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5 Things to Consider if You’re Thinking of Relocating for Work

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relocating for work

From hidden costs to settling into a new community, there's lots to think about, says Vicky Shaw.

Would you up sticks and move away from your area if you were offered better career prospects or a bigger salary? The dilemma of whether to relocate for work or stay put can be tricky to answer – particularly for those who already have strong ties with their local community.

Among employees who have never relocated, 59% of men and 65% of women say the desire to stay near family is the primary reason they’ve stayed put, according to a new survey by jobs website Indeed.co.uk.

On the one hand, there may be the chance of new opportunities opening up, the chance of a pay-boost and better living standards. But on the other, families also need to weigh up how other members of the household may settle into a new life – and how this may also have an impact on the household budget.

Here are some factors you may want to consider when weighing up whether it’s worth relocating for work or not…

relocating for work

1. Can you afford the moving costs?

The cost of moving home can quickly add up to thousands of pounds.

According to research from Lloyds Bank, home movers across the UK may typically need to budget around £12,000 just to cover moving costs.

If you plan to buy a new home, there are expenses to consider such as stamp duty, or in Scotland the land and buildings transaction tax, or in Wales the land transaction tax. There are also estate agent and legal fees to consider, as well as the cost of a removal firm. And if you’re renting, you may need to consider pulling together a bigger deposit.

2. Can you afford the house prices or rents in the area you are thinking of moving to?

You may be getting a pay rise if you relocate, but consider whether this will be swallowed up by a higher mortgage or rental bill every month. If you’re moving to a bigger town or city, the housing costs may be higher if there is stronger demand for properties in these areas.

It may be possible to find cheaper accommodation by finding somewhere to live slightly further afield, but in popular commuting towns property prices may also be high, and the cost of your journey into work could also be higher.

3. What about schools and childcare costs?

Childcare costs can vary hugely depending on where you live. And if you’re currently close to grandparents who are currently helping out with unpaid childcare, the expenses could increase quite dramatically by moving far away. If you or your partner will be getting a bigger salary by moving, the extra childcare costs may be balanced out.

Also bear in mind that house prices in locations near popular and highly-rated schools can often be significantly higher than those in their surrounding areas. For example, recent research from audit firm PwC found that houses within the catchments of the top 10% of England’s primary schools can cost around £27,000 more than those in the wider postcode districts.

relocating for work

4. Will your employer provide you with a relocation package?

Whether it’s your existing employer who is asking you to relocate, or you’re considering going to a new company, you may be able to negotiate a relocation package, particularly if the firm thinks it may help sway your decision in favour of moving.

Ask the company’s HR department whether they can help with expenses such as moving costs, transport and any temporary accommodation you may need.

5. Is working remotely an option?

New technology means it’s easier for many people to work from home at least some of the time now, although this will very much depend on what your job involves.

It may also be possible to stay living where you are but have a longer commute to work. Three-fifths (60%) of men and 59% of women say they are willing to travel for 30-60 minutes to work, if it meant they could avoid relocating, Indeed’s survey also found. But when it came to longer journey times, men were around a third more likely than women to say they would commute for 60-120 minutes in order to avoid relocating.

Confused about Retirement Savings? 7 Popular Pension Myths Busted!

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With the next phase of automatic enrolment starting from April, Alistair McQueen from Aviva separates facts from fiction.

The minimum amounts that can be put into workplace pensions will be stepped up from April, as UK savers are encouraged to put aside more for their retirement.

Under automatic enrolment rules, from April 6, the minimum that can be put in by employers and their staff will increase from 5% of qualifying earnings to 8%. Within the new 8% rate, at least 3% must be paid by the employer, with the remaining 5% made up by staff.

Automatic enrolment started in autumn 2012, amid concerns people were living for longer but not saving enough for their later years. “Automatic enrolment is approaching its seventh birthday. In its short life, it has already brought a quiet revolution to pensions in the UK,” says Alistair McQueen, head of savings and retirement at Aviva.

