Landlord Patrick Osborne profited from rising rents, generous tax breaks and easy capital gains – so why did he get out?

When Patrick Osborne became a landlord in 2001 he was taken aback by how many friends and acquaintances condemned him. “I’m not going to pretend I fell into it by accident. I made an active decision to do it for income and pension planning. But I was surprised by some of the reactions I got and the level of vitriol towards landlords. I’d only ever had good experiences as a tenant, so this shocked me.”

Osborne – data manager at a retail bank’s HQ – moved to the UK from Australia in 1995 and thinks this may, in part, account for his surprise. “There isn’t the same issue about it in Australia. It’s a polarising issue in Britain, and I’m really glad I’m not part of it any more.”

At first, Osborne, who is 40, single and lives alone, was happy to be a landlord. “I took the responsibility seriously. If you don’t have gas and electricity safety certificates and there’s an explosion you’re going straight to jail. And rightly so. But there could still be a fire and someone could die, even if it’s not your fault. I was always aware of that.”

He became a landlord when he moved from his first house in New Cross, south-east London, which he bought for £95,000 in 1999. Rather than selling, he decided to rent to students.

“I liked the idea of offering it to young people who wouldn’t normally want to buy at that stage of life. I didn’t charge the most the market would bear, just enough to make me a steady income, as well as capital appreciation. It was mainly for my pension. I had other pensions but, as I’d changed jobs two or three times, there were lots of bitty ones; this was something solid.”

Like hundreds of thousands of other landlords who jumped on the buy-to-let bandwagon, Osborne could happily have held on to his property, or bought more, using the equity he has built up.

But he had a major change of heart, prompted by the continuing rise in house prices, in London at least, and the lack of supply of homes for younger families.

“I wouldn’t describe myself as left wing but, increasingly, I feel housing provision in Britain is deeply unfair. The only reason I could buy when I did, and become a landlord, was down to luck and timing. I couldn’t afford the house I’m living in if I had to start now.

“I didn’t really need the rental income as I already earn a good salary. And, basically, my views changed.

“I think housing provision should be more regulated and not a free-for-all. It’s not nice to profit from someone else’s need to sleep somewhere. I think it’s wrong some landlords have strings of properties. It restricts supply, and tenants have very few rights, or aren’t aware of rights they do have.

“You hear all kinds of horror stories, such as three months’ rent in advance, or houses let out that aren’t safe but if tenants say anything they’re evicted. A landlord can always replace them. It’s wrong. I don’t want to be part of that, even in my small way, and I like to think I was a good landlord.

“We all make compromises with our principles but I was getting more and more uncomfortable defending mine.”

Osborne says he was also appalled at tax breaks he received. “I was quite surprised by how much I could set against tax and that was without hiring a flashy accountant, so I probably could’ve claimed more. The tax rules were, believe me, very generous.”

When Osborne decided to get out, he gave his tenants six months’ notice – the law only requires two – and sold his house for £230,000. It was a handsome profit even after capital gains tax, which he used to pay off most of his current mortgage.

Osborne bought his first house when he was 28 and became a landlord at 30. It’s a very different picture for today’s under 35s. A survey last week showed what most of us know anecdotally – far fewer young people can afford to buy now. The 2012 HSBC Moving Home Survey revealed a growing number of young people don’t want to own a home, which is a reverse in home ownership aspirations of this age group.

Meanwhile, 61% of people aged 55 and over aren’t planning to move. The generational divide in the UK property market is likely to cause housing stagnation in 2012, with young people unable to buy, and older homeowners unwilling to sell, the report concluded.

This is further backed by HM Revenue and Customs, which this week reported house sales fell last year to one of the lowest ever recorded at 869,000. Further falls are expected this year as the economy remains weak.

But others say 2012 could see the return of the first-time buyer. This week saw the launch of the government’s NewBuy Guarantee scheme designed to help buyers over the obstacle of high deposits. Mainstream lenders are also making more 95% deals available, and offering better prices on longer-term fixed rate mortgages. This week Chelsea building society launched the lowest-ever interest rate for a five-year fixed rate mortgage, pegged at just 3.19%.

But there is no sign Osborne is sparking a trend towards quitting among buy-to-let landlords. In 2001, according to the Council of Mortgage Lenders, 72,200 buy-to-let mortgages were granted, rising to 346,000 in 2007. The figure dropped to 94,600 in 2010 – the last full year figures are available. But the trend is firmly back up, says Sue Anderson, CML spokesperson. “Demand for private rented housing is high and set to remain so. The rising demand for renting makes it likely the buy-to-let market will continue to grow.”

Personal finance and money news, analysis and comment | guardian.co.uk

After years struggling to save big deposits, first-time buyers are hopeful of getting on to the property ladder as lenders line up to offer 95% mortgages

Five years ago there were more than 800 different 95% mortgages available to first-time buyers. When the financial crisis struck, they disappeared from lenders’ shelves almost overnight. But the first few weeks of 2012 are seeing a surprise turnaround – the number of loans on offer has tripled and interest rates have fallen. Will “generation rent“, until now forced into renting because they can’t stump up the huge deposits demanded by lenders, finally be able to put a foot on the property ladder?

