Perpetual Progress Newsletter January/ February 2010

January 29, 2010

Dear Property Investor

 Would You Like to Predict House Prices & Interest Rates?

 You may believe an ability to predict house prices and interest rates, was way beyond the ability of private individuals… however, would you be prepared to believe that 400 years of history can be a very good guide?

 If you have bought a property as a home, a sanctuary or as an investment, or if you are currently renting a property, you need to understand the factors that will impact upon you.

 As a property owner, it’s good to know if prices are going to fall, rise or stabilise.

 As a renter, you need to know what’s going to happen to property prices, as those prices will eventually affect what you pay for rent.

 Of course, the Credit Crunch has traumatised us all… if you haven’t, where have you been?

 

Fundamentally, we all need guidance and help in our life and as property ownership or property renting is very expensive in the UK, it’s useful to know where costs are going.

 

Perhaps you have one house, two houses, three flats, a small portfolio for your pension or a larger portfolio for your business needs.

 Whatever, your circumstances, I can show you how to cut through the rubbish to learn how to interpret the information available to you, in order for you to become better informed.

 

You need to be able to make the right decisions for circumstances that concern you… but where can you get simple, plain information, written in a jargon free way that you understand and most importantly, makes sense!

 Of course you could read the financial pages of your daily newspaper, research your interest on the Internet, listen to Bloomberg or ask an expert… or just ignore everyone else and make up your own mind.

 

Let’s deal with the people above, i.e. particularly the experts. The world is full of experts and they could not predict the chaos we are now enduring and they never will, so forget experts.

 Financial journalists invariably write financial pages, but I have never met a journalist who has experience of business or finance. Quite simply, the only real experience of finance is living in the real world and running your OWN business. Men and women who run their OWN business are the backbone of this country, and they are the people who put the Great into Britain… of course many of you reading this are on PAYE, but have a business as well, be it one investment property, a simple franchise or a car boot business… or a portfolio of properties producing big bucks… or a business which is a tidy sideline to your 9-5 work.

 Whatever your financial circumstances, I believe I can help you in ways, you cannot imagine.

 Let me explain.

 My name is Tony Evans. I am 52 and own 2 separate limited companies, one a publishing business, another, a property investment business, and a large number of properties both in the UK and Mallorca in my own name.

 

I have been working for myself for 15 years, and prior to that spent 17 years in banking, basically lending money to businessmen and women who wanted to buy bricks and mortar.

 

My total property portfolio is quite valuable and annually produces gross rent of £300,000 + per year…and rising.

 

I also live in a nice house with 6 acres in The Cotswold, but I am not flash, I am not flamboyant and, not an expert… I am a simple kind of guy.

 Many of my closest friends describe me as a “Norm”, i.e. Normal, down to earth kind of guy. You might meet me in a pub and think “ordinary”.

 You may talk to me and think “interesting guy”… I just love talking business, finance and money… especially with kindred spirit.

 What never surprises me, is so do most people who want to make money.!!!!!

 People who are happy and contented with their lives, employed, steady and reliable, aren’t always motivated by money.

 

The UK needs steady eddies, they are the backbone of the fabric of society we live in.

 However, I cannot help it, but I cannot have a boss tell me what to do anymore. I have to float free, even if I go broke.

 

So this letter is aimed at you free flyers, who are simply motivated about getting more dosh… if that is you, read on.

 Do You Love Starting New Money Making Streams?

 

If the answer is yes… great.

 

However, making money is only part of the equation, the more important part is preserving the money you make, by investing it wisely under your personal control.

 

PROGRESS

 

Every week for about 40 weeks per year I write a newsletter called Progress, in it I write about financial matters that matter and will affect you.

 

I also introduce my clients to new and existing businesses that work and will work for you.

 

I know I can educate you about property prices, interest rates and other financial products that once understood, will allow you to make informed decisions.

 

You will be amazed just how stupid most economists, financial commentators and journalists really are. You should not be surprised about this because they don’t have what you know you have… and that is common sense.