Pensions are not always easy to understand, though, and there’s still a lot of confusion around them for lots of people. Do you feel unsure of the facts? Here, McQueen busts seven pensions myths…

busting pension myths

Myth 1: No one is saving into a pension

Automatic enrolment has introduced more than 10 million new savers to workplace pensions since 2012. There are now a total of 22 million people participating in workplace pensions in the UK.

Myth 2: Pensions are for old people

Contrary to popular perception, it is the under-30s who are leading the way. All ages have seen an increase in workplace pension participation since 2012, but the under-30s have seen the biggest increase – more than doubling from 35% saving to over 79% by 2018.

busting pension myths

Myth 3: The government will pay for all my retirement

It’s true that we can expect some money in retirement from the state, but this is currently up to a maximum of about £8,500 every year. Today, the majority of the typical retirees’ income in retirement is from sources beyond the state, such as private pensions and other savings.

Myth 4: I will receive my state pension from age 60 if I’m a woman, or 65 if I’m a man

These commonly referred to and long-standing ages were set decades ago, when we could generally expect a few short years in retirement. Since then, average life expectancy has greatly increased, and the age at which we are eligible for our state pension has been increasing, with women starting to qualify for their state pension at the same age as men.

The state pension age is set to keep rising too. The yourpension.gov.uk website can help you check your state pension age.

busting pension myths

Myth 5: I can’t retire until I reach my state pension age

We are free to retire whenever we want to. However, we can only really think about retiring when we feel we have saved enough money to meet our needs when we’re not working. New rules allow people to access private pensions from age 55 – but the state pension age is set by government.

As individuals, we have the freedom to choose our retirement age, but this brings with it a responsibility to ensure we can fund our lifestyle from that point onward. There are many free online resources to help make this decision – such as Aviva’s ‘My retirement planner’ (aviva.co.uk/retirement/tools/my-retirement-planner).

Myth 6: I’m the only one who is confused by pensions

Research suggests only a minority of us feel we really understand pensions. So, if you’re feeling a bit uncertain, you’re not alone. The great news is that more of us are saving for our future. And if you’re looking for a little nudge in the right direction, Aviva suggests three general rules of thumb that could help you be better prepared:

1. Save at least 12.5% of earnings towards your retirement. This can include money from your employer and the taxman.

2. If possible, start saving at least 40 years before your target retirement age.

3. Try to have built up at least 10 times your salary in your pension by the time you retire.

busting pension myths

Myth 7: Retirement is further away than ever

There’s still a collapse in workplace participation as we progress through our 50s. This represents a huge waste of talent, experience and potential. One of the strongest levers we can pull to help fund our lives in retirement is to work longer. Many employers are taking fresh steps to support a fuller working life, with the aim of ensuring that age is no barrier to opportunity.

Tenant Fees Act (2019): An overview

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The Tenant Fees Act will come into force on 1st June 2019. At the centre of the new law is a ban on all tenant fees, including agency and any third party fees.

tenant fee act 2019

The guidelines from the government will come soon, but here’s what we know so far about the Tenant Fees Act (2019).

What does the Act comprise of?

Here are the key parts of the Act:

tenant fee act 2019

All Payments Are Prohibited Except Rent, Utility Bills, Deposits (and 2 Exceptions)

Tenants will no longer be responsible for any costs except: the rent, the tenancy deposit and a holding deposit (more on these below).

This means it is no longer possible to ask tenants to cover the cost of their own referencing. Tenants will not be able to be charged for check-in, inventory or set up fees. These fees will be deemed prohibited by law

The only two exceptions are two forms of ‘default’ fee. These fees are chargeable during the tenancy in the following circumstances, provided the relevant clauses are written into the tenancy agreement.   

a) Late Rent Fees

Fees will be charged for rent payments that are over 2 weeks late. The fees can be up to 3% over the prevailing Bank of England base interest rate. Because this is an annual interest rate, the amount will need to be calculated for the pro rata interest accrued on the outstanding rent.

