28 01 2010
For those in or contemplating Medical sector businesses, we now have 100% commercial mortgages designed specifically for your market expansion, consolidation or purchase. For other businesses looking to similar plans we have a range of products of up to 100% loan facility.
Although the Office of National Statistics had recently revealed that inflation has increased to 2.9% , it was surprising to see the recent reaction of Skipton Building Society being the first to break rank and increase its Standard Variable Rate (SVR); causing disconcertion for its mortgage holders. Another followed; Nationwide is to increase their SVR on its mortgages by up to 0.5% from 1 February. Inevitably others will follow suit.
Every 5 years the generic Rateable Value (RV) of all licensed, leisure and commercial property is reviewed. April 2010 is the date for the latest RVs and have been released from Valuations Office Agency (VOA). Initial read through shows that there will be many reductions, however pubs have risen by 23% and hotels by up to 33%. The Uniform Business Rate, which, when multiplied by the RV calculates Rates Payable, will also change. Large and small properties will go down to 41.4p/£ and 40.7p/£ respectively. Transitional Relief will continue to be applied.
(Image and Article credit: Copyright SUF)
And so another year and another decade starts in which all good intentions are there, in the beginning, but what risks lie ahead and what gambles will be taken? How achievable are objectives?
We have a distraction at SUF headquarters which we won’t be giving up as our New Year Resolution: Buzzword Bingo. The objective is to discover the next buzzword or phrase in terms of finance or the economy before it becomes popular and, after claiming it, see how many times it occurs within a week or so in the media. No big prizes, the winner just gets to choose their next word first. It could be said that a seasoned betting person might have the upperhand in such a game, especially if big prizes were involved, and going for the underdog in the hope of their long-shot netting a win.
A whole myriad of words and phrases became part of everyday language last year; credit-crunch, bailout, meltdown, bankster, quantitative easing, subprime, toxic, stimulus package, housing bubble, green shoots, recession, depression, our-Government-says. Finding the rank outsiders became a test in itself and we think even the professional gambler might have struggled, especially as some of our claims managed a second blooming as the financial lexicon became a bubbling cauldron with words and phrases almost overflowing and the long shots being few.
Meanwhile, Ladbrokes had a different game going by running odds on the 25 candidates for the Nobel Prize in Economics. The long-shots came out on top for their work which, although hadn’t been considered pure economics, was topical as it focused around ‘economic governance’ and was given to Elinor Ostrom and Oliver Williamson. Ostram, apologies at this point to anyone who understands her work in detail, claims that when a market fails it doesn’t necessitate government regulation as the only solution; there are other ways beyond free market or regulation. Williamson, apologies again, was cited for his studies on how organizations are structured.
Economic concerns have ‘Gambling with our Future’ as a phrase that could be on many a buzzword bingo card so who will see the pitfalls and have the confidence to air reservations?
Being in place to have access to relevant information that results in an optimum outcome, including where appropriate, accessing external advice, to avoid or reinforce resolves is always a challenge but never a game.
(Image credit: Danielle Myers Article credit: Copyright SUF)
01 10 2009
Murder in the Dark
“Mama Told Me Not to Come“ sang The Animals, Three Dog Night and later Tom Jones with the Stereophonics. Ambiguous lyrics run through and a mantra repeats that it was a Mama who had forewarned of potential trouble. The earliest version gives an air of discovering something unknown, the following version hints at fear with elements of hesitance, the final version shows a confidence beginning and all three exude the excitement of taboo. No matter what the era, ‘Mama’ gave advice which, on an eve of discovery, that alone might just be the reason to go ahead.
So what has this to do with our subject matter of finance?
For the majority of us, as we scrambled through our younger years trying all manner of new experiences, there will always have been some parental figure, in the background, wagging a finger of warning. Some may have had an advantage of any mistakes having the metaphoric plaster applied and some later appreciating any scolding for the sentiments behind them. As we move on, such parental figures move aside and their reprimands are something that remains only in our heads and we begin making our own decisions.
The outcome of any decision making is a choice, made between alternatives. Approaching the choice varies between logic and emotion. Rational only decision making excludes all emotion and assigns only criteria however emotional decisions can include logic. ‘Mama’ made any decisions with a basis of emotion and added logic therefore when adjusting from being guided by ‘Mama’ to making personal decisions, seeking out advice from different sources ensures a balance to decision making.
Financial decisions are huge, not least because they impact on every aspect of our lives and certain aspects of our lives are subject to emotion more than others. So, is there a ‘Mama’ in matters of finance?