 

Ask A Businessman Why He is Successful

 

The bulk of my banking career was spent with AIB – Allied Irish Bank. Throughout my time, I learned 9 very important lessons about business. Read them below:

 

  • Most people in business earn less than similar people employed.
  • Accountants, bankers and financial advisors don’t understand cash flow
  • Common sense in business is not very common
  • If you want to be successful for longer in business, ensure you are in business longer than your competitors
  • Businesses with no debt cannot go bust
  • Anyone can become a millionaire
  • Age, sex, education, culture or language is no barrier to success
  • You should only take risks when the odds are in your favour.
  • Every bank gets offered lots of bad loans, and it’s the bankers’ fault, if he accepts them.

 Your Future Success- Progress 

 If you believe in your financial future, I genuinely believe I can help you.

 Everything however, starts with Progress, my weekly newsletter.

 Progress is published a minimum of 40 weeks per year, allowing for holidays, bank holidays, Christmas, Easter, etc, etc.

 Within its pages you will get clear unbiased, no nonsense information, which will enable you to make better decisions for you and your family.

 Also, Progress highlights lucrative business opportunities you need to know about… business opportunities that either I am personally involved in, or have close involvement with.

 Examples

 A)         I am personally involved in helping private individuals eliminate their credit card and/or loan debts… and can do the same for you, 100% legally.

 

B)         I own 20 houses, where I have a rock solid contract that gives me a guaranteed no voids and a 5-year contract, with an 8% gross yield… more good landlords are needed…..might that be you?????.

 

C)         I recently established a website to sell an incredible health product for men and women… and from zero I am generating growing sales of about £3500 per quarter, with a gross margin of 60%. I need more men and women to be involved? Will you help?

 

D)         I am about to establish a new property business, which once established would need investors to own a percentage of the shares equal to their investments. The sales and profit potential is substantial and the demand cannot be satisfied!

 Whatever your interest in making money is, Progress is also about showing you how to save money, by reducing your expenses.

 I will introduce you to people and companies who can save you money in ways, not even your accountant will believe… all 100% legal of course.

 The best aspect of Progress though is the price… just £59.99 per year or £5 per month if you prefer to pay by standing order.

 You may believe something as good as Progress cannot be that good for £5 per month… alas, if you don’t understand why Progress is so sensibly priced @ £5 per month, you have proved you need Progress.

 

I simply believe in giving you outstanding value in all our dealings, and that starts at the beginning.

 Believe me, we can make a great deal of money together and I guarantee you, I can show you how to make more money, and spend less money, without reducing the quality of your life.

 

If you go to https://perpetualprogress.wordpress.com, you can view for yourself, a sample or two of what I write, for free.

 Do please realise this blog is only a small sample of what we do.

 If you own a property, involved in a business and want to make more money than you are doing currently, make one of the most astute decisions of your life… spend £5 per month on Progress, as that fiver could well be the best fiver you ever spend in your life.

 Moreover, if you are one of the first 50 subscribers to Progress in 2010, I will send you a free copy of “Rich Dad’s Prophecy”, written by Robert T. Kiyosaki. The book is from the same author as “Rich Dad Poor Dad”.

 

Rich Dad’s Prophecy” was original published in 2004 and told readers the biggest stock Market Crash in history was coming.

 To be fair, The Credit Crunch was not difficult to predict and neither was very low interest rates… Progress told all its readers in 1998 of what lay ahead.

 Currently, we are also telling our readers that interest rates will stay low, very low for years, the next surge in house prices is already under way and unfortunately many people with a mortgage will fix their mortgage interest rates… which is my view is going to be very much an error, but hey, what do I know, I am no expert, financial journalist or broker.

 All I do is apply logic and common sense to all that I read and see… I can do the same for you for just over £1 per week.

 So, if you want to be part of a very exclusive and private circle, please join Progress, I guarantee you will not regret it, as with my help I know I can help you make better business decisions, save money, make money and join me as a business partner.

 Progress is a partnership and we all need good partners in business.

 Sure, I’ve got property and capital, but I also need men and women who are motivated and enthusiastic to make more money and enjoy having fun in the process.

