What is the best way to get rich from property? Forget about home improvements — just keep an eye on the JCBs. In December 2009, rail journey times from Ashford in Kent to London were cut from 83 minutes to 37 minutes, due to the new high-speed link. House prices rose by £13,000! Improved transport infrastructure has a major impact on house prices in the short term, as people want to move to where travel is quick or easy. In the case of Kent, there is also the hope that improved journey times to London will attract business investment. Smiths Medical International has just moved its European headquarters to Ashford, bringing hundreds of well-paid jobs into the area. This will keep house prices rising. In just the same way, new motorways or new tube lines make house prices jump. When the construction work is nearly complete, buy your property.
All A2 students need to understand the impact on business of a change in the value of the pound. Between mid-2007 and the start of 2010, the pound’s value fell by about 25% in relation to the dollar and the euro. This gave British exporters two choices: either increase sales volumes by cutting export prices; or increase profit margins by keeping overseas prices the same. Governments always hope for the first of the two, because that means more production and more jobs. But research by the Bank of England has shown that most exporters kept their prices unchanged when the pound fell — they boosted their profit margins. The Bank hopes that the high profits will encourage exporters to push harder in their overseas markets. That extra effort may yet yield extra sales volumes and jobs.
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