Staying in your home is not selfish, it’s
just the natural human desire to enjoy
life after decades of working and paying
taxes. Most retirement homes are
inadequate and eye-wateringly
expensive. At a time when you want to
settle down, you have to uproot and say
goodbye to all your friends, favourite
places and support networks that help
keep you happy and healthy.
There is an argument that downsizers
should be given stamp duty tax breaks to
get them to move out. Not only would
this be almost impossible to regulate but
it is also unjustifiable.
Besides, these homes are always going
to be freed up at some point. Giving tax
breaks to downsizers would not increase
the supply of homes, it would just speed
up what was going to happen anyway. All
you would end up doing is moving the
backlog further down the chain.
If tax is part of the solution then
maybe we should consider a hefty levy
for those who own an empty home, one
that rises every year it is vacant. Or a
levy on developers that own land but
don’t push ahead with building.
And what about reform of taxes on
holiday lets so that they are more akin to
buy-to-lets?
Taxation can help us deal with
difficult issues, but only if you have a
government bold enough to tackle the
real causes in the first place.
@jimconeyI
have a friend of a friend who has
owned a property in the midlands for
several years since inheriting it from
his father. He has never lived in it or
let it. This ghost home sits
unoccupied on a street of other houses,
yet he has no incentive to sell it. What
would he do with the money? In the
bank it earns nothing, in the stock
market it is at risk, but as an empty
home its value has soared.
Meanwhile, among the residents on
my street are a couple in their late
seventies. They live in a four-bedroom
house with a large, fabulously well-
tended garden.
They’ve been on the street for a
couple of decades and were among the
first to transform their property from a
run-down bungalow to a lovely family
home. As far as I can tell, they spend
their days gardening (obviously),
watching cricket, but mostly looking
after their grandchildren. Not just after
school or in the holidays, but often for
whole weekends.
Who is the villain here?
Listen to the housing minister Chris
Pincher and you’d think it was my
neighbours who are “rattling around”
in a home that’s too big for them.
They’re selfish and should sell up and
move to a retirement home.
This government is in a mess about
housing. On one hand we are facing the
largest tax rises in a generation so thatolder people going into care do not feel
the need to sell homes they no longer
live in. On the other hand we are telling
them they must move out of those same
homes to free up properties for younger
families.
Meanwhile, Michael Gove suggests
that we need to undo the mortgage rules
brought in after the financial crisis to
offer bigger loans to first-time buyers.
It seems the Tories are desperate not
to tackle the real issue, which is that we
need fundamental planning and
infrastructure reform. Builders have
profiteered from inept government
policies for decades but no-one seems
to have the fight to rein this in.
The issue of downsizing is a tricky one
to unpick. Take my neighbours (or my
parents, for that matter, who live in a
large house on the south coast). If they
moved to a smaller house then all of that
free childcare they do would be gone.
Children, grandchildren, and friends
would not be able to stay over any more.Don’t punish my neighbour
— tax empty homes instead
James Coney
It is not selfish for
grandparents to want
to stay in their house
such as Apple, Microsoft and 3M — but
since the easing of lockdowns Mahrous
has decided to invest more in collective
schemes such as exchange traded funds
(ETF) that track a market index.
“I now keep around half my portfolio
in ETFs, such as one that follows the
American S&P 500 index. It is a much
safer and easier way to invest than buying
individual shares, especially if you don’t
have the time to do the research,” he said.
His experience is typical of lockdown
traders. Hargreaves Lansdown says that
in the three months to the end of Septem-
ber there were an average of 861,
trades a month compared with 980,
in the same period last year, and 479,
the year before that. Today people are
still trading shares — about 40,000 deals
a day — but the balance has shifted back
towards funds.
Hargreaves Lansdown said that many
who bought shares as their first purchase
in 2020 have started diversifying by add-
ing funds to balance out their risk.
In their first month of investing, arm-
chair traders held an average of 6 per
cent of their portfolio in funds; by their
ninth month it was 10 per cent. Among
investors aged 18-29 it was higher, at
about 12.5 per cent. Most investorsbefore falling to about four in the next
three months.What does it cost?
Hargreaves Lansdown’s platform charge
of up to 0.45 per cent is capped at £45 a
year for shares and investment trusts inchoose to minimise their deals to keep
costs down.
About two thirds of Hargreaves Lans-
down clients made no trade in the first
nine months of this year, and trading lev-
els at the platform Interactive Investor
peaked at six in the first three monthsUniversity student, who is studying aero-
nautical and aerospace engineering, had
a lot of time on his hands when he was
forced to stay in his student lodgings.
He joined the trading service Freet-
rade and researched individual shares.
