Sancho Panza

Very similar to the price action in Leicester.We rent a nice pad in a lovely area on a 3.5% gross yield.The LL is welcome to the freehold, the interest rate risk and the maintenance at that level. Leicester's boom was 97- to about august 2005 as borne out by the sales data for LE2/3/4.....The county area has gone higher but nothing like Londinium. As you say, a lot of props were used up to achieve an inflation adjusted loss for most people.

Shedlock in joyful mood a few days back https://www.themaven.net/mishtalk/economics/moving-average-bounces-getting-weaker-and-weaker-major-carnage-coming-JeyKpEdrBUKNsk1doqxJ1Q/ Moving Average Bounces Getting Weaker and Weaker: Major Carnage Coming Those 50-week exponential moving averages will break. When that happens I expect a quick plunge to the 200-week EMA. Will that be the end? If I am right, that's not even close. I expect all the gains back to 2007 to be wiped out. To visualize, we need to look at monthly EMAs. Superbear? Does this make me a superbear? Hardly. John Hussman, who does excellent technical and fundamental work is far more bearish: "I Expect the S&P 500 to Lose 2/3 of Its Value" said Hussman in January. My charts suggest about 50% except for the Nasdaq. Pension Fund Disaster The sad part of this story is that despite the biggest bull market in history, pension funds are extremely underfunded. Whether the decline is 33%, 50%, or 66%, pension funds will get crushed. Heck, given 7% per-year assumptions, even flat returns for seven years will destroy many if not most of them.'

You're right.Clear result of them winnign the case was that other BTL LL's not on lifetime trackers would get shafted.I was hoping we'd see some margin call action a la Paddles 2008 and this one might be but without mroe detail we can't be sure.

Thar she blows...... Maybe those bank capital buffers might not be so buff when the tide rolls out? So lower IR's encouraged people to borrow more.....whodda thunk it? https://wolfstreet.com/2018/05/02/wow-thats-fast-mortgage-rates-jump-to-2011-levels/ ' Wow, this was fast. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances – $453,100 or less with 20% down) jumped to 4.80% for the week ending April 27, from 4.73% in the prior week, and from 4.66% two weeks ago, the Mortgage Bankers Association reported this morning (chart via Trading Economics? At 4.80%, the average 30-year fixed rate is now equal to the highest rate since September 2013. And the last time, the rate was higher than 4.80% was in 2011 The big difference between 2010 and now, and between 2008 and now, is that home prices have skyrocketed since then in many markets – by over 50% in some markets, such as Denver, Dallas, or the five-county San Francisco Bay Area, for example, according to the Case-Shiller Home Price Index. In other markets, increases have been in the 25% to 40% range. This worked because mortgage rates zigzagged lower over those years, thus keeping mortgage payments on these higher priced homes within reach for enough people. But that ride is ending. For now, demand for mortgages continues, as homebuyers are trying to make deals before rates rise even further. The MBA’s Purchase Index, which tracks the number of mortgages taken out to purchase a home (as opposed to refis) increased 5% compared to the same week a year ago – after last week’s 11% increase. A 5% mortgage rate will trim off some homebuyers at the margin but is unlikely to derail demand at this point. The real pain for homebuyers, and the housing market, will likely start closer to 6%. While 6% is still a historically low 30-year fixed-rate, home prices are historically high, and the equation has changed. It’s unlikely to get to 6% in 2018, but next year is a candidate. In terms of rents, the housing market is veering off in all kinds of directions. In Chicago, asking rents have collapsed by 30%. In New York City, they’re swooning. But they’re soaring in Southern California. And the US average hides all the drama on the ground'

'The property is in negative equity (value £85,000, mortgage £91,000) and therefore not even close to be able to remortgage with another lender. We have tried to sell through traditional methods and also online auctions, but so far to no avail. The West Brom have said that it will soon pass over to the receiver to take the necessary action. Effectively, I’m trapped. Does anyone have any experience with this? What is their likely action? It doesn’t make any sense to try and force a sale as there won’t be enough proceeds to repay the mortgage. They won’t entertain a capital repayment method to bring the balance down. I’m concerned this will have an impact of my credit. Any help would be much appreciated. Thanks Danny' Intersting that there's no forebearance available at all.If the place is in Neg Eq whilst national HPI is at worst plateauing,then Danny massively overpaid. He doesn't say whether it's a margin call.Doesn't appear to be an IO tracker which iirc that was what the 118 case was about. happy to be corrected. Most are working off net interest margin of 1%.There's nowhere to go from there besides paying BTLers to to stay solvent. Having said that, a surveyor I know was sayting that over the last few years the bulk of the -what we would call- marginal home loans have been written by the BS's esp Nwide.

