The package was agreed in the context of a Ministry of Justice, Department of Business, Innovation and Skills and Insolvency Service consultation on Debt Management Schemes, published in September 2009, and ongoing work by the Lending Standards Board to monitor and enforce the recently established Lending Code.

The Ministry of Justice has been working with the British Bankers’ Association and the Consumer Credit Counselling Services, with input from Citizens Advice to develop a new way to help people who suffer an unexpected income shock such as redundancy, reduced hours or illness.

Under the new initiative banks, building societies and credit card lenders who follow the Lending Code will provide additional protections to people who find themselves in financial difficulties.

Under guidance issued by the Lending Standards Board, lenders will consider reducing or freezing interest and charges. Lenders will also accept token payments where appropriate.

The CCCS will after Easter, introduce a new payment arrangement for consumers with at least two unsecured debts, who are unable to meet their debt repayments, allowing them to make token payments of as little as £1 per debt a month – provided they take responsibility for their debts, engage with their creditors, and pay what they can.

Bridget Prentice, justice minister, says: “We’ve already been working with lenders on a variety of schemes to reduce the rates of repossessions among homeowners and allow flexibility when it comes to repaying consumer debt.

“These new practices by lenders will strengthen the protections offered to people who may have been making regular debt repayments but, through no fault of their own, are temporarily unable to continue to do so.

“At the same time, this initiative introduced by the CCCS will help those debtors who have multiple debts, providing much-needed relief until they are back on their feet financially and able to resume normal repayments.

“We will continue to work with lenders and the debt advice industry to get the best possible results for those homeowners, consumers and families experiencing tough times financially.”

Last week, I spoke at the Chartered Institute of Housing (CIH) conference in Brighton. This was particularly interesting for me as, when I meet property professionals, I am normally meeting property investors.

Not so here. CIH members tend to be working in some way or another in social housing. That makes their take on the market rather more important.

So what do they think? They think just two things could remove many of the difficulties in the housing market. First, changes in the way we treat tenants and, second, the removal of stamp duty.

The first makes sense. There is no real shortage of homes in the UK (none that shows up in the statistics anyway). What we do have is a rental sector that favours landlords so heavily that no one likes renting over the long term. Renting is fine when you are young but, once you have children, do you really want to live somewhere where you can be evicted with only two months’ notice as allowed by the Housing Act 1996, where your rent payments can be upped at your landlord’s pleasure, and where you can’t make any changes to the interior without instantly losing your deposit? Of course not.

You also don’t want to live anywhere actively unpleasant. My family is not renting at the very bottom of the market but, nonetheless, when we took possession of one of the flats we lived in, it was so dirty that we could not enter – let alone use – two of the rooms. And that was not because we have particularly high standards. As anyone who has ever popped round for a coffee will know, we really don’t.

It is all these things that make people desperately want to own a house and that, in turn, pushes up prices and makes buying so expensive that they can’t afford to do so.

CIH members hope that, if the recent crisis in the housing market does anything, it will encourage whatever government we get next to focus on creating a more tenant-friendly and long-term rental market. I hope so too.

I’m also completely with them on stamp duty. If you buy an average house in the UK – for, say, £225,000 – you’ll pay £2,250 (1%) in stamp duty.

On top of all the other costs of moving (estate agency fees, removal costs, lawyers, the usual 50 trips to B&Q and so on), that’s an enormous amount of money for the average family to come up with. But stamp duty goes up exponentially as you move up the property ladder. Buy a reasonable house in the south for anything over £500,000 and your stamp duty alone will come to £20,000 (4%). That’s not much below the national average wage.

Stamp duty is a rotten tax – largely because it is paid out of money you will already have paid income or capital gains tax on.

I hate double taxation. House buyers also have the regular irritation of knowing that, while they are busy begging banks and parents to hand over the extra cash to pay the tax, house sellers are often banking a profit they’ve done nothing to earn (unless they bought their house at the wrong point over the past few years, of course).

But stamp duty is also one of the biggest barriers we have in the UK to labour mobility. If you want to own rather than rent (for the above reasons), you simply can’t afford to buy and sell a house more than once or twice in a lifetime – not if you want to have a pension as well as a home. That’s a big deal when unemployment is high and likely to head higher soon.

So, stamp duty should go. However, it clearly can’t go without being replaced with some other tax – not with the public finances as fragile as they are today. What should the new tax be? That’s an easy one. Capital gains tax on the sale of primary homes.

Not only will this raise a bit of money, but it isn’t easy to argue with: it is a tax on unearned income and one you don’t have to pay if you don’t make money.

With a bit of luck, it might also change the general perception that making heavily leveraged bets on house prices is a kind of tax-free saving. Then, perhaps, we might see a more balanced savings culture.

