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MrMonkey

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Everything posted by MrMonkey

  1. I caught the BBC's summary of the newspaper front pages last night. Despite the news about snowfall and Brexit dominating the headlines, the paper reviewers addressed this headline first. Their insight? We always see drops in December. A small drop in asking prices and the Government's stamp duty exemption make this a great time for FTBs. Expect more mad gainz soon! We'll see.
  2. Given the speculation about a deterioration in public finances, I doubt that the Chancellor is going to be able to backtrack on any of his current tax plans. Especially considering that landlords are one of the easiest sources of tax revenue, with high-value assets which are made of bricks and can be seen on Google Maps. It is also one of the few government policies which is popular with younger voters. Of course, we should not discount the possibility that the Government will do something short sighted to try to kick start the housing market yet again.
  3. Disgusting. These people are victims of a landlord willing to trade people's basic rights for profit. I know that migrants in cramped accommodation get little sympathy with many, but they are the oppressed in these situations. The media has, for years, informed us that migrants are the cause of social problems, whereas in reality they are the victims of exploitation. Landlords who treat people in this way deserve everything which the legal system can throw at them.
  4. From the BBC article: Hopefully when the less professional landlords sell up then we will have more of a 'functioning private rented sector'. I look forward to seeing dilapidated HMOs being put on the market with the same asking price of well maintained three bedroom family homes. It should be a bit of a wake up call to many landlords that their 'pension' is not as liquid or valuable as they have convinced themselves.
  5. If Governments could control house price declines then there would never have been a house price crash in history. For the last decade the Government has been spinning a lot of plates to keep prices up. Sure, they can keep three or four plates going at once. Maybe even half a dozen for a short time. But it will come to a point where a few pages start crashing. You can not spin plates forever. Either you choose to stop or you run out of plates. The Government may be able to keep a loud on things for a while. But when things get bad (good) they will have as much power over the housing market as King Canute did over the sea.
  6. Today's figures are just a positive headline, with the downwards 'correction' a short while later to go unreported.
  7. Maybe not a direct financial benefit. But if you get sick and need a doctor, then you want the doctor who was the smartest kid in his class. Not the one wealthy enough to study a medicine degree. That is when the rest of society benefits from free university education.
  8. In a bubble, nobody thinks they will be unable to get out in time. The bullish ones will think we are seeing a small downward blip, other people are simply following the herd. By the time those in the middle and back of the herd realise what is happening, it will be too late to get out.
  9. Then you pay the tax. It may sound harsh, but if you can afford to run two households for one family then you should be able to pay for the social impact that this creates.
  10. EAs should be welcoming this report. It should back up what they have seen over the last few months - that owners need to be more conservative with their price if they want to sell. Rather than blaming the EA if they do not find a buyer within a week willing to pay 30% more than last year's purchase price of a similar property. The smart EAs will be telling sellers to go a bit low today (before the herd realises that prices are falling) rather than having to go even lower in six months time. They get paid commission on sales, and there is no commission if the price is higher than a buyer is willing to pay.
  11. An aging population means that fewer people are dying young, which means more people around at any one time. Population change involves two stats, population additions and population subtractions. If the number of people being taken out of the population calculation (through deaths and emigration) is lower then the additions (through births and immigration) then this will have a net growth effect. Basically, all the people who used to die at 70 and are now living to 80 are adding to the population figures for an additional ten years.
  12. Anyone who is using a 'leggings agency' to manage their property is frankly asking for trouble.
  13. If I go to a primitive society and claim that I can make the crops grow, and make a big ceremony out of my rituals, then I would be worshipped as a God if the harvest was large. Of course, when there is a drought later on I will be sacrificed by the angry people who see me as the problem, rather than the chancer that I was.
  14. And every time these families did any work to modernise their property, the bank takes 75% of the increase in the value. An extension adding £20k to the value? That will be £15k for the bank. A new kitchen increasing the value by £10k? The bank will pocket £7.5k of that, thank you very much. These deals, with the benefit of hindsight, were ridiculously poor decisions by the homeowners. Not only did they guarantee a nice windfall for the lender (even the most ardent pessimists would expect house prices to rise over 20+ years), but they ensured that they pocket 75% of any investment by the homeowner. The only victims in this situation are the people in society who were priced out of the market by people making these poor financial plans. Unless these people were miss sold their mortgages (and nobody seems to be suggesting they were lied to) then it is time to pay the bank their share when the property is sold or changes ownership.
