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January 2025
Welcome to our first blog of 2025!
We hope you had a restful and joyful Christmas surrounded by loved ones and are feeling refreshed as we step into the New Year. January is a time of fresh starts and new possibilities, and we are here to help you navigate the financial news and opportunities ahead. So, grab a cuppa, get comfortable, and let us dive into what is happening as we kick off 2025 together!
The Bank of Mum and Dad
With house prices rising faster than incomes over recent decades, getting a foot on the property ladder has become increasingly difficult for young people. In England, the average house price in 2023 was £298,000—equivalent to 8.6 years of the average household's disposable income of £35,000. This affordability gap is even more pronounced in London, where average homes remain out of reach for all but the wealthiest households.
Even in other parts of the UK, such as Wales and Scotland, average house prices still demand over five years of income for most buyers.
Amid these challenges, many parents and grandparents are stepping in to help their children or grandchildren buy their first homes. Known as "The Bank of Mum and Dad," this informal support network often involves gifts or loans to boost deposits or secure more favourable mortgage terms. For families with the financial means, this can make a significant difference in helping loved ones achieve homeownership—something that might otherwise feel unattainable in today's market. If you are considering providing financial support, it is worth exploring your options carefully to ensure it benefits everyone involved.
The Economic Outlook for 2025
What does the year ahead hold for the UK economy? According to insights from 4most Analytics Consulting, 2025 is shaping up to be a year of cautious optimism.
Growth on the Horizon - The UK economy is expected to grow by 2.0% in 2025, with government investment in sectors like construction providing a much-needed boost. While businesses remain cautious, this steady growth signals brighter days ahead.
Interest Rates to Ease - Borrowers could see some relief as interest rates are forecast to drop to 4% by the end of the year. This is great news for those managing mortgages or considering equity release, as lower rates make borrowing more affordable. However, for savers—many of whom are in later life—falling rates could mean less attractive returns on savings and investments. This could be a good time to review financial plans to ensure your money is working as hard as possible for you.
Jobs Market Steady but Cautious - Unemployment is projected to stay stable at around 4%. However, businesses may slow down on hiring as they navigate rising costs.
House Prices on the Up - Housing demand remains strong, with prices predicted to rise by 2% over the year. If you are considering helping family members onto the property ladder, this could be a key moment to explore your options.
For those in later life, the economic forecast presents opportunities and challenges. Falling interest rates may reduce the cost of borrowing for major life plans, but savers will need to remain vigilant to ensure their finances are protected and optimised in 2025.
New Year, New Financial Goals: Making the Most of Your Property Wealth in 2025
As we welcome 2025, many of us start thinking about what we would like to achieve in the year ahead. For homeowners, your property is not just a place to live – it is also one of your biggest financial assets. But are you making the most of it?
Setting a few property-related financial goals this year could make a real difference to your peace of mind and your pocket. For example, could it be the right time to reduce your mortgage balance, explore energy-efficient home upgrades to save on bills, or even consider how your home could support your retirement plans?
If you are aged 55 or older, there are flexible options designed just for you. Equity release or later life mortgages allow you to unlock the value of your home without having to move. Whether it is clearing debt, helping family members financially, or funding a big goal like home improvements or a dream holiday, your home can help make it happen.
Perhaps you’re concerned about leaving an inheritance or managing your finances carefully in uncertain times. The good news is that there are solutions tailored to your needs. Some options let you pay off interest or small amounts over time to preserve equity in your home, while others allow for greater flexibility if circumstances change.
This new year, take a moment to consider how your property could work harder for you. It is also an opportunity to review your broader financial picture. Are there ways to save on energy costs, make small changes to boost your income, or get more value out of what you already have?
If you are unsure where to start, seeking guidance from a trusted adviser could open doors to ideas you had not thought about before. Your home is your greatest asset—why not make 2025 the year it works as hard for you as you have worked to own it? Here is to a year full of opportunities and financial confidence!
New Year's Resolutions: A Fresh Start
As the calendar turns to a new year, many of us take the opportunity to set New Year’s resolutions—a tradition believed to date back over 4,000 years to the Babylonians! While the goals have evolved over time, the sentiment remains the same: a chance to reflect, reset, and plan for the year ahead.
Resolutions come in all shapes and sizes, from the traditional—losing weight, exercising more, or saving money—to the delightfully wacky. Some people aim to learn a new skill, like playing the ukulele, while others pledge to embrace quirky habits, such as trying a new type of tea every week or starting a bird-watching journal. According to studies, most people abandon their resolutions by mid-February, but that does not mean they are not worthwhile. Even small, short-lived changes can bring a sense of accomplishment and joy.
For many, resolutions can focus on personal fulfilment and connection, like spending more time with family, exploring hobbies, or finally ticking off an item on the bucket list. Whatever your goals, the New Year is a reminder that it is never too late to make positive changes.
An equity release mortgage may not be the best option for everyone. It is vital to consider other financial alternatives and consult a professional adviser to ensure it meets your needs and circumstances.
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