This Week in Property: The Latest News (3rd December 2021)

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

Black Friday fallout….

I was reading this week about what people bought in the Black Friday ‘sales’. There was a quote from one man who said “Every year, whether you need one or not, you look for a TV,”  and he looks for “Whatever has the highest percentage off,”. Am I missing something here? Why does he need a new TV every year? And what is he doing with all the old ones? It scares me that they’re going into landfill and they will certainly be in landfill long before they’re ever paid for if he buys them on a standard credit card. For example a £1,000 TV bought on a credit card and paid off with only the minimum balance on a standard card each month will take nearly 30 years to pay off and then there’s next year’s TV and the year after and the year after… this type of behaviour is enough to keep people in debt for their entire lives and they will certainly have no money for retirement. HOWEVER, if he invested that £1,000 per year into a standard investment and did that every year for 25 years he would create a pension or savings pot of £119,016. I know what I’d rather have – the savings pot every time. Having a new TV each year does nothing for anybody – it’s not as if the programmes are new and different – they’re exactly the same but his life would be completely different with savings of nearly £120k.

Housing hiatus

I’ve been staggered by how the property market has kept going and kept rising during the last year or so when we’ve been in very restricted circumstances as people, but figures just published tell us all and tell us why. One in sixteen houses have changed hands in 2021 with increased buyer demand being 19 times higher than the 5 year average whilst supply has been 42% lower than usual. That’s a curious perfect storm and rising demand and falling supply will always lead to price rises in any business and housing is no different. This has happened partly because finance and mortgages are so cheap but also, of course, because of lockdown lifestyle changes and that fact is clearly demonstrated by the rise in house prices being nearly 8 times that of a flat on average. The number of houses for sale is less than half normal levels and the number of flats for sale is down by 15%. As a consequence of all this activity and the housing hiatus the value of property transacted this year has surpassed £500 billion for the first time – that’s one hell of a record breaker!

Who’s got my drink?

I accept I’m a weird person and a bit of a contrary Mary and I can confirm quite categorically that I drank no champagne at all during the last year so when I read that spending on champagne rose by almost a third last year up to a staggering annual expenditure of £388.7 million, I was surprised. That’s one hell of a lot of champagne and there’s also been a rise in the expensive brands rather than the cheaper varieties. It just goes to show that people will splash out in lockdowns but it also goes to show that some people are getting legless on champagne. If I didn’t drink any then someone somewhere had to drink twice the average in order for the average to be what it is. And of course there will be lots of people who didn’t drink any and so I’m convinced there’s someone somewhere completely off their trolley and under the table on champagne – drinking just to keep the average up – what a challenge!

Keep calm and be normal

The news is out today that house prices in the year to the end of November rose by 10% and if course it makes a catchy headline in the media. But if you’re a long term property investor you will know that this completely normal and is just about the average running rate for property price rises over the long term. I mention it not because we need to mention that normality in itself but because the media think it is abnormal and worthy of mention. Property prices are the only area where the average or normal is reported as a headline – can you imagine a headline that mentions any other area of life is normal? Weather for instance is reported as extremes and either a freeze or a scorcher – they wouldn’t report that temperatures were normal. Nobody would read the paper concerned but with property any news makes a headline. Bizarre.

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