Petro Yuan is in it's infancy but still another long term pressure pushing Yuan higher vs $... Think harley's decline is more of an age thing.Apparently their biggest customer is 45+ age group. Young guns buy the decent Japanese bikes,the discerning middle aged biker probably buys BMW and the person looking to create a large hole in their pocket buys an overpriced/overhyper/over here Harley. I'm no biker though.iirc @Greg Bowman or anyone else who uses motorbike,might be able to enlightenWhen I was a kid Harley were cool.

https://www.londoncentralportfolio.com/research-media#research Worth noting that Acadata saying from the peak of £299k in Sept last year, house prices have fallen for 4 out of 5 months....to £290k. LSL release in a few days and last month had the annual growth rate at 0.7% in March but market still peaking.But they-unlike LCP who calculate two months behind-present an estimate for march http://www.acadata.co.uk/LSL Acadata E&W HPI News Release March 18.pdf @TonyJ iirc you were after regional data on another thread,LSL do publish that.

It's not input costs that are their problem https://www.marketwatch.com/story/harley-davidson-sales-decline-continues-2018-01-30 'Harley-Davidson Inc. on Tuesday reported its fourth straight year of declining sales as the Milwaukee motorcycle maker struggles to get more riders on Hogs. Harley's motorcycle-related revenue fell 6.8% in 2017 to $4.92 billion, as retail sales continued to suffer in the U.S. and around the globe.'

LSL-who also use Acadata but iirc don't include new build data- publish regional data.Acadata uses land reg sale prices so both of these indices are infinitely superior to Halifax and Nwide. LSL due out around the 12th of the month. New build trends are a marginal area of the market(like top end),hence why LCP Aca report is so interesting. I think -as you allude-HTB has drawn in the bulk of those who would be drawn by it.Other people are more circumspect,particualrly since the first HTBers have seen mortgage costs rise.

Worth noting the E&W figures have the peak average price at £298 k in Sept 17, now £290k.

https://www.londoncentralportfolio.com/research-media#research Headlines from April 2018 Report PRIME CENTRAL LONDON (PCL) TRANSACTIONS HIT ANOTHER LOW AND NEW BUILD SALES PLUMMET Following a strong January, due to some exceptionally high value sales, prices in PCL fell back by 4.6% in February. Average prices now stand at £2,165,829. Quarterly transactions dropped by 2.3% to 974. On an annual basis, transactions are down by 5.7%, now standing at just 4,176. The new build sector has suffered a 13.8% fall in transactions over the year. Quarterly transactions fell by 56%, now standing at just 88. GREATER LONDON MONTHLY PRICES DOWN AND TRANSACTIONS CONTINUE TO FALL Prices fell in Greater London by 1% month on month. The average price now stands at £625,052. Annual price growth has fallen to 6.5%, with growth in the last quarter standing at just 2%. There has also been a significant drop in quarterly sales of 10.4%, the largest fall since August 2016. Quarterly new build prices have fallen by 3.5% and represent just 15.6% of all sales, compared with a peak of almost 20%. The average new build price is now £641,711. England and Wales ENGLAND & WALES SEES FOURTH CONSECUTIVE QUARTERLY FALL IN PRICES AND TRANSACTIONS Monthly prices fell by 0.4% Quarterly price growth dropped 0.5%, the fourth consecutive fall. As a result, annual price growth is just 3.4%. Average prices now stand at £290,624. Quarterly sales fell by 15.4%, also the fourth consecutive quarterly fall. New build prices have seen a 2% decline in quarterly prices and a fall in annual sales of 1%. The average new build price is now £338,694, 15.8% higher than existing stock. ENDS

