This week's comments come from Tom Entwistle, he's the editor and all round nice guy at Landlordzone. Though Tom may wish to reconsider his views, as they are a little gloomy, if not plain miserable (See my post entitled 'Great Ways To Be Miserable') in the current market. It's not all that bad just yet is it....? At least not yet here in Moray !
However, as I write this, mid-June 2008, things look pretty gloomy.The credit crunch is putting the banks under extreme pressure (we still don’t know the full story) leading to a contracting property market because of a severe tightening of lending criteria and the end of cheap money.
Savills last week revised their forecast that residential property values could fall by 9%, to as much as 25%, by the end of 2009.This in turn is severely affecting the construction industry which is seeing builders halting new development plans and even mothballing some current developments.
Rising redundancies in related industries will inevitably have knock-on effects to the economy as a whole, which is already feeling the effects of rising inflation and in particular higher commodity prices and quite dramatic fuel price rises.
Households are also feeling the effects of rising food and fuel prices and therefore retailers’ profits will be hit, inevitably affecting commercial rents and tenancies.The whole scenario looks set to lead to a full blown recession (the first we’ve seen in the UK for 18 years—so much for Gordon’s “the end of boom and bust”) unless moves by government and the Bank of England have their desired effect—so far there’s little evidence of this.
Fortunately for landlords residential rents and demand for renting is holding up very well, though the situation could deteriorate quickly if mass redundancies result. Established landlords with sizeable chunks of equity in their properties will inevitably ride out the storm and many will take advantage of distressed selling and falling values to add to their portfolios, ready for the up-turn—but things can get worse yet!
Additionally, an overall shortage of UK housing should help shore up the market in many locations, especially as new development will slow down or stop.The ones most likely to suffer are those overstretched newbie property investors, and in particular those owning new-build urban flats whose values are badly affected due to oversupply and poor tenant demand in some locations.
You didn’t need to be the Sage of Omaha or even those illustrious property education “experts” running overpriced property courses to see this coming a long time ago.For what some have paid for these courses you could have gleaned more wisdom buying 3 or 4 good investment books and spending a luxurious two weeks of study in one of the best hotels in the Caribbean!
For all those responsible for fleecing and then leading naive and unsuspecting investors into a living hell, to now say: “we were taken by surprise by the credit crunch”, is nothing short of scandalous in my view.
Batten down the hatches ! Stock up on Ringtons and butteries, keep smiling and hopefully things won't seem all that bad.
Until next time,
Mr Jackson.
Monday, 30 June 2008
Friday, 20 June 2008
Another cut price vanilla slice Sir ?
Thousands of landlords are now attempting to break into the sale-and-rent-back (SARB) market as a growing number of people face repossession.
This market is effectively like going into your favourite bakers at five minutes before closing and offering them 70p for their last vanilla slice, priced up at £1.00, which otherwise would go to waste. Except on a much grander scale !
Some would say these landlords are preying on the weak, taking advantage of others misfortune. Others saying they offer a lifeline to the struggling homeowner. There also seems to be a morality issue here, I personally don't think I will be venturing into this new market phenomenon.
Sale-and-rent-back agreements allow homeowners to sell their property at a discount price to a landlord. (Typically the homeowner will receive 75-80% of the property value) who will then rent it back to them at the market rate.
Despite the fact that they will sell their home for tens of thousands less than it is worth, the advantages of sale-and-rent-back may seem attractive to borrower in arrears, especially as deals are advertised on the basis that they can be conducted swiftly and quietly with no need to tell neighbours or even family.
Keeping up appearances and the image of a perfect life is one of the main issue to homeowners here. In many cases the alternative would be repossession.
Would you sell your home for £50,000 less than it's worth? This is what sale-and-rent-back companies would be asking the owner of a £200,000 property to do if they purchased it at 75% of its value.
If you have to sell up and move then accept that fact. If you need a quick sale due to debt problems, speak first to your mortgage lender. It may be able to find a cheaper deal, switch you to an interest-only loan, or delay repayments to give you time to sell.
