Member Info for steph

yes BTR will in time fill the hole left by the forward sales which at their zenith were selling off plan 3 years in advance with 10% deposits rising to 20% (around 12 months I believe) before competing.

In this period of transition from robust forward sales to BTR I feel we have undershot SP as reported actuals on EPS have stagnated or gone down. I consider it a transition problem which is temporary but the market does not give TEF credit for the fuller picture of an ever expanding business with good margins gong forward. Looking forward to a BTR update on 30 May.

A couple of delays on planning on two major sites is of course bearing down on SP. A reminder for us long term holders that achieving planning is difficult and a major barrier to entry that gives TEF space to expand for the next 15 to 20 years within it's core market at a good clip (which I still say is every 6 years or so -down a bit from my previous 4 to 6).

The underlying BTR market is going from strength to strength. The withdrawal of many small buy to let investors (myself included) is giving the BTR market an unexpected boost. Amazing that with all this uncertainty rents are still rising in London. Imagine the shortage of rental units if we had political and economic stability.

Corbyn the only threat and that assumes he gets to power and also passes legislation that hits BTR profits. Even lefties realize that to get homes built by the private sector you can't decrease profitability -so I expect Corbyn "reform" to be long on tenant rights and short on BTR economic stick.

I think a mild Brexit the probability now. A mild Brexit has long been priced in. Indeed a harder Brexit and some degree of risk for no deal is also priced in so an orderly mild Brexit supported by the front bench of Tory and Labour would be a market upside result. pound up then TEF up.

Reading the tea leaves on the deal emerging it seems that it will be some sort of time limited customs union until the next general election when Labor will be free to go milder and perhaps support a second referendum and Tories free to go harder with no second referendum. That might satisfy the various constituencies within each party and be decided by the electorate at the general election between competing manifestoes.

Will be the most interesting general election.. Lib dems may recover their 50 or so parliamentary seats. The new Brexit party might pick up a few. The new centrist party pro EU party may pick up a few. I'd expect the Tories to do quite badly no matter what they do from now on in and no matter what leader they choose. They are hemorrhaging support from both the right and center so the walls are closing in. Tories may yet regret not doing more to support the lib dem proposal for proportional representation. First past the post system works for you when you get over 30% of the vote but can be brutal if you fall below that threshold -as the lib deems know all too well.

I know it is weird how canary wharf (which really helps our TEF market) seems to add jobs in the middle of what should be a crisis. I believe this I because of consolidation effects. Even in a shrinking specialist sector jobs pool the remaining jobs are concentrating into ever larger hubs at the expense of smaller scattered offices. For business and financial services there is this tendency even without a shrinking universe. Sector just makes money no matter what the national problems.

Only the banks are sensitive to national regulations (accountants and financial advisers really independent of which county they are in) and the leverage on retained capital criteria for Banks is Brexit independent. We have benefited (jobs wise) from the liberal approach of our regulator. He thinks the BOE has done such a good job of managing risk that we can allow our banks to grow. They are sill doing so at the expense of other smaller hubs. Arbitrage.

SO we have a banking sector that is less profitable than it was but still creating jobs. Just the inefficiency of dealing with ever more complex regulations creates compliance jobs at the expense of profits. Other financial centers are equally profit squeezed so we are at a relative advantage.

https://www.standard.co.uk/news/london/luxury-coliving-block-with-pool-bar-and-spa-planned-for-canary-wharf-a4130051.html

If I were 25 in my first job I'd do this. Who wants to entertain at home when surrounded by restaurants and facilities.

https://www.theguardian.com/business/2019/apr/29/brexit-has-trapped-uk-in-no-mans-land-warns-top-economist

Andrew is a credible commentator. It is such a pain as investors that we have this uncertainly. A referendum with remain winning ends the uncertainty. All Brexit options super hard, hard and soft mean years of fraught negotiations and uncertainty.

https://ir.q4europe.com/solutions/telfordhomesplc/2792/newsArticle.aspx?storyid=14284224

we don't get an April update this year. Any comment on the end of year results now wait until end of May.

