UK House Price to earnings ratio seen in an article on t1ps.com entitled Foundations of Sand? Its an investment website & I cant reprint the article, although it is critical of the Gvmts inflating of house prices.

All I would say is, be aware of this ratio when you are buying for the long term, and whether reversion to the average will be from an increase in salaries or a falling of house prices.

Adding images seems to be a bit of an issue at the moment so I will try to resolve this. Nevertheless I will state that long term average ratio is 4 but currently we are running at over 5 (it was 6.5 in 2007)

Article posted on BBC site. Difficult too know what to make of it because it needs to be around the whole country to give an indication of an improvement in the economy or at least peoples optimism. I do hope that its not as a result of the Gvmts schemes because thats unhealthy support that causes a false ie bubble market.

http://www.bbc.co.uk/news/business-22984982

Not directly property-related but it should resonate with any business.

Thanks to HubSpot for publishing this article written by Ginny Soskey.

If I ignore any of these, remind me!

1) “I don’t know the rules of grammar … If you’re trying to persuade people to do something, or buy something, it seems to me you should use their language, the language they use every day, the language in which they think. We try to write in the vernacular.”

2) “It has been found that the less an advertisement looks like an advertisement and the more it looks like an editorial, the more readers stop, look, and read.”

3) “Never write an advertisement which you wouldn’t want your family to read. You wouldn’t tell lies to your own wife. Don’t tell them to mine.”

4) “Do not address your readers as though they were gathered together in a stadium. When people read your copy, they are alone. Pretend you are writing to each of them a letter on behalf of your client.”

5) “Consumers [decide] to buy or not to buy [based on] the content of your advertising, not its form.”

6) “On the average, five times as many people read the headline as read the body copy. When you have written your headline, you have spent eighty cents out of your dollar.”

7) “The best ideas come as jokes. Make your thinking as funny as possible.”

8) “Good copy can’t be written with tongue in cheek, written just for a living. You’ve got to believe in the product.”

9) “Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals.”

10) “Never stop testing, and your advertising will never stop improving.”

11) “Why should a manufacturer bet his money, perhaps the future of his company, on your instinct?”

12) “Hire people who are better than you are, then leave them to get on with it. Look for people who will aim for the remarkable, who will not settle for the routine.”

13) “Training should not be confined to trainees. It should be a continuous process, and should include the entire professional staff of the agency. The more our people learn, the more useful they can be to our clients.”

14) “If you always hire people who are smaller than you are, we shall become a company of dwarfs. If, on the other hand, you always hire people who are bigger than you are, we shall become a company of giants.”

15) “Don’t bunt. Aim out of the ball park. Aim for the company of immortals.”

Excellent news. Another property-related rogue off the market.

He was doing Sale & Rent Backs, which are now illegal, but his “failings” were much broader.

http://www.bridgingandcommercialdistributor.co.uk/newsstory?id=633&type=newsfeature&title=fca_issues_record_fine_to_mortgage_adviser

Maybe the FCA is showing it has teeth as the successor to the ineffective FSA. However in my recent dealings with them when I wanted them to confirm in writing what they had told me on the phone (ie that my creatively constructed financing didnt breach any of their rules) their answer was that “they can only refer me to their handbook”, and that I needed to speak to the OFT as they dont yet have responsibility for the Consumer Credit Act. They did refer me to relevant pages in their handbook but their wordings are ambiguous. The OFT simply referred me to their website which is incomprehensible. I had to find another solicitor who specialised in banking & financial laws.

So, personally I suspect the FCA will make loud noises, but in reality continue to be a less than effective bureaucracy. Nevertheless if they can at least start taking out some of these rogues then its good progress.

This has just caused a lot of “panic” in the landlord community. Its a new interpretation of the rules regarding the end of an AST & move to a Statutory Periodic (rollover period) Tenancy and Deposit Protection Schemes.

Total confusion. Landlords, the DPS itself, Rental Agents all may be inadvertently breaking the law. Everyones interpretation of the law was seemingly consistent; until this judgement. What a pigs breakfast. It needs urgent clarification and amendments to the legislation as well as backdating if thats possible.

