10X Your Money: 10X Your Life!

I want to kick off this post by telling you a short story. I must have been around 11 years old, and my family and I were on holiday in North Cyprus, which is a relatively poor country. We had taken a hire car and on a remote mountain road in the middle of nowhere we had found a restaurant to grab a bite to eat.

We placed our order with the waiter and then he scurried off towards the kitchen. A moment later one of the members of staff was seen jumping into his car and speeding off down the dusty road.

A while later the guy returned with a big shopping bag in hand. It turns out whatever we had ordered they didn’t have in stock, but rather than just refusing the order – and sneering, “sorry we’re out of chips” – as they would in most UK restaurants, they bent over backwards to satisfy what was in their mind a wealthy customer. This is a perfect example of how those with money get treated better in life.

In this post we’re talking about some of the many ways money enhances your quality of life. Now, let’s check it out…

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Money Makes You Live Longer

Is money the elixir of life that we’ve all been looking for? The richer you are, the longer you live – that is a fact. Data from the ONS shows that life expectancy at birth of males living in England’s most deprived areas was 74.1 years, whereas it was 83.5 years in the least deprived, a gap of 9.4 years. A different study found that the life expectancy gap between England’s richest and poorest neighbourhoods has widened since 2001.

Economists have warned of wealth inequality rising in Great Britain, so presumably the life expectancy between rich and poor will also continue to widen.

The wealthiest 10% of households owned 43% of all the wealth in Britain between April 2018 to March 2020, according to data from the ONS. In contrast, the entire bottom half of the population held only 9%.

But rich people don’t just live longer. They also get more healthy years. Wealthy men and women generally have eight to nine more years of “disability-free” life after age 50 than poor people do, according to a study of English and American adults.

The study analysed how well various factors including education, social class and wealth predicted how long a person would live before they could no longer carry out activities such as getting out of bed or cooking for themselves — the study’s definition of being “disability-free” and “healthy.”

Everything paled in comparison with wealth! Though education level and social class had some effect, neither was found to be nearly as significant as wealth.

You Are Not Ugly, You Are Just Poor

Before & After memes!

Money seems to possess a magical power that can make you better looking. Take these memes for example. Billionaire Jeff Bezos was a dorky nerd in the ‘90s. Fast-forward to 2017 and he looks more like the Terminator. A similar transformation appears to have happened to Elon Musk. Not only did he found PayPal, Space X, Tesla, and become a billionaire, he clearly has developed a hair growth formula.

Now, some of these extreme transformations might exaggerate the message. No doubt that these were probably the worst and best photos that could be found but even in more normal walks of life, it’s obvious that money can make you better looking and healthier.

In a Guardian article, the author wrote, “It’s simply harder to eat well when you are poor… healthy food is often prohibitively expensive, less healthy options are relatively as cheap as, well, chips. When parents have to find the cheapest food available for their family, it’s nearly always going to be less likely to be fresh; and more likely to be highly calorific (therefore “filling”).”

The next health advantage money buys is access to luxury gyms, health clubs, and personal trainers. None of this is required at all to maintain basic fitness but if you’ve got the money, it significantly helps. The extreme levels of fitness and good looks that most people can only dream of are not obtained by just a quick run round the block.

A personal trainer will push your limits, and crucially keep you motivated. According to PureGym, an average session of 45 minutes will cost up to £65. And a membership to a David Lloyd Gym will set you back over £1,000 a year.

You don’t even need to put in any hard work as long as you have the money. A good dentist can change your smile, swapping crooked gnashers for a set of poker straight, blindingly bright teeth. They don’t call it a ‘Hollywood smile’ for nothing

I had laser eye surgery several years ago, costing nearly £2,000, and the improvement to my life was amazing. I was tired of constantly having to put contacts in when I was doing sport or going out. I was about to travel to Southeast Asia and the thought of swimming, canoeing, and white water rafting while battling with contact lenses was the final straw. Without money, none of this is possible.

Wealth Gives You Options Now & In The Future

For us, a life feeling trapped is not an enjoyable one. Money gives you options. You can quit jobs, chase passions, enjoy hobbies, start businesses, retire early, travel, work part time, and so much more.

Without wealth, you need to constantly work to survive. Passive income is that annoying buzz word that is overused but the reality is that if you build assets that pay you without the need to put in your own time and sweat, you can free up your schedule. The passive income I have from rental properties means I’m never overly stressed about needing to work long hours.

Most of us spend about third of our lives at work, so working a job you hate is no way to live. Those people who have no money have no options.

