jono2000

All this cr*p about Fergus being hard pressed.... let's go through the figures, such as we can, so that all the gossips clucking away like chicken at his financial success can get a clue... We know a lot about the figures, 'cos he's shouted them from the rooftops (or at least in the guardian) for quite a while. Further they don't run any kind of companies, so its private rental income, just like you or me, but scaled up. Its not clever, but it is big... They allegedly have around 700 houses in Kent area, so at an average price of £250k, (rightzoopla estimates for maidstone are actually closer to £400k, but I'm being conservative) thats £175million. They've said in the guardian they have around 61% mortgage, so say its really 66% that's approx £115m debt. And around £59m in equity. Lets say they pay 3% interest on the £115m debt, so they're paying aroun £3.45m in interest every year. Ohh.... seems like a lot, but wait, average rent in their location according to rightzoopla is just under £900pcm, so lets assume they get a little less, say £800, although there's no evidence to say they let out at below market rates, that would bring them an income of £6.72m, however they'll have charges for collection, maintenance, voids etc, which could be around 10-15%, lets say 15% so their income before interest would be around £5.7m so their take home is around £2.25m pa. So they have a minimum of £60m equity and over £2m income per year. Something tells me they're not sweating just yet. I've been harsh on some of the figures, so it wouldn't surprise me if they had more equity, and more income as they always seem to be charging market rates. More bad news for the hard-of-thinking: the power of leverage means that if the prices go up in 2014 as predicted by ten percent they'll have another £17.5m of equity. Barring some Grand-Cayman style trustee scheme coming into play In the long term, without inheritance planning the taxpayer will get 40% of this lot back..... and to be honest they don't look the healthiest couple I've seen. Still chin-up, you lot of ranters and pikey's he could choke on a truffle or drown in champagne or something.

In this part of the market its not QE so much as cash purchasses from abroad. If London is no longer seen as a safe haven and\or Sterling strengthens that would have a bigger impact., as it may if there's a sniff of higher rates. By itself it won't prompt people to sell, just maybe not buy as much. QE is going to be yesterday's news this time next year, the Fed is putting that particular genie back in the bottle. My guess (fwiw) stagnation in the £2m plus bracket towards the end of the year. However don't hold your breath for a "crash" as these sort of people are hardly under pressure to sell so supply will naturally dry up, and who knows when the owner may have to dash to London on the event of ascension of political enemies, a coup d'etat, corruption or bribery scandals, Government confiscatory legislation (hello Cyprus). etc.

Using inflation adjusted figures it turns out that house prices aren't up at all. No, in fact, they are down 5pc over 10 years. Which to be honest chimes with what's happening nationally. Of course there will always be pockets of winners and losers, ie Kensington London, versus Kensington Liverpool say. www.telegraph.co.uk/finance/personalfinance/houseprices/10531165/House-prices-down-5pc-over-ten-years-in-real-terms.html For an investment to be down 5pc over 10 years after inflation is taken into account (and to be honest inflation must be taken into account) is really not a stellar performance. Right now in london, whilst absolute prices are approaching the highes of 2007/2008 the inflation adjusted price are not. Bubble? What bubble?

There'll always be a reason to buy prime property in London.... whether it be european turmoil, (let's get our money out of the euro etc) or Syrian Arab Spring turmoil, or $ strength, or £ weakness, somewhere globally, someone wants a property in London, 'cos its transparent, regulated, and safe and secure compared to whatever they're fleeing from." You'll go to your grave waiting for the "imminent" housing meltdown. Prime London is the Switzerland of Europe. So to speak....

"speculates" is the word....

Ah yes, the ever authoritative Stacey Dooley, reality TV nitwit with her "true life story" style voiceover (cf "Holly" from Badlands). At least once an episode, she cries in sympathy with one or other of the chumps she's interviewing, often consoling them with a rub of the arm, and a tv closeup of her going "don't cry" and capturing her big expressive eyes emperthizing (is that a word?) her heart out... Paxo she's not.... yet she's warmly recommended by the housepricecrash gang.

Yes, i think maybe its the royal family (who are really Evil Aliens). Or maybe those black helicopters I've heard so much about. I know this to be the case as I've read Wikipedia with my own eyes.

Lets be honest, magazine ads have gone to the internet. The internet has eaten so many industries, music, newspapers, magazines, currently eating movies. Magazines don't have a clue. Why pay 2.60 for autocar or even more for the others when they give it away on the net every wednesday?

which means what exactly? strangely its been proved time and again that a lot of people without a pressing need to sell will wait and wait, then remove the house from the market rather than accept less than what they think the house is worth. odd but true. forced and distress sales different, obviously. rightmove? funnily enough i think findaproperty has more better listings for london boroughs. we could be getting a series of mini-cycles: houses go down in price => vendors remove houses from market => shortgage occurs => house prices go up a tad, more sellers come out, back to beginning of cycle.. sort of found this out 2009, think we're at start of cycle again now. er... i think this may be called "supply and demand"

thing is you may have missed the opportunity. i bought in oct 09 a repo flat in london which needed refurb. It sold after 6 weeks on market for 74% of the 2007 price. In this case I'm not sure the 2007 price was "honest", I'm suspecting cashbacks or some such chicanery. So I'd say a "selling" price is around three quarters of the 2007 high water mark. problem is that all happened in snowy jan\feb - my estate agent says its a bit quiet right now, and so do others i've spoken too. i reckon the bears will have the day at least until the election. ps its much much slower to shift high cost properties than cheapo flats i deal with.

That "threat" to sterling has been debunked a bit. It appears it was incorrectly attributed to Jim Rogers but was another of these characters that run symposiums and forums etc. It sounds apocalyptic enough but they may just have been promoting their shares dog and pony show. Interest rates? Yes they're historically low and likely to be til September. After that they may be historically low plus 1 or 2 %. If the poo really hits the fan then by mid 2011 we may be looking at 4 or 5%. If the poo keeps coming by end 2011 we'll be at 6 or 7%. Base Rate. Mortgages that currently have massive margins ie charge 5.5% now will be hugely unpopular charging 8 or 9%. The banks will absorb some margin like they played it out now. Some, not all! Discounted fixed rates will be hugely popular again. (who buys 'em now?). Whilst we remember the 15% mortgages (valid for about 3 months I think...) it just wouldn't happen today. Politically unacceptable, end of story. Rates will max out at 8% or so. All this absolute tosh about "sterling crisis". My bet is the (any) government is pretty sanguine about a devaluation. More work for the boys in Nissan at Sunderland, more British manufacturing off its knees. OK so imported runner beans from Kenya will cost more, but then tough. More money for british farmers!! It may happen that dumb simplistic mercantilist economics may be just what the UK needs. The government (whatever colour) can wring its hands in public, giggle like a schoolgirl in private. Remember old normie lamont? he of the woman in his basement, unexplained black eye, etcetc "Singing in the bath" on "black" Wednesday that turned out to be gold lined wednesday. If you don't remember you're too young to be buying a house. Haven't you got homework to do?