The Success (and Failure) of Help To Buy

by Magical Penny on June 22, 2015

It’s been over two years  since the ‘Help To Buy’ initiative was launched in the UK in April 2013, but 60% of England’s postcodes have no ‘Help To Buy’ Homes.

There are more than 400,000 eligible homes that buyers could have made their own through the scheme but according to housing market data from the HM Treasury,  1,261 out of 2,117 Postcode Districts in England have yet to see any ‘Help to Buy’ mortgage completions.

help to buy

See also the interactive map from TotallyMoney.com,

 

The map in the infographic above highlights all mortgage completions across the UK that were as a result of either the Help to Buy 1 (Equity Loan) or Help to Buy 2 (Mortgage Guarantee) scheme, revealing 1,261 ‘black spots’, where no Help to Buy properties are available or where the scheme simply hasn’t been taken up.

 

Other findings of note:

  • Mortgages on 52,691 Homes in England (as of February 28th, 2015) have completed as a result of Help to Buy so far.
  • 42% of postcode districts in England e.g. NW1 (1261 out of 2117 Total) have yet to see any ‘Help to Buy’ mortgage completions.
  • Leicester is England’s number one Help to Buy city, with 892 completions.
  • MK42, in Bedford, is England’s top Help to Buy postcode, with 309 completions,
Top 10 Regions Total Completions
Leicester 892
Leeds 891
Hampshire 811
Birmingham 788
Wiltshire 749
Liverpool 726
Staffordshire 697
County Durham 696
Norfolk 685
Bedford 683

 

The Help to Buy initiative is available in 2 parts: An Equity loan and mortgage guarantee options:

Help to Buy 1 – Equity Loans

The initial scheme offers first-time buyers easier access to new builds. Help to Buy 1 offers 5-year interest-free Government loans up to 20% of the property value. Once the 5-year interest-free period is complete, interest is charged at 1.75%, with annual rises of 1% above inflation. First-time buyers using the scheme require a minimum 5% deposit and a mortgage to cover the remaining 65-75% of the property value

 

Help to Buy 2 – Mortgage Guarantees

The second phase of the scheme offers mortgage providers more incentive to lend higher loan-to-value mortgages. Access to Government guarantees on these loans allows lenders to give both first-time buyers and existing home owners mortgages with deposits as low as 5% on new builds and older properties.

 

I have friends in Leeds and Leicester who have taken advantage of the scheme, but from the looks of the data, my perception about take-up is more rosy than it should be as Leeds and Leicester are the areas with the highest take-up rate. I would attribute this to quantity of affordable housing stock but its certainly interesting to see how the take-up in distributed up and down the country.

Do you have a ‘Help to Buy’ story you can share in the comments or would like featured on Magical Penny? If so, please get in touch (adam AT magicalpenny.com)

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5 steps to starting a business in your retirement

by Magical Penny on January 12, 2015

retirementRetirement may close the door on your current career, but it paves the way to a wealth of opportunities such as starting your own business.

Entrepreneurialism isn’t just for the young, with a sudden abundance of time and savings, combined with years of real-life experience, retirees have the ideal skill sets for breathing life into their own business ventures.

Assess your financial situation

It’s a good idea to plan your business venture before you hit retirement, so that you can properly assess your financial situation. If money shortages look likely to be an obstacle, then consider cashing in your pension to generate some extra funds. While this may not be the best option for everybody, taking a small amount of your pension pot to bankroll your business may be the answer if you can’t find any other way to fund your idea.

retirementPick something that you love

You may have spent a great proportion of your life working in an industry that you hated, in order to earn a decent living, but retirement is the time where you get to decide exactly what you want to do.

There is no point pursuing a business that you aren’t passionate about, simply because you think it’ll be a good way to make money. Choose something that you love and your enthusiasm will shine through to your customers.

Use existing skills and knowledge

One of the biggest advantages retirees have over younger entrepreneurs is that they possess years of experience and knowledge. Harness this knowledge and implement existing skills into your start-up business.

If you have spent years working in a particular industry, why not spend your retirement working as a freelance consultant, offering pearls of wisdom to the next generation of workers in your specific field of expertise?

Do your homework

After deciding which industry you are going to go into, ensure that you know the current market inside out by researching your competitors and customers. This is essential to make sure that you have enough ability to be successful and that you’ll have enough demand for your product or services.

Enjoy it!

Have fun, this is your retirement after all! Think of this venture as an exciting project, rather than an all-consuming business. While it is easy to let things stress us out, remember that retirement is a time to enjoy life, put yourself first and let the business come second.

