Down valuations are on the rise - should it worry buyers and sellers?

0:03Lee Boyce: Welcome to This Is Money, sponsored by Charles Stanley Direct. I'm Georgie Frost and joining me and Simon Lambert today is Lee Boyce. And coming up, down valuations are on the rise. What happens if you and your mortgage lender don't agree on your new home's value? Meanwhile, how much more would you be willing to pay to be in a good school's catchment area? also stay are you saving enough for your age move over swiftonomics it's all about oasisomics here in the uk and lee's favorite supermarket self-checkout cameras are they even legal don't forget to start up to date with all the latest breaking money news just go to this is money.co.uk or download the app take control of your finances with charles stanley direct Invest, save, coach or plan.

0:53Lee Boyce: Using technology where it's helpful and people where it matters. Our website and app make trading cost-effective and flexible. But we're more than just an online investment service. We're here for you regardless of your financial needs or if your life takes an unexpected turn. Your finances, your way. Take control today with Charles Stanley Direct. Sign up now.

1:18Simon Lambert: Investment involves risk.

1:19Lee Boyce: But first, down valuations are on the rise and they can seriously scupper a home sale. Now, this is where a valuation on the property by your mortgage lender concludes that it's actually worth less than the price that you've agreed to pay for it. It can result in the lender turning down your mortgage offer or a home buyer or seller having to renegotiate the price or indeed borrow more. The most shocking part is that often the valuer doesn't even step inside the home and instead simply drives past it or looks for it online. Now, brokers across the industry have said valuers have become overly cautious with their estimates at a time when property prices are flatlining.

2:01Lee Boyce: Lee, Simon, welcome. Lee, just explain to us, if you would, valuations. How do they work? What are they? What point do they happen? How important are they?

2:10Georgie Frost: it's quite a murky business this and actually for something that's so uh important as getting the price of uh of what is probably going to be the most expensive thing you're going to buy right uh it's surprisingly kind of feels a bit archaic um a lot of these valuations are based on what has sold around the area as you say quite often they just do a drive pass they don't actually go in and sort of kick the tires of the home and properly get under the skin to get to get a valuation so essentially what it is is that you go and have a look around properties you find one you want to buy you make an offer on it you might already have a mortgage offer in place you probably have so you know what you can borrow and what you can afford to buy then the lender will want to make sure ensure that they're not lending you money on an overinflated house price but that's very difficult to run the roll over because you have agreed this price because that's what you think it's worth but banks obviously have to cover themselves because they don't want to you know find that the property is worth less than what the mortgage is out from people getting all sorts of difficulties now in this uh story that ed magnus did for us our mortgage reporter there's quite a lot of anecdotal evidence especially in london and the southeast that there's been some wildly fluctuating valuations that have been done but for example here we've got adam stars managing director of a london-based mortgage broker helix financial partners uh says three of his customers have properties downvalued by over one million pounds in recent weeks whoa we've had some atrocious valuations of late one value went around to value two finished new bills and gave a value of 1.7 million we'd enter the deal to another lender that instructed a different valuer who two weeks later valued the properties at 2.8 million that's a 1.1 million pound difference of value wow crazy um and then there's some other sort of smaller examples uh in here um director of a foreign-based broker sj mortgages jake tutton so we've seen a not uh seen a high number of down values down valuations than we've experienced for a long while recently we had a survey placed for a value on a property of 250 grand in march only to reduce this to 225 000 in June.

4:28Georgie Frost: I'm not aware of anywhere in the UK where the housing market is reduced by 10 % in such a short period of time. And he says that he accepts that agents and sellers might sometimes inflate the value of a property. But in general, he thinks at the moment, values are being overly cautious down to the sort of stagnant property market. Now, it's an interesting one, the property market at the moment, because we say in stagnant flatlining, it's a very different regional picture depending on where you are. And the nervousness it seems like is around London and the South East where property prices are typically far higher than they are elsewhere.

5:06Georgie Frost: But it doesn't give much confidence into the market and it makes people a bit nervier. But on the flip side, a bank has to make sure that they're doing their correct due diligence and the property that they're lending on is going to be you know what they they expect for the prices being paid but you know let's say for example you're buying a home for 400 grand um and you've got a 10 deposit so 40 grand if one of these managers comes over and says well actually it's only worth 360 so that might mean the lender then will only be prepared to lend on 90 or 360 grand instead like 324 grand you've got a massive gap there and the decision is do you try and bridge the gap with your own funds it's probably unlikely likely if you've got a 10 % deposit because you would have probably used it anyway onto a deposit or do you try and haggle with the seller and say hey look the value and the lender are saying actually this house is worth this much will you accept this instead and then you're at the risk of seriously annoying the seller so it's an interesting thing and it kind of goes in peaks and troughs I say Georgie sometimes feels like the property market does get in these times where it gets overly cautious the house price indexes are all pointing at different things there's been all sorts of um kind of those forward estimates have been revised by some of the companies and actually house price growth isn't going to be as strong as what was expected but as far as i'm aware i haven't seen any estimates from any of the mainstream kind of companies that that you know are fully embedded in the property market saying there's going to be a huge crash coming you know why would they be saying that uh but this is what you know is is the kind of nervousness around the market and also it comes at the same time when uh big banks are saying hey you can come borrow more money off us you know we're loosening affordability criteria come and come and borrow more from us so it's a lot of mixed messages uh i would say the property market this year has felt incredibly strange yeah weird isn't it uh simon the last thing you want to do

