No quick end to tightening purse strings

I AM very sorry for all those who are about to see their mortgages rise again in line with yet another, but inevitable in view of inflation, increase in Bank Rate.

I have great sympathy for those who have recently made their first investment in property, carefully budgeted for, who will now see their repayments rise against a background of price increases right across the board.

My mind goes back to the early days of 1957 when I bought my first house, a semi in Great Barr, part of the deposit for which I had to borrow from an elderly aunt. In those days, a wife’s income was not taken into account, for it was assumed that she would be at home bringing up children! Money for me was very tight and my mortgage was obtained with the Bank Rate being 5%.

Our weekly outgoings were very carefully budgeted for, so imagine my shock when just seven months later, the Bank Rate went up to 7% in one jump! It was very much “short rations” time as my wife and I struggled to make ends meet.

However, these early pains were compensated for down years as property values continued to increase over inflation, and within six years we were able to move onto a detached property, so progress! Born out of experience, I would advise anyone contemplating owning their own home to get onto the property ladder at the very earliest possible moment. You will never regret it, for to this day, any profit made in trading your own house is tax free.

Energy and food costs are currently breaking all records and I see absolutely no hope of inflation returning to low single figures by the end of this year as suggested by the Chancellor in his recent Budget statement. In the real world, prices seem to rise very quickly, but when wholesale costs drop, there is quite a delay before such reductions seem to be passed on to the community at large.

So financially, it is not going to be an easy year for anyone, especially those on fixed incomes. Holidays at home, or within the UK may be the order of the day. We are fortunate to be blessed with some fantastic and contrasting scenery to enjoy, it’s just the weather that can be a spoiler! For this year though, less available spare cash!