https://www.rightmove.co.uk/news/house-price-index/

https://www.telegraph.co.uk/news/2019/04/15/house-prices-soaring-homeowners-bored-brexit-want-get-lives/

https://www.theguardian.com/society/2019/apr/15/short-notice-evictions-face-axe-in-tenant-rights-victory

Of course tenants who complain should be protected but this is breaking a nut with a sledge hammer. What's wrong under current legislation with a tenant who wants security asking for and getting a long lease. Maybe even a legislative tweak to encourage but not require long leases.

However this legislation is for when a lease runs out and the tenant is on the rolling renewal period. If a tenant wants security then they should have signed a renewal lease 1, 2 3 or more years whatever the market allows. If the landlord unreasonably refuses legislate for that eventuality.

I just signed a 3 year no break clause lease with my tenant under current legislation. They wanted 3 years security and I gave it to them. What was the problem with the existing legislation?

This is grandstanding by a government on the ropes.

Yes Corbyn and McDonald are far more radical on a personal level than the 2017 manifesto indicates. As an investor it is a potential black swan.

If you assume their manifesto is a sugar coated front end to a potential government that will rip up capitalism itself then of course any advance in the opinion polls for Labour is a strong sell signal. A Labour majority a sell all event.

For my money I don't think a Corbyn government is a threat to TEF share prices.

Of course it is hard to read if they will be more radical than the manifesto. I expect they will pump money into public housing through the housing associations so TEF will pick up additional business -albeit at lower margins. Can't see them nationalizing the house builders nor creating a tax of some sort that shrinks the house building sector. They need the jobs and homes as much as any government. It is a pretty basic rule unless you abolish capitalist companies as the delivery vehicles. Lower profitability and you lower the incentive to build more.

McDonald has a track record one can look at as Deputy Mayor of London and in that role he brought in the travel card that many economists thought would flop but was a wild success widely copied. Also he brought in the affordable housing policies that cross subsidized affordable housing from the profits of the open market sales -also widely coped by many other cities often with center right Mayors.

So while radical in the sense of willing to try new ideas he was practical, took specialist advise and created a new consensus. In short willing to use (rather than destroy) capitalism to achieve socialist objectives. No TEF worries.

I've not voted for some time in line with my personal financial interests. I hope on my blogs I don't let my left of center politics affect my analysis of what happens to the market and thus to TEF. I try to keep them separate.

The Labour 2017 manifesto was a lot less radical than it was billed. Nothing like the 1983 Michael Foot that had much higher rates of tax, immediate nationalization of many industries. EU and NATO withdrawal. Unilateral nuclear disarmament.

Labour's "scary" 2017 manifesto had policies like "more public internet access in public places" and top tax rates raised to be still below what the Tories had under Thatcher. I don't think there would be a market crash under Corbyn.

Corbyn's most worrying policy for TEF share holders is rent controls but I doubt if McDonald will let in something that really bites into profits otherwise new home constriction will decline sharply and hurt treasury receipts and GDP immediately. Maybe freehold reform and maybe some form of longer term tenancies indexed to inflation encouraged. Tinkering at the edges. Maybe even lots of direct funding for housing associations which would even help TEF a lot. SO no worries.

Labour, even with all it's current polices, would be soaring in the polls under a younger more appealing leader with less stubbornness and baggage than Corbyn.

Even though Corbyn is broadly from my wing of the party I don't like the man. Just not smart, strategic and convincing. Wasted opportunity that will not come again in our lifetimes. He was the wrong leftie.

I support whole heartedly his stand on Palestinian rights but the mess he got into with his own Jewish MP's was entirely avoidable. He just is unable to make a speech that moves that ball down the field without offending those who are understandably nervous but still Labour friends. Not effective. Too rigid. Only really comfortable in his own bubble and that is not enough for a PM in waiting. Over promoted.

https://www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/uk-residential-market-survey-march-2019-rics.pdf

https://www.theguardian.com/money/2019/apr/11/uk-house-prices-likely-to-keep-falling-for-another-six-months

relative political stability for a few months but a soft market. Not soft enough in TEF's patch to seriously hurt margins on what was already predicted though. Note RICSs south London market is firming up.

