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New Housing Trend in the South West

By Jessie Wilkens on November 30, 2011 in

While the housing market has taken a continued dip, with housing prices dropping, there are still some home owners who are doing just fine for themselves. A new trend in Cornwall, Devon and other South West areas has started, with people renting out spare rooms in other people’s homes.

Data from Spareroom.co.uk, looking at 2.2 million users, has found that the homeowners in the South West are raking it in. They are earning thousands of extra pounds of income a year renting out pieces of their homes.

Spareroom believes that they’ve seen a marked increase in this practice, both because homeowners are in need of the extra income and are able to get tax benefits by renting rooms, and because so many people are feeling financial strains.

In Truro, for instance, there has been an 89% rise in live-in landlords during the last two years, while housing prices in that area have risen 121% in the last two years.

As Matt Hutchinson, the director of Spareroom, explained,

“The rise of the lodger has been a feature of the financial mire that the UK finds itself in, with cash-strapped homeowners trying to find ways to boost their incomes to pay escalating bills.”

He continued, “What’s clear from these figures is that renting out a spare room continues to be one of the most popular and simple ways to make some extra cash, and with the economic climate still in a state of ill health, live-in landlord numbers are likely to continue rising.

After all, is there an easier way to make a tax free income of £4,250 a year?”

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Osborne’s Latest Proposal

By Jessie Wilkens on November 28, 2011 in

George Osborne just unveiled a new measure that would boost lending to hurting businesses. The £40bn plan is likely to be the main focus of the Tuesday Autumn Statement. This will be part of the cornerstone program, along with plans to lower rail fare rises and freeze fuel duties, in order to help consumers.

As Mr. Osborne told the BBC on the One’s Andrew Marr Show, ‘The government will underwrite the loans the banks make to small businesses in order to cut the interest rates the small businesses pay.We are making available £20bn for the National Loan Guarantee Scheme; however, it sits within an envelope that could be as large as £40bn.”

He continues by saying, “These are guarantees. We are not borrowing this money; we are underwriting the loans that are being made.”

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UK Car Prices Through the Roof

By Jessie Wilkens on November 23, 2011 in

In addition to all of the other economic woes hitting the UK at the moment, add to these the cost of driving. RAC has just revealed that drivers have experienced a 14% rise in the cost of motoring this year. And the hardest hit are the middle-class car users. The report from RAC says that motorists are paying, on average, £128.64 a week to keep the family car going.

The fuel costs have been estimated to be 12.4% higher than they were a year ago, and the maintenance costs are 8.8% higher.

Ironically, at the same time that car costs are skyrocketing, car values are depreciating. Depreciation for cars rose 16.67% during the last year.

Adrian Tink, the RAC motoring strategist, explained,

“This year’s cost index highlights the tough conditions being faced by Britain’s motorists. With the annual cost of motoring approaching £7,000 the price burden of car ownership is hitting drivers hard. The increase of almost three times the rate of inflation is crippling drivers’ wallets and something needs to be done to stem the tide.”

Looks like it might be time to invest in a bike.

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Consumer Group Points Finger at High Street Banks

By Jessie Wilkens on November 21, 2011 in

The consumer group called “Which?” is making some pretty strong allegations based on their recent undercover investigation. They sent nine researchers out into the filed to visit 37 High Street banks and building society branches across the UK.

Going Undercover

All of the undercover researchers were over 60 and were inexperienced investors. What did they find? They found that High Street banks offer “shockingly” poor investment advice to inexperienced older investors.

The research documented that they lied to the potential investors about charges and offered risky and inappropriate investing advice.

They found that in 17 of the 37 cases, risky products were recommended. Which? said that,

“In the worst case one of our researchers was told by a Yorkshire Bank adviser to invest £50,000 in a bond netting more than £4,400 in commission.”

Shocking Discoveries

The executive director of Which?, Richard Lloyd, said, “It’s shocking to see such low standards. It’s also disappointing to see that things haven’t improved in the past year, despite two high street banks being fined for advice failings and poor complaints handling.”

They are reported their findings to the Financial Services Authority and are asking for an investigation and punishment of those that showed the worst practices.

Mr. Lloyd said,

“We want the FSA’s Retail Distribution Review to force banks and building societies to be more upfront about the cost of their advice. We will also be talking to the banks and building societies about improving their standards. Our investigation shows that the High Street isn’t the best place to go for investment advice. If in doubt, consumers should always talk to an independent financial adviser.”

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Good News for the UK Inflation Rates

By Jessie Wilkens on November 16, 2011 in

A bit of good news for the UK – but only a bit. Inflation rates came down slightly from their three year high of 5.2% in September, now at 5%, according to the Office for National Statistics (ONS). The slowdown was due mainly to food prices lowering, to air transportation and to petrol prices.

Food Price Wars

Britain has been witnessing an all-out food price war, as the UK largest supermarkets are having price wars and food prices fell .9% this month as compared with last month.

Gas and electricity bills, however, have moved up significantly, rising 1.4% and 1.5%.

Good News

As Brian Hilliard of Societe Generale said,

“It’s good news and it should help to reinforce the Bank of England’s conviction that inflation has peaked. I think that is correct.”