Warren Buffet has a great phrase that if 'you're willing to hold a share for ten minutes,you should be willing to hold it for ten years.' My experiences of winning and losing over 25 years have steered me toward picking an asset class/share that's undervalued and then sitting in it until it becomes a 'momo' favourite.I've always had an eye for good value but my biggest weakness over that time has been selling early in the uptick-Whitbread,Rolls Royce,Unilever.....I could go on and on and on. Many of my best winners have suffered significant pull backs after purchase.As have some of my biggest losers.The key to long term growth is to be able to read the newsflow and ascertain whether what's occurring is noise or a sign of a more fundamental change in outlook for either the share or the asset class.

https://www.ft.com/content/4d86172e-17f4-11e8-9c33-02f893d608c2 Nice read. I must admit,I've avoided small companies as finding the good ones can take a lot of time.Which is where a good tipsheet can be worth it's weight in the yellow stuff.We haven't really held small company stocks since the middle of the tech bubble. If anyone knows of one,then feel free to post a lnk. I agree completely.I've never understood this idea of rigid per centage stops. Stops encourage overtrading and as you say,re entry points are key.There are loads of shares that have gone down 20% only to then rocket back past that point.

I love that chart MP,picture paints a 1000 words .. The merger is both a symptom and a cause of price/margin deflation

That's a broad question that would involve a lot of research and time to answer properly and today I just don't have that much. I run our investments alongside my day job and I drop into my regular reads whilst I'm doing other things.Today,Im re researching silver miners.

Asda used to dominate the price sensitive end of the market,as Sidey says below,not any more. I agree Sainsbury's are halfway to Waitrose with virtually a completely different demographic.The logic is that they'll cut costs.Experience says they'll lose some of their more affluent shoppers. All in all,this will be a real positive for Aldi/Lidl,M&S and Waitrose Excellent point on the way the 'Big shop' has gone out of the window for younger people.I'd never thought of the aspect you raise-relating it to fridge size/sharing but it's makes perfect sense. The local Co ops/Sainsbury's/Tesco's are doing really well. Sainsbury's would have done better investing in an Aldi lite version on similar footprints to Aldi. You have to consider the reasons rates are rising as well and whether that makes comparison possible. If commerical rates are rising due to credit risk then that's entirely different to them rtising as a result of CB's fighting price inflation. Apples and pears etc.

I look at the above Ash and I'm surprised by the logic on Sainsburys side.I just can't see what comes with Asda besides market share that's being haemorraghed to Aldi and Lidl. Sainsbury's on the other hand appears to have a much more stable platform and stronger brand loyalty.Still bedding in Argos.Strong sales in it's local shops.......etc etc. Asda just has a large portfolio of warehouse style shops,that are aimed at the cheaper end of the market but aren't that cheap.Luckily,we sold out of Sainsbury's a while back.This will destroy the value in it imho. Quite right HarpUnless you're trading with cash,it just doesn't count. Trackers bought the sort of stability that eventually creates instability if you leave it long enough,

A stunning read.I love the guys work. Some pearls. ' Being human, many investors don't want to participate in anything until they see others doing likewise ' ' In my opinion, historic parallels are much more important than reasons. '

I'd agree that velocity is the key metric to watch.I don't see it going anywhere for a while personally,but I think it'll be the first place we'll see an inflationary uptick Stagflation looks baked in to me.Price inflation accompanied by credit deflation. Always worth noting when discussing GDP,the fact that 12% of UK GDP is imputed rents ie an equivalence measure for the benefit of owners occupying their own home-money that isn't actually spent or invested in the economy. Back in the 1960's imputed rents were 2% of GDP apparently.Ergo,a substantial chink of GDP growth in between isn't in anyway taxable

Stepping into the debate from a different angle to where DB came from.It's worth considering the role of FRB in terms of credit creation,just exactly where a loan sits on a bank balance sheet once its made and what the impact is of the bank suffering a loss on any of it's assets (because that's what a mortgage is classed as for the bank-non perfoming loan becomes a loss eventually) Falling house prices could lead to banks taking losses which leads to banks reining in both credit creation and forebearance on current loans,which in turn could force house prices down leading to banks taking losses Wiki explanation is below https://en.wikipedia.org/wiki/Fractional-reserve_banking People gloss over the role of FRB but the mechanics of credit creation and the regulation of leverage but I think they've become central to where we are given how low rates have been driven.

