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Einstein71

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  1. If you take somewhere like Canary Wharf as an example. You have One Canada Square which is the main tower, 50 floors and around 10,000 occupants. Anyone working above floor 10 is out of action for at least 2020 because the lifts accommodate only 3 or 4 people socially distanced and it is just unworkable. Also who is travelling by tube these days. Anyway 137,000 people work in Canary Wharf, if we say 80% are unlikely to return in 2020 then that means every one of the 300+ bars and restaurants are out of business . If we say an average of 20 workers per business (and this 300 figure doesn't include mobile vendors etc) and we say around 500 cleaners plus all the other people that rely on those workers to make a living I would estimate that Canary Wharf alone will see 10,000+ job losses. Then we have "The City" and the tens of thousands there that rely on office worker business. Finger in the air estimate is around 80,000 job losses in 2020 just from food outlets and support services that rely on office workers in London. So 80,000 low skilled workers with no obvious alternative employment. I haven't even started to add up the losses created by Theatre closures and of course The O2, Wembley Arena, Ali Pali etc and all associated businesses supporting these venues. Perhaps another 80,000+. I just wonder if the London property market can suddenly cope with say 200,000 people going on to Universal Credit en masse. As a landlord or mortgage company you can only give so much leeway and most of these people aren't getting other jobs anytime soon. For me the London flats/apartments market will be decimated, it will be a total bloodbath.
  2. The over 70's are HUGE consumers. They have huge pensions, some have made hundreds of thousands by downsizing, why do you think the cruise industry has grown so quickly in the past 10 years. We have a local restaurant (Sussex), a posh one, 45quid per person for 3 course lunch/dinner, open 7 days a week, probably 20 tables+.....anyway 2 month waiting list, even Wednesday lunchtimes are packed out, and guess what..more than 80% are over 70's. Go to any pub or restaurant on a weekday and they are rammed with over 70's. Take away these customers and you take away every penny of profit these places make
  3. Im from Sidmouth originally and I would avoid Seaton/Lyme Regis area. Seaton used to have a holiday camp there and has a bad reputation locally South Hams has a better climate and if you avoid Salcombe the rest of the area is reasonably priced
  4. I am looking at buying in the Devon area as well, I grew up there so know a lot of people in the area and it seems to be totally random when it comes to house prices. I have seen lots of places up for sale for actually less than what people paid 15+ years ago and then lots of places selling for more than double the price paid 5 years ago. This was explained by a friend who works at a well known Exeter estate agent. He said they have people who specifically target "Londoners". These are properties they know will appeal to the retirees or people escaping the Capital. The standard estate agent line at the moment is that swarms of Londoners are looking at Devon after Covid and they have "silly money". These properties are overpriced and people are having a punt. They are also usually next door or in the same road as someone else who has sold to an "outsider". I have family in a little village on the outskirts of Sidmouth and this is what has happened there. Someone retiring from Oxford paid £450k for a bungalow that was around £280k in real value and then all of a sudden bungalows were 450k which until then could have got you a detached house twice the size of the bungalow. Do you know what I mean? Crazy mentality but who can blame them. The sad thing is that the week after the bungalow went for £450k (it was the talk of the village), the old lady 3 doors down from the in laws suddenly had the whole family come and visit, the son turned up with his botox filled wife and their leased 20 plate 4x4, first time in 2 years....coincidence.....maybe. Then you have the properties were local people are just selling and buying somewhere else local. They have realistic targets, they see a house they want and just want to more or less get back what they spent originally on their current house. This is how buying and selling houses should be, it is the housing market without the hot air and speculation. I have been tracking properties now for the past 6 weeks and numbers are increasing rapidly with a few Sold STC but nothing actually selling. I imagine the big block is that people now have to sell their overpriced box in London and I think that is where the HUGE problem lies with the Devon market. The higher end relies on London money which will now dry up and unfortunately a lot of supply in the Devon market is forced sales from people dying or going into homes. I think we will see an ever increasing supply with demand unable to be realised and prices will start to drop come Autumn 2020 as the Summer of Love ends and the Winter of Brexit and "Second Wave" hits the economy really hard. You will have desperate relatives who NEED the money from probate to survive and they will be dropping prices to just get access to money quick, sad as that is that is probably the reality. This then creates the opposite effect to what I described above, suddenly the 450k bungalow the retired "outsider" purchased goes for 250k and prices fall back to a normal level. Rant Over
