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Btl Scum Regrouping And On The Offensive. -- Merged


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HOLA441

I know a family being evicted under S21 because of the tax changes and LL selling up. Really made me realise that in the short term there will be losers.

There will be innocent losers who lose their rented home as a result of C24, but it's important to be clear about where the blame for this lies. Not with clause 24 but with a system that has enabled people (often of limited financial acumen so it seems) to borrow frankly eye watering amounts of cheap money to in an attempt to corner the housing market for appallingly bad returns. C24 should go some way to lancing this boil. One hopes that for every sad story like this there will be at least one family or individual that manages to purchase their own home at a sensible and genuinely affordable price.

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HOLA442

I know you were being facetious but you're totally correct! How many more of the same posts do we need to contribute to their echo chamber from CountOfNowhere and Bland Unsight promoting their great genius in spotting overpriced houses/BTL issues that none of us mere mortals have noticed? How many more times do we need tedious quote fests from Venger? How many more AI/automation threads do we need?

There's not a lot of point in seriously debating housing issues with all of the government props in place at the moment. I'll discuss it more when the whole house of cards collapses.

Man, this really, really hurt my feelings. I've never made a big deal about it because I always assumed it was obvious, but ever since 2013 when Ghostly joined the forum I only really post on HP&TE whilst I'm killing time waiting for Ghostly to post more news of the various female celebrities that he'd be willing to have sex with. I worry now that by starting too many threads (and forcing poor Ghostly to waste literally millions of hours moving his mouse slightly further to reach the HP&TE threads that he is interested in) I've been shooting myself in the foot. Lesson learned, no doubt.

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HOLA443

There will be innocent losers who lose their rented home as a result of C24, but it's important to be clear about where the blame for this lies. Not with clause 24 but with a system that has enabled people (often of limited financial acumen so it seems) to borrow frankly eye watering amounts of cheap money to in an attempt to corner the housing market for appallingly bad returns. C24 should go some way to lancing this boil. One hopes that for every sad story like this there will be at least one family or individual that manages to purchase their own home at a sensible and genuinely affordable price.

It just reveals the fact it was all just a punt on houses with the tenants there to pay the interest. If the altruistic landlords were really in the business of providing a service to customers that they valued there would be nothing to stop them from restricting themselves to sellers who wanted to take on the house with sitting tenants. The fact that they'd rather fish in a larger pool and get a better price by selling with vacant possession just reveals the truth of matters.

Anyway, prior to Clause 24 nobody was crying bucket loads of tears on here each time S21 was used to curtail a debate about hiking the rent that hadn't worked out as the landlord had wished. In the UK tenants have bugger all rights and get pushed from pillar to post according to the whims and wishes of leveraged landlords and their banks. It was like this as the bubble inflated up to 2008, just the same for the first wave of the heart attack, just the same when prices stalled, just the same as they reinflated up to the present.

These evictions are just business as normal in the UK private rental sector. Tenants with no real rights getting marching orders from crap landlords because it suits the landlords and the landlords have all the power.

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HOLA444

This thread seems as good a place for this as any. NewsThump is news to me, but anything that has stories about the discovery of a second Chesney Hawkes and Michael Gove being caught "fingering a pigeon" can't be all bad. A piece called "Buy-to-let landlords demand ‘extortionate’ rise in sympathy" includes this:

In a surprise move by the Chancellor, where he unexpectedly ended up looking like a good guy, rates were increased to 3%, forcing a lot of diamond-shoed millionaire landlords to question why no-one was making a big fuss for them or starting a government petition in their honour.

More at the link.

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HOLA445

A piece called "Buy-to-let landlords demand ‘extortionate’ rise in sympathy" includes this:

In a surprise move by the Chancellor, where he unexpectedly ended up looking like a good guy, rates were increased to 3%, forcing a lot of diamond-shoed millionaire landlords to question why no-one was making a big fuss for them or starting a government petition in their honour.

More at the link.

:lol::lol:

The only thing it's missing is the my/our. BTLers love to post 'my tenants' / 'our tenants' - when in so many instances, they could just use 'tenants'. The my/our implying some possession of tenants lives, imo. (eg BTLer: I treat my tenants fairly. - vs what could be..'I treat tenants fairly.)

Landlords have been widely criticised as the reason that the housing bubble has not yet burst, having strengthened the bubble’s exterior by putting on a extra-solid garden gate lock from Homebase, usually reserved for tenants’ toilet doors, and then ‘putting a bit of WD40 on it’.

That part reminds me a little of this 'real' landlord article.

The accidental landlord:tax relief cuts on mortgage interest payments isn’t fair

Monday 15 February 2016

My tenant has asked me to install a bell, which I could understand if she was in a block of flats, but she has her own front door with a good old-fashioned knocker. She doesn’t think the knocker adequate, even though you can hear it from anywhere inside the flat. You can even hear it in the next street, but my tenant still feels the need for a bell.

It’s an odd request, I think, especially as I have lived in my house for 10 years and it has never bothered me that I don’t have a doorbell.

...However, while I put up with lots of niggling imperfections in my own home, my tenants expect everything to be just so. Little things, like the lack of a bell, can irritate them almost as much as a bigger problem. I guess they think it isn’t a lot to ask, so the landlord ought to sort it out.

...While it is tempting to ignore little problems like loose door handles, wonky loo seats and, yes, the lack of a doorbell — don’t. You hope the tenant won’t notice, but they usually will.

I didn’t want to spend money on an electrician to install a bell, but then I discovered that you can buy wireless, battery-operated ones that just stick into place for about £5 or £6. They look a bit naff, the cheapest might not last very long, but hey, if it keeps my tenant happy, I am happy to buy her one.

