Credit deflation and the reflation cycle to come (part 2)

[Iamcynical]

I'm after a bit of advice from anyone that could help here.  Last week I took a punt on a few grand of Whitbread shares.  I was gambling on the lockdown coming to an end soon and sentiment turning.  To tell the truth, I was just looking to make a grand or so within my ISA.  I bought my shares at about £25 and today a rights issue has come up offering me another 50% of my holding for £15 per share.  So, this will cost me about £1200, or I could flog the rights issued shares for about £700 or so.  It looks like Whitbread are obviously trying to raise some cash to see them through this lockdown.  I never did buy these for even the medium term tbh.  What would the more experienced amongst you do ?  TIA.

[DurhamBorn]

24 minutes ago, Iamcynical said:

I'm after a bit of advice from anyone that could help here.  Last week I took a punt on a few grand of Whitbread shares.  I was gambling on the lockdown coming to an end soon and sentiment turning.  To tell the truth, I was just looking to make a grand or so within my ISA.  I bought my shares at about £25 and today a rights issue has come up offering me another 50% of my holding for £15 per share.  So, this will cost me about £1200, or I could flog the rights issued shares for about £700 or so.  It looks like Whitbread are obviously trying to raise some cash to see them through this lockdown.  I never did buy these for even the medium term tbh.  What would the more experienced amongst you do ?  TIA.

Sell the rights or pay for the rights if you think the shares will go up,or sell the shares and the rights and take the profit.

[King Penda]

48 minutes ago, Iamcynical said:

I'm after a bit of advice from anyone that could help here.  Last week I took a punt on a few grand of Whitbread shares.  I was gambling on the lockdown coming to an end soon and sentiment turning.  To tell the truth, I was just looking to make a grand or so within my ISA.  I bought my shares at about £25 and today a rights issue has come up offering me another 50% of my holding for £15 per share.  So, this will cost me about £1200, or I could flog the rights issued shares for about £700 or so.  It looks like Whitbread are obviously trying to raise some cash to see them through this lockdown.  I never did buy these for even the medium term tbh.  What would the more experienced amongst you do ?  TIA.

Reach for a beer and a treble jd without coke

[Iamcynical]

15 minutes ago, DurhamBorn said:

Sell the rights or pay for the rights if you think the shares will go up,or sell the shares and the rights and take the profit.

Selling the rights, combined with the drop in share value due to dilution is below the profit I was aiming for on these.  I have to be careful of greed in buying the additional shares, but taking the profit as it stands is very easy money of course.  I actually (maybe foolishly) believe the shares will see a bit of a resurgence when this current shit shower ends and people can get back to living their 'normal lives'.

Maybe I'll take @stokiescum's advice and let the alcohol make the decision for me...

Appreciate the advice !

[Barnsey]

I must be mad but have arranged a viewing for a property tomorrow, one that initially came onto market a year ago, has gone sold STC twice, and now back on for the same guide price but key difference this time is “no upward chain”.

I know many of you will say it’s too early, but I’ve mulled over a potential price if we like it, around 13% below asking. Long list of genuine potential issues, but from the tone of the busy estate agent (so many offers rushing in since lockdown was lifted, rushed off their feet apparently), I’m confident my offer will be rejected instantly, even though we’re first time buyers with 2 mortgages in principal and 1 months notice for our rental flat. I could offer even less but I’m also looking at what % a further year of renting would add up to. We’re ahead of the game in the sense we rent on the same development so know the issues well with the area and the potentially patchy build quality. Perhaps this knowledge might scare them off?

Just wanted to ask, is it generally acceptable, in an offer email, for me to list all the reasons why we’re making a lower offer to at least back up how we reached this price? I’m certainly not going any higher so it’ll be a one and done. If rejected then I know it’s too early and we’ll take a back seat and continue saving for now.

[Don Coglione]

13 minutes ago, Barnsey said:

I must be mad but have arranged a viewing for a property tomorrow, one that initially came onto market a year ago, has gone sold STC twice, and now back on for the same guide price but key difference this time is “no upward chain”.

I know many of you will say it’s too early, but I’ve mulled over a potential price if we like it, around 13% below asking. Long list of genuine potential issues, but from the tone of the busy estate agent (so many offers rushing in since lockdown was lifted, rushed off their feet apparently), I’m confident my offer will be rejected instantly, even though we’re first time buyers with 2 mortgages in principal and 1 months notice for our rental flat. I could offer even less but I’m also looking at what % a further year of renting would add up to. We’re ahead of the game in the sense we rent on the same development so know the issues well with the area and the potentially patchy build quality. Perhaps this knowledge might scare them off?

