Weekly Round-Up: 9th March 2018


Flat in Feb

According to the latest report from the Halifax, house prices continue to remain broadly flat, as they have since the end of last year. The annual rate of growth has slowed from 2.2% in January to 1.8% in February, the lowest rate of growth since March 2013.

The Lender highlighted positive trends in the labour market which continues to perform strongly with the number of people in employment rising by 88,000 in the three months to December. Notably, this is almost entirely accounted for by full-time jobs. The strength of the jobs market may finally be benefitting wage growth, with the annual growth rate accelerating from 2.3% in November to 2.8% in December. However, earnings are rising at a slower rate than consumer prices.

Despite the November rise in the Bank of England Base Rate, mortgage rates continue to stay low by historical standards. While The Halifax expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months.

Mother’s day gift

Financial protection may not be top of the list when it comes to Mother’s Day gifts this year, but research from Scottish Widows reveals that 60% of women in the UK with dependent children have no life cover, leaving their families in a precarious situation if the worst were to happen. The research also shows that only 13% of mums have a critical illness policy, leaving many more at risk of financial hardship if they were to become seriously ill.

Three in ten (31%) mums admit their household would be placed at financial risk if they lost their income due to unforeseen circumstances. Family celebrating mothers dayOne in four (25%) claim they could only pay their mortgage for a maximum of three months, while two fifths (39%) say they would have to use their savings to pay for such adverse circumstances. The research also suggests that many mothers are underestimating the value of their role within the household. Almost a quarter (24%) say that they’ve not taken out life insurance because it’s not a financial priority or they don’t think they need it. And 7% of mums without critical illness cover say they’d rather take the risk of not having it than take out a policy.

However, on top of any day jobs, mums spend almost 23 hours a week on childcare and chores such as school runs and housework – tasks which they believe their families could not afford to pay for should the worst happen to them. Three fifths (61%) of women with dependent children also say their household would struggle to complete everyday responsibilities or pay household bills if they were to fall ill or pass away.

Lack of planning is leaving many families in a vulnerable position. When asked how they’d cope should they or their partner not be able to work for six months, three in ten (29%) mothers say they’d rely only on state benefits. And more than half (57%) don’t have the protection of a will or guardianship arrangement in place for their families. With a new Bereavement Support Payment system now in place, which may result in a significant reduction in the period over which support will be available, it’s more important than ever for mothers to review their financial protection needs. This is especially the case for cohabitees, who still don’t qualify for bereavement benefits.

Second Steppers

First-Time Sellers see potential interest rate rises as their biggest challenge to moving up the property ladder – according to Lloyds Bank’s annual Second Stepper report, which tracks the challenges faced by First-Time Sellers. The report reveals one in three (35%) of these households believe it will be more difficult to sell their home this year, with worries over the economy, the size of the deposit they’ll need and a shortage of family-friendly properties.

moving daySecond Steppers are mostly couples and young families moving on from their first-time buyer homes to secure more space and a garden who typically bought their first property in 2014, when the average price of a First-Time home stood at £167,137. Based on the latest house prices figures, selling their home for the average First-Time Buyer house price of £211,296 would provide them with an average equity injection of £85,877 for their next home. That’s grown from £68,629 four years ago.

The gap between the sale of their current property and the cost of their perfect home – usually a detached property – is now £135,985. However, the average equity level of £85,877 can help reduce this gap by 63%, meaning that Second Steppers need only add an extra £50,108 to their existing mortgage. However, across the country, there are significant regional variations in the size of this gap. In Northern Ireland, people will need to find £73,499 extra to make the step to their desired second home. At the other end of the scale, people in London need £330,599 to make the jump.

Just over a third of Second Steppers (35%) think it will be harder to sell their existing property this year than it would have been a year ago. In addition, over a quarter (29%) are worried about the uncertain economic climate, deposit size remains a key challenge (30%) and around one in four (26%) are struggling to find the right property to move to. Getting handy with home improvements is a solution for many Second Steppers if they can’t sell their current home – increasing from 34% in 2016 to 40% in 2017.

The report also reveals some optimism. Two out of five (40%) believe the market conditions for Second Steppers has improved compared to last year and 52% feel there are now more First-Time Buyers in the market, up from 43% in 2016. Over half (52%) also think the stamp duty changes announced in the Budget last year will increase the number of First-Time Buyers entering the market even further.

When looking for their ideal home, Second Stepper’s ‘must haves’ include a driveway or off-road parking (61%), a garden (59%) and a kitchen/diner (56%). Almost two thirds (64%) of Second Steppers have regrets about their first property purchase, with over a third wishing they had bought a bigger property. Just over one in 10 admit that they rushed to get on the property ladder and bought their first home without looking at the details.

5 a day

Millennials are adopting unhealthy habits to keep their weight down, with more than half of UK adults aged 25-34 (51%) skipping meals, analysis from Aviva’s Wellbeing Report shows. Cutting out meals is marginally more common amongst men in this age group: 54% compared to 50% of women aged 25-34.

When it comes to their diet, millennials are willing to sacrifice their health and wellbeing for social purposes, with two in five (42%) saying 5 a daythey starve themselves before an evening out. Close to half (49%) also admit they would rather look good than have a healthy diet. Millennials were found to eat just two pieces of fruit or vegetables per day – less than the national average of three pieces, according to Aviva’s data. Fewer than one in five (17%) manage to eat their ‘five a day’, behind the national average of 21% across all age groups.

In contrast, they were most likely to have a diet made up of unhealthy snacks, with two in five (41%) snacking on treats such as chocolate or crisps at least once a day and nearly more than half (57%) stating they sometimes eat ‘naughty’ foods in secret. Many millennials have excuses at the ready however, with three quarters (77%) saying they find healthier foods too expensive and half (51%) saying they are too busy to prepare healthy meals.