For example:

The tenant is 30 days late for one £1,500 rent payment.

The base rate of interest is currently 0.75%, therefore the amount the tenant can be charged for is the outstanding rent plus a fee of 3.75% of outstanding rent, pro rata for the 30 days. (3.75% of £1,500 is £56.25.) 30 days is 30/365 of the yearly rate. Therefore, the pro rata amount is calculated by multiplying £56.25 by 30/365, which is £4.62.

Landlords will of course still be able to serve Section 8 notices for late payment of rent provided the rent is 2 months or more in arrears.

(b) Lost Keys

Tenants can be charged for losing their keys (or other security device) but the charge must be a reasonable amount for which evidence must be provided.

Both default fees will need to be included in the tenancy agreement to be able to charge them, and previous rules about fair clauses will still apply.

It has also been advised that landlords shall be able to charge up to £50 for a change of tenant, and with regards to an early surrender request by a tenant, a landlord shall be able to charge the tenant for the remaining unexpected void period.

tenant fee act 2019

Cap on Tenancy Deposits

The amount of security deposit that can be requested is being reduced to 5 weeks for AST’s (Assured Shorthold Tenancies) and licences where the rent per annum is up to £50,000, and up to 6 weeks for those tenancies over £50,000 in rent per annum.

This applies to all tenancies regardless of the reason a higher deposit was taken previously. (ie: if there was poor credit etc.)

The ability to request a higher deposit due to the applicant having a pet has also been removed, however, if landlords will consider a pet, when marketing the property, it can be advertised at 2 rental amounts (ie: £1,500 p.c.m. or £1,550 p.c.m. with 1 x pet)

tenant fee act 2019

Cap and New Rules on Holding Deposits

Holding deposits will be limited to one week’s rent.

The holding deposit can only be held for 15 calendar days unless another ‘deadline’ date is agree in writing subsequently by both parties.

After the deadline, the holding deposit must be repaid within 7 days.

The holding deposit must be returned to the tenant via a refund or by being put towards the first rental payment if agreed in writing.

There are some exceptions. In these cases the holding deposit shall be forfeited  but a reason must be given in writing to the tenant within 7 days:

  • The tenant withdraws
  • The tenant doesn’t take all reasonable steps to enter the tenancy in the required time
  • The tenant fails a right to rent check
  • The tenant provides misleading information which materially affects their suitability to rent the property
tenant fee act 2019

What Are the Penalties to Landlords Who Charge Tenant Fees?

Any person,  landlord (or agents) or any third parties who charge fees to Tenants could face paying huge fines.

The first offence would be a civil offence, with a fine of £5,000.

If the offence is repeated within five years, this would be deemed a criminal offence and levies a fine up to £30,000.

Local Trading Standards organisations will enforce the ban.

8 Tips for Successfully Managing your Money as a Couple

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Finances can play a big part in relationships. Vicky Shaw finds out how to set good strategies in place and avoid money fall-outs. So, love has blossomed and you think you've found the perfect partner - but are you financially compatible? Understanding each other on money issues can go a long way to making or breaking a relationship.

managing money in a relationship

“Whether you’re married, living together or just getting to know one another, it’s crucial both parties understand each other’s finances and know how they view money management,” says Emma-Lou Montgomery, associate director at Fidelity International (fidelity.co.uk).

“Being open to discussing the long-term financial plans you may have, and vice versa, can save having a lot of issues further down the line.”

Here, Montgomery shares eight tips for making sure your finances flourish in your relationship…

2019 money financial predictions

1. Don’t be afraid if one of you is a saver and the other is a spender

In a balanced relationship, having one keen saver and one more comfortable spending (within reason) can be beneficial – if it’s clear who’s responsible for what financially in the relationship. The saver can encourage a healthy attitude towards financial saving goals – be it a first home, an adventure holiday, or just cash for a rainy day. On the other hand, the spender may take on monthly living costs and cover expenses like socialising with friends and family.