Just wanted to ask, is it generally acceptable, in an offer email, for me to list all the reasons why we’re making a lower offer to at least back up how we reached this price? I’m certainly not going any higher so it’ll be a one and done. If rejected then I know it’s too early and we’ll take a back seat and continue saving for now.

No justification required; either the offer is accepted, or it is not.

[leonardratso]

why give any reasons? low ball it and move along, fuck them all.

[MrXxxx]

23 hours ago, sancho panza said:

by the sheer poverty of the talent pool in the political class-the latest Tory/Labour/LD leadership elections have set the scene for change.

Perhaps we need to look inward...with a name like yours you could be Foreign Secretary, with his superlative track record @DurhamBorn could be Chancellor of the Exchequer, and for PM Dosbods very own `Mr Diplomacy` MrXYY...sorted ! :-)

[Bricormortis]

1 hour ago, Barnsey said:

I must be mad but have arranged a viewing for a property tomorrow, one that initially came onto market a year ago, has gone sold STC twice, and now back on for the same guide price but key difference this time is “no upward chain”.

I know many of you will say it’s too early, but I’ve mulled over a potential price if we like it, around 13% below asking. Long list of genuine potential issues, but from the tone of the busy estate agent (so many offers rushing in since lockdown was lifted, rushed off their feet apparently), I’m confident my offer will be rejected instantly, even though we’re first time buyers with 2 mortgages in principal and 1 months notice for our rental flat. I could offer even less but I’m also looking at what % a further year of renting would add up to. We’re ahead of the game in the sense we rent on the same development so know the issues well with the area and the potentially patchy build quality. Perhaps this knowledge might scare them off?

Just wanted to ask, is it generally acceptable, in an offer email, for me to list all the reasons why we’re making a lower offer to at least back up how we reached this price? I’m certainly not going any higher so it’ll be a one and done. If rejected then I know it’s too early and we’ll take a back seat and continue saving for now.

I think detailing the reasons makes the vendor consider what you are saying rather than knee jerk dismissing it out of hand, but let them know the offer is best and final.

[Majorpain]

32 minutes ago, MrXxxx said:

Perhaps we need to look inward...with a name like yours you could be Foreign Secretary, with his superlative track record @DurhamBorn could be Chancellor of the Exchequer, and for PM Dosbods very own `Mr Diplomacy` MrXYY...sorted ! :-)

Economy's teetering on the edge of the cliff, don't give them any ideas as its a complete hospital pass!

[Agent ZigZag]

Good luck Barnsey. Sometimes there is never a wrong time to buy if it is to be your home that will make you and your family happy. Always ensure  you can afford the mortgage and you have all bases covered should you lose your job or have a poor economic year.ie you can hedge with silver gold or shares etc

[Barnsey]

1 hour ago, Agent ZigZag said:

Good luck Barnsey. Sometimes there is never a wrong time to buy if it is to be your home that will make you and your family happy. Always ensure  you can afford the mortgage and you have all bases covered should you lose your job or have a poor economic year.ie you can hedge with silver gold or shares etc

Thanks @Agent ZigZag, deep down I feel like I’m definitely early, but until you enter the market and really get to know what’s going on with your local area it’s very hard to judge the situation. Prices where I am were already down something like -0.5% in the first 3 months of the year so certainly not booming. The plan is 74% LTV, 15 year fix @ 2.22% for entire length of mortgage, and payments not overextended so that I can continue to invest in our reflation strategy over the next couple years at least before things hopefully take off. 5 year old property so subject to being satisfied with the survey it should only require some light cosmetic work, again freeing up spare capital for reflation investments rather than large jobs. As @DurhamBorn and others have wisely recommended, also use this low inflation cheap debt window to buy useful items for years ahead.

Lots of moving parts right now fighting each other, the velocity of this shock vs 08 suggests house prices could be equally more rapid in their decline and then stabilise,, so part of my conscience says WAIT but another part says this might be the window, especially if they keep throwing money around. Are we getting a second wave? If so will it be 5x (ala 1918) or a much smaller one? Is a second lockdown even impossible?

If this viewing/potential offer falls flat then I’ll definitely sit on the sidelines for a bit longer and resume the search late Autumn after this pent up demand dies down, and everyone who’s taken up a mortgage holiday realises they no longer qualify for refinancing or a new mortgage. 

[BearyBear]

@Barnsey where do you get 15y fix?

[Barnsey]

1 minute ago, BearyBear said:

@Barnsey where do you get 15y fix?

