CASHPOINTS: Consumers bring car prices down

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The Alliance and Leicester's latest car price index has revealed that car prices are at last falling. According to the report's findings, year-on-year new car prices have fallen by 1.3 per cent with 11.9 per cent for nearly new cars.

Steve Fowler, of What Car? magazine, believes that these price reductions "are solely a result of the fact that people are not buying cars at the moment".

As a result of the recent controversy over "rip-off Britain", an increasing number of British consumers are travelling to continental Europe to buy new cars at lower prices.

Questions surrounding the cost of cars in Britain have led to the Competition Commission investigating such claims. It is due to present its findings to Stephen Byers, Secretary of State for Trade and Industry, on 16 December. His report is then expected to be released early in the New Year when prices could come down further as a result.

Buying to let

The climate of low interest rates and increasing house prices is leading a growing number of people to look at property investment.

Mortgage lenders are offering loans specifically geared to those buying with the purpose of renting out. It is now possible to borrow up to 75 per cent of the house value. With interest rates so low, the repayments are affordable at current rent prices.

For example, for an interest-only loan at a discounted rate of 6 per cent on a property worth pounds 59,950, the monthly payments are only pounds 224.81. This figure is easily redeemable considering that a rent of pounds 550 a month can be charged.

If house prices continue their upward trend, buying to let appears to be a winning option - as long as you can find a tenant, of course.

Damgaard down

Damgaard, the Danish computer software company, announced a profits warning on Thursday, only six weeks after it was floated on the stock market.

Goldman Sachs had recommended investment in the company but, following a 50 per cent drop in profits, it has cut its market rating from "market outperformer" to "market performer" rating.

Since the end of October, the sales performance has dropped due to a low level of incoming orders resulting from Y2K fears.