2nd homes: folly or fantasy?

I spent a fair bit of the summer thinking about second homes. At times it seemed as if every second person I knew had a second home – with plenty bought since lockdown started, as a getaway from urban London. They are (see map below) for the most part 2-3 hours drive form London; the Cotswolds just beyond Oxford and the Poole/Bournemouth coast in the southwest are particularly popular among my London circle.

I have had longstanding views on 2nd homes, so I found James Max’s summer FT article to be very thought-provoking on the topic.

Locations of 2nd homes of friends of mine

2nd homes as hassle and/or social problem

James Max starts with my position – that 2nd homes are fundamentally a hassle. Complexity. Things that can go wrong. Costs. An asset that is more of a liability. Like James, I don’t see myself letting a home out, via AirBNB, VRBO or the rest – so I wouldn’t see any income to offset the additional council taxes, utility bills, and occasional maintenance to deal with. Builders to find, gardeners and cleaners required.

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Margin loans in the UK

The UK has the most sophisticated financial services industry in Europe. And in some respects, one of the most sophisticated in the world. But in one area it clearly lags the USA – the stock market. Whether it comes to the size of the stock market, the % of society who own stocks/shares, or the number of stockbrokers – we in the UK are a long way behind our transatlantic cousins.

In the UK, even the concept of ‘margin loans’ would leave financially savvy stockmarket pundits scratching their head. Perhaps a couple of them – monevator comments readers I’m sure – would cross-reference to the excellent movie ‘Margin Call‘, starring Kevin Spacey, Demi Moore and Jeremy Irons, but that movie’s lack of success in the UK tells you what you need to know about the wider understanding of ‘margin lending’ in the UK.

As regular readers of this blog know, I am a member of that rare and unusual species – a UK user of margin loans. This page is to serve as some form of introduction to the concept for UK/European readers, as well as summarising some of my experiences and linking to further reading.

What is a margin loan?

Loans generally come in two shapes/sizes – secured loans, and unsecured loans. Secured loans – where the lender has some form of collateral – are cheaper, reflecting the lower risk that the lender is exposed to.

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Crowdfunding: why its returns suck

This post is in an occasional series of blog posts (starting here) examining angel investing and the role it plays in high net worth peoples’ investment portfolios. This post looks at the ‘angel investing goes mainstream’ route of investing via crowdfunding platforms, drawing on an exclusive survey I ran on my blog.

I’m dealing here with equities – buying shares in companies – though most of my arguments would apply to crowdfunding platforms offering ways to invest in property, loans, and other asset classes.

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