This week Leeds building society launched a mortgage that requires a deposit of only 5% and comes with an interest rate of 5.25% (although there’s also a hefty £999 in fees). Last week both Newcastle and Ipswich building societies launched 95% deals, while broker John Charcol says it will unveil a low-deposit scheme for first-time buyers in early February.

It follows the launch of Nationwide’s Save to Buy scheme, in which savers who put money aside for at least six months can apply for a 95% loan, and Lloyds’ Lend a Hand scheme, where first-time buyers can access a 95% deal if they can convince their parents to put their savings up as security against the mortgage.

Buyers able to stump up a larger 10% deposit can enjoy interest rates as low as 3.84% from HSBC – which brings the cost of a mortgage significantly below the average that buyers were able to find during the boom.

Fed up with extraordinary rent rises – mundane flats in London are averaging more than £1,000 a month – and now able to find mortgages with low deposits, first-time buyers are beginning to return to the market in volume.

Rent increases mean buying is now on average 16% cheaper than renting, according to research issued by Halifax today. That represents a remarkable turnaround from 2008, when the cost of buying was typically 29% more expensive than renting.

L&G Mortgage Club, which acts for thousands of estate agents and last year sourced 12% of all UK mortgages, says that so far this year it has witnessed a surge in applications from first-time buyers, particularly in London, Surrey, Sussex, Edinburgh and Glasgow.

“A lot of people were priced out of the market between 2003 and 2007, then, when the credit crunch came along, prices became more affordable, but they could no longer get a mortgage because of the deposits required. There’s huge pent-up demand out there from potential first-time buyers,” says Ben Thompson, managing director of L&G Mortgage Club.

This time last year, first-time buyers made up just one quarter of applicants for loans, but the figure is now nearly one third, L&G says.

But let’s not get too carried away with a market revival. Half of all first-time buyer applicants are rejected when applying for a 95% deal. Only those with squeaky clean credit records get through. The new deals are mostly from small building societies with limited funds. Big banks are still hamstrung by capital adequacy problems, and don’t like lending to first-time buyers as 95% deals force them to set aside more capital.

The ongoing eurozone crisis, rising unemployment and forecasts of further house price falls are also encouraging many buyers to sit tight.

Britain’s property market is still characterised by a “can’t buy, won’t sell” generational divide, according to HSBC’s annual Moving Home Survey, published yesterday.

When it asked people under 34 why they are not buying, 29% cited high deposits, 15% the general problem of finding a mortgage, and 14% worries about unemployment. One tenth said they no longer had any wish to buy a home.

A modest pick-up in mortgage approvals during December is unlikely to be sustained. The Council of Mortgage Lenders said this week total lending in 2011 was £140bn – a small rise on 2010 but still substantially below traditional levels and way below the record £363bn in 2007.

Howard Archer, economist at IHS Global Insight, forecasts a 5% house price fall in the UK this year. “We suspect that low wage growth, a markedly weakening labour market and major concerns over the economic outlook will limit potential buyers and weigh down on house prices.”

But many first-timers will be spurred into buying by the looming end of the stamp duty holiday. Since March 2010, first-time buyers have enjoyed exemption from the 1% duty on properties between £125,000 and £250,000, but this ends on 24 March.

The government hopes taxpayer-backed 95% mortgages for new-build properties, scheduled to launch in April under the FirstBuy banner, will help maintain momentum in the market. Interest rates on the loans, which will be offered in partnership with developers such as Barratt, are still being negotiated but are expected to come in at around 4.25%. Potential buyers can register now, but the first homes are unlikely to be available until September.

How to bag a deal

The key to landing a 95% deal is ensuring your credit record is clean, says Ray Boulger at John Charcol. “You are going to need an excellent credit record. The way the points system works, the longer you have been at your address, the longer you’ve been with your employer, and the longer you’ve held your bank account, the better.”

It doesn’t mean you can’t switch bank accounts – just don’t close the original bank account when you switch. The same goes for the electoral roll – when you go to university, keep your electoral roll address at your parents. (You are permitted to register at both your university and home address, but you can only vote at one.)

A clean record on paying the rent also helps. Saffron building society, which offers a 95% deal at 5.79% (and fees of just £195) will accept a tenancy record as evidence that you can afford a mortgage. “If you can prove you have paid the rent [for a minimum of 12 months] we will look at offering a mortgage that costs you up to the same amount per month,” says John Eastgate, Saffron’s sales and marketing director.

Societies such as Saffron use “manual underwriting”, looking at cases on an individual basis and carrying out their own checks and calls, in contrast to the big banks, which tend to use computer-based scoring which results in many potential first-time buyers being screened out.

But the days when you could walk into a bank and obtain a mortgage of five or more times your income are over. Paul Winter, chief executive of Ipswich building society, says borrowers should expect to obtain no more than 3.75 to four times their income. Applicants also go through an affordability test which takes into account more factors than salary. The mortgage will be arranged on a repayment basis, rather than the cheaper interest-only deals popular before the credit crunch.

What’s on offer?

Personal finance and money news, analysis and comment | guardian.co.uk

ATMs and payment readers in shops will soon accept a simple swipe from your card. Miles Brignall went to Barcelona to see the birth of contactless payments

First it was credit and debit cards, then mobile phones. Now the so-called contactless revolution has embraced cash machines.