If they have a nasty boss or the work is torture, there’s very little they can do. And as for starting a business, how is someone on the bread line ever meant to do this? It’s practically impossible. A business needs months, if not years to start turning a profit. A pile of cash gives you and your business the breathing space that is needed.

Even a little money can give you your independence. According to a study commissioned by the Debt Advisory Centre, nearly one in five people have remained in a romantic relationship because financial worries have prevented them from leaving.

Of those who have stayed in relationships for longer than they wanted to, one in five did so for up to three months but the majority stayed together for far longer. A shocking 24% of these respondents remained with their partners for more than three years after things went stale.

Moreover, a lack of good finances could make you dependent on the state, which is no way we would ever want to live. State benefits are always going to be measly and very few people would voluntarily choose to live on state handouts alone.

You might hope that the state pension would be more generous considering you have paid into the system all your life, but you’d be wrong. If you have a full National Insurance record you will only get a little over £9,000 a year. This is not enough to live on, so make sure you are building your own freedom fund, as we call it.

Live Worry Free

41% of Brits don’t have enough savings to live for a month without income, a third of Brits have less than £600 in savings, and 9% of Brits have no savings at all.

Worrying about money can make your mental health worse. Financial difficulties are a common cause of stress and anxiety, and stigma around debt can mean that people struggle to ask for help and may become isolated.

According to a recent American survey, 77% of people report feeling anxious about their financial situation. 58% feel that their finances control their lives, and 52% have difficulty controlling their money-related worries. They are most worried about their financial future with 68% worrying about not having enough money to retire.

Get Away With Murder

There seems to be a different set of rules for those with money. If what you hear is true, Wayne Rooney has had a string of affairs with prostitutes over the years, but Coleen Rooney has forgiven him saying she chose not to leave him partly for the sake of their boys. We’ll let you speculate what else convinced her not to give him the boot. Pun intended.

Back in 1995, OJ Simpson, American football star and actor, was acquitted of all criminal charges relating to the murders of his ex-wife, Nicole Brown Simpson, and her friend, Ron Goldman – even though he almost certainly did it.

OJ had so much money that he was able to put together an impeccable group of defence lawyers, who were nicknamed the Dream Team. It has been estimated that the defence cost Simpson somewhere between $3-6,000,000, the most costly murder defence expense to date.

It appears you can get away with murder: “as along as long as you’ve got the cash, to pay for Cochran”, as Good Charlotte once said. And just to caveat all this, we obviously do not condone any crime.

Invest In Your Future

We, as well as you guys reading, are probably a little different to the average person. Most people have a high time preference meaning they favour having stuff sooner rather than later. They want immediate gratification, whereas we as investors have a low time preference and often choose to delay gratification. We’ll sacrifice more now for a better tomorrow.

Investing in stocks, funds, property, and so on are all investments in your future. The more money you earn, the easier it is to invest more. However, there are many stories of ordinary people becoming millionaires by the time they retire simply by living below their means, investing in the stock market – often through a pension and an ISA – and being super patient.

Another way to invest in your future is by becoming educated. If you have some money behind you, you can invest in your education and learn new skills, which leads to better and more highly paid work. Unfortunately, so many people are firefighting just to pay their monthly bills that they have no money to reinvest in their education. How many books do you think the average person reads? We’re guessing not many, whereas 85% of wealthy people (including self-made millionaires) read two or more books per month. Bill Gates reads roughly 50 books per year.

Buy The Best Things

This point probably doesn’t need saying but money can buy you much better stuff. In some cases, it’s just perceived benefit, but many products and services are genuinely better. And in the case of safety equipment, it might save your life.

By way of example, consider braking distances of budget versus premium tyres. A recent test undertaken by Continental tyres showed that wet braking distance was over five metres longer when the vehicle was using budget tyres compared to premium tyres. Money spent on your car may save your life.

What You Need To Do

It’s evident that money is super important, so we all need to make sure we have plenty of it in our lives. This website is dedicated to helping you grow and invest your money, so make sure you’re subscribed. If you’re new to thinking about your future, make sure you’re putting as much money as you can into Pensions and Stocks & Shares ISAs, and continuously look for ways to save and earn more.

How would more money improve your life? Join the conversation in the comments below.


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Exposed: Completely Pointless Money Tips, Tricks, Hacks, Products & Habits

There’s a lot of financial content out there on the internet, TV, in newspapers and in magazines. Some of this content is extremely useful….and some, not so much! Then, we have businesses who are imagining up gimmicky financial products in an attempt to part you from your cash.

