This Week in Property: The Latest News (4th June 2021)

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

Why it pays to challenge!

Many people think there’s no point in challenging their expenditure or trying to do anything about their outflow of cash as it won’t amount to much but here’s some examples that may change your mind!

Insurance. The Financial Conduct Authority (FCA) have just decreed that insurers can no longer give better deals to new customers than existing ones. The FCA has pointed to an example in which a new customer for home insurance typically pays £130 for a year’s cover. But for the same policy, having stayed with the same insurer for five years, that annual premium rises to £238. For motor insurance, new customers pay £285 while people who have been with their provider for more than five years pay £370, according to the FCA’s example.

If you regularly challenge your insurance costs and change provider you could have saved £193 per year (£108 on house cover and £85 on car insurance).

Collect the vouchers.  A Surrey woman has just collected £200 of vouchers by using a rewards credit card for purchases when she was furnishing her home. She got a bonus of £40 for taking out the card and gets 5 points for every £4 spent at John Lewis and 1 point for money spent elsewhere. Those points have now been converted to vouchers.

If we took the total of those savings of £193 + £200 = £393 and invested it at 10% and left it for 25 years for our retirement it will amount to £4,666.31. Not a huge amount I agree but it’s something you have extra just for challenging your expenses! And hopefully you wouldn’t stop there and could challenge all expenditure and save – and accumulate – a lot more.

Mortgage abundance

As we emerge out of lockdown and the property market opens up more there are also more mortgage products on offer and two deals have caught my eye. It is now possible to get a two year fixed rate deal at below 1%! Both the Co-op and TSB have 0.99% deals available. Providers are doing this as they have loads of savings cash available to lend as people saved throughout lockdown and it’s great for potential property purchasers too as they can get started on the property ladder at very low interest rates.

At the other end of the market lenders are offering mega loans at low rates and some banks now offer mortgages of up to £10 million (just imagine that!). Last year there were 4,454 mortgages of over £1 million and that’s up by 15% on the previous year.  A borrower wanting a £4 million mortgage would have to have income of £400k per year and could get an interest rate of about 1% – 1.5%. Barclays has a mortgage between £2m – £10m at 1.09% or you can fix that for 5 years at 1.27%.  Some lenders are also stretching their affordability criteria to offer 6 times a borrowers income if the income is £100k or more.

It just shows that there’s never been a better time to get a mortgage as all the lenders are desperate for post pandemic business!

Companies have feelings too!

We have long understood the human being need for a purpose in life: it makes sense to have a reason for doing and being who you are. But now companies are increasingly discovering their purpose for being as well claims a recent report from the Institute of Directors. They say that the majority of companies now believe that their sole purpose for existence is not just to make money or profits but to also include contributions to the environment or the community in some way. Quite right too! 90% of directors asked said that companies should have a purpose: 62% said goals should not just be about money and nearly 50% said that companies should be helping to solve problems in society. That’s quite extraordinary as we always imagine that the sole purpose of a business is to provide a product or service whilst delivering a return to its shareholders.

Its great to see such philanthropy and concern across the business world but the cynic in me says they have to do this as part of their product or service because customers are now so acutely aware of societal challenges, the environment and the world at large that to ignore these issues would be detrimental to the business overall. Customers want to buy their products from companies with a conscience – and with feelings.

Mindset Myopia

I read a headline on a news website this morning that said: ‘Re-opening of indoor hospitality fails to boost football’ and as a football fan I assumed the article was about people not watching football on screens in venues now but as I read on football wasn’t even mentioned. I re-read the headline to discover it actually said: ‘Re-opening of indoor venues fails to boost footfall! In my football fan distorted brain I had seen and read the headline with my own perspective and we all do that all the time.

There are people who say that lockdown has been great for their money as they managed to save and those that have had financial difficulties and they each will have different ‘memories’ of lockdown. But more than that we all see what we want to see and hear: it’s the eternal difference between an optimist and a pessimist – the circumstances and situations may be exactly the same but one person sees bad news and the other good. And that’s the point – our view and mindset are a choice. The pandemic, the economy, the government are the same for all but people will each have differing views on them all.

If we have choice why not make it a positive view. The situation is exactly the same but you’ll feel a whole lot better!

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