Category Archives: Money

A very local housing crisis and our crap politicians

In the UK, politicians and hand-wringing professionals from organisations like Shelter are always complaining about ‘Britain’s Housing Crisis’ and that ‘young couples can no longer afford to buy a home’ or ‘greedy buy-to-let landlords are snapping up properties that should go to first-time buyers’ and so on and on and on…

They say that prices have risen so fast that young couples can no longer afford to get on the housing ladder. They say we are in the midst of a ‘HOUSING CRISIS’.

Paxman asked why are our politicians so crap?

Well, in my opinion this is a very local housing crisis and one largely the fault of, to quote a recent brilliant Jeremy Paxman programme, our CRAP politicians. To coin a phrase, I agree with Jeremy. All our politicians and think-tanks etc say that we have to build more homes and they use euphemisms like ‘affordable’ and of course the stupid Labour Party always wants more ‘social’ housing and want to get rid of all those evil landlords.

But as usual all of them fail to see the bigger picture. Although in most parts of South East England house prices are indeed beyond the reach of most first-time buyers and young people are forced to pay very high rents to live in even ordinary accommodation, it’s not like that everywhere in Britain.

So in Camden, one of the fastest appreciating areas in terms of house prices, property is more than 3.5 times as expensive as it was 10 years ago. However, in parts of Liverpool prices are actually 44% LESS than they were 10 years ago! And prices are also actually LESS in parts of Bradford, Hartlepool, Middlesborough and Sunderland. And of course where they have risen, they have not risen nearly as much as in London.

Table showing details of negative changes in house prices in some northern cities and towns.

Property prices are driven partly by availability of credit, but also by DEMAND – the demand by people to live in areas of their choice. Part of that choice depends on availability of employment and availability of employment depends on investment, both public and private.

H2O Yes – HS2 No!

The government has totally failed over the years to invest in the North of Britain and to properly incentivise businesses to relocate there. They have failed to build the required infrastructure, particularly railways. Look at the insanity of two current massive government infrastructure projects, HS2 (or H2O as I heard it referred to by an LBC caller) and Heathrow Expansion.

Whilst being wholly in favour of H2O, HS2 on the other hand is an insane project, that even if built will largely benefit the South. And as for Heathrow expansion, that obviously will do nothing at all to boost the economies of northern towns and cities. and everything to make life even more intolerable for those living in and around London. Boris Johnson did promise to lie in front of the bulldozers to stop it but although extremely adept at lying about most things he isn’t going to lie in front of any bulldozers.

If we just continue to try and satisfy the insatiable demand of people to live in London and the South East of England by building more homes we will end up having to build more homes, and then still more homes and so on until the quality of life in the south east becomes intolerable. It’s already impossible to get anywhere easily on our crowded roads and packed trains and no one can get a doctor or hospital appointment within a reasonable space of time.

The sustainable solution

So, instead of bleating on and on about building more affordable homes whilst expanding Heathrow and spending an unimaginable amount of money on HS2, the government should invest properly in the North and offer real financial incentives to industry and business to relocate there. Then employment will increase, young people won’t be forced to relocate to London and the South East to work and the housing crisis will very gradually ease.

LandlordsandLetting – Affordable Landlord Insurances

Brexit – Let’s call the whole thing off!

Yes, I admit it, I voted in 2016 to leave the EU. And now I bitterly regret being taken in by all the nonsense spoken by Nigel Farage, Boris Johnson and the other jokers.

Reasons to be Cheerless – one, two, three

To be honest I voted leave for three main reasons. One, I was and still am, concerned about the way immigration into south east England is causing great problems – travel, housing, schools, hospitals, GPs, water resources and so on. Two, I loathed David Cameron. And Three – I never dreamed it would actually happen!

Of course, if the ridiculous Boris Johnson hadn’t actually run away after the Referendum result perhaps we wouldn’t have a woman who campaigned to remain, so pusillanimously trying to negotiate our exit. And maybe, just maybe things wouldn’t be quite so bad. But essentially it’s not really hopeless Theresa’s fault.

David Cameron is the primary architect of this mess

The primary culprit is David Cameron, who in order to fend off UKiP, recklessly promised a referendum that, due to inaccurate polls, he never believed he’d have to hold. This man is a bloody disgrace and the second worst PM this country has ever had – I think we all know who the worst one was (clue – he was elected in 1997).