There is a problem with all this of course: it isn’t likely to be popular. I suggested it to a senior politician this week. He told me it would make any party unelectable.

But whoever gets into government next is going to be so unpopular as to be unelectable anyway (once they’ve got into the swing of spending cuts), so it might be nice to think that they would do a few things that would be good for us all in the long term rather than good for them in the short term.

I think that dumping stamp duty for capital gains tax might be one of those things. Now all we need is a government with the guts to give it  a go.

• This article was first published in the Financial Times

Many people today cherish the dream of owning a house, whether just for themselves or for their family. It really makes a big difference when you are living in a house that you truly own, rather than just shacking up in a place that you cannot call your own.

Certainly, buying a house has not always been easy because of its complex procedures, especially in terms of the financial considerations, so it is natural that some people have reservations about doing it.

But actually, buying a house is better than renting it, because you are making real progress towards owning an asset. And, when you are living in your own house, you have a much higher degree of security and permanence. You can do whatever you want inside your house without worrying about the rules imposed by the landlord of the property you are in. When you’re in your own house, you can set your own house rules.

Also, you can fix your financial outgoings with a degree of confidence via your mortgage payments, but rental bills may shoot up every year or two. It is quite normal for renting payments to have a price hike each time they’re reviewed, and you can’t do anything top stop it.

Owning a house is an investment. Your rented property cannot be an investment because you won’t ever own it. If you decided to move to another place, you can make use of your own house by selling it, or releasing capital from its value. You cannot do that when you are just renting . There is also a taxation benefit involved. When you decide to sell your own house, the profit is all yours without subject to capital gains tax, which means that home ownership can always out perform savings in the bank.

At My Dream Pad I offer an alternative way of buying a home, especially useful if you are still saving towards a deposit or maybe have some credit problems from a while ago that are still working their way out of the system.

You can rent-to-own my houses and flats, putting down as much “get started” money as you can comfortably afford, adding to that pot of money every month (as part of your monthly rent also goes towards buying the property), and then buy me out when you’re ready to apply for a mortgage.

With just a few clicks you can start the home buying process by filling in this short form. From there, I’ll call you straight back to get things rolling. By this time next week you could be in your own home, already making payments towards the time when you’ll take full ownership. How would that make you feel?

It’s done just the same as a car lease. You’ll pay for the property every month and eventually own the house at a time of your choosing. You can also build up your equity share at the same time, by investing in home improvements that you’ll benefit from because the purchase price is fixed at the start.

Most of all, you’ll be the king or queen of your own castle in a way that renting can never offer!

After months of wrangling, the government finally announced a new set of guidelines to tackle the unfair practices credit card companies use to take our money.

And here’s the amazing thing: I’m actually impressed. I was expecting something pretty wishy-washy. Instead, these changes will actually make a difference.

The credit card companies can’t wriggle out of complying either. It may be called a voluntary code, but the Financial Ombudsman has the power to force firms to pay compensation if they don’t comply, so effectively these guidelines are rules.

Fantastic news for borrowers

The best part of the new rules will be the change to how payments are allocated. At present, any repayment you make on a credit card debt pays off the bit of the balance with the smallest interest rate first.

Say you have £200 in debt that is on an interest rate of 0% (perhaps it was a balance transfer). Then you buy an £80 dress on the card. This £80 will then accrue interest at the card’s standard rate. Then when you make a repayment, it goes towards the balance transfer amount, and the £80 sits on your card accruing interest until the other £200 has been paid off.

But, under the new rules this will have to be reversed, and repayments will pay off the balance earning the most interest first. So using the example above, you’d pay off the £80 dress before the £200 balance transfer.

This is great news for anyone who doesn’t pay off their balance in full every month, as they will no longer need to worry about their interest payments multiplying their expensive debt, while they pay down their cheap debt.

All that said of course, the best cards to go for are cards that offer 0% deals on both balance transfers and purchases.

The best of the bunch is Virgin who have combined with MoneySupermarket.com to offer a card with 0% on balance transfers and purchases for 12 months. But act quickly as the offer ends on Thursday (18 March).

Have more control over your credit

The other good news to come out of the new credit card rules is that you can now have a lot more control over your credit limit and interest rate.

You can now tell your credit card provider that you never want them to increase your credit limit. In the past, they could increase it as and when they liked – a great way of getting people to spend more than they could afford.

You will also be able to reduce your credit limit whenever you like, either online or through an automated telephone system. You wouldn’t think that reducing your credit limit would ever be a problem, but it is.

Card companies like you to borrow as much money as possible – the more you borrow, the more they make. Only last week I made a request to have my credit limit reduced and was rejected!