Maybe you’ve got a contactless card in your wallet or purse, but haven’t yet made use of the new technology to buy anything. So how would you feel about using a contactless ATM that allowed you to take money out without even having to put your card in the machine?

Last week in Barcelona, Spanish bank La Caixa launched what it says is a world first: a city-wide network of contactless cash machines that allow customers to withdraw money and carry out other transactions with a wave of their bank card across a card reader.

It’s the latest move in a payments shake-up that has seen people all over Europe – including millions in the UK – issued with cards which allow them to pay for low-value items using a reader at the till. If the contactless ATMs prove an Iberian hit, they could well be heading to the UK.

More immediately, travellers to Barcelona will be able to use their new-style cards to buy items in thousands of the city’s shops and bars and withdraw euros contactlessly from next month.

It is the precursor to what anyone planning to visit the London 2012 Olympics sites can expect when the games kick off in July – the event Visa and participating banks hope will push the use of contactless payments into the mainstream.

Guardian Money last week got to see one of the first of the 500 contactless ATMs that are starting to appear across Barcelona. Users wanting to access their account or withdraw cash have to swipe their card across the machine’s reader and wait for a beep – in the same way you would use an Oyster card to enter the London Underground system. The ATM reader is able to read all the card’s data. Users still have to input their pin in the normal way. Two seconds later, out pops the cash.

La Caixa, which developed the ATMs in conjunction with Visa, says eventually users will be able to access small sums without the need to input a pin at all, in the same way that customers can make low-value purchases in shops, although the bank says pin-free cash withdrawals are still a little way off.

If you are wondering what the point is of a contactless ATM, particularly when you still have to key in your pin, the bank points out that they offer a number of advantages. It’s certainly a faster way to access your cash – one that will bring down queues at busy sites such as shopping centres and sports venues. They could also be good news for disabled customers, many of whom will find the new cash machines much easier to use.

La Caixa says people using contactless ATMs will no longer be able to absent-mindedly leave their card in the machine. One big plus is that it is much harder to have your card “skimmed” – when its details are read by another device put on the machine by criminals – as it never leaves your hand. For the same reason, there is less chance of people being distracted by a thief and having their card snatched out of their hand, or grabbed when it is being handed back by the ATM.

For extra security, the Spanish ATMs feature a built-in camera and display which shows the user if anyone is looking over their shoulder, on what is quite a large screen by UK standards. The ATM will also record a snapshot of the person accessing the money, which could be invaluable in the event of a dispute. The banking group has pledged to reimburse anyone who has money taken out of their account if a thief uses their card to make a contactless payment.

La Caixa, which has the most domestic bank customers in Spain (10.5 million), is issuing 1m new contactless cards to its customers. It mirrors the card roll-out by Barclays and Barclaycard, which have been at the forefront of the technology in the UK.

La Caixa is providing 15,000 payment terminals to retailers across Barcelona to ensure customers can pay with a single tap everywhere from the largest stores to fast food outlets and the city’s busiest bars. There is also a plan to offer it to the city’s taxi fleet, as has already been done in New York.

A bank spokesman says Barcelona was selected as a starting point to allow La Caixa to showcase the technology during next month’s Mobile World Congress, a huge annual trade show for the mobile phone industry.

• Miles Brignall’s flights and accommodation were paid for by La Caixa.

Personal finance and money news, analysis and comment | guardian.co.uk

Uploading a video clip on to YouTube of your toddler getting up to mischief can win over a cooing international audience and earn big money. Here’s how …

When Howard Davies-Carr uploaded a video of his two children on to YouTube, he thought it would be seen only by his sons’ godfather and a few friends. More than 400m views later, it has earned him well over £100,000.

The clip of one-year-old Charlie mischievously nibbling his three-year-old brother Harry’s finger, known as “Charlie bit my finger – again!”, became a global phenomenon.

Davies-Carr now regularly uploads videos of his sons – satisfying a cooing international audience and earning him money from the adverts YouTube places next to the clips. In his case, they include a leading baby milk provider, Oxfam and Vodafone.

“I’ve always filmed the boys, but now I make a short extract to upload. I’m grateful to have these snapshots of the boys growing up – the money is a bonus.” You would be forgiven for thinking Davies-Carr’s story is a fluke – even he puts his success “entirely down to luck”. But increasing numbers of people are earning money through the advertising revenue generated by their videos – and not only clips that have gone “viral”, such as the one of the man cursing his dog, Fenton, as it chased deer across Richmond Park.

Across Britain, people of all ages are putting their hobbies online and uploading films to an audience which waits with bated breath. Livie Rose, 21, originally from Swansea and now living near Brighton, started filming make-up tutorials in January 2010 after she got hooked on the beauty videos produced by teenagers in America.

“My mother saw the videos I was watching and said ‘You could do that’, so I did,” she told Guardian Money. Rose has deferred studying politics at Queen Mary University in east London to concentrate on her YouTube channel, “liviesays”, and has even created a studio from her earnings.

“I don’t want to lose the chance to study, but the channel was starting to take me places. I didn’t want to miss out on an opportunity.” The hobby she describes as her “unnatural interest in make-up”, earns her anything from £50 to several thousand pounds each month, depending on the popularity of her videos. “I didn’t set out to make this into a living, but it’s the best kind of hobby, because I get to make money out of it.”