YBS & Virgin, I’m sure more to follow once they get desperate 

[BearyBear]

3 minutes ago, Barnsey said:

YBS & Virgin, I’m sure more to follow once they get desperate 

Hmmm....

https://uk.virginmoney.com/mortgages/find-a-mortgage/firsttimebuyer

There are errors on this page

The maximum loan to value we will offer is 65%. What you have entered is higher than that so please either increase your deposit, or reduce the property value to find the mortgages suitable for you.

[JMD]

9 hours ago, Talking Monkey said:

That was a very interesting read. The bit about reshoring especially, I'm skeptical on huge amounts of jobs being created, the effect of tech and automation will be huge as new factories are built in Europe and America that are largely automated

I agree that there will be massive automation. Surely an argument for tax reform. I am now convinced that if a company wants to sell anything In this country, they should be taxed on turnover, with lower rates if say product is manufactured here. Tax take will wither to nothing of not simplified.

[Barnsey]

18 minutes ago, BearyBear said:

Hmmm....

https://uk.virginmoney.com/mortgages/find-a-mortgage/firsttimebuyer

There are errors on this page

The maximum loan to value we will offer is 65%. What you have entered is higher than that so please either increase your deposit, or reduce the property value to find the mortgages suitable for you.

Just YBS for the moment then, it’ll take a little time for higher % LTV products to come back to market no doubt

[AWW]

3 hours ago, Barnsey said:

Just wanted to ask, is it generally acceptable, in an offer email, for me to list all the reasons why we’re making a lower offer to at least back up how we reached this price? I’m certainly not going any higher so it’ll be a one and done. If rejected then I know it’s too early and we’ll take a back seat and continue saving for now.

Don't send an offer by email.  Call the agent, tell them you're very interested in the property, and bearing in mind that you have mortgage agreed and aren't in a chain, impending economic catastrophe/uncertainty, what is the absolute lowest that the vendor would accept?  The figure will be below the asking price.  This amount is then the most you will ever pay for that property.  Whereas if you go in with your own bid, that becomes the least you will ever pay for the property.

A good EA who wants to shift a property will have no problem telling you the vendor's lowest number.

As an example, me and Mrs AWW recently looked at a place and, when I asked the EA what the vendor's lowest number was, he told me without hesitation a figure that was 17% less than the asking price.  Then CV hit.

Good luck. If they tell you the vendor will only accept the asking price, leave it. You don't sound like you want to pay it (and it wouldn't take you much of a reduction to get to 70% LTV, which will open up cheaper mortgages) so the conversation should end there until the EA phones you back.

[DurhamBorn]

3 hours ago, Barnsey said:

I must be mad but have arranged a viewing for a property tomorrow, one that initially came onto market a year ago, has gone sold STC twice, and now back on for the same guide price but key difference this time is “no upward chain”.

I know many of you will say it’s too early, but I’ve mulled over a potential price if we like it, around 13% below asking. Long list of genuine potential issues, but from the tone of the busy estate agent (so many offers rushing in since lockdown was lifted, rushed off their feet apparently), I’m confident my offer will be rejected instantly, even though we’re first time buyers with 2 mortgages in principal and 1 months notice for our rental flat. I could offer even less but I’m also looking at what % a further year of renting would add up to. We’re ahead of the game in the sense we rent on the same development so know the issues well with the area and the potentially patchy build quality. Perhaps this knowledge might scare them off?

Just wanted to ask, is it generally acceptable, in an offer email, for me to list all the reasons why we’re making a lower offer to at least back up how we reached this price? I’m certainly not going any higher so it’ll be a one and done. If rejected then I know it’s too early and we’ll take a back seat and continue saving for now.

Whenever iv bought property,or handled family buying iv put the offer in and told them id like an answer within 3 hours and that i can proceed quickly,but its that price or im not interested as im looking at several others.If they come back with anything i always say no .I have never said reasons why,offer and i can proceed straight away or walk.

[JMD]

8 hours ago, sancho panza said:

 

We know the various playbooks that msot of the current politcal/CB class are playing with.

The key issue for me is working out who's going to pay,because someone will? We know they're keen to keep the free money flowing.We know they like grandiose gestures.We know they're scared witless of Middle England in swing constituencies.It's working out hwo they will play it.For now,moeny printing has been enough but tax rises look inbound.None of the poltical class want to admit how much trouble we're in.

The game changer will be if and when an Honest Broker arrives on the politcal scene in the UK.Or we get a seismic change nearby eg EU break up.Things could change thereafter.