You see, Mr Osborne, that’s business.

http://www.homesandproperty.co.uk/property-news/renting/the-accidental-landlord-removal-of-tax-aid-isn-t-fair-a99096.html

'BTLers powering the economy.'

And 'the' tenant perhaps, could be used in at least one instance there, instead of 'my' - picky but I do see it a lot.

Can't recall if she's bought any more properties ('accidental landlord') but this was her position in 2014

Recent new story (April 7) from her, re a property in her 3 property portfolio. http://www.homesandproperty.co.uk/property-news/rentals/accidental-landlord-problems-buy-let-mortgages-and-welfare-benefits

&...

* Victoria Whitlock lets three properties in south London. To contact Victoria with your ideas and views, tweet....

Twitter - 08 July 2015

VW 23 minutes ago

#Landlords wear and tear allowance going too in #BloodyBudget? *slums in chair, reaches for revolver*

VW ‏ 2 hours ago

Wait what, did Chancellor just say he was cutting mortgage interest tax relief for #landlords? Wow

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HOLA446

Re the arguments about long posts.

If like me you have the privilege of attending Alcoholics Anonymous where everybody shares their experiences, you will be very familiar with one of the closing phrases.

'Take what is useful, leave the rest.'

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HOLA447

:lol::lol:

The only thing it's missing is the my/our. BTLers love to post 'my tenants' / 'our tenants' - when in so many instances, they could just use 'tenants'. The my/our implying some possession of tenants lives, imo. (eg BTLer: I treat my tenants fairly. - vs what could be..'I treat tenants fairly.)

You forgot "poor". "My poor tenants".

Offering several levels of ambiguity and double meanings:

"Poor" as in not wealthy? Implying that the tenants must rent because they have no (or only a low pay) job, ignoring the real possibility that the tenant could be better paid than the landlord, and with the added benefit of portraying the rental as some kind if alms house.

"Poor" as in unfortunate? Suggesting a degree of sympathy either because of the fact they are tenants, or because they are about to be best by some misfortune the landlord would rather not see, such as eviction or a rent increase.

"Poor" as in low quality? Not good tenants. Agreed there's little ground on that one but it is a possible interpretation.

I could probably go on reading between that line.

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HOLA448

You forgot "poor". "My poor tenants".

"Poor" as in not wealthy?

"Poor" as in unfortunate?

I expect its both of those. Ironic, considering tenants and even the homeless have a higher net worth than many borrow to letters; and with more saleable skills into the bargain too.

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HOLA449

I expect its both of those. Ironic, considering tenants and even the homeless have a higher net worth than many borrow to letters; and with more saleable skills into the bargain too.

Unfortunately neither of those assumptions is likely to be true. Worth looking at the following graph of the financial positions of tenants from http://strategicsociety.org.uk/wp-content/uploads/2013/07/Lord-C-Lloyd-J-and-Barnes-M-2013-Understanding-Landlords.pdf

The majority can barely afford the actual move....

btw) same report discusses the position of the average landlord.

finances.png

post-8022-0-11981000-1459543373_thumb.png

Edited by moesasji
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HOLA4410
Unfortunately neither of those assumptions is likely to be true. Worth looking at the following graph of the financial positions of tenants from http://strategicsociety.org.uk/wp-content/uploads/2013/07/Lord-C-Lloyd-J-and-Barnes-M-2013-Understanding-Landlords.pdf

The majority can barely afford the actual move....

btw) same report discusses the position of the average landlord.

Yet they pay the rent and generate the profits. Weird.

Edited by Idlewild
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HOLA4411

This thread seems as good a place for this as any. NewsThump is news to me, but anything that has stories about the discovery of a second Chesney Hawkes and Michael Gove being caught "fingering a pigeon" can't be all bad. A piece called "Buy-to-let landlords demand ‘extortionate’ rise in sympathy" includes this:

In a surprise move by the Chancellor, where he unexpectedly ended up looking like a good guy, rates were increased to 3%, forcing a lot of diamond-shoed millionaire landlords to question why no-one was making a big fuss for them or starting a government petition in their honour.

More at the link.

:D

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HOLA4412
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HOLA4413

I think the point SimonSays was making is that there seem to be quite a few landlords on the landlord fora claiming they will be making a loss once the changes to mortgage interest tax relief come in, but that they also can't sell because they don't have the equity to pay their capital gains tax. If true their net worth is effectively sub-zero, but might not be accurately represented by any assessment of wealth that didn't consider the tax liability on realising said wealth.

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HOLA4414
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HOLA4415

I got that...the fact that most of the current tenants have little financial assets is likely to amplify the losses of those poor landlords as in the end someone will need to buy their loss making investments.

Indeed! But if the landlords' losses will wipe them out then anyone who isn't bankrupt still has the higher net worth. ;)

I have a pet hypothesis that the multi-decade diversion of productive income away from paying down mortgages as homeowners into paying excessively high rents as tenants (due to what has in effect been a captured market, because credit conditions allow landlords to routinely outbid tenants using the tenants' own income) will result in house prices settling below long term income ratios for some time, as for many would be homeowners much of the money that they would have used to buy their own homes over the course of their working lives has already gone to their landlords.

Basically, I think that at the same time as BTL has been bidding up prices well in excess of historic income multiples it has also been progressively reducing the income multiple - and hence price point - at which continuing direct demand for housing and homeownership could be translated into proceedable, effective demand for homeownership.

I'm guessing we'll see whether that translates to anything significant in practice in due course.