7:13Lee Boyce: is is overspend on a property so you trust the lender to go georgie don't be paying more than you should do because it might come to bite you in the bum but uh having read ed's article the part where the valuer doesn't even step inside your home they might look for something similar online in your street in your neighborhood simply drive past it what right so the first mistake

7:41Simon Lambert: people make with mortgage valuations is they think that the valuer is acting for them. The valuer is not acting for you as the buyer. You might be paying for the valuation that might be part of your mortgage deal. And it usually is. And even when you don't pay for it, it'll be because the mortgage deal offers free valuation, i.e. they're doing you a favor. But you could be paying 250 quid for example for this valuation but don't think the valuer is acting for you the valuer is acting for the bank or the building society the valuer is trying to ascertain whether that bank or building society as lee explained will get their money back if they have to repossess the property and sell it on there's obviously a margin of error there depending on how much you're borrowing against the property so it's more of an issue if you're borrowing 90 it's less of an issue if you're borrowing 60 % and there's an ebb and flow it depends how well the property market's doing most of the time most valuations are absolutely fine what it means is that if the lender's happy with the situation then that's okay now you might not be happy with the drive-by valuation or the idea that it's happening you might think that because you've paid you 250 quid that person should go around the house but that's what your survey is for that's what you pay your surveyor for to do and you and they will give you a valuation on the property when you pay for a survey whichever level of survey that you get the one with the valuation as i said is acting for the mortgage lender however if it does come in materially lower than what you're meant to be paying and you think there is a problem you can challenge it and you can then say to the mortgage lender did you do a drive-by or did you go and look at the property these if you actually look at the property these are the reasons why it's worth more than what your drive-by valuation says because you're comparing it to properties that aren't actually directly similar perhaps it's bigger it's better it's on a better plot it's got a better garden the comparators that you've used you know are not actual direct comparators because bear in mind there's not that many homes that get sold there's less homes that get sold nowadays and so it is quite hard to find directly comparable properties so you could challenge it and you could then say i want you to send somebody around the property uh there's no guarantee the mortgage lender will actually do that but you you can definitely challenge it and get that to happen and to give an illustration of valuations and the kind of finger in the air thing that goes on here i'll tell you two stories of valuations from my own personal experience on the second flat that me and my wife owned in london we needed to remortgage and when we remortgaged uh it was um to first direct who at the time charged different valuation fees depending on the value of the property so if you went through the 500 000 pound mark you had to pay an extra something like an extra 150 quid the valuation fee went up from like 250 to 400 something like that these are not accurate numbers right so i was like well that's a bit much isn't it i was like they're not even going to come around the flat they're just going to do a drive-by i think i even asked them and they were like yeah they probably won't come around i was like so because it didn't make any difference to the mortgage rate we were going to get in terms of our loan to value.

11:17Simon Lambert: When I put in the how much is your property worth thing, I just wrote 500 ,000 pounds. It was worth more than that. Like if they'd done a proper valuation, they would have come back and said it was worth more than that. Just got signed off. They were like, fine, tick the box. I was like, funny that. And actually people will find this. Valuations can be suspiciously close to what you're paying. i.e. our first flat we paid uh what do we pay oh this is gonna say i'm really sorry to everybody listening to this okay who is of a like you know kind of generation of home buyers below me all right we paid 228 000 pounds weirdly valuation came in exactly 228 000 pounds wow i mean how do you do that how do you know it's worth exactly 228 would you believe it the flats worth 228 unbelievable absolutely unbelievable the other one is that we bought our house during the pandemic but like right at the start of the pandemic so we had agreed to buy it uh had an offer accepted in february of 2020 before uh you know lockdown pandemic chaos whenever when nobody thought we were going into lockdown uh then we went into lockdown at the end of march property market It went into the deep freeze.

12:38Simon Lambert: We couldn't do anything during that period. We had managed to get the valuation done beforehand and the survey done before lockdown started. I think the survey was weirdly done like maybe the Friday before the lockdown started on the Monday or something. It was like nobody knew kind of thing. So we had all of that back. And the property market goes into the deep freeze. Everybody thought the property market was going to absolutely tank off the back of that. we thought that we had basically just signed up to lose 100 grand you know it's like if we go through with this we're going to end up instantly with something that's not worth what we agreed to pay for it when the world was very different in february so we spoke to our surveyor who we got to do a full uh survey on the house and i said to him can you do us a new valuation this was after things reopened in kind of may time and he said i can't he said we can't he said i we just cannot do valuations at the moment we have no idea what anything is worth he's like there's there's the comparator prices but that was all before this madness kicked off now that this madness has kicked off we don't know what's going to happen we literally have no idea and i wouldn't be happy to take your money off you and give you a valuation because i just cannot put an accurate number on it so that shows the other end of the stick from the whole like yeah tick box exactly what you said you're going to pay for it so yeah valuation is not that scientific it turns out

14:07Lee Boyce: how disappointingly especially if you're on the receiving end of it so what can you do can you contest it what are your next steps should we go as a buyer and then as a seller yeah so we've got