It is then possible to put the home on the open market at a low asking price and try and get the best offer possible. If you have to move to a different property, so be it. Mortgage lenders do not want to repossess homes, it is a complicated and expensive process for them and they are unlikely to get back a property's true value.
Weigh up all your options first and seek good advice before making a judgement call.
Lets hope this trend doesn't head as far North as Moray !
Let's be careful out there.
Mr Jackson.
This market is effectively like going into your favourite bakers at five minutes before closing and offering them 70p for their last vanilla slice, priced up at £1.00, which otherwise would go to waste. Except on a much grander scale !
Some would say these landlords are preying on the weak, taking advantage of others misfortune. Others saying they offer a lifeline to the struggling homeowner. There also seems to be a morality issue here, I personally don't think I will be venturing into this new market phenomenon.
Sale-and-rent-back agreements allow homeowners to sell their property at a discount price to a landlord. (Typically the homeowner will receive 75-80% of the property value) who will then rent it back to them at the market rate.
Despite the fact that they will sell their home for tens of thousands less than it is worth, the advantages of sale-and-rent-back may seem attractive to borrower in arrears, especially as deals are advertised on the basis that they can be conducted swiftly and quietly with no need to tell neighbours or even family.
Keeping up appearances and the image of a perfect life is one of the main issue to homeowners here. In many cases the alternative would be repossession.
Would you sell your home for £50,000 less than it's worth? This is what sale-and-rent-back companies would be asking the owner of a £200,000 property to do if they purchased it at 75% of its value.
If you have to sell up and move then accept that fact. If you need a quick sale due to debt problems, speak first to your mortgage lender. It may be able to find a cheaper deal, switch you to an interest-only loan, or delay repayments to give you time to sell.
It is then possible to put the home on the open market at a low asking price and try and get the best offer possible. If you have to move to a different property, so be it. Mortgage lenders do not want to repossess homes, it is a complicated and expensive process for them and they are unlikely to get back a property's true value.
Weigh up all your options first and seek good advice before making a judgement call.
Lets hope this trend doesn't head as far North as Moray !
Let's be careful out there.
Mr Jackson.
Wednesday, 11 June 2008
Great Ways To Be Miserable.
I have finally come to the conclusion that some people like to be miserable, that they actually feel happier when they are miserable. I’m sure that is an oxymoron, but I am guessing you know the kind of people I mean.
I like to think that I align with people’s belief systems rather than trying to change them, so I thought it was remiss of me not to offer advice to those folk that think wallowing in self-pity and gloom makes for a great day out.
Of course I understand that this doesn’t apply to you, but if you know somebody who likes to work on feeling bad about things, please feel free to help them out by passing on these handy tips on. If you’re ready to step it up in the misery stakes I’m ready to help so get that frown in place, have a quick grumble about the Government, complain about the state of the property market, mutter that kids today have got no respect, then let’s get on with the business in hand.
Tim Brownson is a friend of a friend, he's a qualified English born Life Coach, NLP Master Practitioner and Hypnotherapist. He is now based just outside Orlando, Florida but coaches people all over the US and UK. His time is split between telephone and face-to-face coaching helping people fulfill their potential and get more out of life. I find his views very entertaining - sit yourself down with a strong cup of Ringtons, an iced finger and enjoy.....
Always whine and complain about stuff that is out of your control. Great examples are the weather, other people’s actions and the housing market. Don’t ever miss an opportunity to remind people that life is much worse and much harder than they think it is. Then drive home your point by giving them a long list of examples of stuff that is wrong with the world and why it was better during the depression/war/60’s* (* delete where applicable).
Keep up to date on celebrity culture. We all know that celebrities lead charmed, perfect lives. They don’t ever get sick; they have lots of money and are all perfectly balanced human beings. Read up on them, yearn to be them and above all idolize them as the gods they are. Never forget that your life is a meaningless travesty compared to theirs.
