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bubble

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Everything posted by bubble

  1. Even if your employer was offering 10 funds, a number of them would have been benchmarked on the FTSE100 - in some regards it is irrelevant what is driving the FTSE100, fund managers have to attempt to outperform and certainly, now we are approaching October, if they are not in significant positive territory they would have been fired by now - I just don't believe this pension adviser is giving our comrade sound advice and quite frankly I'd be looking elsewhere for another advisor.
  2. quick and dirty: AUG no. of house purchase loans approved: 69,499 vs 65,611 in July (and 64,032 in Aug 2004)
  3. Uhmm, not sure if either you heard him incorrectly or he's talking out of his rear end, but: "none of the funds were performing that well at the moment" The last time I looked at the FTSE100 it was on course for a 20% return this year - I can't believe he doesn't have a tracker of some sort in his goodie bag!
  4. I think this aspect of houses for rent and for sale is under-discussed on this board - did we see this phoenomena during the last crash. I would say that at least 1 in 4 places that I have visted for potential renting is also on sale.
  5. Which would imply a buying price of £369,000 (to be cheaper than the price to currently rent it) compared to the currently advertised £480,000 to buy....Uhmm that's a tricky decision
  6. I'm surprised because I would have thought that at current housing price levels, BTL would increasingly be less attractive and the number of mortgages arranged by Paragon would be slipping - irrespective of fudging (and to be frank its difficult to fudge the value of your loan book), and as a housing bear, I still think it is bullish that more BTL mortgages are being arranged by the company now compared to H2 2004 and H1 2005 - whichever way you want to look at it, I read that BTL'ers are certaintly not running out of the market.
  7. I have to say, this came as a surprise to me: The Paragon Group of Companies PLC will shortly be meeting analysts ahead of its close period for the year ending 30 September 2005. The following is an update of the trading position of the Group ahead of the year end and follows the interim results which were announced on 25 May 2005. The Board expects the results for the year to 30 September 2005 to be in line with market expectations. Trading activity has strengthened over the course of the financial year after a comparatively slow first half, with loan advances in the second half of the year expected to be significantly ahead of first half volumes. This is attributable to a strong second half performance by the buy-to-let division, where second half advances will be well ahead of both the first half and the second half of 2004. As anticipated in our interim statement, consumer finance advances are likely to be broadly flat between the first and second halves of the year, leaving them overall below the level for 2004. Consumer finance lending as a proportion of total lending continues to decrease, reflecting the Group’s strategy to emphasise growth in the buy-to-let lending business. The year end pipeline of mortgage loans awaiting completion is also expected to be greater than at the half year end, auguring well for mortgage advances as the Group moves into the next financial year. Total loan assets are expected to be materially higher than a year ago, the strong growth in the buy-to-let portfolio more than compensating for the continuing run off of the owner-occupied mortgage and unsecured consumer books. Margins across the business are comparable with 2004 and, given a larger loan book, shareholders should expect to see strong growth in net interest income for the year. The Group has maintained its conservative stance on credit across the lending businesses and the performance of the buy-to-let book remains exemplary. The performance of the consumer books has improved from the first half of the year, although the charge for provisions for losses will be higher in 2005 than in 2004. As a percentage of assets, the charge for provisions for losses is expected to be similar to 2004. Costs remain well controlled across the Group. A year on year improvement in the cost:income ratio is expected. The outlook for landlords remains positive. Survey evidence continues to point to strong rental demand, which serves to improve returns to landlords and, for the Group, underpins the credit performance of the mortgage portfolio. The recent reduction in money market rates, with the prospect of more to come in future, will serve to improve net yields and we expect seasoned landlords to continue to take advantage of market weakness in building their portfolios. In the interim report the Board outlined its proposals for capital management going forward. In line with that policy shareholders should expect a significant increase in dividend as dividend cover is moved towards the market level. The Board also announced at that time a share buyback programme of up to £20 million. To date, 1,790,000 shares have been repurchased at an average price of £4.64 per share. The Board of Directors intends to announce the preliminary results for the year ending 30 September 2005 on 23 November 2005 and a full report on the progress of the Group will be issued at that time. The results for the year ending 30 September 2005 will be the last prepared under UK GAAP. The Board expects to provide a comparative report to shareholders setting out the impact of the introduction of International Financial Reporting Standards (“IFRS”) on the 2005 results in advance of the 2006 interim results, which will be prepared under IFRS. For further information, please contact: The Paragon Group of Companies PLC Nick Keen, Finance Director - 0121 712 2000 The Wriglesworth Consultancy Mark Baker - 020 7845 7900
  8. Just wondering what you guys figure is an appropriate interest rate when weighing up the benefits of buying to renting. For example, I'm looking at a property that is currently for sale at £480k (but let's be real, even in this inflated market its not worth £400k). It's on for rent at £1430/month. Now even if I was to buy this place at £400k, on the basis of a 5% mortgage rate I'd be looking at interest of £1667/month? Is my rate too high? Do people just go on discounted deals and spin again once the discount period is over, if so what is the rate I should be using. Of course I'm exlcuding all the other costs associated with purchasing, but I'm aware of this added burden, just keen to work it out based on what the mortgage payment would be. If that's the case at what price would this property need to sell at to make it cheaper to buy than rent?
