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Posts posted by VeryMeanReversion

  1. On 02/06/2017 at 7:55 PM, WinstonSmith said:

    I've been to a car dealership today to sell him some oak frames and the owner (local gangster) must have two million quids worth of 2-3 year old ex PCP Audi's, mercs, range rovers, jags on the forecourt. 

    The people looking at the cars weren't exactly wealthy looking so I asked him how they could afford them:

    "They can't. It's all on finance. Ive got families on benefits driving range rovers. F#cking idiots".

    It felt like the stripper scene from The Big Short.

    This will not end well.


    Interesting anecdote. It reminds me that we are all competing for resources but many people will take on any amount of debt for a house or car without considering the risks/consequences. Their behaviour is only limited by available credit.   Many people are simply incapable of understanding those consequences and may eventually be ruined by it.   Even if there were minimum maths and legal qualifications to enter into debt-contracts, I don't see how this can be avoided.

    I don't even try to compete in the new car PCP competition.  My daily driver is a 170K mile worthless but reliable VW that I've had since new. Unexpectedly, the older and crappier it gets, the more I seem to enjoy owning it.  I have a couple of zero-depreciation sports cars in storage but I seem to be using them less and less.






  2. UK-house-price-chart-2016-11.jpg


    I like these heat maps to check whether I'm crazy or if its just everybody else.  This one came from the excellent monevator site. (http://monevator.com/london-property-biggest-bubble-ever/)

    I bought in '97 (dark green), sold end 2003 (dark orange), bought end 2010 (yellow).  At the moment, my mortgage rate is well below CPI/RPI.  I consider that as crazy, basically, someone is lending my money and I will effectively give them back less than they lent me.   When that situation reverses, a real 30-50% drop in house prices looks likely in my opinion.




  3. On 28/05/2017 at 1:59 PM, honkydonkey said:

    Where's the fight in you all? I've just bought a campervan to live in full time. I'm not working to pay rent and commute costs, that's just crazy. You barely need any money when you remove housing from your bills.

    Please start a thread on this and let us updated with how you get on.  I'm always interested in ways to beat the system.

  4. 15 hours ago, Kurt Barlow said:

    I know someone with an I/O mortgage who is mid 40's and on a salary not far off 100K. He is putting 40K into his pension for which he effectively gets 40% tax relief. He occasionally pays off a few thousand off the mortgage but estimates the 25% of the pension he can take as a tax free lump sum will more than cover the outstanding sum. He said with 40% tax relief upfront and mortage rates <2.5% the pension option is a no brainer.

    Tax relief is better than 40% if you use salary sacrifice and get the employer NI saving as well.  If you receive child benefit for a couple of kids in the above situation, your marginal rate is around ~65%.

    I use a similar approach as that person.  My SIPP contributions mean the tax-free lump sum can clear the mortgage. I have enough in there now to clear it but I still have to wait ~7 years left to get my grubby hands on it.  So I could go IO now and have the repayment funds ready in advance but I do a  repayment anyway as I don't believe it is a no-brainer to rely on the lump sum due to changing rules.

    With a 65% marginal tax rate, each £1 saved produces ~£3 in SIPP which with a little bit of real return produces say £4 (e.g. my SIPP went up by over 30% in the last 18 months, lucky/unusual as that is).  Take out 25% tax-free (£1) to clear the mortgage at age 55 and have £3 left over.

    Net result is a pension worth 3x the mortgage at a net cost of £0.

    I wonder how long these rules will last....

  5. On 03/05/2017 at 8:16 AM, Democorruptcy said:

    Ask for planning permission to build something to be used to store fruit, nuts, tools etc. ? Or maybe you are worried that would draw attention.

    This is the best idea. Inspectors don't come round unless tipped off so be nice to your neighbours.

    Some alternatives.

    1. Get some cows, build feed-storage barns. Eat cows, live in barn.

    2. Get some horses, build stables, live in it. 

    3. Get large caravan for "temporary workers". Live in it.  Insulate well.

    I have neighbours doing all of these approaches. Hidden caravans is the favourite. Lots of screening from the road/paths will be essential to stop people nosing around.

    Ideally, start with a legal structure than change how you use it.  The worst they can they do is insist on it returning to its original (legal) use. 

    I don't remember the exact rule but if you have enough acres (17?) you can build whatever you like for agricultural purposes.

    If you have any existing farm buildings then there was a recent change on permitted development that allows you do convert one into a dwelling. 


  6. I've been watching this, some observations.


    1. "Debt-free" meme. Don't be a mortgage/rent slave.  

    2. Use of parents land, reasonable chance of getting planning permission for this,

    3. Claim use as a "temporary building" and live in it for many years anyway

        Personally, I love a planning loophole and have made use of some but this one won't work as far as I can see.

    4. Use of a mobile structure - my neighbour just got caught for a "moveable" extension. Just demolished it, must have lost £50K + legals.

    5. Live on a bus/trailer. Never seems to look that suitable for all-year round living.


    Note that Beeney herself bought a listed mansion in 2001 and modified it without permission, also appears to have changed it use without permission.