She adds: “The proportion YouTube takes is fixed, but it doesn’t actually take that much. Say I earned £1, they would probably take about 10p.”

Video makers can earn money from advertising via the site’s partner programme, a scheme aimed at regular uploaders with big audiences. Basically, this means you share in the revenue generated when people watch. Partners must agree to YouTube allowing “relevant” adverts to be placed alongside, and even within, their videos and earn money based on a combination of “impressions” (views) and “clicks” (how many people click on the ad). “Pre-roll advertising” – those often annoying ads you have to watch before the video starts playing – can be particularly lucrative, as advertisers are willing to pay more.

All of this means the amount of money you can earn will vary dramatically. However, YouTube insists that “partners will always get the majority of the [ad] revenue”.

There are more than 20,000 partners worldwide. While the site wouldn’t disclose how many there are in Britain, it claims it has seen a “seven-times increase” in the number of UK partners earning more than ,000 (around £6,460) a year, plus a 154% increase in revenues received.

Anyone can apply to be a partner as long as they regularly upload original videos that are viewed by thousands of people, and either own, or have permission to use, all the audio and video content, it says. This means videos featuring pop songs, a movie, TV or video game visuals can be problematic.

Shoo Rayner, 55, a children’s author from the Forest of Dean, whose mission statement is to teach the world to draw, has been sharing artistic tips for two years, and has racked up well over 2m views. He has his own channel, Shoo Rayner Drawing. “I’m not making an enormous amount but I am hoping to do this full time soon,” he says. “I’ll have to do other things, as well – I’m starting a course on YouTube for business, and I can do speaking engagements to top up my earnings – but I expect around 60% of my income will come from YouTube advertising.”

Rayner adds: “You can’t predict the amount you’re going to make, although I find January is pretty lean and it starts building from there until Christmas. You can see your earnings ticking up throughout the day, depending on who has watched the video.”

Rebecca Flint, who is 16 and from the Isle of Man, has sold language learning books, music CDs and dance DVDs after a video of her dancing to pop songs went viral, propelling her to Japanese stardom. Her stage name is Beckii Cruel, and she now has her own website, beckii.co.uk

“When I first started, I was filming the videos on a laptop in my bedroom and then overlaying the music,” she says. “Nothing happened at first but then, suddenly, I went viral. It was a complete surprise. It’s been fantastic – I’ve had the opportunity to travel to Japan eight times and perform live.”

But you don’t have to go viral to make it, according to Steve Roberts, who lives in Bury St Edmunds, Suffolk. His football skills tutorials (available on his YouTube channel, STRskillSchool) have more than 48,000 subscribers. “I judge my success according to how many people come back to watch each week. If you’ve got something interesting to say, or a hobby to share – put it on video.”

So what happens if that clip of your cat climbing into a box ends up “doing a Fenton”? YouTube claims its technology can predict when a video is about to go massive. “We can contact the owner and offer to start serving up advertising, so they can make money from a one-week sensation,” it says.

The Fenton clip was reportedly filmed by a 13-year-old boy, and has inspired a range of spin-off items. In early December, the boy’s father was quoted as saying: “We won’t be buying a Caribbean island just yet.” At that point, the clip had been viewed by just over 1 million people. By this week, it had been viewed more than 4.4 million times – and counting.

Personal finance and money news, analysis and comment | guardian.co.uk

There are several types of loans available. To name just a few: unsecured loans, secured loans, car loans and debt consolidation loans.

A loan is a type of credit – and therefore it must be repaid. Repayments are usually made on a monthly basis, and will continue until the loan (plus any interest) has been repaid.

Unfortunately, at a time like now, many people are finding repayments particularly hard to make, whether it’s because they’ve suffered a drop in income or because their essential expenditure has risen.

Help with your payments

However, there is help available. This help could come in the form of budgeting advice – in other words, advice on how to manage your finances more successfully.

Budgeting is all about managing, controlling and understanding your finances. It involves keeping track of your income (the money you receive/earn) and your expenditure (the money you spend).

• Your total income should include everything your household receives/earns: salary, benefits, grants, etc.

• Your total expenditure should include your priority debts and essential costs of living: your mortgage/rent, your utility bills, secured loan payments, etc. It should not, however, include the cost of servicing your non-priority debts (unsecured loans, credit cards, etc.).

By subtracting your total expenditure from your total income, you will be left with your disposable income. This is the money you can use to service your non-priority debts each month and (if you have anything left) to save and spend on non-essential goods and services.

If your disposable income is not enough to cover the cost of servicing your loan/debts, then you should take immediate action. You may wish to start by contacting a professional debt adviser.

Many of us end up paying too much tax or national insurance. Patrick Collinson outlines the main pitfalls

Don’t overpay national insurance

You should stop paying national insurance when you reach state retirement age – 65 for a man and 60 for a woman (rising to 65 in 2015). Lots of people who work part-time after their state pension age, either for an employer or self-employed, wrongly pay NI. You can apply to HMRC for an age exception certificate if you continue working so that you don’t pay NI contributions, and can claim back previous overpayments.

