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non frog

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  1. BTL is not a business. A tapeworm is not a slimming aid.....
  2. Supply and demand are quite basic economics. Increasing the supply of credit increases the demand for it. It is not the physical property that changes value, simply the amount of credit that can chase a finite resource. You cannot build fast enough to change the physical availability at a macro level. This is why Greece (and others) got into bother. The availability of credit and cost of borrowing fell (with entry to the Euro) and so the demand for credit increased. No matter that the ability to repay is constant it is simply the offer of more buying power that in itself drives borrowing. House prices will rise for as long as borrowing secured on houses is made available. The multiples of earnings is not the determinant. If the banks would lend NMW earners 300k to buy a house they would buy. (Japan had intergenerational mortgages at one point). The more you borrow, the more interest you pay. As interest rates fall it is necessary to borrow more principle so that the repayments increase to make up for the percentage loss. Eventually (as in Japan) the mathematics mean that a lifetime's earnings is insufficient to repay the loan. You have become the fabled HPC "wage slave". To "crash" house prices by supply requires over supply (as in Eire and Spain). Over supply is not possible in the South of the UK in my view. Artificial over supply in the form of social housing has been removed. Anyone that thinks the HPI has not been deliberately engineered is mistaken IMHO.
  3. Fraud is part of the issue. Also the removal of self-imposed limits on income multiples or LTV. Banks do not do honest. Or risk assessment. If house prices keep going up there is no risk to them. Can't pay? Take it away. The risk is an HPC. That is why the banks and the government will try to stop prices crashing. So far they have done that very well.
  4. Think of all the money they have wasted on food in that time. Eating food is just dead money.
  5. Our letting agents let themselves in to inspect. They then make some comment like "the carpet needs hoovering". I find this so funny I really don't mind them looking round. What sad little people they are.
  6. non frog

    Another Loss On My Funding Circle.

    We get at least three or four "funding circle" mailshots a week begging us to borrow money. The bank sends us an invitation to borrow money at least once a month. Everywhere I look the newspapers tell me small businesses can't get money. Something doesn't add up.
  7. A discussion on the way to work this morning with the other half raised an interesting point. Is BTL now too big to fail? Just like the banks. When house prices "correct" and interest rates rise will HMG come to the rescue of all the Telegraph and Mail readers with their 2 house portfolio? A lot of votes in this I suspect. The chancellor might well have taxed the big players, but the votes volume is (I think) the "amateur" that fancy themselves as a player. The sort that often think we tenants owe them a living and shouldn't complain about the wallpaper peeling off the damp in the kitchen or the letter box lid falling off after 20 years of junk mail going through it.
  8. non frog

    Telling The Truth About Debt

    People do not want to understand this concept. They want to spend Saturday in Ikea choosing curtains.
  9. If you look carefully you will find people do not work primarily for money. Jobs provide social status and give purpose to life. Examine unemployment patterns and you will see it is the poor who suffer unemployment and the educated wealthy top decile that have the best jobs. This is not because the top decile are any better at "work", but because they keep the best jobs for themselves and their friends, family and peer group. There is an almost limitless need for carers as the boomers age. The cost of employing those carers is infinitesimal compared to the cost of bailing out the banks and the QE and ZIRP. There will never be a "crisis" of unemployment - as the population grows unemployment always remains at about 5-10%. The problem is distribution of jobs, just as it is distribution of wealth and (more pertinent to this forum) the distribution of housing. The young suffer unemployment and they too suffer lack of housing. Older people continue in the workplace and are rewarded by not having to pay NI so they can afford to work for less than the young (even the immigrant young who are desperate). The older workers have much lower housing costs. All ways you look at it, the "work" they do is primarily for something to do, to feel wanted, needed, part of society and most important NOT because they need the money. That is why discussions like this never reach a conclusion because the reasons people go to work are as varied as the workforce itself and the work goes to those who "need" it least. My missus' ex-boss was rich - rich enough to do nothing for 10 generations - but he "worked" (and still does AFAIK) 60 plus hours a week. Work is not about money. Labour is not sold to feed the family. Even Marx got that wrong.
  10. My aunt and the missus' granny both self funded from houses with an insurance product. I understand now that these insurance products are no longer available (both these lovely ladies lived long enough to take much more out than the initial payment and any interest). With the ZIRP the money spent needs the capital in the first place and cannot rely on income from the amalgamated capital of the many generating income. I think your observation is going to be pertinent (much) sooner rather than later.
  11. If people knew what that was house prices would be half the current level. Even at 2% return living in a £1.4m house in London "costs" 28 grand a year. A lot of people sitting on that kind of theoretic money would cash up if they could see the chance.
  12. non frog

    Britain Falls Back Into Deflation

    The BTL mob will be after that extra little bit of disposable.....
  13. non frog

    The Eroei Of Labour

    Top post of the year. Indebted nations are under the bank's control, just as individuals are. Control the creation of debt and you control the world.
  14. This. The term "demand" simply refers to the amount of people/companies that want to buy. BTL rides over the salary multiple "norm" of previous generations. If many people want to buy, in order to rent out for profit then they are the "demand" that drives the price. In effect BTL LLs compete with each other and are willing to pay more than OO because they (LL) see a return whereas the OO sees a cost. House prices will collapse/correct/crash (chose your poison) when/if BTL stops being the highly popular route to riches that many people imagine it to be. As we have discussed so very many times on here - that is sentiment driven. Timing is therefore guesswork.
  15. non frog

    Landlord Fees. New One On Me.

    Our last place we had to sort out the inventory ourselves. The inventory lady did a good job and charged us 45 quid. She said in London it is about 150 quid, as they can get away with it there. Here she has to be "competitive". Very happy with the set up as she listed all the scuffs as "fair wear and tear"..
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