He continued, “However, I think the emphasis tomorrow in the inflation report will be on the deepening gloom from the damage the eurozone crisis is doing to our economy and growth prospects.”

The British Retail Consortium (BRC) has said that shop price inflation has lowered dramatically to 2.1%, which is its lowest point this year. The change is due, they explained, to the supermarket price war, which has also led to petrol wars.

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Thatcher’s Privatization Efforts Paying Off

By Jessie Wilkens on November 14, 2011 in

Sometimes, privatization wins in the global economy. 25 years ago, former Prime Minister Margaret Thatcher’s government decided to privatize British Gas. They urged Brits to purchase shares and they used a well-known advertising slogan “if you see Sid tell him.”

Purchased Shares

Approximately 1.5 million people purchased shares, at the price of 135p per share. There was a minimum purchase required of 100 shares. As John Douthwaite, chief executive of SimplyStockbroking, explained to the Observer,

“Investors have actually done rather well out of this, making 12 times their original stake if they have held onto their shares over the years. A lot of people know they have the shares, but may not realize their worth.”

The Thatcher Philosophy

Mrs. Thatcher’s philosophy was to create a more privatized policy to create a share-owning democracy. The policy has worked, overall, as most former state-owned companies are now providing quite nicely for investors.

A few of the other companies that have fared well when they privatized include BAA, the airports operator, and Severn Trent, the water company.

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Treasury Minister Danny Alexander Weighs in on Eurozone Crisis

By Jessie Wilkens on November 7, 2011 in

Certainly, the crisis in the eurozone is hitting all those involved, and that includes citizens in the UK. As said, Treasury Minister Danny Alexander

“Of course the situation in the eurozone is very serious, it’s one that has an effect on business confidence here.” He continued to say, “After all, three million jobs in the UK depend on our trade with the European Union, and those people and those businesses are affected by the uncertainty.”

He pointed out that the G20 summit in France definitely helped to create some positive steps to boost the global financial picture.

Earlier in the week, Prime Minister David Cameron warned that the British economy is getting worse “every day” for as long as the euro crisis doesn’t see a resolution. He told European leaders that there is no longer time to wait for a rescue package.

As Mr. Alexander continued,

“The most important thing we can do as a responsible global leader is to work alongside the Americans, alongside the Chinese and others, to put maximum pressure on the euro zone including Greece to take responsibility for sorting out the problems that they have and take our own responsibility for ensuring there is the kind of global bazooka to sit alongside the European bazooka.”

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Strengthening Ties Between the UK and Indonesia

By Jessie Wilkens on November 2, 2011 in

The UK and Indonesia are looking to strengthen ties between the two, and perhaps to make Indonesia the UK’s strategic partner in the next 10 to 20 years. Edward Oakden, the managing director of UK Trade&Investment recently told the Jakart Post that, “We want to look at how we build up our relationships because we see Indonesia over the next 10 to 20 years as becoming one of our important partners in Southeast Asia and the world. You have become the third-largest democracy and the largest economy in Southeast Asia. We want to be a strategic partner with you.”

Oakden has been in Indonesia this week with a UK business delegation that is led by Vince Cable, the Secretary of State for Business, Innovation and Skills. They are looking for ways to initiate new partnerships both in education and infrastructure.

Trade Ministry Director General for International Trade Cooperation Gusmardi Bustami said, after the meeting between Indonesian and UK delegates that,” I think we have the same spirit and positive engagement.”

During their meetings, Indonesia raise concerns about the Indonesian Sustainable Palm Oil (ISPO) certification and about some of the policies that make it difficult for exports of Indonesian goods to be made. The UK also expressed some of their frustrations about the 75% foreign ownership cap in pharmaceutical companies in Indonesia and other problems.

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RPI Increase Hurting UK Businesses

By Jessie Wilkens on October 31, 2011 in

The government’s plan to increase business rates next April is raising feathers for shops and small firms. With last month’s rise in the Retail Prices Index of 5.6%, the government feels it needs to make this move.

Now, however, many small businesses and groups say that they simply won’t be able to continue under these terms. The British Property Federation spokesman said that retailers and other businesses can “ill afford” these increases. He said that it is necessary to stop linking them to the RPI.

One business owner, for instance, Liz Lawson, said that her business rates used to be about a third of her rent five years ago; now they are 45%.

A spokesman for the British Independent Retailers Association said that, “Independent shop owners are being squeezed from all sides.”

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English Sawmill Investing in Two New Projects

By Jessie Wilkens on October 26, 2011 in

England’s largest sawmill operator just unveiled a £50 million investment in two of its operations – in Fort William and Latvia. The plan is to invest approximately £43m into the Lochaber site and the rest of the planned amount with be invested in Lavia. BSW Timber recently posted a 187% increase in profits to reach a level of £17.2m.

As BSW Timber chief executive Tony Hackney explained, “For some time, the development at BSW’s colossal Fort William site, at the foot of Ben Nevis, has been postponed in favor of growth through the acquisition of Howie Forest Products in Dalbeattie, the largest sawmill in the UK and one of the largest in Europe.”

The other mills run by BSW are at Boat of Garten, Petersmuir in East Lothian, Carlisle and Wales.

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