August 31st, 2016
Andy Haldane, the chief economist for the Bank of England (BOE), claimed in a recent interview with the Sunday Times that investment in property is a safer choice for retirement when compared to a pension plan. When asked which of the two financial investments provided the better choice for retirement, Haldane said: “It ought to be pension but it’s almost certainly property. As long as we continue not to build anything like as many houses in this country as we need to meet demand, we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.
“I would quite like the day to come when that wasn’t the case, but we’ve got a lot of catching up to do.”
Back in May, Haldane provided a similar evaluation of pensions, when he confirmed that he struggled to understand the inner workings of pension funds. His comments created a stir across the financial sector, as he went on to say that, “conversations with countless experts and IFAs have confirmed for me only one thing – they have no clue either. That is a desperately poor basis for sound financial planning.”
Harking back to this previous assessment of the pensions market, he said: “I must admit that when I said that pensions were complicated, I hadn’t expected it to be a statement of great controversy. My experience since then has rather reinforced the impression that most other people find them quite complicated too.”
Since the turn of the year the level of new homes being built has risen, with the latest Government statistics confirming a 6 per cent rise on the previous year. While this is a positive note for the housing sector, the housing charity, Shelter, stated that this still falls someway short of the 250,000 homes required to provide sufficient housing for UK citizens.
Director of communications for Shelter, Roger Harding, said: “Despite the recent good news, it’s clear from today’s figures that as a country we’re still falling far short of building the number of homes we need. Shelter’s own recent research shows that, without significant reform to the housebuilding market, the government is projected to miss its target of a million homes by 2020 by over a quarter.”
Harding suggested that the change in the Conservative leadership may provide the fresh focus required to turn this around, stating: “Theresa May now has a real chance to turn things around and return hope to all those being left behind by our housing shortage, but only through committing to measures that can reform house-building for the long term.
“This includes using record-low interest rates to invest in a new generation of genuinely affordable homes to rent and buy, and helping our struggling small builders access the land and finance they need to build.”
Article by: Simon Butler, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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