14:17Georgie Frost: a few steps outlined in this story that i did actually so the first thing you can do is we hinted that um earlier in the show and negotiate a new price for the seller that both parties can work with the crucial bit of that is uh the price that both parties can work with um second thing is you can find a new lender uh that will offer the mortgage amount that you need you can increase the size of your deposit from your savings although that's going to probably be quite difficult especially for first-time buyers bridge the gap with money from friends or family walk away and find a new property um them are the options really and then as a seller you know you can consider lowering the sale price or meeting somewhere in the middle but that feels like quite a drastic step when you've kind of had a your home valued by an estate agent and you've got it in your mind that it's worth x amount um and then if you're stepping up the ladder it kind of it's the maths that goes towards taking that next step up the ladder um encourage the buyer to try another lender with different lending criteria if the numbers don't work if you get estate agents or solicitors to negotiate reductions on new deals up the chain so you know that does happen quite a bit actually i think if you kind of say well yeah okay we can accept 20 grand less uh on this if further up the chain it works out and the other parties are willing to do that but it can get quite complicated and can get quite complex and it just takes one of the chain to say no to put that all all to bed really put your property back on the market and try to find a new buyer who can offer the required amount easier said than done you know when you find someone to buy your house like typically it's a bit of a weight off your shoulders you're kind of happy you found someone you can kind of now start thinking about but there's a real estate agent speak at the moment it's all about being procedable it feels like it's like a bit robotic are you procedable and i think that but essentially when you've got people coming to look at your home you want buyers that are procedable aka they've got all of the financing in place they might have sold their home um you can get the ball rolling on the whole process because it is a it is a proper process george isn't it as i think we all know it takes a lot out of you there's a lot of admin there's a lot of moving parts and the last one i love this just look for a cash buyer you you know easy you know just find a cash buyer i do um cash buyers typically ask ask for a discount anyway for being cash buyers uh mainly because it's a smoother process you know there's not there's not as many moving parts and a cash buyer for a lot of people is the dream because they're the easiest people really deal with to be honest though first-time buyers are pretty easy to deal with as well because they typically don't obviously they don't have a chain below them

17:02Lee Boyce: it has whenever you say cash buyer lee i always just think someone with a massive wallet of like hundreds of thousands just yeah in it on them yeah not quite like that a bit like football

17:11Georgie Frost: transfer do you imagine sort of like a massive suitcase of cash the dodgy ones in the brown yeah yeah yeah yeah it's not the case of someone just knocking on your door i've got 380 000 pounds in this suitcase full of uh 50 notes to accept no i mean it's not quite as uh that would actually be a nightmare doing that trying to pay that into the bank these days god knows what kind of checks you'd have to go through on that no more that people have that obviously the savings in the bank and they can just wire it over uh without having to use the lender just for just for the sake of any doubt of anyone listening actually thinking thanks for that lee yeah sorry it's got a bit simplistic hasn't it um but those are the things that that that can be done but it can be a real real headache um yeah and it seems like it's back on the rise a little bit at the moment just because of the the nervousness around the property market and you know it's it's kind of hard to really justify and really get under the bonnet of a house to say it's truly worth this i mean what do you do do you have a a checklist of hundreds of things and you go or you know boiler looks like might pack in soon let's take off a grand or you know it's like you'd be going on and on and on these surveys would take absolutely ages to go through um you know it's kind of i'd like to think as a buyer you've gone through a certain checklist of you've seen lots of homes in the area you've got a you've got a kind of upper limit of what you're willing to pay you've seen 10 15 20 homes potentially you found the one you want to buy there must be a reason that you want to buy that one and they're all going to be probably relatively the same price point so you've actually probably got as much experience as a surveyor in that little local area the little pocket because you've probably set up right move alerts uh you've probably really have the tires and the lots of different homes around around the area so yeah it's a tricky one i've always found it quite a

19:12Lee Boyce: kind of funny business no i've questioned lee can't you just have like a an independent that both that works because simon said it doesn't work for you it works for the lender well can't you have one that works for every party involved but it's the lender that would that just be financially difficult to work out like how to pay some whatever it's the lender that you're taking

19:33Georgie Frost: a huge chunk of cash from it's them protecting themselves isn't it it's not kind of them and also protecting the buyer as well from from overpaying and potentially being stuck in that exactly so i i think that in principle sounds simple but in practice it isn't because really it is about the lender covering their own backside um and making sure that they're not dishing out loads of mortgages for overinflated homes but then lots of people say house prices in this country already overinflated so what's the difference uh so quite quite and talking about

20:11Lee Boyce: overinflated house prices in certain areas. Let's go there next, because parents looking to live near a top state school and paying a few bob extra is, well, it's nothing new. We've spoken about it before, but Labour's VAT hike on private schools has driven up competition, and that's having an impact on prices of homes in certain catchment areas. Question is, how high would you be willing to go? Simon, firstly, the increased competition due to Labour's VAT hike, what impact Is that really having? Are we seeing kids coming out of schools?

