HPC thread of the week

mwpt

westernpromise wrote: »

You're just being obtuse now.

No I'm not. We were talking about rents rising disproportionately during a property crash. Hamish posted a graph from 2010 - 2015.

gadgetmind

MFW_ASAP wrote: »

The consensus was that it is impossible to buy a 'renovation' job and add value because people have children, or because they are too old or unskilled or overworked or tired or disillusioned to either do the work themselves or project manage tradesmen.

Daughter bought a fixer-upper (needed kitchen and bathroom stripping out, external wall rebuilding, lots of plastering, electrics, gas, etc., etc.) and we did the whole lot in five week despite me being very busy, the house being a 1.5-2 hour drive away, and her budget being very limited.

I guess some people are beyond help if they can't knuckle down and do the same.

HAMISH_MCTAVISH

mwpt wrote: »

The supply demand argument is used often here, except when it comes to landlords. :doh:.

You're failing to see one side of the equation.

Adding more supply won't bring down prices if you also add even more demand.

It's the imbalance between the two that causes price rises (or falls), not the absolute number of either.

So if the rented sector expands less quickly than demand does, then rents rise rather a lot, as we have seen.

And if the rented sector now stagnates or even shrinks while demand continues to increase, rents will rise by a fair whack more than 'rather a lot', as we're about to see.

I mean, this isn't even remotely contentious, it's just basic economics.

mwpt

HAMISH_MCTAVISH wrote: »

You're failing to see one side of the equation.

Please read my posts again.

Crashy_Time

HAMISH_MCTAVISH wrote: »

You're failing to see one side of the equation.

Adding more supply won't bring down prices if you also add even more demand.

It's the imbalance between the two that causes price rises (or falls), not the absolute number of either.

So if the rented sector expands less quickly than demand does, then rents rise rather a lot, as we have seen.

And if the rented sector now stagnates or even shrinks while demand continues to increase, rents will rise by a fair whack more than 'rather a lot', as we're about to see.

I mean, this isn't even remotely contentious, it's just basic economics.

Like oil at $100 a barrel was, until it wasn`t?

mystic_trev

Crashy_Time wrote: »

Like oil at $100 a barrel was, until it wasn`t?

A Crashtastic New Year to you Crashy. As you're so fond of Hamish, perhaps you'd like to participate in his 2016 prediction thread?

https://forums.moneysavingexpert.com/discussion/5386252

Crashy_Time

mystic_trev wrote: »

A Crashtastic New Year to you Crashy. As you're so fond of Hamish, perhaps you'd like to participate in his 2016 prediction thread?

https://forums.moneysavingexpert.com/discussion/5386252

Aberdeen landlords to start offering to come round and cook their tenants meals if they promise to stay at half last years rent?


:rotfl:

thequant

Crashy_Time wrote: »

Aberdeen landlords to start offering to come round and cook their tenants meals if they promise to stay at half last years rent?


:rotfl:

You can laugh, but it is us who are laughing all the way to the bank.

:beer::beer::beer::beer::beer::beer::beer::beer::beer::beer:

caronoel

thequant wrote: »

You can laugh, but it is us who are laughing all the way to the bank.

:beer::beer::beer::beer::beer::beer::beer::beer::beer::beer:

My prediction for Crashy - his landlord keeps his rent unchanged for the 103rd year in a row.

anchovypizza

Just want to make this point again after finding out about HPC on this very site, seems there is more posting about HPC on here than there is on the HPC site itself.
I know how this site works, same dozen, maybe less, post on here on a daily basis who just make short sharp repetitive rants and make accusations that are nearly away's unfounded but suit their mantra.
Now after reading about HPC on here I checked it out, again I will say it, on death ears I know, it is well above the maturity and standard of debate that is on here, and non of this silly reccing/thanks which posters just do out of habit to the same people over and over again.

I do not agree with all that's posted on HPC, and the odd few are idiots. I also am a massive rental fan, the standard or type of people renting out properties though are well short of the mark, hence my critical approach. I already own my own home, but that's not to say rental could not be one day seen as a better option.

Here is a post I have just read on HPC, and it is not isolated, far far better quality that is on here, so easy to understand why Martin Lewis has a dislike of this one board in an otherwise brilliant site, the best in fact, please just close it Martin, it is shameful as you will know, why would you hide it from lurkers otherwise?

Here it is

Anecdotal:

Hi everybody, apologies for the epic long first post ! ( Long Long time reader/lurker ) felt compelled to weigh in on this.