Say no to interest rate rises

The government has also acted to curtail credit card firms’ ability to increase the interest rates on existing debt. At present, when a firm decides to increase their rate, you have 30 days to reject the rate and close the account, and you can pay off any existing debt at the old interest rate. Under the new rules, you will have 60 days to reject an interest rate rise.

Your credit card provider will also have to send you a letter telling you how much your debt will cost you at the higher rate, so you can make an informed decision about the rise.

Minimum payments are on the rise

In an effort to help people pay off their credit card more quickly, there are also new rules on minimum payments – the amount you must pay off your credit card each month.

The minimum payment on new credit card deals will have to cover at least that month’s interest, fees, charges and 1% of the amount that has been borrowed.

But, this does all mean credit cards could be about to get more expensive. All these changes are going to cost the companies money – around £533m in the first two years, according to some estimates. And they are going to want to get that money back. So don’t be surprised if some of the more attractive 0% deals disappear, or if you suddenly find yourself paying annual fees just to have your card.

But, at least the government has finally sided with consumers against the profiteering of these firms. Now let’s hope Gordon Brown decides to tackle a few more consumer issues, before election day rolls round.

In its latest Credit Insights report it compares potential rate shocks in the UK, Netherlands and Spain.

It predicts that 80% of all borrowers would be affected by an interest rate shock, which on average would be a 60% shock in payments.

It expects an interest rate rise in the UK towards the end of 2010 and says the UK is likely to come off worse than other European countries such as the Netherlands and Spain.

The UK traditionally had shorter fixed-term rates than in the Netherlands and a larger scale of borrowers on repayment mortgages, but in recent times this has changed and an increasing proportion have taken out interest-only deals.

Moody’s says for repayment mortgages, the remaining term will have an impact on the size of the shock and the presence of interest-only mortgages will also increase this shock.

Moody’s’ says UK and Spanish borrowers are more susceptible to interest rate shocks than Dutch borrowers, mainly because of the prevalence of floating-rate mortgages.

In its report, Moody’s says: “The size of the shock is expected to be greatest in the UK due to the combination of a significant amount of interest-only mortgages and the high volatility of short-term rates.”

It says an increase in interest rates is likely to lead to delinquencies  – especially in the UK, because the UK has more mortgages with adverse characteristics.

It says: “The UK is probably most at risk on a combined basis as there are concerns on both the frequency and the size of an interest rate shock.”

The application launched today and allows borrowers to trawl through the criteria of every mortgage lender in the UK.

Borrowers will also have the option to be transferred to a mortgage adviser in their local area for advice.

Kelly says he is currently in discussions with a number of mortgage brokers about appearing on the system.

Since its launch this morning Kelly says it is already receiving around 100 downloads per hour.

While Mortgage Finder only selects suitable mortgages that match the entered requirements, it can also order and filter the results in different ways, such as initial payment and APR.

In particular it can sort by overall cost.

Kelly, senior partner at the firm, says: “it is amazing to think that this little phone can now do something incredibly complex as match your mortgage requirements with every available product on the mortgage market.”

This great little home in Boscombe is available on an extended purchase. No mortgage needed today!

Rent with the option to buy at a fixed price.

Rent £145.00 per week (payable monthly, and exactly on par with the rent achieved over the past 2 years).

Plus an additional weekly payment of £25.00 towards buying your home, ALL of this credited against the purchase price. This means you can show your future mortgage lender that you are able to pay the equivalent of a repayment mortgage each month and helps show your affordability.

Purchase price £139,995 fixed for 3 years (with the possibility of a further extension).

If you are recovering your credit rating from previous problems that’s OK.

Foreign workers/families welcome. Must be employed.

You’ll need some “get started” money – but not the huge amounts demanded by the banks!  And again, ALL of this is credited against the purchase price.

The flat is in BH1 in a side road and then set back from that road to be very quiet.

It’s is in good physical condition in terms of structure, roof, etc and was completely refurbished by the current owner 2 years ago. There is outside space, and a garage (rare in this part of town!) that adds a real premium to the flat.

Rented since then, by one occupier who has taken great care of the decor and facilities. This is why I’ve decided to rent the flat to someone with an option to buy and help someone who will treat the house as their own, give it even more TLC and make it into a proper home.

You are welcome to stamp your own taste on the decor just like when you buy. Anything you do that adds value to the property can also add to your profit because the price you get to buy at doesn’t go up.

This flat will not be available for long as demand for Rent 2 Own homes is huge in this area.

Call Les on 07823 880405, or fill in this short form and I’ll call you straight back.

Visitors to the Confused.com website will be able to click through to a microsite operated by Home & Capital Advisers.

Customers will be able to get more information about equity release and some of the equity release lenders in the market, and also speak to an equity release adviser.

