Wad
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Posts posted by Wad
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A landlord I recently rented from sold the place on to another investor and that investor died quite soon after so his executors then sold it on to another investor. The agent remained the same. We were just notified by letter that our landlord had changed on both occassions.
It should make no difference to you who owns the property. However, it may be the case that a potential buyer requires to have proof that you to have left the property before he can complete. The reason is that the buyer may well be buying with a mortgage and the mortgage company will not hand over the money without knowing they have good title on a property in vacant possession as security against the money they are advancing.
Disclaimer: You should not rely on this reply as legal advice as I am not a lawyer. You should check with someone legally qualified if this is a really crucial issue to you.
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Just had a thought.
What would happen if Tony Blair just said I am not leaving office? The Blairites have to been able to find a convincing alternative candidate and the party feels generally uncomfortable just handing the position of leader to Gordon Brown without a proper competitive election.
Supose Tony Blair just said if anyone wants to stand against me then lets have an election and clear the air once and for all. Tony could even sack Gordon to force his hand.
It could happen couldn't it?
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I have not seen a single person who actually looks like they are enjoying themselves yet. For goodness sake a picture of City types on mobiles dressed in suit and tie in the South of France. What are they thinking about? If you are going to go to the South of France you may as well stop work for a bit or there is no point in going..
.. and another thing that house in the South of France looked awful. What about buying a chateau for half the price with a vinyard in the Charonte.
These people have absolutely no idea how to 'large it up' at all.
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You know what this is getting pretty boring. I am watching somebody do a table plan for party full of B list celebs.
This is nothing like bonanza that followed the oil boom of the 70s. People really did go mad. As an entree to an infamous party in 70s a couple of oil traders decided to drive landrovers through the plate glass windows of the Grosvenor House hotel and proceed to drive them up the stairs. That the way to kick off a thousand seat party to celebrate a bonus.
Buying houses with your bonus! Come on guys thats what middle aged people do in Tunbridge Wells do. Where is the excess in this? What about booking an entire 747 just to take you and your friends to The Bahamas for the weekend on spec? I don't think I have seen a bottle of champagne over a hundred quid yet!
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I am watching now and me and my wife turned to each other and said: "This feels just like 1986 and 1999 all over again".
You know it cannot last and believe me when the billions of bonus disappear so will the London housing market.
I wish I could have recorded this so I can show my kids in 20 years time so they will really understand what a real bubble looks like.
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This is my first foray into renting so I'm a bit wet behind the ears. I rang BT to transfer my telephone account to the place I'm renting and was told that as a phone line wasn't connected there would be a connection charge of £125. I immediately telephoned the agent (who had told me that the property did have a telephone line) that as this was for the permanent benefit of the property, I was expecting the landlord to pay it. I haven't heard back yet from the agent confirming whether the landlord agrees. Does anyone else have any experience of this?
Yes I do. The current tenancy I have was advertised with a phone line but I soon discovered that while the property was being refurbished before I arrived the line was accidentally cut by the builder working in the roof space.
The landlord paid for the line to be installed again but I stayed in to make sure it was done properly.
If a property is advertised with a given feature it should have it when you arrive - simple as that.
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I wonder who Brown will get rid of next!
...err the MPC perhaps?
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A fair amount of the increase in grain prices is due to the switch to increased ethanol production which uses corn starch (maize). This new source of demand is driven by high oil prices as the ethanol is used in petrol.
If oil prices drop a little more then then the ethanol production plants become uneconomic at these levels of grain prices. To be sure we are facing a dry year and a shortage of grain partly due to that but remove the pull from ethanol production and a switch in acreage back to grain growing on marginal land which is currently underutilised or not utilised at all and then you will see grain prices plummet.
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This year everyone in the office is moaning about inflation - not because the price of their train fare or weekly shop have gone up (although they have), but because the cost of their mortgage just went up. They are angling for 5% at least. The company can afford it and knows the labour market is tight so does not want to lose anyone.
