As one door closes…
Last week, we opened up our regular financial briefing for Property Academy members to anyone interested in hearing the common sense and wisdom from Roger Martin-Fagg, (a brilliant behavioural economist), who correctly forecasted, months ahead, the results of the last three general elections, both the Trump and Biden victories, recessions, booms and busts and was way in front of everyone, including the government and bank of England during the pandemic, calmly urging businesses to hold onto their teams to enable them to reap the benefit from the upturn which he rightly forecasted would inevitably follow.
Roger made the point very firmly that prior to the mini budget the doom mongers were wrong – the market was correcting, but talk of a financial crisis, massive house price falls and the like, were way off.
Of course, those with a pessimistic agenda are now crowing “told you so” when in fact, unless they could predict the chancellor’s announcement, (which is unlikely as apparently even the prime minister didn’t know everything he had planned), had we continued with rishieconomics, Roger is convinced the storm would be mere choppy waters, to be navigated carefully for sure, but nothing like the tempest we now face.
But every cloud has a silver lining, and this one isn’t just thinly plated – there’s a huge opportunity to be mined.
Over 30 years, from 1970-2000, home ownership increased from 50-70%. Many people who then bought their first home, and subsequently traded up, along with those already on the housing ladder, have now paid off their mortgages and have significant equity. Indeed, whilst there’s no definitive statistic available, the consensus is that 55% of all owner occupied properties are mortgage free.
But the chancellor’s actions, following just a week in office, have caused many in their final chapter of life to completely rethink their position. Whereas before, they might have kept their home, now with rising energy costs and potential income issues from their pensions and investments, many will no doubt be considering downsizing to both mitigate their financial position and to pass equity to their children and grandchildren.
And this opens a door of significant opportunity for estate agents, financial advisors and others in the property sector, to help these equity rich/income poor folk make their final move and to enjoy the benefits of their decision to buy a home three decades ago.
No doubt many of the old guard will join the naysayers and advocate drastic cuts and battening down of hatches to ride out the storm. But those who see this for what it is, a poorly thought through economic strategy that can be corrected, either by uturn or replacement, will see that new doors are opening as old ones close.
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