They're taking a punt on the US curve steepening which given how it's on the verge of inverting,probably isn't a mad punt. Not sure the sizes are that big tbh,ZH often psot about whales and without reference to average daily vol-but I'm no specialist in such markets. These days it's not so much about the rates destroying asset prices but more declines in asset prices reducing credit creation Could we have a crash without rates rising?Absolutely in my eyes.

It was @durhamborn Lavalas.

Property Industry Eye 26/4/18 'Average rents in the UK decreased for the first time since 2012 during the first quarter of 2018, the Deposit Protection Service (DPS) claims. However, the finding is out of kilter with ARLA’s latest report – see next story. The deposit protection scheme’s latest Rent Index, based on those who have deposits registered with DPS in England and Wales and the Letting Protection Service Scotland and in Northern Ireland, showed the average UK monthly rent reached £772 per month at the end of March. This was £4 or 0.54% less than the fourth quarter of 2017 and the first annual decline since the end of 2009. Only four out of 12 UK regions experienced growth in average rents, led by a 3.62% rise in Wales to £594 per month and 1.01% in the South East to £879. Northern Ireland experienced the biggest percentage decrease of any UK region, down 3.14% to £527, replacing the North East as the most affordable UK region in which to rent property. London was the most expensive region but saw monthly rents drop 1.39% annually to £1,307. Julian Foster, managing director at the DPS, said: “The decrease in average rents across the UK could represent the beginning of a substantial development for the housing sector and a significant indicator for understanding the wider economy. “Rent growth began to slow in summer 2016, and the slip into negative figures suggests that there is a genuine long-term issue affecting the private rented sector. “The UK-wide decrease implies that there is more at play than a short-term or local correction to excessive prices.” The report also found annual rent growth in Scotland increased for the first time in three years, being £3 or 0.49% higher in the first quarter 2018 than a year before at £634. The Scottish figures are just below those reported by lettings agent portal Citylets in Scotland for the first quarter of 2018. Citylets reported rents increased 1.6% annually in the first three months of 2018 to £780 a month. Thomas Ashdown, managing director at Citylets, said: “Supply in Scotland’s largest cities is pushing rental prices steadily upwards. “Whilst the rate of annual growth has slowed in both Edinburgh and Glasgow, they have been rising every quarter for the past seven years in Glasgow and eight in Edinburgh. “2018 will be a telling year with tax changes and the increasing popularity of short term holiday sites likely to put further pressure on supply.”'

Let's hope so... http://www.propertyindustryeye.com/tech-savvy-generation-of-renters-pose-greatest-threat-to-future-of-blinkered-high-street-agents-claim/ 'Traditional letting agents could be on their way out – it has been claimed. City AM’s Katherine Denham says the danger posed to them is not going to be regulation but the tech-savvy younger generation of renters. She envisages a future where there will be agents charging the wealthiest tenants a high fee in return for an excellent service. “At the same the number of online agents like Purplebricks will rise to reach the mass market,” she says. Denham says that the lettings industry seems “blinkered to the dangers, underestimating the threat posed by thriving online businesses, and millions of tenants who are fed up with paying over the odds to get little in return. “There’s a generation of renters who may not be able to afford to buy a house, but who are not prepared to put up with unprofessional letting agents forever. “And while some agents are upping their game in response, many aren’t doing themselves any favours and show little interest in trying to win over this generation. “Really, it’s not the imminent rules that letting agents should be panicking about. It’s tech-driven millenials who could well be the death of this industry.” Denham, who says some letting agents are “reliably awful”, says the sector is “oblivious to the peril it is facing”. She adds that it has made little effort to make amends over the past decade: “The bad reputation is still exacerbated by hefty letting fees that are hidden within complicated structures. “Property agents have a reputation for milking people out of money . . . it’s an experience that anecdotally seems widespread.” Denham believes that banning tenant fees, and forcing agents to sit exams are welcome. She says the changes mimic those which have reformed the financial advice sector. The Retail Distribution Review sparked a decline in the number of financial advisers, and allowed online advice services to plug the gap being cheaper and faster. “You can see the property agent industry heading in the same direction,” she says.'

Thanks for posting.ZH is great but you have pick out the good stuff from the hyperbole. History repeats etc. On another matter,US economic bullsn bears... https://www.advisorperspectives.com/dshort/updates/2018/04/15/next-recession-pundit-prognoses