“ Where does this 35% discount come from? As far as I can tell rent to buy opens the possibility of shared ownership after 5 years, where the tenant is given the option to purchase a stake in the property.”
I believe now this discount is for Local Authorities owned property, not the private sector. The other information you posted explains it well for private landlords and I was originally thinking that the LA options applied to the private sector as well, which it doesn’t.
“ I thought the right to buy only applies to Local Authority tenants or Housing Association tenants? I t does not apply to private landlord tenants, and Lloyds will be a private landlord.”
OK, that clears it up, thanks. Was getting concerned for a while that this was going to be a disastrous venture for LBG.
I have been looking at R2B and if I have got this right it could be a disaster for LBG. My understanding as an example is if a tenant has been in two rental homes and had two different landlords they qualify for four years R2B. This tenant then moves into a LBG rental home and at the end of the year they have reached the five qualifying years to invoke the R2B.
So as an example this tenant is in a LBG home that was built new say for 400K, to keep things simple we will say at the end of year one it is still worth the same. The tenant now is wanting to buy the property and with the 35% discount they see a sum of 140k but the cap is 102k which means the tenant can buy the house for 300k. Very nice deal, wished I could have had something similar when we had a straightforward mortgage and paid for it in full!
In that first year let’s say the rental income was 20K and now LBG are forced to sell it at 300k, that translates into a thumping loss, how can LBG justify any loss like this to us the shareholders? In fact any private landlord is potentially not going to see the rental market being a fair business opportunity.
If I have this totally wrong I am happy for someone to explain it so that I understand how this benefits LBG and others.
“ Citra Living, part of Lloyds Banking Group, is to bring more than 150 new family homes to the rental market in Gloucestershire. ”
I assume this means that the tenants will have a right to buy after five years if they wish with a 35% (or with max cap) discount? I don’t see how this is going to benefit us as shareholders if LBG is forced to sell them again after such a short time scale. The amount they derive from rental income has the potential to be wipe out. Have I missed something?
“ LTI states below he has told the BoD that dividend will be 3p this year??”
He might be right that this years divi will be near the 3p mark. When the divi started after the Covid drought the BoD reduced it by nearly 40% to start at 2p. Then they announced as LTI said an handsome yearly uptick on the divi which is also correct at nearly 20% for the last two years.
This isn’t going to be sustainable for much longer as if they did it again we could be looking at a divi of about 3.3p for this year which somehow I doubt will happen but would gladly take it if they do. 3.3p takes us back to the level of about 2018. That is six years just to get back to a previous divi of value.
My gut feeling is that for the next two years the divi will increase by about 9-10% each year and then we will be looking at about 3.3p.
The only next step change upwards will be if the next two or three years sees a continuation of buybacks. If the shares in circulation comes in at 50B and the pot is the same as now then in three years time the divi could be around 3.6p a share. I could settle for that in retirement but of course would always like more but I feel that the 3.6p is more realistic and anything above that will be a bonus. May even see a special kicking in at this time.
Just my ramblings on ‘what if’
Only a matter of time when the next government decides to have a windfall tax on private investors if they think they a have too much and deriving an income they feel is not justified to them.
SUFX
“Looking forward to the next Dividend and hoping to see another increase year on year here :-)”
The ‘progressive’ dividend increase as it is called has been dependent on the buybacks and in fact isn’t costing LBG anything at all. The divi ‘pot’ made available I believe has stayed roughly the same. It means that less shares in circulation get more for the same outlay, a clever little ruse by our man.
So what happens in the future?
1/ As and when the buybacks end will see a continuation of a ‘progressive’ divi ?
2/ If not will the divi remain fairly static or could we actually see the divi reduce?
I think they are playing games with us.LOL
Where did I mention Brexit? Every time there are job losses Brexit is blamed, that is a very short sited excuse. These blast furnaces were planned to go before Brexit, it isn’t something recent. The main culprits I believe are costs and the drive for carbon reduction. The carbon brigade probably don’t have an issue with the closure, they are too busy saving the planet. Just for the record I would have preferred 5o have kept them running for the long term.
All companies are chasing the cheapest bottom line, blame China for cheap steel. Perhaps if we set tariffs in place a lot earlier it might have changed the outcome.
Both Labour and the Conservatives have been far too weak on trade, both believing that cheap goods promotes good competition, in reality that concept has ruined us.
Just look at the period we were in the EEC/EU and the amount of engineering/manufacturing we have lost. Companies like Vickers (shipping/aircraft/defence) slowly dismantled by overseas competition and a lot of it ending up in Europe. Then look at our bus and truck industry (Leyland/Bristol/ERF/FODEN) all gone to be replaced by Volvo/DAF/Bova/MAN) from Europe.
Confectionery now gone and also made in Europe.
The UK has systematically been dismantled by Labour and the Conservatives allowing foreign competition to easily acquire our businesses.
