The Illusion of Increasing Property Values

The UK has, over the last decade, experienced an unparalleled growth in the value of domestic property; fuelled by low interest rates and demand exceeding supply. Some areas of the country have experienced annual increases of over 20%.

This growth has led to a feeling of smug self satisfaction among those who own property, and has underpinned a consumer boom; as people release the perceived excess equity in their homes, and use it to satisfy short term desires and whims.

However, the perceived increase in personal wealth has a number of drawbacks:

 The growth in prices is slowing down, and in some parts of the country gone into reverse. This has placed some of those who have borrowed heavily in the uncomfortable position of having negative equity; they have become financial prisoners within their own homes.

 The increase in prices has made it more difficult for first time buyers to fund the purchase of their first home; without borrowing excessive multiples of income, sometimes up to five times their annual salary.

 A house is a lifetime commitment, the debt that goes with it usually takes twenty five years to pay off. I know of no one who can, with certainty, look twenty five years into the future; and guarantee that income, taxes and other issues will not conspire against them to impede their ability to pay off the debt.

 The feeling of greater wealth, that increases in property values brings about, is illusory. You have to live somewhere, if your home has risen by 20% then others have done so as well. Should you wish to move to a larger property, in a few years time, the ongoing increases in prices make that more difficult.

Take the following example:

Property A is worth £100K

Property B is worth £200K

The net difference is £100K

After one year prices have risen by 20%.

A is now worth £120K and B £240K, the net difference is now £120K.

In one year it is now £20K more expensive for the owner of A to sell and buy B.

The only way to benefit from a rising market is to downgrade, and buy a smaller property or live in a cheaper area.

 Finally I would caution all to be very wary of the current Administration’s greed for tax revenue. It is eyeing the rise in property values with great avarice. It will most definitely find a way to grasp an undeserved slice of these gains for itself.

In short, don’t be seduced by the rises; you are probably worse off.

If It Ain’t Broke, Don’t Fix It

Prime Minister Blair last week accepted the “retirement” of Lord Irvine, the Lord Chancellor; and promptly announced that the position of Lord Chancellor would be abolished.

The role will be replaced by a Supreme Court, and a Minister for Constitutional Affairs.

In my opinion, there are a number of problems with this course of action:

 The post of Lord Chancellor has been in existence for 1400 years. Its primary role has been to appoint the judiciary, and oversee the efficient and impartial operations of the judicial process. Its independence, and probity, has not been questioned before; yet the “rationale” for the change is to improve judicial independence. The reality belies the spin.

 It is an ill kept secret that the Home Office has become increasingly exasperated by judges who exercise their independence, when interpreting the law. The nature of the current Administration is skewed towards centralisation and government control; they dislike independent thought. Therefore, I very much suspect that the government would prefer a politicisation of the judiciary.

 Two weeks before making the announcement, Blair was pushing the idea of an Orwellian sounding “Ministry of Justice”. However, after lobbying from the Home Secretary (who feared the erosion of his role) the idea was dropped; and the Supreme Court suggestion was “cobbled together”. The idea has clearly not been thought through.

 The man appointed to design and guide the constitutional changes is Blair’s friend, and former flat mate, Lord Falconer. This is the same man who deserves full credit for mis-managing the Dome fiasco. Scarcely someone to have confidence in with respect to a major “change management” project of this size and complexity.

 The day after being appointed, Lord Falconer was seen in the House of Lords wearing the wig and robes of the office of Lord Chancellor (a position that had been abolished some 24 hours earlier). It appears that there is a procedural requirement, laid down in 1660, that requires the Lord Chancellor to be present when the House of Lords is sitting. It transpires that no one had thought of this when putting together these “plans”.

 The judiciary needs to be politically independent if a democracy is to flourish and thrive. A State appointed Supreme Court is not independent. This idea undermines democracy.

In short, replacing a 1400 year old institution with an ill thought out “rag tag” bag of ideas; put together in a rush, is wrong. Act in haste, repent at your leisure!

The maxim, as invoked by Lord Hailsham a previous Lord Chancellor, applies:

“If it ain’t broke, don’t fix it”.

Counter Points To Militant Vegetarianism

I fully endorse the principles of freedom of speech, thought and belief; so long as one person’s beliefs do not attempt to ride “rough shod” over another’s.

To this end, although I eat meat, I am perfectly happy to accept that others may choose a way of life that eschews meat eating in favour of a vegetarian diet; indeed I support their right to do so.

However, I do not support “diet dictators” who spend their lives telling others how and what eat; and who enhance their practical dietary advice with a relentless bombastic lecture on the unhealthy, and immoral, aspects of the diets of those who do not acquiesce to their views.