20:45Simon Lambert: It is genuinely having an impact. There's a reason why. And it's not necessarily to do with kids who are already at private schools being pulled out of them. And in fact, there's probably less of that going on at the moment than there is the other thing, which is kids not going to private school in the first place. so once children are at school parents are incredibly reluctant to remove them from the school or get them to move schools whenever you read the woe is me i'm on a six figures and i've hardly got any money and we've had to scrimp and save to do everything quite often in there is the mention of school fees right and you look at it and you're like yeah well i mean you're probably looking at 15 or 20 grand a year per kid so if you've got two kids that's 40 grand a year if you're a six-figure earner you're going to have to earn nearly 100 grand just to pay the school fees i can see the problem here maybe move the kids to state school but understandably as a parent i say this as well the last thing you'd want to do is move your kids out of school that's you feel you're letting your kids down um you know socially education disruption the lasting effects of that so you do anything you can not to move them out of school i think that we probably will see in years to come more kids being pulled out of schools but i think it's too early for that to be happening what is happening though is some parents are making a decision not to send their kids to private school in the first place and quite often this is secondary schools which is where the catchment area issue is the biggest thing and this is because firstly the cost has obviously gone up by 20 on top of fees that are already very very high and we're pushing certain parents to breaking point also parents don't trust that the government isn't going to come after them for more money so they think that probably taxes are going to go up they feel there's going to be more of a squeeze on them wherever they can get at them because the government has promised not to raise certain taxes and therefore if it doesn't raise income tax and things like that then it's going to freeze thresholds it's going to go after more capital gains going off in terraces tax all those other things right so they're very concerned about this tax squeeze and i think there's also a concern that the government will go after private schools for more i don't know how it could go after private schools for more and i don't think it will go after private schools for more but you can understand why parents have that concern in their head so they look at this and they go right i've got little johnny or little jenny he or she is 11 years old they're about to start secondary school i've got a choice here do we go for private which is what we wanted to try and do we were going to like really push it to get there because bear in mind like this fees thing it doesn't affect the really rich people the really rich people can afford private school it's the people kind of at the lower end of the of the rich the high earners but who are basically just high earning middle class people and they're the ones who've been hit hardest by VAT um they go like right so we either do this or do we try to get them into the best possible state school and then we don't pay seven years of fees we don't have seven years of worry seven years of fear we don't have to then worry about little johnny or little jenny's younger brother or sister who's two years younger and then if we've sent them to private school we're going to have to send the other one to private school and you know lots of these middle class families have three four kids you know what are you signing up to so they go okay let's just let's go for the state school thing and it doesn't take that many kids to not go to private school to upset the apple cart within certain areas i live in lovely middle class commuter land, Hertfordshire, right?

24:38Simon Lambert: A place where we're really lucky. All of the secondary schools here, and there's four in the town that I live, are good. Like they're all good schools. You'll be happy with your child going to any of them. Three of them are excellent. There's not that much in it. My kids don't go to private school. My kids go to state school. I couldn't afford for my kids to go to private school. As I was talking about, the numbers are unbelievable. Yeah. But what we've seen here and my kids are both already at secondary school. But what but from kids who are not in the year that's going into secondary school is that there were loads of kids who didn't get places in their hometown, even though there's four secondary schools and are then given places in a school they don't want in the next town.

25:21Simon Lambert: And it's like, why has there been this sudden uptick? because actually this is meant to be a relatively low birth year and the school should have plenty of places and i think what it is is it's this effect of even if it's just 10 to 20 pet families going we're not going to send them to private school that's there's there's just enough places for all the kids that they think who are going to go to state school so 10 or 20 more causes an issue and the people who get pushed out are the people who live furthest from the schools because it's done on this catchment area my own daughter eldest daughter didn't get into the schools in this town because we are live on the edge of town again it was a different year it's like the year after one of the years after covid so there's lots of people who've moved out of london you know and the people who'd moved into the town but had moved closer to the town center so you get you get pushed out and the problem with this catchment area thing is that it means that effectively you're paying to get into the school you know people will pay to be close to the school and i must admit i've always thought that it's better to to pay to live closer to a good school to get your child into it than it is to pay for private school fees um if you think that that state school education will be comparable because once your children leave home and are out of the school system you can always sell your house and it'll always be worth more because it's still near to that good school unless the school has suddenly got worse um so you can get the money back whereas with the private school fees you've sunk that money in and you can't sell your children it's just not allowed however good their education was you can't sell them to a law firm at the age of 18 or something you say well i've spent so much money on this child's education i want it back i was i want it back right you could do that with a house you can't do that with your 18 year old child um so so yeah i think it's and i think the problem is i actually think there's a problem with the catchment area system my personal view is that what this does is it creates more of this kind of unfair system where you buy your way in and it creates more of this system where you start you're concentrating people into certain areas and it's massively debilitating for villages for example where you get this huge like kind of drain where you only have people with very young children or old people and all the families in the middle that are so important to the health of the village you get a bit this kind of hollowing out because they move out to the towns to be close to the schools i think it would be better to just have like right these are the this is the whole catchment area for the school and it's not done on how close you are but it's done on a kind of lottery system and if i was a parent who lived close to a really good school i would hate what i just said but i do believe it would be a fairer system as a member of the child free or childless or whatever i find all this really wildly like there's a system to it but this has always been

28:19Lee Boyce: the case or is it you know something in more recent years that's become much more pertinent

28:26Georgie Frost: i think in recent decades it's definitely become more of a thing where parents are more kind of keen on their children to go to uh you know an ofsted rated outstanding or good school since ofsted came about then i don't know i think i think i think i think it's part of it and i think there's also part of the property uh portals you know the right moves etc that will tell you the nearest schools yeah and what they're rated um but these ratings come around in sort of circles you know a school might get rated poorly and then have all this money poured into it maybe a new head teacher then all of a sudden that primary school or secondary school becomes outstanding or good so there's a kind of a little bit of that that goes on i think most parents um do want to move into an area where it's kind of a easy for them their children to get to go to school uh but also that it's a good school i mean we we moved into our home 10 years ago we didn't have children we had no aspirations to have children children weren't the talk of children wasn't on the radar are um it just so happens we sort of bought a house that's within a mile uh of a good school um for me it's always been important to be able to walk to school i think it's nice to be able to walk to school it's just a thing for me i used to walk to primary school i think it's quite a nice thing and people do are willing to pay more uh in order to be near a good school and actually case in point i had a friend of mine who recently moved into the town i live in from from another town that's about five ten miles away because the schools in that area weren't very good um and his son starts school this september and he was in a rush uh to buy a property in this postcode in order to get into one of the primary schools in this town uh and kind of ended up buying a home he wasn't even all that bothered about he just needed they just needed somewhere um which probably goes back to our previous chat about the surveyors and what things are worth he just wanted to get into this town in order for his son to start primary school education not in the place that they lived previously so you can see how it shapes all this and i remember actually georgie it was probably about 10 years ago there was a bit of um there's a bit of hoo-ha uh in in one of the towns nearby i was living here and i read about it in the local news and i did a story about it for um for this is money in which they changed the catchment area uh of this school so the boundaries they had a massive change with the boundaries of this primary school and overnight people that were no longer in this catchment area were now in the catchment area of a not as good school saw their house prices values wiped and they were asking whether or not they could sue the council for changing the catchment area you can understand it though because if you pay x amount that's how important it is it's almost like you know you've got a child that's one two three or for you've paid what you would say a slight premium uh to go and try and get into the catchment area of the school and you've really got your heart set on uh and then that catchment area changes and then all of a sudden the house is not worth as much you know a crazy crazy scenario and actually looking at these figures uh which is a santander research uh if you break it down across the country in london people were willing to spend an extra 81 grand in order to be near a good and in the southeast 58 grand in the east 50 grand um that's quite a lot and actually such is the clamp so this is a phenomenon is actually how do you work that out does someone ask you like