 Subscribe to Progress today… it will be the best £1 you ever spend in a week.

 Subscribing To Progress

 

A)         Call us on 01179477700 and pay by debit/credit card.

B)         Send us an email with our Progress Order Form below.

C)         Fax our order form below to 01179049998.

D)         Post the order form to our address shown below.

 

Thank you for your time.

 tony evans

 

P.S. Call 0871 875 3835 FOR my important message to you!

 

You can call this line 24 hours a day!

 

PPS Our phone lines are open until 9pm every evening.

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www.thelazypuntersblackbook.com

Last Of 2009

January 12, 2010

 

 

Much debate in recent weeks has focused on bankers bonus payments, secret £62 billion loans to RBS and HBOS and will QE, Quantitative Easing, be extended, stopped or understood?

 Bankers Bonus Payments

 Far too much media space has been covered with this issue, so I will not add to it, except with me commenting… all bankers are not bad and not all bankers are good… but if bailout banks need billion pounds bonuses, fire all the directors with a P60… it’s our money. Remember there would be no bank if it were not for UK Plc plus no bonuses.

 

Secret £62 billion to RBS and HBOS

 

This shows that before 8th August 2007, Senior Scottish Bank Executives made a balls up of running their banks! What is now certain is that it’s likely the gaffer of The Bank of Scotland our Merv, a character, who probably knows too much. Simply, it’s almost certain that if he has lent £62 billion quid of Scottish money to keep the ATM’s working; he has done the same for Barclays, Lloyds etc, etc!

 Mervyn King as I have repeated, is an academic, who in early August ’07, preached about moral hazard, “messing it up” to you and me and played hardball… by doing so, he individually made a difficult situation worse. By not accepting calmly the facts, he punished the idiots, which whilst it made the banks worse, it made the whole banking community lepers.

 

Those punished banks then took their medicine by making you and me suffer. You may not agree with this but the facts speak for themselves.

 

So to QE

 

This is being extended by an extra £25 billion and the biggest beneficiaries are banks, pensions funds and other institutional investors, especially banks.

 

They are using the BOE cash to buy shares, commercial property, fund rights issues by Lloyds TSB and others and push the FTSE to very high levels.

So in effect, King punished the banks, helped them, then realised his punishment had punished UK Plc, i.e. you and me, and therefore set about saying Ooh ps so sorry, “Here’s £200 billion quid to make you feel better”.

 

Of course no one knows or will ever know if QE will work, but the Gold price tells you by its record price, that savvy investors, believe £200 billion of QE, allied with record government borrowing, the same thing really, is going to cause inflation sooner or later.

 

Well if you owed someone £200 billion, wouldn’t you want to (in real terms) find a way to make repaying that money easier?

 

Of course you would?

 

The easiest way to reduce the effect of repaying any loan or mortgage is to encourage inflation, which helps dissolve the real value of the debt.

 Currently we have deflation of –1.5% with interest rates of 0.5%, which means to you and we have real interest rates of +1%.

 Consequently, if interest rates rise to 2.5% and inflation increases to 2.5%, the real effect of those interest rates is zero… the situation ahead of us at some point.

 

Inevitably, once all the money in the system (via QE) starts causing inflation, as it will, interest rates will have to rise, to try and reduce inflation… however, because the UK is buggered, the BOE will not increase interest rates to curb inflation until it is 200% certain the economy has turbo charged growth; the risk of not letting the economy rip roar means, QE has to be extended.

 

Regrettably, there is not enough money in the world to allow QE to go on forever, as a result, the only alterative, on offer for any central bank or governor, is to do everything they can to get the economy going, as the risk of not taking positive action soon enough is stagnation.

 

Japan has spare economic capacity of 10% and has had for years, despite the government having debts of 200% of GDP… deflation and no prospect of the good times again.

 

The UK is well aware of previous mistakes of not acting early enough. At the same time, they are well aware of using inflation to get them out of the s***.