If you’re below pension age, you may still be overpaying NI. “If you have two or more jobs, or mix a full or part-time job with some freelance work, you could be in the area of overpaying NI,” says John Whiting, director of the Chartered Institute of Taxation. For example, you may have overpaid if you had more than one job and your combined earnings were more than £844 a week in the 2010-11 tax year. Find out how to reclaim at Direct.gov.uk

Get your tax code right

Some people have overpaid thousands of pounds in tax through having the wrong tax code. It’s that figure on your payslip, usually three digits followed by an L, such as ’725L’, and it tells your employer how much to deduct from your pay packet. A 747L code means you can earn £7,475 a year tax-free. Your tax code is adjusted (downwards) for any untaxed benefits you receive from your employer, such as private health insurance. Incorrect codes – there are thought to be millions – often result when people move jobs and incorrect data is passed on.

To check you’re on the right tax code, try consumer champion Martin Lewis’s code checker . You can claim back up to six years’ overpaid tax, although this will drop to four years very soon.

Older people should check they are receiving their higher personal allowance. The allowance rises from £7,475 to £9,940 at age 65 and £10,090 at age 75. But HMRC starts clawing back the additional allowance once your earnings exceed £24,000. It is reduced by £1 for every £2 you have over the £24,000 limit, so if, for example, you’re 66 and have income of £24,500 – £500 over the limit – your age-related personal allowance is reduced by £250 to £9,690.

Claim the cost of your iPad

There are lots of things you can claim as a business expense, but HMRC will only accept what’s reasonable – just because you do some freelance work from home one or two days a week, but work on an employed basis elsewhere, you can’t run the entire cost of your home phone, broadband and computer purchases against your tax bill. But you can claim some.

The key, says Whiting, is “reasonable apportionment”. He says HMRC objects to the phone line rental being claimed against tax when the phone is principally used for private purposes. Don’t even try to claim clothes against tax, unless you have to buy specialist protective clothing for your line of business. Whiting points to the case of a female barrister who tried to claim her court attire, but was refused; HMRC takes the view that you use most clothing for warmth and decency, not for business purposes.

Use your partner

Spouses and civil partners can legally maximise the benefit of each other’s personal allowance and tax band. This only works if one is paying higher rate tax (40%) and the other is on the lower rate (20%) or not earning.

Savings and investments can be transferred between couples to ensure tax is paid by the partner with the lowest tax rate. If you own a buy-to-let or holiday home, the income from letting can be paid to the partner on the lowest tax rate, potentially saving thousands of pounds. Whiting recommends that owners of buy-to-lets think of all the expenses they can claim, such as the cost of visiting and checking up on the property.

Make the most of Isas and pensions

Put any spare money into a cash Isa. This year’s allowance is £5,340 a head, rising to £10,680 for shares-based Isas. A couple who each take out an Isa every year can in five years avoid tax on more than £50,000.

If you or your partner is a non-taxpayer (for example, a student) you can use form R85, available in bank branches, to ensure that interest on savings is paid gross, rather than basic-rate tax being deducted at source. You can also obtain tax relief of up to 50% on contributions into a pension.

Personal finance and money news, analysis and comment | guardian.co.uk

A planned 8% rise was derailed but many commuters will still feel the pain. Miles Brignall looks at how to save

With train fares rising by an average of 5.9% on Monday 2 January, when few of us have had a pay rise, there’s probably never been a better time to take a proper look at how you can cut your travel costs. Following George Osborne’s intervention in his autumn statement, the train companies were limited to that average, rather than the 8% price hike allowed under the formula set by the government.

It’s still an inflation-busting rise and will typically add £250-£400 a year to the price of many season tickets. It has been attacked by passenger groups and commuters alike.

A Northampton to London annual season ticket increases by 6.92% to £4,756. A 12-month season ticket between Diss and London Liverpool Street will cost £6,420, as opposed to £6,060 this year, while an annual season ticket between Basingstoke and London Waterloo rises from £3,580 to £3,792. A super off-peak return from London to Edinburgh rises by £6.80 to £121.60. The train companies can impose bigger increases on some routes if they introduce smaller ones elsewhere.

If you are caught up in this, what can you do? For those who have to be at the office by 9am, five days a week, there’s little option but to buy a season ticket. Be aware that you can buy these for less than a 12-month period. If you are, say, going on maternity leave in 17 weeks’ time, you can ask the booking office for a 17-week season ticket, which will be cheaper than buying a series of monthlies or weeklies.

It can also be worth looking at alternative routes from nearby stations, and even those from the same station. A standard 12-month Bristol to London season ticket this year was £9,432, but if you agreed to travel only on the Warminster and Salisbury route, you paid £6,628.

However, if you reduce the number of days you need to be in the office, or move to off-peak travel, a host of money-saving opportunities open up.

First up is the carnet ticket. These allow you to pre-buy books of 10 tickets, and you typically get a 10%-20% discount depending on the rail company. Chiltern Railways, for example, offers 12 open return tickets for the price of 10, while First Capital Connect offers nine singles for the price of 10. Carnet savings depend on your journeys but can offer big discounts if you make single journeys. Most of the rail firms now offer carnets but often fail to publicise them. They are also available on several intercity routes too, and can be a boon for those who travel two or three days a week.

If you travel after 10am (or can start doing so), a £28-a-year Network Railcard, which covers most of southern England – from Exeter in the west to Clacton in the east – gives a third off most fares. There’s a minimum fare requirement of £13 Monday to Friday, but off-peak travellers into London from, say, Cambridge, could save a fortune with this card.

