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news opinion
The total wealth held by UK households has risen by nearly 20% in the past year and now stands at £9.1 trillion – the largest increase since records began 14 years ago
The main reason for this growth in wealth is the, on average, 9% rise in house prices over the past 12 months. So we have become wealthier on paper, even though some have not experienced it in reality.
But, taken as a whole, the wealth of the average household has grown faster than increases in consumer prices. So, in theory, we should all feel better off.
Of course, these figures mark huge variances in wealth both in geographic and demographic terms. We all know, for instance, of young people who cannot afford to buy their first home – indeed,
the average age of the first-time buyer is either 36 or 37, depending whose figures you trust.
So, young people turn to the bank of Mum and Dad to try and get their foot on the first rung of the property ladder. And not all parents have the savings to help them.
Recently, we have heard of more than one instance where employers are assisting their staff, and helping them become homeowners. As one CEO told us: ”It‘s not all altruistic. If a young employee puts his roots down and owns a home, he/she is more likely to start a family, and stay in the job, rather than disappearing down the road to another company.”
Loaning an employee the deposit for a first home is a sensible move for employers who struggle to recruit and retain staff. We have, after all, embarked on a new War for Talent. In areas where tenants can‘t afford rent deposits, companies are also helping out.
Watch out for more of this as skills shortages grow.
David Murray Publisher
New Government inherits buoyant business community
The new Conservative Government has inherited a confident business community but underlying fragility is a cause for concern, according to the latest Business Trends Report by accountants and business advisers BDO LLP in the Thames Valley.
BDO’s Optimism Index, which predicts business growth six months ahead, held firm this month at 104.7 pointing to strong confidence among firms in the region. This suggests businesses have been unruffled by the Election and are resilient in the face of eurozone uncertainty.
There may be good news to come, as BDO’s Output Index rose to 104.3 last month from 103.7, indicating that growth could speed up in the latter half of 2015 following a weaker start to the year.
However, sustained growth depends on companies converting their confidence into the capital expenditure needed to boost productivity. Investment in skills and equipment could help to tackle stagnant productivity levels, boosting business output and ultimately growth.
The new Government must act quickly to put in place policies encouraging businesses to invest. BDO would like to see the Government permanently increase the annual investment allowance (AIA) to £5 million, giving a real incentive for businesses to invest
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in the capital assets that will drive future growth, and give businesses the confidence to plan ahead. It should also consider a VAT zero rating of supplies to companies that export. The UK currently allows manufacturers to zero rate their exports but not their suppliers.
Commenting on the findings, Simon Brooker, partner and head of BDO in the Thames Valley, said: “Ahead of the 2010 election our data showed high levels of business confidence, much like this time around. However this fell away not long after. To avoid this happening again, the new Conservative Government needs to put firm actions in place to help businesses thrive.
“It is encouraging to see that businesses are feeling optimistic about the coming months in the hands of a new government, but the confidence that counts is the confidence that converts to businesses actually investing. Our new leaders must help with this by putting tangible measures in place that will encourage businesses to invest in training or research, technology and equipment to help improve productivity.
“The new Government also has the opportunity to boost future economic growth by investing judiciously in our country’s infrastructure. I hope that they will take it.”
Blake Morgan strengthens teams with new merger
Blake Morgan, which has offices in Oxford, Reading, Southampton, Cardiff and London, is to further strengthen its teams by merging with a practice in London, Westminster-based firm Piper Smith Watton.
This will take effect on August 1, just over a year after Blake Morgan was created by the merger of Blake Lapthorn and Morgan Cole.
The merger will boost Blake
Morgan‘s national presence with the addition of 12 partners, taking the total number of partners to 130, and means the firm has a workforce of around 1,000 staff with an annual turnover of £78 million.
Piper Smith Watton brings particular additional expertise in the entrepreneurial private client and corporate markets and doubles the size of its real estate and litigation practices in London.
THE BUSINESS MAGAZINE – THAMES VALLEY – JUNE 2015
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