2. Don’t leave your partner in the dark

All too often, couples leave one of the parties completely in the dark over bigger commitments, like savings or retirement plans, leading to misunderstandings and tension.

The money and your financial security belong to both of you, so make sure you both have at least a basic understanding of the state of your finances. It may feel daunting at first, but talking openly about your finances is so important, both when fostering new relationships or maturing in a long-term relationship or marriage.

managing money in a relationship

3. Be honest

Many people hide debts from their partner – often out of embarrassment. But honesty really is the best policy. If you’ve come to the point when securing a joint loan or mortgage makes sense, it’s crucial any unpaid debt or blips on credit scores come to light. A supportive partner will work with you to find a solution. If they’re not up to it, then better you know now rather than later.

4. Communicate when one of you earns more than the other

Pretending you earn more than you do when you first meet might seem like a good idea, but eventually the shortfall will become apparent. Communication here is key. Some couples have separate bank accounts, others keep a joint account for household expenses, some agree to split bills equally, some do it in proportion to their income, while others divide up the outgoings, with one person paying the mortgage/rent and another responsible for utility bills, for example.

managing money in a relationship

5. Don’t let ‘outside’ interests/expenses become a source of conflict

It may be that you have children from a previous relationship who need your financial support, or a hobby that requires a substantial financial outlay. If you aren’t open about the costs with your partner, these ‘outside’ expenses can become a source of conflict. Be up-front and honest, so you both can ensure you’re able to factor them in to your shared budgeting.

Often, keeping a separate pot of money or a separate account for these expenses is a good way to ensure they’re accounted for and covered. Separating them out also means they’re not a constant niggle to your partner. Setting up a direct debit to cover these costs is another way to make it easier.

6. Discuss the future now

For example, if you both want to travel the world later in life, factor that into your finances now to make sure that when you do travel, you can travel in style.

managing money in a relationship

7. Don’t be afraid to take control

While it’s good to plan together, make sure you also take responsibility for your own finances – whether it’s by opening a new savings account or contributing more into a pension.

8. Protect yourself and your partner

Nowadays, many people choose to live together for longer before getting married or without tying the knot at all. However, this can be an issue in terms of your finances. You could consider setting up an agreement to ensure that both parties are protected and assets are divided as you would wish.

House Buyers Ignore Brexit in January

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house buyers ignore brexit image

With the first month of 2019 trading behind us, it appears that despite the chaos in the Palace of Westminster around Brexit, house buyers are simply getting on with making decisions around matters of day to day life, which are the drivers for a house move.

All of the McCarthy Holden branches experienced an uptake of buyer interest in January and the McCarthy Holden web site enquiry hits were up on the January 2018.

Whilst it is too early to comment on the market direction for 2019, it nevertheless appears that house buying decisions are mostly made by very localised factors such as schooling, access to work and general employment levels and family situations ranging from the three D’s (death, divorce and debt) through to the three N’s (new job, new baby, new beginnings).

high levels of house sales image

Amongst the Estate Agents in Fleet, our own branch had a particularly productive January with, witnessed by events such as £3.4m. worth of residential property sales exchanging contracts in just one 24 hour period.

As we said in our 2018 / 2019 market review, who knows, there might well be some pleasing outcomes to report at the end of 2019.

So, if you are considering a move this year, now is a great time to get ahead of the competition by calling one of our property experts for a free, no obligation, advice on how is best to market your home.

8 Key Money Moments to be Prepared for in 2019

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It pays to be prepared - or at least means you'll be a little more in control of your money. Vicky Shaw reports on this year's financial forecast.

2019 money financial predictions

As with any year, 2019 is bound to bring some unexpected surprises. But, looking ahead, there are some money moments you may be able to prepare for – even if some are more certain than others.

“Uncertainty and change are a part of life, and we’ll be better placed to ride these waves if we’re prepared for whatever may come next,” says Alistair McQueen, head of savings and retirement at Aviva. “We will all benefit from a couple of hours to prepare our finances for whatever 2019 may bring.”

