Loans Scotland

According to the government 2012 will be a year of plenty with the golden shower of the Olympic Games to sustain us; but not everyone is quite so sanguine with fool.co.uk leading the chorus of doomsayers who believe that life could get very hard for people living in the UK.

Lets not discuss the cost of the Olympics which is bound to grow beyond its already gargantuan 10 billion sterling and lets not quibble over the supposedly huge tourism benefits which I personally doubt. Sure it put Atlanta on the map back in 84 but wasn’t Atlanta alredy putting itself on the map by reinventing itself as a new style Southern town. In the case of London it is already an enormous tourism destination and is unlikely to grown any more. Look at other Olympics cities and you realise that they simply get left with a portfolio of oversized venues that nobody really wants to use.

The Fool have a come up with a list of depressing predictions about what the UK will look like in 2012 as far as personal finance is concerned that is enough to make anybody want to emigrate (by 2012 the imploding Spanish property market will have bottomed out so there might be a place to start)

1. The average house will be worth £13,000 less in 2012 than today
2.  Seven out of ten credit applications will be rejected
3. House Price to Earnings ratio will improve for the first time since 1995
4. Pensioners will be worse off in 2012 than in 1980
5. Households face an £8,000 shortfall in their family budget in 2012

So the good news is that P/E for housebuyers will have improved: the bad news for houseowners is that is because houses will have fallen in value over the next five years. Points 4 and 5 are certainly the most distressing in real terms since we are talking about the potential impact that inflation and the ravening jaws of government taxation will have on our purse!

Is this a worse case scenario? Quite probably not as some commentators are suggesting in hushed tones that the UK will stagnate for ten years as the reality of global shifts become more apparent to our economy. Notably the move from Europe to the East which is only just beginning to consume and where savings ratios are very high. If that trend continues then when recession does come we can expect our economy to sink further and faster than elsewhere.

Are buy to let owners speculators or investors who take otherwise undesirable properties, maintain them and provide a rental accommodation sector that local councils no longer provide?

As various experts ponder on the long term future of buy to let and also question whether the sector contributes to the economy or simply pushes up house prices, for many owners they see themselves as entrepreneurs who with few tax incentives take properties cheaply and then invest to make them available for rental.

Certainly markets like Edinburgh in Scotland have offered great opportunities to buyers with a huge demand for properties from renters and a steadily increasing price. How much of that is students and how much immigration is a very interesting question that should play out over the next few years.

One things buy to let owners should remember. They are largely viewed as speculators and so should not expect much support from politicians who are likely to see them an easy target for taxation. The latest changes in capital gains are not aimed at them, but at the same time nobody is crying for them either. Seatbelts, gentlemen!

In a shocking volte-face that left the good people of the central belt speechless, the Labour government has decided to start supporting married couples with the admission that “children notice” when their parents are married. As Chief Secretary to the Treasury says “I don’t seek to preach to anybody, but in an abstract way I think it’s better when children are in a home where their parents are married and I think children do notice if their parents are married or not.” errrrrrrr right!

However, there is a lot of members of the labour nomenklatura who have an ideologicaly aversion to marriage arguing that it diminishes single parents so dont expect Labour to support marriage immediately… there is another year or two until the next election, for god’s sake.

This wouldn’t be a tory policy would it.

Read more about it in the torygraph

It is becoming a fact of life that every labour budget offers fantastic tax cuts from different member of our community (god I hate that word) which are later revealed to have been nullified by swingeing tax rises somewhere else.

Two techniques are favoured: introduce benefits which can only be enjoyed after an Operation Overlord level of form filling which nobody can be bothered to do or create a blizzard of tax changes which confound even experts.

The most recent example is this week where another tax cutting budget has after some analysis turned out to be tax raising with most families facing another £50 tax per week by 2012.

The IFS has successfully analysed the small print of the budget and identified that across a wide range of areas the government will either raise money through fiscal drag or increase it by tinkering with details and numbers.

As with every labour budget - a silver lining rapidly becoming a cloud