Asking prices for British houses have jumped by 3.5% on average in the past month, according to Rightmove. They say the move shows “evidence of some life in the market”. We say, sellers beware.
Asking prices rarely reflect final completion prices, which are usually lower, even at the best of times. The most likely explanation for this month’s rise in an otherwise lacklustre market, as Rightmove concedes, is sellers chancing their luck after the usual summer lull.
But they should be wary of pricing themselves out of the market, even if they are open to negotiation – recent research reveals that two in five would-be buyers won’t even visit a property they consider overpriced, even if it matches their criteria.
• Most of us would rather not think about our own demise, which is why so many of us still don’t have a will. But not making at least a basic one could prove costly. If you die without one, your assets are subject to the vagaries of intestacy law and could end up in the government’s hands and/or trigger family disputes after you’ve gone.
Next month is a good time to get a will done, as every November many solicitors offer a big discount on the usual price or waive it altogether through Willaid.org.uk, provided you make a donation to charity in return.
• Mortgage holders who are struggling to earn a decent return on their ‘rainy day’ fund (three to six months’ salary is recommended) and other savings could consider an offset mortgage.
Under this style of mortgage you forgo a separate return on your savings and instead have any balance netted off against your debt before your interest bill is calculated. So if you have £10,000 in savings and a £120,000 mortgage, the interest is calculated monthly on £110,000.
Why bother? Well, with savings rates so low it’s hard to make even a half-decent return on any deposit after tax. Since you pay your mortgage interest out of your net salary, you are in effect earning your pre-tax mortgage rate on the same money via an offset.
Say you have an offset mortgage with First Direct at a three-year fixed rate of 2.74%, then you are earning the equivalent of 4.57% (2.74%/0/6) as a 40% taxpayer on any offset savings.
• Pensioners have another reason to fret about their savings – the Office for National Statistics is mulling changes to the Retail Prices Index (RPI) to bring it more in line with the Consumer Prices Index (CPI).
Products such as NS&I inflation-linked savings certificates and index-linked pensions typically reference payouts to the RPI, which has historically exceeded the CPI by 0.5%-1%. So a move to align the two will penalise some savers and most pensioners, but will save the Treasury about £1bn-£3bn a year.
One way such embattled pensioners could save money is to kick out any adult offspring still hanging around. Comparison site Confused.com says that 32% of 25 to 39-year-olds still live with their parents. Many neither cook nor clean for themselves, and one in four are “too busy living for today to think about the money they will need to pay back their debts tomorrow”. It’s clearly time for some parents to get tougher.
• Credit and debit cards could be on their way out, according to The Payments Council. A host of innovative ways to pay include facial recognition technology, which would allow users to order and pay for items such as coffee merely by walking into a shop and saying their name.