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austrianec

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  1. The LSL method for calculating the London average looks to have averaged the change in price in every borough. This magnifies the effective weight of the priciest boroughs; and with Kensington and Chelsea/City of London rising 11.5/20.9%, you get a nonsense figure out. It's even worse than that because they also have lower transaction levels than some of the other boroughs (no surprise because they're the biggest outliers) If you take the Land Registry figures for transaction by borough (it's similar data to the data they've used) and work out the average change per house sold, the figure you get it -2.3%, which makes a lot more sense sitting alongside their figures for the South East/East of England. Also, 21 of 33 boroughs have seen falls...London isn't going to be rising faster than the rest of the country!
  2. In the example, the rent for 2 years will be over £25,000 (assuming CPI over 1%) so, on a £250k house, that's a 5% rental yield which I'd say is very high for non-housing benefit rentals High enough that it isn't overly generous to 'give' 5% back after 2 years (leaving aside the fact your house is probably over-priced by people using HTB round the corner) The only thing I wonder though is whether independent valuations would factor in any damage done to the property; if so, that could be one way of securing a bigger discount. As the builder has already established the couple in question don't have any savings, they wouldn't have much recourse against a 'bad tenant'. If there is a garden, it certainly wouldn't be worth mowing the lawn!
  3. I notice Taylor Wimpey are offering would-be buyers with no deposit, the following... https://www.taylorwimpey.co.uk/buying-with-us/special-offers/springboard ...it seems as though they gift the home-buyer a 5% deposit after 2 years 'renting' the property, enabling the buyer to buy the property I imagine the process is legitimate (and not mortgage fraud) because Taylor Wimpey aren't a normal 'landlord' and can claim they're effectively giving you the house 'for free' for 2 years and keeping the money in trust for you as a buyer (just like people living rent-free with their parents). Within 2 years, the prospective buyer will have paid 5% of the house's value in 'rent' and it's perfectly possible this goes straight into an escrow account to which a mortgage from the bank can be added should the purchaser sign on the dotted line after a couple of years. It's certainly intended to allow buyers to buy with no deposit as it appears thus in the corporate presentation: Employment Mr Smith – Trainee doctor current salary - £30,000 Mrs Smith – Legal graduate - £25,000 Financial situation The customers have no savings Customers renting a property for £1,025 Monthly income Mr - £1,750 Monthly income Mrs - £1,500 Other outgoings - £1,600 Surplus income - £625 Income required to purchase a £250k property with a 95% mortgage is £55,000 (jointly) Note the 4.5x salary mortgage. On the plus side, it does say it can't be used in conjunction with Help-to-Buy...
  4. I believe the 26% is of all house purchases (298,000 is 26% of about 1.15 million which sounds like the annual sales volume for all houses, not just FTB). So, assuming that at these bubble prices 'second-steppers' are generally using equity to trade up (if they're moving at all), that's going to be the majority of FTB
  5. I found this yesterday... https://www.zoopla.co.uk/for-sale/details/45809148 (nr Cambridge) Price reduced 4 times in just over 6 months. Was £475k...now £325k...presumably the same agent has talked them down the whole way...
  6. If most FTB-ers were buying new homes in which the sold price were being artificially inflated like this AND most other house sales are in chains of OOs (trade-ins effectively), that would explain how none of the house price indexes seem to bear any resemblance to what people can afford. Maybe the strength of HtB in inflating house prices is that it has deliberately pushed FTB-ers to new homes, removing the awkward problem of having to write down the amount of money they can actually borrow. I was assuming the current house price bubble was based on the same frauds as the first e.g. self-cert...maybe it doesn't have to be...
  7. Is this to do with the new Basel regulations? Even based on 2010 house prices, this wonderful chart suggests rental yields were generally around 5%... https://www.lendinvest.com/buy-to-let-index/rental-yield/. Bizarrely they map that against current rental prices?! ...so you can only let 70% LTV to BTL "investors" at 2010 prices (I haven't checked the maths on the 6.9% but it sounds plausible). In reality, prices have increased since by 15-20% according to the Land Registry (nationwide). In London, they're up 60%...so if London house prices fall 25%, landlords will still have to stump up 40% deposits To me, that sounds like a huge deal and kills BTL...but it was going to die when the greatest fool found himself unable to cover the extra 3% stamp duty in April...
