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Member Info for steph

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Member Since: Wed, 6th Aug 2008

Number of Share Chat Posts (all time): 2,651
Number of Share Chat Posts (last 30 days): 17

Last Posted: Mon 05:55

Post Distribution over the last 30 days

30 Oct '17

It is sad we have Brexit uncertainty but London is so far ahead of all the EU rivals that we can absorb quite a bit of silliness at the top and still grow at a good clip the highly skilled and well paid jobs that are the bread an butter of TEF market.
30 Oct '17

I think there will be a moderate EXCEPTION for the Crossrail areas and for much of TEF's patch which is still enjoying an area specific infrastructure and regeneration bounce.
30 Oct '17

worrying. Business and market confidence surveys are the best lead indicator. They can catch mood changes before they statistically happen. Second best in terms of forward visibility is rightmoves asking price surveys -which are showing a softened UK market although a mixed picture in London.

I am expecting pretty flat London house price inflation over the next 2 years. Perhaps even flat in nominal terms which in real terms is a decrease. There should be a HP bounce when Brexit uncertainty is lifted even if not a great deal going forward. Most business and financial service firms will find a way round the new regulations and keep staff in our EU leading cluster. Most already have EU registered nodes they can use.

I think there will be a moderate except for the Crossrail areas and for much of TEF's patch wich is still enjoying an area specific infrastructure and regeneration bounce.

Used the Javelin recently and wow what a service to get to Kings cross from the new housing and new economy node at the Olympics park. F,,,ing hell it is only 7 minutes station to station and great comfortable seats to boot. That's faster than Leister Square to Kings cross.

Where on the planet in a city ranked as high as London does a new housing area have a 7 minute commute to a new economy employment of Google HQ right at Kings Cross and the rest of central London not far away with a 10 minute tube ride? Google's new HQ in the USA with its massive car parking is a dinosaur in comparison. If an employee is lucky they will have a 7 minute walk from the car park space to the entrance after a nightmare commute on a congested freeway network. It is a pity about Brexit but London has so many advantages we can probably absorb a bit of self harm.
29 Oct '17

2227 you can't seriously think that us long term holders meet the definition of the term you use. I think on this board we are all quite evidence based and enjoy discussing the evidence even with those who have different conclusions. Certainly the best board for a broad discussion of the fundamentals I've seen.

TEF is a bit like Marmite, it's an acquired taste and not for everyone. I think there is "hidden value" not priced in but that is based on my view that the company can grow at this rate for longer and more sustainably than the rest. I absolutely admit against the normal investing criteria there is nothing special about TEF relative to it's peer group nor can this "hidden potential" be shown mathematically. The evidence, such as there is and I admit is debatable, is the unique business model targeted at a unique market niche.
26 Oct '17

Well of course we should all be reassured by Trump putting us at the front of the queue and then slapping a 200% tariff on Bombardier exports.

My odds of a hard chaotic brexit going up a bit. Somewhere between 5 and 10%.

The odds of an organized soft, hard or no exit at all scenario now too difficult to call. The hard brexiters who want something like the Canadian option with a few extra bits on the side don't have a majority in Parliament nor in the Country for that. If they crash and burn both a soft exit and no exit at all will be on the table. Interesting times. As an investor I hate political uncertainty. Too difficult to attach odds to politically driven scenarios to make investment decisions.
25 Oct '17

This trend of taxes or outright restriction for foreign capital to buy into the very limited stock in the sprinkling of top flight desirable world cities -plus the expansion of that international capital seeking a landing does help prop up London's housing market in spite of low yields.

Housing in the leading world cities is an asset class with almost no new supply likely to come on stream in the foreseeable future (unlike gold that can be mined at ever decreasing ore concentrations using new technology). Build rates (measured in new build per year over stock for most top world cities) have a ratio of 1/200 or more and the bulk of the new build is obviously not in the fashionable bits which are treated as a luxury asset class. For those bits the build rate is less than 1/500. That is it would take 500 years to double supply.

No doubt in a time frame measured in a century or two there will be more genuine world cities attracting international staff and residents on quality of life indicators, many of which may be in China, but for now the key Western ones are all there is and London is top of that pile. They are the result of centuries of accumulated investment both public and private and will not be rapidly duplicated elsewhere.
25 Oct '17

all the new buy to let TAXES...
25 Oct '17

Sain, yes the geography of "fashionable" London has changed. Even Islington, Hackey and Tower Hamlets 40 years ago was a brave investment with council grants available to help struggling owner occupiers to do up their rotting Georgian terraces. As TEF operate on the edge of fashionable London their is a time and volume limit to their business model before TEF needs to become more like Berkeley. Lots of infill left for TEF to work it's business model at build rates of up to 5,000 units per annum but there will come a time when they will need to move upmarket a bit. New transport links can bring new areas into the orbit of a good commute to the jobs nodes. Crossrail 2 is very helpful and Crossrail 1 still has many nodes that are underdeveloped and still developable for well below 1000/ sq foot sale prices.

2227 rents dropping is a worry. Yields are already low for anything in London above 500k and drop to 2.5% for stock above a capital value of 1m. London is not unique in this and yet money has flowed for some time into the sector for reasons other than pure rent yield. There are swings and roundabouts for us TEF investors on this. ON one hand it is good that rent increases have not tracked capital value increases. Affordability constraints expressed as multiples of purchase price over earrings are not being breached so long as the job holder is willing to rent.

ON the other hand with reduced prospects for capital growth and all the new buy to let investors might avoid London.

Personally the arrival of a more professional rental sector for me will replace the chaotic inefficient buy to let landlord market we have had for the last 30 years. We are looking at churn of who invests in the rental market and not an overall reduction. TEF is at the forefront of the new professionalized rental sector. It is a squeeze but the result is a professionalization of the sector able to get a reasonable return out of the low yields on offer. So the fat and inefficiency is being squeezed out of the buy to let sector not the volume. Demand is still there at these price points for efficient operators who can sidestep 10% letting fees, improve maintenance efficiencies and sidestep taxes aimed at individual investors.
24 Oct '17

trouble is things will have to get much worse for that to be a viable political option. Right now even Ken Clark says Brexit inevitable. Public opinion needs to shift for Parliamentarians to shift.

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