In this post we’re going to expose many of the pointless money tips, tricks, hacks, products and habits that are not helping you to become rich, even though common wisdom says that they have a positive effect on your wallet.

Please chip in down in the comments and give your opinions on all of these – we’re sure there will be many more that we don’t cover, so tell us what else you think is pointless too. Now, let’s check it out…

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#1 – Save A Penny A Day Savings Challenge

Just thinking about this pointless savings technique winds me right up. If you don’t know what it is it’s a savings technique that rears its ugly head at the very end and beginning of every year. It involves saving 1p on 1 January, then 2p on 2 January, then 3p on 3 January and so on.

Each day, you put aside what you saved the day before, plus a penny more – right the way up to £3.65 saved on the last day of December. It’s supposed to make saving feel easy. Do this for a full year and you’ll have a grand total of £667.95.

So, what’s the problem and why is it pointless? First off, if you’re skint and you’re using this technique to try and save without noticing, you’ll eventually run out of steam.

'Save A Penny A Day' savings challenge over 1 year

Each month gets harder and harder. January starts at £4.96 saved and December ends with £108.50.

You potentially could have saved a lot more in the beginning of the year but because of some stupid challenge you chose not to. Then, in the later months – which are typically more expensive due to Christmas and higher gas bills – you are expected to save significantly more, which you may not be able to. And, if you could save more towards the end of the challenge, why would you not at the start?

Our second beef with this nonsense is the practicality of it. Are you literally expected to transfer a sum of money each day into your savings account? Who can be bothered with that administrative ball-ache?

And thirdly, saving and budgeting is meant to be intentional. You should know how much you can afford to save each month before the month begins. The ‘pay yourself first’ budgeting technique – which works – has already handled your savings.

#2 – Round-Ups

This is another pointless savings technique, which we’ve criticised before but apparently is quite popular with young people.

There are a number of apps that offer this gimmicky service. Whenever you spend on your card, your purchases are rounded up to the nearest pound, and the spare change will be siphoned off and added to your savings or investment account. Again, it is supposedly a way to save without noticing.

As before, a good budget has already determined what you can save for the month, so if you’re doing this on top of a budget we have news for you – your budget sucks!

Another reason it’s pointless is because the spare change is not taken instantly. The apps tend to collect every week or couple of weeks, so you’ll have random amounts being deducted when you’re not expecting it, which is no way to control your money.

What’s more, realistically you’re going to save barely any money at all unless you have a serious spending problem. Most items you buy are priced ending in 99p or 95p, so you could literally be saving pennies on each transaction. Have you ever heard of a rich man who made his money via round-ups? No, we haven’t either.

If you want to save money, then save money intentionally, and save big. It’s counter intuitive to link spending and saving in this manner. Before we move on, we want to say that if you refuse to save intentionally, then please do carry on using both of these pointless savings techniques because they are at least better than nothing… but only just.

#3 – Credit Card Points

We both love reading books on personal finance and investing on the off chance we might learn something new or get a new perspective. Recently I’ve been reading the UK version of the book ‘I Will Teach You To Be Rich’ and the opening chapter about credit cards made me mad. The author was banging on about getting credit card points, which here in the UK is almost non-existent. A few years back you could earn a few percent cashback but today, you’ll be lucky to get 0.5%, which just isn’t worth the hassle.

The highest paying cards are Amex, which are not accepted everywhere in the UK, which means your spending needs to be split over multiple cards making budgeting more painful than it needs to be. The reason you earn points in the first place is because the card providers have calculated that you will spend more. They’re not charities and don’t give away money for nothing.

#4 – Chase The High Interest Savings Account

Back in the day when I was younger and the interest on savings accounts and Cash ISAs was actually good, I used to take the time to move my money around to the account which paid the best interest or at least make sure I was earning a competitive rate.

Today though, what’s the point? The top cash ISAs currently pay around 0.6%, which means if you have £10,000 in savings, you’ll earn a miserly £60 in an entire year. The interest you earn on your cash savings is almost irrelevant anyway. The bulk of your money should be invested in the stock market, property, or wherever else you feel will provide a decent return.

The amount you hold in cash should be a small emergency fund and whatever you have put aside for irregular or non-monthly expenses such as savings for a holiday or Christmas.