Judge others. Don’t listen to people that say you can’t judge a book by a cover. You haven’t got time to read books so how else are you supposed to make up your mind than glancing at the cover? If they are fat then they eat too much, if they smoke they are stupid and if they are out of work then it’s obvious they’re lazy. Soldiers, surgeons and athletes have to make rapid decisions so why not you?
Keep updated on local news. Make sure you know who has murdered whom and more importantly, which drug-crazed lunatic is on the rampage in your neighborhood. Don’t go to bed feeling cheerful when you can watch stories about the worsening economy, rising crime rates and foot tapping politicians hanging around in public bathrooms.
Eat junk food, drink lots of beer and never exercise. Fresh fruit and vegetables are for wusses that are scared to eat a triple pounder deluxe with extra bacon and 62 different kinds of cheese. Those same wusses probably can’t knock back 10 beers a night and an 18″ pizza. A good diet and exercise can help you feel good mentally and look good physically. Who needs that I ask you? Stick to your guns and ignore those fitness fascists like the plague. After all, if you get fit you have to stay fit and that requires time, time that you need to watch TV.
Watch more TV. If you are watching 8 hours per day that’s not enough, edge it up a bit. Aim for a diet of reality TV, local news, soap operas and anything that humiliates people. Avoid programmes that are remotely informative like the plague, so documentary's and anything on the BBC 2 is right out.
Catastrophize. You haven’t had a bad day at work you’ve had a nightmare. You haven’t been sick you have been violently sick. You haven’t got a tough boss; you’ve got the boss from hell. Get the message? If something is worth feeling bad about then it’s worth feeling really, really bad about. Never use expressions like “It’s not so bad” or “There was a silver lining” They will only serve to lessen the impact of negative events and we need to ramp them up. When you get really skilled at this you can slip phrases like “I was violently sick and my boss from hell made my day an absolutely nightmare” into any conversation with aplomb.
Play the lottery. You know you’ll never have much money as things are; so base your future plans on the 1 in 100 million possibility that you can win the big one. If you normally spend £5 per week don’t forget to increase that to £25 when there is a rollover. Let’s face it, you’d struggle to cope on the £3m that is the weekly prize, you really need that £42m mega rollover. Unfortunately for you though, there are part-time players that can’t cope with the normal prize either and jump on your bandwagon when the pot gets that big. In such cases you need to buy lots more tickets. This can be a double-whammy for misery seekers everywhere if you keep a log of what you spent. At the end of the year, add it all up and ponder what you could have bought with the £1000 or so you wasted. Better still; ask a financial expert how much that money would have worth been in 10 years time if invested properly.
Consolidate your debts. Don’t have 3 or 4 small debts here there and everywhere paying 8% on each, get one huge debt and pay 15%. It makes sense, you haven’t got time to manage 3 or 4 debts, Jerry Springer is on! When you’ve signed up for the consolidation asks your friend the financial adviser how much extra interest you’ll be paying over the next 62 years. Make sure you’re sat down with a large brandy, some smelling salts and a defibrillator to hand when he answers you.
Hopefully now you know some great ways to make you even more miserable than you were before, good luck with your endeavors. I guess some people reading this would prefer to be happy and for those sorry souls I suppose you could do just the opposite. The choice is yours !
Yours Grumblingly,
Mr Jackson.
I like to think that I align with people’s belief systems rather than trying to change them, so I thought it was remiss of me not to offer advice to those folk that think wallowing in self-pity and gloom makes for a great day out.
Of course I understand that this doesn’t apply to you, but if you know somebody who likes to work on feeling bad about things, please feel free to help them out by passing on these handy tips on. If you’re ready to step it up in the misery stakes I’m ready to help so get that frown in place, have a quick grumble about the Government, complain about the state of the property market, mutter that kids today have got no respect, then let’s get on with the business in hand.
Tim Brownson is a friend of a friend, he's a qualified English born Life Coach, NLP Master Practitioner and Hypnotherapist. He is now based just outside Orlando, Florida but coaches people all over the US and UK. His time is split between telephone and face-to-face coaching helping people fulfill their potential and get more out of life. I find his views very entertaining - sit yourself down with a strong cup of Ringtons, an iced finger and enjoy.....