I rent from private landlords as my long term goal has always been to leave the UK ( which should be happening next September ) so while I hope for a HPC for my family members who are priced out and for the general stability of my home country, I have no personal stake in a price crash, beyond as a backup if I ever need to return to the UK. The service provided in my experience renting is nothing comparable to any other business. You would logically expect something akin to a hotel or bed and breakfast ( without the room service or breakfast ) where repairs are done in a swift manner, property is well maintained and the consumer is valued ( not treated like a second class citizen ), I have so far had only one landlord who would fit the description of "good. All other landlords I have had, do no repairs, seem to have never done DIY or basic maintenance in their life and seek to do everything to a cheap and shoddy standard ( luckily I can repair things myself ). Damp, Mould, poor electrical work, basic fittings, crap plumbing are par for the course, by delaying small maintenance costs, they are saving up some pretty huge maintenance costs down the road.

I have written to MPs, campaigned and protested for functional sensible tenant laws and would welcome a return to sanity, in the business of shelter and accomodation, both in house prices and in tenancy laws and standards. So am a fairly practical HPCer despite being quiet and lurking for a while. Hasn't gotten anywhere, but would rather give it a go if only for my own sanity and a sense of vague hope. I have seen filibusters, preferential tax, preferential accounting conditions and a very advantageous credit market in support of buy to let.

Warning: More anecdotal ahead !

From 2006 to 2010 I ran my own business ( video/film production) alongside my full time employment, for a time it was succesful enough, but due to changes in the standard distribution model outside of my control and the 2008 credit crisis wiping out trade partners and loads of jobs within the industry, plus not being in a country with a major market for my skills, I needed to close the business. I actually finished up with the company in the black, so no bankruptcy, it just became unviable as a source of dependable income. My business started out originally with a loan, but after that initial start up, I managed to get the business going on its own steam without credit liabilities. I still do video work (10 projects last year ) but not as my main income source, a kind of second job really. Fortunately business is starting to pick up again and next year I may have to move back in to doing it full time. Accounts filed, taxes paid, no crying or moaning on the internet ( unless this post counts ).

Why is this mega rant relevant to this thread ?

Well, because usually a business would be something that would need initial credit to start, but then exist under its own steam, if additional funds are needed, more borrowing can take place, usually at a high interest rate, or the more viable business models would receive external investment from people who see the chance to attain profit.
In my day job to pay the bills, I have worked in risk analysis/forecasting/business process change for 15 years, always prime lending ( won't touch sub prime with a barge pole ) Including business lending, I have quit a few jobs for their dodgy lending practices, not going to be responsible for giving people enough rope to hang themselves, life is too short. I had some brief exposure to "prime" buy to let in 2010 and it was well known within the organization I worked for, that it was a ticking time bomb. It has been increasingly difficult to find employment with prudent lenders, as prudent lenders are very few and far between. There is a benefit in having credit in a society, but currently, this is being abused ( to say the least ).

Most businesses, are not run, entirely, on the fumes of borrowed credit, they do not tend to be leveraged bets using credit funds, which seems to be the buy to let model. With political and taxation changes, most businesses, if profitable, would easily be able to attain institutional investor funds to bolster growth, as they could evidence yield. Essentially in my estimation, buy to let is not a business. Additionally to this, most business men and women, do not go on the internet to whine and complain, they do not call their customers names and they do not lobby the government, they just adapt and change and maybe someday if the business is viable, it will grow again. To define highly leveraged property investment relying on government supported scarcity, as a business, is a slight perversion of the term.

Any criticism of the buy to let model, is seen by the BTLers as jealousy, I can assure you, I am not jealous that my income does not derive from an investment that does not make profit in any conventional defintion and is for the most part a long play on capital value gain, these portfolios, should at this point, be unleveraged, with any business growth coming from turnover, which would make it resistant to any taxation shocks. Also for what it is worth, this government like the ones before it, seems to be fairly inept and lets be honest, is only targeting buy to let because it proposes a massive risk to the countries finances, not out of some sort of ethical realisation of an unfair playing field ( or else there would be no help to buy ), in a bizarre way the buy to letters have a lot in common with the HPCers/debt avoiders, both groups have been harshly treated by government whims. Divide and conquer politics as usual.

For what it is worth, in my day job, we are preparing currently for both a credit crunch type environment and a decline in property values/rise in interest rates environment when deciding where it is prudent to issue credit, Note this is not financial advice.

Quote
MultiQuote