mfs1959

I have checked the quotation. It has only the most tenuous link to anything written by Goethe. In the interests of accuracy I emailed the site address to inform them. Perhaps more people would like to tell them of their error.

Absolutely perfectly expressed.

That is precisely why I started the thread with the commentary from The Times Business pages. It is a definite shift in sentiment.

I know, and this is the Business pages rather than the Money pages. It may, just, reflect a new sentiment.

Today in The times Business: The drug dealers started moving out of my street about three years ago. They have been replaced by marketing types, chief information officers and graphic designers. Both groups seem to favour the same cars, oddly, newish Astra’s and oldish BMWs. I used to chat to the dealers, partly out of an interest in their finances (they didn’t seem to make much money) and partly because I decided they’d be less likely to rob me if they knew me. Their moving on was a sign that my unremarkable street in an ordinary bit of north London was quickly gentrifying. Among the new neighbours, who are much nicer and far less interesting, there is one main topic of conversation: house prices. My favourite question to them is this: could you now afford to buy the property you live in? The answer is always the same: “No, not by miles. We certainly could not.” Our collective happy assumption is that one day we will sell at a huge profit, but that does raise the question of who the buyers are going to be. Russians? Bankers? Why would they want to live on my street? You can’t even get drugs any more. So what we’re left with is a bunch of people living in properties they can’t afford on the dicey premise that a load of other much richer people one day will. This is a balloon, plain and simple, into which we regularly blow another gulp of air. It will go pop in a horrible way.

They forget that ladders go both up and down...

She is, effectively, screwed. She just does not realize it yet.

She should already be in the 40% tax bracket, as she reports an excess of rental income over mortgage payments. I wonder if she declares her income to HMRC, not least if she is still collecting tax credits; the report gives enough info for HMRC to have a shufti.. Taking the best estimates from the report, her rental income may be £22k and, on her approx £300k rental mortgages she would only pay perhaps £15k in interest payments.

You are, of course, right. I was being lazy. It is, in fact, a 30% return based on the £1m investment assumed. Of course, if prices fall in the south then yields can rise.

Mark Alexander's letter certainly raises some interesting thoughts. We have a BTL investor who, assuming he is paying 5% interest, has mortgages worth £4m. Since he is highly geared we will assume he has paid only a 20% deposit for these mortgages. Thus he had £1m in cash and has a £5m portfolio. £300k in rent is only a 6% return; most BTL fans quote returns at least a little above that. Even a 1% increase in return will generate an extra £50k in rent annually. Of course, George Freeman is expected to take Mark Alexander's figures as being beyond question. As an aside, if this mythical investor really has a million in cash and doesn't expect any immediate return then I have an interesting proposition for locating a lost silver mine in Atlantis. He can contact me by reply.

It seems that at least one BofE insider, a member of the MPC, is rather more hawkish on inflation than the rest of the MPC. Link

The components in question are inside the boat, not exposed to sea water. That said, cost cutting by scrimping on components on a project of this size is futile.

There are a lot of 10-15 year old Transits on the roads also and I have seen some carrying rather hefty loads.

There is nothing wrong with a couple supporting themselves by each working part-time. There is everything wrong with a system that bribes taxpayers with their own money to work part-time. Incidentally, where did all of the money come from to support house price inflation? An awful lot of people used their tax credits to help fund house moves. Most income growth between 2004-7 came from tax credits rather than wage rises.

I said rates were wavering as, while there are some reduced rate offers, the best rates require 30% or 40% deposits. Meanwhile: The Skipton Building Society recently raised their SVR from 3.5% to 4.95% after it had pledged not to have their SVR at more than 3% above the Bank of England base rate. I am not sure which is the reliable trend.