31:54Lee Boyce: how much extra would you pay oh 81 grand we worked it out by the survey uh and then sort of

31:59Georgie Frost: on to the average house price across the country uh but actually the this santander research it showed that the number willing to pay a premium to skewer a premium spot in one of these catchment areas 73 percent of people with children or starting families willing to pay the premium compared to 63 percent last year and that's been largely pushed up because of the private school changes but also because parents just want their children they want the best for their children on the whole but it also in this research it says such is the clamor uh for a place of top school that some parents say they would be willing to pay an extra 25 on the average home price tag which is 75 grand on the typical property across the country that's quite nuts isn't it that's quite a lot of money but as Simon says it it works out far cheaper than private school education because private schools are so expensive it's unbelievable yeah is there any way Simon that we can fix this this system well i think we're in the process of fixing it at the moment with an

33:03Lee Boyce: incredibly low birth rate um all right there we go boom just don't have babies well i mean we are shifting knock on effects elsewhere but you know well we are shifting towards a scenario where some

33:15Simon Lambert: of these schools are going to turn out to be undersubscribed in the future and this is what was interesting about what i was talking about with us is that they had said in the last uh certainly I think this year and maybe the year before that all kids should get the places that they wanted because there were less kids because you get high birth years you get low birth years but the trend is going down and you've seen obviously less children of European parents because families have gone home after Brexit some of them or more families haven't come in their place after Brexit and this has happened in London for example where you're getting primary schools that are dropping classes you know so they might have had two dropping forms sorry so you might have had two form entry that go down to one form entry and sometimes they're closing we went to my girls old primary school in london the other week for a celebration of the school because sadly the whole school is closing doesn't have enough pupils it's compounded by the fact that it's a catholic school so obviously you know you did have a lot of european catholic children there so that effect I talked about has happened and then also I think because parents thought that because it was a catholic school their kids wouldn't get in and so they didn't apply for it or got put off applying for it which is sad really because actually because it was a catholic school there were less people you know they did end up with less demands and you could have got yourselves into a really really good school quite easily but this is not an isolated incident it's happening to schools all across London and it's not happening at the moment you know in the kind of commuter belt and in other places but it will it will filter out it does this stuff does always filter out so you know there is the suggestion for example around here that the council has a cunning plan to eventually shut one of the secondary schools and then flog the land off for housing because they know that there's in five years time there's going to be that much less kids and it's prime housing land because it's near the center of town that's it for part one

35:16Lee Boyce: Take control of your finances with Charles Stanley Direct. Invest, save, coach or plan. Using technology where it's helpful and people where it matters. Our website and app make trading cost-effective and flexible. But we're more than just an online investment service. We're here for you regardless of your financial needs or if your life takes an unexpected turn. Your finances, your way. Take control today with Charles Stanley Direct. Sign up now.

35:48Simon Lambert: Investment involves risk.

35:50Lee Boyce: Welcome back. Are you saving enough for your age? Everyone knows that the amount that you should have in an easy access account is three to six months of your income, or is it post-tax income, or is that essential expenditures? Either way, that is the commonly accepted figure. But, Lee Boyce, is it true for everyone? Apparently not. If you're in your 60s plus, you're looking at between one and three years worth of savings. So Lee, drill into this if you would. How much do we need to have saved?

36:20Georgie Frost: Yeah, so this is some Hargreaves Lansdowne data, actually. And as you said, the rule of thumb, three to six months worth of essential spending and cash savings to cover you. The adage of that usually is, you know, if your boiler was going to break down or if you're going to need car repairs and all that kind of stuff. but also if you do lose your job and you need to kind of survive for a bit as well it's the kind of sum that you would need in order to do this but I think that what they're getting at in this research is the over 60s shouldn't blindly follow that rule of thumb and think that three to six months worth of essential spending and cash savings is enough to cover them it's because saviors who reach the age of retirement stop working are usually on a lower fixed income if you are hit with costably you'll need to dip into your savings it will take longer to rebuild them if you're in that over 60s category and not working so as a result they sort of crunched some numbers on this and had a look at what three to six months of savings looks like for different age groups it peaks in your 40s so in your 40s a three months worth of essentials is about seven grand and six months is about 14 grand the reason why it peaks in your 40s is because you're more likely to have children living at home your outgoings are likely to be higher it's probably when you have a higher mortgage on a family home that doesn't fit everyone and that doesn't necessarily it's not the same thing but it is typically when your expenses are the most at their peak and actually in your 30s it's not much lower than that 6 ,800 13 ,500 between three and six months in your 20s it's 4 800 uh for three months and 9 600 for six months and then in your 50s it starts to to dip away a little bit five thousand just over five grand um and just over 10 grand for six months but this is when it starts to get a little bit kind of like whoa how much do i need to have saved in having cash savings so for six years and over they're saying that one year's worth of expenses is£16 ,704 and they're saying at three years it's£50 ,000.

