I really hope there is a mass exodus of BTL landlords! Then the govt would be forced to act and get their building hats on to address the rapid increase in homelessness and poverty stricken famies.
Ever increasing rents and ever decreasing supply of properties....doesn't take Einstein to work out what will eventually happen. BOOM!
I agree there are large gulfs in profitability and affordability of BTLs based on the north/south divide, and some cheaper pockets of the country still remain profitable.
But like a sponge, interest rates are soaking up margins until fully saturated. And it's not just about profitability, it's the significantly heightened risk in terms of tenant default probability vs rental price which has to be at an all time high now. If I were a BTLL, I would be very fearful of rising rents. So BTLs are rightly asking, is a couple of hundred a month worth the massively heightened risks coming in from all angles, not to mention the risk of principle downpayment being wiped out on interest only, as a btl interest only is essentially using leverage. Great for rising property prices, not so great for declining.
For example, the highest paid easy access accounts now pay out 3.3%! A 1 year fix at 4.5%! I know where my £100k would go. An absolute no brainer IMO as opposed to BTL.
And I simply dont buy the whole chorus of BTLs bridging the gap between lack of social and housing needs. Yes, they do in todays world....but if they stopped existing, the government would simply be forced to act like they did post war because they would have to, or risk civil unrest and instability on a massive scale! It's shame that things would have to get really bad in terms of homelessness for this govt to act however and start building affordable homes. And dont get me started on RTBs....a good idea in the 80s, but should have died along with thatcher. Completely defunct policy this day and age. God knows how someone can live in social housing and be able to afford to buy? So many things wrong with social housing and who can live in them. They ought to be strictly means tested. Far too much common sense for this govt though.
"I dont think anything of what I am saying is hype, it's evidence based"
I'm sure we would all love to see this evidence of a miraculous summer recovery.
The banks are not stupid, look how all the cheaper trackers have dissapeared and now focusing on 5 year fixes, locking in these higher rates for 1st timers. This tells you that banks see change on the horizon and expect rates to drop further, but I don't see first timers suddenly enriching themselves as to afford such earnings/price ratios that are currently being being asked, even if interest rates drop from 5% to 4%. Because with a little perspective, this is still a monumental increase, and property prices are surprisingly not dropping that much. If I were to put an offer on a property now, I would ask for 10-15% discount for starters. If the service charge is sky high, even more. Data coming out of rightmove is about as much good as a chocolate fireguard, as asking prices for most properties are just not realistic. Wait for ONS or nationwide data which actually reads the sale prices.
Because from where I am standing, all evidence points to a dismal property market for at least another year, with further pain to come.
Rental markets are certainly no saving grace even in the medium term. Its a ticking time bomb. There is only so much you rent you can extract from tenants. Then suddenly boom....reposessions skyrocket, which means potentially a year of no rent with court backlogs and forced sellers of unprofitable BTLs. More supply = price drops. More reposessions = more pressure on govt to cap rent (which should have been done a while back). A tenant should not be paying for your poor investment choices!
The only good thing is unemployment remaining low. But how long will that last with interest rate hindering growth, and reversing it?? And how much of this employment is actually quality employment, ie not zero hour?? Look at the trends between number of people on zero hour contracts vs unemployment rate. We are all being systemically lied to re the real state of the jobs market (same trend in usa) Unless you count delivering a mcdonalds as employment, like employment rate measure does! The definition of employment according to ONS has evolved a new meaning as time has gone on.
Will be very interesting how this is all managed at the end of the day.
Not great that the SP crashed through 13.8. The bounce yesterday and subsequent retest of 13.8 failed, and now 10p is in the cards.
You now have to look back to march/Apr 2020 when solg was this low. And there's a big gap right the way down to 10p. I can't see any appetite for buying until March 2020 low of 10p is hit from a technical perspective. If there is no news releases, this will undoubtedly be walked down until this technical support is hit.
As for today's news, it just adds to the narrative regarding the boards incompetence.
Strong performance? Christ, I'd like to see your weak performance.
Happydays must be in the dope business. Has he been selling you what he was smoking?
Well and truly broken resistance now. Patience has paid off here.
Well done all, and GL. Expecting 150 very soon
From these beat up stocks.
