More hysterical headline grabbing…

As readers of Friday’s blog will testify, my irritation levels are about on a level with the English football team’s world ranking, or Alastair Cook’s batting average. I could continue with the hammering of the English until I realised that the captain of the Welsh Commonwealth Games team has been given the heave- ho for failing a drug test (well done son, the home country is proud of you, you £$^* ), so I thought it best to adopt the motto of Queen Elizabeth I of “video and taceo”.  Come on all you Latin scholars; those who know me, will appreciate how I find it a struggle.  Having returned yesterday from my usual 5am, 10km run (not the usual 20km that is reserved for weekdays), I was recovering with a cup of tea watching the morning news when I nearly choked on my jammy dodger. “Housing shortage sees more tenants evicted” Sky News Saturday 26 July 2015 0547hrs was flashing up on the screen.  Well, that got my attention.  The Citizens’ Advice Bureau has seen a 38% rise in the number of people needing help with “eviction” notices being served upon them, despite their being up to date with the rent. One hapless soul was given the floor to tell the viewing public and the earnest looking reporter how he had been served with a “Section 21 order”.  He was in state of shock as, “I’ve always been a good tenant and always paid my rent and never engaged in anti-social behaviour”.  Well done son.  You have stuck to the terms of your contract that you signed five years ago.  More importantly, you are not being evicted nor have you been served an ‘order’.

What the above gentleman had been served, was a Section 21 Notice (not an order with its draconian connotations). Under Section 21 of the Housing Act 1988 – amended- by the Housing Act 1996, a landlord has a legal right to get his property back at the end of an assured shortly tenancy.  In order to invoke this right, the landlord must follow the correct legal procedure that involves serving a Section 21 Notice to quit on his tenant(s).  Most noteworthy is the fact that a Section 21 Notice to quit can be issued at any time during the fixed or periodic tenancy.  This means that as the new tenant, you could be handed a Section 21 Notice alongside the keys to your new home. A tenant is not being evicted, they are just being made aware under the guidance of the law as to when the landlord wants their property back – i.e. the end of the agreed tenancy period.  If a landlord wishes to regain possession before the end of the agreed term, this may be possible if he can show that certain conditions have been met.  A valid Section 8 Notice to quit must first be issued and to misquote our Sky News star, being a bad tenant, who hasn’t paid the rent and frequently has the local constabulary calling round (wearing riot gear) would qualify for such a notice being served. Any subsequent eviction notice has to be signed by a judge who has to have been convinced by the landlord that a. the correct legal procedure has been followed and b. the tenant is in breach of the contract. Under a Section 21 Notice, a landlord does not have to give a reason as to why he wants his property back; why should he? He is merely exercising his legal right.

To further fuel my ire, our friend from Shelter, the housing charity, hoved into view in a suitably hand-wringing, open-toed sandal, knit-your-own-underwear-from-hemp fashion. “Sadly landlords can evict…for no reason, even if you have been keeping up with the rent…” Lord in Heaven, (other deities are available), check your facts my friend, before spouting misinformation on national news.  The report concluded  with our Pulitzer prize wannabee breathlessly telling us the that the Government is in the process of introducing new legislation that it hopes will strengthen the rights of private tenants and help protect them from exploitation or unjustified eviction. Tenants and landlords both need protection from the nefarious and immoral behaviour of the other party. But eviction is justified by the gentleman (or lady), who is in their position because of their intellect/legal prowess/professional acievement and has been convinced by the evidence placed in front of them that the tenant needs to find alternative accommodation.  Over to you Shelter.