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HOLA4416

Unfortunately neither of those assumptions is likely to be true. Worth looking at the following graph of the financial positions of tenants from http://strategicsociety.org.uk/wp-content/uploads/2013/07/Lord-C-Lloyd-J-and-Barnes-M-2013-Understanding-Landlords.pdf

The majority can barely afford the actual move....

btw) same report discusses the position of the average landlord.

Will there be a point where you understand that the link you are posting is for the PRS as a whole and not leveraged landlords (being a subset of the PRS), or will I have to keep pointing it out to you?

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HOLA4417

There will be innocent losers who lose their rented home as a result of C24, but it's important to be clear about where the blame for this lies. Not with clause 24 but with a system that has enabled people (often of limited financial acumen so it seems) to borrow frankly eye watering amounts of cheap money to in an attempt to corner the housing market for appallingly bad returns. C24 should go some way to lancing this boil. One hopes that for every sad story like this there will be at least one family or individual that manages to purchase their own home at a sensible and genuinely affordable price.

Agree with all of this (very good) - except for one point. 'Often of limited financial acumen.'

Going to push back against this. A suggestion lingers the little blame in all this. That the system alone responsible. I realise I am focusing on that point, perhaps a bit unfairly to you.

One thing worth bearing in mind is that if other people do not find your reasons as compelling as you yourself find them, then they may end up interpreting them as excuses, regardless of your perspective on yourself.

There are deep questions here about agency and responsibility. It seems to me that the saying that eternal vigilance is the price of liberty has relevance here. We can imagine ourselves first and foremost as sheeple, prey to advertising and salesmen who have the ability to fit us up with a reality of their choosing or we can imagine ourselves as a free people actively engaged in constructing reality.

It is associated to the 2008 postings on HPC of so many HPCers awarding innocence, just as the market was finally falling. 'They didn't know what they were doing (more recent buyers from 2004).' / 'They just wanted a home' / 'Media' / 'Banks didn't tell them the risks.' / '£400,000 doesn't seem like a lot of money on computer digits, and if bank showed them that in cash, then the borrower/buyer would have know lot of money'.

Many of us 'just want a home' © - as in not a rental - and won't pay £400K+ for a Stockport semi-detached in the suburbs. (Or even near £500K going from some recent sales) vs incomes.

Getting back to the BTLers. That system created by people. Millions of people in a market. A mirror almost, perhaps. So many get wrapped up in the boom-think, including on the authority/system side. Enough people let go of previous lessons where the issues had been proven (house prices can crash, corrections and losses possible, and credit a big driver of prices)...... and went for greed on all sides of the market.

If you read the BTL forums you may get that impression of limited financial acumen, although of them are intelligent. Intelligent enough to know what they are doing. Active. To see difference between haves and have nots.

How difficult is to put down a deposit and then get a conveyor belt of 9-to-5 sweatshop monkeys paying off the mortgage over the course of 20 odd years? Were really onto something here. Rinse and repeat. Easy.'

Not all of us on renter-saver side, and wider HPC side are the top engineers, accountants, whizz at physics - STEM'd up either (although many are). We have challenges to muddle through life and its challenges, the same as most individual BTLers. Except many of us have to do it from position of renter-savers, vs an outrageous house price bubble. Against BTLers who;ve been on the happy double-down for years. BTL forums flying high with mad-gainz, and also heard everywhere else you go, out and about. Backed up by older homeowners (not all) and their mad-gainz. And then everything outside of the internet, we see and are up against on the BTL and HPI side on an almost daily basis.

BTLers mostly with claims on 2 and more homes, via debt. Many who have seen a long wave HPI/rent-roll ride. Some of those BTLers who have £5m worth of BTL properties (fat equity, rent rolls, and associated debt - sometimes a lot via clams on more property).

We do need to be careful about awarding the BTLers in general this pass of them being 'no-brain innocents'... 'take for a ride by bankers'. It simply is not the case for the majority of BTLers - who are currently sat happy with massive housing wealth, and/or, houses they are renting out to non-howners. Would-be homebuyers, waiting for better value - priced out.

Many of the BTLers are pwoperdee mad idiots who've been eager to conspire with banks. That in itself doesn't make most of the BTLers 'no brain innocents'.

And on the renter-saver or HPC minded side have been tough. Very very tough. And tough for so long vs bubble and those complicit in it, on both BTL lending and borrowing side. I say greed, and intelligent greed - or intelligence equal to many on the renter-saver side of things, has risked devouring itself. That type of heart, more than mind for all BTLers of different intelligence levels (including very high intelligence). with BTLing.

This reconfiguring of the BTL game into a 25% deposit down, single property controlled by a single borrower model is great news for the private banks and George Osborne - it keeps house prices inflated and inflating whilst shifting the risks associated with a correction out of the banking sector and onto an the books of a handful of voters that a larger number of voters despise.

All the plan needs is a population with a sufficient number of pwoperdee mad idiots eager to conspire in being financially eviscerated by a bunch of spivs - hence it is bound to fail here in England. Oh, wait...

Source: Judith Wilson Investment Property Bond website

Many on HPI+ and BTL side have been left untouched by the credit-crunch, saved by 0.5% QE. Many have spent last few years bragging about their mad-gainz and good times on their forums. One BTLer upsized to a £2.25m house, just about 1 year before C.24 announced. Tipping up on HPC telling us things like 'It's why you're all seen as a joke on HPC by people in the real world of HPI.'

Was impressed with one of the BTLers n PovertyLater the other day. He clearly knows how to read a balance sheet (Grainger). Also he was cutting through some of the more technical aspects. A good understanding of DOTAS and GAAR, minimum ICR thresholds.