I hold thg, asos and boo. A small percentage of pf, but certainly enough to keep me interested.
Also good noises coming out of the fed re inflation. When this is reflected in the data, then these beaten up stocks will begin to motor
Indeed. Certainly a more optimistic take on the matter. However tracker mortgages should not be confused with a fixed term discounted SVR rate. Both are completely different.
The former has is tracked against an underlying index, I.e. BOE rates. The latter can change at the bank/building societies whim...at best are loosely tracked to BOE/own SVR. Smaller building societies with top discounted SVR's of c 3.5% look good on the surface, but dig a little deeper and the inherent risks are there for all to see. Firstly the gaps are much wider between the discounted SVR and their standard SVR. If you can't remortgage at the end of the fixed period....you are in big trouble. Also, due to these sorts of institutions not needing to compete as much as they usually offer bespoke mortgages, even if BOE rates drop, their standard SVR could remain sky high, thus mainstream bank fixed/discount SVR rates could very quickly overtake your discounted SVR with one of these bespoke building societies and there is little that can be done about it.
I would always opt to go for a more mainstream bank unless of course your circumstances require a bespoke solution. I wouldn't get suckered into lower discounted SVRs with these building societies i have never heard of. There's a reason why mainstream banks discounted SVR is much less and the gap between standard and discounted is much less.
But yes, my money would be on a 3 year discounted SVR with a major bank if I had to mortgage right now. That should see you through current troubles, and hopefully allow you to fix a lower rate at the end whilst avoiding higher rate fixes currently.
Where is all the "it's different this time" gang? The funniest ad was in london at the very peak of the bubble, and read "if you see crypto advertising on london underground, you know its time to buy". I of course crossed out the buy and replaced with black graffiti SELL.
Being one of the very early adopters of bitcoin back in 2010, and looking what has happened now, the whole idea and concept of cryptocurrency has completely lost its way. Satoshi has unwittingly created a monster; a plaything for speculators and institutions alike.
The whole idea was a deregulated, definancialised value conduit away from government intervention, manipulation or financialisation and thats it! Its really quite simple really. But It has become everything but! Everything that has come since is a cancer on the idea of bitcoin, and is an insult for bitcoin to even be categorised with 99% of the utter garbage that has ensued since. Governments control cryptocurrencies by proxy, their puppet platforms who bend at their will If it means they can make a little more profit. Who uses a core wallet? Who here even knows what a core wallet is/was?
After FTX, I really hope cryptocurrencues go backwards to basic, grassroot principals. They must go backwards to move forwards again, and people need to educate themselves on why bitcoin was created in the first place!
indeed. Same goes with ASOS, BOO and lots of other massively beaten down stocks. First signs of a reversal, the shorts which have huge positions in some will scramble and trip over themselves to get out.
3 bagger within hours achievable on the right sort of news, or inflation finally peaking.
The only one talking sense here and knows what they are talking about is molly1966.
Its obviously an amendment of terms so they don't breach covenants in the future if dung really hits the fan. They use a whole menagerie of ratios to calculate how much the RCF should be, but obviously things have deteriorated, revenues will drop so adjustments need to be made to ensure the facility remains open to them. At worst there may be an adjustment of the value of the RCF.
What on earth has this got to do with an equity raise? This is not debt restructuring where BHs demand an equity raise as part of an agreement to satisfy covenants! Any talk of equity raise at this point is sheer nonsense.
Indeed beetrootjuice. Anyone here hoping for the 19% dividend will be sorely dissapointed unless the dark clouds that hang over the housing market magically dissipates.
It's still guesswork how this will affect housebuilders as we will have to wait for at least a couple of quarters for all this to filter down into earnings. But even if they could afford a special dividend, considering what is going on I would be stunned if they paid it out
I think even the most bullish spectator on houseprices will concede defeat regarding where they are heading. Demand and supply doesn't even really come into it anymore. Willingness and capability are unfortunately two very different things. First time buyers simply cannot afford anymore, price to earnings ratio is at an all time high and interest rates will only go up from here. They simply have to correct. Anyone paying today's asking price for any property are barmy; I would demand at least a 15% reduction, if not 20%. And some vendors are accepting!
Then you got 1 year fixed savings accounts now offering close to 5%; even easy access is approaching 3%! Looks like saving will be very much back in vogue soon. Who will risk a BTL whilst you got risk free savings rates like this?
