Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss property prices and mortgage rates. Also, the cost of the coronation, and my thoughts on monarchy.
Quote of the Week
This week’s news has been dominated by the coronation of Charles. My views on the monarchy range from “indifferent” to “fucking raging”. The idea that in 2023 we have this group of people that are treated as, somehow, superior purely because of their birth is ludicrous. There is not a single coherent argument that can be made for maintaining a monarchy, and those arguments that are made are easy to dismantle.
If we abolish the monarchy it doesn’t mean we have to get rid of the various castles, palaces, and estates that form the physical infrastructure of the monarchy. I’ll hold my hands up if I’m wrong in what I’m about to say, but I’m pretty sure the cost of a ticket to any of the palaces or residences doesn’t include a “meet and greet” with any member of the royal family. People still regularly visit palaces all over the world in countries that no longer have a monarchy, so why do we think tourism will drop if we suddenly remove this archaic institution? If anything, tourism would increase as previously off-limit areas would be open for business.
They do a lot of work for the country
Such as…? There are literally dozens of nations around the world that manage just fine without an unelected monarchy, where official representatives are chosen and not born into their positions of power or authority. As for their supposed “hard work”, I’d wager that almost anyone in full-time employment who also has to; cook, clean, do their own shopping, arrange their own finances, look after children, or complete any of the huge number of chores that come with daily life would happily take on the workload of any of these leeches.
I mean, what could possibly be wrong with continuing to do something just because it’s what’s always been done? Human history is littered with many traditions and customs that are best consigned to history. It’s a sign of an enlightened society when we can look back at how things used to be done and feel shame. It’s a sign we’ve grown as a people. I don’t understand how a typical, everyday person can look at the royal family and feel pride. I mean, the very concept of a royal family is based on the idea that they are inherently better than the general population. If someone came up to you on the street and argued that they are better than you, or carry greater value or worth than you, you would rightfully be offended. So why accept this from the monarchy? Do royalists view themselves in such low regard?
All these points bring us back to the rumoured cost of this absolute fucking farce; £250,000,000.
Exact numbers vary, but it’s thought there are at least 15 million people in poverty in the United Kingdom, of which roughly a third are children*. Yet, the country spent £250,000,000 to watch some guy put on a hat. Let that sink in; all this expense so we can watch a guy put on a hat. This whole shitshow should be a source of national embarrassment.
*sources, because someone on Twitter said “I don’t think we have millions of children living in poverty.”
It’s the time of year when the wildlife on the river starts to thrive. We are lucky enough to live on a stretch of river with geese, ducks, moorhens, herons, kingfishers, and more. There are many nests up and down this area and it always brings joy, and a sense of peace, to see nature in this way. A few years ago we had a family of four white geese, of which two were nesting, as well as a large family of Canada geese, including seven goslings. We also had many ducklings and other young birds. I remember vividly looking down the river and being so happy at all the nature on display. Then, later that day a bunch of people came rafting downriver and all the wildlife disappeared, and it’s never recovered back to that level. It’s extremely annoying.
Earlier in the week Oana and I went for a walk around the area and checked in with a nesting Canada goose with several eggs. There were half a dozen people rafting on this stretch of river and they kept coming close to the nest, and the goose was obviously in distress. What is wrong with people? Why can’t we just leave nature in peace? The closest we got was on a pedestrian bridge over the river. These rafters were coming within a couple of meters of the nest. We asked them to keep their distance, but it seemed to go in one ear and out of the other.
I’m not saying that people shouldn’t be allowed to use the river for recreation, but there should be some common sense. This river is shallow; only a few inches deep in places. I could stand in the river and the water would only come halfway up my shin. We’re not talking about a large, fast-moving river, so it would be great if we could just leave these animals in peace and observe them from a distance.
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What Am I Doing?
TV: Masterchef (BBC).
Audiobook: Children of Ash and Elm by Neil Price.
Premium Bonds: £7,350.00 (+£6,000.00).
Stocks and Shares ISA: £84,318.13 (-£2,309.52).
Fuck It Fund: £400.00 (+£25.00).
Pensions: £57,647.03 (+£272.36).
Residential Property Value: £226,085.00 (no change).
BTL Property Value: £145,893.00 (no change).
Total Assets: £521,693.16 (+£3,987.84).
Credit Card: £0.00 (no change).
Loans: £9,600.00 (no change).
Residential Mortgage: £177,728.81 (-£476.12).
BTL Mortgage: £104,992.26 (-£9.49).
Total Debts: £292,321.07 (-£485.61).
Total Wealth: £229,372.09 (£4,473.45).
Investment Income in 2023: £1,555.75 (target £8,500).
We had some spare cash that had been earmarked for another purpose, but we changed our mind on what we were going to do, and so I’ve been able to invest that money in my Premium Bonds.
My ISA took a hammering this week, but there are signs that the housing market may be picking up. Earlier in the week Nationwide Building Society reported that house prices rose 0.5% in April, after months of decreases in prices. What I need is for prices to increase steadily for the next couple of years as it will allow me to draw out the equity in my existing BTL to put into more investments.
Property investing is much more expensive now than it was just a couple of years ago. Mortgage rates have increased across the board and data from Rightmove suggests that first-time buyers are paying at least £190 more each month for their mortgage than if they’d taken a mortgage out a year ago.
I do worry that we have a ticking timebomb of mortgage debt which could cause problems over the next five years or so. During the pandemic years, the mortgage market was insane and house prices surged. Anyone who bought during this time, and stretched themselves to the brink of what they could afford, will have taken a rate that is extremely low compared to rates available today. In July 2020 a typical five-year fixed rate was around 2.25%, whereas today it could be anywhere from 4.5%-5%. On a £200,000 mortgage with a 25-year term, this would be an increase of roughly £300. If you were already at the brink of what you could afford, then this will come as a hammer blow to your finances.
If enough people find themselves struggling to afford their mortgages, then it could lead to a fire-sale of properties, which in turn would lead to an oversupply and subsequent drop in prices.
May is a huge month for my FIRE plan as it should see almost a quarter of my annual investment income received. I’m expecting a sizable dividend payment, as well as rental income which will push my investment income for the year so far to around £3,650. In an effort to boost my income, I may start charging people £25 to watch me put on a beanie, because I’m apparently “a chancer” (If you know, you know).
Anyway, that’s all for now. It’s been a long week of work, and I only closed my work laptop at 4pm on Saturday. I hope you are having a relaxing bank holiday weekend. Thanks for reading.
The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, nor should they be considered advice.
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2 thoughts on “Part 184: 250,000,000 reasons…”
I’m sure you still enjoyed the coronation bank holiday!
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Not gonna turn down a free holiday day
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