That very same BTLer used to be active on hpc forum, but clashed with some of us on a few things. Clashed with me due to his insistence that he wanted the HPC so he could buy more BTL property. Only good thing there was it was clear he wanted to feed on his fellow tribe BTL pals. They're not all friends in it together. However... he wants more property. Was totally open about it. Wants more and more houses. Think his words were, 'perhaps 3 more.' - Own choices, even if I hope the stamp duty hike on BTLers announced since then, will thwart his plans. Together with other like tighter financing and ever more regulation to take seriously. Quite a bit in recent times tilting back a little towards tenants. Ideally of course, a HPC so big that he gets shaken to the core with a drop in value of his existing BTLs.

I think he already owned 4 or 5 houses, and had used last few years of slashed interest rates to use tenants rents to pay down debt. His hero was seemingly another BTL with 300 BTLs, who inherited them from his Daddy. (There was a old framed sweety-bag from 1970s involved, where the father had wrote the complete rules of success in property.)

Some of us know about a BTLer who has had a life as a senior lawyer (full equity partner) in central London, approaching retirement, who has spent decades advising on commercial issues and especially on property. (Com-prop mostly). Now facing financial ruin. And that was before C.24. Found out from a small tweak with his lenders financing, elsewhere. Enough to tip things seriously against him. Writing letters to lender to try and put a stay on them appointing LPA Receivers, trying to wriggle out of it. From decades of HPI and the big-I-am.... to having been found out with 10+ properties on the BTL with one lender.

I've given a basic outline in the past, of information that came my way, about Bomad had helped fund the property-portfolio of their son (senior professional in IT - and daughter-in-laws questing into BTL. 4 or 5 BTLs around 2010. His parents monies - the father had been a high-earning senior professional - as pension/investment into it. Then the son died (some sudden illness). Nothing in writing. Soon after, daughter in law charmed by another man, and avoiding their calls about the money they had 'invested' - although portfolio was already heavily leveraged.

Read Contractor websites, and the BTL years of glory there. So many of the BTL success story (forever HPI) posters seem sharp enough on other posts about financial matters, including, how they had been enjoying. MSE and some older guy with 8 London properties (and more elsewhere), and all his years posting of his BTL glory. I can't recall what he did as a career alongside BTL but it was something professional.

The bubble doesn't just attack body and mind.... it takes in certain people's hearts, imo. Those predisposed to it. That type of heart. Including highly intelligent people with such hearts. Senior pros. High earners. Those who already have more than enough. Others who have had easy HPI long wave on their own homes, to MEW fortunes out of, because fortunes gainz from HPI. Others who take huge risks (not in BTL as such - well one rented out) - who go from positions of bliss and total security, and lovely own home... to having to 'bend over for bank manager' to borrow more money to complete their HPI chasing mega dreams.

---------------

From that Grand Designs episode. (2009 filmed?)

Not only have things on site change but there's been a huge shift in the world economy. Barry's plan has always been to finance this project by selling their current home and the development project he owns next door.

Barry: £450,000 is what they've asked us to drop it by. Now that house (points to house to the right of the glass mansion house - apparently rented out then, or later, to Peter Andre), and that house (points to his original home he planned to rent out before a fire outbreak in garage - wiring - a few days before tenants due to move in, meant tenants didn't move in) are worth kind of the same money. If I was to drop them both by that kind of money then it's going to cost about one million pounds. The dream that I've had has been entirely changed since we've started building it.

Barry: I've had a few days in each of the last few weeks where I've been really demoralised by it. Now I'm thoroughly aware I've put us in a position that we really didn't actually have to be in. There's a different scenario attached to our personal finances now so us like everyone else have got concerns. Suddenly it seems excessive to have even the vehicles we've got, and three houses in a row, that kind of stuff. There's almost an element of embarrassment about it.

Wife: I've thought so much, were we too greedy, were we striving for too much when what we'd already got was more than, you know, a lot of people would hope for in a lifetime really.

The prices and the difference between the haves and have-nots is wide. So wide. With all of the BTL activity. Blandy spelled out some of the risks to one BTLer who hasd just bought another property in London to rent out - telling us of his BTL wealth outlook. Just a short time before C.24. And so many of us have clearly set out the risks, here and outside of forum - to see BTLers scoff at our logic. And who knows... HPC not proven yet, so no need for any excuses, that tilt to blaming something other than the BTLers themselves.

....You've set down at least £100k invested in a property somewhere in London, which you paid £400k for, and which you think will let at £2,700 pcm. Firstly, I just don't believe your numbers. As there are obviously plenty of BTLers willing to pay prices which correspond to 5% 'gross yields', somebody would have outbid you, unless of course you missed something, e.g. the people who signed up for £2700 pcm propose to pay for a month and then string you along as the arrears mount up for as long as they are able, or possibly you are just exaggerating.

What makes your hand weak is that if buy-to-let mortgage rates move up sharply and a recession hits and you find that you can't secure the rents that you'd anticipated, the net cash flows on your property can turn negative. Now your work as a contractor generates income, but sometimes bad things happen. For example you might fall ill, or you might accidentally call a woman in the lift a "Stupid cow" because she pushed into you and crumpled your recently purchased Margaret Thatcher 2015 swimsuit calendar. If she is the HR director, you might find your contracting services are no longer required. The recession makes it difficult for you to get work and your buy-to-let investments, as well as sundry expenses like tissues and hand lotion, are bleeding your savings. A point would come where you might want to sell the BTLs so you could get out ahead. However, you'd find that a house price crash meant that if you sold the BTL you'd make a capital loss, (that is of course what the deposit is really for, to ensure that you and not the bank absorb the capital loss).