“Diet dictators” are not confined to any one group, and can include the following:

 The anti fat lobby

 Those who eschew carbohydrates

 The organic brigade

 The GM lobby (pro and anti)

 Vegetarians

On a personal level, I have been fortunate enough to only have rare encounters with “diet dictators”. However, some people are not so fortunate; and find themselves confronted on a very personal level by these intolerant people.

Militant vegetarians seem to be the more prevalent, and vociferous, in Western society. Therefore I have put together four simple counter points, that can be used by anyone when confronted by a militant vegetarian:

 Mankind’s brain size and power increased as a direct result of the protein being ingested from meat eating.

 We have incisors for tearing flesh.

 Herbivores (such as sheep) eat by grinding their jaws in a “side to side” motion, the resultant wear on their teeth is counteracted by the fact that their teeth are continually growing. Human jaws work in an “up and down” motion and our teeth, once fully formed, stop growing.

 Hitler was a vegetarian.

Point taken?

The Dis-United States of Europe

There are those in Europe who are working towards a political and economic union that, they believe, would equal the USA; in terms of economic power and political “clout”.

They believe that every act that harmonises European law, such as the introduction of a single currency, brings them ever closer to realising their dream.

Yet they ignore the one fundamental difference between Europe and the USA; that prevents the free movement of labour, and places an intolerable bureaucratic burden on the European Commission and European Parliament.

The difference is one of language. The USA has one common language, the European Union does not.

Currently official documentation has to be translated into all of the languages, of the ever increasing number of member states. This creates a mountain of paperwork, and an army of translators.

A unified Europe will, if it wishes to emulate the USA, have to address the issue of language; and adopt one common language for all member states. This language will have to be spoken by every man, woman and child throughout the European Union.

Now tell me; do you really believe that the Europeans could ever voluntarily agree on which language they should speak?

My conclusion, a United States of Europe is but a fanciful dream.

The Absurdity of English Pub Closing Time

Those of you who live in England or who have travelled to England may find, like I do, the 11:00PM closing time to be somewhat absurd. Unless the publican has obtained special permission, he has to close his pub by 11:00PM Monday to Saturday and 10:30PM on Sunday’s.

This “nanny like” state of affairs arose from regulations introduced during the First World War.

Whilst assembling shells and other explosive devices; British munitions workers were often so drunk that they would, on occasions, blow themselves and their factories up. To improve the sobriety, and productivity, of the workers the government of the day sought to restrict opening times. Part of that legacy remains with us to this very day; in the form of 11:00PM closing.

Whenever changes have been proposed, these have been opposed by religious elements within parliament who raise vociferous objections.

To my view, politics and religion should be kept well apart. My views on religion are well known, and are expressed in my article “What Use is Religion?” click here to view it.

My simple message to our beloved legislators is this:

“The First World War is over, let us now move on to the 21st century”.

Does Anyone Really Care Anymore?

The Western world claims to live by the mantra “The Customer is Always Right”; companies and governments have become obsessed with building targets into almost every facet of commercial and governmental enterprise, examples of these targets include:

 Call answering time

 Complaint response time

 Outstanding corrective actions

 Customer satisfaction

 Hospital waiting lists

 Exam pass rates

 Brand awareness etc

However, it is my experience as evidenced in the “Worse Than Worthless” and “The Endowment Diary” sections of my website; that many organisations merely pay lip service to these “ideals”. When “push comes to shove”, individuals are left to fight the lengthy battle for justice alone; with whatever means they have at their disposal.

As you can see from my own experiences on my website; one often has to cajole the organisation and publicise the problem to as wider audience as possible, before any semblance of action is taken to address the issues raised.

Those of us who use the UK’s “beloved” rail network know that we are no longer referred to as passengers, but as customers. A sign, we are told, that the rail companies recognise our importance. Has that improved the quality of service? NO!

Rail operators, in fact, in order to meet their much heralded punctuality targets are changing timetables and reducing the number of trains running; in order to be able to claim to be improving.

Hospital waiting list targets, by all accounts, are now being met because the statistics are being adjusted.

Exam results improve each year because the papers being set, and the exam marking standards, are becoming less demanding.

This sorry state of affairs was predicted in Orwell’s 1984. In one passage, Winston Smith (the hero) noted that the Ministry of Truth recently announced figures about shoe production showed an increase on the previous year. However, no one knew if the numbers being quoted referred to the number of pairs of shoes, the number of left footed shoes or the number of right footed shoes.

Moreover, no one even knew if the figures were correct; and indeed, at the end of the day, did anyone really care?

Cynicism, lethargy and apathy have allowed commercial organisations and government to wear us down with meaningless targets and statistics; these are the real “Weapons of Mass Destruction”.

It is up to the individuals in society to neutralise these self induced “WMD”; and force political and business leaders to respect them as individuals and serve their needs once again.