This Week in Property: The Latest News (17th December 2021)

Take a look at what our CEO Gill Fielding has to say about this week’s property news…

Christmas costings….

I’m always encouraging people to budget for their expenditure so I went looking for the cost of a Christmas lunch today so I could plan that in my cash flow and it turns out that the cost of a Christmas lunch is now £27.48 for a family of four – although I’m sure I spend a lot more than that. However even this average cost has risen by 3.4% since last year as the cost of a frozen Turkey is now 7% more (at £12.46) and potatoes and cauliflower are 5% more. And now I come to two contentious items – both of which I love but I know that’s not always the case. Both Christmas puddings and brussel sprouts are also up by 5%. That’s an interesting point as I know not all people like sprouts – or Christmas pud so now you have choice to reduce the overall cost by omitting those items – and cheer yourself up in the process. And that’s really the point of budgeting – it allows you to make adjustments and reduce costs to suit your particular taste and preferences and you don’t have that choice if you’re not looking at it and making a plan. Now obviously with food items like this you just don’t buy them and you save the money but with many items we glibly click to buy stuff without really looking at all the component parts or bits included and we often end up with some items we don’t want or need and we overspend when we don’t need to. So check the details and make a plan before you buy and save some money and unnecessary angst when you have to feed the brussel sprouts to the dog!

Mum please can I play with my financial future?

I read a fantastic piece in the media this weekend about Lego. Now most of us only think about Lego when we need to find a present for a birthday or Christmas but apparently second hand Lego sets increased in value by 11% per year between 1987 and 2015 compared to a miserly 9.6% growth for gold over the same period. But there are two issues with this as an investment: firstly, the boxes have to be unopened – so you can’t play with it – and secondly you need to be careful about the specific type of Lego. Apparently the price increases after Lego stop selling a particular box so in a way you’re hoping for unpopular items as there will be fewer of those in the future market place and the price will rise more. As usual the price is determined by demand and supply but what a great gift for your nephew or niece for Christmas – a potential pot of money as long as they don’t actually open the present itself! That might make for a fraught Christmas visit but they may appreciate it in the long run – good luck with that!

What are you investing in?

If you ask your circle of friends and family what they’re investing in, I bet the vast majority will say that they don’t invest – but in all likelihood they do without knowing it! That’s because the vast majority of all money in funds aiming to provide pensions are invested in shares and sadly people don’t realise that. Apparently only 1 in 4 women understand that a pension fund invests in shares and 44% of men and only 33% of people approaching retirement (in the age bracket 45-54) understand the link. It is probable that with initiatives like auto enrolment, the number of people invested in pension funds – and shares – has never been higher and yet the majority of people don’t bother to find out what that means and if the stock market crashes – so does their pension! It saddens me that so many people don’t understand what is happening to what is probably the most important part of their finances and their security in older age but it’s this lack of knowledge and education that we need to address and teach some fundamentals in schools, to young people and every person that needs to know – and that’s all of us! Many people will be daunted by that possibility and feel like it’s a scary topic but it can be simply taught and the sooner we learn the better.  Do your children a huge favour and get them some stocks and shares knowledge for Christmas!

Where have all the houses gone?

I’ve just read that the number of properties for sale has fallen to the lowest level since 2004. Figures from Rightmove suggest that on average each estate agent has just 14 properties for sale which is half that of a year ago. So where have all the houses gone? Partly the answer has to be – there aren’t any! We have failed to build new properties for many decades now and the failure of that is beginning to take its toll on our underlying housing stock. Added to that the pandemic has severely restricted building, relevant labour force and building supplies. Then we also have the pandemic itself which has led to many people just staying put and waiting until the pandemic eases before they put their house up for sale – also many people don‘t like the idea of strangers trapsing through their house during Covid. It’s a perfect storm of lack of supply and house prices will only rise as a result. Mind you I suspect that many people will see 2022 as a new start and put their house up for sale in early January. It would be lovely to see that happen and a more normal housing market next year.

Property Investing….it’s not as easy as it looks!

We’ve had the news this week that Purplebricks, the online estate agency and property managers have lost about 20% off the value of their shares and their business due to failures to comply with the Housing Acts. It all boils down to tenants deposits and the letting arm of Purplebricks failed to provide the correct information to tenants. There’s no suggestion of any wrong doing but the error resulted in an approximate £15 million down value in the company – that’s one heck of a costly error and I’d hate to be the team of people responsible for it. And it’s a stark reminder that property investing and lettings aren’t as easy as most people think. I’ve lost count of the number of people who have asked me to tell them about investing in a ‘phone call’. That can’t be done! To learn how to be a professional investor where you are fairly sure you won’t miss things or get it wrong, takes a couple of years of part time study and it isn’t something to be taken lightly – just ask Purplebricks. Hopefully any individual error won’t cost £15 million but any financial loss or fine or penalty isn’t necessary as long as you get the right education and knowledge and I’m happy to welcome any member of the Purplebricks team on our property courses at any time.

If you would like to find out more about investing in property, come along to our 3-Day Property Investing Training.

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