  8. I got a letter from my bank today stating changes to foreign currency business bank accounts. They are changing the terms and conditions to allow them to charge negative interest rates in the event that central banks pay a negative rate on deposits First they came for the investment banks yet it mattered not because everyone thought they were a load of t*ssers Then they came for the businesses yet it mattered not because a negative interest rate would be cheaper than the security required to protect that much cash under the mattress Then they came for the individuals yet it mattered not because they'd spent everything they had buying over-priced houses
  9. To be fair, I've just looked up the full income tables by decile here... http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-337425 ...and note that 20% of employees in South Cambridgeshire are on £51,000/year gross (compared with £41,000/year in Cambridge)...because the Science Park isn't in Cambridge. The statistical confidence is very low on those 2014 figures...but they are consistent with the 2013 figures. As for £100,000, the figures suggest that 150,000 of those earning over £100,000 work in Inner London...and that that's around half of such people in the country. Obviously there will be more in Cambridge than most places...perhaps 3% of workers? Based on those stats, I guess the £45-60k estimate is right for a typical employee with 10-15 years experience...and according to a couple of FOI requests, the 4,000 who may be on > £100k in Cambridge/South Cambs don't work for the council. So maybe you're right...I only get anecdotes from peers as am self-employed...
  10. https://www.nomisweb.co.uk/reports/lmp/wpca/1929379928/report.aspx?town=cambridge £569.40 median full-time earnings (gross) for those living in Cambridge £574.90 for those working in Cambridge (possibly more relevant). Men earn £120/week than women which (£627.10), without wishing to gender stereotype, will be the tech premium In 'Employment by Occupation', there are 64,300 individuals listed. Just over 10% are "managers, directors and senior officials"...our median male salary will be somewhere in the professional class below. So your 10-15 years experience individual is probably towards the top end of that bracket...I can't see they'd be on much more than a 30% premium over others who are solidly in that category...£40-45k then? I know a couple who bought a £400k 2-bedroom flat in some Soviet style block near the hospital in the Newspeak-named "Trumpington Meadows" (there was a meadow here once upon a time). Two salaries...both in their late 20s so "ahead" of the competition...big deposit...their whole place flooded in a storm recently (like a real meadow?) The thing about bubbles is that they don't make sense.
  11. There are two factors here: 1. Rental yields are going to remain similar across all parts of the country. As there is more employment spending in London/Cambridge, prices continue to rise to give the 4% rental yield or whatever makes them equal to the rest of the country. Rental yields are ridiculously low because we're in a bubble everywhere but... 2. Because actual prices rise a little, people want to cling onto their "asset", reducing supply. Now since the booms in London/Cambridge are related to more transitory populations than elsewhere, there are more people looking to move (be that buying or renting) than in other cities...so the reduced supply gets drip fed higher up the income curve than it would elsewhere That's my interpretation.
  12. This reminds me of an analysis I did last year...based on payments of LHA, I calculated 79% of all renters in Blackpool would be claiming housing benefit. It is the highest of any district (Tendring with 71% came next). Even though LHA rates are no longer linked to the median private rental value in an area, it did rather make a mockery of councils' efforts to set a meaningful LHA rate. Disappointingly for someone renting in Cambridge, I found our market wasn't distorted in the same way with only 10% of rents being paid by LHA (just above the City of London at 6%)...although I'm sure a vast amount of private rent is supported by student loans. Scanning my list, it does appear that none of top districts have large student populations
  13. I found it so unbelievable I had to look up the methodology. Based on the fact I'd heard a similar figure gets you in the top 1%. The figures aren't real. There aren't 5% of two adult/two child households on more than £151.4k/year. What it means is that "to have the standard of living in the top 5%, the household would have to earn that much money". HMRC assume one adult needs 2/3 the money of two adults...and that those two adults then need an extra 40% of their income for each child (page 18 here... http://www.ons.gov.uk/ons/dcp171766_409063.pdf).You'll notice all the two adult/two child figures are exactly 1.8/0.67x the amount of the single adult households. Only 30% of households have dependent children so we can suppose most households living a top 5% lifestyle don't earn that much money. Which makes sense. Most will be in the one adult/two adult categories...ergo probably only 5% of households actually earn £90k/year gross. So even if the average house contains 1.5 households (think shared housing), £90k/year should be able to comfortably afford something in the top 10% most expensive houses in the country. According to the Land Registry, 25% of houses sold for more than £300k last year...but, post MMR, they should only be accessible to the top 5%...I know it's a slow market...but surely that provides further evidence it's being propped up by BTL?