Always whine and complain about stuff that is out of your control. Great examples are the weather, other people’s actions and the housing market. Don’t ever miss an opportunity to remind people that life is much worse and much harder than they think it is. Then drive home your point by giving them a long list of examples of stuff that is wrong with the world and why it was better during the depression/war/60’s* (* delete where applicable).
Keep up to date on celebrity culture. We all know that celebrities lead charmed, perfect lives. They don’t ever get sick; they have lots of money and are all perfectly balanced human beings. Read up on them, yearn to be them and above all idolize them as the gods they are. Never forget that your life is a meaningless travesty compared to theirs.
Judge others. Don’t listen to people that say you can’t judge a book by a cover. You haven’t got time to read books so how else are you supposed to make up your mind than glancing at the cover? If they are fat then they eat too much, if they smoke they are stupid and if they are out of work then it’s obvious they’re lazy. Soldiers, surgeons and athletes have to make rapid decisions so why not you?
Keep updated on local news. Make sure you know who has murdered whom and more importantly, which drug-crazed lunatic is on the rampage in your neighborhood. Don’t go to bed feeling cheerful when you can watch stories about the worsening economy, rising crime rates and foot tapping politicians hanging around in public bathrooms.
Eat junk food, drink lots of beer and never exercise. Fresh fruit and vegetables are for wusses that are scared to eat a triple pounder deluxe with extra bacon and 62 different kinds of cheese. Those same wusses probably can’t knock back 10 beers a night and an 18″ pizza. A good diet and exercise can help you feel good mentally and look good physically. Who needs that I ask you? Stick to your guns and ignore those fitness fascists like the plague. After all, if you get fit you have to stay fit and that requires time, time that you need to watch TV.
Watch more TV. If you are watching 8 hours per day that’s not enough, edge it up a bit. Aim for a diet of reality TV, local news, soap operas and anything that humiliates people. Avoid programmes that are remotely informative like the plague, so documentary's and anything on the BBC 2 is right out.
Catastrophize. You haven’t had a bad day at work you’ve had a nightmare. You haven’t been sick you have been violently sick. You haven’t got a tough boss; you’ve got the boss from hell. Get the message? If something is worth feeling bad about then it’s worth feeling really, really bad about. Never use expressions like “It’s not so bad” or “There was a silver lining” They will only serve to lessen the impact of negative events and we need to ramp them up. When you get really skilled at this you can slip phrases like “I was violently sick and my boss from hell made my day an absolutely nightmare” into any conversation with aplomb.
Play the lottery. You know you’ll never have much money as things are; so base your future plans on the 1 in 100 million possibility that you can win the big one. If you normally spend £5 per week don’t forget to increase that to £25 when there is a rollover. Let’s face it, you’d struggle to cope on the £3m that is the weekly prize, you really need that £42m mega rollover. Unfortunately for you though, there are part-time players that can’t cope with the normal prize either and jump on your bandwagon when the pot gets that big. In such cases you need to buy lots more tickets. This can be a double-whammy for misery seekers everywhere if you keep a log of what you spent. At the end of the year, add it all up and ponder what you could have bought with the £1000 or so you wasted. Better still; ask a financial expert how much that money would have worth been in 10 years time if invested properly.
Consolidate your debts. Don’t have 3 or 4 small debts here there and everywhere paying 8% on each, get one huge debt and pay 15%. It makes sense, you haven’t got time to manage 3 or 4 debts, Jerry Springer is on! When you’ve signed up for the consolidation asks your friend the financial adviser how much extra interest you’ll be paying over the next 62 years. Make sure you’re sat down with a large brandy, some smelling salts and a defibrillator to hand when he answers you.
Hopefully now you know some great ways to make you even more miserable than you were before, good luck with your endeavors. I guess some people reading this would prefer to be happy and for those sorry souls I suppose you could do just the opposite. The choice is yours !
Yours Grumblingly,
Mr Jackson.
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