Also culpable however is Nigel Farage – a man driven by an obsession for over 20 years that the EU is our main enemy. What he fails to understand is that our main enemies are not in Brussels but in The Kremlin. In fact I believe he was offered his own show on RT (Russia Today) in 2016 although he did decline the offer. But it shows that, completely inadvertently, Brexiteers are furthering The Kremlin’s policies.

So should we stay, or should we go?

So all us regular folk, who are usually not even consulted about such pressing questions as whether the power of vacuum cleaners should be regulated, were presented with this one oh so simple question: Do you want to remain in the EU, or do you want to leave the EU? That’s simple isn’t it?

Had YOU ever heard of The Customs Union? Honestly?

However, what The Referendum didn’t ask was, if you want to leave, do you still want to be part of the Customs Union and have access to the single market or not be part of the Customs Union but still have access to the Single Market and would you like a soft, hard or medium soft border for Ireland and what about services do you feel that we should perhaps retain control of services but at the same time be able to strike deals with a deranged nationalist with a bad hair-do in the USA and are you happy that Putin is also firmly behind Brexit and in any case are you happy that Jean Claude Junker is usually drunk and anyway what about the fishing quota?

Who’d ever heard of The Customs Union? And in all that pre-referendum debate did ANYONE ever mention the border with Northern Ireland?

Boris DIDN’T get what he wished for

Of course, like little me, I am sure the Great Boris also never believed the Leave side would actually win – which was why he threw his weight behind it. If Remain had won as expected and predicted (those bloody polls agin) he would then have been able to have mounted a campaign for the leadership against his arch rival, Cameron. Two posh boys slugging it out. When Leave surprisingly won he knew it would be very very difficult – which was why he ran away. My favourite description of Boris Johnson is, just because he appears to be a bungling buffoon, doesn’t mean he isn’t. And he mainly got where he did because he did well on ‘Have I Got News For You’ – they’ve got a lot to answer for!

I still hate the EU – it is an appalling corrupt, wasteful and over-bureaucratic organisation with a Mickey Mouse currency but I realise we are better in it and campaigning aggressively to change it than be outside it. After all, we are not part of the Euro or the Schengen Agreement and we should have been way tougher with them while remaining inside the club.

A New Referendum with Three Options

UPDATE December 9th 2018
Theresa May has just negotiated a ‘Deal’ (I though we had a good one – not in Schengen and with our own currency) so let’s have another Referendum before it’s too late, but with THREE options:
1. Do you want Theresa May’s Deal?
2. Do you want to leave the EU without a deal?
3. Do you simply want to remain in the EU?

I would vote for option 3! But I would demand that our leaders be very awkward and cheat a bit when necessary. After all, that’s what countries like France, Italy and Hungary do quite successfully!

James Stretten – Landlords and Letting

Letting Agents – landlords should avoid them!

Landlords – how to save around £5500 letting your property

There has been a lot of discussion recently about how letting agents regularly rip off tenants – and they do. The government is belatedly introducing legislation to restrict their fees to tenants. But they also rip off landlords and whilst it’s difficult for tenants to avoid them, it’s much easier for landlords, as long as their property is local.

Given letting agents outrageous fees to landlords, it’s incredible they have the nerve to invent all the other charges they make to tenants – that’s why most tenants and landlords alike dislike them.

Letting Agents’ charges to landlords

Agents love to talk in terms of percentages because it enables them to disguise the iniquitous levels of charging they engage in. So let’s take a property that the rent is £1500 per calendar month. I have taken as an example the quoted fees of a well know high street agent, which do include landlord rent guarantee insurance.*

I am assuming the case of tenants who remain in the property for a total of two years…

These agents charge 7.5% plus VAT for Sole Letting Rights – this means that WHOEVER lets the property this agent gets their cash.

The real costs of using a letting agent

  1. Letting fee for let only will be £1500 x 12 x 7.5% = £1350.00 plus VAT for the FIRST year, paid in advance.
  2. Let’s say you are stupid enough to use their ‘Full Management Service’. This involves collecting the rent – it just goes into their account before eventually going into yours. They deal with everyday calls from the tenants and make 6 monthly inspections etc. Add an EXTRA 6% plus VAT. So that’s £1500 x 12 x 6% = £1080.00 per annum extra plus VAT.
  3. Providing you with an Inventory – between £140 – £200. So, let’s say £170 on average.
  4. If the same tenants simply decide to stay on in the premises which involves the agent in doing VIRTUALLY NOTHING they will charge the landlord another 7.5% plus VAT – Yes ANOTHER fee, amounting to £1350.00 plus VAT

Let’s add up all the bold figures because they are indeed bold. That’s £1350.00 x 2 + £1080 x 2 + £170.00 = £5030 plus VAT where applicable.