Hence you'd be looking at a situation where you thought the market was irrational (your BTL, in your estimation, was worth £400k, although nobody would pay you £400k for it) but the rate at which the negative cash flows and your own living expenses were bleeding out your liquid assets meant that you couldn't hold out forever because eventually you'd run out of savings to pay the mortgages on the BTLs; you would no longer be able to meet your obligations as they fell due, i.e. you would be insolvent, but sometimes the market can stay irrational longer than you can stay solvent. That is the heart of the aphorism; it's about holding on to a leveraged investment position when the market turns against you.

Late entrants are piss weak because in reality the gross yields people are signing up for are too thin to absorb much movement on rents or BTL mortgage rates, much less disadvantageous movements of both at the same time.

You've got it all back to front.

The bank demands the big deposit because they know that you are weak. Arguing that you are not weak because you've handed over a big deposit is an interesting way to look at things, but in my opinion, completely wrong headed.

The risks, against these house prices have been clear. History has shown time and time again, and quite recently (2008, 1990), of the risks of debt and laying excessive claim via debt.

There is much evidence that human expectations tend to be linear. Most of the time, most people expect current conditions to continue for the indefinite future. Wherever prosperity exists, it is natural for people to expect prosperity to continue. For this reason, much of the history of human society is a record of astonishment.

Time and again, people have marginalised their affairs, rendering themselves increasingly crisis-prone. They have gone into debt, extending claims on resources to an extreme that could be supported only if current conditions were sustained uninterrupted into the future. Time and again these hopes have been disappointed.

------------

Also there is no HPC as yet... really... in any half-decent area of UK. Not vs local incomes. Rent-rolls still feeding through to the BTLers, and HPI HPI bubble-bubble. The policy moves may take some time to have an effect (hopefully some cascade) - but we have to see it proven. For me, we have to be careful about always wanting to put BTLers on the stone altar of innocence, and pointing the finger of blame at some 'system' or banks. That system is a mirror - time for someone else to stand infront of it... to knock the BTL heads out of the reflection. 'They were misled into it because of limited financial acumen'. - That's just not true for so many BTLers who have positions of wealth/homes, cars, holidays, free spending, savings.. from long wave (even short wave.. 2010-16) HPI that puts them so far ahead of renter-savers relying on incomes alone to buy a home.

'You want her washed and anointed, put in a white robe and placed on a stone

altar, too?' Yalson said acidly.

Horza shook his head. 'I want her clean of anything, anything at all that could

be used as a weapon or that could turn into one. I don't want to risk there being

anything more dangerous than Ms Balveda herself on board.'

-Consider Phlebas

And the BTLers are still very dangerous, and very opposed, to so many of HPC ideals (for lower prices and widerspread homeownership). Well when it comes at equity losses to them, dreams of their forever HPI and moar and moar properties shattered. Where in a few extreme cases, they've gone from top of everything with £millions in net worth, to looking at bankruptcy, if things unwind hard on them (CGT).

Also - for ThisTime and JiltedJen. Although posted a weighty post on this thread yesterday, which drew your ire (despite it covering so many of the issues - and it's clear many people don't fully understand the issues and the wider objectives many of us stand for - as seemingly does Gov policy now - when they go on about the pain for renters given S21s as losers in all of this), it was my first post on this thread for 4 days. So off with your flow and spamming nonsense. And yes, another weighty post, but one that I feel has important message in it.

Why don't you make a contribution to this thread to see how worthy your posts are? I am satisfied my post here makes an important point, that is rarely considered. Pushes back against those who risk giving a bit too much forgiveness to the BTLers as innocents. There are many highly intelligent BTLers who have got into it, and now facing financial challenges. BTLers should not be considered as innocent dupes of system/banks alone. Have to push back against that. Especially at these house prices, with all the BTLers still happily in position as a force in the market - feeding on the rent rolls and still with 'mad gainz' for the majority of them.

If we get HPC, I promise you this - we will see many BTLers who have had HPI rides, working in senior positions, come a cropper for their yearnings for BTL debt, and to buy up homes and deny other people homeownership - to feed on the rents, and put themselves first, going for ever more £millions of worth. Never enough for some of them.

It's people, of all levels of intelligence. Everywhere. Globally. BTLers are involved and complicit. When we can't afford one house, spare me innocence and blameless BTLers at peak prices. Occurred time and time again in different forms... housing and other speculative booms. However with housing it really does impact hard on other people... the bubble chasers, laying claim on assets via debt, to feed on 'mug' renters and housing benefit. Creates such a negative loop. There has to be consequences. Hard market on the way up into the boom.... (where's the innocence and excuses for renter-savers with limited financial acumen who recoiled at ever higher prices, for years - vs their incomes - clear as anything) should be hard market on the way down.

neg-gearing.jpg

The idea that you are somehow helping people is a complete fallacy, it would be like me cornering the market in dialysis machines, renting them to hospitals at inflated prices and then claiming I was "saving lives".

Your simply a middle man in the chain between someone's income and the mortgage payments to buy the house.

At the end of the day the world doesn't owe you a pension, especially one funded by other peoples income while giving nothing of value back to the economy. If you want an income then make a real productive investment in something, start a business, get a better job and save more money i.e. do one of the things the people who incomes you arn't able to farm any more have to do.

Edited by Venger
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HOLA4418
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HOLA4419

Limited financial acumen of BTLers / other HPIers....

Sleepwell has been very active in BTL. We've all heard about his mad-gainz. Isn't he an accountant? Watching over the renter-savers for years on HPC - and so many others who pity us, thinking it's a HPI or/and rent-roll future.