There are plenty of early warnings of rip-roaring inflation ahead of us, house prices up 10%, booming stock markets, booming investment banks profits.

 

Many commentators are suggesting house prices will fall next year, initially they should, but 12 months from now they probably will be up between 5-10%. My view is 10%… not because of lack of supply of houses, but because banks are flush with cash and want to lend it to make profits, so they will fall over themselves to compete in the mortgage market… knowing their security (the houses they mortgage) will be worth more from offer to completion.

 As we discussed before, everything in the UK depends on a healthy housing market and we have to get that market roaring to get consumer confidence up. Unless UK consumers are confident to start spending, we will suffer like Japan for years.

 Fortunately, Merv has worked this out early, and is taking or putting the medicine in place… now!

 Make no mistake the quandary for all of us with savings and borrowings is to work out when the break is released on low interest rates, because eventually interest rates will have to rise.

 

My view is changing but current rates or rates under 1% will be with us for sometime ahead or not until we see the word inflation in every tabloid. At that point, BOE will get interest rates up.

 The real test will be for those who want to sell their houses and bank their equity, because beyond 2013 house prices will by that point be steaming ahead.

 

My current view is consumers are reducing personal debt, (wrongly in my view,) but this is holding back consumption… but only until they realise inflation will be better at solving their debt burden, and then consumer spending will take over.

 

Of course in the future we may well have a new man in 10 Downing Street, but “he is a toff” and never done a dirty job in his life or worked for £5 per hour. He cannot hope to understand how hard life is for working class people.

 When I was a student, I buried the dead in the 1976 heat wave, unblocked sewers, sucked up compacted sceptic tanks, and collected dead dogs from the local vet for incineration

Men and women doing these jobs are screaming, because current economic policy is all against them, as it is for so many.

 Having stated the above, eventually conditions will improve and I fear the government of the day will try and impose measures through taxation to prevent booms in house prices, as well as price and income policies to prevent or control wages. Neither will work because the pressure for higher incomes will be driven by rising prices through inflation. Taxing rapidly increasing housing profits is useless; all that will do is stop the housing market overnight, which will lead to bust again.

 A better and more sustainable policy is to tax the buying and selling of land, as that will reduce land speculation in its tracks or control increases to more modest levels.

 At that moment, houses only need to increase by 4-5% per year to enable the housing market to start functioning efficiently. Will any politician though understand the cure for boom or bust in housing or commercial property is to tax land speculation? Not housing?

11.th November Spain and Beyond

November 11, 2009

 Last week I wrote about the healthy housing market and how the health of the housing market, has a fundamental part to play with the wider economy.

 This week, and next, we will draw comparisons with 2 overseas housing markets, Spain and Argentina as together and individually they have much to tell us about our own market and how recent banking developments within the UK may affect the future of the UK market.

 Additionally, we will look at recent G.D.P. figures, which apparently caught all economic forecasters off guard.

 Unanimously all these so called economists expected G.D.P. (Gross Domestic Product) or growth in the UK economy for 3 months ending September 09 to be positive; thereby confirming the economy was coming out of recession.

 Instead the figures were –0/4%, which meant the UK, was now officially in “depression”, or in the last 6 quarters, the economy has contracted by 5.9%.

 This officially confirms what the National Institute for Economic and Social Research (NICS) has been saying we are in depression mode.

 Fred Harrison taught me in his book “Boom Bust: House Prices and the Depression of 2010”, that the Depression of 2010 was historically inevitable.

 The current figures only tell us, the current economics malaise is as bad as we have ever experienced… that includes the 1920s, 1930s and the very worst of the 1970s.

 However, does it feel bad to you?

 

Personally, Yes.

 I have been a banker, but also been self-employed just as long… and it has never been worse.

 

Added to the falls in economic output, throughout the EU in deflation. In Ireland prices are falling from –3%-6%, dependent on which figures you believe. Prices in Japan are falling over 6% annually.

 Prices, just in September fell 3% in Ireland, 1.8% in Portugal, 1% Spain, this is just in one month remember!