Not to detract from some lending institutions’ charitable deeds, whilst their media campaigns are that of being friendly and empathetic the reality is that their decisions are made with (their) logic and, as we move further up the chain, upper echelons are further removed from emotion when it comes to their workaday decisions.
Finance, especially personal, is a difficult taboo subject for many to talk about. Although information about the subject can be garnered from all corners and debt advice charities such as Citizens Advice shouldn’t be underestimated but when it comes to that warts and all conversation a ‘Mama’ substitute is required. Since the oxymoron of Solvent Bank came about, finance and trust have been torn apart but trust is needed for such a conversation.
We’re always talking about the need to secure knowledge in personal finance and we’d like to think that those who ignore such advice aren’t doing so to be petulant. If you want to have fun you might consider turning the lights on or, as with a recent crazy party which we’re all aware of, things can soon get out of hand and it seems a crime to ignore the opportunity of once again having a ‘Mama’ who’ll wag a finger of understanding instead of waiting for an en masse finger wag when it all goes wrong.
As Agatha Christie once said: “Good advice is always certain to be ignored, but that’s no reason not to give it”.
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01 09 2009
The British Bankers Association has issued figures showing a Gross rise in mortgage lending of £0.3Bn for July 2009.
For the same period the Net rise is shown as £1.6Bn; with £2.2Bn for June & £2.9Bn over the last six month period.
Total loans for July were £9.7Bn of which £5.2Bn was represented by 38,141 house purchase loans, an increase upon June of 2,577. Re-mortgage numbers also edged up slightly by 2,146.
Confused? You’re probably not alone.
We’ve commented in the past about such numbers – See Think of a Number and What the Numbers really mean. Unfortunately, as is often in the finance markets, the changes are subtle and the numbers can be baffling.
The Council of Mortgage Lenders ( CML ) has revealed 2008’s Big Four UK Mortgage Lenders. Illustrating a par-for-the-course and little change from last year. Once again, look beyond the numbers and look at the purpose of such a list.
Fitch Ratings have downgraded financial institutions which have taken State Aid, ahead of possible EU Commission intervention. The implications of this will be interesting to follow especially with regard to some Building Societies and Foreign Banks.
Lincoln Financial Group’s research has found that around 2 million adults have no idea where their pension funds are being invested or, indeed, who their pension provider is.
(Image and Article credit: Copyright SUF)
01 09 2009
Sins Ain’t What They Used To Be
As the Roman calendar names September as simply Septem, month seven, with no reference to the usual God or hero, we’re been reminded about how barren the world of finance is of Gods and heroes and thought it would be an opportunity to give consideration to Seven, in terms of finance in this unprecedented year, deadly sins.
Pride : Having an excessive belief in one’s own abilities or love for oneself. Pride prevents any learning taking place consequently unnecessary risk taking is the outcome. No matter what state the economy is in, if vanity is avoided, learning takes place and the chain reaction of introducing further ‘sin’ is avoided.
Envy: Desiring others’ traits, status, abilities, or situation.
Being able to balance essential and non essential requirements and creating strategy can be sobering. A difficult one to avoid but with careful assessment an objective can feel like soothing anesthetic.
Gluttony: The inordinate desire to consume more than that which one requires.
The difference between sufficient and insufficient.
Lust: Obsessive or excessive thoughts or desires.
The bottom line in preventing gluttony’s twin is identifying the difference between wants and needs.
Wrath: Extreme and uncontrolled feelings of hatred and anger.
Life is unfair.Taking command and gaining a thorough understanding prevents such a fury.
Greed: An excess beyond lust and gluttony.
Yes, a sin that exceeds the excessive sins and one we’ve all heard a lot about.
Sloth: Failing to utilize one’s talents and gifts.
Blocks empowerment; prevents success and achievement at any level.
So, those are the sins now what about the punishments?
Pride: Broken on the wheel
Envy: Put in freezing water
Gluttony: Forced to eat rats, toads, and snakes
Lust: Smothered in fire and brimstone
Anger: Dismembered alive
Greed: Put in cauldrons of boiling oil
Sloth: Thrown in snake pits.
(Devils, Demons and Witchcraft by Ernst-Lehner)
At this point, if there is any spark of excitement when thinking about The Bank that wouldn’t give you an extended overdraft or charged you a month’s salary for going into the red by a few pounds, we’re afraid you’ll be disappointed as it seems guaranteed that the modern ‘punishment’ for such behavior, in the higher element of such circles, is The Bonus.
