Category Archives: Political

Some interesting figures regarding house prices…

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I’ve often heard it, always from the older generations…

“Isn’t it about time you got your foot on the property ladder, settled down”.

Lets run through some numbers.

If you are between 50 and 60 years old now you would have probably paid between 15k and 30k for a house, lets take an example of a house in a quiet countryside village costing 25k in 1980. The average salary was around 8k a year.

Fast forward to 2008 and the average house price (170k) is just short of 8 times the average salary. In the 1930’s and 40s the average house only cost a years salary. And the quality of properties that make up the mid range of these averages has gone down considerably. 1st time buyers are pretty much restricted to town and city living which was not the case until recent years.

So if you are between 20 and 30, and people of your parents age say something like:
“When we were your age we had a nice little cottage and the wife was expecting” you can remind them that their cottage was probably priced below the average for the year, costing around 2 years salary.

Today that same cottage would be valued above average at around 10 times their salary – I wonder would they have been so quick to settle down and start a family under these circumstances.

I think not!

French Fisherman Blockades – Economic implications

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French fishermen are blockading all major french ferry ports, ruining 1000’s of people’s bank holiday plans as part of a strategically timed appeal for state aid. The extra money they want is in order to cope with rising fuel prices.

I support direct action, but France is part of the European economy, as is Britain which leads to some issues here.

Fuel price rises are due to many factors, and it is not just the french that are affected, we have been hard hit as well. UK businesses that rely on fuel to deliver services to clients are having to apply extra charges for these services, UK producers have little state help, in fact many are being pushed out of business every year by harsh government budgeting.

Before the 2nd world war, around 65% of all Britain’s consumables, mainly food was imported. The 1st strategic move by the Nazi’s was to blockade these trade routes with u-boats, forcing the UK to be self sufficient.

Emergency measures had to be put in place, ration books issued, legislation put in place including one law which made it illegal to leave anything on your plate during a meal.

My point is, a sudden problem with food imports put this country in a state of emergency. I would bet that many households in the UK rely on near 100% imported consumables. If a pre-war 65% reliability bought us to our knees, then what on earth would happen now.

France is part of the European economy, but it is far from balanced. Producers are supported by the state, farmers can live a compatible life running their businesses at a terrible loss because of payment from the state. We see this and feel bitter, partly because of the huge amounts of cash we put into Europe, very little of which comes back.

I can see how UK producers would be livid, running a business in this country with the government apparently doing everything in its power to break them, watching the same products as they grow here, coming into the country by boat, plane and lorry at a retail price that they could not even grow for.

In being less reliant on imports, maybe the french government are having to pay farmers, business men would call it ridiculous, governments supporting loss making businesses, supporting a way of life for sentimental reasons, but think of the environmental impacts of being self sufficient.

Its plain ridiculous to bring something in to a country by means of expensive environmentally damaging transport when we can grow it here. And if we can’t sell it for the same price as the import without making a loss, there is a serious problem of this governments making which require direct and prompt resolution.

As part of a European economy, we cannot support imbalances for long, when the french fishermen get their government aid to offset high fuel costs, this will increase a dangerous imbalance unless UK businesses affected in the same way get the same support.

So while I support action as a responce to perceved injustice, I suggest that self sufficiency and economic balence between EU member states needs to be reevalutated urgently.

Where funds from the UK are flowing into another country, and their businesses are enjoying magor benifits that their UK counterparts are not, there is a serious, serious problem.

Read the full report here…

There you go, quite a balenced expression of my thoughts on this subject taking into account that my own bank holiday plans have been made pretty damn difficult because of this situation.

5 Tips For 1st Time Buyers

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Reading this Motley Fool Article entitled 5 tips for struggling 1st time buyers got me thinking.

As has been pointed out, 4 out of the 5 tips rely on parents help in some way or another. Looking with a cold eye on the situation it is now almost impossible for a couple (let alone an individual) on an average income to buy a property.

A default notice was wrongly places on my credit file in 2007, this prevented me from taking advantage of HSBC’s 100% graduate mortgage… It took me a year of fighting to have this removed, and now that it is, no ones lending anyway.

I speak to many people of previous generations who tell tales of buying land in their ideal spot, building their home, or buying a place at auction for £10,000 which is now worth £300,000. Will we ever see that sort of growth in our lifetime? Not within a time-frame of 20 years as some people previously have.

So is this unfair? well… economies are all essentially lots of sets balances, one imbalance starts chain reactions creating both positive and negative outcomes, depending on who you are and what situation you are in. There will never be an economic state that suits everyone so in that sense, this is just a transitory period on the way to a greater balance.

Could policy makers make live easier for 1st time buyers, desperately wanting to get on the housing ladder? Yes – planning policies which don’t require large sums of bribe cash would be nice. mortgages made available for 1st time buyers who want to convert derelict houses, barns, churches etc…. (my parents were allowed one of these with no problem but I am not). Why should these opportunities be reserved exclusively for cash rich developers and builders when they could go towards solving a problem.

Discrimination – yes, even though I can prove a substantial income for years, I cannot get the best rates beacause of my self employed status. Also the fact any company can place what they want on your credit file with no accountability or penalty if this is done incorrectly or wrecklassly is wrong. Credit referencing needs a complete overhaul.

The only thing I should have to do to secure a mortgage is prove my income and the ability to maintain that income to a human, not a computer! What I buy with this money is my business and my risk!