Member Info for Property1

Looks like this week may start off down with EU elections and announcement on French election. Any thoughts?

Small typo on last post, meant so say 2025

Swap rates aren’t showing many signs of relief so can’t see an imminent reduction in BoE interest rates. If the BoE goes before US, it’ll add to inflation pressures for imports so BoE stuck between a rock and a hard place. I doubt Eu rate dropping slightly will have a large impact in the short-medium term. UK economy trundling along so mortgage defaults still appear low, so Banks should continue to do well on the back of higher interest rates. Think the BoE will hold fire till after election and see what the next govt sets out in an economic plan, but assuming main budget would come fwd end of year, may only see a small drop in rates (maybe 0.25 drop) before March/ April 2024 when the next big budget is announced. If Labour win as expected, I doubt there will be much left in the coffers to do anything major to reignite the economy, so expect the status quo to last a fair while.

PT51. Labour are playing the game…we won’t increase VAT as a percentage, but they want to add it to private school fees! What next private health care subject to VAT? I’m hoping for hung parliament as have no faith in any of the main parties

Viking - there’s already a tax on banks. I doubt theyll change it (and they’ve already noted they won’t) as they need the banks to lend to grow the economy. If new/ more taxes come in, banks lend less, economy slows etc…

Easiest way to think about it. It could help draw funds into FTSE. It’s cheaper to buy US stocks so traders reduced UK investments in favour of cheaper trading markets, hence loss of investment in UK listed shares/ companies. One of the reasons more companies listing in US

I think Labour may well remove it. It’ll be a good economic move to get investors back into UK markets. Reignite Pension fund purchasing power removing red tape as well and they could see the biggest stock market rise, boosting the economy. If Conservatives had any sense, they’d do it now then claim the uplift and blame Labour on any failings

Lloyds got out in time with the Telegraph sale!

https://www.proactiveinvestors.co.uk/companies/news/1046465/telegraph-titles-for-sale-again-as-government-blocks-uae-deal-1046465.html

Anyone else starting to think the rental returns on Citra probably won’t top 2-4% after costs (and is starting to look like a lame duck)? Portfolio growth over the long term may drive asset valuation but with risks of defaults, maintenance etc… I don’t think Citra will be that big a money maker. Cash would be better off in an American stocks fund (maybe missing out Lloyds haha)

Lloyds is never a sitting duck. I’d expect - Politically - it would never be allowed for an external / non UK company to purchase what is a critical UK asset. To big to merge with another provider as well (as CMA would step in).

FTSE podcast. Well worth a listen (and Lloyds has a few mentions as well).

https://www.bloomberg.com/merryn-talks-money-podcast

It’s going to be a long time before the war is resolved. Ukraine can’t back down or agree a stalemate unless US and western countries pull funding. The stalemate around Crimea allowed time for Russia to regroup then launch a new attack (albeit it took a few years to launch the second invasion). If they have a stalemate and cede land (more than Crimea), it’ll probably go quiet for a bit then another attack launched when Russia regroups (which is probably what Putin wants), so Ukraine has little option at the moment but to keep going. All talks of a cease fire seem pie in the sky thinking.

Strike123 - I’d assume the market has already priced in the estimated fall, but if worse than forecast, low-mid 40s maybe on the cards in my opinion, then propped back up by buyback. Maybe a temp sell off on results day (worse case) so maybe a dip to buy some more in mid 40s. If they make another provision for car loan farce, then low 40s is probably a realistic outcome (but would be great for the buyback numbers). Still aiming for 60p year end if all holds. If not will continue to hold for the dividends and ride the wave. Barclays looking the better bank at the moment for a bigger/ quicker bounce (so keeping an eye on both sets of results). DYOR

Looks like Q1 results season is going to be interesting,

“The country’s largest mortgage lender, Lloyds, will kick off earnings week on Wednesday, and is expected to reveal a 26% drop in pre-tax profits to £1.7bn for the three months to March. That reflects analysts’ expectations for a drop in net interest income, as well as a 15% rise in impairment charges to protect itself against a possible rise in defaults.”

https://www.theguardian.com/business/2024/apr/20/even-a-rate-shock-for-british-mortgage-borrowers-may-not-help-the-banks

Rates go up good for NIM but can cause issues with defaults/ bad debt and a more limited lending market. Fine balance between increase in profits and tanking either way

Interest would be written off in Ltd company. Current estimate is he is worth £123million so don’t think he has much to worry about

So if the liability is built in already, by virtue, it’s holding back the share price and when resolved, in what ever format, the share price should be free from the issue and therefore rise (or worse case fall further). Doesn’t really matter when the liability was factored into the share price, the issue is it’s factored in, so holding back…

LTI - I don’t disagree with you, if an adult signs up to something and didn’t shop around, more fool them. Car loan scandal/ debacle is any easy reference for issue. Its a clear issue holding Lloyds back from where the share price should be… I think the PPI raised a similar issue and know of people who reclaimed even though they knew full well at the time what they were signing up for.

Thought I’d do a post about Lloyds to mix it up haha. Car finance seems to be holding back Lloyds but with current money set aside, they could easily scrap/ reduce any future buy back in 2025 to more than cover the estimated £2billion loss and still maintain the divi payment (would hope they don’t get stung for it but based on past shenanigans I’m sceptical there won’t be some form of payout). Interest rates don’t look like they will drop much for 2024 (maybe 0.5%?) so lending returns should be good (and defaults recently haven’t been that bad considering). Economy looks like it will trundle on so unless big spike in unemployment and defaults, can’t see much movement in share price until market forces play out. I’m thinking IR fall August at earliest which should bolster price but not much movement till then. Car loans scandal I reckon will drag on for another 12-24 months so I think we will be back in the doldrums for a while yet. Buy back can hoover up the shares to prop up price in interim. Role on 2025 Rodney!

You’ll need to find out your purchase price. I’d expect if there is a CG then CGT would become due on the sale. When in an ISA there is no CGT