Far better we think, to accept the likely measly interest paid by the same bank that you use for your current account, and here’s why:

  • Instant Access – you can shift money at a moment’s notice, which is vital when it’s your emergency fund. Nothing infuriates me more than when I send money to different banks and the money is lost in the ether for a day or two. Show me the money!
  • In One Place – When your savings and current account are together with the same bank you can easily monitor it all at the same time, in one app, which is super convenient. Personal finance is complicated enough without having to login to yet another app.

To boil it down, with interest rates as low as they are, choosing a savings account should really come down to choosing the best current account for you, and taking whatever easy-access savings account is offered by that same bank.

#5 – Life Insurance If No Dependants Or Family

We believe that insurance is usually a waste of money if you can afford the consequences easily or if there are no consequences.  So, in the case of Life Insurance, which is designed to pay out a sum of money upon your death, if you don’t have dependants, then it’s pointless taking out a policy.

The primary reason for Life Insurance is to ensure your spouse or children are financially taken care of in the unfortunate event of you dying prematurely. You may also have retired or sick parents who rely on your financial support for care and survival. In these cases, Life Insurance is of vital importance.

However, if you’re young and single with none of the responsibilities mentioned, then Life Insurance is likely to be totally pointless for you. If your situation changes, then you can get it then.

For those of you watching with dependants, then Life Insurance is likely to be critical. Visit our Life Insurance page to learn more and get a quote from our preferred partner.

#6 – Turning Plugs Off At The Wall

China’s power stations and factories are spewing out millions of tonnes of toxic gas and fumes, but Dorris thinks she’s saving the world by turning off her appliances at the wall. She thinks that standby light is causing global warming and she’ll also save a small fortune in energy bills.

Sorry Dorris, that just isn’t true. The Energy Saving Trust estimates that you could be paying around £35 a year for devices you’re not actually using. In the usual media hysteria, every article I’ve seen thinks this is enough justification to convince you to switch everything off when you’re not using it. That’s not even 10p a day making the entire exercise completely pointless.

Moreover, many devices such as TV’s, which are likely to be the worst offenders for energy usage in standby, are programmed to carry out software updates at night, so leave them plugged in for goodness’ sake.

#7 – Ethical Investing

We know, we know, we must be monsters. First, we’re saying leave your TV on standby and now we’re saying ethical investing is pointless. What evil will we say next? Well hear us out.

Ethical investing has grown in popularity in recent years and there are now many ETFs or funds badged with an ethical sounding name and objective. But everything is not what it seems.

Due to the surge in popularity for ethical funds it is being claimed that fund managers are taking shortcuts in order to meet this demand, which has led to some potentially less ethical funds being mis-labelled. Apparently, the underlying investments of the so-called ethical funds are actually little different from similar mainstream funds that are from the same fund providers.

One such case involves Vanguard, which runs the £389 million fund SRI European Stock. This fund is designed to mirror an index comprising 614 listed European companies, while excluding companies in the index which do not meet socially responsible criteria. Just 25 of 614 companies have been screened out. That still leaves an abundance of stocks in the SRI European Stock fund that most investors would expect to be routinely excluded from green ethical funds.

For example, still included are alcohol companies (the likes of Heineken and Carlsberg); gambling businesses (Entain and Evolution); mining giants (Rio Tinto and Anglo American); and oil producers such as BP and Shell. It even includes building supplies company Kingspan, criticised in the Grenfell Tower inquiry.

If socially responsible investing matters to you, then you should go back and re-evaluate your fund selections, because the name seems to matter little. Your intended ethical investing to date may have been pointless as the fees tend to be higher and you’re not getting what you paid for!

#8 – The Lifetime ISA

The Lifetime ISA is in some cases a very useful savings product but under certain circumstances if you’re not careful it can be not only pointless… but damaging to your money goals.

The Lifetime ISA is designed for two purposes: first-time home buyers and retirement savers. But if you’re one of these, don’t just assume a Lifetime ISA will help you.

The reason why it’s pointless for some first-time buyers is because it has a limit of £450k on the purchase price of the property. In many areas of the country that is way too low; you don’t get much home in London on that kind of budget for example.

Also, because of the cost of moving home – particularly due to excessive stamp duty – and the trend of starting families later, some people choose to skip the typical cheap starter home and buy a larger family home as their first house.

In these situations, your first property may exceed the £450k limit on the Lifetime ISA but now you can only access the money by incurring a massive financial penalty, which is ridiculous.

The problem is amplified because the limit is not tied to inflation or increasing house prices and they tend to rise fast. There is every chance that when you first start saving for your first home the house you desire is say £300k but by the time you are ready to buy – say in 10 years’ time – the house could easily exceed the limit. A £300k house growing 5% for 10 years would be worth £489k.