38:31Georgie Frost: So ideally you would have between those two sums tucked away in your 60s. It's going to be hard if you reach 60 or you reach into your 60s and you haven't begun but if you were kind of in your 20s, 30s, 40s and started tucking away money in this kind of like savings buffer type fashion it wouldn't be as difficult as you say keep it easy access but the one thing i would definitely implore is a make sure that you're utilizing your cash right so that goes without saying the other thing i'll say is that we have just had the base rate cut savings providers have been absolutely swinging away at rates to the point now where the big banks some of the big banks are offering wait for it Georgie 1 % again on your savings if you have your money in one of those big banks please don't leave it in there getting 1 % so make sure you're not doing it

39:32Lee Boyce: when you think about inflation and where that's at the minute

39:33Georgie Frost: well exactly yeah the thing is actually in this I thought this was higher than I expected but maybe it was because of the kind of people that Hargreaves were sort of asking but almost 2 000 people have built a decent emergency savings safety net to support them if life takes a turn for the unexpected i mean unsurprisingly young savers are more likely to fall short uh between 20 and 24 30 it says here only 31 percent hold enough cash i think that's quite a large sum for in your early 20s when you might be coming out of a lot of student debt when you might be kind of finding your way in the world and not on particularly high wages cost of living is obviously still not exactly cheap um it's it's definitely a difficult part of your life but but those figures are quite i would say quite encouraging i think that feels quite high and i would be very very very surprised if two-thirds of adults in this country have a decent emergency saving safety net if i'm being quite honest looking at this research Yeah.

40:39Georgie Frost: Feels high.

40:41Lee Boyce: I mean, it's so individual, which is why I think that personal finance experts and journalists are reluctant to give exact figures for things like how much should you have in your pension? How much should you have in savings, etc? Because everybody's different. However, I do think it's quite useful to have just a rough idea and something, if nothing else, to aspire to have. and it just sort of gives an indication here as well about how it is impacted by different ages and a lot of people when we speak about that three to six months we don't mention sort of actually if you're older so i think that's always really useful and that's what i took from that

41:20Georgie Frost: research really because i think the three to six months is so ingrained it's one of those like financial mantras i would say it's like the top 10 financial mantras that people know you know you should have three to six months of earnings in a savings account. People know, kind of, have heard of that. That's why I think what high degrees are getting at here is that, but there is a massive asterisk on that if you're older and actually you should be thinking it in a one to three year savings buffer rather than a three to six month savings buffer. This is what the whole thing was about.

41:52Lee Boyce: And I also wonder if sort of that figure would be slightly higher for the self-employed, et cetera. Anyway, let's talk OASonomics. Elsewhere, in 2023-24, the world got Swiftonomics. That was the financial impact of Taylor Swift's ERA's tour. Forget ticket sales, which were massive. Some analysts suggest that in the US alone, consumer spending tied to the tour, such as travel, hotel and food, passed 5 billion. When you factor in all the indirect spending, it's double that just six nights in la alone is said to have supported 3 300 jobs such is the power of big events and the one i always quote is liverpool's run to the 2019 ua for champions league final which injected approximately 575 million into the uk economy most of that just under 500 million liverpool city center but oasis the big gig who has been to the gig simon lee did Do you get to go?

42:52Simon Lambert: I didn't go, George. I haven't been. I'm more of a global. I went to see Oasis. I went with one of my best friends. It was great. It was brilliant.

42:58Lee Boyce: Well, I will ask you about the gig itself, but more about the finances, because it's expected to bring a staggering 1.1 billion into the British economy, boosting struggling high streets, bars, shops and city centres, which incidentally is a very similar figure to how much Taylor Swift was meant to have boosted the UK economy to. So, Simon, mint. Isn't that what they say? north um explain lee stop laughing at me shut up yeah i could do this entirely in oasis cliches about how businesses were mad for it um so the figures in here come from barclays

43:38Simon Lambert: manchester apparently the gigs piled around 302 million pounds into the area Wembley seven sellout shows 90 ,000 people I think the capacity was for each of those gigs anticipated to rake in at least 476 million pounds in total for the London economy and businesses and stuff like that these these are huge sums Cardiff worth 112 million Edinburgh are worth 151. These are huge sums, and it's really interesting. And it shows the power of something like this to deliver economic growth and get the spending going. Obviously, a big chunk of this spending actually came almost a year ago, when they, in the most oasis possible way, did the biggest ticket sales event of the year, and still somehow managed to bodge it and piss everybody off you've got to love how they managed to do this they rushed it one weekend it was oasis is going to play a lot of gigs next weekend we're selling the tickets i would have maybe left a little bit of time between those two events in order to get things right instead they upset loads of their fans by doing this kind of pre-sale thing where people did manage to get pre-sale codes some people didn't get pre-sale codes people who did get pre-sale codes couldn't get in anyway instead of coming up with some system like you know literally just like a lot of people do it as simple as join the mailing list or if you buy the album you get a code bearing in mind they were re-releasing one of the old albums they could have done that it's not a perfect way it still means loads of people can do it but it does it throttles it and it means that you're more likely to only get their genuine fans going my friend got my ticket of somebody who bought the tickets and didn't even want them.

