Look at other ways to reduce environmental footprint
Purchase first stock investment
Checking the assets and liabilities:
These are taken, as always, from my Beast Budget spreadsheet. This month my net worth grew by £2,871, 9.46%! This was due to an unexpected but welcome tax rebate due to overpaying at some point earlier in the year- my tax codes bounce about a bit. Another momentous month too, as this was the first time my liquid cash (emergency fund and savings pot) was greater than my unsecured debts (credit cards and family loans). I put another £200 on my 5% Santander saver, paid down our wedding loan to a family member and paid off £1000 of my credit card. The remaining tax boon went in a S&S ISA – more on that below.
Goals:
Goal failed:Sell £100 worth of stuff
Failed this. I managed to sell another £50 worth of car parts, but I’ve been royally dicked about trying to sell some furniture and other spare household stuff. Interest has been strong, but lots of “best price m8?”, “would you take [1/2 list price]?”, topped off by some people coming to view an item desperate for it but refusing to pay and demanding delivery. Choosing beggars.
Goal achieved: Finish the raised beds
Now complete and planting has commenced. I got fed up of trawling gumtree for a few bags of soil here and there, so ended up paying £60 for two tons of topsoil to be delivered. It’s otherwise been a free project made of scavenged pallets, so not complaining too hard.
Goal achieved:Calculate and set a budget for personal spending
My old budget for personal spending was plucked out of thin air. In an effort to continue to properly track my budget I’ve moved some more categories under this heading. It now includes my clothing budget, gifts for people, trips to the barber, books, CDs, DVDs, computer games and any music. Looking over the past 12 months my spending is a bit all over the place, varying from £5.50 to ~£300, which makes sense when you include clothes. My plan from now on is to put aside £100 a month to pay for these items and then see how it looks in a years time.
Goal failed:Look at other ways to reduce environmental footprint
Started looking at changing cars, electric bikes… all sorts. Haven’t had time this month to actually summarise the relevant thoughts. Will return.
Goal achieved: Purchase first stock investment
The tax rebate went straight into a S&S ISA with Vanguard to the tune of £1,000. Showing impressive skill, I purchased at a six month high for my chosen fund (Dev World Ex-UK). An immediate lesson in market timing and not checking too frequently. More details in my Q1 review.
Budgets:
Groceries – Budget £300, spent £158.58, last month £207.01. Looking good for my Q1 goals.
Entertainment – Budget £150, spent £76.50, last month £92.
Transport – Budget £460, spent £329.90, last month £405.44. Spending a lot more on petrol with my new commute.
Holiday – £150, spent £0, last month £0.
Personal – £100/ £47.57/ £5.50.
Loans/ Credit – £350/ £748.44/ £288.99.
Misc – £50/ £81.77/ £186.45. Misc payments this month:
£60 cash on soil
£21.77 in Wickes on house stuff.
In the garden:
Raised beds are done. Cabbages, three types of raddish, four types of lettuce, two types of potato, two types of onion and various other odd bits are in the ground. Peas, peppers, sweet peas, cucumbers and tomatoes are on the go in the greenhouse.
Goals for next month:
Sell £100 worth of stuff
Set up pots for holiday and personal money
Look at other ways to reduce environmental footprint
Set up regular stock investment
Finish my portfolio spreadsheet
What’s in the pipeline:(Life continues to get in the way of blogging)
Quarterly Returns Q1 2019
How I calculate my net worth
Stoicism and the finance world
Green Credentials
Property Renovation Lessons Part III
Plus the usual Full English Accompaniments and other drivel…
As part of our goals for this year MrsShrink and I are trying to live more sustainably. Recently we’ve got a bit stuck for ideas, and a friend recommended we go through our daily routine to look for places where we couple replace things. Here’s part of MrsShrink’s day as an example:
Morning shower:
shower gel – swap for soap bar
plastic loofah – swap to natural loofa
venus razor – ceramic or wood with replaceable blades?
face wash – home made
face exfoliator – home made
Brush teeth:
electric toothbrush heads – bamboo heads?
toothpaste – tabs?
Creams/ lotions/ make-up:
moisturiser cream
lip balm – metal tins
deodorant – bars or powders
make-up – plastic free
Clothes:
buy from charity shops
natural fibres only
Tea & coffee:
teabags (contain plastic) – loose leaf instead
coffee – buy beans from sustainable source and grind
This method has helped us recognise areas where we can change. Some of the ideas we came up with are probably more expensive, but we’re going to try and implement the cheaper ones. So why not give it a go as another way of budgeting and accounting in your life.
These are taken from my Beast Budget spreadsheet. This month my net worth grew by £984 (~3%). For the first time I’ve ended the month with a net worth >£30k. I put another £200 on my 5% Santander saver, paid down our wedding loan to a family member and my credit card bill. I also put money aside as budgeted for future professional and car expenses.
Goals:
Goal achieved: Sell £50 worth of stuff
Sold some car parts, got £50 in cash, spent it on soil (rock ‘n’ roll). I’ll increase this for next month to keep the impetus up.
Goal achieved: Calculate and set a budget for Entertainment
Again I went back over the past year’s spending to calculate what my average is. I’ve previously classed entertainment as daily living type costs, and kept gym and hobby fees separate. For this year and to produce a proper budget I’m going to include them all together, so that it encompasses eating out, the cinema/ theatre/ concerts/ events, the gym and my other esoteric hobbies. There’s been a lot of variance in monthly spending, from £~50 to £~250, accounted for by concert tickets and times when we’ve eaten out a lot. In the last couple of months we’ve spent around £100, but we’ve barely left the house. I’m going to budget £150/month for the future, and anything left over at the end of the year can be used to top up ISAs.
Goal achieved: Reduce consumption of single use plastics
Gradual progress here, through small changes. We’ve moved to only buy loose fruit where possible. Our veg is delivered loose. Our meat is delivered wrapped in waxed paper. We’ve switched some of our cosmetic items, so that we only buy paper earbuds, and we’ve made re-usable face-wipes for makeup from old material. We’ve switched to shampoo bars, which are more expensive but seem to last much longer (this sort of thing). We’ve switched back to soap bars from liquid hand soap. Slow but steady, with plenty more to do. Next month I want to look at other ways we can reduce our environmental footprint.
Goal failed: Finish the raised beds
I’m tripling my veg patch size by rebuilding the raised beds using fly-tipped or old pallets and free/ cheap soil. This is taking bloody ages. Trying to scrounge free or cheap soil through gumtree and facebook is slow. I’ve probably put in about five tonnes of soil so far, with the same to go.
Goal achieved: Set up an account with an investment platform
I’ve spent much of the month looking at online brokers using Monevator’s excellent guide and a few other websites (1, 2). As we’re coming to the end of the tax year my first purchase will be pretty simple. I’ve opted to go with Vanguard directly and have set up an account in anticipation for making my first payment in March.
Budgets:
Groceries – Budget £300, spent £207.01, last month £185.03 Continue to underspend.
Entertainment – Budget £150, spent £92, last month £97.30.
Transport – Budget £460, spent £405.44, last month £124.75. MOT and tax costs came in under budget, so a little carries forward for next month.
Holiday – £150, spent £0, last month £133.09. Need to start putting a little away here.
Personal – £50/ £5.50/ £61.52. Had a rejig here which I’ll explain next month
Loans/ Credit – £350/ £288.99/ £-445.78. This is now net change for the month.
Misc – £50/ £186.45/ £123.34. Had a rejig with the new spreadsheet here too. Misc payments this month:
£50 cash on soil (plus £50 from the car parts)
£20 cash for a work event
£50-odd at B&Q on more house things
In the garden:
See above for a raised bed update. The greenhouse is now full of seedtrays with early crops, and the dining room table covered in potatoes being chitted.
Goals for next month:
Sell £100 worth of stuff
Finish the raised beds
Calculate and set a budget for Personal spending
Look at other ways to reduce environmental footprint
Purchase first stock investment
What’s in the pipeline:
Stoicism and the finance world
Green Credentials
Property Renovation Lessons Part III
Plus the usual Full English Accompaniments and other drivel…
In Frugal Motoring I discuss how I run cheap cars, the pros and cons for various purchasing methods (straight up cash, loan, PCP, lease), diesel vs petrol vs hybrid vs electric, ongoing political/ government motoring related machinations and how to keep your car running. Here I’ll look at the pros and cons of hybrid cars, some of the history and some worked costings.
Which hybrids am I talking about?
Hybrid vehicles have been around for as long as there has been motorised transport. Petrol-electric hybrid trams were first patented in 1889 (1). The Woods “Dual Power” of 1915 used a combined system of electric motor below 15mph and petrol engine up to it’s max of 35mph, which also charged on-board batteries. Just like a modern Prius (1).
It was a commercial failure, as were most attempts at developing electric vehicles up until the turn of the century. Batteries could not provide the range, speed or flexibility required for most users. The energy density of petrol outstripped conventional batteries. Rural communities lacked an electricity grid, and oil-based fuels were much more portable. The idea was ahead of the technology. Lots of companies toyed with electric vehicles, including AMC (developing regenerative breaking systems for the failed Amitron) and Audi (the Audi Duo, a plug-in parallel hybrid 100 Avant quattro), BMW (CVT hybrid-electric E34) and Volvo (with a gas-turbine hybrid 850/S80) (2, 3). It was Toyota with the Prius and Honda with the Insight that were the first mass-produced hybrids, using the trusty petrol engine as backup. Battery technology and the focus on reducing emissions has pushed the pace of change, and since the turn of the century hybrids have begun to become mainstream (1).
Types of hybrid
For sake of simplicity there’s five hybrids I’ll talk about:
A bit of a weird halfway house where the petrol (or diesel) engine is the main driving force, and an electric motor replaces the starter and alternator to provide a boost when accelerating and battery regeneration when breaking. The more powerful electric motor also allows the engine to turn off when coasting or when stopped, as part of stop-start emissions technology (5). The electric motor can’t propel the vehicle on it’s own, and systems are generally at a lower voltage. This is a route taken by most US and European marques, including the Mercedes, BMW, Audi and Peugeot, and allows for greater fuel efficiency with little change to drivetrain structure (5).
Series hybrids
In some ways the simplest design, a series hybrid attaches a fuel-burning engine to the batteries or electric motors. Electric motors provide the drivetrain and motion, and the petrol engine is there to top up the batteries or provide the electricity. This system allows the engine to run continuously at peak efficiency, but requires large batteries and motors to provide sufficient power (6). A clever idea and a solution to range anxiety for those with city cars that occasionally need rural jaunts. Because of the larger motors and batteries they tend to be more expensive, and aren’t really mainstream. The only one I can think of is the BMW I3 REX (Range-extender), which was discontinued (7). Make your own by connecting a diesel generator to an electric milk float.
Parallel hybrids
Here the electric motor and/or the petrol engine power the vehicle by being mated to a combined drivetrain, increasing complexity and potential drivetrain losses, but decreasing energy conversion losses. Here the high-torque nature of electric motors are often used for stop-start, with the petrol/ diesel engine providing the higher power required at higher speeds. The combination means smaller motors and batteries can be used, reducing costs while increasing efficiency. Regenerative breaking recoups the battery losses, with further recharging from the petrol engine’s alternator (4, 6).
Series/ Parallel hybrids
The logical next step in development was to combine these two systems (6, 8). This is what Toyota did with the Hybrid Synergy Drive in the Prius, and what is now found in most hybrid systems (9). In it’s simplest form the transmission is set up so that two modes of driving are available; an electric motor only for low speeds, and a petrol engine for higher speeds that also recharges the batteries at high RPM cruising. In some applications the electric motor is used to provide a power boost at high speeds, and the electric motor can act as a generator through regenerative breaking. The use of more complex transmission systems allows for different proportions of electric motor power and petrol engine power to be used at different times. A further development is the use of engine designs and valve-timing maps in the petrol engine which alternate to the more fuel-efficient but less powerful Atkinson-Miller cycle (9).
Plug-in hybrids
The final step in development was to add the ability to charge the batteries from the mains, rather than being solely dependent on the engine/ regen. These basically do what they say on the tin. They usually have a larger battery capable of 20-30 miles of range, with a mains connector enabling you to run them entirely on electric for short commutes, saving the petrol engine for fast or long journeys. Due to the larger (heavier) battery they can be less efficient than a pure EV or solely petrol car. Examples here are the hugely popular Mitsubishi Outlander (who basically nailed the market by providing eco-conscious chelsea-tractorists the first PHEV 4×4), plus newer Honda Accords, Chevy Volt and Hyundai Ioniq (10).
Tax benefits
Hybrids are looked on less favourably by HMRC than in the past. Pre-2001 things were just done on engine size. Then HM Gov made efforts to move away from polluting cars, continually driving emissions ratings lower, pushing tax brackets to follow. It got so good that the government got fed up of everyone having fun, so from April 2017 hybrids tax rules were changed to make it harder for hybrids to be used as a tax-break. They also made it a lot more complicated, because they’re politicians. This actually means buying an older car can work out cheaper. Up to March 2017 this was the state of play (11):
So it was as simple as if your car produced less than 100g/km CO2 it was free tax. From April 2017 (post Dieselgate) the Gov implemented a system where tax was calculated based on the Real Driving Emissions 2 (RDE2) standard (take that VAG), with a discount for the first year and a supplement if the car had a list price over £40k payable for the first five years. This looks like this (12):
Notice that this still subsidises cheap EVs, but not hybrids. The other tax benefits to mention for everyday users are that home electricity incurs only 5% VAT rather than the 20% on fuel (13). Company car users get further benefits when selecting a hybrid or pure electric vehicle, through benefit-in-kind (BIK) and various means. Rather than listing them all out here I’d recommend a read of the useful “Tax Benefits for ultra low emission vehicles” cribsheet from the Office for Low Emission Vehicles, and the comprehensive calculator at nextgreencar(14, 15).
Worked examples
One of the reasons for this article is we’re deliberating replacing MrsShrink’s car with a hybrid or electric. We wanted to run the numbers to see if we could actually save money by replacing. We’d be buying second-hand which means we can navigate the tax system to our benefit with plenty of online guides to help, but for the purposes of this calculation I’ll also include some PCP options (16, 17, 18). The benefit of second-hand is that the 20% increase in new purchase price of a hybrid is mostly lost (although still present) due to depreciation (19). We’ve chosen to look at a new Hyundai Ioniq, a three-year old Mitsubishi Outlander, a six-year old Prius and an eight-year old CR-Z. The Ioniq is Whatcar’s 2019 hybrid car of the year, coming with a five-year warranty and looking super sleek and futuristic (20). For the purposes of this calculation I’ve used PCP (it’s the cheapest, but read the reasons I hate PCP here) over two years, with a £3k deposit and 10,000 mile limit on the base model PHEV (cheapest) (21). My table includes Hyundai’s claimed 252mpg but I’ve used the real-world figure obtained when by a couple of different magazines who ran a long-term test Ioniq hybrid for MPG calculations (22, 23). CO2 emissions of 26g/km mean it’s tax free for the first year. A Hyundai yearly service is quoted at ~£130.
The second contender is the Mitsubishi Outlander (24). The best-selling hybrid 4×4. Autotrader found me a 2016 PHEV model with 30k on the clock for a reasonable £260/month, again on PCP. Same £3k deposit. Mitsubishi claims between 139 (RDE2) and 156mpg depending on where you look, but again real road tests find it more like 40mpg average (25, 26). 46g/km of CO2 means free tax. A quick google finds people on car forums quoting £300 from Mitsubishi for a service. At 3 years old I’d hope the tyres would be ok, but we’ll throw in £30/month to cover a couple of replacements over the course of the year.
Next is our old friend the Prius. 2013 models come in a range of prices depending on spec. Straight-up hybrids start about ~£9k, with around 80k on the clock, whilst PHEVs start at £14-15k. This time we’ll take a standard hybrid and purchase it outright with our £3k deposit and a £6k credit card at 0% interest, with the intention of paying back in 24 months. We would intend to own for five years, and so we’ll take a guestimate at residual values by looking at what an eleven-year old Prius currently costs; between £4-6k. If we say £5k then we’ve essentially paid £4k to own a car for five years. For the sums I’ve used the credit card £6k over two years, plus the sum of the final residual value minus the deposit over the five year ownership; i.e. (credit card/24) + ((residual value-deposit)/60). This simulates financing the depreciation (like PCP) and what you would need to save over five years to go from £3k to £5k deposit (without interest). Stated MPG for the Prius is 70.6mpg, but real world appears to be more like 55mpg (still bloody impressive) (27, 28, 29). Yearly servicing stands between £180 for a minor to £350 for a major (so we’ll call it £250). As a six year old car I’d expect higher consumables, so I’ll add £50/month to cover wear and tear repairs/ tyres etc. For a 2013 model the 92g/km of CO2 means free tax.
The final contender is the Honda CR-Z, a quirky little coupe which was billed as the first hybrid sportscar (30). It’s a proper oddball, not as quick as it’s looks suggest, not big enough to be particularly usable for a family (31, 32). Made from 2010 to 2015, a 2011 model with 50-70k miles can be had for as little as £5.5k. We’ll take one of those for the maths, with £2.5 on a 0% credit card over two years. Residual is more difficult, but I’ll lowball an estimate of £2k after five years, losing £3.5k of value. Same formula for this as the Prius when calculating depreciation costs, just changed slightly to account for the drop of residual versus deposit. CO2 of 117g/km means a tax cost of £20/year. MPG is quoted at 56, but real world tests find it to be closer to 45-50 (a bit pants TBH) (33) Servicing is quoted at £200/year, and as an older car again I’d expect a bit more in terms of wear and tear although most places agree the build quality is high.
So how do the sums add up when compared to my daily Green Car. I’ve tracked all 40,000 miles with an average MPG around 33, it costs me £25/month in tax, and over the four years of ownership I’ve spent £2000 on purchase and another £2.4k on servicing and wear and tear, for a total of £92.40/month. Here’s the final breakdown:
Summary
The sums say it all. On paper, my cheap and cheerful petrol car has cost me less to run for four years than a new hybrid would. The old lump is not pretty, it’s not fancy and it’s more polluting, but it serves it’s purpose. Ignoring the depreciation costs I would still spend more than half what I do now to run a hybrid. The MPG and tax improvement is not significant enough to offset the purchase cost. Hybrids have two powertrains, they’re heavier than a car with one powertrain; they shoot themselves in the MPG foot. There are also concerns about the durability of batteries, although the number of Prius taxis with 250k miles under their belt seems to disprove this. The volume of EVs and hybrids sold continues to rise in the face of falling wider car demand (34). I think I’ll wait for further depreciation to bring hybrids into my price bracket, and we’ll have to see if they’re a technological dead-end to be overtaken by pure electric vehicles, or will remain as a market option in the future.
Sell five more childhood toys. Sell five more car parts – Failure
Develop a single spreadsheet for all my financial data/ graphs etc – Success
Finish my Investment Strategy Statement – Success
Check our household green credentials – Success
Check utilities for potential savings – Success
Checking the assets and liabilities:
These are taken from my Beast Budget spreadsheet. This month my net worth grew by £867 (~3%), so that I’m now sitting just under £30k. It was a pretty poor month on the savings front with no overtime or extra shifts, the added expense of a holiday and the GMC and Royal College both deciding to take their pound of flesh. I’ve saved another £200 on my 5% Santander saver, and started paying down our wedding loan to a family member, but the Royal College bill went on the credit card (slap on wrist) nudging my debt up. February will also be lean as I start a new job and wait for a new payday. Luckily my new pay should be a fair bit more thanks to the vagaries of the NHS. Got to love a nationalised monopoly! Goals: Goal failed: Sell five more childhood toys. Sell five more car parts
I continue to fail here, and I wonder if that’s because I’m trying to sell lots of unusual oddments and expecting everyone else to want my old shit. I have gradually increased the amount of stuff listed on eBay, and have sold ~£20 quid worth of kit. I’ve also braved Facebook and Gumtree, with some success. I’m going to change this for next month and make it a more achievable sell £50 worth of stuff. Goal achieved: Develop a single spreadsheet for all my financial data/ graphs etc
I’ve streamlined our various household spreadsheets into a new, improved Beast Budget, adding some new functions and graphs at the same time.
Goal achieved: Finish my Investment Strategy Statement
Now complete and to be found here. Goal achieved: Check our household green credentials
This was a really interesting exercise, and exposed where I’m lying to myself in my bourgeois way. I ran our household information through the WWF Carbon Footprint calculator (1).
Oh dear. Where’s it all going?
Ah. Breaking it down:
Home – We’re doing pretty well. Our energy is supplied by Bulb (message me for a £50 referral bonus), which is 100% renewable electricity and 10% renewable (bio)gas. All our lightbulbs are LED, our boiler is old but regularly serviced, our white goods are low-energy and the whole house is well insulated with double glazing etc.
Stuff – We don’t buy much in the way of clothes or consumerist claptrap, and I think this is mainly raised by the fact we bought new appliances when moving into our house.
Food – We’re doing reasonably here too. We eat meat three or four times a week, but I want to get this down to two. We eat a varied seasonal diet from local organic sources, and I want to grow and preserve more at home.
Travel – Oh bugger. This’ll be the (count ’em) four short haul, four medium haul and two very-long haul flights we’ve made in the last year. Seriously bad for the environment and won’t be doing that in 2019! I also need to get my bike serviced and start using it for local journeys.
This has been useful enough as an audit exercise that I’m going to check my progress quarterly for 2019 to see how I get on improving matters. Goal achieved:Check utilities for potential savings
I try to check for potential savings every 3-6 months. Uswitch and MoneySavingExpert reckon we can save £45 over the year if we switch to EDF, Lumo or Octopus (2). I’m really happy with the customer service with Bulb (fanboi), and I’m willing to suck up £45 to know my energy is coming from renewable sources. Our previous Plusnet connection went from £27 to £38 in December, so I called their retention department who couldn’t match Virgins 100mbp for £22/month offer. We’ll wait and see whether the reality matches the quoted service. Budgets:
Groceries – Budget £300, spent £185.03, last month N/A. We had lots of Christmas food left over, but happy with this!
Entertainment – Budget £300, spent £97.30, last month N/A. Going to look into entertainment spending this month.
Transport – Budget £460, spent £103.12, last month £233.69. Remarkably little this month, but MOTs and tuning costs loom.
Holiday – £150, spent £133.09, last month £0. Went skiing, fully catered chalet kept £ costs low and moods high.
I’m mid-way through building the raised beds and I’ve prepared the greenhouse ready for seedtrays next month. The raised beds are 2 foot high (to ward off carrotfly) and constructed from old pallets I’ve scavenged with tanalised upright supports. I’m collecting a load of free topsoil found on Gumtree next week to fill them up and then they should be ready for planting.
Goals for next month:
Sell £50 worth of stuff
Calculate and set a budget for Entertainment
Reduce consumption of single use plastics
Finish the raised beds
Set up an account with an investment platform
What’s in the pipeline:
Stoicism, Ascetism and the modern world
Property Renovation Lessons Part III
Frugal Motoring – Should I buy a Hybrid?
Plus the usual Full English Accompaniments and other drivel…
The above question appears to be a recurring theme in our little niche of the financial blogging community. High-profile, mainstream public-facing blogs like MMM and the Frugalwoods argue that anyone and everyone can potentially be financially independent and retire early, if they take the right steps (1). It’s great for selling the story and motivating potential readers, but to me it’s selling an impossible dream.
To explain let’s draw up some basic sums. The amount most people can save towards an early retirement can be defined as:
For the sake of simplicity we’ll ignore tax rebates, dividend payments, inheritance etc. I’m not even going to bother running this on a minimum wage. Instead we’ll start at the UK Living Wage, currently £9.00/hr (2). This is built on the Minimum Income Standard, which calculates the cost of the average basket of goods required for a household to afford an acceptable standard of living (3).
A 23 year old working a 37.5hr week on £9/hr that will see a yearly salary of £17,550. Plug that into a salary calculator, incorporating 8% pension contribution with an 8% employer match. That’s D and E. The Living Wage is based upon a minimum acceptable standard of lifestyle, so we’ll use that figure again for B, with £0 lifestyle inflation cost and we get (4):
A = ((£76.79 X 2)+£1214.81) – (£1214.81+£0)
How does that lifestyle cost compare? Well the average UK 1 bed flat costs £600, but that’s skewed by London’s ridiculous prices (5). Say instead you’re sharing or living in an area with cheaper housing, it’s more likely to be £400/month, this represents ~30% of your earnings and so if a fairly accurate representation given the UK average is 25% of earnings spent on accommodation (6). If you get can by on another £600/month for all other expenses then well done, you can save £215. Add in your generous pension contributions and you’re up to £365/month put aside for the future, or £4,380 annually. Run that number through a rough early retirement calculator and we get that you can retire in 33 years. So that’s early retirement at 56 for a lifetime spent in a one bed flat and minimum acceptable standard of living.
Not realistic? Lets work another example. Example 2:
30 year old earning median UK disposable household income (2017) of £27,300 (7). Same sums, same aggressive pension match, £1715.31 take home. This time our 30 year old has got bored of living in digs, and is instead renting a two bed new build in a LCOL area. £750/month for rent gets you access to homes in 67% of the UK, so compared to Example 1 you’ll pay £350 more/month (8). Your lifestyle has inflated a bit, but not much, just a few beers now and then, a better phone, a decent tv and slightly better food. Say £100/month? So, let’s punch that into our equations and calculators:
A = ((£141.79 X 2)+£1715.31) – (£1214.81+£450)
A = £334
Retire in 44 years
Ouch. That lifestyle inflation has hit hard. Your early retirement age is now 74. So what do you do? Cut back on the house size or go back to shared accommodation? Stop drinking and eat 7p basics noodles? We know that actually, due to the benefits from our taxation system and social support services, a moderate increase in income in the lower quartiles makes little difference to disposable income (available for savings). Lifestyle inflation at this end quickly gobbles up the extra earnings as you are now comfortable, not just-about-managing. Do you make yourself uncomfortable to retire early? That requires a special type of motivation (9, 10, 11).
You have to be a high earner to achieve the % savings rates required for early retirement without living uncomfortably in some way. Ignoring this fact is dreaming. Most people will not achieve early retirement without either lifestyle discomfort or a serious increase in their earning power. That’s FIREs dirty little secret (11). To say otherwise is to sell a dream.
I don’t think this is a bad thing.
Because the world is driven by soundbites and nicely packaged information, easily digestible and understandable. The majority of the FI blogs pitched to the mainstream do just that, make it easily digestible, understandable and relate-able. A cynic would argue it funds their early retirement through a customer-facing monetised website (12). But I’m not that cynic, this is a good thing, more people should be thinking about their money matters. The UK household savings ratio is currently stuck around 4%, and has been for several years (13):
The financial choices required for early retirement are for everyone.
The’ye just a good idea. Just by thinking about your finances you’re ahead of those ignoring their accounts. To crib my fellow medical colleague, the female money doc (14):
Know your numbers
Build assets
Get out of debt
Buffer it
Consider extra income streams
Anyone could achieve financial independence, but not everyone can. The effort can only be a good thing. No shame in trying!
Continuing where we left off, we’ll walk in the front door when viewing a potential house purchase. In part two I’ll cover what I’ve learnt to look for in general interior room condition. Shut the front door
Before shutting it, take a look at it. It seems a bit odd, but much like shoes tell the story of a person, I reckon a front door tells the story of a house. There’s lots of different styles:
Look at the construction; is the door PVC/ composite/ wood/ metal? Is the style of the door in-keeping with the age of the property? White PVC doors are very common, because cheap, and if a prior owner has opted for a cheap door they may have opted for other cheap options in the house. Has the owner put a modern door on an old house, perhaps hinting at a major modern refurb. In an older property does it retain it’s original wooden door? If so, look at the state of the paint. Such doors can last hundreds of years with maintenance, but need periodic sanding and repainting to maintain integrity. Again you can learn a lot about the owners attitude to preventative maintenance.
Look at the locks and door furniture. As mentioned in Part I, many insurance companies offer preferential rates for BS 5-lever locks. Most PVC doors are safer as they will have a multi-point locking system. Don’t forget to change the locks when you move in. Look at the door furniture; it can hint at chintz inside. Front doors have changed dramatically over the years, they tell the history of a property, and are an easy way to improve kerb appeal (1, 2, 3).
Flooring
You’re in the front door so look down. Victorian and Edwardian builders knew the importance of first impressions. Older properties will hopefully retain the beautiful parquet or tiled flooring. This can be replaced but it’s expensive and I don’t think it ever looks the same (although we have looked at reclaimed parquet in the past).
Worn parquet can be sanded back and re-varnished, as can original floorboards. This can be a DIY job if you fancy a go, budget at least £150 for a sander for a weekend and varnish. There’s lots of guides and Youtube tutorials which can take you through the process (4). Cover everything in dust sheets. We’re still finding dust three years later.
When viewing houses we would find try to find a neglected corner of carpet, or a piece where it had already come up, and peek at the condition of the floorboards. We were lucky with our first property that the floorboards had been hidden behind 100 years of layers of carpet and were pristine. We also discovered a hidden terrazzo floor in a property we lost out on.
Terrazzo is a polished solid flooring, produced by pouring a mixture of resin/concrete and marble/ stone chips (5). It has similarities with polished concrete and resin floors, which are both very fashionable currently (6, 7).
Laminate and carpet
Both of these I could write entire articles about. Laminate can be beautiful when done well. It also offers a cheap DIY way to update and upgrade a tired space, with ‘click-clack’ self-connecting forms available from most retailers. On the cons, it’s loud underheel, and is used by slum landlords to hide substandard flooring surfaces. Engineered hardwood flooring is the step up from laminate where a layer of real wood is added to a ply backing. This can really make a difference to a space but is understandably more expensive (8).
Carpet again comes in all shapes, sizes and styles. Look out for damage to carpet, lifting, or the carpet moth that will munch it’s way through natural fibre (i.e. wool) carpet in darker spaces. Bare patches in corners with discarded casings and potentially larvae will point towards the moth. We stripped the carpet from our whole house and switched to synthetic fibre to try and eradicate our infestation (9).
Wall and ceiling coverings
Lets talk plaster, paint and wallpaper. We’ll start with that perennial favourite, woodchip. Used in the 60s and 70s to hide poor plaster and imperfections, it’s wallpaper will added chips of wood to provide texture. It’s one of the main things to put potential viewers off a house. It’s a bugger to remove, as those woodchips soak up attempts to chisel it off. It’s super messy, takes ages, but is cheap to do DIY (main cost being a £30 wallpaper steamer from Screwfix etc). There’s plenty of guides on the internet into how to tackle removal (10).
The texture and endurance of woodchip means it can hide a myriad of problems behind it. To an extent any textured wallpaper can do the same, and should be treated as such. Anyone can wallpaper a room, and it’s a quick way to refresh a room or hide problems. Don’t be fooled by Victorian anaglypta’s either, which can look stunning but hide issues.
Another covering you may come across is Artex. This is a further 70s product designed to hide poor plastering finishes behind a textured fascade. To make things even better, pre-1980s Artex was made with our old friend white asbestos (11). Undisturbed behind paint this is fine, but sanding or removal risks hazardous dust. The asbestos can be identified and the Artex removed by a specialist company, using steam or preparatory products (12). Some people tackle it themselves, which I would not recommend unless you are willing to risk Mesothelioma. The other alternative is to plaster over the top to produce a new flat surface.
People also deployed Asbestos (the wonder substance) in tile form on ceilings or where drop ceilings have been installed. This is mainly found in commercial buildings, but we clocked some hiding in a renovation project (a right dogs-dinner of a property) and ran. Again it really needs a specialist company to identify. Some people choose to remove it themselves with commercial-grade PPE, but I would not advise due to the health and legal risks (do as I say not as I do) (13). Asbestos has to be disposed of safely, and rules vary depending on your locality on whether your local tip will take it.
The only real mention I’ll make of paint is lead-based paints. If your house was built before the ’70s it probably contains some lead-based paint. This is only really an issue if the paint is damaged, crumbling, and you go around licking it or sticking it in your mouth. Kids do. It tastes slightly sweet (Darwin at work). Lead accumulation isn’t something to mess about with, so keep on top of it and don’t let your kids peel it off and chow down (14).
Plaster
With the exception of paint, all of the coverings above can mask potential plaster issues. This is one of the reasons in recent property searches I’ve tended to prefer properties where I can see what I’m dealing with. Plaster problems fall into three main areas:
Dead Plaster
This is more an appearance than a problem itself. Traditional construction techniques were to use thin lathe battens nailed to the structural upright stud wall or brick. Movement of the wall, damp trapped in the plaster or superficial damage can all cause the plaster to lift away from the lathe. Attempts can be made to repair this by pinning the surround plaster and patching, but often it’s easier to hack off and redo with modern plasterboard and a fresh skim. On a ceiling this can suggest damp ‘falling’ from above, so a leak in a bathroom or roof (see below).
Cracked Plaster
Smaller cracks caused by structural movement in the property or just general wear and tear can be dealt with filler and a scraper tool. It’s important to make sure this is not the above, by lightly pressing on the plaster. If there’s a ‘give’ and movement then the plaster may well have peeled away from the underlying lathe, requiring more significant attention (15).
Damp
Damp. The blank chequebook to a cowboy builder. You’ll smell damp as soon as you walk into a house, that mouldy, fusty odour. It’s nothing to fear as long as you remember one rule. Damp has to come from somewhere.
Actually two rules. Rule two: rising damp is a sales tool. Don’t believe me? RICS agrees (16, 17). While osmosis happens, water won’t climb up a wall in a warm home because it has to. There’s such a thing as gravity. Damp proof courses are a waste of money. There I said it!
I’m not saying it doesn’t happen, but ground and construction conditions have to be really specific. Rising damp requires hygroscopic salts to be present in the minerals used in the walls construction and surrounding soil to create an environment where water molecules can move through osmosis. They’ll often leave crystals on the wall. ‘Rising damp’ as a ‘diagnosis’ got big in the ’60s and ’70s as a way to fix the problem of damp inside houses, right around the time lots of poor quality houses were being built and older houses being renovated by caking them in impermeable concrete (18). Same goes for cavity wall insulation. Older houses built of brick, stone and lime mortar were permeable. They would absorb moisture, they could ‘breathe’. If a wall was facing the predominantly inclement weather it could get damp, but it would dry out when the weather was dry again. The Victorians and Edwardians solved this by having an air-gap cavity wall. People in the C20th didn’t like the fact that walls would get damp, so they covered them in impermeable concrete render or membranes, plus plastic wall paints. They then added double glazing without air vents. This kept the rain and weather out, but also kept moisture produced by general day-to-day living in. If you breathe on a cold pane of glass it steams up. Multiply that throughout your home and you get condensation. This is the main cause of damp in homes. Other causes include:
Insulation – (I look forward to the class action lawsuits in 30 years as swathes of government-grant retrofitted old houses succumb to damp damage)
Heating on/off – must be constantly ON, but low temp = 15 degrees C – heating and then cooling creates an environment for condensation
Ground levels outside higher than inside
Broken guttering or missing downpipes
Vegetation growing near the wall
Trees creating shade and moist air near a wall
Lack of ventilation – double glazing, no vents
Blocked chimneys – fireplace blocked up, no vents
Furniture against walls creating cold, damp areas (18)
The answer is (as always) preventative maintenance and taking a nuanced approach based on the buildings construction. If you live in an older home you cannot expect it to achieve modern standards of insulation. Ensure you use permeable materials to allow movement of moisture in renovation work. Appreciate your higher utility bills as a trade-off for period features and room sizes. As a slight aside here, if buying a new property ensure that there are air vents in the glazing, air bricks in the walls and plenty of opportunities for air movement. Amongst high-end architectural design the move is towards Passivhaus standards, where moisture, dew points and ventilation are carefully controlled as part of holistic approach to construction (19).
How to tackle damp?
Unsightly mould around windows (like above) or on walls (below)? Check for vents in windows and doors. Check the type of paint or wall covering used. Often this is down to people not opening windows or allowing ventilation in an attempt to keep heat in. Crack the window or buy a dehumidifier (20, 21).
Peeling plaster, cracked and lifting paint? The is more likely to be penetrating damp, or a leaking roof or bathroom plumbing if it’s the ceiling. This is often enough to scare off most buyers, but look carefully. Penetrating damp or a leak has to come from somewhere (22). Is the external ground level higher than the internal wall? Are there boundary walls abutting the internal wall? It could be caused by a sill or beam bridging a wall cavity. Go back outside and look externally for cracks in render, damaged, eroded or poorly pointed brickwork, absent flashing or leaking gutters. This is why it’s often good to view a house in heavy rain. If it’s on the ceiling is there a bathroom above? If so run all the taps and check for drips. Is the roof in good condition, and can you view the loft in rain to check for water ingress? We had penetrating damp in a previous house caused by a) a wooden sill which was exposed to rain which soaked internally, and b) an external garden boundary wall abutting the damp wall, with next-door slightly higher than our ground level. Solved by rebuilding the external wall with damp proof tanking. I worked on another house where a ceiling would get wet when the wind blew from the North-East, as it then forced the rain up a pitch through the roof so it could drip down. Had to put a new roof on to solve that.
Electrics
Fuse board
Fuse boards, or more properly domestic consumer units, are a must check. They ensure electrical safety in your home, preventing you getting shocked (/dying) and the house burning down every time something short circuits. They’ve developed over time with progressive regulation changes. Up to 2001 most homes were fitted with fuse boards like the older Wylex one pictured, containing individual rewire-able fuses plus a main circuit breaker/ isolation switch. Since 2001 regs have mandated individual residual current devices (RCDs) protection for circuits, offering extra protection (23, 24). Any new electrical work being done to a property will require an RCD system to meet regs. Budget £300-400 for installation of this alone. My garage is currently (not working) on an old 1940s cast iron splitter unit like the last image piggybacked off the main RCD. I’m exploring ways to retain the unit as it’s bloody cool (25).
Certificates
Sort of an extension of the above, but it’s important to ensure any electrical work that has been completed to the property has been done so by an accredited person. All work should be certificated and ideally marked as tested. Any changes to circuits like adding new sockets, adding new outlets, changing lighting circuits etc technically needs this (26). Ensure you get these certificates when purchasing the property and when you have any work done. It’s often a requirement for property insurance, it can be in the fine print in the mortgages, and you’ll need it to rent the property out (27). Work without certificates opens up a legal minefield, and can knock serious cash off the property value. Copy and paste this to central heating, gas work and plumbing.
Wiring
One to check out as you look around. First, is wiring (and plumbing) fitted with surface trunking, or properly chased into the wall? Trunking fitted to existing wall is quicker, cheaper but looks less attractive (to me). Chasing into the wall is harder, slower and more expensive, but the flush finish looks smarter (28). This will give you an idea of the costs the owner has spent on this sort of work and the quality they’ve been happy with.
If you can see exposed wiring (try next to the fuseboard or under-stairs cupboards) look at the colour of the wiring. Wiring since 2006 has followed European and Australian code; brown is live, blue is neutral, green/yellow is earth. Prior to that we ran red live, black neutral and green earth (29). Since the 1960s most UK wiring has been sheathed in PVC. You can age your wiring on what it’s sheathed in. Prior to PVC was vulcanised rubber (notable by being black), before that was lead (notable because it’s… lead), and before that it was all sorts of odd stuff including cloth and paper-wrapped wiring (30). The cloth, lead and rubber all degrade, so will all be due replacement.
We made a not untidy sum ripping out the rats nest of old wiring in a previous property. Once we’d turned everything off at the main breaker we found cloth-wrapped, lead-sheathed (£££) and 1960s wiring had all been run in parallel circuits under the floor. The joys of renovation!
Other things to look out for are old plug sockets like the one below, featuring the earlier circular three pin plug. There were lots of variants of plug prior to the adoption of the ubiquitous three-prong plug and socket in 1947 (31). This means you can reliably date your wiring and definitely decide it’s due a rewire. The UK’s socket design is the envy of the world (32), so embrace it! Brown bakelite junction boxes, on the other hand, are not something to run from. They’re still in production, still used and definitely serviceable (33). I really like bakelite as I think it’s retro, but then I’m a bit weird.
Plumbing
Where’s the stop cock? Check if there’s one in the house as well as one by your meter (if you have one) where it enters the property. You and your neighbours will thank you when you’re not screaming “How do I turn off the bloody water?” at 3am.
Pipes
The water pipe for your property is your responsibility from where it tees off the mains (34). Track it’s path throughout the house if you can, check for leaks and quality. Lead has not been used for pipes since the 1960s but most old houses will retain it somewhere (as it’s a pain to replace for various reasons). Most internal pipes will be stainless steel, copper or plastic. Old pipes may be iron. They all degrade over time (at different rates), so need periodic maintenance (35, 36).
Pipes in the UK for central heating are generally copper or plastic (often white). They come in various sizes. Size of pipe is an important consideration when fitting central heating, as you need to calculate the total thermal load on the boiler (the radiators) and the efficiency and flow rates (based on pipe diameter and water temperature) to ensure that your boiler has enough oomph to actually heat all the radiators (36, 37). There’s online calculators that can help you work out your heating requirement to spec this, such as here: https://www.plumbnation.co.uk/heating-calculator/(38). Frankly, I just get a plumber. Heating
While we’re on boilers, check if the property has one. There’s essentially two types of heating; wet and dry.
Wet
Does the property have a wet system (i.e. radiators and a water boiler)?
Is it gas, oil, coal, calor gas, solid?
How old is it?
Does it have a hot water cylinder or on demand?
Has it been serviced?
This is a whole other set of posts. Essentially most houses are on gas boilers, of which the most common is combi-boilers which do heating and hot water. There’s system boilers, which have a hot water storage cylinder (so are better for households that have multiple bathrooms and need lots of hot water at once), but are generally less efficient. Then there’s conventional boilers which have a water tank and a hot water cylinder (39, 40). Newer boilers across the range are generally much more efficient. Google the brand and model number and check the reviews. Older boilers can be very reliable if well maintained, so check for service record stickers. Budget between £1-4k for a decent replacement, and remember you really get what you pay for with boilers (40, 41). Budget more for a new install on a property without central heating.
Oil-fired boilers and calor gas systems are generally used for the estimated 4 million households that are not on mains gas. Oil is a bit more fuel efficient than gas, but can cost more to buy as the cost fluctuates and you have to store it in tanks (generally bunded green things) (43, 44). You can also run out if you forget to order more, or the roads are shut. Same rules apply re: servicing and replacement.
Dry
In the UK this basically means electric heating systems in rooms. Other countries and some UK commercial and old buildings will use a central furnace and hot air vent system, but they’re inefficient for our construction practices. Electric heating costs more to run than gas, and should really be considered only where gas is unavailable, where heating is infrequently required or where wet system installation is impractical. We’ve gone through various stages of electric heaters too, with electric radiant heaters (i.e. old bar electric bar fires), electric fan heaters, through night storage, oil filled and panel heaters. Fan, radiant and oil column filled heaters are usually portable and can be used to heat up the room you’re in at the time (45).
Panel heaters can be very minimalist and are therefore currently the fashion choice. They’re generally touted as ‘eco’, but given all electric heating systems convert electricity to heat what that essentially means is they don’t use much electricity as they don’t give off much heat. Night storage heaters look more like a radiator and work by heating up a ceramic brick during the night (when electricity can be cheaper if you’re on Economy 7/10 or similar) and releasing it during the day (46, 47, 48). They work much more like a conventional wet system, and get a room toasty warm. Budget £500 per heater.
There’s also ground-source or air-source heat pumps, solar thermal, district heating, underfloor heating, biomass systems and all sorts of others which I can go into in detail if people are interested (i.e. leave a comment to motivate me to do it!). I may do an eco renovation post in the future.
Summary
In part two I’ve covered most of the general building fabric and utilities considerations. This should give you an idea of what to look for on property viewings and in your own home. In part three I’ll cover room specific considerations (kitchen, bathroom etc), construction (chimneys etc) and layout.
