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Money and Budget 2023 Nov Predictions
MBA MBA
Posted: 02 November 2023 12:17:09(UTC)
#31

Joined: 16/12/2012(UTC)
Posts: 1,725

The latest speculation is around pumping the housing market, especially at the FTB end, and possibly the BTL end too. In the past HPI has often been the go to option when govts (Lab and Cons) are doing badly.

Its all tittle tattle of course. Things can only get worse...
Newbie
Posted: 02 November 2023 15:11:48(UTC)
#32

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MBA MBA;284692 wrote:
The latest speculation is around pumping the housing market, especially at the FTB end, and possibly the BTL end too. In the past HPI has often been the go to option when govts (Lab and Cons) are doing badly.

Its all tittle tattle of course. Things can only get worse...

BTL market IMO is too big to mess around with and ignore.
Despite everything being thrown at it the situation is getting worse for renters.

In my neck of the woods, rent are going up.
The ratio of properties to renters is going down - there are queues a mile long when one comes on the market.
House prices have not really moved - very few sellers.
Around here it seems that homeowners are selling (upsizing) and keeping their BTL investments.
Buyers are on the sidelines with cash at their disposable to push out FTB's.
Developers are snapping up land and sitting on it instead of building.
A new breed of investors are rising - moving in renovating and selling with £40-50k tax free gain.
Any tax increases just get passed on to renters - so this is not working.
2 users thanked Newbie for this post.
Tim D on 02/11/2023(UTC), MBA MBA on 02/11/2023(UTC)
Thrugelmir
Posted: 02 November 2023 16:21:18(UTC)
#33

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Newbie;284723 wrote:

BTL market IMO is too big to mess around with and ignore.


Markets ultimately find their natural level. Given that BTL borrowers account for just 7% of mortgages but 20% of total amount borrowed. Shows how much leverage has been used by investors to build their empires. A correction will be beneficial on many levels. To fix something you first need to break it.
2 users thanked Thrugelmir for this post.
Arnoldy on 02/11/2023(UTC), MBA MBA on 02/11/2023(UTC)
Newbie
Posted: 02 November 2023 16:28:54(UTC)
#34

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Thrugelmir;284732 wrote:
Newbie;284723 wrote:

BTL market IMO is too big to mess around with and ignore.


Markets ultimately find their natural level. Given that BTL borrowers account for just 7% of mortgages but 20% of total amount borrowed. Shows how much leverage has been used by investors to build their empires. A correction will be beneficial on many levels. To fix something you first need to break it.

That is the financial side.
Now look at the social side.
What % of renters make up the BTL market ?

As a Politician - When you have a fish bowl with fish in it - you cannot break the bowl and expect the fish to survive.
As a BTL Owner - The fish are already in a barrel and easy shoot ! Saviours need to come with a bowl and water to re house any survivors.
As a Lender - We like BTL owners, they are economically good for us, politicians not so good, especially when they just dumped the covid guarantees.
1 user thanked Newbie for this post.
MBA MBA on 02/11/2023(UTC)
Thrugelmir
Posted: 02 November 2023 16:50:49(UTC)
#35

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Newbie;284733 wrote:
Thrugelmir;284732 wrote:
Newbie;284723 wrote:

BTL market IMO is too big to mess around with and ignore.


Markets ultimately find their natural level. Given that BTL borrowers account for just 7% of mortgages but 20% of total amount borrowed. Shows how much leverage has been used by investors to build their empires. A correction will be beneficial on many levels. To fix something you first need to break it.

That is the financial side.
Now look at the social side.
What % of renters make up the BTL market ?

As a Politician - When you have a fish bowl with fish in it - you cannot break the bowl and expect the fish to survive.
As a BTL Owner - The fish are already in a barrel and easy shoot ! Saviours need to come with a bowl and water to re house any survivors.
As a Lender - We like BTL owners, they are economically good for us, politicians not so good, especially when they just dumped the covid guarantees.