So, you let a flat or house for £1500 pcm and end up paying the letting agent £5030.00 plus VAT, which is £6036.00! 

Even if you only elect for the let only service, over two years it would cost you £2700.00 plus VAT which is a massive £3240.00. And all this is paid up front at the beginning of each year.

Letting agents fleecing the tenants as well

So the letting agents get all this money from the landlord then they proceed to rip off the tenants for even more money!

They have various ingenious made up charges, such as ‘Administration Fees’, ‘Checking In Fees’, ‘Checking Out Fees’.

Then there’s the scandalous ‘Holding Fees’ to retain a property while referencing is carried out. It is reasonable to withhold them in the event that the tenants change their minds. But they also withhold these fees in the event that the references come back as unsatisfactory. These fees can be as much as £700 – £800. They probably hope they’ll come back as unsatisfactory.

Some letting agents charge tenants for ‘drawing up the Assured Shorthold Tenancy’ document’. This takes about 15 minutes to revise a template on their system.

And then there is referencing. Charging for this is justified, but for tenants in full-time employment with proof of previous address etc it COSTS around £10.00 per tenants. Many agents charge around £60 – £70 per tenant.

If you’re a landlord and you can, just let it yourself

As a landlord you can list your property on the main portals like Rightmove, Zoopla, Primelocation etc, using companies that will charge you around £60.00. You then ensure that you THOROUGHLY reference any prospective tenants rather than saying to yourself ‘Oh they seem such a nice couple’.

Don’t forget Landlord Rent Guarantee Insurance

Then you buy Landlord Rent Guarantee and Legal Expenses Insurance* – we do it for about £105.00 per property per year.  This insurance pays your rent in the event that the tenants stop paying for any reason and the legal team then go to work to evict the tenants as soon as possible. Strict tenant referencing is a requirement of this insurance. Let’s assume you charge the tenants for referencing, which is reasonable then your total outlay over two years will be about £170.00.

So it’s your choice. Pay a letting agent £3240.00 or £6036.00 including VAT or spend £170.00 letting it yourself. Some agents will charge even more than the amounts quoted above and some will negotiate for less but as the Americans say, I think it’s a no-brainer.

LandlordsandLetting – Affordable landlord insurances

Theresa May to meet Arlene Phillips at No 10?

I was watching Sky News a couple of days ago and one of their reporters was doing a live report to camera outside No 10 Downing Street.  She actually announced that Theresa May was due to meet Arlene Phillips at No 10 on Tuesday.

Was this a mis-speak, as I assumed at the time…or was it actually true?

I know that Arlene Phillips is not the leader of the DUP, and is probably not a creationist or anti-gay in any way, but there were rumours last year of Arlene returning to Strictly Come Dancing.

Ed Balls does Gangnam Style

Here’s the thing. There’s quite a glittering record of failed politicians getting on Strictly.  The blonde Anne Widdecombe did it, although admittedly she showed she was no Ginger Rodgers. And we all know how ex-shadow Chancellor Ed Balls turned a political disaster of a career into a huge success on Strictly Come Dancing. I was particularly impressed with his Gangnam Style dance with his glamorous partner Katya Jones.

Could Strictly save Theresa May and Nick Timothy?

So could Theresa be thinking the same way?  Will she follow in the nimble footsteps of Ed Balls? Could Strictly Come Dancing be her saviour too? She is going to need some pretty nimble political footwork to get herself out of the mess she’s got herself and us into, so maybe she could imitate Ed and also be a great success in sequins on the dance floor?

And of course, now her equally useless advisor, Nick Timothy has lost his job, maybe he could also join Strictly Come Dancing?

Evidence mounts

There are various other pieces of evidence that she may be planning an eventual move into ballroom dancing.  Politically she has always been very good at dancing on the head of a pin and she has done some very nifty about-turns in her career as Home Secretary and latterly PM. Her love of shoes is legendary – apparently she wore 17 different pairs during the campaign, whilst dowdy Corbyn only wore one pair.  And Theresa May certainly likes her clothes – surely one of our most stylish PMs?

Vote – not ANOTHER election!

So, should Theresa meet Arlene Phillips and give Strictly a go? Yes or No (this question is NOT suitable for the politicians amongst you). See our Poll below…

James Stretten

Landlords and Letting

Affordable Landlord Insurances

[yop_poll id=”3″]

What sort of Brexit do YOU want?