45:34Simon Lambert: Did manage to get through all of this, but actually kind of knew at the time that he probably wasn't going to be able to go. And my friend kept on him for months. And eventually, when he did say, I can't go, sold the tickets to him. But we were talking about this yesterday. I don't know about these numbers. Right, figures here. Each gig worth an average of 64 million. 90 ,000 people at Wembley. What do you reckon people paid on average for a ticket? I was going lower at 150 because I think most people probably paid. I think most people paid face value and face value was, was, you know, under that Lee and Helen argued for more because they said, yeah, but you've got to bear in mind the people who got caught out by the dynamic price way up and then all of the, um, hospitality tickets and everything like that.

46:23Simon Lambert: So say we went for a two 50 average on ticket prices, right? which I think is quite high. 250 times 90 ,000 is 22 and a half million pounds. So you've still got to get another 40 million and a bit out of here, right? Now I read something that said they were selling 250 ,000 pints a night at those gigs. And I think it was eight or nine pounds a pint. So let's say nine pounds a pint just to give the benefit of doubt. Well, that would be another 2.25 million. so you still need to raise nearly another 40 million merch people spending around uh wembley obviously you know places like box park and all the the pubs and restaurants and everything were busy then people coming into london there was certainly a lot of people in london that day but was there was there enough people each day spending extra money in london to do an extra of 40 million pounds i mean okay you've got travel cost train fares hotels and the hotel prices are being blamed for potentially driving up the inflation number off the back of this but it still felt it still felt a bit steep to me the one thing i would say it would be ill of me to mention that i went to see oasis and for someone of my generation to say that without of course saying that I did see them at Nebworth in 1996 as well.

47:46Georgie Frost: And of course, back then when Oasis played Nebworth, companies like Barclays didn't hold the details on whether there was archaeodynamics because everyone was just paying in shillings and banknotes. So it was hard to keep track.

48:00Simon Lambert: No, we actually bartered for our tickets. I paid in chickens and grain. Question is, Simon, was it as good the second time round? I've seen them a few times. They were absolutely brilliant. unbelievably good like the energy was really great it was basically a massive sing-along in a football stadium um you couldn't really hear anything that Liam or Noel was singing but it was back to their kind of like that real hardcore energy wall of sound kind of thing as for how it compares to like Nebworth I really can't remember that much about that like what it sounded like at that Nebworth gig because it was a very long time ago it was good though

48:41Lee Boyce: the only time i've ever seen oasis was in bangkok don't remember that much about it i think franz ferdinand were also playing and the one from stone roses what's his face anyway trips down memory lane finally lee this one's for you i read this story and was like i can't let this go because i remember you moaning about it um i mean thinking about all the things you moan about it's there's a lot but this one specifically this is all about self-checkouts at supermarkets if they're not annoying enough now you've got a camera in your face you've got a reader who has written in and wants to know basically is a supermarket legally out to film me without my permission and how long can they store the footage for while i was using the self-checkout at the supermarket an item i scanned and put it into my shopping bag did not match the expected weight the console beeped and played back a video of me trying to put the item into my shopping bag i was embarrassed and worried people would think i was trying to steal it's weird i've never seen it replay back to you that's

49:43Georgie Frost: that's a new one on me a var slow motion of it exactly

49:50Lee Boyce: let's look at it from different angles did she steal it i mean if it's beeping off i mean that's the time when you actually should steal isn't it because if it's showing you an instant replay it's not it's not filming you is it i'm not saying you should ever steal by the way it's It's a damning indictment that we need these cameras and shows how much is being stolen from supermarkets. So I have immense sympathy for the supermarkets and anyone works in those stores that has to deal with those sort of things. I think it must be horrible. But, Lee, can they film us and show VAR replay?

50:20Georgie Frost: First of all, can I just say, you say moaning. I think it's more constructive feedback on... All right, fine. Whatever you call it, Lee. ...happening in life that are annoying people, firstly. second of all how did we go from simon getting to talk about rock and roll and oasis and things to me getting the the bum deal here talking about cameras in the soup how i see you two simon is the cool yin yang skateboarder yin yang of like life this of stories i can't believe that you've landed me in it like this listen the self-checkouts are fine if you have a few items and you want to get in and out let's get going right you know that's absolutely fine of course they use self-checkouts it's not like i avoid self-checkout what i don't like is self-checkouts when you've got a bigger shop and you just just doesn't make any sense so for example uh at the weekend i did something that i seldom do big shop uh the one with the orange logo uh took the kids in as i had a six-year-old with me and i had my 15 month year old baby in the trolley trying to keep them both entertained i find it quite fun i quite enjoyed it solo dadding around mucking around absolutely fine they have for whatever reason decided to strip out almost all of the manned tills there's now about 30 self-checkout tills and about five manned tills that is fine in a smaller supermarket in my opinion georgie but not in one of these gigantic ones where people go in on a weekend and fill up their trolleys and do not want to be scanning all of it it just it makes no sense and then these cameras have become more and more intrusive uh when you do the self check out so you can see yourself in those cameras looking absolutely disgusting you're looking at yourself in those cameras so it's really all about isn't it lee am i really do i really look like that god this is depressing um so anyway someone has written in with this and we've had dean dunham our consumer but get in touch and actually you know supermarkets and other retailers are allowed to record a new cctv for legitimate purposes of course they are and we're in what feels like a bit of a shoplifting epidemic at the moment and it's totally same as you i feel complete sympathy for supermarkets for shops retailers and the people that work within them and 99.9 of us are law-abiding citizens and it feels irritating um that we are having more and more of us recorded and kind of feeling like a criminal for doing our shop when we would never dream of stealing anything because we just wouldn't.