He invested in technology companiesAndrew
Mahrous has
moved away
from tech
shares and
towards fundsMONEY
HOW DAY TRADING DISAPPEARED
Fund sales Share sales80% of trades4050607030202012201420162018 2020
Source: Hargreaves LansdownHOW DAY TRADING DISAPPEARED
Fund sales Share sales80% of trades405060703020201220142016 2018 2020
Source: Hargreaves LansdownFollow us on Twitter @ST_Money
What became of the
lockdown share traders?
T
omorrow is the first anniver-
sary of Vaccine Day, when
Pfizer’s coronavirus break-
through triggered a melt-
down in stock trading sys-
tems. It sparked the most
intense bout of trading ever,
and a high point for a new
breed of armchair investors
who had signed up to share
trading to seize opportunities as Covid
had struck. With spare time on their
hands — and with the help of social media
influencers promoting individual stocks,
often in defiance of experts who suggest
more cautious routes to investing — they
cashed in on the market turmoil.
But a year later share trading volumes
are back to where they were before the
pandemic began. So has the amateur day
trader died out already?The frenzy for shares
Vaccine Day, November 15, was an aston-
ishing time for the stock market. The
FTSE 100 jumped almost 4 per cent as
investors amateur and professional saw
an opportunity and pounced.
The share price of IAG, the owner of
British Airways, soared 30 per cent,
Cineworld was up 50 per cent and Rolls-
Royce 46 per cent. Investment platforms
crashed under the weight of trades, leav-
ing angry customers unable to capitalise.
Before the pandemic, customers new
to platforms such as Hargreaves Lans-
down preferred to buy funds. From 2012
until April last year an average of 36 per
cent of new customers bought shares,
compared with 64 per cent who invested
in funds. Between April and June last year
that changed: 60 per cent of new Har-
greaves Lansdown customers bought
individual shares. The remaining buys
were in managed funds.
From July to September this year, how-
ever, things went back to normal. The
proportion of new customers buying
shares fell to 28 per cent while 72 per cent
opted for managed funds.
Trading levels calmed down too.
Etoro, the global trading platform, expe-
rienced a sharp decline in trades, from a
peak of 210 million in the first three
months of 2021 to 127 million in the next
three months. This is still more than
double the 63 million global trades in the
first three months of 2020.
Emma Wall, the head of investment
analysis and research at Hargreaves Lans-
down, said: “At times of extreme market
volatility it is typical for us to see share
trading, among new and existing clients,
overtake fund trading. During the pan-
demic-related market downturn in 2020
we saw investors look to take advantage
of single stock moves — external factors
and uncertainty create perceived value
opportunities. As the market volatility
has stabilised, trading patterns have
normalised and reverted.”What happened to the traders?
Andrew Mahrous, 20, started investing
last year during lockdown. The LeedsIt’s been a year since armchair investors piled in to the stock market. Ali Hussain explains what they did next
an Isa. Outside an Isa there are no plat-
form charges for shares, but they incur a
dealing fee of up to £11.95, while funds
have no additional trade costs. If you deal
often, charges can fall to £5.95 a trade.
AJ Bell has a platform charge capped at
£3.50 a month, and it charges £1.50 per
fund deal and £9.95 for shares and invest-
ment trusts. The share trade costs fall to
£4.95 if you deal frequently.
Interactive Investor’s platform fee is a
flat £9.99 a month, plus £7.99 for a share
or fund trade. You get one free trade a
month and can cut the trading charges to
zero if you agree to invest a regular
monthly sum.
Newer platforms that do not charge
platform or trading fees in most cases,
such as Freetrade, have boomed. It
launched in 2018 and reached 1 million
registered users last month. It makes
money by charging £36 a year if you want
to invest in an Isa and has a 0.45 per cent
currency exchange fee if you buy stocks
listed in the US.
There are no platform or trading fees
on Etoro, which profits from the spread
between the buy and sell price of an
asset. There may be a charge to take
money out of your Etoro account.Diversify, diversify
Those who invested for the first time in
individual shares are now being warned
that they may be exposing themselves to
too much risk.
Hargreaves Lansdown is targeting
investors with “educational content and
research”, encouraging them to consider
a long-term approach.
Buying a fund or investment trust
provides automatic diversification. You
are quickly able to invest in dozens of
companies and are not reliant on the per-
formance of an individual share.
Another way to diversify is to invest in
a tracker that follows an index such as the
FTSE 100 in the UK or the S&P 500 in the
US. A FTSE 100 tracker can cost 0.06 per
cent a year from Fidelity, while a man-
aged fund is 0.7 per cent or more.SPECIAL REPORT:
THE LIVES PUT
ON HOLD BY THE
CHAOS AT HMRC
PAGES 12-