Whereabouts are you?

Where I am in North Hampshire lower priced properties are selling very quickly. To give an example a two bedroom terraced house sold in 2013 for £180K. The identical house next door sold last month for £230K. Apartments at under £200K don't stay on the market for long.

It has now been rented for £1000 per month. That's a 5.2% yield, no letting agent involved and maintenance costs on a 10 year old house are unlikely to be very high. If the new owner has financed it themself that's a much higher yield than cash on deposit. And its an investment as safe as houses.

I know you lot will flame me, but this is the mindset you are disparaging. So far this has prevailed over your hopes for an HPC. If the owner is looking at the investment as a future pension then in 16 years the cost will have been recovered, in nominal terms. Thereon it looks to be a better investment than letting the financial services industry pick your pocket. Even if the capital value falls there isn't really a problem as long as rents stay in line with RPI or CPI.


RK has only seen 50+ years of HPI long wave. Even in his area.. hpi mad-gainz to 1990, and then 1990-1994 only saw a 4% ish drop in values, before accelerating away 1997-2007... and from 2002ish.. at a pace that many relying on incomes, looking at value for money couldn't easily position with.... vs BTLers/flippers.

Limited financial acumen? (Isn't he a retired Investment Banker?) Lived a life in one of the most expensive housing markets, of long wave HPI.

WE ARE IN A MARKET. One which some participants think supply is everything about prices... and can't have HPC because savers get wiped out and owners are still left with all the houses (seemingly). WE ARE IN A MARKET. And that includes owners sat on mad-gainz, not wanting to come and cash in/sell - which is fine - but I suggest some may in future, and accept lower prices from the buying side. And that is how house prices fall at the wider level.

I know several friends/acquaintances who have put houses up for sale over the last few months in the £500-800k region, who are expecting to have to wait 12 months + to sell. In one case they had an offer £50k under asking (which was I think £50k less than the agents recommended price anyway) and they rejected it. Another who put it on at what seemed a peak price to me, only to drop it by about £80k a few weeks later after little response and who has now decided not to sell (doesn't need to).


It's the 'savings' which are 'unreal' in a rapid uncontrolled deleveraging/liquidation.

What you are arguing for is for all the assets on all the banks' b.sheets to be sold at once, with NO liduidity provider in the market. In other words a currency collapse.

That's been tried in the past and it doesn't end well for 'savings'.

AS you rightly point out - the houses and all other physical assets would still exist. So anyone who owned a house would still own a house.

However, since every business in the country just went bust, there's no payment system, nobody has a job or an income anymore, the only people who really benefit are those who already owned their own homes.

Anyone with 'savings', financial investments, a job etc etc just got wiped out.

Good luck with that.


It ought not come as a surprise then that nominal house prices have also risen (and imo over the long run will continue to do so).

We know this isn't 1980. We're not coming off high inflation rates, and we know demographics aren't the same as they were post war, so another real terms bubble seems unlikely. Moreover in real terms houses, especially in London/SE are moderately overvalued still. They're clearly not 'cheap'. Against that, this government has done nothing to resolve the supply problem, in fact they've made it worse and wasted 5 years to boot. If a 1 in 100 year collapse in the banking system, and the longest depression in history isn't sufficient to prevent above target nominal price rises then I'd venture that nothing short of the Four Horsemen of the Apocalpyse is likely to do it. Even then, I'd still bet on a Carney put.


You do accept that period, media pump, bull market, 120% LTVs, banks overleveraged, historically high transactions, selling > asking etc etc was 03-07 and not now don't you?

Now it's high deposits, high unemployment, historically low transactions, tighter credit, banks deleveraging, households deleveraging, fiscal tightening, negative real wage increases, selling < asking and so on.

This is the accumulation phase. The buyers are those with strong credit histories, large deposits and/or cash. The boom phase will be when those factors above go into significant reversal, the banks are recapped, wages are rising strongly again and so on.......

That's the macro position. It's puzzling to find anyone who thinks it is otherwise frankly.

As for anecdotals, you can find those to suit any outcome. My sense is bids are getting closer to asking and more recent asking prices appear to have jumped. One friend selling has had competitive bidding from developers, which was a surprise, so they appear to be getting funding again.

It's difficult to see how this is any different to prior consolidation/accumulation phases that we've experienced in the early 80s or mid 90s.

So many market participants known little more than multi-decades HPI long-wave mad-gainz + followed by determined reflation (imo to suck greedy hearts in to taking on more risk and making them prone to HPC). There is intelligence on BTLer side as well - but imo - a lot of greedy hearts and complacency. It has to be proven. Now is not the time for giving the BTLers an out... victims.. to blame the system/banks as responsible for it all. A mirror only.

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HOLA4420

A mirror, a market, full of active market decisions (even not selling at mad-gainz values is a decision). BTLers.. all individial decisions, and make from highly intelligent borrowers.

Had this memorised, word-for-word, for many a year. Much of the HPI and BTL days have a mirror for the chasing desires of millions of market participants, and also reveals their hearts.... for both limited-financial-acumen, and much by way of high intelligence / high financial acumen. Let it play out, and fight for it, rather than excuses, including about 'the system'. It's individual decisions and outlooks and choices (with so many who've piled in for second-homes / BTL galore). You don't need to be a genius to know you're doing it to farm someone else's income (in most instances).

You could see anything in the rain. The individual drops became streaks with the slow-ness of the eye; they merged and re-emerged as cyphers for the shapes you carried inside you; they lasted less than a heartbeat in your sight and they went on for ever.

