Following the publication of his latest pre-budget report, Chancellor Alistair Darling has not won favours with everybody it would seem but, so far as homeowners are concerned, next year could have been much worse. In fact, the pre-budget report comes as good news to homeowners whose central heating boilers have seen better days.
The Chancellor aims to introduce the Boiler Scrappage Scheme in early 2010, which enables homeowners to trade in their existing boilers for a newer, more energy efficient condensing model. Most importantly, the Boiler Scrappage Scheme provides a cash incentive of up to £400 towards the replacement.
The Chancellor’s plan is certainly not a bad idea in the short term but, so far as long term environmental targets are concerned, it does little to address the fact that imported non-renewable fuels will still be required to heat most homes throughout the country, thereby making it a little less of a bad thing.
Another criticism of the Boiler Scrappage Scheme is the 125,000 home cap is probably not enough to drive significant environmental change in the country. Moreover, it is thought many of the most inefficient boilers can be found in privately rented homes, so it is somewhat unrealistic to expect landlords to purchase a new boiler installation for the sake of their tenants’ energy bills and a £400 cash incentive.
The recently published pre-budget report has largely been derided as too soft on repaying the national deficit and too hard on the everyday Joe. Of course, all budgets are subject to criticism of some form or another and they rarely involve black or white issues – especially with regard to pre-election budgets – so not everybody’s needs will always be satisfied. However, the recent pre-budget report released by Alistair Darling features surprisingly good news for homeowners and property developers.
In fact, there are two notable provisions of the pre-budget report that are likely to be of great value and interest to homeowners. First, the boiler scrappage scheme, which will most likely be launched in early 2010, enables homeowners to trade in their old boilers for up to £400. In respect to meeting the UK Government’s environmental targets, which ultimately aim to cut the emission of harmful greenhouse gases into the atmosphere, the boiler scrappage scheme is useful in so much as it allows homeowners to replace their old boilers with new and efficient condensing boilers, whilst receiving a cash incentive in the process.
However, the boiler scrappage scheme does present a potentially awkward problem in respect to existing boilers that are fitted on internal walls, which is fairly common for old boilers. Indeed, the new condensing boilers must be installed to an external wall in order to condense efficiently, so this could pose a few problems for homeowners. Nevertheless, the scheme is likely to be of benefit to homeowners on the whole. Finally, the Chancellor has also announced that environmentally conscious homeowners will be entitled to feed-in tariffs, which guarantee a price for electricity fed back to the national grid (via solar panels, wind turbines, etc.) as of April 2010, which could provide more than £900 tax free each year on average per household.
On Tuesday, one of the UK’s leading mortgage lenders announced that house prices in the UK have risen for the fifth consecutive month, which adds further weight to the view shared by many that the country’s weakened housing market is well on the road to recovery.
However, whilst the Halifax’s figures bolster those published by the Nationwide Building Society last week, which suggest that house prices have in fact risen for seven consecutive months as of November 2009, there remains a healthy scepticism over claims that the slump is over.
According to the Halifax’s figures, house prices rose by 1.4% in November, which elevated the average cost of a home in the UK to £167,664. These figures can be compared with those of the Nationwide, which comprised a 0.5% rise during the same month and an average house price of £162,764. However, the Halifax’s figures remain 1.6% lower than they were in 2008, although they have risen by 4.2% over the current year. In any case, homeowners who are eager to sell up at former market prices should not be counting their idiomatic chickens just yet.
Indeed, despite strong signs that the housing market is continuing to recover steadily in the UK, the Halifax has issued a caution to potential buyers and sellers who intend to do business in the New Year. Speaking to the BBC news service, Martin Ellis, an economist at the Halifax, warned that house prices had been “driven by increased demand for property, largely due to the improvement in affordability for existing homeowners and first-time buyers”, whilst “the prospects for the market will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale”. Specifically, the Halifax is predicting that current house prices can only be sustained in 2010 if more homes enter the market.
If the current range of high street Christmas trees is anything to go by, Christmas 2009 will be notable for its rather unusual selection of artificial trees. Indeed, although it is fairly traditional nowadays – not to mention considerably more practical – to purchase plastic Christmas trees in place of natural pines, firs and spruces, the availability of choice has always been fairly limited.
However, the recent unveiling of John Galliano’s Christmas tree, which was designed for Dior and Claridge’s, marks the beginning of a trend or fashion statement that aims to put the traditional Christmas tree in the shade. In fact, some would argue that John Galliano’s work of art, which he described in the Guardian newspaper last week as a creation of “icy frozen snow scenes mixed with a tropical twist”, is nothing short of sheer butchery.
Indeed, there are many ways in which the home can be properly decorated for Christmas, yet the most common and important of these involves the selection of a traditional natural or artificial Christmas tree that is appropriately adorned with baubles, tinsel, fairy lights and other such festive treats. Therefore, John Galliano’s Christmas tree, the artistic value of which could be easily branded as gaudy, austere and characterless, is anathema to anybody who appreciates the more traditional elements of Christmas.
Nevertheless, it would seem that many of the top high street department stores have followed suit by introducing their own unusual Christmas tree designs for 2009. John Lewis, for instance, is selling its Pre-Lit Mistletoe tree for around £50, which is perhaps not such a great deal considering its diminutive size (75 cm height) and gaunt appearance. John Lewis also boasts a rather odd 6ft Reversible Upside Down Christmas tree and a Snowy Paper Christmas tree, which offers a distinctly wintry look and feel.
House prices in the UK have risen for the seventh consecutive month, which runs contrary to the forecasts of various industry experts who have suggested the rise cannot be sustained for any significant period of time. In fact, many experts, including the International Monetary Fund (IMF), believe that house prices must fall to record lows before they are likely to rise beyond their peak 2007 values.
Moreover, this process could take a further four to five years to come to fruition, which is hardly good news for homeowners looking to sell up and move on. Indeed, many homeowners have already been forced to invest in significant home improvements, including loft conversion and garage conversion projects, which are designed to increase the available space in houses that have become too small to be called family homes.
However, the Nationwide Building Society has announced the average value of a home in the UK has increased by 0.5% in November compared to the previous month. This rise puts the average UK house price at £162,764, which puts the market in a position similar to that which was experienced in early 2006. Nationwide attributed the continued increase of house prices to a job market that is much stronger than had been feared. Indeed, many employers have chosen to reduce salaries and working hours rather than terminate employment, so although the recession has hit workers hard the damage has been limited to a certain extent.
Furthermore, demands for high mortgage deposits have also reduced, so access to the market has widened somewhat. Nevertheless, despite these encouraging figures, the so-called ‘three-month on three-month’ rate of increase in house prices has dipped from 3.5% in October to 2.8% in November, which can perhaps be seen as a sign that the apparent recovery is in fact slowing.