Weekly Round-up: 12th January 2018

Off to the races

The Gloucestershire town of Cheltenham saw the highest percentage rise in house prices of any major UK town or city in 2017, according to new research by Halifax. The average house price in the town that’s located on the edge of the Cotswolds and is famous for its horse racing and cultural festivals, was 13% higher than in the previous year, increasing from £277,118 to £313,150 in 2017; nearly five times the 2.7% increase in the UK as a whole.

The seaside town of Bournemouth on the south coast experienced the second biggest rise, with an increase of 11.7%, while Brighton, on the south east coast completed the top three with an 11.4% rise in the past year.

Fifteen of the 20 top house price performers are in London and southern England – these include Crawley (10.4%), Newham (10.2%), Peterborough (10.1%), Gloucester (9.5%) and Exeter (9.1%).

Huddersfield (9.3%) in Yorkshire and the Humber, Nottingham (8.9%) and Lincoln (8.4%) in the East Midlands along with Stockport in the North West (8.2%) and Swansea in Wales (7.7%) are the top performers outside London and the South, making the top 20 this year. There were marginal price decreases in a number of other towns: three in Scotland – Paisley (-3.6%), Dunfermline (-2.2%) and Aberdeen (-1.1%); five in Yorkshire and the Humber – Wakefield (-2.9%), Rotherham (-2.2%), Barnsley (-1.6%), Bradford (-0.4%) and Leeds (-0.4%); one in the West Midlands – Stoke on Trent (-4.0%); Bromley in the South East (-0.6%); Hounslow in Greater London (-0.2%); and Sunderland in the North (-0.2%).

Happy Birthday

New research from Barclays finds that the average British parent will spend £4,886.28 on birthdays in the seven years their children attend primary school (ages 4-11). And with parents expected to have to fork out an average of £60,000 on the expenses children’s school years bring, from school uniforms, to trips, to extra-curricular activities, the strain on savings is only going to deepen in later life.

The survey of 1,000 British parents with children aged eight years old or below found that parents will typically spend £433.39 on their children’s birthday parties, and £164.65 on presents – with some more extravagant parents buying as many as 50 gifts per birthday. Catering, the entertainment, the activities, party bags and cake are the top 5 most expensive elements of a birthday, parents claim. Birthday spending reaches even more astronomical heights when it comes to the costs parents have to fork out on other people’s children. The research revealed that parents spend an average of £223.05 on party bags alone (£14.87 per bag), with birthdays attended by an average of 15 children.

Perhaps due to peer pressure from parents and children alike, almost half of respondents (49%) said they feel obliged to invite the whole class, raising attendance numbers to a minimum of 27, according to average class sizes in UK Primary Schools. And although some dutiful parents revealed they attend as many as 30 children’s parties every year, the typical parent in the UK will have to take their child to six occasions a year, spending an average of £16 for a gift.

Go Home

The latest industry figures show the lowest level of sickness absence since records began almost a quarter of a century ago. However Bupa research highlights that millions head into work despite being unwell, with figures revealing that two-thirds (64%) of UK employees have done so in the last twelve months. The findings come at a time when increasing productivity is a strategic goal for most business leaders in 2018. But high levels of ‘presenteeism’ are in fact associated with loss of productivity and reduced performance – as emFuturistic Doctors Officeployees who push themselves into work when unwell, risk delaying their own recovery.

Bupa’s research shows that more than one in four (27%) employees ignore their doctor’s orders to stay at home and ‘soldier on’. A third of employees would go to work despite back pain or issues related to their joints and, disturbingly, a similar number (29%) head to work when suffering from mental health issues such as depression. As two of the most common reasons to be signed off work, Bupa’s experts fear these employees risk worsening their health, increasing the likelihood that they’ll need a prolonged period of time off work further down the line.

Although businesses across the UK are starting to recognise that a healthy workforce is more productive, workload pressure is one of the reasons many people head to work regardless of the state of their health. Many felt their to-do list was too long for them to be able to take time off. A quarter (26%) of people selflessly head into work when they are seriously ill because they worry that their absence will be a burden on their team, unaware that this is counterintuitive.

However, others come into work despite being ill because of a lack of trust and they worry that their colleagues would think they were not genuinely unwell and others worry that being off may impact their job security.

Accessing Equity

The Full Year 2017 report from Key Retirement reveals the highest recorded year both for equity release new plan numbers and total lending. Every quarter of 2017 has witnessed consistent year on year record growth. Sales of plans were 38,995 from 27,666 for 2016, an increase of 41%, whilst Lending increased to £3.01 billion, from £2.15 billion in 2016, an increase of 40%.

The average loan amount has fallen slightly over the period from £77,877 to £77,380 with Drawdown remaining the most popular type of plan accounting for 62% of all new plans (Drawdown and Enhanced Drawdown). Drawdown, which retains accessible further funds, provides potential further borrowing of £910 million in addition to the £3.01 billion in initial advances; giving a total market for the year of £3.92 billion, compared to the total of £2.87 billion for 2016. Lump sum releases have remained steady accounting for 38% of new business the same as for 2016. The average age for those releasing equity was 72 remaining unchanged against 2016.

Away from the consistently top reason for releasing equity of Home/Garden Improvement, featuring high up the list is Oldeer Couple Reading Paperworkdebt repayment both secured and unsecured. Over 1 in 5 are utilising the funds to repay outstanding mortgages. The average mortgage debt for those releasing equity is £84,000 carrying an average monthly payment of £674. Equity release has become established as a prime option for those looking to clear maturing interest only mortgages, with 2017 witnessing the beginning of the first major wave of maturities.

Whilst many lenders are working hard to lend to older borrowers, reduced incomes in retirement, and tightened mainstream mortgage criteria, still means that many are faced with the only option of selling their home to clear the debt. Increasingly though equity release is providing a robust alternative to meeting this need. 31% of those releasing equity were repaying unsecured debts with the money released. With average credit card balances nearing £11,000 and average monthly payments of £292 to service this debt, the impact of releasing equity to eradicate the burden has a huge impact for many on their retirement income.

House prices in Cheltenham up 13% for 2017, parents buying as many as 50 gifts per birthday for the under 8’s, the lowest level of sickness absence since records began and equity release lending up 41%, it’s our roundup of the week.  

2018-02-19T14:18:51+00:00