This, I am sure, is being repeated in businesses across the land. The majority of workers are homeowners, and when the BoE puts up their mortgage to control inflation, they demand higher wages, fuelling inflation, leading to BoE to...you get it.
The inflation toothpaste is out of the tube, have fun putting it back in Merv.
Very good point. This is the major problem with CPI and RPI numbers. They do not take into account the rising cost of housing as house prices start to rise unless and until mortgage interest rates go up. To be correct the RPI and CPI should include an implied rental cost based on the price of houses. That way the BOE would get an earlier signal.
The eventual rise in RPI which is caused by the interest costs of mortgages is a very late cycle indicator of the inflationary pressure caused by house prices and of course CPI is even later cycle. It is the major reason that the BOE reacted too late on the way up and the reason they will react too late on the way down. Even if house prices now began to slump that effect would not show up in CPI/RPI numbers until the BOE started dropping interest rates. Problem is the interest rate cannot start dropping until reported inflation numbers start dropping. This effect is very likely to lead to an overshoot in interest rates IMO.
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Whilst the prospective FTB has been kept out of the market due to rapid and substantial house price increases, we're now going to be hit with the double whammy of even less affordability due to higher interest rates.
Assuming the crash occurs, how long do people think it will be before i) house prices fall enough to compensate for the further rate rises; or ii) both house prices fall and rates also have a chance to decrease again (if they do)?
Will we look back with hindsight in 5 years time and say "I wish I'd forked out for that £120k flat in 2006 - at least interest rates were only 4.5%"
Grass, greener, etc...
No we will all look back in 5 years time and say I can now afford to fork out £60k for a flat and at least interest rates have fallen back to 4.5% now and still look like they are going to go lower.
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Deputy Labour Leadership Runner, Peter Hain, has lashed out at second homes and executive pay...
http://money.guardian.co.uk/news_/story/0,,1990147,00.html
"He blamed a 'rat-run' of 'City types' snapping up Scottish shooting estates and second homes for soaring house prices that have squeezed out first-time buyers. Hain is understood to be studying ways of bringing in legislation to limit the size of the gap between the pay of a company's most senior and most junior staff to help reduce social inequality. Companies could still give top performers big rises, but doing so would be expensive because they would have to lift pay at the bottom too."
Since when did first time buyers decide to buy a Scottish shooting estate as their first foray into the housing market? FTB and people buying castles in Scotland are not in the same market except via a very long chain of housing transactions and even then the number of country estates sold in a year is far less than the number of two bed flats!
It is not City types but ordinary people borrowing large multiples of income and using their existing equity to do BTL that is driving out FTB. Of course a potential deputy leader could not be seen to be criticising the future leader for his economic policies so we just slip back into 'Old Labour' politics of envy mode and criticise the City. Problem is that Gordon Brown actually has praised the City for its innovation and wealth generation.
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I'd say a national average crash (excluding London) of 50%. Some of the overpriced crap in London is going to fall even harder than that, maybe 60-70% for the worst examples.
I partly agree but not about London.
I tend to find from my claculations that sales prices of large country houses in the Wales, Midlands and North would need to fall by 50% to get them back to fair value as implied by the rental market. The nearer I look to central London the smaller I find that the fall needs to be to get sales prices back to fair value as implied by the rental market.
London is not as overpriced as the rest of the country because its economy is so strong and this supports high rents. If rents started falling in nominal terms in London (e.g due to a downturn in the City) then paradoxically London would gradually become overvalued even if London house prices there had stopped rising.
My general feeling is that the most likley broader economic scenario is 'stagflation' with rising interest rates. This will reveal itself in the housing market in the form of a combined fall in nominal prices as people are simply unable or unwilling to borrow larger and larger multiples of income combined with a gradual pick up in rental inflation. If rents begin inflating quickly then it is possible that we could reach fair value for house prices without any nominal fall in prices. This is unlikely though.
Under the most likley 'stagflation' scenario we could reach fair value for house prices with say a 20% nominal price fall and a five year burst of rental inflation at say 5% per annum. Of course that outcome still suggests that it is better to wait five years before buying a house or plunging into BTL.