  7. +2% but have been offered +11% by my current employer and +25% by a competitor.  Turned them both down to avoid 65% effective marginal tax rates on my PAYE income.

    Instead, I'm getting my current employer to start an EMI options scheme which could pay out nearly tax-free (<10%).  Then again, it could pay out nothing at all.  I'm motivated to take a risk where I keep the reward.  I'm not motivated to do anything taxed at 65%, especially when commute costs are paid out of net income.


    Fungus is playing the game that the government/banks have set up for him.  He got in early and went large.

    1. Unlimited property hoarding using borrowed money

    2. Assured Shorthold Tenancy. i.e. tenants with nothing to lose can take 12 months to get evicted

    If I was a landlord, I would ensure the tenant could always pay. If not, make sure a guarantor could.

    Compared to a banker, he's a big softie.  The RBS business abuse stories recently make Fungus look like a beginner.

    Now that '1' is being curtailed by the new mortgage rules, I hope his time is up.  The continual delays to selling his empire look like holding out for best price when the tide is against him.  With the interest deduction changes, I hope he loses millions as he waits for his asking price.


  9. On 27/04/2017 at 7:01 PM, ccc said:

    A good non managerial IT guy in jpm will be on £100-200k !! No chance. 

    Certain day rate contractors of course. But that's not a job and there is no such thing as a salary.


    A relative is an IT project manager (not department manager) at one of the London investment banks, previously been at Barclays and JPM doing similar work.

    He's on well over £100K, in his mid 30's.   His contractors are £700-1000 per day.  

    He works on IT projects where they will throw hundreds of people at it, lots on £100K/yr plus the even more expensive contractors.  Contractors at HSBC are limited to 2 yrs max but there are plenty of ways around it.   His current project comes to an end in November and they need to find something for 2000 people to do!!

    I heard so many stories of the badly organised projects and inefficiencies, there is so many £millions being wasted, especially keeping obsolete old systems going. 

    No-one is interested is sorting it out, they all want the gravy train to keep going at supersonic speed.

    The downside (there's always one) is the boredom/futility of the job and the effect it is having on his health.



  10. http://www.dailymail.co.uk/news/article-4485336/Couple-claimed-extension-house-CARAVAN.htm


    I've posted about my neighbour a few times on here but he has finally been caught.

    The plot is 9 acres, was bought for £552K around 6 years ago. I offered £325K :)

    On picture 5, you can see the top of another building. It has permission for being a cow-shed but it has two storeys and I've never seen the cows climb up to the top floor. The parish council keep monitoring it and as soon as he moves into it, will get another enforcement order against him.  I'd guess this caravan case has taken around four years to resolve since the enforcement notice was made.

    There are more (real) caravans hidden out the back which seem to be permanently occupied. I've been told the owner has several properties in Cambridge, including some HMO's.

    It looks like he has now modified the "caravan extension" to be compliant with Class E permitted development, that's what I had to do with mine to avoid the nightmare of South Cambs planning.  I fought for over two years before finding enough legal loopholes to bypass the planners (I prefer to use lawful development certificates now)

    He has another building on the go but I've heard he was going to build it 7m high but the planners said a maximum of 4m so that has also stalled.

    With a bit of sense, the owners could have had a fanastic plot but has ended up with a disaster.

    His neighbour applied for a nice 4000sqft house, only managed to get permission because South Cambs were too busy so it went to East Cambs for approval "Nice house, get on with it".  Even then, they build a supposed horse trailer barn and that seems to have turn into a ~2000sqft house.

    The article says " 'We always try and work with anyone looking to develop their home or business and even offer some free advice to get them on the right track."

    But I found their free advice simply reduced to "use our paid advice service", which basically says "no, no, no".

    Did I mention that I hate South Cambs planners!!!!




  11. 18 minutes ago, dugsbody said:

    Would you mind sharing the mechanism you bought through?

    It's an ETC run by JPMorgan, 100% physically backed 


    Ongoing charge 0.39%.

    The total platform charge for the investments I use is capped at £200 a year, no matter how much you have in there.  (I don't use units trusts which incur an additional 0.45% charge)


  12. I've finally bought some PMs for the first time as an investment.  I went for £10K of platinum held in a SIPP after I noticed the price dipped around 5% this week.  I'll buy more if it goes down further up to a max of 15% of SIPP.  Maybe everyone expects catalytic converter demand to dive in an all-electric car world.

    I've grown to hate cash.  They just keep creating more and more of it out of nothing. I'll do P2P with the last of my cash when the SIPP supports it (hopefully this year).   I'm ~70% equities now and the divi's are spinning off £1k/month.

    I actually spent some money on myself this year, bought WICAO's book a few weeks ago.  My extravagance knows no bounds :)

  13. 36 minutes ago, GreenDevil said:

    700ks for a terrace in Northampton? WTF?

    Olney is a nice place to live, short commute to Milton Keynes and far enough away from Northampton.

    Even then, that particular house looks at least 2x overpriced. I sold a very nice 4-bed detached for £325K in Olney (for probate, not mine) in ~2009.