..And he saw that which cannot be seen; a concept; the adaptive, self-seeking urge to survive, to bend everything that can be reached to that end, and to remove and to add and to smash and to create so that one particular collection of cells can go on, can move onwards and decide, and keeping moving, and keeping deciding, knowing that - if nothing else - at least it lives.

And it had two shadows, it was two things; it was the need and it was the method. The need was obvious; to defeat what opposed its life. The method was that taking and bending of materials and people to one purpose, the outlook that every-thing could be used in the fight; that nothing could be excluded, that everything was a weapon, and the ability to handle those weapons, to find them and choose which one to aim and fire; that talent, that ability, that use of weapons.

- Use of Weapons



Firstly, I believe yes we have made quite a few preparations (financially speaking) to shelter us from a quite a flood - as have a great many. The fact is that, as history shows those who can see the madness for what it is, and take precautions, tend to survive more than those who do not. Whereas the financial zombies get completely eradicated.

But, as you say, it is indeed well possible that the 'flood' would exceed our expectations and not leave us completely untouched in some form or another (e.g. rising crime rates, etc). But then again are we not already 'touched', harmed and hard done by this ongoing financial madness? I would argue we, and our like, have already (unfairly!) suffered. So IF suffering should come to those who genuinely deserve it? GOOD! It cannot come too soon.

Using the fear tactic that you espouse (i.e. you too will get swept up in the flood) doesn't hold sway with me anymore.

What are you? Man or Mouse?

It has been said, in many different ways, in respect of personal liberty and freedom that it isn't 'free' - it has to, from time to time, be paid for in toil and blood. The same such applies to ensuring restoration of financial sanity to the world. IF I have to suffer some (more than already) to ensure a better world for my children and their children than I gladly do so. What are you prepared to do?!

These personal stories of people, in this day and age, having to resort to living in vans utterly disgusts me with the 'system' and TPTB. Anyone who is not similarly disgusted simply does not grasp the significance.

If it doesn't you then I put it to you that you have started to lose some crucial essence of your decency and humanity.

With all due respect, what do you expect this forum’s users to do? Just stop talking about it and go cry in their soup? I get that your conclusion, and a reasonable one, is that the system is quite rigged against all but the deep pocketed and those connected to the central planning/government types will win while the rest lost. But it is in the discussion of it that people become educated about the exact levers (legislation, tax code, demographic change, whatever) that are directly related to the distortion in prices and markets.

If those that are outraged just all turn into a one-tune chorus of “it’s all rigged and we’ve lost” then they risk being taken as conspiracy theorists and sore losers. Credibility is lost. One has to choose a theme to battle upon…and have some ******ing faith that ultimately we still live in a democracy. Talk, educate, know the issues–a little feeling sorry for yourself is natural, but taking it to the point where you consider all action, including talking, futile, is, well, just pathetic, isn’t it?

Knowing the issues, which adjust slight every day on the technical side, and take in everything that is now beginning to come together, helps compound ideas in wider world. There are so many interesting pressures weighing down on the market for the near term future. I know my message gets out - and goes a small way to perhaps creating a change in other market participants decisions - tiny spark - and that message is heavily influenced from my learnings from other HPCers.

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HOLA4421

Will there be a point where you understand that the link you are posting is for the PRS as a whole and not leveraged landlords (being a subset of the PRS), or will I have to keep pointing it out to you?

You might consider being a bit less rude as what I quoted here had nothing to do with the financial positions of the landlord.....

btw) and yes I have read what I quote, so am perfectly aware that it refers to the PRS as a whole, not just leveraged landlords.

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HOLA4422

Unfortunately neither of those assumptions is likely to be true. Worth looking at the following graph of the financial positions of tenants from http://strategicsociety.org.uk/wp-content/uploads/2013/07/Lord-C-Lloyd-J-and-Barnes-M-2013-Understanding-Landlords.pdf

The majority can barely afford the actual move....

btw) same report discusses the position of the average landlord.

Yet they pay the rent and generate the profits. Weird.

Which is why a very significant fraction of tenants finds it incredibly difficult to save as they still need to live somewhere...hence the graph.

I got that...the fact that most of the current tenants have little financial assets is likely to amplify the losses of those poor landlords as in the end someone will need to buy their loss making investments.

Indeed! But if the landlords' losses will wipe them out then anyone who isn't bankrupt still has the higher net worth. ;)

I have a pet hypothesis that the multi-decade diversion of productive income away from paying down mortgages as homeowners into paying excessively high rents as tenants (due to what has in effect been a captured market, because credit conditions allow landlords to routinely outbid tenants using the tenants' own income) will result in house prices settling below long term income ratios for some time, as for many would be homeowners much of the money that they would have used to buy their own homes over the course of their working lives has already gone to their landlords.

Basically, I think that at the same time as BTL has been bidding up prices well in excess of historic income multiples it has also been progressively reducing the income multiple - and hence price point - at which continuing direct demand for housing and homeownership could be translated into proceedable, effective demand for homeownership.

I'm guessing we'll see whether that translates to anything significant in practice in due course.

---------------

Everyone here says the young are being ******ed over, which they are. But even if there is HPC of -50%, few young people will be able to buy on a zero hours contract - if they even have a job at all.

Then we'll have to have a 90% correction.

---------------

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HOLA4423

You obviously don't understand the taxation changes. It is precisely smaller unincorporated landlords that will be affected most. Without tax relief for debt interest, even a modest earner with one or two BTL properties will be dragged into the 40% tax band.

The one property investor can cover the shortfall with earned income separate to the property punt. We understand it just fine. You are mistaking a loss you can cover for a loss you can't cover.