So what can you do to help get prepared? Here, McQueen highlights some of the key 2019 money moments to get ready for…

2019 money financial predictions

1. Get ready for the rising state pension age

In 2018, the state pension age for men and women was equalised, at 65. Men and women will now experience a state pension age rising in tandem. The state pension continues to represent most peoples’ biggest source of income in retirement. So, in 2019, it could be a good idea to request a free state pension forecast from the government to understand when you will be entitled to yours, and how much you may receive (gov.uk/check-state-pension).

2. Get ready for a longer working life

Last year saw the number of people in work over the age of 50 reach a record 10 million. As our life expectancy rises, we can expect this trend to continue. Aviva expects one in three workers in the UK will be over the age of 50 in the next decade. So, looking ahead, it may be worth starting to re-frame your expectations towards a longer working life. Aviva is launching a new service called the ‘mid-life-MOT’, to help our people prepare for this longer working life.

2019 money financial predictions

3. Get ready for an increase in pension payments

Employers have duties to provide a workplace pension. Since 2012, this new system – called automatic enrolment – has introduced nearly 10 million new savers across the UK to pensions. It’s been a great success. In April 2019, the minimum pension payment will increase from 5% of your earnings to 8% of your earnings. At least 3% of this 8% must come from your employer. A workplace pension can be a valuable way of saving for later life. So, in 2019 think about preparing for this increase in payments. For your future, it will pay to save.

4. Get ready for potential further interest rate increases

After a near decade of record low interest rates, 2018 saw the Bank of England increase its base rate to 0.75%. Many commentators expect 2019 could see further small increases in the base rate, in a bid to ease rising price pressures. This would be good news for savers, but not so good for the millions of borrowers holding short-term loans and mortgages. So, in 2019, it would be a good idea to shop around for the best saving and borrowing rates. A small change could make a big difference.

2019 money financial predictions

5. Get ready for more people taking up pension freedoms

The new pension freedoms for over-55s have proven to be hugely popular. More than £20 billion has been withdrawn from private pensions in new flexible payments. If you’re over 50 and considering your options, it would be a good idea to consult the government’s free Pension Wise service for guidance (pensionwise.gov.uk).

6. Get ready for more ways to manage your money online

Many of us regularly go online to send emails, do a spot of shopping or catch up on social media. But using the internet to manage pensions and investments continues to be an afterthought for many. Most pension and investment providers now offer free online services to help you manage your money. So, in 2019, consider taking advantage of these services so you can make the most of your money, whenever and wherever you want.

2019 money financial predictions

7. Get ready for the new face of the Bank of England £50 note

The new face on this new note will be announced in summer 2019 – and the Bank has stated that it will be someone who has contributed to science.

8. Get ready for the long game

2019 looks set to be a time of volatility and change. At times like these, it is helpful to remember that investments are typically designed to navigate at least a five-year horizon, or even up to 40 years if it’s our investment in our retirement. So, in 2019 it would be a good idea to remember those longer-term goals.

2019 money financial predictions

New Campaign Urges Consumers To Buy British Christmas Trees

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christmas trees

A new campaign has been launched by Grown in Britain to encourage UK consumers to buy more assured British grown Christmas trees.

Grown in Britain says many people may be assuming they are buying fresh British grown trees, when they are not. The organisation is urging consumers to support rural businesses in Britain and reduce ‘tree miles’ by checking where their Christmas tree comes from before they buy.

christmas trees grower

According to Government statistics, £3 million pounds worth of real Christmas trees were imported into the UK last year.

Grown in Britain has created a Christmas tree licensing scheme that operates throughout the supply chain from growers to retailers and provides an assurance that trees are fresh and grown in the UK in a responsible way with due regard to the environment.

Chief Executive Dougal Driver says: “The UK has a flourishing Christmas tree growing sector and our auditing process checks that trees are definitely from the UK, grown responsibly and meet a strict forest floor to shop floor freshness test.”