Another trick is to buy southern England’s cheapest annual season ticket: Ryde Esplanade to Ryde Pier Head on the Isle of Wight, which will set you back £232 next year. This also allows a third off fares in the Network card area, but without the minimum charge. Again only after 10am.

Everyone knows if you book early, you can often get good-value fares – but they disappear fast. Network Rail has to have its timetables in place 12 weeks in advance, and train operators commonly, though not always, release cheap advance tickets at around the same time. If you register, Thetrainline.com ticket alert system will send you an email the moment cheap advance tickets come on sale.

The train companies also do special promotions, and if you travel regularly, it’s worth spending time online looking for the best deals. Remember, if you have to travel last-minute, much cheaper advance fares are available until 6pm the day before you travel.

Split ticketing – buying two tickets that make up a journey – seems to have been tightened up in recent years, but can still give discounts. The often-quoted example is a ticket from London to Penzance where an anytime day return can cost more than £250, but by buying four singles it can be cut to just £70. You don’t have to change trains; you’re just splitting the ticket.

This is particularly useful if part of your journey is a peak fare and the rest is off-peak. The Split Your Ticket website can help, but you may need to find your own deals on National Rail’s site.

Personal finance and money news, analysis and comment | guardian.co.uk

Ryanair says the £6 charge per passenger per one-way flight relates to costs associated with its booking system, and isn’t a payments surcharge

Ryanair has defied the government’s move to ban surcharges on payments to airlines and other firms by saying it does not charge its passengers any credit or debit card fees.

Airlines, cinemas and holiday firms will be stopped from imposing millions of pounds in “hidden last-minute” charges on internet bookings. Treasury minister Mark Hoban said the government is prepared to legislate to prevent airlines and other businesses from imposing hefty charges on credit and debit card bookings that are difficult to detect.

However, the budget airline said in a statement: “Ryanair, the UK’s favourite airline, today confirms that it does not impose any debit or credit card fees.”

Ryanair claims instead to charge an “admin fee” per passenger per one-way flight. This £6 charge is levied when a passenger comes to pay and can only be avoided by using the airline’s own prepaid Mastercard. It states on its website that this charge “relates to costs associated with Ryanair’s booking system.”

The charge means that, for example, a group of 14 people travelling together would pay £168 extra for their flights, despite the fact that only one payment is processed for the entire group.

John Holmes, principal economist at Which?, who helped compile a report into excessive card charges which formed the basis of a supercomplaint to the Office of Fair Trading earlier this year, said the Ryanair reaction was typical of the airline and would be dismissed by the government.

“The only time the airline charges that £6 admin fee is when a passenger presents a payment method to the airline,” he said. “The principle of this government legislation is about those charges that are practically unavoidable. You cannot avoid paying for a flight so you cannot avoid the charge.”

Which? says an airline incurs costs of between 8p-20p on debit card transactions. Those rise to between 0.88% and 1.8% of the transaction for payments by credit card. It means a passenger paying the average return fare of £136.09 should pay a minimum of £1.20 and a maximum of £2.45 for a credit card booking.

In June 2011 the OFT called on the government to ban debit card surcharges, but said companies could still impose credit card transaction fees as they are more costly to process, provided they meet minimum transparency requirements.

However, the Treasury has taken this a step further and decided to ban “excessive surcharges” on credit and debit cards by most “retail sectors”. Ministers could have opened themselves up to a judicial review if they had just targeted airlines. The ban is to be imposed from the end of 2012.

The ruling will put the UK ahead of many other EU countries, all of which would have to ban the same fees from 2014 under the Consumer Rights Directive.

However, it does not stop retailers imposing other charges. Ryanair charges 15 different types of fee, including those for reserved seating, priority boarding and reissuing airport boarding cards, while ticketing agency Ticketmaster charges a service charge and order processing fee for tickets to sporting events and concerts.

Government agencies, including the DVLA, will be allowed to continue charging card fees. The DVLA has a £2.50 credit card charge for anyone renewing their tax disc.

“This ruling is trying to tackle excessive surcharges. My understanding is that the DVLA charge only covers costs,” a Treasury spokesman said.

Mark Hoban added: “We want consumers to be able to shop around. They have a right to understand the charges they may incur up front and not be hit through a hidden last-minute payment surcharge.

“We are leading the way in Europe by stopping this practice. The government remains committed to helping consumers get a good deal in these difficult times.”

Which? executive director Richard Lloyd said: “The government’s decision to ban ‘rip-off’ debit and credit card surcharges is a huge victory for consumers. Given that airline passengers alone pay more than £265,000 a day in card surcharges, businesses shouldn’t drag their feet over this. While the law will come into force at the end of 2012, we want companies to be upfront and fair over card charges today.”

Melanie Johnson, chair of The UK Cards Association, the service company for the UK payments industry, said: “This is a terrific Christmas gift for consumers. The UK Cards Association fully supported Which? and the OFT on this issue and we are delighted the Treasury has decided to bring into line those few businesses who continue excessively charging us all for using our cards.

“The charges in no way reflect the true costs of processing the transaction, are rarely up front, and could not be justified”.

