House prices vs inflation: The slow motion property slump

0:02Lee Boyce: Welcome to This Is Money podcast sponsored by Trading212. Download Trading212 app today and open a cash ISA with promo code TIM to get the 12 month bonus promo rate of 4.76 % term supply. I'm Georgie Frost and joining me and Simon Lambert today is Helen Crane. And coming up, is the great British property obsession finally coming to an end? Should young people be able to access their pension early? How can you protect your retirement front from the AI bubble? And guess which car makes Britain's happiest to own? Don't forget you can stay up to date with all the latest breaking money news. Just go to thisismoney.co.uk or download the app.

0:41Lee Boyce: But first, safe as houses. For years, the assumption has been that house prices, apart from in a few small pockets of the UK, only go one way. But what if that's no longer true? According to wealth manager Rathbones, property is no longer a reliable route to retirement wealth after UK house prices lost value in real terms over the past decade. Meanwhile, the market for London flats is crumbling and its impact is beginning to ripple out across the country. But before we get to that, welcome Helen, welcome Simon. The property pension debate related to this was something that you've been exploring on your investing show.

1:18Lee Boyce: Just briefly, tee it up for us for when we go and watch it. Tell me about the conversation you had. Okay, so next week I will be publishing an interview with Duncan Lamont of Schroders, who has done some research into the stock market versus property and what comes out on top. And he has crunched the numbers and delivered the real answer of what is better, property or a pension or investing in the stock market, and how that has stacked up over the last, you know, five years, 10 years, 20 years, etc. etc. My instinct, even though I haven't seen it yet, given this latest Raspbones research and all the things we're about to talk about, is possibly not property right now is the best route to retirement, the most reliable route to retirement.

2:03Lee Boyce: Would I be correct? Oh, well, spoiler alert.

2:06Simon Lambert: Yes. If you're talking about for retirement, I think it's really important for people to remember the tax position. And this is something that we go into in the interview with Duncan, but you are actively heavily penalized for investing in property, whether it's in buy-to-let or a second home by the tax system. Stamp duty is extortionate. I mean, it's bad enough if you're buying your own home. It's unbelievable if you're buying a second home. You are then disadvantaged when it comes to rental income as well. And you are then, you know, going to pay capital gains tax when you sell. So you're going to get taxed on your profits.

2:45in a pension it is the opposite way around you are actively encouraged to pay money into your pension you get a 25 basic rate automatic uplift on money that you pay in if you're a high rate taxpayer you can claim the rest back on your tax bill to take you to the position that you were in before you paid income tax you can build up your dividends and reinvest them free of dividend tax within your pension you can buy and sell investments within your pension without paying any capital gains tax, you will be taxed on the income when you take it at the other end. However, but again, it just stacks up way more favorably.

3:25And I think that's something that people absolutely 100 % need to consider. And if you are going to try to make money from property, I really think the only way you can do it nowadays, and I know there are some very good experts who disagree with this. I think really the only way you can do it nowadays is if you can find properties that you can do up and actually like add value to unless you have a system for working out how you can buy properties at kind of below market value which brings us on nicely to properties

3:56Lee Boyce: going down in value. Just before we get that just a really brief question about when people talk about this property pension debate was there ever a time when you could safely argue that property was a more reliable route to retirement wealth than, I suppose, the alternatives? Probably. If you take a window of time, if you look at the house prices chart, right, so go look at your nationwide Halifax land registry, average UK house price chart as the basis, and you go back to 1997, remember those heady days, the excitement of a new Labour government that came in and swept all before them in a mood of optimism.

4:40Simon Lambert: Compare and contrast to the recent change of government, if you will, who came in on a wave of optimism, then decided to stamp on all of that optimism as hard as they possibly could three months in. However, go back to 1997 and you see a scenario where actually property was pretty cheap in this country. You had the 90s crash after the 80s boom, and then house prices didn't go anywhere and actually kind of fell, you know, through the 90s. Compared to wages, they got back to a relatively decent level. It meant that you could get good rental yields on properties because, you know, the rents compared to the price of properties were decent.

