This Week in Property: The Latest News (10th June 2022)
Take a look at what our CEO Gill Fielding has to say about this week’s property news…
Can you afford to save?
I’ve just seen some amazing stats showing how our savings erode over time and apparently a £10,000 deposit made in 2012 would now be worth only £8,580 in real terms (analysis by AJ Bell). And tis gets worse. With inflation now running high and expected to go higher a £20k deposit today would be worth only £9,465 in a years time. If the Bank of England’s inflation estimates are correct then that £10k of savings is losing you £10.70 a week in real terms. That surely must be the definition of insanity! Why would you ever save money at pathetically low rates and certainly at savings rates lower than the rate of inflation because that always means you’re losing money. It’s only when you’re investing and gaining more than the rate of inflation that you can ever be in the positive. That simple learning and understanding of the difference between savings and investing is what keeps most people poor – so learn that today and give yourself a chance of earning more than you lose with your money. Otherwise you’ll be paying £10.70 per week on your savings.
Where’s the missing £1.79 billion?
In the papers today there is a report from Roman Abramovich’s lawyers stating that over the last 20 years Abramovich has paid £1.79 billion in UK taxes and in the last complete tax year alone he paid £41 million in Corporation tax, stamp duty and NI contributions. In addition, he has invested £2 billion into the UK economy and businesses. Now I understand why politically he has now been excluded from the UK but there is another view to this. As a country we desperately need that money and those taxes to help pay for the NHS, Covid subsidies, the rail system and the energy crisis so the politically ‘right thing’ to do turns out to be economically the ‘wrong thing’ to do and I’m afraid I’d rather have his money in the country than not. I’d rather he pay for our country than have to pay myself through increased taxes. By punishing him we’ve punished ourselves – my mum would have said that we’ve cut off our nose to spite our face!
When is 40% a majority?
I’ve been intrigued but the fall out from the Conservative leadership vote where the vote was split 211 for Boris and 148 against. Now mathematically that means Boris got 58.77% of the vote and his opponents got 41.23% and in my mind that means the majority voted to keep Boris but apparently I’m mistaken! Although Boris has clearly seen it as a victory and now wants to move on, his opponents are saying that there are a significant majority want him out. Of course, each side present the view they want you to see and hear and they put their own spin on it – but numbers don’t lie. I’m a mathematician and just look at the numbers but many people won’t do that and they will just go with whoever they hear and frankly, what they want to hear. Numbers are concrete and they are exact but even with numbers people hear and believe what they want to believe and they believe the view that supports their own mental framework and belief system and I mention it because sometimes people need to be aware that their internal belief system distorts their hearing and vision. Sadly politicians are masters at spin and creating the view that suits their view so be careful and remember the old adage – there’s lies, damned lies and statistics, and 40% is NOT a majority!
Boris on the bandwagon!
We all know that Boris has had a tricky week and his party has some lack of confidence in him and their main fear is that people won’t for him (or them) in the next general election. So Boris has done the only thing possible in those circumstances and raised the standard vote winner – property – as his current ‘priority’ policy. All politicians are painfully aware that housing is in very short supply and housing is the hot topic for most people and it is a genuine vote winner if any political party says that they will address housing issues. Consequently, today Boris is talking about extending the right to buy programme to those people in housing association properties as well as those in local authority housing which will reduce housing supply even further as those homes aren’t replaced. It’s easy to see that if you sell a house at half price with the right to buy discount that doesn’t generate enough money to build a replacement property. Combined with that Boris ahs said that local housing benefit will now count towards a mortgage and this is bizarre and shows that Boris has never experienced housing benefit – which is only paid to low income people and with less than £16k savings – so people who don’t have a hope in hell of getting a mortgage. He also hasn’t mentioned what the mortgage providers might think of that policy. So, as usual, a public statement which has all the bluster to win votes but that doesn’t have any substance to it btu Boris has jumped on the property bandwagon to try to rebuild confidence from, and in, his party.
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