Personal finance and money news, analysis and comment | guardian.co.uk

Car hire customers have been warned to take extra care when renting a vehicle this Christmas. What looks like a cheap deal could end up costing you hundreds of pounds

Adverts in the national press were this week promising “unbeatable” deals on car hire this Christmas. The company behind the ads, a new name called 118 Car Hire, boasts that it has a “huge range of cars available,” with “affordable rates guaranteed,” plus free delivery and collection.

But is this deal too good to be true?

Car hire is an area where consumers need to tread carefully. In the run-up to Christmas last year, a sizeable number of people were duped by a firm trading as “Rentmac,” which had advertised in the Guardian and other publications, promising quality vehicles at “Xmas special” bargain rates. Many people handed over hundreds of pounds for cars that never materialised.

This week, the trade body for the UK car rental industry warned the public to “take extra care” when confronted with cheap deals for Christmas car hire on the internet, or in the press.

The British Vehicle Rental and Leasing Association (BVRLA) says it believes that “similar scams are being planned this year, and [it] has already made contact with police and trading standards over one potential threat”.

The BVRLA declined to give further details, but said people need to be wary and take some simple steps to ensure they are dealing with a reputable company.

Guardian Money has not received any complaints about 118 Car Hire, but its ads – which have appeared in the Times, Metro and the London Evening Standard during the last few days – caught our eye because the deals look very attractive. It is offering a VW Passat 2.0 TDI for £32 a day, which is around half the price one might expect to pay normally, while the website (118carhire.net) lists a number of “sensational” two-week Christmas deals (19 December to 2 January), starting at £224 for a VW Polo or Vauxhall Corsa 1.2.

Intrigued, and not being familiar with the company, we decided to look under the bonnet. A Companies House search revealed that the firm came into being in September 2010, and changed its name from Abbeyworth just over a month ago.

We decided to test the online booking system. Unlike the majority of car hire companies, the 118 website didn’t ask for the driver’s age. Many car hire firms either won’t hire out vehicles to drivers aged under 25, or will load the price. We selected a VW Polo and were quoted £60 to hire it between 22 December and 25 December (ie, Christmas Day). It was to be sent to the reporter’s home and collected from there. After entering our details, a message came up saying that the company would be in touch shortly to confirm our booking. We did not receive the instant email confirmation typically sent after an online purchase. The company did ring back the next morning and left a message, but we were unable to get through on its 0845 number.

The address given on its website, and at Companies House, is 120 Bath Road, Middlesex – a short bus ride from Heathrow airport. As 118 Car Hire states that customers can pick up and drop off vehicles at Bath Road, we decided to pay them a visit. That address turned out to be a five-storey office block, called Capital Place, with a small car park. A large sign outside gave a web address, which clicked through to a company called Avanta which explained that 120 Bath Road was a “serviced office centre” offering “the perfect location for … businesses needing London office space”. The address also offers “virtual offices” costing from £60 a month.

The company’s website says it offers 21 different models, but when we arrived, we could not see any evidence of a fleet of vehicles.

Posing as a customer arriving to pick up a car, we were told by a receptionist that there was no one in from 118 Car Hire today. When we asked when they were last in, the receptionist told us: “They were here at the start of the week.” When we asked about the firm’s fleet of cars, she said the company was allowed to park its own vehicles there, but not hire cars for clients.

According to Companies House, the director is Roger Doyle, whose address was given as Onslow Gardens in London’s South Kensington. We visited the address, which was a property split into several flats, and spoke to two residents who had not heard of Doyle.

The most recent adverts for 118 Car Hire appeared in the Times and the free Metro newspaper on Tuesday. A source at Associated Newspapers, publisher of Metro, told Money it was “investigating whether this advertiser is bogus or not”.

We have been unable to get through on its 0845 number, as it was constantly engaged. We emailed on Wednesday, explained we were writing an article and posed several questions. It emailed us the next day, saying: “Thank you for the offer for advertising but we have furfilled [sic] all our advertising needs for 2011, We will be intouch [sic] in the new year to arrange our new campaign. Again many thanks and have a good christmas and new year! Kind Regards Peter Nolan 118carhire ltd.”

The BVRLA this week suggested some tips for customers looking for “safe and hassle-free” car or van rental:

• Never hand over cash or accept a demand to pay by bank transfer. Most reputable rental firms will only want to accept credit/debit card payment.

• Make sure the company is operating from a bona fide commercial premises, not a PO box or virtual office, no matter how prestigious the location sounds.

• Make sure it actually owns and operates the cars it is offering.

• If the price or service being offered seems too good to be true, it probably is, and you may well end up out of pocket and disappointed!”

• Only use a BVRLA member. “Seeing our logo is a sign that you are dealing with a reputable company that has been vetted and operates to a professional code of conduct.”

Personal finance and money news, analysis and comment | guardian.co.uk

Suspicions were raised when a customer discovered he had ‘agreed’ to terms and conditions on a loan when he insists he hadn’t

How would you feel if you discovered your high street bank had forged your signature on a document? It sounds fanciful, or even in the realms of conspiracy theory, but this is the situation Phil Morley has found himself in – and it’s not just him claiming he’s been the victim of foul play. NatWest has admitted, in writing, that its own handwriting specialist “has confirmed they believe Mr Morley’s signature was forged”.