  14. On 30/03/2017 at 9:56 AM, Sancho Panza said:


    He warned agents never to leave viewers unattended, and to be especially vigilant on open days. He also advised using Google to search individuals early on in the sales and lettings process; and to put basic controls in place, such as regular password updates, to try and prevent cyber crime.



    When I was selling my Uncles house for probate, the car keys were kept in a desk in the office.

    The agent must have left a viewer unattended as those key went missing and the car was stolen. The house was locked up at all other times and there were no signs of forced entry.

     It did me a favour though as the car lease had a while to run and the insurance paid out for the subsequent trashing of the car, a rather nice BMW 6 series.

  15. On 30/04/2017 at 6:39 PM, keeprenting said:

    What should people who STR do with the money? Does anyone have ideas/ what have people actually done with it?

    I STR'd from 2003 to 20010. The cash went into building societies and NS&I paying ~3-4%, more than enough to cover the rent.

    If I had to STR now, I would struggle to work out what to do.




  16. 2 hours ago, mat109 said:


    87% tax (4 kids) or 77% (2 kids)!

    Why bother making the jump between 50 and 60k at all?

    Marginal taxation, my favourite subject (I'm not very popular at dinner parties).  Glad to see other people working this out.

    I decided to stick at £49,999 a few years ago and salary sacrifice the rest into SIPP to avoid those marginal rates.  I'm getting interest from companies offering nearly twice that but all it will do for me is either :

    - Hit the annual pension allowance (£40K)
    - Hit the the lifetime pension allowance (eventually)
    - Bring forward retirement (but can't get the money any earlier than 55)

    I'll try and sort out apprenticeships for my kids, companies can pay for the degree as a business expense. Learning from home and on the job seems far more efficient.

    My sister in law (mid-50's) has just finished a masters in Drama and milked the loans/benefits system for all its worth. Not a penny will ever be paid back.


  17. On 21/03/2017 at 9:18 AM, HairyOb1 said:

     If you thinkon £40k you can save between 13-23k, then tell me how and I'll be all over it.

    The Lithuanian workers at the farm next to me live in caravans. Their children sometimes live on site.   No rent, no council tax but entitled to tax credits and child benefit.

    Easy enough to get an effective gross income > £40K by claiming to be a single parent on minimum wage with three kids (whether in the UK or not).  A net income of £30,690 with three kids and very little housing/tax costs should make saving over £13k easy.



  18. 2 hours ago, wsn03 said:

    When people start thinking like that there's something very wrong indeed.

    I was planning something like this when I bought a fixer-upper in 2010 (youngest child was only 3 at the time).  With the extensions I've done,  I can now easily split into two flats of ~1150 sqft each.  An outbuilding can be used for a 1200sqft barn-conversion.

    So me and the Mrs in the downstairs half, the kids can have their own space each. We all get more space than the average new house.

    That's me sorted for old age and the kids won't have to pay a landlord. They can save up and move out when they want.


  19. 1 hour ago, HairyOb1 said:

    It isn't, sorry, but it isn't. Not unless you are a one man band Ltd.

    Using salary sacrifice, my employer hands over "their" NI contributions into my SIPP.  It's effectively the same as income tax or employee NI.

    For workers, NI is just being used to pretend income tax is lower than it really is. The following graph is now out of date but it is clear what they are doing.

    Pensioners are the ones that benefit from this shift.  Hence the reasons why I dump everything I can into SIPP.  May as well become a part-timer and/or pensioner as quickly as possible to avoid the high marginal tax rates.





  20. I bought in 2010, still have it now.

    1. The flat roof leaked in the first winter, since replaced by a proper extension

    2. Boiler went after two years, cost around £3500 to sort (external oil burner now)

    3. Neighbours good

    4. Getting planning was a nightmare, resorted to bending permitted development rules

    5. I like lots of rooms. Latest one is a 8.5m x 6m triple aspect. All rooms get used every day.

    6. I like a gardening (big garden means room for more permitted development in future)

  21. On 04/03/2017 at 7:04 AM, Phil321 said:

    But my instinct was never to evict. The tenants kids go to school with my grandkids. They were married in the home, have had kids there.....its their home now. This is not some act of charity on my part, these guys have struggled and in the main paid when due. It is fair they benefit from security and I am paid handsomely for the investment. 

    If houses prices fall 1% mom for an extended period of time, I wonder if your view that it is "their home" will change.

    When my Grandmother died, my Uncle inherited the bungalow then rented it out to other relative. He was full of the "good tenants, giving them cheap rent as they are family and nice people" story as he paid out to have it refurbished.  I witnessed the change over the next few years into "they're always moaning tenant scum" then when he needed the money, sold their "home".

    I witnessed it myself when I rented in 1997 and 2003-2010.  I looked after the properties but any maintenance required was always considered by the landlord as my fault. The landlords really do seem to act as "lord" of their property and enjoy having control over other people.  I think this is a strong motivator for the BTL'rs which is little discussed on here.



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