5:22The tax position was good. Buy-to-let was encouraged. It's amazing to think that buy-to-let was a thing that was once encouraged. But buy to let was an idea that was kind of cooked up by the property industry and the governments of the time to encourage people to invest into residential property. And if you go from that point on to the kind of peak of the market, just for the credit crunch and financial crisis, then yeah, that period of time was a great time to do it. And actually, probably there were some people out there who did actually make sums of money that were good enough for them to be able to then use to retire on but investing for retirement is a longer game than a you know 1997 to 2007 you do it over 40 years not 10 years and i think that it's probably very difficult to find any 40 year period where you would have been better off buying the houses although actually i don't know if you go back 40 years houses were um pretty cheap but then the problem is is we You anchor on my parents bought our house for X and it's now worth Y.

6:29And that's crazy how much money they've made. But we never mentally put that money into the stock market and then do the maths that then shows us how much that's worth either. And I would say that one of the problems there is that a lot of long term stock market returns come from dividends being reinvested. And I've made this point before. I think we make a mistake. You know, the investment industry makes a mistake by not making it easier to find total return figures, which is like the share price plus the dividends reinvested. People look at the FTSE 100 figure. They don't look at the FTSE 100 total return figure.

7:07And the FTSE 100 total return index looks totally different. But you've really got to try to find that index. For most people, it's almost impossible to find.

7:16Lee Boyce: All right, Simon, we're going to leave that debate to one side. But just a reminder, how do we access the investing show?

7:20Simon Lambert: You go to thisismoney.co.uk forward slash investing show.

7:24Lee Boyce: Super. Are we a bit guilty, Helen, though, of just assuming that house prices only ever just go up? Do you think? A little bit.

7:32Helen Crane: Yes, absolutely. I think that we are. In general, that is true. If you look at the last 50 years, there's been periods where house prices have fallen, notably the financial crash. But other than that, really, the slips have been generally quite minor and house prices tend to sort of go up in the long run. I think what people overlook a bit is there's been periods where house prices are quite flat. Simon was saying, for example, during the 90s and the last couple of years as well, we've seen house prices really being quite stagnant. But then when we talk about this property versus pension debate, I think people are sort of talking about different things.

8:11Helen Crane: Some people might be thinking about the house that they live in. People who are lucky enough to have bought their house maybe 30 years ago just sat on it when they retire their plan is to downsize sell it and have a bit of a pot of cash to play with but other people are talking about buy to let you know that's the traditional property is my pension people who've especially during the big sort of boom in right to buy in the 80s people who perhaps bought then or a bit later and made a conscious decision you know this is how I'm going to fund my retirement through being a buy to that landlord and the environment for landlords is so so different now to what it was even 15 years ago.

8:50Helen Crane: So much more regulation, very different rental market. I think one of the trends that people don't really talk about in this is that so many more young people stay living with their parents now. Rents are high, young people are struggling for jobs, they're struggling for sort of graduate level jobs. You You know, I left university about 15, 16 years ago and almost no one that I knew if they had a job to go to would go back to living with their parents. You know, someone says, why are you doing that? Like, do you not want to go and rent in a house yet? Whereas now it seems much, much more common, almost expected that, you know, people in their 20s will leave you in your leave school and they'll stay with their parents for years and years.

9:31Helen Crane: So I think there's this sort of gap in the rental market that is making it more difficult for landlords as well. You know, at the minute, the amount of properties that are out there is going down as well, because some landlords are selling because of, you know, renter's rights bill and things like that. But I do think in the long term, the actual demand for rented homes will fall as well. So, yeah, very different environment now than what it was, you know, in that real sort of buy to let boom. So, yeah, property and pension, definitely more complicated than it used to be.