What are suggesting should be done then ? Words come cheap but fail to address the real issues. Somebody has to make tough decisions. Not pander to any particular lobby group.
3 users thanked Thrugelmir for this post.
MBA MBA on 02/11/2023(UTC), Laura Sommer on 02/11/2023(UTC), Guest on 03/11/2023(UTC)
DIY Investing
Posted: 02 November 2023 17:32:06(UTC)
#37

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Things are are only going to get worse for renters and Landlords.

Years of stupid policy aimed at winning the votes of the envious are coming to a head.

Years ago the government of the day decided it didn't want to be in the business of building or buying homes to house those that couldn't afford to buy one for themselves.

So they outsourced it to the private sector.

But successive governments, with blue ties and red ties, since have decided that they don't want the private sector to make any profit from providing this service because it upsets voters....which is a problem, given that profit is the private sectors reason for being.

They pushed on with daft policies regardless, culminating in a situation where small time independent landlords are taxed on revenue rather than profit, where paying rent is almost optional because its so difficult to evict anyone or end a contract, and where politicians can just decide to force landlords to spend tens of thousands making properties 'greener' on a whim.

This induced many landlords to think "#### this for a game of cricket' and sell up, removing supply from the market. Those that remained decided that, as a result of the costs/risks highlighted above, that they'd like a lot more rent from their tenants in compensation for the risks. And, given the supply shortage, those tenants don't have much choice.

Now throw higher mortgage Interest rates into the mix, and the aformentioned problems are further exacerbated, as some landlords will go bust due to being over leveraged diminishing supply further, and those that survive will pass those borrowing costs onto renters.

Even if the government, and the opposition, reversed course and said "sorry everyone we'll stop being silly now, we'll let you profit from building, buying and renting out houses". People won't believe them and will be reluctant to enter the BTL game anyway.

So multi generational households, or shopping trolleys and cardboard boxes, here we come. Renters can thank their local member of parliament (who doesn't care anyway. Secretly they don't think peasants should have decent, affordable housing! Not even the ones in red ties!)
6 users thanked DIY Investing for this post.
Newbie on 02/11/2023(UTC), MBA MBA on 02/11/2023(UTC), Tim D on 02/11/2023(UTC), Martina on 02/11/2023(UTC), Laura Sommer on 02/11/2023(UTC), Guest on 03/11/2023(UTC)
Shetland
Posted: 02 November 2023 17:59:04(UTC)
#38

Joined: 13/03/2015(UTC)
Posts: 1,244

MBA MBA;282918 wrote:
Just for fun, what things would you do/would like Hunt to do in the Nov Budget on personal finance matters with the view of shoring up the base vote, and if they lose the election Lab can deal with the issues/cost.

PS No Trussonomics i.e. cut taxes AND commit to spending £80-120bn subsidising everyone's gas and electric bills.

My starter

Raise ISA allowance to £25k
Create a new British ISA £20k for just FTSE listed instruments (yes most of us would just stick it in a global fund but listed on FTSE, I would)
Raise tax free pension first 25% to 35%
Raise savings interest allowance to £1000 for higher rate tax payers too
Allow parents to access Junior ISA balance at age 14 (could say for supporting 'education' blah blah blah)
Do not proceed with raising the private pension access age from 55 to 57 (has anyone heard any more about if they're still planning on legislating on this?) for the foreseeable future

The above wouldn't cost v much in the first few years and so OBR / IFS /BofE (the people who actually run economic policy now) might not mark Govt down with the resulting spike in gilt yields plus they could do what govts always do and pretend they'll reduce spending in the future, increase efficiency, increase immigration even more, increase productivity etc.

And there you go, a chance to reduce Lab's majority.


I can’t see most of these happening, they cost money and add very few votes
Newbie
Posted: 02 November 2023 18:42:09(UTC)
#36

Joined: 31/01/2012(UTC)
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Thrugelmir;284737 wrote:
Newbie;284733 wrote:
Thrugelmir;284732 wrote:
Newbie;284723 wrote:

BTL market IMO is too big to mess around with and ignore.