 These countries were turbo charged with growth when ECB rate settlers based in Frankfurt, kept interest rates too low, or too loose for too long. Now monetary policy is too tight in the mistaken belief that inflation will ignite these economies again.

 The German economy is expected to decline 6% this year and worse Angela Merkel has paid subsidies to big German companies, in order to allow them to pay full-time wages to staff on a part-time hours. Those subsidies are now going to end and, as is likely exports, are not going to pick up as expected in 2010, leading to further mass lay offs in the engine room of Europe.

 Also, because of constraints being put on banks, as a result of G20 proposals, banks have to hold more cash on deposit, this restricting the amount of money they can lend.

 

So despite lowest interest rates on record, deflation and QE at record levels, what does the future hold for us? Darkness.

 Quite simply, consumer spending is going to decline, job losses are going to increase, deflation will get worse and people will try and save more, as they fear for their future.

 Every government in the developed world has to boost QE for several years and if they don’t, the slump back will be deeper, bigger and more rapid than anything ever seen.

 The worldwide slump in output has been faster and deeper than at any time seen in economic history and at the moment the prospects for preventing the slide, appear limited.

 

The lost decade of the 1990s in Japan show us what life could be like for us.

 Germany is going to the same way.

 Spanish banks arrogantly believe they have been protected by the actions of the Bank of Spain, who because of the property bubble of the 1980s forced all Spanish banks to hold more capital and lend less aggressively.

 The problem is in the last 9 years; ECB interest rates were too low and Spanish lenders, naively relied on professional valuations by RICS (Royal Institute of Chartered Surveyors) equivalent surveyors, to tell them, what a Spanish property was worth.

 The largest and most professional valuation business was TINSA.

 Their reports were thorough, professional, comprehensive and contained excellent comparisons for neighboroughling properties, to allow lenders to see how prices for the property under survey, compared to similar properties in the locality.

 Unfortunately from my personal experience, the experience of sales agents and bank employees themselves in the branches, TINSA valuations were obligatory.

 TINSA as well, undertook valuations in various economic categories, i.e. buoyant, constant, declining and recession. All valuations contained one of the above phrases to describe the current economic outlook or something similar.

 

Those buying off plan had a limit on their borrowing by lenders which was typically 70% of purchase price or a lower percentage of the open market value or valuation provided by TINSA.

 

By way of an example, late last year I tried to arrange finance in a property that I paid a 109,000 Euros deposit on. The purchase price agreed in May 2007 was 465,000 Euros, so my deposit was 23%. When the property was eventually valued in January 09 by TINSA under recession code it was valued @ 1080 Million Euros.

 

Now to say even I knew that was stupid was an understatement, but I had to pay 1000 Euros for this report.

 

Ultimately I got finance but was not prepared to accept it, as the terms of the mortgage were payments of 3,000 Euros per month and 6.75% interest rate.

 

That property in now on the market @ 650,000 Euros and still is unsold.

 

Virtually every bank in Spain uses TINSA valuations for both residential and commercial property valuations and all Spanish lenders have to re-assess their property values annually.

 

Currently market valuations in Mallorca are down 30%. Any Mallorcan property under 1 million Euros bought in the period 2003 onwards, probably is worth less today… and it’s in the period of 2003-2008 that most Spanish banks really exploded their lending.

 

85% of Spaniards are owner-occupiers, and the number of overseas buyers is substantial. Construction accounted about 20-25% of GDP in some Spanish regions and every bank lent to developers as though there was no tomorrow.

 Commercial property valuations, due to poor levels of tenant occupancy in Madrid, Barcelona, Valencia, Seville etc, etc have fallen so dramatically that many tenants are only paying 30% of the rent they used to pay, as landlords desperate to hang on, use any measure to get income in.

 

Spanish Banks are up to their neck in Commercial property and they gorged on it.

 Revaluations for all these properties are now arriving on Spanish Banks desks, and they make grim reading. So Spanish Banks are only now about to get into a very, very hot bath and feel and understand what sub-prime really feels like.