  14. Actually, this detail amused me and I don't know why I left it out: As well as the basic facts of the case, there is written evidence that you proposed protecting the deposit with MyDeposits, and that I questioned the economic sense of paying the insurance premium on the basis of a £24 fee. You wrote back on the 28th August 2013 stating: “As a landlord I have two governments (sic) schemes, I always and will continue to use the insurance scheme. It is approved I have used it since its introduction, there is charge of £80 which I opt to pay for. As soon as you sign the contract I will register the deposit and send you the scheme number.”
  15. I had to have this argument with a landlord. He originally threatened me with small claims due to damage exceeding the deposit (claimed £2.5k for things like the toilet that broke at the end of the tenancy). Interestingly it is no longer ok to simply repay a deposit after the event; I guess that was changed in 2011. Also, you can claim 3x deposit penalty for every individual tenancy over the 3 years (it may just be the initial fixed term, and a second periodic tenancy). Put together, it can sound pretty scary to a landlord. Mine offered me all but £300 of my deposit back. I said "no" and he eventually gave back the full £1,575 having wasted money on a solicitor. Which was ok because my dog had done a little bit of damage and, if you go through court, they can counter-claim for that. I used the following (names/specifics removed)... Having sought legal advice, it is my intention to take civil action against you for two offences under Section 214 of the Housing Act 2004, with respect to the amendments made under Section 184 of the Localism Act 2011. More specifically, the offences in question were: 1. Failure to protect a £1,575 deposit within the prescribed 30 day period for the Assured Shorthold Tenancy on XXX that ran for a 12 month period from 10th August 2013 2. Failure to provide the prescribed information for the Periodic Tenancy that ran from the 10th August 2014 until ending by mutual consent on the 19th September 2014 It should be noted that under a 2013 Court of Appeal case between Superstrike and Rodrigues, it has been determined that a statutory periodic tenancy constitutes a new tenancy. Even in the case of a deposit subject to on-going protection, it has been found that the prescribed information has to be served again (Gardner vs McCusker, Birmingham County Court) and the Landlord was fined two times the deposit amount. In our case, as the initial deposit was not protected until the 12th August 2014, after the Periodic Tenancy began, and the prescribed information has still not been served at the time of writing, there is a very strong case for a higher penalty in relation to the second offence. Although ignorance is not a defence, the correspondence between us suggests this was a wilful failure to comply with tenancy legislation. If found guilty of the above offences, the “court must also order the landlord to pay to the applicant not less than the amount of the deposit and not more than three times the amount of the deposit”. The maximum penalty that could be awarded against you is £9,450 and, if forced to go to court, I will be pursuing a claim of at least £6,300 + costs. The exact amount will be subject to further legal advice. In order to save us both the hassle of going through the court process, I am prepared to renounce all my claims against you if you: 1. Renounce all claim for any moneys owed with respect to my tenure at XXX 2. Return my £1,575 deposit in full 3. Pay a further £1,575 in settlement Please pay £3,150 into my account in the next 14 days or I will proceed to full legal action on the basis of this letter. Account details follow: XXX This letter before claim is in accordance with Civil Procedure Rules and if you do not wish to settle as outlined above then, as defendant, you should “give a full written response within a reasonable period, preceded, if appropriate, by a written acknowledgment of the letter before claim”, where a reasonable period would be considered to be 14 days (Pre-Action Conduct, Section 7.2, Paragraphs 1 and 2).
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