He adds: “This is the start of the campaign with approximately 50,000 Christmas trees currently licensed for sale, but the public can really make a difference by asking their stockists to supply assured Grown in Britain trees now and in the future. This will help ensure the number of assured homegrown Christmas trees rises over time, with a consequential boost to the UK’s rural economy.”

To find out your nearest supplier of Grown in Britain licensed Christmas trees, look at the licence holder map on the Grown in Britain website www.growninbritain.org

christmas trees growing

Thinking about adding a granny flat? Here are 9 points to keep in mind

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It might be a great solution but building an annex is a big decision. Lisa Salmon (who had one built for her mum) discusses the granny flat boom.

adding a granny flat pros cons

Thanks to rising property prices and expensive care home fees, a growing number of families are opting to live with, or right next to older relatives, by building granny flats on their homes.

The latest figures from the Valuation Office Agency show there are now nearly 39,000 granny annexes in England and Wales alone – an increase of 16% in recent years.

The government has tried to encourage families to live together by discounting council tax and scrapping stamp duty increases on annexes, and ministers have stressed the benefits of inter-generational families, which help save the NHS and social care system a lot of money.

But if you’ve got an elderly relative, is constructing a granny flat on your home the right option for you and them?

building granny flat points to consider

It was certainly the right choice for our family. Around three years ago, my widowed mother Sheila, now 81, and my husband and I decided we should build a granny flat for her on the side of our house. So she sold her house about 40 miles from us, and we applied for planning permission to build a two-storey annex.

It was a huge decision for us and my mum, who was leaving the house she’d lived in for more than 50 years, as well as her friends and neighbours, to live in a new city where she only knew us.

But the alternative was that, as she got older and became less mobile, she could be lonely – and there’d be no one to help her if she fell, for example, or became ill. Her moving to live, not with us, but next to us, was clearly the best option – particularly as she’d always been vehemently opposed to moving into a residential home should the need arise.

My mum’s now lived in the annex for around two years, and while the process wasn’t always easy (the build was stressful, to say the least!) and my mum understandably still misses her old life and home, we have no regrets. My mum lives completely independently in her self-contained one-bedroom flat on the side of our house, still regularly drives over to her old golf clubs 40 miles away, and is (gradually) forging a new life here.

family living granny flat

There’s no doubt, building a granny flat has worked for us. But what about other families?

Caroline Abrahams, charity director at Age UK (ageuk.org.uk), thinks granny flats are a “great solution” for elderly living – although clearly they’re not something that can be rushed into.

“This type of accommodation is one of a range of housing options open to older people who want to maintain their independence for longer in a smaller, easier-to-manage home, with around-the-clock family support when needed. It’s a great solution, but needs agreement and understanding on living arrangements and expectations,” says Abrahams.

“Bold and innovative new independent living arrangements should be encouraged and made easier to implement and afford. When so many older people are finding it increasingly difficult to get the support they want when they need it, alternative living arrangements for older people such as this play an important role in reducing the overwhelming demand on not only health and social care services but on housing too, and will ensure good health and wellbeing for longer.”

building a granny flat

Thinking of building a granny flat? Here’s nine points that might help…

1. Bridge before care

While it may not be possible for an elderly person to avoid going into a care home eventually, a granny annex can offer a useful bridge between independence and the provision of care.

2. No council tax

The National Federation of Builders (NFB) says an annex occupied by an elderly or disabled family member has a 100% council tax discount.

3. Shared bills

Depending on how it’s built and your preferences, bills may be shared between the family home and the granny flat, potentially saving money (assuming granny or grand-dad doesn’t have the heating on all the time).

4. Do it sooner not later

Moving can be very stressful for anyone, but especially for an older person. A decision to build a granny flat needs to be made sooner rather than later – ie. before an elderly relative is in desperate need of an accommodation change, and while they’re still reasonably mobile if possible. Look on it as an investment for the future.

