Legal & General plans to become large-scale landlord

Graham_Devon

IveSeenTheLight wrote: »

With increased administration costs and a desire to increase margins, please explain why you believe this will bring costs down for the tenant and what the impact would be on the services income for supporting the large corporation?

I've never stated it would bring costs down for L&G tenants.

Why, therefore, would I need to explain myself?

IveSeenTheLight

Thrugelmir wrote: »

On the scale L&G intend to operate. Creating your own end to end supply chain makes financial sense.

I can see this from a business sense, however I can't see how this makes it financially any easier on tenants.

If anything I see the costs increasing.

IveSeenTheLight

Graham_Devon wrote: »

I've never stated it would bring costs down for L&G tenants.

Why, therefore, would I need to explain myself?

You made the comment

Everyone, including you clapton, have been saying this is what's needed to bring prices down

The previous comments in the thread related to the company being able to reduce their costs.

I'm therefore wondering why you think this would bring prices down?

IveSeenTheLight

Thrugelmir wrote: »

Property letting is profitable. If you have the cash to invest then why not do it. Unlike private investors, L&G can take a long term view. In the process offering tenants long term security.

I'm a private investor and I have a long term view.
I've been leasing for a number of years now and intend to continue leasing the properties for the foreseeable future.

Possibly I might consider a change in strategy in about 25 years time, but at the moment, certainly not before then.

IveSeenTheLight

Percy1983 wrote: »

My company has an excellent CEO :rotfl:

You sure.
I'm sure they once commented about giving away their products and the company being non profitable.

Certainly nothing to note worth investing in or backing

Graham_Devon

IveSeenTheLight wrote: »

You made the comment


The previous comments in the thread related to the company being able to reduce their costs.

I'm therefore wondering why you think this would bring prices down?

We went through this on page 1.

http://forums.moneysavingexpert.com/showpost.php?p=62839734&postcount=19

IveSeenTheLight

antrobus wrote: »

In the same way as Tesco is more profitable than your local independent grocer?

But we aren't discussing the companies profitability, but the impact to cost of the end user.

In the example you show above, there are many independent retailers / farmers markets which sell there produce cheaper than countrywide supermarkets

antrobus wrote: »

In any case, margins won't be of prime concern to L&G, they'll be looking at investment returns, i.e. the return on capital invested. The fact that they'll probably have access to cheaper funds than your typical BTL investor will have a greater impact on their return than any administration costs.

Of course, I agree that BTL is a great return with very good security on the invested capital.

Still this is looking at it from the investors point of view.
I'm getting a 13.2% return on my investment without including the capital gains I have seen since I invested.
this will only be realised when I sell.

What do you think will be the

IveSeenTheLight

Graham_Devon wrote: »

We went through this on page 1.

http://forums.moneysavingexpert.com/showpost.php?p=62839734&postcount=19

I see no direct comparison of how it would drive prices down.
How many additional homes are L&G building? or are they investing in existing stock?
For the additional building, how is this dispersed across the UK.
What will be the impact locally?

Let's assume that you are right and there is sufficient new builds BTL from L&G in a locale that directly affects my margins.
I'd then consider leaving the market, to them, thus reducing supply again.

There are a lot of if's surrounding this announcement, but certainly I have not seen any sound evidence that tenants would benefit financially from this deal.

IveSeenTheLight

Graham_Devon wrote: »

Simple. Economies of scale.

From what you are saying, it would always cost more to buy from larger business. We all know that's obviously not the case.

Saying Economies of scale does not consider the local impact.

There have been references to supermarkets who operate under economies of scale, but we can also see a number of independent retailers / farmers markets which offer better value for money.

Often these large companies are banking on convenience and people not being able to work out weights and prices.

The other day, I saw a deal for a product that was £1.25 each or two for £3.
An independent retailer was selling for £1.

Supermarkets draw you in with low price products but bank on you buying alternatives which balances the margins.

If economies of scale works as you so simply describe, why are we seeing food prices escalate.

Graham_Devon

Good grief ISTL, do you want me to provide a dissertation on it or something? How am I supposed to know detailed answers from one article on which we are discussing?

Something you have told me on many occasions is that if you want prices to fall you have to add more supply. That is what is happening here, to which you now state the opposite of what you have stated before.

Another BTL against a large company getting in on it....