Games of Two Halves – Premiership Season So Far

With 19 games played and 19 to go it seems an appropriate time to take stock and take a look back over the first half of the season, before the January transfer window takes over all the sporting headlines for a month.

So who has done good, who couldn’t hit a cows arse with a banjo and which teams will end up making up the important top-four and bottom-three places?

Arsenal

There are few superlatives yet to be used to describe the season an Ozil and Ramsey inspired Gunners are having. After an opening day shocker against Aston Villa (how long ago that seems now), Arsene Wenger’s Arsenal have been pretty dominant and sit atop the Premiership table as we head towards 2014.

Worries remain about the squad quality and depth, especially if the aforementioned German and Welshman pick-up injuries or hit a run of bad form, however, it is fair to say the red side of North London have as good a chance as they have had in years to secure a trophy.

Mid-Term Report:  A+        

Starting to show the quality to back-up the hype

January: If they are to make a serious push for the league title and Champions League, Mr Wenger may be forced to pull out his chequebook out again in January. A quality striker is certainly required, but adding any depth to the squad would certainly be welcome, but will Bendtner finally leave?

Manchester City

As one of the pre-season title favourites, it is surprising it has taken until Christmas for the blue side of Manchester to show themselves as title contenders. However, the undoubted strength and standard of the squad is starting to show itself.

At home they have been scoring for fun, netting six against both North London teams and seven against Norwich. Despite all this doubts do remain, particularly with regard to the team’s away form, which has been sporadic to say the least (remember the game against Cardiff?), although this has improved greatly during December.

Mid-Term Report: A -         

Improving all the time

January: You expect Man City to buy in January, but the question is where. They are well catered across the field, but it will be interesting to see if Manuel Pellegrini decides to bring in a quality goalkeeper to replace the resurgent Joe Hart. The transfer window may be a question of who heads for the exit.

Chelsea

The return of ‘The Special One’ has not been as special as his last stint, but two points off first-place certainly keeps them in the running. However, all is not well at Stamford Bridge. Like many teams this season, a lack of form has been the most troubling aspect for the Blues, although the absence of a striker is certainly a major cause of this.

Fernando Torres is still miss-firing, apart from a high-octane 20 minutes at the start of the second half away at Tottenham which saw him shown an eventual red card. New (albeit old) signing, Samuel Eto’o, is yet to hit any form, while the senior members of the squad, in particular Frank Lampard, are bringing to show the strain. Meanwhile Juan Mata (much to the confusion of everyone else) is still struggling to get in the team.

Mid-Term Report: B-          

Has so far lacked the killer edge, but somehow has been able to keep up with the leaders

January: A striker, a striker, my kingdom for a 20-goal-a-season striker.

Everton

While his predecessor in the hot-seat at the Toffees has struggled with the demands of his new job, Roberto Martinez has taken to it like the proverbial duck to water. Despite the loss of Marouane Fellanini, Everton have been in great form, proving themselves to be one of the toughest teams to beat in the league.

Even an injured Layton Baines, who may yet follow his former boss to Manchester, has failed to stifle their efforts.

While many would still question the Merseysiders chances of a top-four finish, a Europa League place is certainly more than a possibility, but arguably the two most important questions this season, is there a future after Moyes and the quality of Martinez, have both been answered.

Mid-Term Report: A         

Pre-season doubts confounded and proved baseless

January: The future of Baines will probably be the most important aspect of the transfer window at Everton, as will the future of Chelsea loanee Romelu Lukaku.

Liverpool

Liverpool were on top of the table at Christmas and you would certainly have got good odds on that at the start of the season, but back-to-back defeats against title rivals Manchester City and Chelsea have seen the Reds drop down to fifth. However, it would be unfair to judge the ‘pools season on the last two games alone.

Few, if any, were tipping them for success in August and now Champions League football is a real possibility next season. Louis Suarez has confounded his vocal pre-season critics to arguably become the best player in the league, while Daniel Sturridge, before he picked-up an injury, was getting on the score sheet regularly.

