Month: June 2021

This March saw the prices of residential properties rising at the fastest rate since just before 2007’s financial crisis, with the average price of a home in the UK increasing by 10.2% in the year up until March. The stamp duty holiday introduced by the Government certainly played a part in this development. Having been introduced to encourage people to move home after the first COVID-19 lockdown in 2020, it seems to be doing its job. The threshold at which stamp duty, the tax paid when purchasing a property at a percentage of the property price, is due was temporarily raised to £500,000 in England and Northern Ireland and £250,000 in Scotland and Wales. With that holiday coming to an end on the 1st of July, many would-be buyers are rushing to take advantage of the tax break that could save them up to £15,000.

The growth rate of 10.2% in March is up from 9.2% in February and, according to the Office for National Statistics, is the highest annual growth rate the UK has seen since August 2007. The average property price in the UK, as of March, was £256,000 which is a year-on-year increase of £24,000. In addition, according to the ONS, the average price of detached properties actually rose by 11.7% in that time period, whereas flats and maisonettes rose by a smaller but still significant 5%.

These percentages can be seen in real terms in the soaring demand experienced by estate agents. CEO Vic Darvey of online estate agent Purplebricks also believes that the market will remain buoyant beyond the tax break, stating, “I don’t think it [the housing market situation] will change materially. If you look at where we are today and what the market is forecasting, the likes of Rightmove and Zoopla are forecasting as many properties to come to the market this year as last year. We think that the market is in a strong position and will continue to be.” So the future still appears bright, with Darvey adding that “the Government’s recent mortgage guarantee scheme is also going to help.”

Purplebricks has reported that over 60,000 customers downloaded their app in the third quarter of 2020, for reference, that’s a 300% increase on the same period in 2019. The company saw a 12% lift in its instruction numbers in the year up to May, and even paid back £1million in furlough relief cash, thanks to their strong performance.

You may have come across the recent story of Jonathan Frostick.

Mr Frostick is a contractor, managing a team of 20 people for HSBC. In the middle of April he sadly suffered a heart attack. Starting his recovery in hospital he wrote a post on LinkedIn, vowing ‘to restructure his approach to work’ and confessing that his first thought as the heart attack struck was that ‘it wasn’t convenient: I had a meeting with my manager tomorrow.’

Mr Frostick’s post went viral, gaining more than 200,000 likes and over 11,000 comments – as he said that life ‘literally is too short.’ This story came hot on the heels of young bankers at Goldman Sachs complaining about their ‘inhumane’ working hours – and calling for an 80 hour a week cap.

There is no doubt that the pandemic and the last 12 months have brought working practices under the spotlight. Many people have used lockdown and the new experience of working from home to reassess what they want from life and work.

They’ve realised that they haven’t missed time spent commuting: the same sandwiches from the same sandwich shop. That they’ve enjoyed spending more time with their families, or simply having time to exercise, think and re-evaluate their lives.

Even though many people are now going back to the office, it is likely that the process will continue. It is easy to think that a lot of people will initially go back to the office with enthusiasm – and three months later walk in to see their manager and say, “I need to have a word…”

Of course, we will always recommend investing in long term financial planning. But as we’ve seen above, the last 12 months have shown us that there are equally important things to invest in.

The most important of these – obviously – is your own health. With more limited options for both exercise and socialising, getting out for walks has become a popular past-time over the pandemic. Given all its health benefits – improved posture, a stronger heart, weight loss, improved mental health – perhaps we should all invest in a pair of walking boots! But whether walking is an option that works for you or not, it’s important to take care of your mental health.

The pandemic has been tough on many levels and for a lot of people – especially frontline staff – the true mental health cost may only be seen as the pandemic comes to an end and they are no longer ‘living on adrenaline.’ Juggling work, family, home schooling and perhaps elderly relatives will have taken a big toll.

As the pandemic ends it is important that we don’t simply slip back into our old ways of doing things: of never having enough time and getting our work/life balance completely unbalanced. We need to heed the lesson of Jonathan Frostick!

In the middle of May pubs and restaurants reopened after lockdown. Finally, we could have a drink or a meal inside.

But what was noticeable was the number of pubs and restaurants that didn’t reopen. Speaking on the BBC News, the owner of one establishment gave a very simple explanation: “we cannot get the staff.” After a year of various lockdowns, furlough and uncertainty it would be easy to think people would be queuing up for jobs. The reverse seems to be the case.

One in ten UK restaurants has closed down in the last year. It has been reported that 20% of jobs in the hospitality sector have disappeared. But rather than fighting for the jobs remaining in the sector, it seems that many people have used the last 12 months to rethink what they want from life and work and decided upon a complete change of direction.

Of course, that’s not just confined to the hospitality sector, but the numbers quoted there do show the scale of the problem.

…And, apparently, the opportunity. A record number of new businesses were created during lockdown, as more and more people decided that the change of direction they really wanted was to be their own boss.

You might argue that there was never a worse time to start a business: economic uncertainty, travel restrictions, unable to meet face-to-face. The list is almost endless, but that doesn’t appear to have put people off. More than 29,000 new companies were registered in the UK in September last year, the highest since October 2007 and the third-highest since records began in the late 1980s. New business creation increased month on month from the beginning of lockdown.

Looking at figures for the full year, 835,494 new businesses were registered in the UK last year – a 41% increase on the previous year and virtually double the number registered in 2018.

“British entrepreneurial spirit has been undeterred, despite the challenges of the pandemic,” said a spokesman for Growthdeck, the company which compiled the figures. “People have remained optimistic about starting a business, even in a challenging economy.”

So where are these new entrepreneurs starting their businesses? E-commerce has been the most popular area, with an average of 4,613 online retail businesses set up each month in April, May and June last year, a 66% increase on the same months in the previous year. Second place went to “buying and selling property” and then came management consultancy and “other service activities” including “letting your own property” (where you can suspect the influence of Airbnb).

But who knows? A few years from now a small company’s fund manager might be telling us about a hot new stock they’ve invested in. “Would you believe it? The business started during the pandemic…”