 Rising unemployment, deflation, massive falls in GDP and massively reduced inward investment in Spain by overseas buyers is going to make Spain a basket case.

Allied with the collapse in sterling for UK visitors, the situation is desperate.

 The ECB in Frankfurt appear happy with their one size fits all approach and hence the PIGS, Portugal, Spain, Ireland and Greece are going to be slaughtered to protect German and French industry… which clings on the belief things will get better.

 

Things will get much, much worse throughout the EU before they get better.

Saturday 31st October

November 1, 2009

Hello folks,

We are about to publish our second abbreviated edition of Perpetual Progress,we ,this week look at the housing market in Spain, followed by the market in Argentina….whilst both markets are miles apart and currently very different, they teach us much about how property markets can function when banks stop or are unwilling to lend.

Property needs finance from lenders to give the market momentum,however,when the banks do not provide momentum,primarily because depositors do not trust banks and thus do not make deposits ,those seekers of refuge for their capital ofter,as is the case in Argentina ,just deposit their capital into bricks and mortar bercause property really is the” safe as houses” safe haven in times of crisis.

 

However,let us not forget where we all started and that is with horses,via The Lazy Punters Black Book….accordingly,do not forget to check out our new web site at www.thelazypuntersblackbook.com    

 

Tony Evans 25/10/09- Perpetual Progress

October 25, 2009

I wrote last week that it has now been proved beyond reasonable doubt that a sick housing market is the bellweather sign of a sick economy.

 

In 2006/7/8 Mervyn The Swerve King talked about irrational exuberances and over heating in the housing market.

 

Perversely though both sets of inflation figures took only a small note of the cost of housing and the policy of the Bank of England was not to target house prices, as interest rates were meant to control inflation… which ignored the cost of housing.

 

Only a flaming idiot would draw up such a scheme as the cost of housing in the UK is as expensive as almost any other country on earth.

 

Clearly as the man at the tiller Merv the Swerve lives on another planet.

 

However, no sooner had the financial world melted then we saw house prices fall off a cliff… or did they?

 

A loss is only a loss when it is realised and even if the worst of prices fell to 2003 levels, who said they were that bad.

 

For example, this recent article form The Daily Telegraph sets the way forward as Gordon Brown and his mob see it going to June 2010.

 

   In February, the Prime Minister asked the FSA to consider a veto on zero-deposit mortgages as he called for a return to traditional banking values. But the regulator has decided against setting caps on loan-to-value or loan-to-income ratios. Instead, it wants lenders to ensure clients are more rigorously credit checked so they are not extended debt they cannot afford.

The FSA’s Mortgage Market Review, published tomorrow, will focus on the third of the market considered “higher risk”. At the market peak, higher risk loans accounted for 45pc of all mortgage lending, according to the FSA. One source described the proposed reforms, which will be put out for industry consultation, as “more evolution than revolution”.

Among the report’s proposals, the financial regulator is expected to call for an end to self-certification mortgages and rule that responsibility for income verification be transferred from mortgage brokers to lenders. The moves are an effort to crack down on mortgage fraud, which has already cost lenders about £400bn due to borrowers lying about their earnings to secure a home loan.

“It would be a mistake to effectively ban self-certification,” said Ray Boulger, senior technical manager at mortgage broker John Charcol. “There would be real consumer detriment.” He argued that certain self-certification mortgages – for example for those self-employed people who would struggle to obtain a mainstream mortgage but have sufficient earnings – were a perfectly valid part of the market, “providing they are appropriately priced”.

Specialist non-bank lenders, which account for 17pc – or £200bn – of the UK’s £1.2 trillion of mortgage debt and tend to be subsidiaries of investment banks, also face tougher regulations. Firms such as GMAC originated mortgages and sold them to banks and building societies. Those portfolios have been responsible for the worst of the industry’s bad debts, with average arrears rate of more than 5pc.

The FSA is expected to propose new rules to force such non-bank lenders, which are lightly regulated because they don’t take deposits, to hold on to 5pc-10pc of the loans they originate.

