators say they expect house prices across the UK to increase by around 2 per cent in 2020 – although there could be big variations depending on where you live.

Howard Archer, chief economic adviser at EY ITEM Club, believes some easing of political uncertainties could help house prices rise by around 2 per cent in 2020, compared with an increase of around 1 per cent in 2019. He says: “Housing market activity – and possibly to a lesser extent prices – could be given a modest lift in 2020.”

Rising house prices could be good news if you’re selling, or less welcome if you’re trying to get on the property ladder. However, there are still plenty of low-deposit mortgage deals around to give aspiring first-time buyers a helping hand.

Nitesh Patel, Yorkshire Building Society’s strategic economist, says: “We’re seeing more and more lenders giving access to 5 per cent deposit mortgages, which can be useful for those looking to buy their first home.”

The cost of commuting will increase for many workers

Train fares will increase on average by 2.7 per cent in 2020, industry body Rail Delivery Group has already announced. Fares become more expensive from 2 January. The extent to which travellers could be affected – or not – will depend on where they live.

Laura Suter, a personal finance analyst at investment platform AJ Bell suggests some people may be able to ease the costs by making use of their employer’s season ticket loan scheme.

Another alternative she suggests is: “Put the season ticket on a 0 per cent interest credit card to spread the cost across 12 months, meaning you don’t have to start the New Year by forking out thousands of pounds in one go.”

Your overdraft costs could go down – or up – depending on your normal borrowing behaviour

The Financial Conduct Authority is bringing new industry rules into force on 6 April to make overdraft charges fairer and simpler to understand.

It has promised to shake up the “dysfunctional” overdraft market – including stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts.

More than 50 per cent of banks’ unarranged overdraft fees came from just 1.5 per cent of customers in 2016.

People who sometimes slip into an unauthorised overdraft may well find they pay less under the new rules. But those who stick within their authorised overdraft may potentially find they pay more.

Some current account providers have already announced plans to impose new blanket overdraft rates set at 39.9 per cent – leading some commentators to say that being charged around 40 per cent annual interest for going into the red could become “the new normal”.

This may come as a shock to some borrowers, but at least the costs they are actually paying should become clearer.

Suter says: “If you are in your overdraft you should check how much you’re being charged and see if there is cheaper credit available, so you can move it to that while you pay it off.”

Some broadband customers could get a fairer deal

Regulator Ofcom has challenged broadband companies to make prices fairer for “out of contract” customers.

Ofcom found these customers could save around £100 a year by picking up the phone to their current provider and getting a better deal once their attractive introductory offer has ended and their existing suppliers’ usual fees kicked in .

As a result of its review, major broadband companies had made various commitments to protect customers and cut prices for those who are out of contract.

Most commitments come into effect by March 2020.