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Sonic the Hedge Fund

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Everything posted by Sonic the Hedge Fund

  1. I like this bit, tucked away at the bottom, which is perhaps the grain of truth in the whole article: If my recent experience in the rental market is anything to go on, many long term LL with 3 & 4 bed houses are finding it very, very diffcult ATM. Their tired old houses look sh1t compared to the many nice houses being offeed by desperate OOs who have failed to sell, which are usualy much beter presented on account of the fact that they used to be the LL's own home which they have been trying to sell. Also the 'failed to sell' type LL tend to be more 'distressed' and up for a haggle on the rent. The LL with the Sh1tty places are either having to drop their rents, or they just sit unlet for weeks on end.
  2. Right about fundimental value, but wrong about the premium IMO Rent should always be MORE than purchase price, because the LL has to maintain the place, get gas certs, credit checks etc. The fact that many LL do this at their own expence just shows how insane it has all got
  3. Hemel Hempstead (it does have some quite decent bits, beleive it or not! Certainly a lot greener than Surbiton and no further from Docklands) If you are looking for somewhere half reasonable within 1 hour of Docklands try looking around East Herts. There are a few sh1tty areas (i.e. Stevenage, Cheshunt etc.) but also some very nice villages with bargain rents - Just ask FP, IIRC he lives around that way.
  4. It's a complete load of BS IMO, rents are certainly not rising at all round my way, if anything LL are competing for tenants. My recent experience, I just negotiated full 10% discount on a new let, paying £900pcm for a house that was concurenlty for sale at £299K. The house is imaculate with new kitchen, new bathroom and new carpets throughout, located in the best part of town just 5 mins walk from the station and with veiws over open countryside. The LL is letting because he cannot sell, and at least half the others we looked at were the same - advertised concurently for sale or rent. Renters currenlty looking for 3 or 4 bedroom homes are spoilt for choice.
  5. Workmate brought mid 2007 with full knowlege of my STR, discusions about cost of buying Vs. renting, decline of the money markets etc. He actualy asked for my advice about buying, I said somthing along the lines of 'Iwouldn't, but it's your decsion, and if you must buy then make sure you have plenty of room for falling prices/higher interest payments'. So he went away and on a £45K salary brought his first house in Essex for £295K, I don't know the size of the mortgage but he did let slip that the payments were £1700pm IO. And this on a 2 year fix that presumably will not be repeated in the near future. So I geuss that the payments are about 70% of his salary and he was totaly banking on continued HPI The guy simply refused to beleive that house prices can fall, I dont even need to say 'I told you so' because he can't even look me in the eye now it's all so obvious, but I don't feel much sympathy since he so blatently ignored my advice. I have another young coleage who decided to wait and see, now he can't thank me enough for telling him to be very carefull.
  6. As somone who remebers the early 90s well, I think you may well be right. IMO people base their perceptions on their past experience, this is entirely rational. But many people only have a short and selective memory, so their rationale is incomplete. This works both ways with house prices, most people's perceptions will be determined by their most recent and most dramatic experiences
  7. Its always worth making coments, even if they are not published, because editors use such feedback to judge the public mood and consequently their editorial policy.
  8. I spoke at a council meeting where a bunch of 60 somethings voted to close down a load of schools without a second thought, then spent over an hour arguing over the morality of means testing for OAP bus passes. After the meeting one of the Councilors said to me 'I'm sorry', to which I replied "Indeed you probably will be, because by the time your generation is old and vulnerable, my generation will be running the country".
  9. Very interesting stuff Marky, I know a very bullish EA who works up your way, so thanks for the amo! In the USA it was the housebuiders that depressed the market with deep discounts. I have long predicted that the same would happen here Its hard to sell a second hand home when a brand new one can be had for less. Obviously not everyone likes new build but i would expect OOs to drop prices in line once they get out of the denial phase
  10. Profesional LL (not recent BTL muppets) often use 10* anual rent, which would make 120* monthly
  11. 2001 is also the point that prices crossed the long term average line on the Nationwide graph. The other interesting feature of the NW graph is that the troughs aline with the peaks in each cycle i.e. the drop is larger each time. Could this mean we are currently headed for a much larger bust than the 90s? Note also that average prices in 1995 were only fractionally higher than the bottom of the previous cycle in 1982
  12. I was referring to the quote attributed to Napoleon, I quite like it because it sums up politicians in a nutshell I would not credit any government with the intelligence to manufacture a grand plan to deliver social housing through a private sector stitch-up, considering what happened to Northern Rock they are clearly not capable of such foresight. Conspiracy requires knowledge and cunning, my first hand dealings with politicians has taught me one thing: That most politicians know [email protected] all about anything other than politics!
  13. That should be good for house prices in Hemel Hempstead where DSG employ 2500 people in their head office
  14. Having dealt first hand with a number of politicians, I am much more inclined to agree with the third quote in Disillutioned's signature
  15. I remeber like it was yesterday, talking to a family buider I knew in 91/92 or thereabouts, because his response was unexpected. I asked him how the business was doing 'wot wiv the recesion and all that'. His answer was 'What recesion? We have got more work than ever!'. His veiw was that people were feafull of moving in an uncertain market, so more were chosing to stay put and extend instead, hence loads of work for small building firms. Small builders being very busy could therfore be a good indication that the HM is foocked, IMO.
