Trevor Law: Cut your waste and soothe your pain...
Sep 3 2010 By Trevor Law
But the era of people finding it reasonably easy to borrow the equivalent of six times their income has past. And Bean has hinted than the Bank of England could resort to “loan-to-value ratios” to halt risks that have seen mortgage lending on this scale and some borrowers even being lent 125 per cent of their property’s value.
This may all seem bleak news for newcomers trying to get on the property market. But there is a balancing factor.
As many experts predict, the housing market could well go down from present levels before stabilising.
Those with existing loans would do well to anticipate and plan for a rise in interest rates.
We all need to look inwards and assess where savings can be made, particularly a reduction in waste from what has become the ‘throwaway society’.
A fascinating programme on BBC last week highlighted this dramatically. The Great British Waste Menu saw four Michelin-star chefs cooking a banquet from ‘waste food’. This was food disposed of by supermarkets, farms, markets, houses which was either out of date (but not bad), the wrong shape or size or slightly imperfect.
It is claimed that £10 billion of avoidable food is wasted per annum, and 60 per cent of dumped food has been untouched.
I believe that the effect of the cuts can be minimised if people reduce waste in all aspects of life. What is the outlook for restaurant chains and pubs when you can buy ready made meals for such good value?
Bookings are already being taken for this year’s Christmas lunch. Many restaurants charge £50 plus per head. Last year Morrisons were offering a three course meal for four people for £4. Expect more offers like that this year – consider the impact on the pub sector which is already struggling.
The incredible competition between supermarkets has driven down the price of basic commodities in many areas. There is presently a price war on between supermarkets and stores for school uniforms as we approach the back-to-school milestone.
Tesco is marketing a complete new school uniform for £3.75 – polo shirts 50p, trousers/skirts £1.50, sweatshirts £1.75. How many consumers will continue to pay ten times this price for a brand when this sort of value exists?
The real pain is about to start. Those who take the medicine early and complete the course will come out fittest and healthiest and enjoy the rewards.
* Trevor Law is a director with Montpelier Group (Europe) Ltd, the privately-owned independent financial advisers, near Solihull. Email:tilaw@montpeliergroup.com
