Rip-off News round-up. Our pick of the last week's media (Thu 4th Sept)

Gas costs you THREE times what the energy firms pay: Millions of households being ripped off after wholesale cost halves in six months

Wholesale costs have halved in six months yet bills have not fallen. British Gas customers are paying between £1.35 and £1.50 per therm. Its parent company, Centrica, announced profits of £900million for the first six months of the financial year. Yet the wholesale gas price paid by suppliers has hit a four-year low of less than 42p per therm, down from 72p in December. The other Big Six energy companies – nPower, EDF, SSE, E.on and Scottish Power – charge between £1.21 and £1.37 per therm. One therm of gas is enough to power a domestic boiler at full output for almost two hours. British Gas spokesman Tim Cowen said: ‘The wholesale cost of energy is now less than half the bill, which partly explains why the wholesale price can fall, but overall prices don’t... We also have other costs, such as regulated transport and distribution costs, that are rising.' The boss of one of the big six energy companies, nPower, has said Labour’s promise to  freeze energy prices if they win next year’s election is a factor in his company not reducing its prices. But Labour energy spokesman Caroline Flint rejected claims that her party’s pledge is to blame for energy firms keeping bills high. ‘It’s always the same old story – when wholesale prices go up, energy bills go through the roof, but when they fall consumers never see the full benefit,’ she said. The Competition and Markets Authority is holding an inquiry into the energy supply business. DAILY MAIL

Welcome to Copeland in north-west England: the last place where house prices are less than three times the average national salary

According to a study by the Trade Union Congress, back in 1997 one in five local authorities were deemed "easily affordable" with the cost of a home below three times earnings. But the combination of the housing market recovery across the UK and low wage growth since the recession means that areas which were traditionally accessible such as Oldham and Rotherham are now out of reach for many first-time buyers trying to secure a foothold of the property ladder. The value of a home in Oldham, near Manchester, was 2.73 times salary in 1997, but is now up at five times earnings. Rotherham was 2.78 and is now also at five times salary. House prices in Copeland, which lies between the north-west coastline and the Lake District, are 2.87 times the average salary, Barrow-in-Furness is the second most affordable area with Burnley third, the analysis showed. The study also revealed that 84pc of the UK now boast house prices at more than five times the local salary. TELEGRAPH

London and south-east grab the lion’s share of Help to Buy

7,501 buyers in the south-east and 2,837 in London have taken out either an interest-free loan on a new build home or used the mortgage guarantee that allows them to buy a home with only a 5% deposit. The popularity of the scheme in the south-east pushed the north-west into second place, where 6,180 buyers have completed a purchase. More than 48,000 homebuyers have used the scheme since its launch in October 2013. The scheme, it is open to all homebuyers regardless of their income, and can be used on properties costing up to £600,000. The Treasury said the scheme had allowed first-time buyers to access the housing market at a time when mortgage restrictions have locked many of the out. “Out of a total of 48,393 Help to Buy completions to date, 82% have been made by first-time buyers,” it said. The chancellor, George Osborne, added: “Help to Buy is working exactly as we intended. It’s helping first-time buyers on to the housing ladder. It’s a key part of our long-term economic plan, which is supporting hard working people to secure a better future for their families”. Critics of the mortgage guarantee element of Help to Buy warned when it was launched almost year ago that it would push prices in London and the south-east higher unless the government found a way to increase the supply of homes coming up for sale. GUARDIAN

London renters trapped in £1,000 a month 'rabbit hutch properties'

An increasing number of landlords are boosting their returns by splitting family homes into small studio flats, or even smaller living spaces which letting agents have dubbed "semi-studios". Recently buy-to-let specialist firm Platinum Property Partners suggested that an investor buying a £300,000 house could more than treble their returns by converting it and letting to separate tenants rather than a family. Spending £12,000 on converting the home into studios, said the lender, could generate rental income of £37,800 compared with £17,940 they would make from a family let. The result is a growing number of tiny spaces to let, some barely bigger than the recommended minimum. The Housing Act states that a studio flat need only be 110 sq ft – say 11ft by 10ft – to house two adults, while a single tenant can be accommodated in 70 sq ft – a room just 7ft by 10ft. A search of rental websites yielded several examples of rooms where a "mezzanine sleeping area" had been erected - in practice a large shelf, usually little more than a metre from the ceiling, with room for a mattress – making the room large enough to let to a couple. One home in west London, being marketed as a "dynamic studio flat" and available to rent for more than £1,000 a month, has a main living space measuring 9ft 6in by 9ft 3in, or just under 88 sq ft. In another nearby tenants must cook, eat and sleep in a space 10ft by 8.9ft. In 2012/13 London councils estimated that there were 184,878 homes with multiple occupancy (HMOs) in the capital, up by 20,000 on one year previously. Some London councils are acting to clamp down on conversions, with Haringey in north London recently extending rules on houses in multiple occupation to Tottenham to tackle what it described as an abundance of HMOs springing up in response to an increased demand for cheap, privately rented accommodation. GUARDIAN

Banks to reopen 2.5m PPI claims after FCA inquiry

Banks and card companies will reopen 2.5 million PPI mis-selling complaints amid claims of underpayment and rejection of compensation. The Financial Conduct Authority (FCA) said that firms would look again at cases in 2012 and 2013 where claimants could have been treated unfairly. One expert, commissioned by the BBC, estimated that underpayments could have hit £1bn. The 2.5 million cases are now being reopened because the FCA noticed a sudden dip in the number of complaints being upheld and leading to compensation. Payment protection insurance (PPI) was designed to cover repayments, in the event of redundancy or ill-health, but was widely mis-sold. A huge programme of compensation was set up, with financial firms now having handled more than 13 million complaints since 2007. The latest figures show that £390m was paid out in compensation in June, taking the total amount of redress in three years to £16bn. Seven out of 10 claims of mis-selling of PPI have been upheld in the customer's favour. About 3.2 million letters have been sent to people believed to have been mis-sold PPI but who have not submitted a compensation claim, with another two million still to be sent out. BBC NEWS

Consumer borrowing jumped in July, says Bank of England

It is the highest figure since March this year, and a big jump on the figure for June. Consumers borrowed £1.1bn on credit cards and through unsecured loans in July, compared with £655m in the previous month. Borrowing on credit cards alone more than doubled over the period. But the monthly figures are volatile and can depend on the weather. The fact that consumers are prepared to take on more loans may be a sign of greater consumer confidence. However, it could equally be that people are having to borrow extra cash to cover their basic needs. And with borrowing on the increase, more consumers will be vulnerable to interest rate rises. BBC NEWS