This Week in Property: The Latest News (27th August 2021)

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

Sensible Student option

I’ve just read that there are now 3 building societies offering 100% mortgages to students (up to £400k) such that they can buy a property and rent out the spare rooms to student friends. What a brilliant idea!

I’ve known a few very successful property investors start their investing portfolio in this way and now the fund providers have recognised what an opportunity this is for both them and the student involved.

The student will need a parental guarantee and the interest rates are higher than average at over 4% but it’s a great opportunity. Not all students want to be living in poverty and some students are keen to be financially secure and to take responsibility for their financial future particularly when the job market can be perilous.

There’s no better way to start that journey and I bought my first house whilst at University myself and that was the start of a very successful property investing career which still enthuses me today. Hopefully many students will take up this offer and educate themselves both in their academic studies but also in their property investing career and safeguard their money future with a choice and two strands of income!

Financial Education Rant!

There’s an interesting rant in the media this week from Lord Lee of Trafford who has tabled a question in the house of parliament about financial education in share trading, bitcoin and cryptocurrencies.

Lord Lee wants the TV companies to work with Ofcom and the Financial Conduct Authority to provide financial education programmes in these topics – and what a great idea!

It’s always been a bug bear of mine that TV companies are ‘allowed’ to make programmes about property make overs for instance without making the viewer aware of pitfalls and I’d love to see a decent series of Tv programmes educating the viewer on all financial matters – not just share trading.

There’s many other basic topics that we need first: how to manage debt, how to control financial flows and how to budget for instance. These are three of my Financial Five a day topics which need to be taught in schools and throughout life. The topic of share trading would be covered too but there’s many things we need to understand before we get to cryptocurrencies!

It could be a great TV series taking a family along a ‘journey’ to financial awareness and it could be fun, informative and would help people understand money so that they could take more responsibility for their financial affairs and save the government loads of money over time as people relied less on government benefits and more on themselves.

I’d love to do it so if there’s any Tv executives reading do get in touch!

Britain Bonus

We know that the pandemic has created lots of changes in the cost of products and services and none more so than the cost of a getaway. We accept travel is difficult and consequently people in the UK are resorting to the staycation and having their annual holiday in Britain but they are facing increased costs of up to 40% compared to a similar UK getaway holiday in 2019.

A one night stay for two in Brighton currently costs £206 on average compared to £109 in 2019 (a rise of 89%) and other similar rises are seen across the country with Lyme Regis up by 74% and in the Channel Islands up by 76%, according to research by AirDNA.

Providers of these self-catering type of holiday units are claiming that the increased price is due to extra cleaning and sanitisation required but I don’t believe that accounts for an extra £100 per night and if we compare the UK to other countries where the pandemic is the same (and presumably cleaning and sanitisation is the same) we find that a week in Brighton costs £1,131 compared to Nice in France at £1,085 and that includes the flights. Lake Windermere costs an average of £2,424 for a week compared to Lake Garda in Italy at £802 (again including flights).

It seems that the UK self-catering industry are increasing prices due to increased demand which may not be the same in France or Italy and in some sense I can understand that. However, if you are one of the people who are wanting a holiday you have to choose between an increased price in the UK or an increased risk and cost for tests etc that you incur when travelling abroad. Tough choice and I think I’d go for the Britain Bonus option – or maybe opt for staying at home and creating a holiday there.

Buying is Better than Renting – Who Knew!

Occasionally a piece of research comes out that just confirms the obvious and one such piece came out this week when the Equity Release Council confirmed that owning your home will make you £326,000 wealthier over a 30 year period than renting even before house price growth is included and that’s due to mortgage payments in the main being less over time than rents.

It’s a sad fact that most people ‘earn’ and gain more from their own home than they ever do from working for a living and most people now understand what a powerful investment your own home is – and how tolerable a mortgage is.

My parents hated owing money and hated their mortgage but for most of us we can see that a mortgage is cheaper overall than paying monthly rent and of course you get an asset at the end of the mortgage which you can then sell or live off so it gives you financial flexibility.

This is all welcome news and although the research is obvious it’s great to have the confirmation from an external body and to have the relevant figures.

Now I’m thinking if one property makes me wealthier what if I bought two properties – that would give me even more!

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