Paul Chohan, head of mortgages and life assurance at Confused.com, says: “This is an important development for Confused.com as we extend the range of products and services available through the website, recognising that the internet is increasingly becoming the preferred way of accessing information and researching financial products for the more mature members of society, as well as the young.”

Simon Little, director of Home & Capital Advisers, says: “Clearly equity release is not a product to be purchased online – this is a major decision that needs careful consideration based on independent advice, which is best provided face-to-face.

“But I’m certain this will help us open a dialogue with many people who could benefit from equity release advice, and who will value the opportunity to discuss alternatives which are available.”

The cost of the service will be funded by a levy on the financial sector and funds recovered from dormant bank accounts, though the government will pay some of the costs in the first year.

Consumers will be able to get free advice on financial problems, financial planning, or advice on their rights should they feel they are not be treated fairly.

The government has been trialling the service in the North-East and North-West since last April, which the government says has helped 500,000 consumer so far, including 23,000 who received face-to-face assistance. It is expected to help one million consumers in the next year.

Alistair Darling, the chancellor, says: “Moneymadeclear is free, impartial advice for all, whether you are unsure about the small print in a mortgage form; want advice about opening a savings account for your children or grand-children or you want some help dealing with repayments before they get out of hand.”

Money Made Clear Website

Start with a blank sheet of paper divided into two columns. On one side, list details of your monthly income. Apart from your salary, this should include any benefits such as tax credits or child benefit. If you have joint finances, include your partner’s salary

Be honest

In the second column write down all your monthly outgoings. Unless you are a hermit, this list will inevitably be a lot longer than the other. But don’t panic. It is important to be honest about your and writing everything down to start with will help you spot any unnecessary spending.

List essential commitments such as your mortgage or rent, council tax, ground rent and service charges, buildings and contents insurance plus TV licence and utilities. Life insurance, pension contributions and any maintenance payments should also be included. If you have a car, calculate how much you need to put aside each month for insurance, MOT, tax and maintenance. Any credit card, loan, hire purchase or second mortgage repayments should be added here. Now add up the costs so you have a sub-total for essential spending.

Next comes everyday spending. If you have children then the costs of their care plus clothes and toys should be listed. Include a realistic estimate of your monthly food and toiletries bill plus public transport, parking and petrol costs. Money spent on leisure should cover gym membership, newspaper and magazine bills, alcohol, CDs, books and DVD purchase or rental. Don’t forget those trips to the hairdresser and beauty therapist. Add details of take aways, eating out and bar bills including any food bought at lunchtime during the working week. If you smoke then write down the amount spent on cigarettes and if you have pets don’t forget their food expenses. If you have a passion for clothes or electrical gadgets and retail therapy forms a regular part of your spending then include details here. Then add up the everyday spending costs for another sub-total.

Occasional costs should be things that may only happen once or twice a year but still have to be paid for. Think birthdays, weddings, Christmas, and holidays. Decorating, furniture and gardening costs should appear here plus any dentist and optician costs. As before, add up the outgoings for a sub-total.

The big picture

Next add the three sub-totals to form a grand total and deduct it from your total income. You will now have a clear idea of whether your spending exceeds your income and by how much. With any luck, you will be living within your means. If you have money to spare then consider increasing any debt repayments or bumping up your savings. Aim to set aside some rainy day money. To build your emergency cash cushion, the rule of thumb used by financial advisers is to save the equivalent of three months’ net salary. So if your monthly take-home pay is £1,500 for example then aim to make regular contributions – of whatever you can afford – into a separate pot with a target of at least £4,500.

If you are not living within your means then it is time to look more closely at where you money goes and identify areas where you can cut back or make sacrifices. Unless you are living a Champagne lifestyle on a lemonade income, don’t panic and make sweeping changes. Instead, think about small ways to avoid unnecessary spending. The benefit of having separate totals is that you can set aside the essential costs and concentrate on others when you want to save money. Go through the lists of everyday spending and occasional costs and if you ask: Is this absolutely necessary?

Keep it under review

Reviewing your direct debits and standing orders is good financial practice, but it may also throw up things you had forgotten you were paying for. Research from Cahoot reveals that, as a nation, we waste an amazing £160 million every year on direct debits we forget to cancel. More than 80% of people continue paying for two or more months for a gym membership they no longer use. Women are quicker to cancel their gym membership than men – 19% of women cancel within the first month they stop using it compared to only 10% of men. Magazine subscriptions and mobile phone contracts are other items that go unnoticed. Ask your bank for a list of your direct debits and standing orders and make sure you review them regularly.

Preparing your budget is not a one-off. You should review it a couple of times a year and whenever your circumstances change. Managing your bank account online will also help you keep tabs on your cash.