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One of our tenants was, the other day, lamenting the fact that he will leave University with £50,000 worth of debt and will probably be in one of our studio flats for many years to come!

I’ve never understood the rationale for making students take out loans to study. We live in a service orientated country where manufacturing and agriculture has been in decline for many years (we haven’t fed ourselves for decades). As a mature, developed economy we’ve moved brilliantly towards providing services to the world (Financial & Creative), but student loans are a barrier to developing the expertise required to carry on doing so. Taking on a debt of £50,000 to get a degree is going to make many think twice about going for further education. And that’s happening!

A “service” country by definition requires an educated population to maintain a comparative advantage over anybody else. If we’re dumber – we’re not going to get the business. SO WHY MAKE THE NEXT GENERATION DUMBER???
The Government(s) seem to want to reduce their outgoings across the board, but a generation that will statistically make less money (and therefor pay less tax) is mind-numbingly short-sighted.

You’d imagine that it would be the Conservatives that would do away with free Universities but it was actually Tony Blair and Labour. (Who went to Oxford for free). And the charges have incrementally become increasingly punitive.
Now that the student debt is a fair chunk (£12 Billion), it’s the Conservatives who have sold that debt off to the bankers whilst patting themselves on the back for a stitch up well done.

These Bankers are the loan/debt Bankers that almost ruined this country in 2008 and their only mission (whatever the Government says) is to extract maximum returns from the students. It’s the thin end of the wedge, slight of hand politics, that is mildly revolting, and that leaves our poor students holding the bag!

Economics Manufacturing
Econowatch – UK can’t feed itself
Which Student Debt
UCAS Applications Down
Telegraph – Selling Student Debt

 

 

 

Rentals Down/Ownership Down

The stats and the experience are pointing to the fact that rental returns are down for this period. The implication is that the Stamp duty rise galvanised the sector into buying just prior to the rise and putting those properties on to the rental market.
The thing that I don’t understand though is that property ownership is down in the stats and there is an under-supply in the market.
So either people are staying with Mum & Dad longer than they should or enough of the other bunch are feeling un-welcome and leaving in their drove.

BBC
Guardian
ONS Background

Myopia!

It irritates me no end that people keep telling me that the economy is going from strength to strength post Brexit!
It irritates me because A) We’re not post Brexit. We’ve merely agreed to start talking about leaving.
B) On the vote our currency went into freefall so our exports went through the roof and strengthened the economy. But the problem with that is that it’s a short term fix because it’s massively inflationary so the bits they import to make the bits they export are going to get more expensive.
Plus, since we import loads of our stuff everything is going to get more expensive which means your pound isn’t going to take you as far. So in real terms you’ve lost shed loads of money & good luck with your holidays!

Oh, and if we pat ourselves on the back one more time, I’m going to vomit!

BBC – Hammond

Exodus: Brexit for the Poor – Tax For The Rich.

As I understand it, the Government have made it so that it is no longer tax efficient, from April, for wealthy foreigners to retain residence in the UK.
So, according to City AM & the FT , they will be leaving in their droves.

When they leave, they will defacto sell their UK property holdings and presumably some of their investments. When they do that, it will have a knock on effect on prices in the South East, making property somewhat more affordable. That would be great for Londoners who can’t afford to get on the property ladder but not so good for those who remember foreclosures through “negative equity!”.

In addition to that though, it will also mean that they no longer employ the help, buy the cars, the clothes, the houses, the furnishings or live the A lister lives or indeed pay tax at all. (I wonder what will happen to Chelsea FC?).

Just now we can’t even guarantee that our run of mill foreigners will stay.

London’s income’s not going to soar – how can it?

I wonder if HMRC will be better or worse off? And if it’s worse off (which is highly likely) – won’t that mean more taxes for us?

Source:
CITYAM
FT

 

 

What is happening to property in the UK?

George Osborne changed the law so that private Landlords could incrementally no longer claim interest relief on their investments.
Sounds technical until you realise that if you make £10,000 a year in
rent, you might previously pay say £7,000 in interest then (ignoring agents & maintenance) pay tax on the balance – £3,000.
In 4 years time (25% per year) you will pay tax on the £10,000 then you will pay your interest, then there will be a shortfall then you will most likely have to sell your rental property. And that will happen accross the board, with our levels of gearing, which will lead to many repossessions and a gargantuan property crash – or am I missing something?

Source:
FT
The Guardian