The world as we know it...

Happy New Year everyone and a warm welcome back from us here at the Opulent crew. Keep your eyes peeled for what’s hot and what’s not every bi-monthly in our January/February scoop or if you prefer drop us an email and we can send it right into your inbox, so you never have to miss out on the gossip. So what is the hype this season? Mainly three issues spring to mind: 

‘High Interest’   ‘High Inflation’   ‘High Energy’ 

Increasing Interest Rates

Ever since the Bank of England raised its interest rate from its base rate of 1% (now 3.5%), it's just been spiralling on from there with experts forecasting further rises yet to come. So how did this come about and what impact does this have on the housing market? Well, mortgage rates for one will be going up, meaning more people will find it difficult to secure a mortgage or have something agreed in principle. With fewer mortgage’s house buying activity will be slowing down bringing the economy to a crash like feel. Call it recession, a downturn or simply post pandemic apocalypse, but life is about to get even harder. Job losses/job shortages will put families into greater predicament as keeping up with their mortgage repayments will be difficult. 

There are many out there that will be coming out of their fixed-term mortgage only to find out that they will be paying more than three or even four times what they were previously paying. This will put a serious strain on households as many could be at risk of loosing their homes. However, this will give rise to creativity and investors using sophisticated methods to offer solutions to homeowners wishing to sell or buy. Well known strategies such as Lease Option Agreements (LOA), Assisted Sales (AS) and Exchange with delayed completion on the forefront. Rent-to-Rent (R2R) will also be a buy product since more people will be staying or coming into rentals. 

All time high inflation since 40 years

At 10.5%, you just have to walk into any retail outlet to see all your favourite items going up in price and margins being stretched to uncomfortable levels. Our once upon a time happy purchases are no longer happy but stressful to say the least. But it’s just not individual households that are suffering but major industries too. Housing and/or house building in particular being one of them. Big construction companies have gone bust in the light of recent price hikes. Price of materials being the source of the problem and bringing down construction giants to their knees. 

The cost of labour has also gone up as stagnant wages and scarcity always inflates prices. Announcement from government saying they will be slowing down their house building activity and a steady drop in these numbers mean more people will look to rent. That being said, it’s not all bad news as the rental market is buoyant than ever and this will bring a new pool of private landlords into the playing field to meet the ever increasing demand for additional housing. 

Soaring Energy Prices 

The war in Ukraine has had a devastating effect upon global economy. Deliveries and suppliers withholding stock have lead to shortages, strikes and uncertainty as to what is on the horizon. As thousands fled the war zone in a quest to seek refuge in the UK and neighbouring countries, this only put more pressure domestically, how is one to accommodate these huge changes and/or movement? 

Migration is a bitter pill to swallow, an already shrinking job market, National Health Service (NHS) squeezed to its core, stringent immigration laws with fuel prices not looking to stabilise, one can only say the country is in ruins. The cost of living crisis is only getting worse with ‘fuel poverty’, many are facing ill health due to not being able to heat their homes or feed their families. Most concerning is our vulnerable citizens. Charities and food banks are appearing everywhere yet still facing challenges. With that being said, the only way out is by taking a long-term view. We must remember this devastation didn’t happen over night. 

Lets break this down a little; first Brexit, then Covid19, then a War followed by a change of Monarch (with the sad loss of Queen Elizabeth the II), a New Government (Prime-Minister) and of course Econometrics of all that has been discussed above! A lot to despair but with all its adversity I can say one thing for sure, crisis often brings people closer together. Human beings are resilient, resourceful and strong willed and by making some temporary changes/cutbacks this will hopefully ease some pressure and teach one how to prioritise. Patients, slowing-down, and reconnecting in this new world order can only be done by living simply and taking a longer term approach to life. 

Nature finds a way to bring everything back to equilibrium, ‘the dust will settle’, it always does…