A title push is not out of the question and might be worth a flutter, but would certainly be a tall order, while the pre-season objective of re-entering the top-four is certainly on the cards, particularly without the demands of European football.

Mid-Term Report: A       

Would be unfair to say they are over-performing, but are taking their rightful place back at the top table

January: If Brenden Rodgers continues to leave out Daniel Agger then a good central defender is certainly going to be needed, with Liverpool leaking too many easy goals at the back.

Manchester United

There were always questions over whether or not last season’s champions could challenge again without the guiding hand of Sir Alex. After a questionable start the Red Devil’s form has improved, although even recent wins over Hull and Norwich have raised questions.

All that said, they are only eight points behind Arsenal and, more importantly, just three behind current fourth-place team Everton. It was always known it might take some time for David Moyes to find his feet and get a weak United squad to play in a Ferguson inspired manner, but being in Europe’s top club competition next season would certainly be seen as a successful first campaign.

Mid-Term Report: B         

Much improved after slow start to a long-term project

January:  For several seasons it has been suggested United were over performing with a very weak squad. Fellanini’s arrival has not been inspirational, while Robin van Persie’s injury has been very inconvenient. Any quality additions to the squad would be welcome.

Tottenham Hotspur

The summer’s big-spenders, although the sale of Gareth Bale balanced the books, have not had the season they were hoping for. New strikers have failed to replace the goals the left-footed Welshman scored last season and Roberto Soldado in particular seems to struggle from anywhere other than the penalty spot.

All this, plus a thumping by Liverpool, resulted in Andre Villas Boas being the highest placed manager this season to be shown the door, although he was swiftly replaced by former Spurs-man Tim Sherwood. At the moment a Europa League place next season would be seen as a success, but for the financial outlay over the summer the team is yet to hit the heights expected.

Mid-Term Report: C         

Underperforming given previous reputation although results have not always been disastrous

January: Given the fact few of their summer signings have hit their stride it is hard to see where Tottenham would be looking. The players are there, it is just a case of getting them turning reputations into results.

Newcastle United

After a first-day dissection by Manchester City it looked like the Magpies would be in for a long season and Alan Pardew would be a manager facing the sack. However, in the way you would want your team to react, Newcastle have started to show the talent of the 2011/12 squad.

Unfortunately, for those in the media, the expected Joe Kinnear bust-up is yet to happen, but the former manager will have to be in top negotiating form in January to bring in some new faces. It is hard to know where Le Toon will end up at the end of the season, but they look more likely than any other team to round off the top-eight.

Mid-Term Report: B         

Like a good French cheese, it stinks at the start, but tastes good in the end

January: Bringing in quality is needed, but getting them may be easier said than done.

Southampton

The south coast team were in third place at one point this season, although as we reach the halfway point their position has normalised itself. However, no matter which way you look at it the Saints have had a great season so far, a statement epitomised by England call-ups for Adam Lallana and Jay Rodriguez.

However, for all the good work the big summer signings of Daniel Osvaldo and Victor Wanyama have not really added much to the team. If Southampton continue to pick-up points form the teams below them, as they have so far this season, then they could be this seasons Swansea.

Mid-Term Report: B+       

Doing well, although the work over the summer looks to have had little improvement

January: Questions remain as to whether or not Southampton can attract the players they need, but the biggest goal of the window will be holding onto the talent they currently have.

Hull City

The highest placed of the newly promoted teams and the only one to still have their original manager still in charge. Although they have not set the division on fire this season, they have done what every promoted team needs to do and quietly and calmly pick-up points.

Most of the team’s headlines have been off the pitch with protests against the sides chairman wanting to rebrand the team Hull City Tigers, but, to the relief of Hull fans, this has not happened yet and has not affected performances on the pitch.

Huddleston and Livermore have proven to be great signings, and ones which Tottenham now may be regretting, but, as always with promotees, questions over staying power are often raised in the second half of the season. All that said, Hull have, without doubt, given themselves a great chance of staying up.

Mid-Term Report: A          

Best of the new kids. Hopefully can keep up the good form

January: Almost certainly no money to spend.

