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Everything posted by sleepwello'nights

  1. I still maintain that this course of action is a better outcome than the repossessed property being sold at a fire sale price or remaining unsold. Lets not forget it was the actions of the banks that got us into this situation in the first place. Initially by loosening their lending criteria and allowing us to stretch affordability and then by stopping lending. The results are more extreme in the USA. Houses in Detroit being unsaleable, even though some have been sold for $1, yes one dollar. If your a crack head it would be a nice neighbourhood. Before the slowdown these areas were reasonable places to live. If you read the articles they explain how one or two foreclosed properties in an area start the downward cycle. What's worse the debt bubble or a depression? At least when houses were selling the economy was working. And when you start thinking about the money in terms of billions it becomes nonsense, nothing more than a concept. Whereas if an individual loses his income, be it from employment or a pension, it will cause immense suffering. Ownership and control? Through my shareholdings I have ownership of a number of commercial organisations. But no effective control whatsoever. I suggest that what's important is the reality. It is their home if they live there.
  2. Isn't this a sensible outcome. But would it be better if the repossessed owner had the option to remain in occupation. I'm sure most people don't choose to have their house repossessed, its usually down to circumstances they would have preferred to have avoided. It seems to me that the lenders are starting to engage in some intelligent thinking and by so doing will provide a floor for house prices. A house will be worth the yield available on its achievable rent.
  3. All this complaining about fees to letting agents. I advertise my properties myself, make credit checks myself, take references myself, check the tenants in myself, prepare the inventory myself, prepare the tenancy agreement myself and don't charge the tenant any fees. Yet the response to my adverts is very low. I advertise them in the local paper and using advertising agencies on the main web sites, Primelocation, Rightmove, etc. Why do you numpties insist on viewing through letting agents? Oh I know so you can grumble at the high fees charged!
  4. The demand for scrap cars was quite high back in the summer, I heard scrap dealers were paying a couple of hundred pounds for any scrap vehicle. Hence the disappearance of all scrap vehicles that used to blight some residential estates. Of course this was before house prices fell and the global economy stalled!!! Careful what you wish for it may come true.
  5. As a Landlord(LL) I often feel the law is biased in favour of the tenants. The first thing to establish is how much is at stake. You need to be pragmatic, its all well and good arguing over principles, lawyers just love it when someone says its the principle that is the issue. How the £ signs light up in their eyes. If its not a large amount don't waste energy on it and write it off to experience. All our tenants kept to the terms of the tenancy agreement except one. Despite a specific provision in the tenancy agreement that the deposit was not to be used to pay rent, after he gave notice he didn't pay any more rent. We decided that it was not worth taking action to enforce the tenancy agreement as it was likely that he would have left before the case could be heard. As it turned out he did leave when his notice expired and we didn't really lose out. A couple of minor issues aside. Matt Henson has given very sound advice. An Assured Shorthold Tenancy (AST) is valid for the period specified. When it expires, unless it is renewed, it becomes a periodic tenancy. By signing a new document you probably entered into another AST and agreed to be bound by its terms. It's unnecessary to sign a document to enter into a periodic tenancy, but who knows how some people interpret the law - even judges come to think of it. However, if a dispute occurs and no agreements can be reached about how much of the deposit should be returned, there will be a free service, offered by the tenancy deposit scheme protecting the deposit to help resolve any disputes – the alternative Dispute Resolution (ADR) service. By the way the LL is under an obligation to give you specified information regarding the scheme used to safeguard your deposit when you enter into the tenancy. As your question indicates uncertainty about the deposit it seems that he didn't give you the prescribed information. You would be well advised to do some research on the Tenancy Deposit Regulations. Any questions regarding the deposit and deductions from it are decided by the deposit scheme arbitrator. The big advantage of the deposit schemes are that the procedures are informal and quick. Very strict timescales are imposed. If the decision goes against you its not a matter of public record and your credit rating will not be affected. If you don't adhere to the decision then further action can be taken through the courts which may impact your credit rating. From your posting you seem a responsible individual and I am sure you will get a fair result from the ADR.