  5. A friend was showing me a property someone he knows has been trying to sell now for almost a year, this is a house they bought 16 years ago, a house which at the time they thought they had bought cheap because it was the builders own house in a development of 8 barn conversions. The house has close to 1/2 acre of gardens, manicured over the years and well kept, a few changes in the house fair bit of money spent (new boiler, bathroom, kitchen etc). It is in a very sought after area, 6 miles outside of Exeter in lovely East Devon. Anyway they expected a price tag of close to a million but estate agent told them to expect less and now after close to a year it looks like they are going to have to drop the price to more or less "break even". They bought the house in 2004 for £740k so with fees, stamp duty etc that is close to £780k. With say £60k spent over the past 16 years that is £840k and even that is now looking like it is unachievable especially in the current climate. Just goes to show that some people really haven't made anything on property, if anything this place is going to go for a loss and that is during apparently the largest property boom in history. I imagine anyone who has bought in the last 10 years will be feeling this in the coming years https://www.rightmove.co.uk/property-for-sale/property-86547890.html
  6. Without giving too much away I have worked in the Games Industry now for more than 20 years and currently hold a Global role heading up recruitment for a company with 3000+ employees and a worth of around $8billion. I have actually written the "state of the industry" reports for the trade rag Develop. When it comes to the industry it has always been pretty unstable in that people are hired and fired for projects, very much like the TV/Film Industry. When a game comes to an end or a game is canned it inevitably leads to redundancies. There is also lots of contract roles as you would expect in some of the lower level roles such as QA/Design and Junior Art roles. The Games Industry has always paid pretty poorly in comparison to other industries. A Senior Programmer with 5-10 years experience can expect around £65-£75k in London, if they decided to work in Fintech instead they would earn double that figure. The question is would you prefer to work in a bank or a games studio. At the moment I know of tech companies such as Uber, AirBNB, Skyscanner and Expedia who are asking employees to take pay cuts but haven't heard of any games companies doing that. The UK is very attractive at the moment for US companies looking to divert their R&D functions away from expensive hubs such as SF, Seattle and Austin, the other attractive location is Montreal or Quebec in general. I think equating tech or in this case creative tech industries with the arts such as acting, singing, fashion, design, media etc is a total mismatch. One is a booming industry with constant growth the other is flaky at best and likely to continue into decline post Covid. When I lived in London I was always surprised at the number of people working in PR, Marketing and Media - when you dug into what it was they did from day to day it was inevitable the whole thing would collapse as soon as the froth was blown off the economy.
  7. As someone who works in the Games (Gaming is Gambling) and Special Effects sector in the UK I can confirm that during Covid this industry is up by about 30% and has a very robust future
  8. Fully agree, a certain corner of England has been feeding off of debt and reckless corporate expenditure for too long. On our close we have a family, husband worked as some management consultant, she doesn't work. Two 4x4's, 3 holidays a year usually to Maldives, St Lucia etc and doesn't she just love making sure everyone knows. They sold a house in 2005 for £430k which they paid £185k for in 1998. Bought this house on our close for £480k and have been spending fortunes on extensions, new kitchen etc. Anyway 5 months ago he loses his job. I hear through the grapevine it isn't a problem because he got a huge redundancy payout + he is in demand blah blah blah. Wife in show of defiance swaps 5 yr old 4x4 for a convertible Mercedes SLK..I kid you not Brand New!! Next thing they are off to Thailand, she claims it is 5 star resort but kids let slip that it was some First Choice place. 2 weeks ago house goes up for sale £680k, even the neighbour who is constantly telling me how desirable his house is and the Close is was gobsmacked. Anyway husband still hasnt got job, he is startting to look a bit disheveled and she has no intention of ever looking for a job. How long before the house must go down to £580k and then £500k and then how much do they need to break even because they have been MEW'ing. Scary stuff for them and end of a generation. How long before he realises he needs to reskill or take a job, any job? The very people like them that would buy their overpriced house are all in the same situation. Where do they go and who replaces them?