I'd expect a bit of market stability for a few months before the Oct 31 deadline looms. SO a relatively calm environment for TEF to give us an update on the 16th of April and finals 30 May. I take this extension as a buy signal.

I am hoping for good BTR news and new partnerships increasing the pipeline and bringing forward earnings.

Maybe we will recover to 3.50 by May 31. I note my average in my isa is also 3.50. A paper loss to show for 7 years of absolute post crash ISA loyalty to TEF. I would have more cash if I had left it under a pillow for 7 years. Still behind the ISA tax firewall my TEF shares will still likely help my retirement, I still believe in the doubling every 4 to 6 years in volume and this will in time pull the SP and dividends up from what is now a very a low base.

Within 10 years an SP of 1000 and dividends of 50p are still credible. The fact May has not yet crashed the economy is in an odd way reassuring about the underlying strength of the UK and London in particular.

Maybe in 15 years TEF @ 2000 and a quid divi. Not enough for me to always fly business class but maybe economy plus will be affordable.

Brexit may well finally break it. It is two factors not previously in play.

The self defeating age profile of the party is being accelerated by the age profile of the Brexit issue.

Also the Tories survived so long by not being an ideological party and was always able to tack with the wind. The post 1951 Churchill and McMillan governments bragged about how many council flats they were building and how much they supported the new NHS. Cameron tried to tack to the center and might have succeeded if not for 3% on the referendum result.

The ERG and its like have always existed in the Tory party but not been so able to influence front bench policy. It is quite outrageous for conservative party MP's to be lobbying foreign governments to frustrate the policy of their own government. Once upon a time that would have been labeled treason.

corrections

It will be interesting to see the results of the EU elections where new pro European and pro Brexit parties are forming.

Very possible on the EU elections the combined Labour Tory vote will not exceed 50%.

For any UK Parliamentary elections I suspect while UKIP and it's new offshoots will do well on the percentage of the vote they will get few if any seats. Conversely the new centrist party might be able to concentrate their efforts on a smaller number of winnable seats.

With some formal or informal pact with the lib dems this centrist pro EU group might surge to 50 to 100 seats and be kingmakers. Whether they ally with Tory or Labour will be down to personalities. Hard to see Corbyn sitting down with Chakka Umna.

What the Brexit deal any Parliamentary coalition will strike will be is anybody's guess. Almost certainly a new referendum will be part of those negotiations.

I take the delay as a modest buy signal. Much better than a chaotic exit -which is still possible but the odds are receding -if nothing else due to the Cooper bill prohibiting it.

I was hoping for a 12 month rolling delay but France vetoed that. Would have given UK stocks a chance to recover a bit. UK economy avoiding recession in spite of business uncertainty. Stockpiling has added GDP in the last quarter (watch for a sharp setback in our balance of payments as a result) that is a one off but underlying economy still better than many predicted.

Would also have given Labour enough time to gently dump Corbyn for a more electable leftie. Would have given the Tories the same opportunity but unlike Labour hard to see someone more electable than May getting through the Tory member vote right now. Tories are really scr..ed. Perhaps in terminal decline. The age profile of Tory members and voters is an existential threat for the party I can't see them pulling out of.

I suspect the end game now goes down only two paths. I see little chance of some compromise between Labour and Tory which can pass parliament or even their own parties.

One -a confirmatory referendum which remain will probably, but not necessarily, win depending on the exact question. After that clarity either way.

Second -UK elections with a completely unpredictable result. It is possible that neither Labour or Tory will be an a position to form a stable majority and that strange new alliances will form with Brexit as the driving force of negotiations.