52:52Georgie Frost: And of course, the CCTV are theft deterrents. They're there for staff and customer safety. And of course, we are not saying here, and I would never say there shouldn't be cameras. I do think that the self-checkouts, if the supermarkets are going to push all these self-checkouts on us, then they've really got to trust people to use them correctly rather than shoving a camera within about 10 centimetres of your face. But the supermarket must meet four key requirements, according to Dean. Regulate the use of CCTV and handling of personal data, which is GDPR, Data Protection Act 2018. Firstly, the supermarket must be transparent about its use of surveillance.

53:30Georgie Frost: It means prominent signs informing the public that they're being filmed. You will find them everywhere. All the retailers will have that bit covered, of course. Second, the use must be proportionate and not excessive or intrusive. monitoring the shop floor is allowed but recording and change rooms toilets example you know can't do that doesn't talk about the cameras at the self-checkout interestingly here now and could you argue that they're intrusive and excessive well the supermarkets will argue that they're there to protect the company and to make sure that things aren't being stolen third the cctv footage should be kept up for only as long as necessarily typically more no more than 30 to 90 days unless it's needed for investigations i wouldn't have thought that any of the retailers or supermarkets hold on to the footage for very long because it's a lot of footage to be keeping hold of and yeah probably quite expensive i'd imagine um and finally only authorized personnel should access the footage and it must be stored securely uh importantly cctv footage cannot be used to embarrass or shame individuals and any such use would therefore be unlawful so dean concludes here showing uh you the video to clarify that you put the goods in your basket is not in his view breach of any of these if you feel that your privacy rights are being violated you can file a complaint with the supermarket ask for a copy of the cctv footage if you're unhappy with that you can go to the information commissioner's office the ico as it is regularly known um and take your complaint there probably i'm going to argue in this case would be quite a big waste of time these um supermarkets retailers they are litigious they're backed up to the hilt knowing what they're doing you know making sure that they're not getting sued around the clock for all sorts of things that can happen they will be well within their rights to do all of this the choice is yours though the choice is yours if you are unhappy with these cameras being in your face when you're using self-checkouts you have to just queue for demand check out and let these companies know how you feel by huffing and puffing in a queue eight people deep and the thing is when i was in one of these queues at the weekend i couldn't even sort of like say to like the manager or people go can you open another till because there were no other tills to open they were all man yeah there's just not enough of them anymore we've gone from having probably i would say 12 to 14 maybe 16 man tills in this supermarket i think i counted five that's a massive change that's a massive shift um and of course self-checkouts i would suspect mean low overhead costs you know in terms of having to employ people to actually put your shopping through and hence why it's gone down that route and as i say georgie listen it's like a lot of things in life you think i moan about i i am happy to use a self-checkout i am happy to use contactless payments what i'm not happy about is when it we get pushed towards it there's no other option yeah and that increasingly feels like it's happening year on year and year things get chipped away um you know and i just i just want to be able to pay for my big supermarket shop in the regular way rather than having to do it all myself which feels like i'm not the employee of the supermarket i'm going to stop no it's fine constructive criticism of life these cameras to me feel a

56:57Lee Boyce: bit more behavioural economics than they do actually trying to stop people stealing because having worked in a supermarket and having seen people steal stuff they will just have a hold all bag and they'll shovel it all in they're not going to the tills but what it's doing is it's just they are moving everyone away from manned tills onto these self-checkouts and so it's basically saying we're watching you even if they probably aren't so I think it's much more about preempting the fact that people who don't normally use these tills might be tempted to put something in our basket or take something then we are watching you but yeah like i said i don't know how much of their percentage of stolen goods is actually going through people using those sort of self checkouts because let's be honest as you said you can't really put a lot in them you know they're so tiny anyway simon stat of the week 3.7 million that's my stat of the week

57:53Simon Lambert: no it is not what somebody spent on beer at an oasis concert it is the number of investors being stung by dividend tax as they breach the reduced 500 pound tax-free allowance number of individuals paying tax on dividend payments is expected to reach a record 3.67 million in the last tax year according to a freedom of information request by quilter this is owing to the fact that the dividend tax-free allowance has gone from£2 ,000 to just£500, which has pulled in a huge amount more. That figure is double two years earlier after the cuts of the dividend tax-free allowance. And the next time you hear someone moaning about Rachel Reeves and Labour, just remember, it was Jeremy Hunt and the Tories that did this one.

58:45Lee Boyce: all right that's it you can keep up to date with all the latest breaking money news just go to thisismoney.co.uk or download the app and if you have any comments or questions for the team or

58:54Simon Lambert: anything you'd like them to look into simon you can email us at podcast at thisismoney.co.uk come to thisismoney.co.uk forward slash podcast to join in the debate and read the comments

59:05Lee Boyce: and if you like our podcast why not rate us wherever you found us it helps other people find us too take control of your finances with charles stanley direct invest save, coach or plan using technology where it's helpful and people where it matters. Our website and app make trading cost effective and flexible but we're more than just an online investment service. We're here for you regardless of your financial needs or if your life takes an unexpected turn. Your finances, your way. Take control today with Charles Stanley Direct. Sign up now.

59:41Simon Lambert: Investment involves risk.