  6. This seems like a good idea to me. If there is a housing shortage in the UK then almost every property repossessed means that there is someone who needs to find somewhere else to live. Be it owner occupier of tenant. In the worst case where the occupier has no income then he will be entitled to housing benefit. Which means that the property will generate an income. Sure it will need to be managed but fees can be quite low, I've seen some management fees advertised around the 4% level. The lender has already provided the loan, so doesn't need to find additional capital and with a bit of will can find a way to move the capital to another entity if it needs to get the loan of its books. Mostly the lender won't want to. If the loan is repaid then the capital of the lender is de-leveraged. This is one of the causes of the credit crunch, do some research on the fractional reserve banking system if you want to understand how money creation works. Sure house prices are falling now, but most predictions are that this is a correction and in a few years time will revert to trend. Especially if demographic trends continue and demand continues to grow. Look at how low the number of houses being constructed has fallen this year. House building never got to the levels that were needed to balance demand. Weren't we told 240,000 houses a year needed to be built, 160,000 houses were being built; the forecast for houses built this year is 80,000. So the lenders may be holding an asset that is declining in value for a short period but eventually the price will start to increase again. Rental yields will provide a floor for prices, maybe a more sensible way of valuing a house than we had the last few years. The lender will not incur all the costs involved in repossession and there is a good chance that it will not fall into disrepair. The flow of houses into a depressed market may slow the spiral of falling prices. Perhaps not what this site hopes for but a lot better for the economy and people's livelihoods. As regards the indeterminate loss the bank is exposed to lets not forget that they can still claim on the borrower for any shortfall for up to 6 years after the debt has last been acknowledged. Perhaps not as good for the lender when they could claim for up to 12 years as a specialty, but a lot shorter for the borrower. And given the £ billions that have been used to bail out UK lenders not unreasonable for some of the benefit to circulate elsewhere. In the longer term there may not even be a shortfall, depends on your horizon. Anyone got any ideas how we can promote this idea to the lenders?
  7. Hi everybody, Now that the thread is back on topic I’ll come back in. Can I first of all thank you all for your opinions, except Renterknob, whoops Renterbob, (thanks The Wicked Landlord). Cantimandua51 your warning was spot on. I was challenged to explain what I meant by “controlling ourselves”. I meant exactly what I said, it was completely unambiguous – to exercise self control. Of course we are controlled by others. That control can range from external force to persuasive reasoning that makes us act against our own self interest; the promise of a better life in another world in the future. Even so we all have the luxury of choice, and that choice is how we choose to respond to the control. How do one respondents’ arguments using words, phrases and three letter acronyms – WTF, Lizard, eat children, Troll - refute this opinion. I can’t figure out what is meant by “the professional landlords like the OP don’t mew”. Can anyone translate it into a comprehensible english. The spelling on some of the other replies is abysmal. Rant over. Paddles I still regard your view on gearing to be irrelevant. I know why you are raising the issue. But how does whether I’ve paid for the asset outright or borrowed as much as I can to purchase it affect my behaviour as a landlord? I don’t think I would behave any differently to my tenants whether I owned the properties outright or had no equity in them. By the way I wasn’t referring to your posts when I took exception to the tone of some replies. You seem resentful that some took the opportunity to acquire property, and risk, when the conditions permitted. It did increase the supply of property available to rent. Why do you think we have an inalienable right to own a dwelling? Not everybody has been priced out of the property market, some rent from choice. There are advantages, mobility for one. The business model that Northosite refers to is the standard business model. An asset is exploited. Someone gets control of it and makes it available for others to benefit from. Provided there is sufficient demand then whoever controls it generates a profit. If there is insufficient demand the profit will not cover the costs of utilising it and less effort will be expended on it. Substitute the economist’s term utility for profit and the model applies to the public sector as well as the private sector. I see nothing wrong with that. In fact I think most of us would be delighted if we could acquire something without cost, get someone to operate it and be able to provide for our needs from it. Most of us though put a lot of effort into acquiring what we desire. The argument that the tenant is powerless has some force. But consider in present market conditions the supply of property to rent is increasing and as a consequence rents are reducing. If a tenant is renting a property in a poor condition or has an inconsiderate landlord, then surely he can find somewhere else to live that is more suitable. In our society this tends to happen until a balance is reached. Power and control wax and wane. I’m not sure that more regulation would be a good thing. The security of tenure that existed pre 1994 depressed the supply of private rented accommodation, but didn’t prevent – Hoogstraten?? Is that his name, is/was having an enormous mansion built in Sussex, has ties with African tyrants, was convicted of murder – from operating. Aren’t living conditions for tenants better now than before?