 

So, what sort of Brexit do YOU want? Do you want a Hard Brexit? Do you want a Soft Brexit? What about a Soft and Cuddly Brexit, or perhaps a Thin and Crispy Brexit?

A Warm and Soothing Brexit

We now have a situation where even prominent politicians are talking non-stop nonsense about what sort of Brexit we should have.  Usually on the left they seem to be demanding a Warm and Soothing Brexit – rather like a nice cup of Horlicks that Jeremy Corbyn would have to help him wind down after a hard day’s politicking about how he intends to spend other people’s money.

Any Answers Bleaters

Certainly if you listen to irrepressibly middle class middle-Englanders on Radio 4’s Any Answers, most of them seem to be calling for a Kind and Soothing Brexit where a Lovely European Brexit Omelette gets made without cracking anybody’s free-range eggs.  Wouldn’t it be luverly?

Hard or Soft Brexit? – it’s all nonsense

On the right we often hear demands for a Hard Brexit or maybe even a Vindictive and Vicious one.  Or even a Sod Off Johnny Foreigner Brexit.

But it’s all puerile nonsense!  The reality is less exciting.

We are going into a NEGOTIATION.  And in a negotiation each side seeks to get the best deal they can wring out of the other side.  All I can say is that I’d love to sell my car to one of these people bleating about ‘Soft Brexit’.  They say that under no circumstances should we go into the negotiations saying things like ‘no deal is better than a bad deal’. I know that’s a phrase made famous by that massive Looser May, but I still think it’s the right thing to SAY.

Selling a used car to the ‘Soft Brexiteers’

So I would advertise my car for way over its market value for say £14000.  These kinds of people would turn up, start kicking the tyres and, having told me ‘a bad deal IS better than no deal’, would offer me £10500.  I’d say NO, I want £14000.  They’d then perhaps offer £12900 and I’d still say NO, I want £14000.  And eventually I’d get £14000.

A great deal for me but a shitty one for them!

Landlords and Letting
Affordable Landlord Insurances

Is there a future for traditional estate agency?

I was prompted to write this after receiving something in my email inbox about how traditional estate agencies are suffering in the current Brexit market.

Estate Agencies on the High Street

Once upon a time, if you were looking to sell, buy or rent a property you would either check out the ads in the local paper and/or wander down the local high street and have a chat with people in the local estate agencies. People do still do this, but a huge and increasing number now simply go online, usually heading straight for the main portals like Rightmove, Primelocation and Zoopla, or maybe the agents’ own websites.

Nowadays, there are agents set up to exploit this new world, such as Purplebricks.com who just charge vendors a fairly low fixed fee to market their property. Of course this does save vendors a huge amount but only if the property actually sells, because of course, traditional agents’ fees are dependent on the sale actually completing.

Agents’ high commission

But it is true that with astronomical property prices (in some parts of the UK) the traditional agent’s 1.25% fee actually can translate into a huge amount of cash. It’s not uncommon in London and the South East for quite ordinary properties to sell for £700,000 or more. At only 1.25 % this means that vendors are having to give the agent £8750.00 PLUS 20% VAT. And for agents who are charging 1.5% it amounts to a staggering £10.500 plus VAT!

The High Street Estate Agency – who still needs it?

However, estate agents will rightly point to the huge expense of maintaining a high street presence and having to spend money on expensive newspaper advertising. But are either of these really necessary anymore? How many people actually bother to visit a high street agent with all the problems of city centre parking etc? And do purchasers really pay much attention to the local paper even? Not only are printed ads often out of date but sadly, local papers, like so much other printed media are in serious decline.

Perhaps the future lies in much more ‘stripped-down’ a la carte estate agencies, where they do not maintain high street offices but work out of ordinary offices not in city centres. Furthermore they would not advertise unless the client wishes to pay for it and rely almost entirely on web interaction. This would mean that fees could be much less and still allow the agents to make decent profits.

Landlords and letting property

As for lettings agencies, I think much the same applies. In fact, as a landlord unless you live far away from your rental investment, it really does not make sense to use an agent at all. You can now use companies who will let you access the main property portals for a very small fee. However, if you do not use a letting agent , obtaining Landlord Rental Guarantee and Legal Expenses Insurance together with thorough referencing is even more important – but still much cheaper than using an agent.

I am sure that, except for selling, renting and buying the most prestigious and up-market properties, the future is in this much more ‘stripped-down’ letting or sales agency.

Landlords and Letting – Affordable Landlord Insurance

Will you be forced to repay rent to your tenants?