At worst its an increase in costs for landlords, which ultimately will mean the tenant will have to pay more.

http://www.landlordtoday.co.uk/news_features/Thousands-of-landlords-could-face-legal-action-after-new-Court-of-Appeal-ruling

More evidence of interference from the “authorities” who patently dont understand supply & demand. If theres high demand, prices will go up. If prices are capped there will be no supply. BIG problem. If people cant afford to live in London, why do they stay there? Commute instead. Regulation is NOT what is needed.

http://www.lettingagenttoday.co.uk/news_features/Boris-told-to-introduce-rent-controls-in-London

http://www.mortgagesolutions.co.uk/mortgage-solutions/blog-post/2274136/is-stamp-duty-strangling-the-housing-market?wt.mc_ev=click&WT.tsrc=Email&utm_term=&utm_content=Is%20Stamp%20Duty%20strangling%20the%20housing%20market%3F&utm_campaign=11/06/13%2014.00%20Blogs&utm_source=Daily&utm_medium=Email

In my opinion, undoubtedly. As the article states, when house prices were increasing, stamp duty was simply “a cost of doing business” so was less grudgingly paid. The added problem we now have is that many additional areas of the country ie lower end of the market are now having to pay Stamp Duty (SDLT) as prices have increased to 125k.

In my opinion the worst aspect of SDLT is its unfairness & arbritrariness. It is not a graduated tax, unlike income tax. Currently at £250000 it rises from 1% to 3%. So, for the additional £1 in the sale price, there is an additional £5000 of tax to pay! There is only a small amount that you can mitigate by selling fixtures & fittings separately (speak to your solicitor first).

For a property whose estimated true value is £250k it will need to be psychologically distant from this SDLT threshold so it needs to be marketed at £280k. Most buyers wont even look to do viewings because they know its overpriced, and they add in SDLT of £8400… so they look elsewhere. The property needs to be advertised at £250k with a view to accepting a price even lower. Result; seller loses.

So, at £250k there is a market barrier. Properties will not be sold at £260k unless the seller offers to pay the additional SDLT, in which case both buyer & seller will benefit. However how many times have agents ever suggested or even done this?

This can be seen where I live in the Bournemouth area where much of the housing stock is priced between £190-£280k. Anything advertised at £280k you know is really worth less than £250k (there is also another local ceiling at £300k). As a refurbisher I dont want to be buying above £200k because after refurb costs, tieing up money for 6 months (3 months refurb & 3 months to sell if I am lucky) & taking a financial risk (properties will not continue to go up in price), because the stamp duty threshold means that I will not be able to sell above £250k my margin is approx £20k. Instead I will need to add further value eg an extension to take it above the psychological barrier of £280k, or just take a big risk & hope that I find a buyer at this price who will pay over the estimated market value. How long could that take?

Stamp Duty needs urgently reviewing; it is distorting the marketplace & preventing people from moving more speedily. But what does any Gvmt understand about marketplaces, supply & demand? The problem is that the Gvmt is bankrupt & they have to tax more to pay their escalating debts. As a result they will resist making changes to what they will see as a “cash cow”, which wont lose them votes.

Mary Latham, (whom I havent yet met but have been in touch with several times) is a very experienced and professional Landlady who has just written an excellent book about the rental market. I thoroughly recommend it. There is no hype, no blind enthusiasm that is typical of our industry, just facts and her considered opinions on the reality of being a landlord(lady), and the future as she sees it. You can get a kindle version for £1.36 (Mary wont be getting rich on the proceeds).

http://www.insidehousing.co.uk/development/councils-want-power-to-negotiate-private-rents/6527224.article#.UbKLGMZF8WI.facebook

Unsurprising proof that politicians and councils (in this case Labour) do not understand supply & demand or the housing market. Tenants do not pay over the odds, they pay the market rent. Unfortunately councils DO pay over market rent in because there arent enough properties available as many of us landlords dont want to be in the Local Housing Authority (LHA) market.

Even the National Landlords Association (NLA) are incorrect when they state that ‘The only long-term solution to making housing more affordable is to increase the supply by building more homes in the areas where they are most needed”.

If house prices fell then that too would make them more affordable. We currently have a Government that is creating a false market by holding interest rates down and encouraging people to “get on the housing ladder” by providing financial support. For goodness sake, the world is in a financial mess because of excess debt and what do they do – buy the drunk another bottle. This policy is designed to increase house prices so that people feel wealthier come the next election. Its a bribe from a desperate government. It will end in tears if prices go up much further with people committing to buy properties they cant afford when interest rates revert to their mean average ie 6-8%.

http://uk.finance.yahoo.com/news/first-time-buyers-need-all-the-help-they-can-get–132820528.html
Dont think the author understands supply & demand. If a Gvmt subsidises something it is creating a false market, therefore manipulating demand, which therefore affects supply & pricing. Neither has the manipulatedly low rate of interest been considered in the article.

As for blaming price increases over the last decade on BTL landlords…nonsense. They have been a fraction of the marketplace, and in fact as they run a business they/we buy at prices that are lower than the general price levels (“BMV” – Below Market Value), usually because the property needs a lot of work to bring it up to an acceptable standard (in my case a fully refurbished and good standard). If they were not then they were speculators, not landlords. They certainly wouldnt have bought if there was no demand for rentals properties.