 

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Smart saving tips for families

by Magical Penny on October 31, 2014

The amount of cash that UK households are spending per household seems to be ever increasing, and it’s certainly top of mind for many of us as we head towards the festive season! (yes, it’s coming!)

 

Here are top 4 tips to start using today for your family’s budget


If you are the person who is responsible for the family’s budget, you should consider some of these strategies to keep your family’s personal finances looking healthy:

  • Ensure you are on the right energy tariff for you.

    It’s worth shopping around for your energy. You should be as diligent with this as you most likely are when you shop around for the best mobile phone contract or car insurance. It really can help save you money. And thanks to recent reforms in the energy market, things are now simpler, clearer and fairer – making it easier to check your existing energy deal and work out if you’d benefit from a change. You can learn about the best ways to shop around by visiting Go Energy Shopping. You can also learn all about the new changes that the UK government has introduced to make shopping around for energy easier and clearer than ever.

  • Check your transport costs.

    In a 2012 report on household spending, the ONS stated that transport was one of the biggest drainers of household cash. Transport ranges from motors to scooters. If your family lives close to school, consider walking children to school in the morning if it is close to your home. Using public transport to cut down on the effects of paying for petrol and diesel. We all know that the fuel pump is one of the most expensive aspects of life in the UK – avoid it and try different methods of transportation such walking and cycling which relies on your body and energy for power

  • Keep technology purchases to a minimum per quarter: The ONS also found that more families are spending household money to purchase items such as computers for the home. If this sounds like something you want to invest in, try and look for as many deals and bargains as possible such as using vouchers that you see in print media or checking online. This gives great value for money so you can best use your savings when purchasing a computer. While IT companies such as Apple might convince us that we need an iPad and a Mac book, look beyond the marketing before you buy. Be stringent with your technology purchases in order to balance your family’s budget each month.

  • Buy supermarket brands: This is an area that many families can find themselves overspending because after all, we all need painkillers for headaches and keeping the house clean is a priority. This is where plenty of savings can be had if families opt for supermarket brand versions instead of the market leading brands.

With a frugal grip on household budgeting thanks to these tips, you can manage your family’s money prudently so you don’t feel strapped for cash towards the end of the month.

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Three Simple Steps to Transforming Your Hobby into A Moneymaker

by Magical Penny on October 9, 2014

Whether you’re finding it slightly more difficult than usual to make ends meet, or you’re simply after that little bit of extra cash on the side to give you more financial freedom, being able to turn one of your favourite hobbies or pastimes into a genuine moneymaker is an essential skill for those of us who are looking to earn that little bit more than what our day jobs facilitate. You never know, if you follow the advice below, you might be able to quit your day job altogether and simoney making ideasmply run your home business full time.

Step One: Explore Your Passions and Select a Niche

If you want to be good at what you do, a good dictum to follow is to do what you love. If you can do this, you’ll be able to put your everything into the product you’re trying to sell, and after all, the best sales person is somebody who truly believes in what they’re selling. So, the way to achieve this is to go through your interests: fashion, jewellery, video games, comic books or anything else, and select the one that you know you’ll be able to dedicate all your spare time to selling without it getting boring. You also need to take into consideration your work process; we’ll discuss this in the next point.

Step Two: Create a Process and Refine Your Workflow

Once you’ve selected your niche, you need to define your process. Are you going to produce your own jewellery, or are you simply going to resell what other people have made? Are you going to design a smartphone game or an app, or are you going to buy classic arcade cabinets, restore them, and sell them on to collectors? Answering these questions will help you to generate a great business plan that you can work from, and that you can adapt and tweak when the need arises.

Step Three: Pleasing the Customer with Quality Service

The third point is probably the most important: customer service. If you really want to impress your customers, you need to leave them with a brilliant lasting impression. There are a number of ways to do this, from setting up a Facebook account and interacting with your customers, by producing an amazing FAQ section on your site to help your customers answer their own questions, or by delivering products on time across the world using a reliable courier like TNT Direct. You could offer the best customer advice, but if their purchase turns up late, your customer will still probably leave you a negative review.

So there you have it: three simple ways to transform your hobby into a genuine moneymaker.

Have any other ideas?

Share them in the comments!

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History of the Credit Card

by Magical Penny on September 30, 2014

Using credit cardsThese days, most of us have a credit card tucked away in our purse or wallet. Some of us probably even have a lot more than one. Now, with so many different credit card types on the market, offering things from cashback rewards to air miles, they have become so much more than just a convenient way to pay. But credit cards haven’t always been available, so when did it all begin?

Though the credit card itself didn’t come about till the 20th century, the concept of credit has been around for a very long time.