The love of money is the root of all evil, apparently said St Paul, or in other words, it is not money but our attitude to it that counts.
How right the chap was. Telling someone they need to budget, in order to stay solvent, used to be the job of those that, in days gone by, could well be swimming in a vat of boiling oil. Instead such people now offer up a series of automated numbers for you to phone and are as elusive and unreal as the product they trade: Finance.
Looking over the embers left over from financial hell-breaking-loose can feel like looking over the edge into the circles of a personal Dante’s Hell and it’s often easier to turn away. Whilst the winds of change keep the embers burning it’s worthwhile picking over personal wealth and nurturing what remains. It isn’t compulsory that, by conserving a financial situation, you’ll be taken as pillion by a certain Four Horsemen to dance with Beelzebub.
Good stewardship needs more than the ambiguous messages being trumpeted by major lending institutions. It needs genuine people with real solutions but as we don’t want any big wheels near us we’ll just say that we’re here whatever your query.
We’re not intent on selling as we have nothing to sell. You won’t have to face the situation of shouting at an automatic phone system; we’re a small team giving you immediate attention because if you’re contacting us we share the same values for attending to personal matters of finance.
Sometimes it’s just a case of not seeing the wood for the trees and that might be all you need to hear. Sometimes you might only need to hear the obvious. Sometimes you might need to sound out your options. Sometimes, after talking with us, you might want us to work with you. Using our knowledge to extend your knowledge, instead of getting burnt.
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30 07 2009
Digging Deep for Change
A private excavation in the late 1930`s, initiated by landowner Mrs Pretty on her land at Sutton Hoo, Suffolk, was made by Basil Brown, “a local archaeologist of no formal education” along with her gardener and gamekeeper. Using only spades and barrows they unearthed what is thought to be the burial chamber and ship of King Raedwald, the first King of the English people and High King of all other kingdoms. As soon as the significance of the discovery was apparent, Officialdom took over and, noticing that his record-keeping was poor, Mr Brown was conveniently made redundant from the responsibility. Officials had wanted the dig kept secret but the story was leaked by the local paper. Not much change in 70 years then.
The dig revealed the biggest haul of gold and silver ever found in Europe. Amongst it was a belt buckle weighing 30 Shillings, which, according to the Wergild (payment fee), was the going-price for the slaying of a nobleman or compensation payment for their murder; You’ve seen the adverts: Call us if you inexplicably fell from a pair of ladders, especially if every other rung was missing. Not too many changes there either.
The Aristocratic occupation of warfare enabled riches from plundering, therefore a small buckle representing a nobleman’s life was likely to be disproportionate to assets available. The payment fee for the crime, versus these assets, had no benefit as a disincentive. However there is the possibility that the 30 Shilling buckle might have been carried to represent the status of the wearer, rather like a pair of Jimmy Choos or Rolex. Spot any changes since the 7th Century?
A more severe punishment, for lesser mortals, was banishment from the tribe. Imposed upon an individual who continually broke the laws they would be left alone to face survival in the very wild forests of the time. So it seems there was a distinct system for those able to pay their way out of trouble. Spot any changes?
Ensuring a good “Send Off” for such noblemen included burying what might likely now amount to a small island’s National Debt – The “price of a man” sitting on his belt, proof of his wealth amassed around him and all encased in a ship’s hull as a burial chamber. Technically not found to be Treasure Trove the find was handed back to Mrs Pretty who could have made a fortune from its sale but instead, recognizing the significant true value, handed everything to the British Museum and declined her invitation to become a Dame…. How times have changed. A few months later War broke out…..No change there.
01 07 2009
No Paine, No Gain……
Living during a time of constitutional change, economic expansion, the birth of both National Debt and the Bank of England, Thomas Paine, amongst many things, called for revolution, defended private property, wrote on behalf of Banking, the Wage and Class Injustice, has been quoted by American Presidents and yet had only 6 or so people attend his funeral. His two centuries old quotes have resonance and relevance today; he would have made a superb and controversial Blogger.
“I offer nothing more than simple facts, plain arguments and common sense; and have not other preliminaries to settle with the reader, than that he will divest himself of prejudice and prepossession, and suffer his reason and his feelings to determine for themselves; that he will put on rather than he will not put off, the true character of a man, and generously enlarge his views beyond the present day.” (Common Sense pamphlet)
Using common sense or, as we with Northern roots prefer, gumption, is more relevant than ever before. Enlarging our views beyond the present day is a must in order to re-think our ideas in the multi-changing globalised world we exist in. Even the word gumption has transformed it’s meaning from ‘common sense’ in Paine’s time with ‘drive / initiative’ added to the sense of the meaning as businesses and economy expanded throughout the next Century. Those changes were the premise for Paine’s radical thinking just as the changes happening now are creating problems requiring solutions, of which some may also be radical.