So, if you’re using a Lifetime ISA consider very carefully whether it’s fit for your needs.

What other money tips, tricks, hacks, products and habits are totally pointless? Join the conversation in the comments below.

Written by Andy


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The Truth – Why You Can’t Afford To Buy A Home

It seems that every government policy to help first‑time buyers get onto the housing ladder has in fact pushed up house prices even more! The average price of a property in the UK jumped by 10% to £253,000 over the year to December 2021. And that’s just the average. Try living in London, where poky properties passing as legal homes average over £500,000.

Swathes of twenty and thirtysomethings can’t get on the property ladder, and the disparity between house prices and wages may make your low salary seem like it’s the fundamental problem. House prices after all are 65 times higher than what they were in 1970, while wages are only 36 times higher.

It’s more complicated than that, as we’ll show, but this certainly doesn’t help.

A 10% deposit for the average house is now nearly as much as the average pre-tax salary. And since house prices grew by £24,000 this year, you would need to have saved £2,000 a month just to keep up, assuming you’re already at the borrowing limit for your salary level set by the mortgage lenders.

Industry guidelines say that mortgages should not be larger than 4.5 times a borrower’s income, so as prices rocket, your deposit has to cover the full amount of the price growth as the banks won’t lend you any more cash. But there has to be some kind of a limit to how much you can borrow, for simple affordability reasons, so it’s not the bank’s fault that you can’t afford a house. Something else is going on.

As a wannabe homeowner, you wouldn’t be blamed for thinking that the housing wealth of others is being protected above and beyond your need to get on the ladder.

As an investor in property following this closely, I’m inclined to agree with you! Why is it that the many government policies for helping first-time buyers never seem to actually… help? And are they in fact just making it worse? Let’s check it out!

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#1 – Scrapping The Stress Test

This first one’s not the government’s fault, but the devolved Bank of England’s. They have confirmed plans to scrap the rate rise stress test for mortgage borrowers, making it easier for you to get a bigger loan. The test checks if borrowers could still afford the mortgage in the event of an interest rate rise of 3%.

It’s great news for people looking to buy right now, since removing this restriction would make it easier for borrowers to take out larger mortgages, helping those who were stopped from buying a house by this rule.

But it’s terrible news for those still saving up for a deposit. That’s because mortgage experts have warned that bigger mortgages would also send house prices even higher than they are already.

Simple market forces mean that when buyers have more cash at their disposal due to a bigger mortgage, sellers will put up their prices to match.

#2 – Help To Buy

Now we turn to the government’s flagship policy to help first-time buyers: the Help to Buy equity loan. This has allowed homebuyers to borrow up to 20% (or 40% in London) of the cost of a new build property from the government, reducing the size of the mortgage needed. Users of the scheme could also get away with having a deposit of just 5%.

Lower mortgage, lower deposit. Sounds good in theory, but there were effectively no limits on the amount of money that builders could make from the scheme, and the ticket price of new builds went up accordingly. New builds already have a premium built into the price, so you have to wonder whether this type of scheme really helps first-time buyers onto the property ladder.

Plus, a study from the National Audit Office found that the scheme mainly supports buyers who do not need the money, and crucially, has helped to inflate already high property prices.

As a side note, we must point out that there’s no equivalent help for people who currently do not own a home but have in the past. People who’ve broken up with partners for instance might be in the same or a worse situation financially as a first-time buyer and in the same age bracket but get zero help back onto the housing ladder.

#3 – The Stamp Duty Holiday

This next one’s on Rishi – it’s clear that the stamp duty holiday during the pandemic, which meant there was no stamp duty on properties up to £500,000, helped to push house prices to new records, and they never went down again once the holiday was ended.

This one must be particularly irritating to first-time buyers because they already pay no stamp duty on houses worth up to £300,000, so this policy only helped existing homeowners, while pushing up market prices for everyone.

Existing homeowners had the chance to save up to £15,000, while the market for everyone has risen by £24,000 in the last year alone.

#4 – Lifetime ISAs

In what is perhaps the best policy idea so far, the government’s introduction of a Lifetime ISA gets less and less helpful as house prices rise. The Lifetime ISA gives a 25% bonus on savings for a house deposit, but stupidly it has an arbitrary cap meaning you can only use it on properties worth £450,000 or less.

The insane part of this cap is that the benefits aren’t even pro-rated! If you buy a house worth £451,000, you cannot use the Lifetime ISA at all – you lose your built-up 25% bonus, and you have to pay a penalty to access your money! That limit, by the way, has stayed the same since it was introduced in 2017. If it had risen with house prices, it would now be £549,000.