Property hedge against Inflation? I beg to differ. You fail to take into account the most vital variable in the equation....first time buyers!
They are the primary engine of houseprice growth. The last couple of weeks events would have crushed and stomped on new market entrants, which would have caused a cliff edge style drop in demand. This is all because of inflation and the need to rise interest rates, exacerbated by stupid govt policies. Because of the nature of how our houseprice growth is driven by first time buyers, house prices can never be a hedge against Inflation.
This will take a few months to be fully reflected in house prices and housebuilder balance sheets/forward statements. Tbh I think it is about time house prices came back down to earth. Us homeowners have done well enough over the past 15 years, and if prices fall back in line to pre covid levels like stocks have, I would still be happy. As for new entrants suckered into extreme low rates and sky high prices....its going to be painful; very painful. Late 80s all over again. I say new entrants, but really those who have brought within the last decade who have known nothing but rock bottom rates.
However as jamrock correctly states, its all a cycle. Soon as inflation passes (and it will because obviously price increases cannot maintain 10% forever), then the government will drop the rates back low simply because they have to, especially with the ultra agressive trussnomics. Interest rates were kept too low for too long, and now have been effectively rebased. If the BoE put rates back to historical mean of c.5% for a long period of time, houseprices would tank 30-40% and the entire system would no doubt collapse.
I am not voting labour on a whim. I am voting labour to vent my anger at the tories and what they have achieved, or lack of, over the past decade and a bit. That mini budget was the last straw for many including myself; unfunded tax cuts for the very richest guised as helping growth is beyond the pale and a step too far.
The chancellor making the excuse of stress caused due to the queens death for one of the single biggest chancellor ****ups in living history is quite hilarious, but then again tragic and shows the calibre of the people now running the country. Sunak would have made a much better PM; at least he had a grasp of the dire situation this country faces.
And you must live on cloud 9 if you think public spending grew in the cameron years. Public sector spend as a percentage of GDP was down every single year from 2010 to 2018, and only picked up again once bojo entered! Education spending was slashed, NHS slashed, Welfare slashed! If memory serves, Labour would have protected these services, but of course at the expense of others like defence, transport ect who would have faced savage cuts. However education and health are the most valuable public services and should be the last on the chopping block, not the first! This should be protected at all costs.
We also cannot keep blaming Blair/Brown for the problems we face today. That excuse has gotten very old now and really doesn't wash anymore given the time that has elapsed since! Particularly the self inflicted issue of brexit caused solely by Cameron's idiotic gamble!
haha. I remember writing my masters dissertation about 15 years ago outlining then our desperate need for nuclear power for the next 50 years to bridge our energy needs whilst transitioning from fossil fuels to clean energy. Everyone high up knew then that nuclear power was desperately needed to secure energy needs, but the UK have done literally nothing regarding building more plants, mainly citing costs. But they are more than happy to splash £150bn on the energy cap, which could have built several power plants!
Then came the austerity period. This would have been the opportune time to reignite growth truss style, but no! Cameron and Osborne saw it prudent to massively cut public spending...and for what? Penny shrift, pound stupid! Under the tories, this country has become economically and morally bankrupt, our public services are crumbling, we have diminished on the international stage and the desperation of truss & Co shows how out of ideas they really are.
Truss policies are simply in the wrong era. We needed them back in 2013, not now when we are in a midst of an inflation crisis. I don't like labour, but we literally need a change just to freshen things up and wake the complacent Tories up. We will get it come next election, because many including myself will be voting labour for the first time.
If i were at the helm, nuclear power would be national priority number 1. For someone to spout so much about growth, how does blackouts and lack of energy feed into her growth plans? Will we build giant hampster wheels for the poor and those wishing to continue to claim benefits to run inside and power the country like the old wheels used to power cotton mills back in the 18th century? With talk of candles, it feels like UK is heading back to that era!
Truss is another wannabe thatcher, but unfortunately for her she lacks the capacity thatcher had.
Inflation and growth are not not the best bed partners. You have to deal with these one at a time. Thatcher would have never done unfunded tax cuts given the current environment and would be rolling in her grave right now.
Deal with inflation first! Then start with growth policies.