A much less likley scenario would involve a really serious crash and depression, especially if the City and the banking system is dragged down as well. This outcome cannot be discounted and would cause a massive overshoot to the downside on house prices with the result that houses would become severely undervalued because sentiment would be so against buying that real bargains could be had by brave investors with access to their own equity.
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The Bank of England saw the data before their public release so it can say that steps have already been taken to address the overshoot of the 2 per cent inflation target.
I have been mulling over this for several days. I just keep coming back to the central question: Why did the BOE raise rates now and not wait for February when the wage settlement picture would have been clearer as well as the results of the December/January retail sales?
THis MPC has shown itself to be very concerned to monitor and manage market expectations of when it will raise rates. However this time it just shoved up rates against all expectations. Indeed the very expectations it has been planting since last October.
The only reason I can think is because MPC have got wind of the fact that CPI or even RPI figures are going to come out well ahead of expectations and has to be seen to be 'doing something' when the letter is written.
The 1 year LIBOR swap market seems to be pricing in rates at 6.5% by this time next year so its seems that the money market believes tha there is a lot more to come before inflation begins to drop. Problem is that having got it wrong the MPC will be hyper cautious and therefore reluctant to drop rates before inflation really starts to fall for sure. They were slow to make crucial decisions on the way up and will be equally slow on the way down. They now appear to be just reacting to data not anticipating.
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This would leave an approximate £600 a month mortgage payment (Interest only) even before repayment, voids, maintenance etc etc I said I'd rent it for £450 a month furnished. After they laughed at me I proceeded to show them a link for the same development 3 doors down at £475 a month furnished on rightmove.
I think this is quite a common phenomenon. My parents are exactly the same. They have absolutely no idea what rent any given property will fetch compared to IO mortgage. They just 'believe' that rent is dead money and so have actually never bothered looking at the rental market. Alll they ever look at is the sales market.
Their experience when they were young was that people who could not afford to get a deposit together had to pay over the odds on rent - hence they ended up paying off someone elses mortgage. They have no idea that this is no longer the case.
They recently retired to a place that is very nice but far too big for them but that could definitely not rent out for more than £1500 per month. However, they are missing out on £3,000 per month of interest income they could be earning on the capital they spent on buying and doing up the place they bought. They are also facing the risk of a price drop plus all the ongoing costs of repairs, insurance, etc.
At least they are not planning to do BTL as well though!
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Read an absolutley staggering statistic in the FT Money section today about people who are approaching the Citizens Advice Bureau (CAB)for debt counselling.
http://www.ft.com/cms/s/45765d2a-a233-11db...00779e2340.html
"In May 2006 it estimated that the average debt of its [CAB] clients (excluding mortgage debt) was just over £13,000 and that it would take them on average 77 years to pay off their debt at a rate they could afford. With three quarter-point rises in interest rates since then, things can only have got even tougher."
That means these people have a choice of either:
i) facing a lifetime of penury;
ii) seeking an IVA; or
iii bankruptcy.
If I was in that position it seems to me that ii and iii are the no brainer options. There is no way anyone will agree to spend their life paying of debt until they are dead if they can escape it by any other means. Mass default seems the only option and the banks seem to have only just woken up to this fact.
Frightening
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Prof David Smith (not the Sunday Times chappie) thinks that interest rates will need to rise to 6.5% to hold inflation.
He's been quite accurate in the past, so things could get very messy soon.
Yes I too think this is where interests should already be now.
Unfortunately they are not so the BOE is now just beginning the process of playing catch up. It will probably will go to 6.5% eventually but only when the economy is already contracting due to fiscal tightening (rising taxes falling public spending) and job losses caused by external world economy factors (US recession). Net result will be a UK recession. Fiscal and monetary tightening together have always had this effect on the UK economy in the past.
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Wow, the thread is still running..
I suppose you could just accept that you are a bear and she is a bull.