It will be interesting to see the results of the EU elections where new pro European and pro Brexit parties are forming. Very possible on the EU elections the combined Labour Tory vote will exceed 50%. I suspect while UKIP and it's new offshoots will do well on the percentage of the vote they will get few if any seats. Conversely the new centrist party might be able to concentrate their efforts on a smaller number of winnable seats. With some formal or informal pact with the lib dems this centrist pro EU group might surge to 50 to 100 seats and be kingmakers. Whether they ally with Tory or Labour will be down to personalities. Hard to see Corbyn sitting down with Chakka Umna. What the Brexit deal they strike will be is anybody's guess. Almost certainly a new referendum will be part of that

https://www.theguardian.com/politics/2019/apr/06/a-shambles-on-which-the-sun-never-sets-how-the-world-sees-brexit

It matters not if the world wide opinion is based on fact or just sour grapes. This will hurt inward investment for a long time.

The ideal recovery is a rejection of Brexit itself at ballot but second best is a stable Brexit backed up by public opinion. That outcome probably also needs a referendum to create. If may succeeds in scraping her unpopular Brexit through it will be years of argument and instability.

There is no magic "no deal" either. Even in no deal there will be a series of small disadvantageous issue specific deals that will not add up to what we comprehensively already have. Politician's who should know better advocating this are in my mind the worst of all.

Tied votes and now passing by one vote a bill that take power away from the executive. We are living through a period that historians will almost certainly highlight as a pivot point.

Too bad it has hurt my investment strategy. I guess the unexpected 2016 Brexit vote will have decreased my net worth by 2030 by at least half a million and that is still assuming a relatively orderly process and a relatively mild form of Brexit. London property market was cruising along vey nicely with the business and financial service sector jobs driver beating New York on many criteria just before this.

I take the Cooper bill as a buy signal. It seems to take no deal off the table without relying on the good faith of whoever is Tory leader.

Don't quite know (as an investor) what to make of May's pivot to sit down wit Labour. It is probably a buy signal although I wonder what will really come out of it. Market doe snot like ERG and the further ERG are from dictating results the the market likes it.

Don't know why TEF did not rise yesterday with the market. Maybe an overhang of a few sellers needs to clear.

I am now, relative to the limited money I have available, very TEF long on my spread. Have not been this long since pre Brexit vote. Just think we have bottomed out on political uncertainty affecting our SP. I do expect some company specific announcements soon on BTL deals that may bring forward earnings and help eliminate the EPS dip for the next two fiscal years. That will really help us fly. Maybe update on 16th April will be positive on this.

Jobs, inward investment, domestic investment, and housing prices finally getting affected by Brexit uncertainty. I am amazed it took this long which just shows the strength of the UK market (or maybe just the expectation by investors we would have an orderly mild Brexit in spite of the huffing and puffing going on by politicians). Lifting of political uncertainly will reverse these negative trends pretty quickly.

serving article 50 before a white paper and a won parliamentary vote on the basic strategy was daft. May is reaping the whirlwind of that. She deserves all what is being dumped on her. ERG group have led her by the nose to this impasse and she was stupid to follow.

I take it an a buy signal for my TEF holding that she has reached out and softened her red lines. Lessens chance of a chaotic exit.

Thus I have been topping up in my spread. Bit disappointed there was not a move up today but will wait.

May:" I can't get my homework in on time?

Teacher: "why not?"

May: "Well teacher I was having so much pretending to be the PM I did not look at my watch"

Teacher: "That's no excuse"

May: "Well there is more teacher. A classmate called ERG cut off both my legs, Look (lifts designer dress and shows teacher two bandaged and still bloody stumps).

Teacher: "That's truly appalling May take the whole semester if you need it. "

May: "no teacher, I can't I have a play date with this nice classmate called Jeremy who has promised to give me a hand"

Teacher; "give you a hand? "

May: "Well maybe he actually said "take a hand" it does not matter teacher so long as I can pretend to be PM for a few more days. "

Teacher to aid " get the nice men in white coats please"

By the way I've been buying on my spread. Just think a way forward will be found shortly.