Swansea

The demands of Europa League football have had an effect on the Swans as they have struggled to recreate last season’s early season form, which eventually led them to a League Cup win.

To their credit they are comfortably mid-table, although drawing to many home games, and through the group stages in Europe and set to face Rafa Benitez’s Napoli. Even if this does prove to be the end of the Swans European adventure, this and avoidance of the relegation dog-fight will be successful.

Mid-Term Report: C+          

Performing well given the extracurricular activities.

January: Brought in quite a few players over the summer, but are still lacking that one high-quality addition.

Stoke City

Ever since their opening day match against Liverpool it has been obvious the Pullis days have gone. All that said Mark Hughes has not been an absolute revelation, with the Potter’s twelfth place disguising the fact they are only five points clear of the drop-zone.

Avoiding last terms nail-biting end-of-season finale will have been the goal from the start and it is true they have not shown any sign of falling into it yet, but they are still a little close for comfort.

Mid-Term Report: C+          

Much improved attitude on last year, but is yet to convert itself into long term results.

January: Hughes did not spend over the summer and if this was due to lack of funds then January will not be more fruitful, however, any additions would be welcome.

Aston Villa

This time last year Villa were on an appalling run of form seeing them concede 15 goals in just three games and, although this season has been better, it has still seen pressure heaped on Paul Lambert as the inexperienced players from last season look to improve.

Unfortunately for the Villa Park faithful  results have been hard to come by and while they have so far avoided being dragged into relegation they have been far from convincing, leaving themselves as one of the clubs (from 10^th to 16^th) who would see a couple of wins pull them away from the bottom three.

Mid-Term Report: C-            

Doing better, but not by much

January: Lambert is not one for spending big on one player, but might need to buck this trend. With Benteke not performing a striker is needed, but arguments could be made across the side.

Norwich

It has been a very disappointing and frustrating season for the boys in yellow. While at times the team has showed quality against the big sides, most notably Chelsea at Carrow Road, unfortunately the word most commonly used to describe them is toothless.

Summer signings Leroy Fer, Nathan Redmond and Gary Hooper have all started to show some quality, while record signing Ricky van Wolfswinkle has been plagued by injury and has just a solitary goal to his name.

The most serious problem for the Canaries seems to be an inability to beat teams around them and manager, team and fans will want to see improvements made over the second half of the season.

Mid-Term Report: D             

Good work over the summer has not transferred into better results

January: With all the money spent before the start of the season and the lack of return it is hard to see who they would buy, but some quality defenders would be a start.

West Bromwich

Other than the loss of Lukaku, who returned to parent club Chelsea after a successful season at The Hawthorns last season, it is hard to put your finger on what exactly has gone wrong at West Brom. After years of yo-yoing between the top-flight and second tier the Midlanders seemed to have cemented their place mid-table before a string of bad results left them in their current plight.

The sacking of Steve Clark was harsh, although not unexpected, and no new manager has been appointed. You would back the Baggies to avoid the drop, but it has been disappointing for a team who had improved so much over the last few years.

Mid-Term Report: E         

A lot of room for improvement

January: A replacement for Lukaku is required

Cardiff

Like fellow new boys Hull, most of Cardiff’s headlines have been made off the pitch with renegade chairman Vincent Tan issuing ultimatums and threats before eventually sacking boss Malky Mackay in what will be seen as one of the harshest departures in the often tumultuous history of Premiership management.

Until the nonsense surrounding Mackay, Cardiff was having a good season, including an unexpected win over Man City. However, many now think the red shirted Bluebirds are destined for relegation.

Mid-Term Report: C for the team and an F for Vincent Tan

January: According to the chairman Mackay overspent in the summer so it is unlikely there will be much money floating around.

Crystal Palace

After a dire start under the stewardship of Ian Holloway, Tony Pullis seems to have steadied the ship, but the fact Palace was unprepared for promotion is still showing. Under both managers there were some gutsy performances, but the team have a bad habit of losing 1-0 rather than holding on to pick up a draw.