Given time, one or both of you will turn.........***worries***
Yes.....it seems to come back in the middle of the night like a vampire. I think I am going to have to get a FOR SALE sign and drive it through its heart.
Woops! Sorry about that I think I just brought it back to life again.
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Have you noticed that there is a get out clause for girls who have got pregnant. They will not have to do it.
http://www.thesun.co.uk/article/0,,2-2007010766,00.html
"Only those who have to care for sick relatives will be allowed to leave at 16 — along with teenage mums."
So lets think through the incentives here.
Imagine yourself in the shoes of a 16 year old girl who is facing two years more in education/training and you are going to be living on very low pay or some kind of training grant with your parents and have little prospect of a job paying very far above minimum wage at the end of it. The alternative is to get preganant and then live on benefits while being bumped up to the top of the local authority list so you can have a nice flat newly kitted out to live in.
It does not take much of an education to see what the rational economic decision is here.
This initiative may well be the centre piece of the Chancellor's ten year plan but you can tell he has a degree in history rather than one in economics. :angry:
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Won't there come a point this year where the stagnation in the housing market, caused by the unaffordability of property driven ever upwards by EAs and VI spin, when the lack of property turnover will really start to hurt EAs?
When this point is reached (realised) their best option will be to precipitate as short and sharp a correction as possible to re esablish demand. A long drawn out stagnant flat market will really hurt.
In my opinion we will see them start to talk the market down by the summer but they'll have a big job on as they've spent years convinving the sheeple that a cardboard box in a desirable area really is worth £.25m+ !!
They're screwed
I lived through the last crash in London and what I can safely predict is that EA firms will already be pencilling in a big cut in bonuses and then follow up with a big cull of junior sales staff at the end of March 2007. The full year figures are pretty much in already for December year end firms and with market volume in free fall the top management will probably be holding meetings as we speak.
I can also safely predict that many people working in agents will already have been told they must raise their game and as the pressure grows they will be left with no option but to tell buyers to cut prices or take their business elsewhere. When you have to make your numbers as any who has ever been a saleman knows you would rather have a sale at any price rather than none at all.
It happened last time and it will happen again.
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Some media reaction after yesterdays decision:
"It's been as plain as a pikestaff for some months now that the Bank of England's approach to policy is far too lax.
Perhaps it was the surprise nature of yesterday's rate hike, but I'm not sure a British rate change has ever had as much international impact as this one. Markets around the world were unsettled by a move widely seen as a harbinger of things to come across the globe. Might it not signal a generalised "get tough" stance by central bankers keen to stifle excess liquidity and overexuberance?..............."
Absolutely spot on. I think the BOE decision is far more important in its timing than the amount by which it raised rates.
My immediate reaction to the news was that this decision had been brought forward because the MPC had suddenly realised it could not afford to wait even a month longer. This suggests the underlying inflation numbers are a lot stronger than they had hoped. Remember the MPC get a feel for the numbers well before the meetings so they probably have a pretty good handle on what the inflation numbers are going to be right out to March already.
This is panning out as I expected with the MPC delaying a rise for far too long in an effort to engineer a 'soft landing' then a panic reaction to kill off unexpected strength in inflationary pressure followed by an over shoot in interest rates as they keep raising them in the face of continuing high inflation numbers but well after the economy has begun to soften.
This 'over shooting' interest rate scenario would eventually precipitate a severe recession and only then would MPC really be able to drop rates quickly but far too late. I would not be at all surprised to see negative inflation numbers in both prices and wages in 2009. Negative inflation and falling GDP would pressage a severe depression and even if MPC followed through by dropping rates to zero it might not be able to pull it back quick enough. Their job will be made that much harder by a severe fiscal tightening which has already begun but the next Chancellor will be forced to do even more of just to keep the deficit from exploding as tax revenues fall.
House prices will inevitably fall in nominal as well as real terms under such a scenario.
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How does your wife feel today, is she still wanting to buy ar is an IR rise a good enough argument?
We have been working on a couple of very nice rentals for the last few weeks and they just got seriously better yesterday after the BOE did the right thing (although should have been a 1.0% rise IMO).