  8. Aren't Paddles and Renterbob amusing. No rational arguments, just degenerate to personal abuse and then accuse me of being a troll. Clearly their level of debate quickly descends to a very low level if you have the temerity to disagree with their opinion or propose another point of view. Thanks to the earlier posters for their replies and encouragement. Goodbye.
  9. No rational argument then just degrading to personal abuse. that tells me all I need to know about you!
  10. Hello nig, Thanks for your reply. There are some useful insights into the resentment felt against Landlords (LL’s). By the way Paddles I find your AA comparison and your irrelevant questions about gearing rather juvenile. I don’t have the inclination to come up with a more humorous response. Thinking more deeply about nig’s response it seems to me that what you are railing against is human nature itself. Unfortunately despite the attempts of masters such as Jesus (Christianity), Mohammed (Islamism), Siddhartha Gautama (Budhism) and Guru Nanak (Sikhism) it cannot be overcome. So we’ll skip the philosophy and accept that Darwinism (survival of the fittest or luckiest) is dominant. Our species have devised two ways of controlling ourselves: economics and politics. The issues you raise have come about because neither method has brought about a solution that satisfies everyone, nor will they ever. The first target is that LL’s have inflated property prices and are taxed less. It has never been in a LL’s interest to overpay for a property. What inflated property prices was the bankers willingness to lend, the propaganda disseminated by the media about property being as safe as houses and the lower returns on other asset classes relative to property. The demand was and still is there, if the statistics about household growth and property supply are true. As regards taxation rental income is taxable as is the capital gain when a property is sold. National Insurance contributions are lower but then with CGT at 40% any benefit there is well and truly wiped out. That also seems to me to negate the argument that property owners benefited because they are subsidised by the taxpayer. As LL’s are taxed we are also long suffering taxpayers. I’ve looked at your link and I disagree with its arguments which I consider spurious. By the way this hoary tale that Northern Rock has cost taxpayers up to, what is it £100 billion, is total nonsense. Yes if every Northern Rock mortgagee didn’t make any more repayments and not only was the house the loan secured on demolished, but the ground it stood on disappeared – then yes it might cost the taxpayer that much. But that is a ridiculous and implausible scenario. The next point that we fraudulently sucked money out of the productive economy. Economists distinguish between investment and consumption. To invest in productive capacity is good to consume is wasteful. I’ve always seen this as a chicken and egg situation. We have to consume to live, there is no point in generating capacity if it is not to satisfy consumption. And then Money itself is just a concept, even gold has little intrinsic value; you can’t eat it and there are other superior alternatives for any other material uses it has. The fiat currency we use has broken the link with gold. There is a short video that gives an easily assimable explanation of the fractional reserve banking system. http://www.moneyasdebt.net/ . The wealth that money represents has not disappeared, in reality nothing has changed – the sun rises in the east, night turns to day, what has really changed? Nothing except the monetary value placed on an asset. The fact is that as economic activity declines the vast majority of us will be less wealthy, there will be fewer jobs and fewer opportunities to generate wealth and savings. A few will prosper but most of us will suffer. Read the Grapes of Wrath by Steinbeck to get an inkling of how obscene I think the present economic situation is. We’re all in trouble and I hope our leaders are strong enough to get us through this quickly. Your next point is how the tenant’s freedom is impinged by LL’s. In most cases the tenants freedom is not constrained any differently from the way we are all constrained by the need to be considerate to others. Sure they have to look after the LL’s property but that applies to anything that other people have a right to. The basic premise is that when you no longer need it it is returned to the condition it was in when you started to use it. If I lent somebody a book say, I would be annoyed if it was returned with pages torn out, parts were annotated and some pages coloured in, I see renting a property exactly the same way. I also see it as in the LL’s interest to keep their property in good repair. I’ve found from experience that if something is in good condition to start with it tends to be looked after better than if it was in poor condition. The house I live in is built and maintained to the same standard as the houses I rent out. What I’m trying to do is to provide for myself and my family now and in the future. One of the ways I’ve chosen is to purchase some houses and to rent them to others. Why do some people resent me for that?