The second half of the season, like Hull and Cardiff, will be difficult due to a lack of squad depth and the extra demands put on teams by the Premiership timetable and unfortunately Palace will both have to improve their performances and hope other teams around them continue to perform badly to get back-to-back seasons in the top flight.

Mid-Term Report: B    

Been doing better than expected (just) but needs to improve quickly

January: Could be interesting for Palace as the owners openly admit they were not prepared or behind schedule in their dealings following the playoff win. Better players required in all positions.

Fulham

Despite being one of the teams tipped to struggle this year, most will be surprised just how bad the Cottagers have been at times, particularly at home where they have only picked up two wins and one draw so far, compared to three wins on the road where they usually struggle.

Martin Jol was shown the door and was replaced quickly, and unsurprisingly, by Rene Meulensteen who has not really justified the appointment, particularly based on the trashing by Hull, but Clint Dempsey returns on loan in the New Year which should give them some much needed fire power.

Mid-Term Report: E       

New owner has not translated to investment in players or results on pitch

January: With no money invested by Shahid Khan over the summer you would expect some spending in January, but the new chairman has been quiet on the subject

West Ham United

Out of the bottom six teams West Ham is the only one not to have changed managers, although this could quickly change. Sam Allardyce (or Allardychi as he proclaimed himself following his only successful experimentation with a false number 9) is under serious pressure and results need to improve if he is not to be the next manager axed.

A lot of this improvement may come down to the when’s, ifs and how longs of Andy Carrols injury woes. What may hasten Allardyce’s departure is the Hammers securing the rights to the Olympic stadium, a ground that will require top-flight football to fill it.

Mid-Term Rating: E      

Have lost the potential shown last season     

January: A striker is needed if Carroll is out, but with all the money spent on Downing and the aforementioned long-haired gal scorer there might not be any available for the quality required

Sunderland

It has been a very difficult season for the Black Cats, with just one point before the departure of Paulo Di Canio. The replacement for the fiery Italian, the equally divisive Gus Poyet, has been more successful, but being bottom at Christmas usually means the bells are tolling.

However, just two points separate them from 17^th place Crystal Palace so it is not all over yet and if a team was able to pull off a great escape Sunderland have put themselves in the right position to do it.

Mid-Term Rating: D     

Very poor early on, but are getting better

January: A lot of new faces joined over the summer, but were brought in by the previous gaffer. There is very little cash available, but Poyet will want to put his own mark on the team

Top of the Table

Doubts still remain about Arsenal, although the Gunners seem determined to prove pundits wrong, while Manchester City continue to improve and Chelsea deal with a serious striker shortage.

At the start of the season many believed the Mourinho factor alone would bring the Blues another league title, but given how close the top of the table is it is still anybody’s guess.

The top-four looks likely to be made up of Arsenal, Man City, Chelsea and Liverpool, although United and Everton will be determined to prove everyone wrong.

If I had to stick my neck out now I would change my prediction from Chelsea to Manchester City.

Down at the Bottom

Expect Cardiff and Palace to drop into the relegation spots as backroom upheaval (at Cardiff) and lack of quality on the pitch (at Palace) combine with fatigue.

The third spot is harder to call. Sunderland will be favourites for the drop, but have been showing more fight than West Ham or Fulham which counts for a lot in the long run.

West Brom, Norwich, Villa and even Stoke could still be dragged into the mess, but there are three worse teams than this in the league and they would expect to stay up, although the fans and owners will expect improved results from all of them.

Hull would still be an outside bet as the long, arduous season starts to take its toll.

Team of the Season (so far)

Arsenal, Southampton and Everton all make a good case here, but it is also hard to look past Hull who have done a lot better than many were predicting, especially with all the off-pitch distractions.

The second half of the season will be more difficult for them, but have been the best of the promoted teams by a long way.

Underperformers of the Season (so far)

Norwich. Spent big over the summer and were looking to push on and cement their place as a stable mid-table team this season and have just not been performing.

However, like many of the teams around them, a couple of wins would make a huge difference to the season.