Customer Value is a current buzzword but the simple fact and plain argument is that customer value has been ignored by both financial institutions and many of their customers; until now. Financial Institutions now having much leaner budgets are adapting their business goals and models accordingly and whilst their bottom line is value, unless those wanting funding determine for themselves to look beyond the present day, what may seem a straightforward product will become more complicated as resources deplete further. Looking at a Long Term Product in the same way as a Short Term Product is tantamount to prejudice through prepossession and the lending institutions’ customers could get caught out in terms of Customer Value. With financial institutions deciding to alter their lending criteria and consumer confidence being so low it is easiest to ignore the true character of a product. Just as when financial institutions decided to alter their lending criteria and consumer confidence was high it was also easy to ignore the true character of a product.
Paine’s work is hugely debatable and to some as equally as devoid for interaction as complicated products and finance in general. Finance is a necessity of life and the assumption and presumption is that you’ll use your gumption.
The following is a précis of the past few weeks showing up on the SUF radar as elements for your financial Sudoku.
We had warned that Residential Fixed rates were to rise, a severe prediction which continues with the market being driven into 5 year fixes, some High Street Lenders are already up to 7.5%; a 30% increase on last year’s comparison for the same period.
Another trend which is likely to continue is the Lender criteria becoming stricter, as the new world market evolves, therefore preparation remains key to obtaining a satisfactory result.
Personal Loans are holding well with rates, despite the unpredictable property market. Comparatively reasonable Redemption Penalties may sweeten any bitter-pill effect and can be used creatively for the savvy strategist.
On the subject of Rates and their effect on world markets consider the fate of Spain compared with Florida. The tables have been turned here and, whilst both have repos and thousands of empty properties, rates in Spain can be as low as 2.5 % for a remortgage whilst Florida is almost impossible to refinance, and purchase rates start around 9%.
Commercial property could, for some, be an excellent investment. With some propositions now falling outside of Bank Lending Criteria other lending lines are recognising the opportunities and are able to provide the necessary loans, including for properties with leases of less than 15 years.
It has been brought to our attention that a huge percentage of pets are insured whilst only a fraction of us insure personal income (63% vs. 6% – not able to reference this as it was during a conversation). However, a reminder that if you have a debt, you need protection; an unfortunate component of personal finance.
01 06 2009
Life on Earth climbs out of the Swamp….
We’re not historians but this does, to us, seem to be echoing the metaphor of Survival of the Fittest. Adapting to conditions achieves survival necessary to go on and become the fittest. With an attitude of weeding out the weak, the ‘survival’ phrase has been a business mantra throughout the 20th Century, taken to new heights during the mid 80’s and continuing until very recently.
Ironically, the fittest may no longer be fit. We have a new economic world with different surroundings. It was futile during the age of ‘might and arrogance’ to talk about the trust we’d built up with our clients. Reliability and loyalty weren’t priority characteristics in the swamp. Those that had the same ethos worked quietly alongside us without the bells and whistles of a louder, brasher way of working.
However it now appears that we might be something of an anomaly. An outcome of the economic evolution has altered many to now think about something we have been advocating since our inception 16 years ago….. Take One Step Backward to Make Two Steps Forward. Those surviving to become the fittest are those that adapted alongside us. The Brontosaurus is a better known dinosaur than the Apatosaurus but, as Sir Alan said during an Apprentice sales task, ‘novelty sells’. Whilst one is easier to say than the other, neither survived the evolutionary process, and both are the same dinosaur . The Apprentice’s Brontosaurus, whilst being novel didn’t survive as choice for the sales task either; he was deemed too expensive by the chap who got the chop.
Many believed, during Victoria’s reign, that the theory of natural selection could only have been born during that time of Laissez-Faire attitudes, which remains an argument for now, as some would say, there is many a dinosaur walking the halls of Westminster, especially looking over their comments in the news over the past few weeks. The evolutionary process of natural selection should be interesting to watch emerge from that particular swamp….. but our persistence and tenacity has ensured our clients’ and customers survival which in turn ensures our survival – proving that we’re not lofty cold-bloodied dinosaurs.
(Image credit: somegeekintn Article credit: Copyright SUF)