If you live in an area where house prices are around £400,000, there’s every chance that they could have risen to the cap of £450,000 by the time you’re ready to buy a year or so from now, completely scuppering your chances of buying if you’re saving within a Lifetime ISA.

We could tell you to move somewhere cheaper, but how far should you be expected to move out of the cities? Londoners will be living in the Scottish Highlands before much longer.

#5 – Planning Law Shake Ups Cancelled

What home buyers really need from the government is not another tweak, or tool, but for it to build some more goddamn houses. In 2021 the government was gearing up, finally, for a major overhaul of the planning system, the biggest barrier to home building.

But… the plans were abandoned after the Tories lost a by-election, since the affluent voters in the area who failed to vote Tory were unhappy with houses being built in their area.

#6 – Low Interest Rates

This next one’s on the Bank of England, but it wasn’t really their fault, given the circumstances. Between 2007 and 2009, given the financial world was burning around them, the Bank lowered interest rates from 5.75% to 0.5%.

This helped to fix the economy but caused house prices to rocket. What really matters with house buying, aside from the initial deposit, is the affordability of the monthly payments.

A £600k house with a 10% deposit might require a mortgage payment of £2,000 a month when the base rate is at 0.25%, whereas in 2007 that house could have been worth just £320k and still have cost you the same in terms of your monthly budget when the base rate was 5.75%. When rates were lowered, simple market forces ensured that the prices of houses, which are in limited supply, rose in line with monthly affordability.

#7 – Brexit

This next one is a mixed bag of good and bad news for aspiring home buyers. Let’s start with the good news.

The irony of Brexit is that Londoners who were most in favour of open borders immigration will be the ones who benefit the most by a fall in house prices if the population size of the UK were to decrease or even if growth slows, which is more likely.

In the UK, in the 10 years leading up to the 2008 financial crisis, house prices tripled. That’s largely because for every 4 new people that entered the economy through population growth and immigration, only 3 new houses were built. Simple supply and demand.

Brexit is also believed to be a major factor involved in the recent pay rises seen across the UK – a double edged sword, because house prices can rise further still if some people are being paid more highly. But if you did get a significant pay rise this year, you might be better able to save for a deposit.

If, however, you’re one of the unlucky people who did not get a pay rise in the last year, houses will still have risen slightly due to those who did now being able to afford a bigger mortgage, but your wage still sucks. As we said, a mixed bag.

#8 – Lockdowns

While a dwindling number of people still think the lengthy lockdowns didn’t cause any harm, there’s no doubting that this government policy had a seismic impact on the housing market.

Home workers, cooped up all day, probably already realised that their houses were too small to live in comfortably… but were forced to confront this reality when they were stuck in it 24/7. The demand for spacious family houses has skyrocketed. It’s no longer just about supply of housing, but also a matter of quality, and space.

#9 – Stamp Duty For Pensioners

We hate stamp duty in general and have moaned about it often on this channel because it’s a transaction tax that interferes with what should be a free-flowing housing market. If there’s one area where stamp duty is holding back the property market the most, it’s when it’s charged to pensioners.

As we just discussed, people now care more than ever before about the quality and size of their home. But a huge chunk of the 4-or-more bed family homes are in the hands of older couples whose kids have long since grown up and flown the nest.

If these people could be incentivised to downsize and give up their huge houses so that a young family could move in instead, it would vastly increase the supply of quality family homes and bring prices down.

However, the government actively disincentivises pensioners from moving home, because if they did, they’d be instantly whacked with a huge stamp duty tax to pay. An older couple moving from a £500k 4-bed house to a £400k 3-bed house would have to pay stamp duty of £10,000! No wonder they don’t downsize.

Reasons To Be Cheerful

It’s not all bad news for aspiring homeowners. Thanks to the tax rises and energy price increases heading our way in April, we’re all about to made poorer… great news for house prices!

Ironically, when everyone has less cash, house prices go down to meet what the most well-off savers can afford to pay. The cost of living crisis might actually precede a slight fall in house prices. Yay…

There’s also the prospect of further interest rate rises this year, which will increase your mortgage interest but… it will also lower everyone’s affordability calculations and hence the amount the banks will lend, and therefore lower the maximum market prices that properties can be sold at. Silver linings, eh?

Do you own, or are you still saving up? How hard has it been for you? Join the conversation in the comments below!

Written by Ben


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Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday: