This week: Crisis preparations → Base Rate rise → Property prices plunder → New side hustle rules → Housel's spending challenge → First step to increase income.
THE BIGGEST LESSON:
I've paid for peace of mind this week...
I'm sure you've seen, over the last week or so, many governments (including the UK) have encouraged civilians to have a stock-pile ready of essentials should a crisis happen.
Personally, I think this is a scare-mongering tactic and think we will be fine. But it made me reflect. Now I'm a parent, is not just me I have to think about, I have a wife and two young sons who depend on me to keep them safe, and well-fed.
And if there is a 1% chance of this happening, I was warned, and did nothing about it. I'd be furious with myself for not being prepared.
So, I did what we all seem to do daily, and asked AI. Grok gave me a response of what I should have ready.
The next day I went to Sainsburys, and spent under £50 on tinned goods, water and other essentials.
To reiterate, I dont think we will enter such crisis, but regardless of what happens, for £50, I'm a little better prepared than I was yesterday.
WHAT YOU NEED TO KNOW:
Rate rise day: the first hike in over three years?
Economists polled by Reuters expect the Bank of England to raise Bank Rate from 3.75% to 4.0% today at 12:00.
It would be the first rise since August 2023. The poll points to a 7–2 vote; September's vote was 6–3 to hold.
Markets are pricing three or four more quarter-point rises in 2027, which would take Bank Rate to 4.75%–5.0%. Some economists think the Bank may push back on that, and the Guardian reports many City economists see two rises as more likely.
Separately, UK Finance data shows more than 2.3m households come off fixed-rate mortgages in 2027, with about 700,000 forecast to switch between July and December this year.
What it means for a 9–5er:
- On a fix: nothing changes until your deal ends. The risk is the rate you roll onto.
- On a tracker: on a £200,000 repayment mortgage over 25 years, 0.25 points (4.75% to 5.0%) adds about £29 a month.
- What to watch at noon: the vote split and what the Bank says about future rises matter more than today's 0.25.
- Action: know your fix end date. If it's within six months, speak to a broker now.
House prices stall, but mortgages don't get cheaper
Nationwide says UK house prices rose just 0.5% in the year to October, the slowest pace since January 2024. Prices were flat on the month, and the average is £273,566.
Bank of England data shows mortgage approvals for house purchases fell to 53,400 in September (from 54,800), while remortgage approvals (to a different lender) rose to 42,600 (from 34,000).
Moneyfacts, via the Guardian on 30 Oct, puts the average five-year fix at 5.99% and the two-year at 5.97%. The five-year average had hit 6% earlier in the month.
What it means for a 9–5er:
- Flat prices don't make homes affordable: when rates are near 6%. On £200,000 over 25 years, a 2% fix costs about £848 a month and 5.97% about £1,285. That's about £437 a month more.
- Buyers: don't wait for falling prices to rescue you. Run the numbers at today's rates.
- Owners: more people are remortgaging. Start shopping around six months before your deal ends.
Your first £3,000 of side income goes tax-free (and the small print)
From 6 April 2027, the trading allowance triples from £1,000 to £3,000, and the Self Assessment reporting threshold rises to £3,000 with it.
HMRC data shows 2.6m people sold through eBay, Vinted and Etsy last year, and platforms now report sellers with 30 sales or about £1,700 to HMRC.
The small print:
- It's one allowance per person across all your side trades, not one each.
- It's based on receipts before expenses, not profit. You choose either the allowance or your actual expenses, not both.
- You can't use it in a year when your side income includes payments from your own employer (or your spouse's), or from a company or partnership you or someone connected to you controls. That one matters for 9–5ers who freelance for their own firm.
- Until 5 April 2027 the limit is still £1,000.
- The property allowance doesn't change.
- Selling your own old stuff for less than you paid for it isn't taxable.
What it means for a 9–5er:
This is the cheapest test there's ever been for income outside the 9–5. £3,000 a year is £250 a month. Sell one skill to a handful of people and the first £3,000 is yours. Keep records anyway.
SOMETHING YOU CAN COPY:
One of my favourite content creators on all things money and wealth is Morgan Housel. In this episode he sets a challenge at the end we can all benefit from.
Ask yourself, and your partner: what are we spending money on that doesn't bring us joy, but we think we're supposed to enjoy? Pick one and experiment with cutting or replacing it.
His own example: he and his wife realised the best part of most holidays was coming home, so they're spending more time at home.
Listen here: https://the1thing.com/podcast-episode/525-the-art-of-spending-money-and-why-most-of-us-get-it-wrong-with-morgan-housel/
(Fast forward to 36:55 to listen only to the challenge)
QUOTE OF NOTE:
This weeks quote is from another one of my favourites, Naval:
"You are not going to get rich renting out your time. You must own equity, a piece of the business to gain your financial freedom."
We only have so much time and it doesn't scale. Find leverage and own assets that scale and bring unlimited returns.
THE TAKEAWAY:
Rates are going up. House prices are going nowhere. Energy bills are heading higher in January. You can't control any of it.
But this week the government handed every 9–5er one lever: from April, your first £3,000 of side income is tax-free.
Your 9–5 is the foundation. It pays the bills and funds your ISA. But if you want financial freedom sooner, your income has to grow faster than your spending. Raise it, hold spending flat, invest the gap.
Your action this week: write down one skill people already ask you for help with. Then write down who would pay you £50 for it. That's it. You don't need a business plan, just one name.
To give you some more ideas, heres a post I made about some ways to increase your income:
