Month: October 2023

After many years of consistent house price inflation, the value of the average property in the UK has started to decline.

In fact, the Royal Institution of Chartered Surveyors has noted that house prices are now on a “downward trajectory at the national level”, and especially so in the West Midlands and south-east England.

Savills, meanwhile, has questioned whether recent data showing house price falls is telling an accurate story, as they don’t take into account soaring inflation over the last few years.

The organisation believes that if you adjust for inflation, average house prices are no higher than they were in late 2015, so if you bought your property around then, it’s likely you’ll have seen a real-terms loss in the value of your home.

Of course, this is bad news if you see your property largely as an investment and have an eye on collecting healthy returns when you sell up.

But interestingly, this drop in house prices isn’t causing any great anxiety among property owners who just want a place to call their own.

According to research by eXp UK, 83 per cent of homeowners are comfortable with cooling house prices, and only 27 per cent are concerned that a market slowdown could turn into a house price crash.

To answer the question of why they’re so relaxed about the situation, we have to look at why they bought a property in the first place.

The eXp UK survey found that 89 per cent of current homeowners believe it’s important to get their foot on the property ladder.

But when asked why, only 12 per cent said they bought a house largely as an investment so they could make a profit when they sell in the future.

By contrast, more than half – 51 per cent – said their main drive was simply to own a home of their own, without being hamstrung by rental market restrictions and having to deal with landlords.

So it seems that how you respond to news that house prices are coming down really is a matter of perspective.

For all the talk about how a housing market crash could represent a major financial hit to Britain’s homeowners, it appears as if the vast majority don’t perceive their house as a financial asset that’s there to generate returns.

If you ask most people, buying a house is about having a place to call their own, laying down roots, being part of a community and giving a sense of security and belonging to themselves and their families.

And if you have bought a property as an investment and are worried about its potential to generate a profit, it’s worth remembering that the value of any type of investment goes down as well as up in the short term.

Markets always bounce back in the longer term, so it’s important not to react rashly if there’s any decline or volatility.

It’s interesting to observe that even though most of the people polled by eXp UK weren’t overly concerned about the profitability of their home, the vast majority were still confident that they’d receive more money than they paid for it, whenever they decided to sell up.

So even if you’re confronted with alarmist headlines and scare stories about plummeting house prices day after day, there’s no need to panic and act impulsively.

If you have any questions about managing your long-term finances, please get in touch with our specialist advisers and we’ll be happy to speak with you.

Love it or loathe it, Christmas is fast approaching, and for many of us, it’ll be the most expensive time of the year.

From buying gifts for friends and loved ones and entertaining dozens of family members, the festive season can be extremely costly.

So how can you make sure your Christmas spending doesn’t tip you into the red and that you don’t end up spending more than you can afford?

Set a realistic budget
It’s important to start with a clear understanding of how much money you’ve got to spend without compromising on other expenses, such as your day-to-day living costs and putting money into savings and pensions.

Review your income, outgoings, savings and outstanding debts so you can get a clear picture of what you can afford to spend on your Christmas festivities.

You can then set a realistic budget, based on all your likely expenses, from food and drink to gifts and travel costs.

Prioritise your spending
Not all Christmas outgoings are equally important. For instance, while you might want to get presents for your other half, your children or your parents, it might be less of a priority to buy presents for work colleagues, or pay over the odds for expensive decorations.

So work out what you consider essential and allocate your budget accordingly, with smaller sums being spent on less important purchases.

Start shopping early
Christmas Day is set in stone, so there’s no reason to wait until December to start buying your Christmas presents.

You could take advantage of sales, discounts and the likelihood of there being more stock in the shops by purchasing early or even throughout the whole year.

Use cash or prepaid cards
Even if you’ve set a budget, the temptation to overspend might still be there, and with that comes the risk of getting into or exacerbating debts. In that case, it could be worth taking steps to ensure you never go above the limit you’ve set yourself, such as only using cash or a prepaid card, so you’re only dipping into a single pot of money with a clear upper limit.

Track your spending
Keep a close eye on your spending during the run-up to Christmas, perhaps by recording all your expenses in a dedicated budgeting app or spreadsheet.

This will help you stay within your budget and see where and when you might be overspending, in which case, you’ll have time to make adjustments to your plan where necessary.

Research the market
The first price you see for an item isn’t always the best, so make sure you shop around for the best deal before making a purchase.

Small savings here and there soon mount up, freeing up cash for other festive expenses, such as extra food for the big day or an additional stocking filler.

Make homemade gifts
Homemade gifts, such as custom photo albums, crafts or sweet treats, are a great way to ease the burden on your wallet at Christmas.

The fact that you’ve gone to the time and effort to make something special can also make a gift more meaningful to the recipient.

It’s important that Christmas outgoings don’t jeopardise or interfere with your other spending commitments beyond the festive season.

So it’s well worth planning in advance to make sure you aren’t putting your financial goals at risk by going overboard.

With just a little thought and effort, you can enjoy the best of both worlds – a happy Christmas and staying on course to achieve your longer-term objectives.

Running a car can be one of your biggest and most frequent outgoings, so driving can leave a serious hole in your pocket.

Thankfully, there are some really simple and straightforward ways to reduce the cost of being a motorist, which don’t detract from the convenience and enjoyment that driving can offer.

Choose a fuel-efficient vehicle
The first step is to select a car with good green credentials. Not only does that mean you aren’t using or paying too much for fuel, it can also help you save money on road tax and congestion charges in towns and cities.

Start by looking for vehicles with high miles per gallon (MPG) ratings, or perhaps consider alternatives such as hybrid or electric vehicles.

Drive sensibly
Your driving habits directly affect how much fuel you use, and in turn, the amount you’re paying at the pump.

So take simple steps such as sticking to speed limits, keeping your tyres properly inflated and turning your engine off if you’re likely to be at a standstill for over a minute. That way, you can enjoy more fuel-efficient trips.

Shop around for insurance
Many motorists make the mistake of just accepting the first insurance quote they’re given, but it’s well worth researching the market to find the best deal.

Shopping around also allows you to make sure you’re choosing a policy that reflects your specific circumstances, so you’re only paying for what you actually need.

Maintain your vehicle
Your car will be much more fuel-efficient if it’s well looked after, and getting it regularly serviced and MOT’d has multiple benefits. Your vehicle will run more reliably at peak performance for much longer, so you’re less likely to have to fork out for costly repairs or replace your vehicle completely.

You could also save a few extra pounds by learning how to perform fairly basic tasks such as checking your oil levels yourself.

Plan your journeys
Planning your route, the time you set off and combining errands to reduce the number of trips you take could pay off handsomely.

There are plenty of tools and apps available, such as Google Maps, that can help you identify the best time to set off and which routes to take and avoid, as well as get real-time information on traffic conditions.

Driving can be essential in many aspects of your day-to-day life, so it’s easy for costs to mount up and even become something of a burden.

But by following these five simple steps, you could make considerable savings and free up cash that could be far better spent, saved or invested elsewhere.