10:01Lee Boyce: Absolutely right. But this house prices going down, are we looking at a temporary wobble in the housing market? Like I said, I mean, you said as well, like house prices largely have gone up. We've almost got so used to that, that that's like now the norm. But is this a correction? A little wobble? Something fundamentally different here?

10:21Helen Crane: Look, I think correction is a word that estate agents always love to use, isn't it? Look, I think for most people, they're not seeing their house price plummet. There are small pockets of localised areas and types of property where things aren't going well, as I think we're going to discuss in a minute. Leasehold flats are an area where people are seeing big price falls. But I think in general, we're not in a situation where most people are seeing their property value plummet. I think it's just a bit of a calming down. You know, we've seen higher mortgage rates for the last few years. things just aren't as kind of gung ho as they used to be.

11:00Helen Crane: People have wider worries about, you know, a lot of people feeling a bit insecure in their jobs, worries about inflation and things still people still kind of reeling from the cost of living and COVID. And I just think people aren't in a big mood to move house a lot, as they used to, you know, maybe every few years, moving is really expensive. I think it's just a culmination of all these different worries that people have and you know cost of mortgages cost of moving that the attitude to you know moving up the property ladder and moving a lot has just sort of changed in in the last few years but I don't think that means necessary that prices will plummet I just think it means that we might not see the the sort of big growth that we have in recent decades.

11:42Lee Boyce: I'm going to come back to the housing market in London particularly but Simon I just want to ask you about the stock market in the same vein that we sort of are perhaps a little bit guilty of believing that house prices only ever go up. In recent years, we've been rather fortunate, I suppose, with investing. It's been going up, great guns. So are we almost in danger of believing that is going to continue as it is? Yes. This is true. The stock markets go up and stock markets also go down.

12:10Simon Lambert: They have to put that on warnings when they try to sell you investment accounts. Capital at risk. Basically, that means stuff goes down as well as up. At least with the stock market, we're constantly reminded of that. You don't get that when you buy a house, do you? Capital at risk. House prices may go down as well as up. Inflation happens. I think the difficulty is at the moment, there's the US stock market and there's everything else. Not quite everything else, because actually the market that's gone up the most this year is the South Korean market, which has gone completely bananas, largely due to it being dominated by some large chip making companies.

12:48Simon Lambert: The US stock market has seen stratospheric gains focused on a chunk of mega cap tech firms. Mega cap tech firms? What do we mean mega cap? Mega cap as in like massive, absolutely humongous companies. When you refer to the market cap of a company it means like its size based on its stock market value the number of shares in existence times by the share price apple's market cap is 4.3 trillion small change the market cap of nvidia which is even bigger than apple now is 4.96 trillion so give or take a bit it's five trillion dollars. That is absolutely humongous. So you've got these huge companies that are dominating it.

13:42Simon Lambert: Their share prices have gone up by a lot. And, you know, if you look at NVIDIA, share prices is up 1000 % over the last five years. The expectation that this can just continue and continue and continue is wrong. It can't. There is a limit to this. There are concerns about it. There have been lots of concerns about it and every time you see a bit of a correction things go down and then things bounce straight back up but there will come a point where these giant tech firms don't bounce back up there is a lot of concern over what's you know termed the ai trade the hyperscalers the massive building out of data centers all costs huge amounts of money a lot of these tech firms which once were considered a really good investment because they were awash with cash are now actually trying to raise money on the stock market in order to get the cash to spend on this data center spending.

14:37NVIDIA is a beneficiary of this because it's NVIDIA's chips that a lot of this spending is going on. But if that dies off, then NVIDIA will maybe it won't see all the orders come through that it thinks of. We've got SpaceX, as we speak at the moment, IPO-ing, biggest IPO ever. It's raised$75 billion, valued at$1.75 trillion.