Markets ultimately find their natural level. Given that BTL borrowers account for just 7% of mortgages but 20% of total amount borrowed. Shows how much leverage has been used by investors to build their empires. A correction will be beneficial on many levels. To fix something you first need to break it.

That is the financial side.
Now look at the social side.
What % of renters make up the BTL market ?

As a Politician - When you have a fish bowl with fish in it - you cannot break the bowl and expect the fish to survive.
As a BTL Owner - The fish are already in a barrel and easy shoot ! Saviours need to come with a bowl and water to re house any survivors.
As a Lender - We like BTL owners, they are economically good for us, politicians not so good, especially when they just dumped the covid guarantees.


What are suggesting should be done then ? Words come cheap but fail to address the real issues. Somebody has to make tough decisions. Not pander to any particular lobby group.

The long term, economic and social solution may be for the government taking back control of the housing market by getting back into the business of house building and offering social housing themselves.

However this does not satisfy the short term problem of the mass voting population thinking where they are going to the monies to pay the rent and put food on the table.

So temporary solution is to fall back on "cheap words" and earn a crust whilst the can is kicked further afield to see if the next lot are up to the task of making the tough decision - Likely not given it will cost the politician their vote and their chance to earn a few bob. So best to talk a good game and keep the peasants happy and occupied.

The taxation on landlords is just like VAT, it just gets passed down and consumers generally do not argue with VAT, they simply have no choice but to pay it. But a 1% rise in income tax gets everyone up and armed and ready.
MBA MBA
Posted: 02 November 2023 19:10:23(UTC)
#39

Joined: 16/12/2012(UTC)
Posts: 1,725

Wait till Lab get in. Landlords and parents who send / have to send their kids to private schools + anyone saving for a pension is gonna be rinsed.

More broadly I’ve been thinking how Lab will find the £ in the absence of global economic growth and after the first two years when they’ve written strategies, published white papers and legislated for growth and for everyone to be happy + pulled any of the levers outstanding and nothings happening. I reckon they’ll…

1) if they’re able to they’ll reduce interest rates if global inflation falls / do more QE
2) find a way for the Bank of Eng to cancel the outstanding gilts it owns via QE then the national debt falls and they can start borrowing again (and spending)
1 user thanked MBA MBA for this post.
Guest on 03/11/2023(UTC)
Newbie
Posted: 02 November 2023 19:19:09(UTC)
#40

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MBA MBA;284751 wrote:
Wait till Lab get in. Landlords and parents who send / have to send their kids to private schools + anyone saving for a pension is gonna be rinsed.

More broadly I’ve been thinking how Lab will find the £ in the absence of global economic growth and after the first two years when they’ve written strategies, published white papers and legislated for growth and for everyone to be happy + pulled any of the levers outstanding and nothings happening. I reckon they’ll…

1) if they’re able to they’ll reduce interest rates or generate more inflation / do more QE
2) find a way for the Bank of Eng to cancel the outstanding gilts it owns via QE then the national debt falls and they can start borrowing again (and spending)

A bit confused.

Are you saying that Labour will generate more Inflation - if so how does it help voters across any spectrum.

Cancel Gilts - do you mean default and then issue more QE in another name

Do more QE - will that not simply just push properties back up and drive it away, not only from the low income level but also middle income level to the far extreme of the uber wealthy - The former need to rent it out to pay the mortgages, the latter just need to sit on it and watch it appreciate.

Also by doing more QE will it not simply arm the wealthy with more firepower to get access to cheap credit without necessarily touching their existing assets.

As for private schools - they are now offering VAT free fees if you pay now and enjoy later. So again the super wealthy with assets create another barrier for anyone with a chance to get in. What needs to happen here is the other way round, forget mickey mouse courses and qualifications and focus on higher standards instead of inclusivity nonsense IMO.
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