  11. But what relevance does my leverage or lack of have to do with the resentment that some posters feel towards private landlords?
  12. I didn't realise you were Polish RenterBob. My remarks must be very resonant for you. God Bless
  13. Thank you and hello RenterBob, it was some of your comments that prompted me to post. If I may answer your assertions: I'm not sure what you mean by "deliquent comment". I accept that the state has a function in a society, but the argument is what is that function? When I grew up the state controlled far more than they do now. Choice was limited and economic performance fell below that achieved by other countries. Now I see a return to state control and very serious erosion of personal liberty. But this is an argument for another political forum. I see nothing wrong with providing accommodation to those who choose to rent. I don't see that it is a transfer of power. Yes there has been profiteering, but is it the landlords who gained the most or other parties involved such as politicians and financiers. My decision was predicated on rental values increasing in line with average wages. Other factors that reinforced my decision were the past performance of housing, i.e what I've seen since the1960's and the claims of a housing shortage in the UK. In the 1950's young couples' first home was often rented rooms in a house occupied by another family. As we have become more prosperous we can afford better accommodation. The provision of homes by the private rental sector does not deprive anyone of a roof over their head. Indeed the massive influx of financial loans into housing increased the supply of housing dramatically. Just as the withdrawal of finance is resulting in a dramatic reduction in house building. I firmly believe that "the market" not "the state" is better placed to decide on the allocation of resources. I am not arrogant in my belief that I make a better landlord than the state. I've seen how the state behaves as a landlord first hand. Have you? I have heard anecdotal evidence of how housing associations treat their tenants that might cause you to reconsider your opinion. Where did I compare myself to God? (Alright I realise it was a typo and i think you meant good ) I can't do as I like, besides being constrained by legislation there are other self imposed codes of behaviour that are exercised in a civil society. Sure I'm in it to make money, that's why I go out to work; well I would if I could find a job. But I've saved in the past and put aside resources to tide me over should the need arise. I'm puzzled why that makes you angry. Can you provide evidence that rents have increased so much that tenants are forced to pay over the odds. From what I see rents have risen generally in line with average wages and at the moment are falling. I take your point but I did not come into this as a get rich quick scheme. I don't need to account for the value of my properties on the "mark to market" accounting standard. I view it as a business and I will make commercial decisions based on rational analysis. I would suggest that your anger would be better directed towards those that have damaged the financial system and the contraction of our economy rather than landlords in the private rented sector
  14. I purchased some properties to rent out a few years ago. Yes I am a buy to let landlord. I am amazed at some of the resentful emotions expressed by some contributors, obviously tenants. When I was a child my family and lots of others lived in rented council accommodation. But then the general economic environment was socialism and moving more and more towards the now discredited communist system. You can guess that I don't like state control. As I recall we could not even decorate the house, redecoration was done by the council on their schedule. As I recall we could choose from one of a few wallpaper patterns for the sitting room. If I and others like me did not provide the housing that is available for you to rent who would pay and provide it for it? And if you answer the state, think where will they get the capital from? Whether you rent or buy is a rational decision you choose to make. If you can afford to and you think it will benefit you you will buy. If you can't afford to or you think it is in your best interests to rent you will rent. It's the same decision process we use whenever we make a decision on how to utilise our resources. Whether its the purchase of supermarket own brand or a premium product, a secondhand car or a new car, whether you stay in and watch TV or go out and pay for your seat at the Cinema. Your money your choice. The arithmetic of BTL is not currently very favourable, but I purchased in the expectation that rents would rise in line with average wages over the medium to long term. As a business it would provide a steady income stream and hopefully some capital appreciation if I sold the house. I know I treat my tenants well and afford them the respect they deserve as individuals. The houses I let are relatively new, they are all well maintained, repairs are carried out promptly and I comply with all the statutory regulations that exist and are being introduced at an ever increasing rate. Why do I deserve your opprobrium?
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