The first recorded use dates back almost 3,000 years, to civilizations in ancient Egypt and Babylon, where merchants would allow customers to pay for an item at a later date if they didn’t have the means to pay then and there, after making a note of the due payments. Fast forward to the mid 1900’s and in the US, oil companies, as well as local department stores and petrol stations, had a similar system, creating charge accounts which could be accessed using a card for their customers in an effort to create customer loyalty. It is from this system that the first credit card stemmed from.

The Charg-It Card

The ‘Charg-It’ card is often considered as the world’s first actual credit card and was a concept thought up by Brooklyn banker, John Biggins back in 1946. The idea was that when a customer made a purchase, the bank would pay and the customer would be sent the bill later. It wasn’t without its catches though. The card could only be used to make purchases locally and unsurprisingly was only available to those customers who had a bank account at Biggins’ own bank.

Three years later, in 1949, a new credit card was developed with a rather fanciful tale behind its creation. The story goes, that Frank McNamara, the head of the Hamilton Credit Corporation was out for dinner at New York’s Major’s Cabin Grill along with his attorney and a man named Alfred Bloomingdale, the grandson of the founder of the famous store Bloomingdale’s. A discussion arose regarding one of McNamara’s problem customers who had borrowed money and was unable to pay it back in a short space of time. Embarrassingly, shortly after this conversation had ended, McNamara realised that he had forgotten his wallet and had no way of paying for the meal. He had to phone and tell his wife to come to the restaurant with some money from home.

The Diners Club Card

With thoughts of the problem customer still on his mind, and vowing never to be stuck in this situation again, McNamara came up with the concept of a credit card that could be used to pay at multiple locations. The three men present at the dinner, then got together some money and started a company called The Diners Club. The Diners Club Card saw a step away from individual companies offering their own credit to customers as previously seen and gave customers the chance to pay using one card across many different companies.

At first, the card was only used by a select few at a small selection of restaurants and entertainment venues (hence the name Diner Card) but by the end of its first year, it had spread with over 20,000 people using the card.

Again it was not without its catches. Customers didn’t pay interest, however they were charged an annual fee for using the card and had to pay their bills back in full at the end of each month. Also, companies that accepted the Diners Card, were charged 7% on each transaction made with it.

 

 

Wider Adoption

It wasn’t until 1958 that The Diners Card saw real competition in the form of American Express. American Express as a company had existed for a long time before this date, but it wasn’t until then that they turned their attention to credit cards. It was a year later that the company introduced the first ever plastic credit card that we are now so used to seeing. Up until then cards were made of paper or cardboard. In its first five years, American Express could boast over one million card users across approximately 85,000 establishments and soon became used worldwide. Similar to the Diners Club Card, the early American Express cards required users to pay back their bills in full at the end of each month and it wasn’t until 1987 that the company allowed users to pay across a longer period of time.

Though this put customers at the risk of getting themselves into debt, when used sensibly, it provided customers with more flexibility with their money, which is what we enjoy today.

 

 

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Looking to Sell Your House?

by Magical Penny on September 18, 2014

If you’re in the UK and either buying or selling a house, you’ll definitely find this info-graphic very interesting. London House prices have doubled compared to the rest of the UK. This is the widest gap since the history books began.

 

UK-housing-Infographic

 

We Buy Any House is a professional UK based house buying service.  Check out the latest news section for housing views, news and opinions on the current state of the UK property market, learn more about them at www.webuyanyhouse.co.uk

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Investing in Alibaba, Pre IPO, in IG’s Grey Market

by Magical Penny on September 17, 2014

business IPOThere’s a internet company that soon will be worth more than Amazon.com

It’s often described as a cross between Amazon, Ebay, and Paypal.

It’s huge in China, and although not well known in the west, already owns stakes in companies you may have heard of like Uber, Lyft and the search engine app Quixey.

And you have an opportunity to get a piece of the action before its shares are publicly traded in a huge Initial Public Offering (IPO) when it starts trading on the New York Stock Exchange in the next few days.

Intrigued?

The Chinese company is called Alibaba and the huge internet e-commerce business is predicting its IPO will value itself at $167 billion if it prices at the high end of its range. As a comparison, Amazon has a $160 billion market cap. And for context, that little internet auction site eBay’s only has a $67 billion market valuation.

On a price per share basis, Alibaba’s new target IPO price range is between $66 and $68 a share (It was set initially between $60 and $66 a share.) and all this new money from the IPO (potentially $25 billion) will mean the site will have plenty of cash to put into research and possibly acquisitions of more Technology companies, so the future looks bright.
If you’re interested in investing in Alibaba, the self proclaimed ‘largest online and mobile commerce company in the world’, you cannot buy shares directly until the IPO, but there is a way to capitalise on the opportunity at this stage, through what’s known as the ‘Grey Market’.