  16. Nice work Kurt, them old Navitron heat pipes are a steal!
  17. On previous expeirence I would agree with this - in particular tranquil-looking rural areas often seem to have a disturbingly high 'chav count', full of loud-mouthed boy racers and single mums. In a small town or village it's on your doorstep, but it's not always apparent until you actually live there. House sales in these areas can depend on a steady flow of incomers, so you can get stuck with a property if it all turns sour. IMO The best bet is to try the area by renting before you commit to buy. On the other hand many towns with less than enviable reputations can turn out OK (if you avoid the town centre!), becuase the better areas are well segragated from the not so nice.
  18. My best sources are kind of favours for favours, e.g. I know a chap who can get very nice designer lighting at import cost +10% (ie about 80% off retail!)cos he does install work for the importer & doesn't mind doing a deal because I put some work his way. Through my wife's family I know a plumber who does work for a very expensive bespoke kitchen designer; some of the stuff they rip out is better than you could buy from magnets/howdens etc. and looks like new (truly weathy people just don't do cooking!) It takes years of favours to build this up and must not be abused, you have to know lots of people and keep them sweet (growing up in 'emel 'empstead does have it's advantages!). Most tradesmen LOVE to 'talk shop'; learn a bit about what they do and chew the fat, even if it bores you to tears it's suprising what it will get you. If tradesmen think you are rich or 'clever' they WILL charge you more, so don't be. I think my biggest asset is an ability to flip between 'proper' english and 'emel cockney drawl, it certainly helps in not getting my head kicked in down the pub! But I could probably still give you a couple of pointers for competative wholesalers, drop me a PM.
  19. There are plenty of family homes owned by LAs; the problem is that they are mostly occupied by 'empty nesters' The key difference between social and private housing is that the powers that be could force the LA tennant 'empty nesters' to downsize, just by changing the law. If there are enough 'families stuffed into rooms and studios' this becomes a simple political calculation, because families contain more potential voters by definition. You can even forsee a govt. & media hate campain against the 'selfish empty nesters' blocking needy families from decent housing, I smell this coming already. Council tax, utility bills and means testing for care should acheive the same outcome for private housing.
  20. Rachman, No need to be derisory, I practicaly grew up on buiding sites. It's quite obvious that you couldnt do up YOUR house for £10K, but I trust you had all this costed before buying? Plumbing and electrics are not so expensive, you can buy a 28Kw Worcester-Bosch condensing combi for under £600....If you know the right people, but I guesse most people don't. The same goes for all fixtures and fittings, look at the sh1te big housebuilders get away with! In my book there are two key rules to property development: 1) Unless the price is ridiculously cheap, try to find houses that look sh1te but are structuraly sound. Cosmetic improvements carry far less risk and usualy add far more value than structural repairs, simply because cosmetic changes are relatively cheap and more obvious to the average buyer. 2) Do a refurb that is appropriate for the property/area. What's right for your house might not be for mine; in my book this doesn't include granite worktops in 'average dormitory towns' when solid surface can look just as good (if not better) for half the cost. These two rules have made me a lot of money. But honestly, I wish you luck with your developments; it sounds like you might need it.
  21. I have found surveys to be a a complete and utter waste of money. The last survey I had done didn't tell me anything I didn't already know, and worse, missed quite a few things that I could have worked out for myself if I had a good look. But I didn't, foolishly trusting the surveyer. If anything the survey gave me a false sense of security, while containing enough caveats to protect the surveryor from comebacks. If you are buying a house then get a few tradesmen to look round and tell you what needs doing; they should uncover anything seriously wrong. Its quite obvious realy that somone who actualy builds/wires/plumbs/roofs houses knows far more about these things than someone who just looks at them for a living, and most tradesmen will quote for free because they want the work! Vendors should not object unless they have somthing to hide. But also be VERY picky with tradesmen, personal recomendations from people you know are the best bet.
  22. Agree with both ?...! and ABB that demographics are central to all this But I would call it demographic cycle, as housing costs and population rates are linked both ways, and always have been. Today couples are having children later (if at all) becuase they can't afford family housing. As somone else pointed out, in previous centuries popluation was controled by increased mortality in declining living conditions, just like the rats in a tank..... So the difference today is birth control...same sh1t as ever, just a bit less harsh.
  23. Calm before the real storm? Or perhaps Monoline woes are no longer newsworthy cos it's 'normal' now Thanks for reviving this thread BTW!
  24. Agreed! As for refurb costs, some of the posters here sound like all those [email protected] on 'Property Ladder' who say things like 'but you couldn't possibly do a decent bathroom/kitchen for less than £10K'. Well I'm afraid I could, and have done, some very expensive looking bathrooms/kitchens for much less than half that. The EA and the people who brought my last 2 houses certainly couldn't tell the difference! But hey ho, I guesse some people will have to learn the meaning of cost management the hard way, and no doubt they will in the next couple of years.
  25. Kudos to the woman who bothered to DO somthing proactive, instead of just moaning about it. HPCers take note!
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