Second charge and buy-to-let mortgages, neither of which are regulated by the FSA, are expected to be brought under its supervision. In addition, sub-prime, interest-only, and 125pc mortgages will all be subjected to closer scrutiny and higher capital requirements.

There is some nervousness within the industry that the review will go too far: “We don’t want to see over-regulation on products…a reduction in the flexibility of products, which would not be helpful to consumers,” a spokesman from the Home Builders Federation said.

Major reform will be limited to the riskier end of the mortgage market because the regulator does not want to damage the vital first-time buyers’ market. The average age of a first time buyer has already jumped from 25 to 34 in the past 12 years due to the near-trebling of house prices in the decade to 2007.

One Treasury official, commenting on the huge slowdown in the mortgage market, said: “We want to get business back into some sort of normality, this is about making sure it is done on safe terms.”

On average, according to the FSA, borrowers are taking out loans 3.2 times larger than their annual income to buy a house, compared with 2.5 times a decade ago and 1.6 times in 1978. Mortgage interest payments are eating up 18.5pc of monthly paycheques, against 11.5pc in 2002.

Despite the UK housing market collapse, some lenders are still lending to people on a five times income basis.

The review is expected to reiterate how vital the housing market is to the country’s economic health. Net housing equity – the value of people’s homes after mortgage debt – amounts to £2.4 trillion, even after a 20pc fall in prices. Mortgage debt, at £1.2 trillion, amounts to 85pc of the country’s entire GDP, compared with 35pc in 1987.

At its peak the mortgage market was growing at breakneck speed. Net new lending hit £110bn in 2006 alone. Net lending is expected to be negative this year.

The number of mortgage products available has collapsed from 15,000 to 1,500 in just two years, according to Fathom Consulting, and mortgage approvals are sharply down. However, new players, including Tesco Bank, are emerging.

Despite a 16pc fall in house prices last year, according to Nationwide, prices have started rising again in recent months. Some, however, fear this will be a false dawn.

The IMF estimates that UK lenders will have to write off £29bn from their £1 trillion mortgage books between 2007 and 2010 due to poor lending and the recession.

As you will see from the above, the size of the UK mortgage market is vast.

Surprise surprise, the Treasurey, FSA and other idiots who are paid too much of our money, need to undertake resarch, for what we already know ie. “the health of the housing market is vital to the country’s ecnomic health”.

You do not need a review of the mortgage market to realise the consequences of a buggered housing market.

Too much regulation is restricting products, lending percentages etc. etc only prevents the self employed getting a home.

Gordon wants to encourage men and women to go into business, banks then, will ot lend them money until they have, 3 years of good accounts and profits, so how are these aspiring, ‘get-off-your-arse’ individuals going to get a roof over their head? They aren’t, are they?

Instead, the rental market will boom, but the FSA wants to curb buy to let loans.

Personally, I am delighted because the 10% increase in house prices ahead of us, will be overtaken by 20% increase in rents.

Currently, many of my properties achieve 85% of the rents they were achieving in 2007/08… fortunately my interst is down over 77%.

For example, I have several apartments in one building. Total rent was in 2007/08 £26,940.

My interest at the peak was £43,875, a defecit of £16,935.

So my tenants were being subsidised by me at £4233 or £81.40 per week to rent one of my nice flats.

How long do you think I could sustain that position…? Answers on a postcard.

If you have never expereinced sleepless nights, become a landlord.

Today those same properties yield rent of £24,600, down 10% currently, after voids of 3 months to 1 month… though as I gasp for breath, my total interest bill is only £9750, a reduction of £34,125. so I am clearing, before management charges and tax, £14,850 per year or a 2.28% net return on my money invested.

Consequently, the way ahead is not in buying property to rent but to live in… that is why the residential market will improve and reflate the UK economy.

Any sensible landlord will sell into a rising market and buy a business to service the buoyant housing market, where people buy to live!

Tony

 https://perpetualprogress.wordpress.com

PERPETUAL PUBLICATIONS Ltd

283 Speedwell Road

Speedwell

Bristol

BS5 7SY

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October 25, 2009

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