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jaycey

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About jaycey

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  1. Your plan won't work in most major cities, as there's not a huge differential between the price to rent and the price to buy - we keep being reminded of this with the average BTL rental yields, meaning that landlords are closing any gaps. Hence if you stop people from buying, you'll increase the yields for landlords, so you'll have more landlords. You can keep the landlords out by making it unattractive to be a landlord, but bascially this is communism. Or you could address the underlying issue of rents being too high by building more houses (or deporting people).
  2. I'd say Streatham is probably your best bet, but you could try Brixton / Wimbledon / Tooting. You're likely to find somewhere but I doubt you'll find anywhere particularly nice. You might be better trying to find a house share because you should be able find somewhere really nice at your budget. Obviously it's not as good as having a place of your own, but better to share somewhere really nice, than have a dump all to yourselves.
  3. I think the article is saying, that if you compare the average FTBs getting a mortgage on an average house a year ago, against the same for today, today's FTB is better off. This makes sense because the available mortgage rates a year ago to the average FTB with high LTV would be pretty high, whereas a year on there is more competition and rates have come down. The problem is that the story seems to be trying to imply something else.
  4. I agree, the atricle doesn't make much sense. I'm tempted to think there's some tiny kernal of truth in it, looking at the narrow position of FTBs at two points in time, but it's just misleading. It's a well-documented argument that housing costs as a percentage of disposable income have dropped over the very very long term but trying to push this line with reference to the short term will only mislead.
  5. Has to be the right decision with such a disparity between the mortgage and rental costs. Whatever happens to house prices over the next 3 years, I predict you'll look back in 5 years and think this was the best decision you ever made.
  6. A lot of the 'disgust' seems to be closer to jealousy. I personally find their new-age ish approach to shopping and the children incredibly annoying and patronising, and they seem to not have a clue where their money is being spent (personally I'd use the term wasted), which is annoying. However, they seem to earn 150k on one salary, so they are paying 52k in tax, to which the employer will add another 19k, so they're contributing a good amount of tax. Plus, if you take out the one-off items, they're spending 7k ish per month against an income 8k - and bear in mind that's only one income and they plan to add a second income. They're not really that bad (still annoying though).
  7. I cannot believe that they don't choose to send their kids to a private school.
  8. Thanks for starting the thread with such a well-reasoned post, Second Time Around. I think it's pretty obvious that house price inflation over the long term is not a good thing, but I don't see many alternatives. I know it's an old argument but demographics changes are increasing demand, demand is increasing faster than supply, and none of this is predicted to change. Unfortunately this guarantees house price inflation in the very long term. It also appears to be the case that cost of housing as a proportion of disposable income hasn't changed over the long term for the past 30 years, although obviously this trend cannot be sustainable in the very long term. As for the short term, I'm very much with you on the strong downward pressures approaching, and agree that the downward pressures should remain for quite a few years. However, I don't think potential sellers can bring themselves to sell below a certain level. They think they're better off to wait, or negative equity might prevent them, anyway, the result is that there's a hard floor to the market that you can only breach with forced sales through a pretty bad recession or high interest rates. How high do you think interest rates can go, and how quick? Competition seems to be coming back to the mortgage market and margins are being eroded, but obviously if we get interest rates of 6% before we get a decent recovery the market should crash.
  9. Excellent thread, plus some insightful comments. I think that the problem is the systemic public sector defecit. Public sector spending is currently above a level that's sustainable over the economic cycle, this is why Gordon Brown always failed with his "Golden Rule". With hindsight, it looks like government spending was last sustainable about 10 years ago, meaning that it is currently about 20% above sustainable levels. Herein lies the problem, a reduction of 20% in the public sector is a bitter pill, and can only really be achieved with job losses and no sacred cows (NHS). Bank bail-out and QE money are mostly irrelevant. The government should be able to turn a profit on the bailout money. The only thing stopping them will be the old short-term vs long-term quandry, but the Tories have a track record of making the right decisions on this. QE can be reversed and it only costs money until it's reversed. The problem is that reversing it will be a drag on recover, so it's a balancing act.
  10. I really don't understand, are you saying that BTL is not a business... that people do it for pleasure? I agree about tax, but I think the HMRC are rapidly cleaning up. People mainly buy houses because they have a belief that it's cheaper over a 25 year period to buy than to rent - ie the total cost to buy is less than the cost to rent. Landlords mainly buy houses because they have a belief that it's cheaper over a 25 year period to buy than to rent - ie the total cost to buy is less than the rental income.
  11. Phil I feel really sorry for you. It obviously took some balls to get up off your backside and get yourself an investment that's doing pretty well. Obviously there's a few people posting who would love to have your backside and balls... if you know what I mean. I see where the bank are coming from, but obviously it's sad that they can't see that you have a good, solid business going. For what it's worth, I'd go to the EA that looked like they might get the highest price. You can hate the EAs all you like (I do), but if they get you an extra 5% on the price, their fees seem small. Best of luck
  12. North London is a real mixture, you could include Brent, Islington, Dalston, Wembley, Stanmore, Crouch End, Finchley etc. There are some parts that always seemed overpriced, and particularly some upper middle class areas that will likely take a pounding from the economy. At the same time there are areas that have been gentrifying and will likely continue, plus some perennial nice area that are well-connected that never suffer. I think you need to be more specific than just 'North London'.
  13. This whole arguement is based upon the premise that the amount and value of mortgage fraud was large enough to have an effect on the market. The premise requires material systemic fraud in the self-cert system, and I haven't see any evidence to support this. A vast majority of self-certs were checked by honest brokers, and there was no fraud at all. I'm not arguing that mortgage availability doesn't affect prices or that fraud is OK, just that I think the target is misguided.
  14. The LL signs that he'll pay them commission for any tenancy where a person introduced by the EA becomes a tenant. I'm sorry I can't be bothered to look up the exact terms, but it's worded very widely to include the obvious ways of circumventing the contract. If they find out, they will go after the LL. As you've not signed anything I doubt they would bother with you. I'm totally with you on keeping the EA out of the deal, but if I was the LL I wouldn't be prepared to take the risk where you viewed through the EA. I would certainly suggest that we ditch the EA after a year and split the commission, and I've done exactly this. I'm not sure if it's possible to do this after 6 months, though.
  15. It's always cashflow. A business can be very profitable but it all falls down when there's no cash. If we're talking property-related, it will almost always be a tenant not paying rent. 'Rainy day' cash will cover the mid-sized refurbishment and associated void period, but the cash dries up really quickly when a tenant just doesn't pay. Interest rates are a little over-rated, as they tend to correlate to rental income (although there could be timing differences).
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