  9. RichM - my advice on children is NOT TO WAIT. You can wait to purchase a house, but the biological clock is ticking and has been said on this thread, you don't know how long it will take and believe me, the father of a 1 year-old, it can be much harder than you think. The cost of having a baby isn't substantial in the early years - you can buy lots of items second-hand, you've just got to be sensible. Of course, if you're dependent on your wife's income, it's going to be even harder and if possible stay close to family. I certainly wouldn't put having children on hold because of the curent economic environment in the UK - if I was really that concerned I'd move abroad to cuontries such as Canada where there is ample more help when having children. Apom - all I can say is I'm exceptionally sorry for you - if the current housing crisis is principally to blame for terminating a pregnancy this is truly tragic.
  10. Well - in turns out I don't have a legal position to stand on - a holding deposit is one way. Spoke to the head of the agency who apologised and said he deeply regreted the landlords action - when I explained to him that it impacts their reputation as well and that he should refuse to do any business with the landlord, his sad reply was that "I've known him personally for years, he's just this way, he's a professional, he knows how to squeeze the market and has given us a lot of business over that time" - I just couldn't believe my ears -I've learnt a lesson from this and hope it provides a warning for your other renters out there.
  11. Desert Knight, it is standard practice to provide a holding deposit UNTIL the tenancy agreement is drawn up and finalised (including the landlord undertaking the relevant reference checks). It is supposedly there to show committment from both landlord and tenant and stop either party messing the other about. As a landlord, I'm surprised you haven't come across this practice?
  12. Desert Knight, I've been renting for 7 years and 4 out of the 5 landlords have tried to fleece me - whilst this is clearly not representative of all the landlords out there and apologies to the good ones, my experience with landlords has generally been poor. I don't want to be accused of sterotyping, so if it suits happy to just say "F****** landlord". Furthermore, he's not asking for more money on the holding deposit - he's asking to change the agreed rent/month now that someone else has come along and is willing to offer - I have no problem with being gazumped, but not when the deal has been agreed and I've paid money that I think "secures" the proprety for me. I've already taken steps to change the phone line, utilities etc. All I'm querying is whether a "holding deposit" is one-way or what I believe should be two-way.
  13. Get the deposit back is a certainty, but I also believe he should hold to his end of the bargin - he's just being greedy. If a trajedy had happened which forced him to change his position, I'd be more accommodating, but why should I when it's simply a matter of someone offering more?
  14. Okay need some help here - just agreed with agent new rental starting October - went at the weekend and stumped up £250 holding deposit - get a call this morning saying landlord wants more money on reflection (i.e. he's had another offer over the w/e!). Anyone know whether he's allowed to back out now that I have got a holding deposit receipt - quite frightening cos this could have happened much closer to my move in time and left us homeless!! Bubble...