15:00Simon Lambert: There's three bits to it. Starlink, the successful satellite business, that makes a profit. Then there is a loss-making AI business. And then there is a loss-making space launch business. And you tie it all together. And the prospectus involves some of the most magnificent things I've ever seen. Future markets. We talked about this last week. Interplanetary travel. travel to Mars, asteroid mining, data centers in space. It's epic. It is truly epic. And epic is a word that is used all too often, but the ambitions in that SpaceX prospectus are epic. And it's almost price for perfection. Some of the analysis on this said, in order for this valuation to be correct, it has to deliver on all of the stuff in there, which is amazing, really, if you think about it considering what's in there and actually it's highly likely that when those shares start trading on the stock market this afternoon we're recording it on friday morning by the time you listen to this they will have started trading on the stock market you'll know what has happened it's highly likely they're going to go up by quite a bit because all of the evidence suggests that there has been way more demand for those shares than there has been supply following hot on the heels of spacex we're going to have anthropic going public we're going to have open AI going public.

16:22It's going to be the summer of stock market mega floats. By the end of the year, we'll know how all of this has gone. Whether you can expect this stuff to still keep going straight up, make your own mind up.

16:35Lee Boyce: Simon, thank you very much. We will be talking about how you can protect your pension from the AI bubble. But before we get to that, I just want to return to house prices. Helen, what is going on in London? You've got an article talking about London property, but it's not just exclusively sticking in London, it's rippling out across the country. So what's going on?

16:55Helen Crane: Sure, so another brilliant day to be the owner of a flat in London as I myself am. This is more of the story that we've heard a lot recently about the value of flats in London, particularly one-bed flats and studios in this case. So this is some analysis of land registry data, which has been done by a firm called Bricks and Logic. And they found that almost half of small flats in London are selling for less than they were bought for. Now, that's not only flats that were bought in the last five years, but 10, 15 or even more than 20 years ago. So this is a serious problem for people who own these small flats.

17:38Helen Crane: In the last year alone, the price of an inner London flat has fallen by 6.2%. that's according to land registry data. In real terms, that's about£35 ,000. We've spoken to one person in this story who's in this exact situation. So she and her husband bought a flat in Greenwich two and a half years ago for£470 ,000. They're now trying to sell it for less than that for£460 ,000 but it's been on the market for almost a year. They're about to change state agents for the fourth time because they simply can't find a buyer. A service charge is one of the issues people often bring up when they talk about white flats won't sell.

18:13Helen Crane: Their service charge is£3 ,000.

18:16Lee Boyce: And then you add council tax for a year. That's a lot. It is.

18:19Helen Crane: It is a lot of money. But there's plenty of other flats in London that have a similar service charge. And I think this really gets to the heart of what this story is about. The issue is it stops people from moving on and doing what they want with their lives. So her and her husband would like to move out of London to St Albans where their family lives so they can start their own family. They're now not able to do that. Because they simply can't move, they can't sell this flat, they don't have room to raise the family there. And they're just stuck. And I feel like this is a story for more and more people and not just in London, but around the country.

18:55Helen Crane: So this data is really interesting. They look at how far flat prices have fallen in the last year, in regions across the UK. And actually, I just said it was 6.2 % in London. In the northeast, It was even more as 8.9 % fall in a year, 7.4 % in Yorkshire and the Humber, same in the northwest, east midlands, southwest, southeast, all saw bigger falls than London. Now, a lot of those areas will have many fewer flats than there are flats in London. But in cities around the UK, there are places where a flat is still the first step onto the property ladder. And I think it just shows that this effect is sadly spreading across the UK.

19:37Helen Crane: I do want to say maybe as a flat owner myself, you know, not all flats are created equal. It does seem like it's, you know, studios, very small flats, flats in new blocks with high service charges that seem to be bearing the brunt of this struggle to sell. You would hope that in different areas with different type of flats, you know not everyone will be having the exact same experience but it's really it has a potential to really sort of bung up the property market because we're seeing now people who might own a terraced house and they want to move up the property ladder they now in some areas will struggle to find the second steppers property people call them the people are moving out of their first place and moving up the property ladder they might now struggle to find one because they're struggling to sell their flats that they're moving out of and you can see how this would just block up the whole kind of property market over time.