My initial thoughts (this paragraph) are I guess rather prosaic - spending on housing and the NHS to keep the masses happy. And for everything else there will be austerity with the justification that the country is now skint. To sell these policies, the fear factor of China will be ramped up, along with the moral blame of the Corona coming from China. Local police lockdowns, sometimes Corona related, sometimes not, will help keep things orderly (after all the police are now ok with acting on government health/hearsay panicks, ex judge Jonathan Sumption has written about this). I admit that I have problem knowing where new taxes will come from, after all who will be making the sustained profits to find these taxes?                                                                                                                                                                                             However elsewhere I think there is ample space for a new party to emerge, along with an 'honest broker' type leader, especially if we get some chaos in future. I would favour people like Clair Fox/Academy of ideas, as she speaks such 'intelligent common sense'. Have you heard of the intellectual dark web? Its mostly Americans, but does have Brit Douglas Murrey, and has a big and growing fanbase in the US among people hungry to hear intelligent discourse and ideas, completely free from pc nonsence. Perhaps this will become popular over here - Actually, it is this type of phenomena that gives me some hope that new thinking may yet emerge to steer us through the chaos ahead, anyway well worth checking out I think.

[DurhamBorn]

https://www.rightmove.co.uk/property-for-sale/property-80124379.html

Thats two doors away from where i bought my first house in 1992.I paid £27k

Thats come up today for £35k,so lets say it goes for £32k (probably less)

I bought my house after a crash not before.Inflation adjusted that £27k would be £61,905 now

So that house has gone up £5k in 28 years nominal.Inflation adjusted only it should be double the price,so in 28 years its halved in price.

Property only ever goes up.

Two up two down terraces have no demand these days apart from landlords in the north,but its interesting.

 

 

[JMD]

9 hours ago, sancho panza said:

 

I tried to explain to my (very left wing) Dad,why Brexit occurred-rising retns/declining real wages(in simpel temrs) ,Trump's election for similar reasons.But changing some peoples world view is hard and it sometiems stops them assimialting the reality.History told us these things were more likely to occur than the odds.

SP, obviously I'm not commenting on your own family setup. But in terms of world views there is a disconnect between left and right. The left view the right as being morally deficient, and in debate seek to impune their motives. This has been a successful tactic in our modern day faux compassionate West. The right have been portrayed as dinosaurs for many decades and therefore an irrelevance. I think it interesting that the left today are continually arguing amongst themselves, it's almost as if the ultra relativistic universe of ideas they have constructed has no centre they can cling to at time of crises (excuse mixed metaphor).

[JMD]

9 hours ago, Dogtania said:

Saw mentioned somewhere gold confiscation being mentioned as a possible but unlikely thing.

Do you have any views on whether this could happen.  It happened in the US before but back then the dollar was convertible into gold now we have fiat so different.  But can't rule anything out so guess my next question is what would happen to the price of gold.  

I have had a quick look now but the figure was reached arbitrary by President FDR in 1932/33 around about same time it was made criminal offence for individuals to own or trade.  Don't know if the quoted price jump from roughly $23 to $34 just reflects the US price or whether they had such clout they could dictate the price (and if it was higher then obviously that is where the market will be made).

The other thing is arguably we are moving -or so some lament- towards a more globalised system/ one world currency type thing.  If that comes to pass or near then definitely I see gold being raided somehow.... The price can be more easily managed in order to extract wealth from the most people or individual investors/ hoarders.  

Wonder too if something like bitcoin is an extra hedge against as long as enough people accept which seems to have been proven now.  

Just thinking out loud but do wonder what would happen to my precious few pieces of silver.  Hopefully not enough interest in - like a lot of things more people - more danger less reward.  And a bigger target for taking control of.

I believe it was made illegal to own gold but none was actually confiscated from any individual. Ie no raids on people's homes. So I wonder how many people actually held onto their PM's? Also the price jump you mention was to encourage holders to sell up and make a profit. I think lots of half truths are spoken to support a particular narrative or to promote a fear.                                                                                                                                                                      Of course it could happen but I do dought it. But to be on the safe side dont sign up to any government pm-contact-tracing app!

[DurhamBorn]

https://www.msn.com/en-gb/news/world/china-and-indias-quiet-border-fight-threatens-to-expand-conflict-in-asia/ar-BB14DxJm?ocid=mailsignout

[MrXxxx]

8 hours ago, Barnsey said:

his viewing/potential offer falls flat then I’ll definitely sit on the sidelines for a bit longer and resume the search late Autumn after this pent up demand dies down, and everyone who’s taken up a mortgage holiday realises they no longer qualify for refinancing or a new mortgage

I think you probably know the right answer yourself...you cite all the reasons here as to why you should wait, but still think about the `rent is dead money`...I look on renting as giving a opportunity to time a purchase, and with things the way they are you will have either a) security of tenure until you do so, or b) have a buying opportunity from your current LL.