Hero of the Season (so far)

Louis Suarez. After all the controversy he has come back as an unstoppable force.

Villain of the Season (so far)

Vincent Tan. People like him should not be allowed to run football teams

Predictions and Premonitions – Looking Forward to 2014

As 2013 [literally] blows into 2014 many choose to look back over the last 12 months, there has even been a program dedicated to reviewing the years weather, an exercise almost as pointless as telling us what the weather was like earlier in the day.

However, here at The Inquisitive Panda we like to look forward, so instead have decided to give you five things to look out for in the next 12 months.

Energy

The last few months of 2013 has been dominated by a variety of energy related topics, from price rises to Labour’s price freeze promise, and this will continue well into the New Year with many issues continuing to dominate the landscape, both socially and politically.

The cost of living will almost certainly remain a centre of contention between the coalition and the opposition, regardless of how well the official GDP, employment and inflation figures suggest, mainly because Ed Miliband knows keeping this issue front and centre is vital to his potential success in the next general election.

Regulation will also be a battleground with a new chief executive, Dermot Nolan, taking over at Ofgem. 

Between the incessant hatred of the consumer towards the energy companies, fuel poverty and the potential power shortage he certainly has his work cut-out and will undoubtedly never be far from the headlines.

Energy generation is set to be a major issue in 2014, particularly when it comes to fracking. There have been several high-profile disputes and protests over this controversial energy source this year, including one involving the arrest of Green Party MP Caroline Lucas.

While there are certainly some significant benefits to fracking, there remain some serious problems, several of which relate to the industry regulator. If fracking really is to become a major energy source in the UK 2014 might have to be the year it starts to take off.

Bulgaria and Romania

With the immigration restrictions being lifted on 1 January, those leaving two of the EUs newest member states looking for work in the UK were never going to be far from the news. In fact both the Eurosceptic and Europhile elements in British politics have both been keen to keep the issue newsworthy, albeit in different ways, to further their own cause.

Yet, unlike other years when the immigration issue would rumble along as it usually does, with no tangible effect, the EU elections will ensure it remains a key issue in the run-up to polling-day in May.

The European elections also offer the opportunity to mention what could be a key political story this year, the rise of UKIP. Despite serious gains over the last 12 months, Nigel Farages party continues to be seen by most as a protest vote, with no real influence, an image not helped by Godfrey Bloom’s repeated blunders during 2013.

However, with the EU soap-box available for the first few months of the year, UKIP, and most importantly Mr Farage, have the opportunity to vault the main political parties and gain support in local elections, potentially making them a serious force in 2015, a party who could actually gain seats, rather than one simply there to harm to Conservative’s share of the vote.

There is one other issue likely to come out of the EU elections, and that is the debate over voter turnout. European parliament elections have traditionally never seen high numbers at polling stations and, regardless of them being arranged for the same day as local government elections, it is unlikely they will be any better this year.

Manufacturing, Retail and Exports

As 2013 progressed the economic news started to improve, although the UK, the Eurozone and America are far from in good health. As much as the economic revival is expected to continue, there are three statistics which will continue to have increased significance in 2014.

Industrial output, how much the UK is producing, retail sales, how much is being spent on the high street, and export figures, how much is being sent overseas, are the most important of these, for very different, but equally important reasons.

Both manufacturing and retail statistics have been volatile and need to stabilise and grow over the next 12 months. Improving industrial output proves companies are confident enough in the business conditions, while increasing retails sales would demonstrate the welcome return of consumer confidence.

From a political, rather than economic perspective, export figures will also be worth watching as if these start to increase then the Conservatives central policy, of exporting further afield than just the EU, will demonstrate the growing influence of UK plc across the world.

Syria

Rarely out of the newspapers this year, Syria is likely to remain high on the news agenda, for several reasons.

First is the decommissioning of chemical weapons under the Russian led deal put together earlier in the year. If this goes to plan then the west will be able to claim some kind of progress, if there are hold-ups or if something else should go wrong then the whole debate about military intervention will raise its head again.