5. Choose builders carefully

A new build can also be very stressful, so choose your builders carefully. The NFB’s Find a Builder (builders.org.uk/find-a-builder) helps people contact reputable builders who’ve been strictly vetted and have undergone a range of reference checks.

6. Plan for future needs

Think carefully not just about the elderly person’s needs now, but what they may be in the future. If your granny annex is two storeys, do the bedroom and toilet need to be downstairs in case mobility becomes an issue in later years?

7. Communication is key

Honest and detailed discussions are crucial, both with the builder before construction about the budget, timescale and exactly what you and the elderly relative want, and with your relative about how bills will be paid (if they’re shared), who’s responsible for the garden if it’s shared, whether you eat together, whether you knock before entering each other’s homes, etc.

8. Get legal advice

It’s important to discuss, and get legal advice if necessary, what happens if either the younger family or the older relative wants to sell up and move to a different property but the others don’t want to sell.

9. Be prepared for relationship breakdowns

It may also be worth seeing a solicitor to discuss what happens if there’s a relationship breakdown, as one of the family homeowners may demand their share of the property in divorce proceedings. What happens to the granny flat occupant then?

adding granny flat

If you are considering building or adding a granny flat and want to know how this could change the value of your home, please do call your local office for a free no obligation market appraisal where you can discuss the options that you are considering. https://www.mccarthyholden.co.uk/branches/

Bank of England Warns of No-Deal Brexit House Price Crash

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Property Hampshire Warning Bank of England
Governor of the Bank of England Dr Mark Carney leaving Downing Street, London yesterday, following a Cabinet meeting.

Was this a forecast?

The Governor of the Bank of England has warned ministers that house prices could crash by more than a third in the event of a disorderly, no-deal Brexit, according to a report by Gavin Cordon, Press Association Whitehall Editor.

Yesterday, Mark Carney briefed Theresa May and senior ministers on the Bank’s planning for a “cliff edge” break with the EU at a special Cabinet meeting on Thursday to review the Government’s no-deal preparations.

It is understood he warned house prices could fall by up to 35% over three years in a worst case scenario, as sterling plummeted and the Bank was forced to push up interest rates.

“What could be lost in the alarmist headline is that Carney wasn’t making a forecast,” says John Holden Chairman of McCarthy Holden.

We’ve been here before

“And hang on, haven’t we been here before?” Holden continues.

Back in May 2016, the then Chancellor of the Exchequer George Osborne warned that following a leave vote house prices would drop by 18%. Around the same time US President Barack Obama said Britain would go to the “back of the queue” for trade deals with the US if it votes to leave the European Union.

“So again today we read headlines which could damage confidence further in both the wider economy and the UK residential property market.” continues Holden.

Understanding the context

Fortunately, some leading economists have stepped up and put Mr Carney’s comments in a framework of context.

Take BBC’s economic editor Kamal Ahmed, who stated today that it appears that the Governor wasn’t providing the Cabinet with a forecast of what the Bank believes would happen in the event of a no-deal Brexit. He was briefing the Cabinet on what preparations the Bank was making if that does happen, including last November’s stress test.

It was not a forecast.

It was an apocalyptic test where the Bank deliberately sets the parameters beyond what might reasonably be expected to occur. The major banks all passed the test, giving reassurance that the financial system can cope with whatever happens next year.

The Governor believes that a ‘no-deal’ scenario would be bad for the economy. But not as bad as the headlines today which are based on a doomsday scenario that is not actually forecast to happen.

The market insight from John Holden is  that “On the shop floor at McCarthy Holden the first half of 2018 saw one of the poorest levels of house sale transactions for some time, however, since July positivity was in the wings because house buyers began surfacing again with intent.”

“Right now, discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. The news for house sellers is that you can and will sell successfully in today’s market, but don’t expect a fancy or inflated price.”

“Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake. Savvy buyers know this and are taking care of business now” concludes Holden.

John Holden - Chairman McCarthy Holden

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