The 10-20% reduction is a number I found interesting, I wouldn't be surprised if the actual figure (if the proposals are implemented as expected) was multiples higher than the lower end of the range.

Basically for a newbie to get into BTL this autumn it is conceivable they'll need to show a gross rental potential of over 11k/annum for every 100k borrowed (higher rate taxpayer) or 8.5k per 100k borrowed for basic rate taxpayer plus the SDLT supplement which quickly escalates to sums comparable with annual achievable rents, and the knock on effect for borrowing potential.

Wouldn't surprise me if BTL activity is laid waste in the circumstances. 10-20% reduction seems like a figure put about so as not to frighten horses prior to impementation.

I know you know this (and I know you know that I know you know this, and I know that we know that lots of people reading this know this, know we know this and know that we know that they know this) but there is a reason that you are not a leveraged landlord. The leveraged landlords don't know any of this. Even if they read this then after reading this, they will not know any of this. At some point they will find that they no longer have the cash to stay at the table. At that point they will still not know and of this, but at that point their role in the setting of house prices will end.

:lol::lol::lol:

You obviously don't understand the taxation changes. It is precisely smaller unincorporated landlords that will be affected most. Without tax relief for debt interest, even a modest earner with one or two BTL properties will be dragged into the 40% tax band.

Had a sort of esprit de l'escalier moment on this. You are not admitting capital losses as a premise. This is the housepricecrash forum - you ought to consider that you could spend money on a house, have prices move against you and end up being compelled to sell for less, don't you think?

If you have £200k of equity in your own home and you put down £50k of savings on a BTL, find the market moves against you and end up losing £100k and having to sell your own home and hand over £50k to your lender to make them whole, you still have £150k. You may even avoid the unmentionable shame of renting.

Try that stunt with £200k in your own home and £50k of savings leveraged up, in the fullness of time, to £300k of portfolio equity and £1.5m of debt and the same move in house prices will bankrupt you and you'll be in an HMO.

Anyway, BalancedBear, good talking to you. Don't be a stranger.

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HOLA4424

You might consider being a bit less rude as what I quoted here had nothing to do with the financial positions of the landlord.....

btw) and yes I have read what I quote, so am perfectly aware that it refers to the PRS as a whole, not just leveraged landlords.

Yeah, it was a bit rude. However, I liked the joke made by SimonSays that you to which you were responding:

I expect its both of those. Ironic, considering tenants and even the homeless have a higher net worth than many borrow to letters; and with more saleable skills into the bargain too.

As he was making the claim that many tenants have higher net worth (not most) I thought that your supposed correction of that part wasn't really justified by the data. You also rejected his idea that many tenants might have more saleable skills, but didn't back that up at all, so presumably it is just a personal conviction of yours that our BTL overlords have mad skillz as well as mad gainz.

Long and short of it, you were offering a pretty weak 'correction' to a joke on a 350-page fun thread a thread on which, up to that point, you'd been conspicuous by your absence, so I didn't feel the need to be too cuddly.

Edited by Idlewild
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HOLA4425

There will be innocent losers who lose their rented home as a result of C24, but it's important to be clear about where the blame for this lies. Not with clause 24 but with a system that has enabled people (often of limited financial acumen so it seems) to borrow frankly eye watering amounts of cheap money to in an attempt to corner the housing market for appallingly bad returns. C24 should go some way to lancing this boil. One hopes that for every sad story like this there will be at least one family or individual that manages to purchase their own home at a sensible and genuinely affordable price.

Agree with all your main points, apart from 'the system' and 'often of limited financial acumen'

The system is millions of other people, including HPIers not tempted to sell up in low inventory market for ever more possible 'mad gainz' in a market - and with BTLers of all types of financial acumen... including accountants, equity partner lawyers, investment bankers, who are totally committed to a view of forever HPI (or most still are... only a few begun to doubt themselves, with higher rate stamp duty on BTL and C.24... to their total astonishment (those who have read about it).

Always feel like this, so many years pushing back against 'the system / bankers taking advantage of limited financial acumen) against raging HPI year on year on year.

It's instantly forgotten - or not accepted - because so many people are too nice to point to outrageous greed where it clearly exists. Impossible to miss.

Housing inventory (houses on market scraping 1970s lows in run up to Christmas) and house prics in many markets so outrageously beyond earnings. They would rather point to 'the system' - in really abstract terms. Very unwilling to accept other INDIVIDUALS are intelligent, just as intelligent as many hpcers - much more so even - and still go BTL lusting in deep. Active and complicit and responsible. Not concerned about wider impact on others, but putting themselves in position to feast on it, and capture incomes. It's houses, not shares. Other people's lives and dreams long outbid and captured by active BTLers.

I honestly think that many people view impediments to BTL as proof that property is the hottest ticket in town, and that any spanner thrown in the works has been chucked in there deliberately to try to discourage the faint of heart. It almost seems to make them more determined.

Back in 2011, my parents emailed me to ask what I thought about BTL as an investment. My response led to me being somewhat excommunicated, since it apparently wasn't the affirmation they so badly wanted. I recently found out that they'd weighed up my considered opinion, and promptly gone balls deep with not one but 3 BTLs, so I re-read my email response to them, and IIRC 4/5 of the main points I made 5 years ago are looking very close to being proven correct. I'm taking no credit for that because my points were only rehashes of what I read here. But the fact is, they ignored what now increasingly seems like prescient advice and have 3 BTL hanging round their necks, seemingly oblivious to the fact that when the BTL buyer pool exits the market (if not already) the price point where OO buyers can provide any support is a long way below where they think it is.

It'll be an interesting conversation.

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