Guardian Money has seen a copy of a letter from the state-owned bank, in which it says that “no one [at the branch] has admitted to forging the signature,” but “internal action” has been taken against a member of staff involved with the case. The bank has apologised “for any upset”. But is an apology enough?

Morley, who lives in Kent, believes it happened to make it look like he had agreed to the bank’s terms and conditions when, in fact, he hadn’t.

The 44-year-old had taken out a NatWest personal loan, but then a mysterious second loan agreement, carrying his fake signature, turned up. Some Money readers may recall that NatWest’s parent group, Royal Bank of Scotland, has “form” when it comes to phantom loans and recreating paperwork.

Three years ago, we reported on the case of RBS customer Paul Walton, who turned detective after he was sent a copy of his loan agreement that he knew wasn’t the genuine article. During his investigations, he obtained an internal RBS memo, which boasted that the bank had introduced procedures allowing staff to “recreate” agreements that it had lost (this might sound iffy, but is not against the law).

At the time, we wrote: “Surely one of Britain’s biggest banks isn’t forging documents? Of course not – but it is controversially ‘recreating’ them.” Now a case has emerged where it seems forgery has taken place.

Intriguingly, this isn’t the first time this year that RBS has had to deal with allegations of signature forgery. Last month, the Sun published an article which said the bank had suspended an employee accused of doing just that to win business. That case involved a customer in Bournemouth who discovered his account had been “upgraded”. In May, the same newspaper claimed RBS had let a banker resign with a clear reference, even though he had forged customers’ signatures.

So, what’s going on at NatWest/RBS? Should customers be worried? The bank is saying very little.

Morley, who lives in Faversham, has been a NatWest customer for more than 20 years. On 4 September 2007 he went to his local branch and took out a £25,000 personal loan to consolidate his existing borrowings. He says he was advised to take out payment protection insurance (PPI), which he wasn’t keen on, so the staff member told him he would “make the adjustments later on and say you’ve cancelled the PPI”. Morley was happy, and everything went through.

Then, in early 2009, Morley was made redundant, and he approached his creditors to see if he could come to a short-term arrangement while he sorted himself out. He says the others agreed, but he had to chase NatWest. Morley felt he was getting nowhere, and was also left puzzled when bank staff mentioned terms applying to the loan that he didn’t recognise, so he asked them to send him a copy of the agreement.

When he received it he knew, at once, something weird was going on. “One, I didn’t recognise the signature. It looked like P Morley but it wasn’t my handwriting. It was blatantly different. Two, it wasn’t anything like the same terms to the loan I had. Three, it was countersigned by hand for 17 September 2007 – a date when I was in France.”

Morley says he repeatedly quizzed NatWest about this mysterious second loan agreement, and the signature.

“I said … I haven’t agreed to those terms and conditions. I didn’t sign for that loan. They kept coming back saying the loan is still outstanding, and we would like you to call us to discuss ways of settling it.”

Then, this summer, the Financial Ombudsman Service (FOS) sent him a copy of a letter that they had received from NatWest in March. This, from one of the bank’s customer relations managers, says: “With regards to the second loan agreement dated 17 September 2007, our handwriting specialist has confirmed they believe Mr Morley’s signature was forged. [The bank's case investigator] has been investigating the incident with the member of staff from the branch.

“No one has admitted to forging the signature, however the member of staff involved has admitted that he drew the funds down before the agreement was signed … The bank has taken this matter seriously, and internal action has been taken against the member of staff.”

So what on earth happened? RBS won’t comment on Morley’s case, so we have to rely on the letter’s somewhat confusing account. It points out that Morley doesn’t deny he applied for the original loan, adding: “The original agreement would have been drawn down with the repayment protection [PPI] and, knowing this was not required, the second loan application was then drawn down by the member of staff to exclude this. This loan was then used to pay off the initial loan … Mr Morley was then getting the loan he applied for, and the member of staff would have two loans recorded against his name.”

The letter adds: “It is regrettable this has occurred and my sincere apologies to Mr Morley for any upset this has caused … However, the bank still holds the opinion that he has benefited from the loan funds received.”

It says NatWest has refunded him £612 to cover charges and interest as a goodwill gesture.

Morley says NatWest has never said anything directly to him about his signature being forged. Unhappy with how the matter was being handled, he decided to pursue NatWest in court. He says the case is currently “on stay” at Canterbury county court, as the bank has indicated it will be proposing a settlement. He reported what happened to Kent police, and it is understood the matter is, at this point, being treated as a civil dispute.

Asked why he thinks the bank employee forged his signature, Morley says: “To tidy up the paperwork. The audacity … to front a document to me that has clearly been forged.”

As to what he would like to see happen, he says he wants “all parties put back on a level footing,” plus a proper apology. It is understood the bank takes the view that a five-figure sum is still owed on the loan.

However, Morley’s view is that “there’s not a penny outstanding,” bearing in mind what the bank has taken in repayments, bank charges and interest over the last four years.

We put a number of questions to NatWest/RBS, which it declined to answer. It issued this statement: “Internal fraud is an industry-wide issue which we take very, very seriously. In this instance we do not have a comment as the customer has indicated he will pursue further legal remedies.”

Personal finance and money news, analysis and comment | guardian.co.uk