  15. Not wishing to shoot the messenger, but I wonder how people sleep at night if they see a potential economic collapse as an opportunity to profit from the desperate. Weak income growth and rising unemployment would see the worst off in society hit the hardest, not the wealthier middle classes. I know that we all want to see housing costs fall, which would likely cause hardship for some in society. But I do not think that anyone on these forums relishes the social consequences of an economic downturn so much as seeing the rebalancing of asset prices as a necessity to reduce the social unrest that high house prices are causing.
  16. That depends on two things: How high is the LTV of the mortgage? If it is high, then prices falling significantly may put you on a more expensive rate down the line. If low, then it is pretty meaningless unless values fall by a lot. Do you want to eventually move to a more expensive property? If so, then a drop can make it cheaper to move 'up' the ladder. A rising value is only beneficial to get on a better LTV rate when you remortgage or when you downsize or sell without needing to replace the property.
  17. From the Telegraph article: It sounds to me as though the housing market is going to get a 'turbo boost' from landlords selling. After all, I presume that they will be selling to somebody and if landlords are selling more than buying then that would represent a shift from landlords to another type of owner (presumably owner occupiers). What the RICS means is "the housing market needs props to keep values high without sales volumes collapsing". If the housing market really needs a boost, then prices need to be allowed to fall to a level which would generate more activity, just as we would be told about any other market. It is telling that, after years of high house price growth, the very notion of prices dropping back even a few percent is seen as a doomsday scenario.
  18. Rents will need to rise by over 25% for BTL landlords to break even on the changes to taxation being phased in over the next few years, surely?
  19. Don't forget the plethora of shows following the adventures of debt collectors as well!
  20. What is his rationale? Does he use the "nobody is building any more land" reasoning like we do in the UK? UK: 694 per sqm Australia: 8.2 per sqm
  21. The more inflated the bubble, the greater the pain when it bursts. The Government could have let house prices fall to a sensible level in 2010 when they came into power, and they could have blamed the Labour Government for it. But, after seven years in power, they know that they will have to take responsibility for the crash when (not if) it comes. The economic consequences, as painful as they may be, are necessary now. Just as a drug addict needs to accept the withdrawal symptoms to get the drug out of the system, the UK needs to deal with its addiction to cheap credit at unsustainably low interest rates as inflation creeps up and the US raises its rates further. The alternative is for the bubble to get even larger (even more pain later), and in the meantime the economic impacts of unaffordable housing for a second generation of people. More money spent on high rents is less money spent on goods and services, and delays the raising of a family. At some point these impacts will bring about a crash on their own, and at that point the Government will have even less control over it than it would if it facilitated a crash today.
  22. In the past, I could accept that BTL investors were (wilfully or unintentionally) ignorant of the housing crisis and their impact on it. Trying to secure financial security for themselves in a way which was unintentionally screwing over the younger generations. Sure, they should know better. But not everyone sees the same information from the same perspective. After all, over the last decade (with low interest rates) we have been told that houses are more affordable than ever. I can understand how some with less financial nous would see that as an indication that the market is functioning. But now that the Government is stating that the housing market is broken, I refuse to have any further sympathy for anyone who invests in BTL. The message is clear - BTL can only be a part of the solution if it is more heavily taxed and regulated to compensate for its impact. Anyone who gets involved with it not understanding the effect on the housing crisis can no longer hide behind their ignorance, or feign innocence if the bank or taxman comes knocking looking for their money. The White Paper does not seem to offer much new, which is not a surprise with the Government's attention elsewhere in Brussels and Washington, but it does clearly state that things are bad and provides a clear rationale for the Government to announce further regulation or taxation on the BTL sector. Landlords who do not see this only have themselves to blame.
  23. Surely this focus on rights for renters is a good thing for non-landlords. After all, more rights for tenants means less power for landlords. This can help to reduce the appeal of BTL and add to the view that this business is not the source of easy money that it has been seen as.
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