First Steps to Solvency

ryanm8655

ladyholly said:

From what you have said your wife has helped gain the cc debts so it is only right she helps clearing them. If she is giving up stuff I hope you are too. 

Exactly. It’s yours and her debt problem, not just yours and you need to work as a team to tackle it. If you can make £10k from selling them, imagine how much has needless been spent on bags over the years...probably a good chunk of the debt (not that I’m saying it’s your wife’s fault...but you have both contributed to the debt, knowingly or not).

alt80

We’re both giving up stuff - I’m going to get rid of the two watches I don’t wear and have a look through other stuff too. Next Tuesday my f-type is going.

I’m more concerned about the immediate future than I ever have been - the economy seems very uncertain and hard to predict what will happen next. It’s stressing me out - I was alright whilst lockdown happened, I got on with what I needed to do and actually enjoyed the time off but now I’m looking back at a UK government and a Conservative one at that locking the whole country down, paying staff and forcing business to close. Beyond all that taking our personal freedom. I have never felt as vulnerable as I do now - always thought my business, my choices good or bad. I didn’t even know the government even had those sorts of powers if I’m honest. I’m losing it I know that much and I don’t know how much is down to the debts and how much is down to everything else going on. Boris needs to get on tv and tell us it was all some really bad joke.

Start of March we were all laughing about corona; wash your hands whilst singing happy birthday, we’ll be fine in the UK by the end of that month all control taken from our lives couldn’t even go for a drive or walk more than once a day unless your name is Dominic of course. My wife doesn’t understand “not all about your business and money” she tells me but it is for me or I’m done, game over. She would find someone better and I would probably completely implode. She just thinks everything is going to work out and people will in the long term be better for having gone through the whole crisis and we’ll all live happily ever after. Half my fault I’ve spent years trying to shelter her from life.

ryanm8655

alt80 said:

We’re both giving up stuff - I’m going to get rid of the two watches I don’t wear and have a look through other stuff too. Next Tuesday my f-type is going.

I’m more concerned about the immediate future than I ever have been - the economy seems very uncertain and hard to predict what will happen next. It’s stressing me out - I was alright whilst lockdown happened, I got on with what I needed to do and actually enjoyed the time off but now I’m looking back at a UK government and a Conservative one at that locking the whole country down, paying staff and forcing business to close. Beyond all that taking our personal freedom. I have never felt as vulnerable as I do now - always thought my business, my choices good or bad. I didn’t even know the government even had those sorts of powers if I’m honest. I’m losing it I know that much and I don’t know how much is down to the debts and how much is down to everything else going on. Boris needs to get on tv and tell us it was all some really bad joke.

Start of March we were all laughing about corona; wash your hands whilst singing happy birthday, we’ll be fine in the UK by the end of that month all control taken from our lives couldn’t even go for a drive or walk more than once a day unless your name is Dominic of course. My wife doesn’t understand “not all about your business and money” she tells me but it is for me or I’m done, game over. She would find someone better and I would probably completely implode. She just thinks everything is going to work out and people will in the long term be better for having gone through the whole crisis and we’ll all live happily ever after. Half my fault I’ve spent years trying to shelter her from life.

I think a lot of people feel the way you do buddy. I know I do. The thought of still living like this going into match next year terrifies me, I’m just trying not to think about it and living a day at a time on that front...

Re: the economy, your BTLs are covered by LHA tenants so you’re ok there. Not sure what your other business is though but assuming it’s property management/potentially sales/Lettings or something property related.

I don’t know if markets outside of London will be so badly impacted...but this whole cladding malarkey is limiting the supply of flats, which’ll be inflating the prices of new builds I’d imagine, plus ordinary houses to some extent, due to the potentially increased demand.

Personally think there is a lot of evidence that the most recent restrictions are poor policy making on the basis of a failure to understand data. Positive test results don’t equal coronavirus cases. There’s evidence that most of them are likely false positives as a result of testing so many people...and the fact hospital admissions and deaths are rising at no where near the same rate supports this. It’s the same story in other countries. About the only country that doesn’t fit the pattern is the US... The data experts are calling it a casedemic and there is evidence from previous epidemics to suggest the same has happened previously. Not that that helps change anything as well all know how much people have disdain for data and experts...just look at brexit...

alt80

I’m a comm / res surveyor so work as valuer in a professional capacity - agency/ secured lending/ management etc. All part of my business/ professional life. Cladding not really a big issue up here fortunately. Market is currently good on the resi side but feels like it’s at a cliff edge people taking advantage of the stamp duty holiday / still being in work etc. Maybe just burying their heads in the sand or possibly just getting on with life. Lenders have got stricter. Unemployment rising. No movement on interest rates. Everyone asking me what the market is going to do because I’m the qualified professional ... I don’t know I haven’t lived through a pandemic either Let alone a pandemic and brexit in a country still under measures of quantitative easing brought about from a previous recession many have still not entirely recovered from.

