This Week in Property: The Latest News (30th July 2021)
Take a look at what our CEO Gill Fielding has to say about this week’s property news…
Poacher turned gamekeeper
It’s just been announced that the new chief inspector for schools in Wales, Owen Evans, was once expelled from school for putting laxatives in teacher’s cakes. So Owen has gone from rebel to society stalwart and that’s absolutely fabulous as it just shows that anything is possible and we should never give up – either on ourselves or on others – as there’s always a chance that life or our circumstances will turn around if we keep at it. Perseverance pays.
This is true for most areas of life and it’s certainly true for money – it doesn’t matter how late – or how small – your start with financial education and control may be but as soon as you start then your finances start to turn around – and then even if you fall off the path for a while – you can still get back on track and make a difference. Money control is best learned small – although it’s daft on one level to say ‘if you look after the pennies then the pounds will look after themselves’, there is some truth in that because the controls and organisational skills learned with a few pennies will hold you in good stead when the pounds start to roll in. And as for Owen Evans he clearly learnt a lot about education as a child and perhaps how it didn’t serve him well and he’s managed to use that experience for good. Sadly with money we don’t educate children properly in financial matters – I wonder if Owen could turn his head to that in his new role?
Estate agents rip off
Now in all honesty we don’t need yet another reason to be fed up with estate agents but I’ve found one! There’s a new property website called ViewRabbit which is the first pay to view website and they intend to charge £30 for a property viewing – and this is apparently meant to weed out no hopers and no shows. Well welcome to my world – and the world of every other small business owner. Shops get no hopers all the time and in my business of educational events we get no shows all the time and always have – window shoppers and tyre kickers are in every business so why not estate agency? Of course, I understand why they’re doing it:
At the moment we have a huge excess of demand for very few properties on the market and they’re trying to make sure that every viewing is a potential sale from a serious potential buyer but times will change and at some stage there will be a surplus of properties and all the estate agents will be begging us to attend viewings (with free cups of tea and other enticements!). The current market is just part of the standard business cycle of the property market and a business within that can’t change its pricing model every time there’s a movement. Estate agents really are in a world of their own but fortunately I can’t see the public tolerating this viewing charge and if the agents persist with it I can see a rise in private sales platforms so the agents will be cut out of the transaction altogether. Idiots!
It’s good news week!
I’m old enough to remember a song by Hedgehoppers Anonymous called It’s Good News Week – a catchy little number so go and have a listen. Anyway, I was reminded of that this week as I read the news – because it’s definitely good news week. Covid cases are dropping day by day, and all the economic forecasts are positive. The IMF have upgraded their economic forecast for the UK to 7% which is predicted to be the fastest growth for any G7 country which is miraculous. This is partly because of the strength of our economy but also due to the success of the vaccine rollout which indicates that we will be back to normal (whatever that is) in fairly short order.
Indications are that consumers are out shopping and going to bars and restaurants in their droves desperate to spend their pent up savings. A survey by EY suggests that the UK economy is growing at its fastest rate for 80 years. Now that’s good news – and so is the latest news for the property market which says that UK property prices have tripled in the last 20 years according to Zoopla research. Apparently, an average property has risen by £163k since 2001 and that’s despite the property crash in 2008. And as a homeowner and property investor I can only say that’s brilliant news. It’s definitely Good News week for me!
The news today is that Tesco’s is going to close all its customers current bank accounts after it has decided that Financial Services are not for them. The announcement comes after Tesco’s sold off their mortgage book of customers two years ago and after M&S also announced that they will close all their customers current accounts in August. It seems size isn’t necessarily a guarantee of success and it also shows that sometimes businesses need to stick to their basics rather than venturing into unknown territory.
Although I have to say that although this ‘failure’ in providing financial services is quite public, it is just what small businesses do all the time with what I call the ‘core and explore’ strategy. Most small businesses start with one or maybe a handful of products and do fine with those core products or services and then want to expand and so they explore other potential areas of business. In some cases this exploration results in a discovery of something momentous and business changing and in many cases it results in nothing but it’s the only way that businesses can really expand beyond their core activity which may be limiting in sales and profits. Small businesses do it all the time and yet when a larger business does it – and fails – it makes headlines but I understand what Tesco were trying to do but it was just a step too far for its customers who apparently don’t want a credit card with their croissants or a mortgage with their mango!
One of my go to websites Is the Your Money page of the BBC and I’ve just clicked on it to see the two headline pieces – alongside one another are: Housing market cools as stamp duty break withdrawn – and then – House prices at new high as buyers seek more space. Now if you read the two pieces they aren’t exactly contradictory but at first glance you might think they are and that’s the problem for people wanting to invest in the property market – the media use the property market as their default topic for articles and headlines (well that and the weather!) and in usual media style it’s the drama that they lead with not the normal regular stuff. I personally don’t mind it really and I know why they do it – or why they did it traditionally – because drama sells news and nothing hits the spot like a bit of property news as its one of the nation’s obsessions.
Anyway I digress. The issue I have is that inexperienced investors use these type of articles as their basis for investment knowledge and that’s scary. The newspaper or web site are not intending to educate or provide financial guidance – their remit is to sell papers and clicks whilst the property investor’s aim is to find out the detail of what’s going on in the property market. They are not the same aims nor are they the same piece of news so potential property investors beware! Before anyone invests in property they need to understand how the market works and why it moves and you won’t get that sort of information from the general mass media – you need specialists. Property investment information will always be at a premium – a bit like the market itself at the moment.
Only perfection wanted
I’ve been enjoying the Olympics this week and I watched the final of the Synchronised 3 m springboard diving where two people do amazing twists and twirls in harmony off a bouncy ironing board device. It’s tricky and one of the pairs from the Russian Olympic Committee (which sounds like a duo from the local council) had a calamitous dive. One man did the ‘normal’ and bounced into the air, did several somersaults and landed like a pin into the water whilst his partner got too close to the end of the board, fell off, did manage to complete several somersaults but then entered the water in what I can only describe as the downward dog pose. I applauded. It was a great dive, perfectly executed by one and perfectly entertaining from the other. It was the best dive of the day for me but it scored zero. Absolute zero! It turns out it was a failed dive because one of them had not entered the water hands down first. What a bizarre rule but understandable in the event. I thought it was harsh because they did more or less do it but sadly in some aspects of life if you don’t comply to the rules you don’t score anything or succeed. There are no points for getting close.
Financial Services and money matters are a bit like that. With many aspects you need to get it exactly right and I’m thinking partly about the property investing world and the gas safety rules, the EICR report, HMO licensing, fire regulations and so on. They all have to be exact and right otherwise you get a hefty fine – there are no bonuses for nearly doing it. Whatever we do in life we need to understand the rules and decide whether we’re going to comply or not. If you want to be an artist then rules may not matter so much but if you want to be a property investor or an Olympic diver clearly the rules are paramount. You just need to make sure you know the difference and know what applies to your activity and I dearly wish there was an Olympic medal for entertainment value as the Russian pair would win hands down for me – or maybe that’s the wrong phrase because he wasn’t hands down!
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