20:31Helen Crane: So I think it's one of those things, you know, it's a worry for people, even if they don't necessarily own a one bed flat in a city themselves.

20:39Simon Lambert: There's this element of inflation that, as I said, we don't factor in and Helen talked about that as well. But just to look at the numbers, between 2021 and 2026, so basically over the last five years, according to the Nationwide's Index, house prices have gone up by 13%. on average. So it's over five years. Inflation has been 27%. That means that theoretically, houses have got 14 % cheaper. When you compare them to inflation, in real terms, they've got 14 % cheaper. House prices in London have gone up by 5.5 % over that whole period. So they have gone up over the last five years on average according to Nationwide.

21:17But again, inflation has been 27%. So in theory, houses in London have got 22 % cheaper.

21:23Simon Lambert: The thing is, you don't pay with inflation. You pay with wages, don't you? You pay with the money that you earn. But wages, actually, if you look at the ONS figures for average weekly earnings, have gone up by 29 % over that period. We've actually seen a five-year period where wages have gone up in real terms. Not much, only 2%, but, you know, it's better than nothing, isn't it? So we've actually got slightly richer, even though stuff has got quite a lot more expensive. But this illustrates how property houses are not cheap but they are actually getting cheaper it won't feel like it's got cheaper it feels like a massive jump up the jumps up the ladder are unbelievable the price of property is still way too high the jumps up the ladder are way too big the taxes on doing so are still too punitive but it is actually getting cheaper right well that is um cause for cheer

22:16Lee Boyce: for anyone who wants to get on the property ladder as well because we know that one of the biggest hurdles helen don't we are facing young people actually i wasn't that young when i bought my first home. But people wanting to get on the property ladder is the deposit, of course. So should younger people, let's call it younger people, be given the option to delay their state pension by a year in exchange for receiving a lump sum now to help them get on the property ladder, which would work out about£12 ,500 now. Now, the idea has been doing the rounds for a while, but it's been resurrected in a report by the independent think tank, the Social Market Foundation.

22:53Lee Boyce: So Helen, just explain how this would work, whether it would be popular and what are the risks?

22:59Helen Crane: So this is an idea from the Social Market Foundation think tank. And what they're calling it is a state alternative to the bank of mum and dad. Sounds quite good, right? So people who might not have parental help can get access to this money to help them get on the property ladder. So it's worth saying it wouldn't be just to get them on the property ladder. They could use it for anything. But this is how the think tank is billing it. So their plan is that age 28 is the age that they're proposing this deal would be offered. So you turn 28, and you are offered the chance to get one year of your state pension at that point.

23:40Helen Crane: And in exchange, you would forego one year of state pension at retirement age. So for those people, that would be when they were 68. So they would face potentially retiring at 69 rather than 68. So at the minute, that amount would be£12 ,547. It's a controversial idea. It's a very long term policy. And who on earth knows by the time 28 year olds now retire, what the state pension will be how the state pension will have changed. There will presumably be many changes of government in that time. So the goal post could just change so much.

24:20Lee Boyce: Which is why I think every single person would take this up, because there's absolutely no guarantee that there'd be a pension by the time they retire. So they're like£12 ,500 now. Yes, please. How much is that going to cost the government?

24:33Helen Crane: Well, that's the thing. The think tank in this report claims that it will be cost neutral, but cost neutral over a very long time. So they'll be paying the money out. But the argument is that over time, obviously, as these people then retire, they will recoup the money back in terms of one year of state pension that they don't have to pay. However, you're correct. That is a 40 year period in between those two things happening. So on day one, it is going to be a cost. I think you're right, a great deal for the 28 year olds who are being offered it. I've been reading the comments on this story. And a lot of people response has been like, what's 12 grand going to get you?