Perhaps someone can tell me where it has worked in the other direction, what large businesses here have purchased an overseas business, shut it down and moved it to the UK? I am struggling to find any. Again, look at our utilities, who owns most of them, it isn’t us. Shall I mention more?
Bizzybee
“ Labour has run Wales for over 20 years, are fully 100% responsible for NHS, economy, etc, and it is on its knees.”
Interesting how the Welsh looking/seeking/demanding to split from Westminster to be self governing but when things go pear shaped big time like the steel industry they respond as below looking/seeking/demanding to be bailed out by Westminster. What a joke.
Welsh Secretary David TC Davies said: "If 3,000 people are going to lose their jobs, the UK government is not going to walk away, and not turn their backs on those people or that community."
Options on the table include cutting tax relief on pension contributions. This would leave current workers able to save less into their pension pots tax free.
Owners of more expensive homes may also face higher council tax bills, a policy that would hit many current pensioners who tend to live in larger, more valuable homes, according to IFS research.
Inheritance tax rules could also be tightened, making it harder for the elderly to leave money to their families after they die, without incurring a levy.
I see another shipping line is now not going to use the Red Sea for transporting goods.
Is this going to wipe out those recent gains on LBG shares next week and the stock market in general especially if others do the same?
Gunsup
Yep, and I am guilty of that as well. There are times when you are looking for something special and the only place it can be found is in China. So if I can’t locate that hard to find item on the net in the UK, there sure isn’t going to be a shop that has it in my local town.
So what is the answer to our declining towns? Some will say reduced or free parking, reduce business rates as a start, but I’ll be honest and say that will not convince me to go into town.
People have moved on, towns are history now. A lot of older people used are trying to hang on to the past. Younger people want to use free time for what they see as more important things like leisure and taking the family out.
Gunsup
Yes you are right also about rates, staff and wages. Online shopping has an audience of the whole country while local shops have a much smaller area looking for customers, no competition really.
I can’t remember when I last went into my local town to shop, many years ago. The only time I go is to get new glasses.
I remember as a kid we went food shopping to our local town for our food shop. Then from the 80’s we saw a major shift to out of town supermarkets. We have one only half a mile away. The town we used to go to five decades ago has only a small convenience size one now.
Towns decline of shops started back then forty plus years ago.
STP
“ Well you are going to have to pay for all the illegal immigrants coming into the UK, somehow.
I think it was 750,000 illegals last year or something like that.
Oops, I thought Brexit was going to fix that....”
Well it would help if Labour supported the Government along with all the civil servants who are actively stopping it. It becomes clear that Labour are not listening to the wishes of the people and are in fact looking to work with the EU when the time comes to actually bring more in. How can you trust any Government if they go against most peoples wishes.
Be careful what you wish for.
STP
Most sensible people will know that we have had ghost towns well before Brexit. Those same sensible people will also know that the primary cause of our ghost towns is on line shopping and delivery to home.
You only have to know that loads of shopping malls in the US have closed and they were not part of Brexit.
The future will no longer focus around town centres as we know them, I suspect that some towns will actually shrink in size and become de-cluttered of shops and offices and become valuable sites for homes.
Hardup
“Seany.....the link you posted is a paywall. I have found the same report elsewhere which is not a paywall. I don't think there is anything in the report that rules out Labour bringing in a windfall tax on Banks when Labour come to power?
https://www.businesstelegraph.co.uk/labour-says-no-longer-sneering-at-business-and-unveils-10-city-advisers/ “
Reeves said the party had no plans to raise more taxes from the financial services sector beyond a move to end a private equity tax loophole, but added she could not conclusively rule out such a move in future if “something dramatic happens”.
“I would just say never say never, but . . . that’s never been an area we have discussed,” she said.
Uncle Doug
“Many nursing and medical students leave university after their 5 to 8 year's degrees, then do a few months placement training and then fly off to Aus or NZ , etc for better pay and lower hours. We therefore have spent all that money subsidising their education and training and they clear off to benefit other countries.”
That doesn’t surprise me now. Perhaps terms of the degree course should include a clause that you have to work ‘X’ many years in the NHS and then be allowed to leave and work elsewhere, be it here or abroad. If they wish to leave earlier than the agreed term of working they have to repay a proportion of the degree/training costs. It isn’t difficult to overcome this problem.
Pickedpexk
“Go to an NHS hospital anywhere in the UK and do a head count of staff born here vs staff that have been born elsewhere and have come here since.”
I believe quite simply it is because it is cost effective to employ people that are already trained and have the skill sets and these are nearly always going to be people not from our shores.Our governments (Tory and Labour) don’t seem to want to spend money on training our own indigenous people, I suspect they see it as dead money wasted on a three? year course and non productive.
I also seem to remember that to be a nurse these days you need a degree as in the old days I believe people who had a vocation to be a nurse etc could train and sit exams and then become qualified.
If I have any of this massively wrong I am happy to be corrected.