Where Does It Go? - UK Money Blog £

Could Google be a way to predict trends, enough so that it could point to investments?

Its an interesting idea, introduced by Hitwise when they ask if the housing market has hit rock bottom - pointing to a levelling off of the decline in Google searches for “Houses For Sale”

Certainly looking at searches for trends for “houses for sale” in Google trends doesn’t share the level off, with a decline still shown, almost 50% down on the same time last year due to a shortage of mortgages

Also look at spending power - “DIY” is down about 30% from last year, but is experiencing an upswing in the last month.

Are people finding they do have more disposable income, or are they trying to tart up their houses as much as possible to make them easier to sell in this tough market?

But is everyone feeling the blues and booking themselves on holiday? Looks like search trends for “holiday” are on their way up.

Could you maybe let search volume govern investment choices? Indeed, could you not build a search engine that looked for company names in the vicinity of certain “buzz” works such as Buy, Sell, Good, Bad, and make a call on possible share options? I’ll tell you if it works after I make my first million

Technorati Tags: google, trends, economy, mortgages, buy a house, blog, uk, money

More doom and gloom on Radio 4 on the way to work last week - Centrica who own British Gas have announced that average annual gas bills could raise to £1000 a year - an increase of 60%.

As oil prices have risen, gas which is an immediate product of crude oil has had to walk in step. To be honest its been a long time coming - follow the money - oil and gas company shares have not historically walked in step with the price of crude for a few years, as this graph shows:

It was only a matter of time before the utility companies started putting up prices.

This is all happening at the same time as the credit crunch starts taking hold - there are some estimates that house prices could dip by 30% and stay there for 20 years! More conservative estimates talk of a four year gap until they reach 2007 levels.

Will the banks learn their lessons? Will sub-prime mortgages be consigned to the past as a silly un-prudent idea, never to be repeated?

As repossessions continue, we could see houses being sold only to the cash rich, leaving less and less people in control of more and more property - we’ll become a nation of renters and a tiny minority of landlords. If it really goes tits-up we could even see those landlords falling foul of high interest rates and rising costs, with more nationalisation of banks to prevent the economy collapsing.

I sit here working, earning more than I have ever done before, yet find myself with less and less disposable income. I work to keep myself in just enough comfort to continue working.

Why does this all sound familiar?

The
worker becomes all the poorer the more wealth he produces, the more his production
increases in power and range. The worker becomes an ever cheaper commodity the more
commodities he creates. With the increasing value of the world of things proceeds
in direct proportion to the devaluation of the world of men. Labour produces not
only commodities; it produces itself and the worker as a commodity — and does so
in the proportion in which it produces commodities generally.

Marx - Economic and Philosophic Manuscripts (1844)

A very informative YouTube video on how the sub-prime market rocked the UK, ending up with the nationalisation of Northern Rock.

It includes a very easy to understand guide on how the banks planned out the sub-prime lending scheme, using Collaterised Loan Obligations (CLO).

The Collaterised Loan Obligations bankers used are less regulated than normal banking.

How The Banks Bet Your Money UK & US part 1

Basically bankers borrow money at a low rate from say pension funds, then buy sub-prime mortgages which gave an income greater than the low interest they were paying. This gave an estimated 26% a year return on investments per year. Big figures for a greedy banker.

It’ll be similar if you used a 0% credit card to buy a buy to let flat - whilst you have tenants you earn enough money to pay off your credit card bill and make a good amount of profit - but if for some reason your tenant cannot pay, you’re left with debts you cannot afford.

Of course, it didn’t end up like that. The banks even leant to people with no asset, jobs or capital, so often they had a specific term for them - NINJA (No Income No Job or Assets) - a derogatory term used by high income bankers to describe the sacrificial lambs that would provide their bonuses. When those NINJA’s couldn’t pay their mortgages, the income for the CLO dries up and the banks are left with huge loans to pay off. Ergo - the Credit Crunch.

If you thought that was informative, the other parts of the programme are available here:
Part 2
Part 3
Part 4
Part 5

A new bill to factor into your expenses this year are the new car tax rules - if you’re buying a car first registered after 2001 then the car tax you pay is set to change, due next year.

If you buy a very fuel efficient car, you could pay no car tax, but a gas guzzler could cost you £455 a year.

A BBC information page gives you the typical tax for the leading cars being sold today, find it here.

You may need to bear this in mind if your selling a car from after 2001 also, since the car may have been instantly devalued, or you may be lucky to find it has increased in value, since buyers will factor in they will pay no car tax on a highly economical motorcar.

There has been some backlash from the press that this tax will affect the poorest more, and Gorden Brown also faces backbench rebellion due to it acting retrospectively, hitting drivers who had no knowledge of the tax when they bought their car.

Like many government initiatives at the moment, the measure seems to have good intentions (cutting CO2 levels) but hitting the wrong type of people in the pocket, which after all is the majority’s main concern.

Judging by the pressure on Gorden Brown recently, this measure could be taken down, but expect some kind of initiative targeting green cars soon.

Its been a real noticeable change in policy in the UK where environmental concerns take front stage - as a child in the 80s I remember such initiatives would have been part of the “loony left”.

Tags: cartax, budget tips, car

There are various online planners these days, here are a few of them.

The Snowball Calculator I’ve mentioned before, a great way to organise your debts and it really works.

Various Flash graphs to see how your money grows or falls in the future, including pensions.

Quick Salary Calculator to work out your take home pay after taxes and NI

Budget Calculator from the FSA to see how much you are spending. See more of their tools here.

How much was money worth in 1850? Compare prices now and then with this olde £ calculator

A few travel related money saving sites….

Why pay for hotels when some kind soul will let you sleep on the sofa?

See how much money you’ll get in the exchange rate markets with XE.com

Calculate the ethics of going at all, with this carbon footprint calculator.

A few mortgage specific ones now….

Lots of shoddy mortgage calculators online which try and sell you a mortgage when you’re just after information - the Guardian’s mortgage calculator sticks to the facts.

Is it worth buying a house or investing the money instead? This calculator tries to help you decide.

How much is that student loan going to cost you? Try out the Student Loan debt guide.

Savings and investments

A quick way to see how much money you get back out of certain investments is found here.

These investment calculators let you work out you work out how much money you’ll get back in more breakdown detail. You can select monthly, annual, or a single premium.

Tags: budgettips, travel, online, finance, planners, uk