A grey market is a parallel market which allows for the trade of a commodity, legally but unofficially.

IG allows you to trade on the Grey market for many pre-IPO companies including Alibaba: IG offers a Alibaba marketplace to invest in Alibaba before the IPO, and after.

At IG you can trade on their grey market before shares are released and do other things such as Spread bet, trade CFDs or use the stockbroking service to trade Alibaba shares after the IPO.

There’s a lot of demand for owning a piece of the internet giant because, quite simply, it sells so much stuff.

Using gross merchandise volume as a metric, the value of all the merchandise changing hands on a platform over a given time, Alibaba generated $248 billion of gross merchandise volume in 2013. Compare this to Amazon’s figure of $116 billion, according to estimates by IDC, and you can see what all the fuss is about.
In fact, if you add up the value of goods being exchanged on Alibaba, it’s greater than that of Amazon, eBay, JD.com (JD) and Japanese e-commerce giant Rakuten — combined.

Alibaba’s dominance may grow even further as China’s middle class continues to expand. So if you already have sensible diversified investments and want to speculate with what looks to be an investment with a lot of potential, then investing in Alibaba pre or post IPO could be what you’re looking for.

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Save Money With Simpler and Clearer Energy Comparison Shopping

by Magical Penny on July 13, 2014

Energy shopping One of the easiest ways to save extra money every month is to review your monthly bills.

  • Do you know how much is being taken out of bank account every month?
  • Are you using what you’re paying for?
  • Can you get a cheaper deal elsewhere?

You may find a few payments that you don’t need any more, perhaps a magazine subscription that you don’t read any more. Doing an audit of your direct debits and standing orders is a good place to start, but there’s always going to be payments that are unavoidable, like paying for energy.

A recent study by OFGEM revealed that almost half (43%) of those surveyed in Britain admit they don’t prioritise ‘energy shopping’ to find the best deal, despite the fact that it could save them precious pennies (and in many cases, a lot of pounds!).

You may not have checked your energy prices recently because you thought it was complicated, hard to compare, or you of the opinion that all energy companies are as bad as each other.

Thankfully, new reforms have now resulted in a simpler, clearer and fairer energy market for the UK, and there’s a new website launched to help you get the best deal: Go Energy Shopping.

 

What is Go Energy Shopping?

The Go Energy Shopping site has been set up by OFGEM, which stands for the Office of Gas and Electricity Markets. It’s a non-ministerial British government department and an independent National Regulatory Authority, recognised by EU Directives.

The purpose of OFGEM is to promote value for money, and make sure the energy market is being competitive and is keeping to government regulation and schemes. This means the Go Energy site has your best interests at heart.

 

Why Now?

It’s now easier than ever before to compare energy providers. There’s now only 4 core tariffs for gas from any energy supplier, just one pricing structure (standing charge, + unit rate), and just 2 cash discounts allowed – for dual fuel and for managing your account online.  These changes have been brought it to make energy pricing less confusing and easier to compare.

But how can you take advantage of it?

 

The 3 steps to Energy Shopping

1. Take Stock

The first step is getting all your papers together including recent bills and any letters you’ve been sent from your current provider. Look out of your annual consumption figures on the letters you should have been sent. You should also look for the name of the tariff you are on, and if there are any restrictions or ‘exit’ fees that may make switching energy suppliers less worthwhile at the moment.

Tackle Jargon

Don’t worry if you’re getting overwhelmed by the terminology and confusing words used on some bills and letters. The Go Energy Shopping has a helpful glossary  so you can tell the difference between ‘evergreen’ and ‘core’ tariffs and another  words.

 

2. Shop Around

Once you have all your information in one place, it’s time to go comparison shopping!  Helpfully OFGEM have compiled a list of sites that are OFGEM accredited.

These are sites that have been vetted to ensure they are independent, and include option and prices that are displayed fairly meaning you can be more confident about the results.

3. Take control and start saving on your energy

Once you’ve found a good deal you have two options: you can let the comparison site do all the work for you, getting your switched over, or you can contact your new preferred supplier yourself. Just make sure you pay any outstanding debts to your current provider to ensure the switch over goes without any delays.

 

For a more detailed full step-by-step downloadable guide to help choose and change your energy supplier, check it out here:

The guide shows how the recent changes to the energy market can help you to compare tariffs and get a better deal on your gas and electricity bills.

Once you’ve been through the above steps, there’s just one thing else to do: Remember to pat yourself of the back for going through the process. It can seem a bit of a hassle if you haven’t done it before but it really can be worth it, with savings of £200 possible in some cases!