  9. My take on NI is that it was all a big Nu Labour experiment. TB rode into town, unleashed a Mowlam and a shed load of cash and promises. Here you are Gerry, nice little wage, position in power and some international credibility for you and McGuiness. Mowlam even did deals with the Ulster Loyalists in the Maze. Everyone was paid off but then there was the bigger problem which was poverty created by unemployment. NI was a place no one really wanted to invest in because of the troubles....not to worry Mr Blair will bring us the money and so it came via the Public Sector. Close to 40% of all employment as it stands. And then you have the Victoria Quarter and Titanic Quarter, 1 Billion pounds invested in Belfast...private investors....who are you kidding, read the small print and you'll see it is Laganside Corporation who were publicly funded and all the work has now been taken over by the Dept of social development. Billions of investment. So basically you suddenly get investment in property and everyone is so excited because they believe that this new improved infrastructure means that NI is a wonderful place buzzing with new opportunity and growth. The unfortunate reality is that everything was paid for, it could have been Kosovo, with 2 billion thrown at it and you'll make anywhere appear succesful for a few years. The experiment was propped up by the Celtic Tiger over the border. So when all of a sudden you get BOOM, no more money in the UK PLC Coffers and then BOOM Eire going under it really is going to hit the fan and that is why such HUGE drops have been witnessed in NI. It was its very own bubble which was always going to burst when the money machine ran dry. The experiment ended with Nu Labour, completely polar opposite of the South East of England.
  10. Yes I definitely think it is time to buy. I have spent years expecting certain things to happen which clearly now will NEVER happen. I have listened to people on this forum who talk as if they clearly know what they are talking about and like all economists they do, but it is total theory. In practice the collective will to keep house prices high is just too strong. In my area (Sussex) we haven't seen drops at all but I understand in other areas there have been localised falls where it was just plain silly. If I look at in unemotional manner and in my area only which is the South East I see the following: Rental Market: Rents Rising every year since I entered in 2002 Supply increasing by about 20% Demand increasing by about 35% Conclusion: With big deposits required to buy and students leaving Uni with big debts + Increased living costs, FTB will be a thing of the past. Rental demand is therefore set to increase. With popularity of BTL this will increase but because of low housing stock supply may be restricted in the SE. Average Rents will rise by around 6% per annum with lower rises for low end flats and higher for Mid Level housing. Housing Market: Prices have just flatlined with people buying up and down the ladder with stored equity and BTL investors tempted into the traditional FTB market Conclusion: Prices will bounce along with no rampant rises but no dramatic falls Price of 3 bed semi in Sussex - £250k Rental Cost £1200 - £1500pcm Mortgage 80% £850pcm There are a large number of people on this forum who have started storing water and tinned food in their cellar (rented) expecting World War 3....... sometimes take a step back, take a deep breath and look around you with a clear head. Ask yourself if you want to still be renting in 2030, how much will rent be then? How much of your mortgage would you have paid off?
  11. I know that in 3 years he has received from me what he originally paid for the house 15 years ago. I assume he has paid some interest over the past 15 years so may be another 1-2 yrs rental to cover that. The house is his only house in the UK, he owns a house in Kenya where he has lived for a lot of his life. He isn't a BTL investor he is just somebody who decided to rent his house out rather than sell it. The house is more or less in its original state apart from a new front door and new boiler. For his initial investment of just shy of £50k he now earns himself an income of around £1000pcm (£300pcm deducted for letting fees and maintenance). He was lucky and bought low. My point was that any landlord who had bought 10yrs+ ago is probably covering their initial purchase price with 3-5 yrs rental, if you look at the housing market historically from a pure unemotional perspective you see that it always makes sense to rent your property out rather than sell it. If you believe that house prices will drop by 40% and Interest Rates will rise at the same time as rents dropping for the first time in history and house values will never rise again then I can see why you wouldn't believe it to be a good decision. As someone who has been renting for 7 years now I fully accept that I am a cog in a system that is really unfair and did have belief in the powers that be that something would be done about it. Here I am working my guts out to pay off a mortgage which isn't mine !!!! , how can that be fair? I am now thinking that I was wrong and that the aim is to make BTL as desirable as possible to encourage house building and private rentals to establish a network of flexible accomodation for a growing populace. In some ways this takes the power from a few very wealthy people and on to an army