The level of human suffering, as terrible as it is, will be counted in far more than dead and displaced as the refugee crisis forces the bordering countries to actively take sides in a highly charged conflict which shows little chance of abating.

The influence of Syria’s Arab neighbours cannot be underestimated in terms of the global war on Islamic extremism, with Iraq, Lebanon and Turkey, all with their own sectarian problems, being inadvertently caught up the war’s aftermath, not to mention Iran, Israel, Palestine, Hezbollah, Hamas and almost countless more interested parties.

In terms of the war on terror, Africa is likely to become the main focus for Islamic extremism in the next year, with the continued rise of Al Shabab and violence in South Sudan and the Central African Republic.

2015

Let’s face facts, the big story of 2014 will be what will happen in 2015 and from the UKs perspective the big story this year will be the political positioning ahead of the following years general election, but this will take very different paths.

David Cameron and the Conservative party will try, in all likelihood unsuccessfully, to have a quiet year and rely on improving economic figures to boost their polls, while Ed Miliband and Labour need to make some noise and, more importantly, headway on important issues.

Nick Clegg and the Liberal Democrats are unlikely to have a successful year. While in government is difficult for them to effectively oppose spending cuts and will then face an uphill battle trying to persuade anyone to vote for them come May 2015. It will certainly be interesting to see what, if anything the Deputy Prime Minister does to improve his chances over the next year.

Most important on the political spectrum this year will be Nigel Farage and UKIP who, following the EU elections, will look to position themselves as effective alternatives to both Labour and Conservatives at the general election. However, the question remains as to whether or not the party can come up with more than one electable member in a national election.

What Didn’t Make the Cut and Why

Scottish Independence referendum: Many might be surprised this has not made the cut in a 2014 preview, but there is one good reason for this, we already know what the result will be. It would take a monumental swing to the pro-independence movement for the result to change so we are not even going to bother thinking about it.

World Cup: Face it, England will be lucky if they reach the quarter finals, and if they do they will lose on penalties.

America: Joy of joys, Presidential Primaries will start in early 2016. After the display both parties have put up in 2013, it will be nothing but painful to see what second-rate carpetbaggers toss their hats into the ring to replace President Obama.

The Problem With Professions – Job Market Woes

In recent months the jobs market has been in the news regularly thanks to improving unemployment numbers and criticism of zero-hour contracts.

This is certainly not a coincidence, with a large proportion of the new jobs being created in the private sector being part-time, shift and zero-hour employment.

Then in the Metro this week (Monday November 18) two letters were published from Kelly-Marie Blundell, a prospective Liberal Democrat candidate in 2015, and Karen Mattison MBE, cofounder of Timewise Foundation, a pro-flexible working action group.

Both claimed the creation of part-time work was a good thing and we should be abandoning the idea of the traditional full-time job for flexi-time, telecommuting and working from home.

This raises two very interesting points, firstly about the nature of the new jobs being created in the economy and second about the concept behind flexible working.

Flexible working and flexi-time have been seen as the trump card in modern work environments for at least the last two decades, but as yet has not taken off as quickly is expected.

With people living further from work, commuting greater distances and having to juggle both a professional and home life, the idea of fitting your working day around your children’s school hours, for example, seems like a really good idea.

The basic concept was people would come into the office earlier, reduce break times, telecommute and work remotely from home.

However, this holy grail of 21^st century human resources has not materialised to the extent many thought it would.

Yes, parents are taking advantage of it to drop-off and collect their kids from work and, thanks to modern telecommunications, work remotely from halfway around the globe in extreme cases, but this is far from the norm.

In particular, working from home is unfairly stigmatised in many office-based environments.

There are many reasons for it not taking off in the way many thought it would.

Firstly, despite the wonders of modern communications there is a significant and quantifiable benefit to having a team based in one place, being able to interact and bond face-to-face rather than email-to-email.

Secondly, people like the routine of going into work. Ask anyone (including this blogger) about working from home and they will tell you it is not as relaxing as it sounds as your home becomes your workplace rather than a place of rest.