For best results, take those magical penny energy savings and funnel them into your savings account or ISA to get a warm feeling inside as well as a warm feeling inside your home 🙂

 

 

 

This post is sponsored by OFGEM, a non-ministerial government department of the UK, who look out for the consumer’s best interests when it comes to energy.

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Escalating Costs in Britain…but a Big Mac has only gone up 2p in a decade

by Magical Penny on July 4, 2014

Have you noticed your household bills escalating?

Magical Penny has readers across the world but there’s a sizeable readership in the UK. Naturally I’m not surprised, as I’m British myself.

If you’re living in Britain I’m sure you’ll find this infographic of interest. It details how the cost of living has changed in the UK over the last decade.

The good news is that a Big Mac is only 2p more than a decade ago.

 

rising costs

Source: Vouchercloud

Those take-home points again:

 

  • Taking your date to the cinema in 2004 was £1.38 cheaper than it is today.
  • A Big Mac today costs only 2p more than it did in 2003.
  • Assuming you drink the average 144 pints of milk per year, you spend £7.20 less now than you did in 2003.
  • The recommended limit of three units of alcohol per day equates to £1524 a year, in current pub prices.
  • Going to University today costs over 6 times more than it did in 2003.
  • The journey between Leicester Square and Covent Garden takes only 20 seconds but costs £4.30 today.
  • Those who bought their house in 2007 could have saved nearly £50k in they had waited 2 years to buy.
  • Those earning minimum wage were £665 better off in 2009 than they were two years later in 2011.
  • 2011 saw the second lowest average salary over the last decade.
  • A 35 mile commute to work today, over the course of a year, is £411 more than you paid in 2003.
  • Keeping your lights on and your devices powered costs over £200 more today, than in 2003.
  • The price you pay today would pay the gas bill for two houses back in 2003.

 

Inflation-adjusted figures are super-insightful aren’t they?

 

What do you think? Are there any other costs that have escalated for you?

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The Rapid Evolution of Crypto-currencies

by Magical Penny on July 4, 2014

Warning, this post contains a reference to Justin Bieber…read on if you dare…

Crypto-currencies have long since moved on from being the official payment method of internet dwellers. Despite their rather geeky creation methods; a series of mathematical algorithms must first be solved to unlock the currency, crypto-currencies are now worth billions of dollars, and are used even within the mainstream markets.

Famous entrepreneur Richard Branson recently confirmed Bitcoins will now get you a ride into space. Virgin Galactic tours will be accepting the coins as payment for a ride to infinity and beyond. Or at least to the edge of our O-zone layer.

bieber bitcoin Bitcoins are so new that Bieber’s ‘Baby’ song came first!

 
Given that Justin Bieber’s hit song, Baby, was recorded before crypto-currencies such as Bitcoin were even a ‘thing’, their rise to popularity in such a skeptical industry, has been remarkable.


Although Bitcoin is the first type of virtual currency people think of when hearing the words crypto-currency, there are some others also gaining ahead of steam. Reddit users will probably be familiar with Dogecoin. Dogecoin is a new type of currency that’s already been making waves in it’s short time in existence. Back in 2013, before the start of the Sochi winter Olympics, the Jamaican bobsleigh team were struggling to fund their trip to Russia after an unexpected qualification to the event.


Needing $40,000, and feeling slightly hopeless, a Dogecoin  campaign run by internet users managed to raise the whole fair and send the team to the tournament. While the currency still needed to be converted into fiat currency to purchase plane tickets and equipment, the fact that such a ‘minor’ currency had made such a big impact at such a big event was a turning point for crypto-currencies.

In many big cities such as London and New York, many restaurants now accept Bitcoin and other crypto-currencies as a form of payment. A trip along London’s South Bank, and New York’s Times Square will reveal a handful of food chains as well as mini food stalls that accept the peer-to-peer form of currency as a payment. Perhaps no food outlet is bigger than Subway. In 2013, the sandwich giants released a list of sandwich outlets which now accepted Bitcoin as payment for food. The move is a far cry from the days when the underground currency was only good for buying hosting or use as a gaming currency.

Bitcoin looks set to grow even more in 2014 and into 2015. London have announced Bitcoin cash machines are to open around the city, allowing owners of them to withdraw fiat currency or exchange into local currency. The idea looks set to be copied by other cities world wide, firmly cementing Bitcoins place among the larger global paper currencies.

 

What do you think? Are you investing in Bitcoin?

 

Also on Magical Penny, the story of how I more than doubled my magical pennies through Bitcoin:

http://magicalpenny.com/what-on-earth-is-bitcoin/

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