25:12Helen Crane: That's not going to get you a deposit to get onto the property ladder. However, I would say if you're in a couple and you both get it, that's about£25 ,000. That's not nothing. If you say that's a 10 % house deposit in quite a few areas. Other options, you know, you could take it and you can invest it over 30 or 40 years. You never know what's going to happen, but you'd be likely to at least double, triple, maybe even quadruple your money. could be a smart move. You know, I think it's unlikely that this is going to happen. But if you're offered it, yeah, bite the hands off, to be honest.

25:45Lee Boyce: Would it not, though? Is there not a danger, Simon, that this is just sort of another measure to stoke up house prices? So if everybody has their deposit to buy a house, more people want houses, house prices go up and that money you've just got is effectively neutral.

26:00Simon Lambert: But then if you look at the Pensions UK report that we discussed last week, it presumes based on the income that you'll need in retirement for a basic, moderate or comfortable retirement. Two things. Firstly, that income is after tax, but secondly, it presumes that by then you'll own a home mortgage free. And it warns that if you don't, then you will need a bigger income. So I guess if you're creating a scenario where people can own that home mortgage free by the end, then they will need less income at the end in order to cover either still paying off their mortgage or their rent but as you point out all the fiddling that we do in order to provide people with more money to buy houses is inflationary and drives up the cost of those houses arguably what we need to be doing is bringing down the cost of the houses themselves there is an argument that what we should do is we should just build build build build baby build all of the evidence shows that it is not the bogeyman that is the planning system that is at fault, that it's not all of these things that it's pointed at.

27:06Simon Lambert: The problem is, is we're not building enough houses because developers can't build them at a price where they can then sell them and make a profit. So they are deliberately building less houses in order to protect their profit margins. All you have to do is have a look at the house builders results. They literally say it in their results. Our property expert Ed Magnus is writing about this at the moment, but the answer is not just, you know, the government has put forward this scenario where it says it's going to build one and a half million homes by whenever it's going to say it's going to build one and a half million homes.

27:39Simon Lambert: But it's not going to do that because it's not really dealing with the problems. And the issues are developers can't build them cheaply enough. The land's too expensive. We don't have the people to build the houses in the first place. We need more social housing, all of these other things. And to be fair to the government, it is trying to do something. But unfortunately, I don't think it's going about it the right way. And yeah, you're right that every time you give buyers more money, that just means they can spend more money on a property and it pushes up the price of those properties. I think people also underestimate in this idea quite how valuable that guaranteed income from a state pension is.

28:20Lee Boyce: Right, let's go to pensions. I did say that we would talk about this, didn't I, Simon? You have a piece on your website from the very excellent Andrew Oxo, Director at Fidelity Personal Investing and former This Is Money editor, no less. Six steps I've taken, not me, him, obviously, to protect my pension from the AI bubble. So what has Andrew, a man who knows his stuff, what has he suggested, Simon? So Andrew's talking about these concerns that I was talking about before as well, that we are in a stock market bubble, an epic stock market bubble. And in fact, we've even illustrated this story with a picture of SpaceX.

28:56Andrew is an investor and has been an investor for a long time. As long as I've known him and I've known him for over 20 years now, he loves investing. He's a proper geek. He won't mind me saying this. He's a very sensible investor.

29:10Simon Lambert: He does like a shiny thing. And he says the problem here is the FOMO, the fear of missing out. I should be reducing my exposure to all of this, Throft, but I have a terrible fear of missing out scenario. And he said, I've been battling my FOMO, a nagging trait we investors must constantly fend off and have taken steps that felt sensible for my portfolio and my aims. Because what Andrew's saying is, I see what's going on here. I know what's going on here. I want to protect myself against this. I also don't want to give up the profits and I would really like to still profit from it at the same time.

29:45Simon Lambert: Okay, so what can you do? So step one, you can adjust geographically from expensive to cheap. There are concerns over the valuations of the US stock market. There are not concerns over valuations of all stock markets. The UK stock market, for example, is considered to be pretty fairly valued. Emerging markets are considered to be pretty fairly valued. Europe is also considered to be pretty fairly valued. So you can direct some of your funds away towards that. You're still invested. You're still benefiting from what's going on. But you're buying something that is cheaper and therefore has more room to go up.