Thirdly, and lastly in terms of this blog post (although there are many other reasons), the modern workplace has not evolved as rapidly as people think.

It is easy to claim flexible working sets the workers free, but it is not true in the majority of cases.

Most people still have and work to the traditional idea of what a job and career is and this still revolves around the basic principle of 9-to-5.

Undeniably, more people are working from home or are on flexible hours, but these still make up a minority of the work force and while we have been reliably informed for the last two decades this is the way things are moving there is precious few facts to prove it.

The problem is there are very few hours in the day to be flexible with in the first place.

Almost all professions keep what are essentially office hours, or operate to a much fuller capacity during them. This includes the construction industry, retailing, customer services and event he medical and care professions.

If the majority of people are at work between 9am and 5pm then the majority of business needs to be done between those hours.

In fact, even the single parent, a prime candidate for benefiting from flexible working, still works what are essentially normal office hours, minus 90 minutes at the end of the day.

However, here lies a problem. People get mixed up between part-time and flexible working, when in fact the two are totally different.

Flexible working involves working a standard number of hours, while not necessarily keeping the same office times as other staff. Part time simply involves working fewer hours.

Yes, part-time work has its place in the economy, but it always has, and should always, be taken by people who require this kind of employment routine, for example, students or those requiring a few extra hours to top up wages. It is not a full-time employment substitute.

This is the problem with the current jobs market.

A major criticism of the recently improving unemployment figures is the majority of the newly created jobs are not full-time or even flexible working, but standard, part-time work, which is of debatable benefit.

You can create as many part-time as you want, but if people need to work three of them just to make ends meet then you will need to create three times as many part-time jobs as you would full-time jobs.

It is very easy for us all to get caught up in the technology revolution, allowing us to stay in constant, and all too often unnecessary contact, a think everything else has moved forward at the same pace, but it has not.

For example, the underground system in London has hardly changed at all since the first mobile phone was invented, let alone moved with the times in terms of WiFi, smart phones and tablets.

Yes, the world is changing and in some areas this change is happening at a staggering rate, but it is foolish to think everything is moving forward at the same rate.

We do not currently, nor will we for a while, live in a world where a majority of people require some level of flexible working and the people who require part-time work, like students, will always be able to find it.

So for now the most important thing is to encourage job creation in the way it is actually needed, not in the way a human resource manager’s dream thinks it should be, and for the moment this path is still firmly based around the 9-5 rat-race.

Through The Keyhole – Help-to-Buy

Helping to buy or not helping at all?

A landmark scheme from the government has been launched this week, months ahead of schedule, with the aim of helping first-time-buyers get on the property ladder.

Sounds great right? Well it has been met with a decidedly frosty reception by, unsurprisingly, the Labour party opposition and, much more surprisingly, by the International Monetary Fund (IMF), among others.

So what is the scheme, how is it supposed to help and why is it unpopular in some quarters.

Help-to-Buy is an extension of Right-to-Buy, a program introduced during the Thatcher years where council house residents could buy their home at a substantial discount.

This policy is aimed a little higher up the market and offers a three part mortgage deal, a 5% deposit from the buyers, an equity loan from the government of up to 20% and a standard mortgage covering the remaining amount.

The idea behind it is average income earners will no longer have to save up for years to afford a deposit, equating to around a quarter of the value of the house.

On the face of it this is a great idea, in a market currently dominated by the buy-to-let market, so why are some convinced it is flawed?

The first problem is the policy only creates the illusion of making housing cheaper, in fact it arguable makes them more expensive.

A standard mortgage involves a large deposit and paying off the remained over an extended period of time.

Help-to-Buy involves a much smaller mortgage, but paying off a much larger proportion of the property’s value.

It also makes an assumption about a 5% deposit being an affordable target.

Yes, it is easier to save up 5% than 25%, but either way these are still large amounts of money.

A £300,000 home will require a £15,000 deposit, while a £150,000 property will still involve saving £7,500.

