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Sprrite

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  1. I'm probably the most contrarian person right now on inflation as my view is that any inflation will likely only be temporary as price increases are mostly being driven by supply side shocks and not necessarily by demand. The effect COVID is having on the supply chain cannot be understated at all as ports and shipping are now working at a slower pace than they were pre-covid. Getting from A to B is taking much longer and this may likely continue until the end of this year in some capacity depending on how COVID plays out. Recent COVID upsurge in Guangdong, China is a good example of this which shows the unpredictability of this pandemic. The BBC had a good article on this below on the effect it will have on the supply chain until the end of 2021. bbc.co.uk/news/business-57446437 On a local UK level, demand for goods/services will increase massively once lockdown is fully lifted, but I fully expect this to be temporary and once things are back to "normal", demand will fall back to its natural equilibrium. One consequence of this pandemic may actually end up being that supply chains are more localised, and with automation, it may make more sense to produce things locally to avoid large shipping costs.
  2. I've been listening to David Lammy on LBC this morning who was talking about eviction ban and as you can probably guess there were lots of LLs moaning stating that tenants are gaming the system and choosing not to pay. I still think the LLs who have 1 or 2 properties will struggle and those with a much larger and diversified portfolio will ride this storm out. Having said that, it is getting more onerous now to rent out properties with more regulation so the days of accidental LLs may be over. It will be interesting to see what happens but I don't think it will bring overall property prices down - although I hope i'm wrong.
  3. This is not about winning/losing, it isn't a zero-sum game. This is merely a discussion like many others on this forum.
  4. In my opinion, if anything were to happen it would be based on the above 3. The first point is very topical as many of new build flats built since 2015 are not selling at the same level (unless it's SO) since the next buyer doesn't have access to the same HTB financing. I could see some form of this happening i.e. HTB only available for FTBs for properties build in the last 5 years (or something similar to this). Point 6 has been previously discussed by the Tories previously from what I remember but it does open a can of worms and stores up problems in future years. Depending on how things go electorally in the next few years, this may happen but it's the only asset that millennials have that is locked away. Point 10 is interesting. I'll probably be shot down for this but it may make sense to have a 60/70 year mortgage as with current interest rates (and factoring in any IR increases) it would be cheaper than renting. If it helps get more people on the property ladder and reduced the amount of people renting it can't be a bad thing. Another positive is that money previously going to BTLs would go into other productive parts of the economy.
  5. I guess we'll see. I know I'm contrarian on this point and I've said it before on this forum, but I still think there is a chance of a deflationary cycle happening especially once government supports ends and unemployment increases. God knows how many people have left the UK because of the pandemic and the knock-on effects of this.
  6. Well you're probably right no-one is 'forced' but I suspect a lot of LLs will want guarantors or significant rent upfront given how COVID has panned out and the difficulty of evicting tenants in the last 12 months. I have had the issue of guarantor sprung on me rather slyly by an agency a few years ago which was a big learning experience for me. It was more common than people think in pre-pandemic times. I'll see how it is later this year when I move back to London but I am very hesitant to add guarantors (even though I know they will never be needed).
  7. For London, the flat is nice and it would suit a couple who are FTBs but the biggest issue is the tenants. You'd have to be pretty brave right now to buy with a tenant in place.
  8. Also forgot to mention the Suez blockage would have had some temporary effect too.
  9. The reason some think this is temporary is because it's a supply side shock. The demand of those materials hasn't increased commensurate to the current price increases. It is taking longer for goods (building materials or otherwise) to get from A to B. Ports aren't working at optimal capacity due to COVID (new safety protocols). Furthermore, many Indians are also seamen but due to COVID, they either aren't working or some countries are refusing to let ships dock in their countries. A very good article on this from the FT below: https://www.ft.com/content/cf40d764-6ab6-4638-bea6-594cc3cd5d53 Couple this with the fact that at the beginning of an economic cycle, commodities usually always boom and we have the perfect storm. I think this is temporary as long as the world can adequately recover from COVID in the next 6-12 months and things go back to relative 'normality'.
  10. Let's run with the point about hospital staff brining COVID back to their homes - during lockdown, the worst that happens is that COVID would only spread within their homes whereas if there was no lockdown, it can easily spread to to others in the community causing an exponential rise in infections and deaths. In regards to your second point in regards to the solution - it wasn't politically feasible to infect a significant portion of the population or 'young people' as they would have inevitably spread it to the older generation. How many of those would have got Long Covid which further strains the NHS in future years? Letting people get mass infected would have just made the spreading of COVID more intense and overloaded the NHS. The very fact that the Indian variant is more infectious makes it more deadly. It's a numbers game after all and the more people you infect, the more deaths that will occur. What's going on in India is a lesson to other countries in the region and the world. Nutcases? Really? There's any things I would have liked to have done differently in the last 18 months, but ultimately lockdowns worked in the UK. They reduced infections and deaths - to argue against that is going against fact.
  11. It has flattened the curve in the UK last year and also earlier this year during periods of lockdown. Even the lite-lockdown in November reduced transmissions. If lockdowns didn't occur, we would have had a much higher death rate in the UK - it's a numbers game after all and the more people infected means the more deaths that would have taken place. Given the Indian variant is now in the UK, I can see some form of another lockdown occurring later this year (possibly around half term school holidays in October).
  12. Lockdown has helped flatten the curve in the UK and in other countries/ Hospital Transmission to the community will be negligible under lockdown - I'm not sure how this causes the dominance of a more harmful strain? If you look at India, the amount of political/religious events that took place were breeding grounds for spreading the virus 🦠 and given this there's more transmission, there's more likelihood of different and more harmful strains emerging in order to survive and thrive. We may not like it, but lockdown does seem to work to flatten the curve.
  13. I still think inflation will remain low long term. This uptick in inflation has more to do with COVID - as in Ports/Ships working at less than optimal efficiency due to social distancing / sick leave than anything else. Now granted this could continue for a while depending on how the pandemic plays out. Shipping and trade basically collapsed downwards in around March/April 2020 but has since recovered to pre-pandemic levels whilst countries are still fighting the pandemic and implementing safety protocols like social distancing. Inevitably this will have an effect on port capacity and how long things are taking to get from A to B. Interest video from the FT on this topic. Eventually this should level itself out in the future once most countries get vaccinated and things return to relative "normality". Inflation in hard assets like housing/stocks is mostly being driven by the professional class and the savings they have made in the last 12 months. So in answer to the OPs, there won't be a 'crack-up boom' since the credit is going to people who inevitably can afford repayment and may have likely made big down-payments on there property purchases.
  14. Do you have a link to that story? Or was it on LBC?
  15. I do find it interesting we are seeing articles like the above especially in places like the Times. I have seen similar stuff on the FT and Guardian recently too. AFAIK, this has not happened previously. In regards to your second point, I think looking at a home as an investment is one of the reasons we are in this mess. A house should be somewhere to live in, not a commodified asset. Having looked at your analogy though, I still think that the FTSE 100/All Share accumulation would have outperformed average house prices in the last 30 years. If you hold stocks long-term, they will always provide a decent return.
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