30:16Simon Lambert: trimming your winners now this is the idea of taking some profits from some of your winners you don't have to sell out of them altogether but if you've got something that's gone up by a lot then maybe you should take a bit of profit and you should reinvest it maybe into something cheaper some of the things that we were talking about earlier checking your emerging market funds for ai exposure now andrew says emerging markets were regarded as cheap up until this year a recent surge in prices has narrowed much of that valuation gap. Much of the rally has been driven by three AI related stocks. TSMC, which is Taiwan Semiconductor Manufacturing Company.

30:53Simon Lambert: And then two of those companies I was talking about earlier with South Korea, Samsung and SK Hynix. Okay. And he said these chip making stocks represent 14%, 8 % and 7 % of the emerging markets index respectively so if you're holding something that just holds the emerging markets index you are also very exposed to this big tech ai trade but you can find some funds that invest elsewhere and put their money into other stuff stuff that's still considered cheaper so you might want to consider doing that number four controversial consider going active over passive index funds are hugely popular they're a very cheap very easy way of investing but if you hold a global index fund about five percent of your money is going to be in uh nvidia for example you're going to have a huge chunk in the magnificent seven perhaps you might want to steer a bit of your money away from it you can keep plenty of your money still in an index fund and choose an actively managed fund instead or you could even go for a tracker fund that spreads your money evenly so for example there's the legal and general s &p 500 us equal weight index fund or the Invesco MSCI World Equal Weight ETF.

32:04And instead of going on the size of the companies, they spread their money equally across all of the companies. You are giving up some of the gains though there and you will fall behind the market if the big stuff keeps going up.

32:16Simon Lambert: Also increase your alternatives. So diversification is important. Maybe you want to diversify into other things, some modest allocations to things like real estate, infrastructure, things like that. And number six, the final one is you can increase your cash holdings if you are concerned you don't have to sell every single one of your investments but you could maybe move a little bit to cash then you remain invested but you've protected a bit of your money and up until some new rules come in next april you will still allow to do that within your stocks and shares isa but as it stands you will start to be penalized for moving to cash within your stocks and shares isa but you might consider that penalty worth it if you're concerned about the market obviously you're then not invested and if the market keeps

32:58Lee Boyce: going up you miss out anything you'd add to that list though simon or is he pretty much nailed it

33:03Simon Lambert: don't try to be too clever is the thing that i would add to that list i think there is a space for thinking about how you do things i think that andrew is absolutely right with all the things he's talking about here and i think people should be aware of this and they should certainly think about the fact of okay how close am i to the point where i need this money how upset will i be if the market does take a big tumble will i be able to handle it am i going to anchor on where i was rather than the gains that i've made even after the market has fallen but when you do do these things don't try to be too smart don't try to be too clever because that

33:40Lee Boyce: can also trip you up as well all right then right finally if someone were to ask me what is the best car to own? What makes Brits the happiest? Helen, I'd think manual, obviously. Petrol, petrol head. Sporty, a little bit sexy maybe. But no, according to a massive survey of UK drivers, the best car model to own is, Helen, what is it?

34:09Helen Crane: Well, it's a bit of a surprise. It's a Tesla Model

34:11Lee Boyce: three it is an ev yeah and and this is not an ev chart is it this is all cars i was a bit disappointed not to see a voxel mocha but a voxel is in there yes they make us happy a mocha is on there georgie

34:28Helen Crane: no mocha's number eight number eight oh 86.3 percent of uh people who own a mocha are happy

34:35Lee Boyce: i must have only got to number five clearly they've not had the model of my mocha because the amount I've spent on that piece of crap, it doesn't make me happy. But you don't drive, do you, Helen?

34:46Helen Crane: I don't have a car, no. So any car would make me happy.

34:51Lee Boyce: Yeah, exactly. Simon, what do you make of this? Fox or Mocha in there. Get in.