Yet more anti-landlord legislation starts to become operative this April (2017). This one is unimaginatively called The Housing & Planning Act 2016.

How does it affect landlords? Will YOU be forced to repay rent to your tenants?

If you are found guilty by a tribunal of any of the following offences you can be ordered to pay back up to 12 months’ rent…

  • Failing to comply with an Improvement Notice under section 30 of The Housing Act 2004.
  • Failing to comply with a Prohibition Order under section 32 of The Housing Act 2004.
  • Any breach of a banning order made under section 21 of the Housing & Planning Act 2016 (this act)
  • If you use violence to gain entry to a property under section 6 of the Criminal Law Act 1977.
  • If you illegally evict or harass the occupiers of a property under section 1 of the Protection from Eviction Act 1977.

Making an example of transgressing landlords

The above applies whether you are receiving rent direct from a tenant or wholly or partly from the local authority. The act also states that tribunals need to take deterrence into account when fining landlords and urges making examples of transgressors to dissuade others.

Either your tenant(s) or the local authority can apply for Rent Repayment Orders.

These powers come into effect on 6th April 2017.

The main points of the new laws are…

• Civil penalties of up to £30,000 as an alternative to prosecution for certain specified offences.
• Extension of rent repayment orders of up to 12 MONTHS’ rent, to cover illegal eviction, a breach of a banning order and certain other specified offences (coming into force on 6 April 2017);
• There’ll be a database of rogue landlords and property agents who have been convicted of certain offences or received multiple civil penalties (scheduled to come into force on 1 October 2017);
• Banning orders for the most serious and prolific offenders (scheduled to come into force on 1 October 2017).

The full dreary details are here.

Landlords and Letting – Affordable Landlord Insurance

Britain’s Zero percent APR Addiction

UPDATE June 28th – Now Mark Carney agrees with me!

Britain today is addicted – addicted to cheap credit

Britain’s zero percent APR addiction entails endless adverts for cars, vans, furniture, white goods etc where you are charged zero percent interest and they even contribute towards your deposit! At the same time nobody is really interested in you paying up front for anything and savers are lucky to get over 1% on their savings. No wonder so many older people almost feel forced to enter the buy-to-let market and many young people have given up on saving.

It’s now almost pointless to hold large sums of money on deposit. It’s true that we are warned by Mark Carney and others on a regular basis about what might happen ‘when interest rates rise’. But maybe they never will – at least not in the medium term, because our whole economy is hopelessly addicted to cheap credit – that goes for the car industry, manufacturing and indeed the property market.

How did we get here?

The main source of our current addiction leads back to the financial crash of 2008, when the banks – mainly American, nearly trashed the world economy. Following that crash it was necessary for government and banks to progressively lower the rate of interest just to keep the economy turning over. This has been true the world over but it is particularly critical in Britain where a disproportionate  amount of the nation’s cash is locked up in property. Thus the very roofs over British people’s heads depend upon the perpetuation of cheap credit – not to mention the existence of the likes of B&Q and Homebase.

However the other main reason is the massive suppression of ordinary people’s wages over the past 20 years or so, due largely to mass immigration, the increased power of directors and the decline of trades unions. Employers can literally pick and choose employees, whilst offering them absolutely paltry wages. Thus the only way employees’ purchasing power can be maintained is with cheap and widely available credit. Enter the enticing Zero Percent APR.

The Property Market

The fall in interest rates is indeed worldwide, but because we in Britain have such a love affair with property ownership it has drastic effects on the housing market here. Many older people who would have once tucked their savings away in their local building society now feel almost forced to jump into buy-to-let, where yields of 6% are fairly easily attained. This in turn drives up demand for property, putting it even further out of the reach of the majority of younger people. When I was young it was fairly normal to buy your first property in your late 20s but now many are having to wait until their late 30s or even 40s before they can ‘get on the property ladder’.

You would assume that because mortgages are so cheap that younger people would be able to afford them but because of the traumatic experience of easily available mortgages before 2008, banks and building societies tend to look for relatively high deposit to loan ratios.

So will interest rates ever rise?

Obviously no one has a crystal ball, but as I have said, I certainly believe they will not rise in either the short or the medium term – maybe 10 years. Chronically low interest rates and quantitative easing mean that money itself is losing its value and that is a very dangerous thing. Perhaps if there is a change in the employment market where people are actually paid more realistic wages then this could eventually begin to turn the tide in the opposite direction. Maybe in many years time interest rates may at least climb to 3 or 4% and people might start saving again – who knows?

LandlordsandLetting – affordable landlord insurances.