RelievedSheff

Try not to see this as a punishment. It isn't, it is working towards financial freedom and every pound or penny not spent is helping you to get there sooner.

It is great that the wife wants to get onboard and sell some items to help things along. Dont feel guilty about it. 

ladyholly

Try not to worry too much about the things you cant change.We are all at the mercy of the government and the sitution as it is. Yes mistakes are being made not just by our government although they do seem particularly error prone but the whole world is trying to control Covid19 and in general the results are variable. No we are not being told the whole truth but then are we ever. You just need to do the best you can for you and your family and let everyone else do the same.

enthusiasticsaver

I think you are right to be concerned but as you say at the moment people are being sucked into moving by governments desperate attempt to avoid a recession by giving the stamp duty holiday. I know loads of people who are doing that but I predict a massive amount of redundancies when the furlough scheme ends and these restrictions make some businesses unviable. All anyone can do is to prepare as much as they can by getting their finances in good shape as governments don't care about voters personally. They can't fix everything either. 

The housing market is being propped up by the stamp duty holiday but I think it will be lending restrictions which will cap it off at some point. A lot of people would be in serious trouble if interest rates rose so I don't think that will happen considering the massive amount of borrowing the government has. I have pushed most of our savings (bar emergency fund and next years requirements) into investments which are remarkably buoyant since the very slight dip in March. Much better return than the pitiful saving rates high street banks or internet banks are providing. 

All you can can do is pay down the personal debt as far as possible and get some emergency savings behind you in case your business profits drop. 

getmore4less

Residential letting seem to ride the downturns reasonably well as long as there is enough reserves and cash flow to avoid the need to liquidate assets.

Tight lending has meant a lot have had to postpone purchase plans so will remain in rentals, the SDLT holiday helps deposits a bit but not enough now they are pretty much restricted to max 85% LTV

The 2 big risks I see are.

The government has given poor(as in bad and no income) tenants an open door to stop paying rent and sit tight for a lot longer as you can't evict with no courts taking letting disputes.

Student towns/city,
remote learning reduces student demand,
or
university accommodation is high covid risk so students go looking  for private house shares.

even though jobs are getting lost there will still be plenty in work and people need places to live.


I Have seen a few down turns and every time the headlines are prices down but those are mainly the forced sales.
MOST people ride it out staying put where they are leaving bargains for those with the cash pots.

enthusiasticsaver

We have seen recessions before. I remember the 1990s particularly as I was working for a major bank as a debt counsellor and we were doing repossessions every week. Awful time. I was out of the finance industry by 2007/2008 but I think every effort is now made to keep people in their homes. Lots of bargains to be had by those who are cash rich as you say. My eldest daughter is working on evaluating the finances of Universities and I expect some are very vulnerable. 

As a lot of companies are asking people to work to work from home for the foreseeable future I wonder if commercial property will take a dive. My youngest DDs employer has already let leases go on several buildings as many of their workers can work fine from home. The only fund in my portfolio not doing well (frozen in fact) is Legal and General UK property feeder which deals in commercial property. 

alt80

@RelievedSheff Thanks. I can't really see the financial freedom thing - long way to go to being at the point of no finance / no res mortgage. If I get the opportunity to move I'll be paying off until way past the usual age of retirement. Wife thinks we'd be better off if I stopped chasing my dreams.

Tbh wife is propping me up right now she took the conversation about us both needing to grow up a bit and support each other seriously - it's my behaviour that's the problem atm I can see that much.

@ladyholly It's like we're living in some dystopian novel haha.

@enthusiasticsaver yes I think you're right re. redundancies - companies are starting to realise they have some staff in positions that are superfluous to the business other businesses are struggling or had massive restrictions imposed on them.

Lending restrictions already happening and will be the major factor in downwards pressure on the housing market.

My level of personal debt is an issue - outgoings are high with little left over to rid myself of the debts in a quick timeframe.

Commercial side is challenging at the moment some sectors there are some very real concerns. 

Repossessions aren't of the quantity they used to be - heard the tales of the 90s from older guys in my industry many times but I've dealt with them both as a valuer and agent.

@getmore4less I'm not particularly concerned about the res lettings side either. Agreed re risks - tenants are generally getting more protection had already started but accelerated with covid and a massive backlog. Some LLs having difficulty with tenants. Not seen much of it personally but perhaps that's down to management / getting the right type of tenants from the outset. A lot that goes wrong in res lettings are naive LLs and rubbish management. Not that you don't have to account for bad tenants you do but not at the rates some people seem to attract them.

Student sector is definitely an interesting one right now.

People staying put on the res side puts pressure on parts of my business. Still remos / lettings / some sales / other valuations etc but generally a slow market isn't ideal. Glad I'm fairly diverse in what I do - those doing nothing but sales aren't going to be in a great place. Absolute goldmine for cash buyers to pick up forced sales though agreed if it goes the way I think likely.