FEAR OF FINANCE
Saturday 12 August 1995
Only this week John Redwood was renewing the Thatcherite commitment to ownership rather than renting. But owning is now easier said than done. People moved regularly up the property ladder, unleashing a DIY frenzy in their wake, because additional costs could be recouped in a matter of months as the property market moved ever upwards. Then the recession slammed the brake on the market and suddenly moving was much more expensive.
The costs of moving are as real as ever. The potential gains look more elusive year after year. The market in certain pockets of the country remains buoyant, particularly in central London, such as Islington and Battersea. In Scotland, medium-priced properties in Edinburgh are also doing well. But they are few and far between. So is it worth moving, or should you stay put until prices pick up?
David Miles at Merrill Lynch would encourage those who can move to take the step up the property ladder. "Now is a good time to build an exposure to residential property if you can afford to absorb the extra costs," he says. "As real incomes continue to rise, added to tax giveaways in the next Budget, before you know it the housing market will be in an upswing again." Importantly, Mr Miles does not believe that house prices will remain flat for ever. "Markets just don't behave that way," he says.
The message is that if you can afford to absorb costs now and wait three to five years to recoup, it is a good time to swap your one-bedroomed flat for something more castle-like.
Others are more cautious. The golden rule now, according to Rob Thomas at UBS, is to buy a property that you are really happy with and not buy just to speculate.
Even he, however, remains optimistic that the housing market will turn around. "The outlook is good once we get past the next two to three years of recovery," he says. "House prices should rise 5-10 per cent across the board."
The solution for those who need to move but cannot, or do not want to, wait the three to four years to make up costs is to rent. To rent is now considered more acceptable and is even considered positively trendy among young professionals.
Since 1988, driven by changes in law relating to short-term tenancies, the rental market has moved up nearly a third. There are nearly a quarter of a million properties throughout the UK for rent.
To capitalise on this trend, Kleinwort Benson Development Capital has funded a pounds 44.2m package for London & Henley, which will acquire, refurbish and let central London residential property in the pounds 125,000-pounds 250,000 price bracket aimed at young professionals.
Ian Grant of KB says there is a fundamental shift towards young professionals renting for several years until salary increases enable them to buy what they would like to live in.
Simon Read: "Pension freedom is months away but if we don't act soon, the freedom may be to make an expensive mistake with our future"
30 January 2015 11:00 PM
The introduction of the new pension freedoms has been "alarmingly chaotic", reckons Nigel Green, chief executive of the financial consultancy deVere Group, He said this week: "The implementation of changes appears to be being rushed in a cynical attempt to woo older voters ahead of May's election."
30 January 2015 09:24 AM
There has been continued criticism of banks' delaying tactics and failure to find those affected by by the UK’s biggest-ever financial mis-selling scandal
26 January 2015 03:29 PM
Companies will be required to ask about health and lifestyle choices or marital status, to protect consumers who do not take up the government’s offer of the Pension Wise guidance guarantee service
23 January 2015 08:00 PM
I had dinner with the pensions minister Steve Webb this week. There was a wide-ranging discussion about the new pensions freedoms starting in April, and changes to the state pension. Crucially, I also got to ask Mr Webb whether he had any plans to have another look at the injustice that is frozen pensions.
23 January 2015 08:00 PM
23 January 2015 08:00 PM
While the health of the economy is not insignificant, Mark Dampier finds it incredibly unpredictable in terms of its impact on the stock market
21 January 2015 12:32 PM
A new free app is aimed at the three-fifths of Brits who have never switched supplier
20 January 2015 09:34 AM
Regulator’s investigation into the market found that around £160bn was held in easy access savings accounts that pay interest lower or equal to BoE base rate
17 January 2015 12:00 AM
Simon Read: Information is power. And it's in the wrong hands when people are cold-called by companies that know they're in debt
17 January 2015 12:00 AM
In debt? You're likely to be targeted by unscrupulous companies that hope to profit from your misfortune. They may try to pretend to be your friend by offering what they call "help" – but almost certainly that help will come with a cost and leave you worse off than you were before they got in touch.
17 January 2015 12:00 AM
In less than three months' time radical changes to pensions will take effect, providing investors with more freedom. Yet for those who prefer to make their own investment decisions, the choice of funds available is overwhelming. And an income drawdown account is also not particularly easy to manage.
15 January 2015 12:23 PM
The minimum amount for which you can be forced into bankruptcy is being raised from £750 to £5,000
Mark Dampier: How to get an income now that savings are past the 'use by' date
Thousands of UK investors could lose out following collapse of Secured Energy Bonds
Bargain Hunter: Fly off for a winter break in France or Portugal for well under £100
Millions in line for compensation after being sold unnecessary credit card cover
Weekly Money: Round-up of the personal finance stories you may have missed 26-30 January
- 1 Three-year-old boy shoots pregnant mother and father in New Mexico
- 2 Stephen Fry explains what he would say if he was 'confronted by God'
- 3 Jewish community urged to boycott Cornwall village after residents vote for 'Hitlers Walk' sign to be reinstated
- 4 Benedict Cumberbatch's Alan Turing gay-rights campaign snubbed by Prince William and Kate Middleton
- 5 Kim Sears responds to swearing controversy with 'parental advisory' T-shirt at Andy Murray's Australian Open final
Stephen Fry explains what he would say if he was 'confronted by God'
The open loathing between Barack Obama and Benjamin Netanyahu just got worse
9 reasons Greece's experiment with the radical left is doomed to failure
President Putin is a dangerous psychopath - reason is not going to work with him
Have we reached 'peak food'? Shortages loom as global production rates slow
Britain's widening poverty gap should be causing outrage at the start of the election campaign
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