Director Maximiti Limited
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Hidden cost paradox of Covid hiding in plain view

26th Oct 2020
Director Maximiti Limited
Columnist
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The tumultuous Covid season that was foisted upon us has seen endless column inches devoted to the devastating implications for personal finance.

However, DIY and home improvements - from flooring to glazing to patios to gardens, have been on the up and up. 

So how come we hear so much about the personal cost if all these improvements are taking place?   How are they being paid for?

And all this while household savings are hitting record highs   https://www.thisismoney.co.uk/money/saving/article-8790533/Household-saving-hit-time-high-coronavirus-lockdown.html

Given that these are bog ticket items it can't be explained by not eating out

Am I missing something here?

Replies (9)

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Hallerud at Easter
By DJKL
26th Oct 2020 13:19

No, it is financially hitting different sections of the workforce in different ways- those that could work from home with no income loss started to find spare money, be it lunches, travel costs, petrol e.g I filled my car in March and next bought fuel in late August/early September, whilst food shops have increased all that other expenditure has been saved, I have not even read a newspaper since March.

So across the summer we bought new garden furniture, I finished stage 1 landscaping, decorated a bedroom and replaced its carpet and bought some limited materials for circa £200 (I has a fair bit of timber on hand) to build a summerhouse. (Though I also purchased a new plane, a new electric plane and a slide arm mitre saw as my ones were stuck in Sweden)

Contrast with my downstairs neighbours, their son lost his job in hospitality back in April/May, has had to move back in with them (Though they have effectively moved to their house in France), as far as I know he has still not found work.

There are in effect Covid haves and have nots and I suspect a fair few on here rarely see the have nots.

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By Norman Younger
26th Oct 2020 14:24

I appreciate that point but it is the combination of all the extra savings with the spending that seems to be a conundrum.

Sounds like you are very handy but there must be a lot of people like me who cannot do much more than replace a lightbulb and need professional help. From what I understand local tradesmen here are booked up for a long time

You purchased a new plane....A Boeing or an Airbus ?

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Replying to Flying Scotsman:
Hallerud at Easter
By DJKL
27th Oct 2020 09:51

I did have to employ carpet fitters and I know from the shop that they had been busy as I was told I was lucky to get a slot as fast as I did.

I also know from a business contact who sells houses that the local property market (Edinburgh) has been quite busy at the upper end (here say £600k upward), there appears to have been an increase in pent up supply and demand during Covid that then got unleashed when sales became possible again, and one think that Edinburghers seem to do when moving is do up the new place so that may account for demand re some tradesmen (Not sure I am really qualified to comment about the Edinburgh butterflies who flit every three/four years as I do not move, 23 years where we currently are and only two houses in >30 years of marriage)

One of the new planes is unbranded (was not paying the price for a brand name as I already have a quality one in Sweden and just needed the new one for a particular job) the electric one was an acknowledgement that though the spirit is willing the flesh is weak (I now have tendonitis issues with both forearms /elbows, the electric plane is less painful to use)

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By Norman Younger
27th Oct 2020 12:46

As a Glaswegian it would be in appropriate to comment on the good people on the east coast.

Spent the morning at a wholesaler / manufacturer in the leisure sector and he tells me sales up 4 fold since lockdown

Keep calm and carry on spending our way out of Covid !

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Replying to Flying Scotsman:
Hallerud at Easter
By DJKL
27th Oct 2020 17:19

Glasgow is where I started out, to be precise Hodgson Impey, Abbey House, Bothwell Street, Glasgow (just round two corners from Central Station).

I had most of an apprenticeship there that went from pension schemes managed in St Vincent Street via companies on Clydebank Industrial Estate and Paisley Road West, trips to Govan and Bridgeton also taking in manufacturers on Broadmeadows Industrial Estate in Dumbarton, a boat yard up by Roseneath and trips to the Hebrides- you tended to get far more interesting clients in the west compared with your Edinburgh retail/pubs/financial services and professions

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avatar
By Paul Crowley
27th Oct 2020 15:20

Yes
Bounce back loans for the self-employed and soon to become defunct companies
Loads of interest free money available

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Replying to Paul Crowley:
By Norman Younger
27th Oct 2020 19:54

I had rather hoped for an answer without mention of those ubiquitous loans.

Which leads to me to ponder the following:
If there is mass defaulting and so many people / companies shoot their credit rating to pieces will lenders to forced to revise credit score acceptances downwards to maintain their lending or will they have to rein it in and we'll have a recession due to lack of lending for spending.

There's a new natty name for another Sunak wheeze -
"lend to spend"

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@enanen
By enanen
30th Oct 2020 09:53

BOUNCE BACK LOANS

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Replying to enanen:
By Norman Younger
30th Oct 2020 11:37

Inevitably so , but the spending started prior to theses loans.

At least if the money has trickled through to home improvements surely there is a greater chance of it being repaid

So, I still haven't got my answer......please keep trying everybody

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