34:57Simon Lambert: Well, I mean, it just goes to show, never underestimate the something of people and fill in the blank yourself. Delusion, desperation. and what that something may be depending on what your view of life is yeah look my view as someone who could probably be described by other people as a petrol head is not a way i describe myself

35:20Lee Boyce: but i do like cars right car enthusiast yeah i like cars enough to have three of them okay so

35:25Simon Lambert: we've got our family car which my theory is i don't buy new cars right new cars are expensive they depreciate by lots my argument is why not let someone else lose 30 of the car's value for you and then buy it for less money basically new cars are like so good nowadays even if you buy one that's five years old it still feels pretty amazing right so do it like that so our family car is a jaguar xf right a three liter diesel diesel jaguar xf it's a fabulous car this might sound ostentatious to people but it's a 2012 one right okay current value approximately three thousand pounds with a good tailwind but it's still great i love it it's great to drive it's a fantastic car it's great as a family car and then i've got a peugeot 205 gti which is like my classic car that i love i bought it some some years ago and that i'm fortunate it's gone up in value that car makes me happy that car every time i drive that car it puts a smile on my face you get other people waving at you and stuff like that it makes them happy it's great my other car is a saab 93 convertible again a 2006 car it's 20 years old it cost me two and a half grand that car makes me happy um when i'm driving it when the sun's shining sometimes it makes me unhappy when things go wrong with it and i have to pay for it my point is that some of the things about my cars at the moment are making me unhappy which is the amount of money that we keep spending on bills on them which is because they're old cars with lots of miles on the clock um like our family car lost a bit of coolant the other day and i was like oh it's probably like the hose or something we took it

37:04Lee Boyce: to the garage yeah 600 pound bill i had that coolant thing yeah radiator went as well thing

37:10Simon Lambert: it was a yeah it was a flange apparently needed changing lots of work just like ouch so yeah cars can make you unhappy as well and i think it probably is directly related to the size of the bills that they're serving you up.

37:24Lee Boyce: But not many things can make you smile every time you use it, I have to say. It's a bit like a pet, isn't it? You know, you pay those bills, but you still love them, don't you? Yeah, people spend a fortune on pets and you can't even drive them. Exactly, exactly. On that note, why did Tesla come out, do you think? You've driven that car, haven't you? What do you think? Would it make you happy? And an EV as well, really? That would give me anxiety, but...

37:48Simon Lambert: Yeah, I know. And they even asked people whether their car made them

37:51Lee Boyce: happy rather than smug but have you seen the stickers which go i may have a tesla but i don't like elon kind of thing so i'd also feel the anxiety if someone's going to key my car because

37:58Simon Lambert: they don't like elon musk i thought that was interesting actually and i thought it was really interesting that the tesla did come out top because you do see people apologizing for their car quite a bit more recently but maybe people are getting over that now we've all gone spacex crazy we've forgotten about doge attention spans are incredibly short nowadays forget doge it's

38:17Lee Boyce: all about spacex yeah very true um simon you start the week please yes my start of the week is again

38:23Simon Lambert: i'm sorry for another spacex stat but 270 million pounds according to reports this morning that we had through british investors retail investors ordinary people i hate the term retail investors i hate the fact i just said that okay basically just normal people investors people like us have scooped up in the float 2.7 million SpaceX shares, costing a total of£270 million. All of those who applied for up to around£2 ,000 of shares got their full allocation that they applied for. And that was 61 % of those who took part. And then people who applied for more than that were scaled back. My understanding is that there are some people out there who reply for quite a lot.

39:13Lee Boyce: All right, then. That is it. Thank you very much, Simon. Thank you very much, Helen. You can keep up to date with 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 anything you'd like them to look into, Simon. You can email us at podcast at thisismoney.co.uk and come to thisismoney.co.uk forward slash podcast to join in the debate and read the comments. And if you like our podcast, why not rate us wherever you found us? It helps other people find us too.