I did a quick calculation on one of the properties we are looking at and I estimate that the rental I am being offered will produce a net rental yield of about 1.75%. With base rate at 5.25% and long Gilts at 4.0% I estimate the fair capital value implied by that rental yield is 50% less than what the property would come on the market to sell for.
I like 50% off as a starting point for a negotiation and I think my wife is quite persuaded by that arguement too. Problem is that we need to land something by summer and we do not therefore have unlimited time to search and negotiate.
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Can you make plastic out of gas?
Yes you can make plastic out of gas.
Alcohol is also a good fuel and carbon neutral. Nuclear power is, of course, the only way we have any chance of meeting Kyoto targets. Not that anything that we will do will be anything more than a drop in the ocean compared to all the new coal-powered powerstations that the Chinese are bringing on line.Alcohol production requires large areas of farm land to grow crops on which compete with our need for food sources. Witness the rapid rise in the price of corn as demand for corn starch (a major input to ethanol plants) has rapidly increased.
Nuclear is far to expensive on a long run marginal cost basis. With gas at £0.10 - 20 per Therm electricty can be produced at around £30.00 / MWh while nuclear is running at £50.00 if decommissioning and waste disposal are included.
China uses coal because it is a centrally planned economy with very cheap labour, low health and safety standards and virtually non existent environmental standards. However, air pollution (smog) is becoming so bad in Beijing and othe rlarge cities that it will have to reduce its dependence on coal very soon. Once this happens then LNG will become a crucial fuel, especially for the industrial megalopolis of Guandong as it is very close to the coast and a long distance from domestic coal fields which are of generally low quality and poorly linked by an massively overcrowded rail system.
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Global oil production has been in decline from Dec 05, it's only a matter of time before the market wakes up and oil will be cheap no more. In addition, there's always the wild cards which could cause the price of crude to ratchet up out of sight, i.e Bush/Omert (both?) blowing up I-ran or some fanatical maniac flying a plane into a Saudi oil facility.
I keep reading on this Forum how oil is going to run out and bring the world economy to its knees and therefore precipitate HPC.
Let get one thing straight. There has never been any energy source used in human history that has ran out before we found a cheaper and better source of energy. The cheaper and better source of energy that is already replacing oil is natural gas - it is the fuel of the 21st Century and is so underutilised it is still flared off (burned off in the atmosphere as a waste product) in many places that are too remote from markets that can easily be reached by pipeline.
These currently underutilised natural gas resources will eventually be economic to move to market as liquified natural gas (LNG) on mega large LNG tankers that are currently not even on the drawing board. When that happens gas will be so cheap it will displace massive quantities of oil.
Short term there may be oil price shocks but the long term trend is for oil to be displaced by gas.
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Why is Russia getting the blame here? Belarus has been paying half as much as its neighbours for russias gas.
This issue is very unlikely indeed to cause a HPC.
The real reasons behind the cutting off of oil supply to Belarus is far more complex than that being presented by the media and it is also being widely misunderstood in political circles.
The real reason this apparent 'cut off of supply is threefold:
1. Russia is struggling to maintain production at current and contracted levels;
2. Russia is still grossly underpricing energy in its own economy so there is rapidly expanding demand and significant waste but if it raised prices to market levels there would be civil unrest;
3. The combinatioon of failing production levels and ever expanding internal demand means that Russia is forced to curtail exports to its old clients in the former Soviet Union and sell what little surplus it still has at the best price possible.
Unfortunately, the best price is currently being paid by countries to the West of Belarus but Belarus is demanding a very high transit fee in the form of physical oil offtake from the pipes runnng through its territory and and very low prices for the remainder it actually pays for.
Russia never cut off oil supply to the West during the days of the Soviet Union and is unlikely to do so now. It would not be in its economic or political interests to do so. It simply has a dispute with Belarus on the implied transit fee for the oil that passes through it territory.
Has Anyone Else Noticed ?
in House prices and the economy
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I never log off. Always watching. Always waiting.