  15. Hi FF, do many of your peers have other jobs? Is there any sense of concern on job losses if the market stays as it is? And in terms of the office sentiment re the housing market, how does the current environment compare to when you started work 3 years ago? Thanks Bubble
  16. Yes I agree, thanks FF - perhaps you could give us an indication of your locality? How long have you been working as an EA. I was under the impression that most EAs were commissioned - is this not the case then? CHeers Bubble
  17. Used to live on Leigh Hunt Drive, in 2002, 1 bed flat was going for £150k (asking), over 2003/04 this went up to 165-175 - interesting to note on findaproperty.com that while one 1 bed is still being offered out at 175k, one is now under offer where the asking price is £149k! So back to 2002! If one considers that these were bought in 2000/1 at around £100k, I still think there is plenty of downside here... Cheers Bubble
  18. Can I ask a cheeky question - what did you pay for your 1 bed 3 years ago and what is it on the market for today? Cheers Bubble
  19. It is not an exaggeration to say that the one sticking issue in my relationship with my wife has being buying a home. Quite frankly, if I knew the grief I would have saved myself from I would probably have bought even in a market I knew was about to crash...I'd say on average we argue about it about once a week...
  20. Yeah and they also used to say that if you bought shares you couldn't lose over 5 years, shame about those that bought in 2000...There's no surpise that you're better off buying based on the the last 5 years of housing price gains...
  21. It wouldn't surprise me, with the transport disaster in the capital, if in 30 years time more londers are working from home - think about the economic waste of time travelling back and from work (i certainly work better when I'm at home). I'm sure there are many jobs that could be based in regions where the cost of living is so much lower that employees can afford to take a 20% paycut and live a better quality of life and employers get better value for money from them. Only wish such a trend would happen more rapidly.
  22. I have to say, I'm just not convinced that we're going to be able to identify a catalyst - if one is right in believing that the market peaked last June - why then? What changed in July from an economic perspective to burst the bubble? If one trys to relate the housing bubble to the IT bubble in equities, no one can really explain what caused the reversal for IT stocks. In both cases, there was an understanding the markets were exhibiting "irrational exuberance", but I beileve one of the features of bubbles is simply the inability to predict when they will reverse. I think we have an interesting dynamic developing between inflation and a consumer slow down. If Merv is right in that in appears that consumer spending is more linked to the housing market than orginally anticipated, it does suggest that the MPC may move rates down (especially as taxes look almost certain to rise over the next 12 months), but with oil rising one has to expect that inflation should start to pick up in which case they are in a difficult position. I have no doubt that if we are at an inflexion point, then a 0.5% on the current base rate would certainly accelerate the reversal. PS Dr Bubb, I love the graph, but it's so depressing to note that even in the bearish case, if I wait till next year, I'm still looking at price levels back to 02 only!
  23. Dear ALL, this is my first post and I just wanted to thank the website creator and all of your enjoyable positings. I'm a potential FTB, but have steered clear of the housing market for a number of years now on the view that I believed it to be overvalued. Indeed I still do! As each year goes by, and with my wife nagging me to buy, the pain gets harder. I've researched for a long-time the potential turning points. but all this has taught me that while I still conclude today we are observing a highly overvalued market on a HISTORICAL basis, the timeline to a significant fall is unpredictable and so will the extent of the fall. If you bought in London in 2001 or before, I now believe that it is likely that even with a significant fall you're unlikely to be hit with significant negative equity. While the housing market has all the signs of a bubble (easy money, dinner conversations, too many tv programmes, millionaire seminars etc.), bubbles have a way of sucking in everyone. I wonder if any of you have thought about: 1. The impact of being able to hold property in a SIPP as of 2006 - I see this as a further stimulus to the housing market. 2. Is there any database or record of the actual number of estate agents in the UK over time - I'm sure this would be as good an indicator of how frenzied the market is (there seem to be more than Starbucks!). 3. Does anyone know what the average un-letted time for BTLs has changed over the last three years. While rents have clearly come down, I just wonder whether letting times have increased. For a FTB, remember the first step on to the ladder is where you are essentially locking in - any move after that is generally relative - getting your timing wrong as an FTB will have negative consequences for you for potentially decades to come. Also a way to think about purchasing is this: you want to buy a Ferrari, and I tell you that its going to cost you £250k, but you can pay me by monthly installments of a £100? Yes I know its simple, but people too frequently focus on affordability as opposed to value when it comes to housing. If I was a younger gun I would be seriously renting for the next three years... Cheers Bubble
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