of private "investors". In a sick and twisted way the Government probably believe BTL is an ideal way to solve a number of major problems. It offers a decent return for those holding cash and an alternative to savings and other volatile investment vehicles, as a result it allows them to keep IR's low for the indebted. The guy wanting to rent out his place to a friend should do so immediately, jump on the gravy train. Your friend gets a place where he knows he isn't going to get thrown out in 6 months time and you get your mortgage paid. A whole host of doomday scenarios could happen but these have been around the corner for 7 years now and the same people will just repeat the mantra. You will most likely have the place still in 15 years time, getting £1100pcm for it and the mortgage paid off, you wont care about the £30k it has dropped in value because some tenant mug would have paid that for you anyway :-)
  12. I dont know why people get so uptight about this kind of post on here, I think it must really hit an extremely raw nerve. I discovered that the house I rent was purchased for £47,500 in 1996. I have been paying £1,350pcm in rent for 3 years, very minimal repairs required so I have more or less bought the house for the LL. In 2020 who knows that average rent may be £2000pcm. We may have higher interest rates....but only in my opinion if the economy is on solid footing in which case you may be looking at HPI again, may be not. Eventually if you have the income to ride out the rough patches being a Landlord makes complete business sense, absolutely cast iron sense. The key is obviously buying a house or apartment that is desirable but if you have that then as long as you aren't entirely reliant on capital gains you should be able to cover your expenses with your income which is the fundamentals of business, if that isn't possible even after a few percent IR increase then it is the wrong property . In 20 years you should then own outright an asset which is providing you with a stable income. There is no such thing as a bad business only bad businessmen. I personally never had the desire to get involved but from a purely business perspective the BTL business really is buying an asset and then making somebody else pay for it for you. You have to learn to swallow the fact that as a tenant you are in most cases paying for somebody elses retirement, its wrong but it has been that way since the dawn of time. I need to buy soon because I realise that when I hit my 50's I may not be able to rely upon my interest / investment returns to pay for the roof over my head. Where as if I have bought a roof over my head at least I know I have that !!!
  13. LOL What a load of Drama Queens !! At the end of the day it will hardly effect your man in the street one jot. What they are talking about here is a load of banks losing a load of money, some of them will go to the wall, stock markets will fall by about 25%. We will have emergency meetings, the Chinese will get involved and for a week we will have "economic uncertainty" but Brian will still be selling his bread in the bakers and Susan will still work Saturdays down Sainsburys. When the dust settles we will have some people losing billions in investments/pensions, a load of out of work bankers, credit will cease for a month, a few Woolworth type businesses will go to the wall.....nothing extraordinary, no armageddon type scenario. I still hear people talk about the HUGE financial disaster of 2008 !!! What happened? It didn't effect me one bit, if anything I was begging for a little austerity, we needed to end our debt addiction. I havent noticed anything change, I still struggle to book a table at any of the restuarants in my town on a weekend, shops seem packed, new 4x4's still everywhere, every banker/city type I know still has a job or got a new one within a few weeks. This Brink is only the Brink if you are in that financial industry and only really then if you are at the high end. Cameron, Cable, Peston, IMF etc are spending their days with these people and the panic is more to do with the party coming to an end rather than any doomsday scenario.
  14. Yes exactly my point. I dont see distressed sellers, banks will be looking to repossess as few properties as possible and so people struggling to pay will be offered alternative payment schemes. Repossession will be only the action of last resort, the banks want to avoid any downturn in the property market caused by fire sales.
  15. I remember being told about the "crisis loan" in the early 90's and going to Woolwich Benefit Office, collecting my ticket and waiting an hour plus for the hordes of people to collect their £45. The story was always that you couldn't do your weekly shop, you had to say you hadn't eaten for 2 days and then it was guaranteed. You could go back a few weeks later and they could only take £2 or something from your income support and you could end up getting £200, if you played it right you could then avoid having to pay it back. I am assuming this is just a way of them swerving around that payment. Everyone at Woolwich would just go straight into the pub or bookies. If you believe there are people in this country who are genuinely famished then you are an absolute fool, people may choose to spend the money on booze or fags but NOBODY is forced into food poverty in the UK like they are in the US.
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