Couples on average incomes will be able to afford this much sooner than a £50,000 deposit, for example, but it will still involve making sacrifices.

Lower income earners with children, the group who benefited the most from Right-to-Buy, however, will still really struggle to see this as a logical option.

Unfortunately some even greater issues arise once the deposit is found.

When people find a home they will have to repay 95% of its value, the 75% mortgage plus the 20% equity loan, with the later only interest free for five years.

With conservative estimates on average property values, people will still be looking at over £1,000/month in repayments before interest, just on the mortgage without the equity loan, over a 25-year period (Based on Clydesdale and Yorkshire Banks official figures).

Admittedly, this is not dissimilar from the average rent in London, but similarly house prices are higher in the capital resulting in higher repayment levels.

There is a serious irony about a government fixated with cutting the national debt level, while encouraging people to incur large amounts of long-term debt in the name of the national obsession that is home ownership.

It also needs to be taken into consideration the people applying for these mortgages will probably not be getting preferential rates from their bank. They are after all those who would have struggled to get a mortgage without it.

On top of this buyers will also have to pay over £1,000 in bank and lawyer fees, not to mention also remain able to maintain rent on current property, energy bills and food.

The issues with this can best be summed up by the comments of Martin Lewis, founder of MoneySavingExpert.com.

Lewis said Help-to-Buy mortgages were “still very costly compared to normal mortgage rates.”

He went on to say those considering small deposit mortgages should consider a 10% deposit to get a better repayment package.

If this is starting to sound strikingly similar to the sub-prime mortgage collapse in the USA, where people were given mortgages when they clearly could not afford to pay them off and which was a significant factor in the banking collapse, then you are not alone.

There are also economic issues, which is where the IMFs issues start to come into play.

Supply and demand is a basic premise of economics, with the idea being as demand goes up, price comes down.

However, in housing this idea is flawed as supply is not rising to meet the demand.

Throw into the mix the fact the housing market does not suffer from a lack of demand and the problems become clear.

Static supply meets rising demand in an already overcrowded market place and already inflated house prices rise even further making it harder still for first time buyers to get on  the property ladder.

This scenario is by no means a certainty, but is a very real possibility.

Unfortunately, this demand issue brings with it a much more real problem for the would-be home owner.

Ask anyone under 35 years old who is trying to buy a house on a moderate income and you will hear the same stories.

They had the mortgage in place, found the house, but were then out-bid by a rival buyer. Help-to-Buy does not stop this happening.

Some will claim this is the nature of a free-market economy, every commodity has a different value to all people and those who want it more pay a higher price, but it is of little consolation to those who will either have to take out a larger mortgage or settle for a cheaper home.

Then there is the knock on effects this could result in.

People tied into long term debt to such a large extent are unlikely to consider major renovation works, such as new kitchens, bathrooms, and conservatory’s, redecoration, or even expenses in the service sectors like retail or tourism.

While consumer spending is certainly not the be-all-and-end-all of a recovering economy it is a major factor.

People who spend money have disposable income and thusly feel secure in their jobs and are positive about the future.

In fact the employment rate amongst builders, decorators and other tradesmen is a significant indicator of economic health.

There is a reason the phrase for an economic recovery is called ‘green shoots’, it is because economics works from the ground up, not top down.

Although, as this blog has previously published, there are serious doubts about the long-term validity of the UKs desire for home ownership (New World Order – Pensions, Retirement and Saving 6-9-13), people should not be discouraged from buying a home.

Being a property owner brings with it many benefits, greater retirement income, improved credit rating and long term cost-of-living reductions to name a few.

However, if people are continually stuck in a cycle of long-term debt the clear and present problem of economic growth is forsaken, which has a detrimental effect on everyone.

Despite its many flaws, Right-to-Buy at least made buying cheaper, whereas Help-to-Buy does not and in the long run is probably more expensive.

The problems of rapidly rising house prices, a lack of construction and unrealistic financing systems needs to be addressed, but with so many flaws and potential pitfalls this system seems to tick very few of the boxes.

Help-to-Buy encourages buyers, but in the wrong way.