Reading behind the headlines…

I admit that in these warmer climes my irritation with the human race does increase on a par with the mercury.  There is a lot to be said for the winter; am I alone in thinking it a little uncouth to be wandering along the pavement shirtless? (I’m specifically talking about the male of the species; ladies, if you would like to form an orderly queue outside 10 Chapel Street….). Back to matters property-orientated.   Headlines on Rightmove this week proclaimed, “House Prices fall for the first time in 2014”.  Further investigation revealed that what was actually being reported was the fact that asking prices have dropped by 0.8% in July.  This is the first monthly fall since December 2013. What everyone – not least the vendor – is interested in, is as always, the completed sale price.  We could all buck the trend by asking a million pounds for every property that we are asked to market; how many sales will that bring about?  The square root of naff all.  Mr Rightmove himself, Miles Shipside then poured further water on the bonfire of his headline writer’s hysteria by commenting that July has seen a fall in asking prices six times out of the last ten years; including pre the 2007 crash.

Even if one does use the highly erratic benchmark of asking prices, they are still 6.5% higher than those of July 2013.  This last statistic could have been used by the journalist Becky Barrow in Tuesday’s Daily Mail.  “Young priced out of a home” Daily Mail Tuesday 22 July 2014  was the suitably restrained lead on her article.  Apparently, the National Association of Estate Agents (NAEA) tracked purchases in June of this year, (a whole 30 days… Clearly they felt that it would have been imprudent to use a month with 31 days) and announced that only 3% of buyers fell into the age range of 18-30.  This could possibly be attributable to a number of people in that demographic having spent much of the past few weeks in Shagaluf and other places of culture.  See, I told you that the hot weather made me irritable..  The point that I am trying to make is that it would be far more sensible to judge things over a lengthier period of time that reflects far more accurately the machinations of who is buying what and where.  Snapshots are not truly representative and can be wholly misleading.  England played well for certain periods, (admittedly the time taken to go and put the kettle on), in the recent World Cup, but come accounting time, i.e. the end of qualifying, they were still on the plane back home.

 

As I was saying to Carlos…

…Slim (Hula – to give him his full title, no relation to Fat Boy).  The aforementioned gentleman was and has just returned to being the richest man in the world. He first held the title in 2010 and only relinquished his crown to a certain Mr Bill Gates when the value of his stock in his primary companies, Telmex and America Movil, dropped as a result of the Mexican government announcing new anti-trust telecom regulations.  Having made a surprise decision, (a ‘surprise’ to those who have not from modest beginnings made themselves numero uno in the rich list) to divest himself of many of his assets in order to comply with the regulations, Mr Slim saw the stock value of this company rise by 1.09% on Monday evening; a move that saw his own value rise to $78.5 billion, a mere $0.4 billion behind Bill.  That was Monday, the asset value has kept on rising throughout the week and if various publications are to be believed, he is now back on pole position.  The reason why he has come to prominence to a wider audience, (admit it, did you know who he was?) is that at a conference this week in Paraguay, he advocated a “radical overhaul” of peoples’ working lives. As the Financial Times reported, “With three days a week, we would have more time to relax; for quality of life.”  Well said Carlos, I’m glad that you listened to what I advocated…. There is however a catch; in exchange for working fewer days a week, we should work longer hours (possibly 11) and instead of retiring at 50 or 60, workers should still be clocking in until the age of 70 or 75.  This has, as expected generated a furore of people squealing about it being easy for him to come up with something like that because as a billionaire he has any number of minions scrabbling in the dirt to carry out his bidding, (cue the theme tune to Citizen Smith).  People do though forget, that in order to qualify as a billionaire, you have to have acquired the billions in the first place.  In Carlos’s case this was through some enlightened and quite frankly, ballsy decisions over the preceding decades.  Jealousy is a terrible thing.  As regular readers of this blog will acknowledge, I am an enlightened soul…I have been clocking 11 hour days for some time, (continuing the musical theme, is that a tiny violin that I see you playing?); unfortunately I haven’t yet mastered the three day week and am not prepared to find out the effect on the company if I only put the welcome mat out less than 50% of the time.  Next time I’m speaking with him, I’ll suggest that he may have to do a rethink on the theory that whilst easily employed in a manufacturing behemoth, would send small, independent companies within the service industries to their grave.

CAN YOU SPOT THE DELIBERATE ERROR ?

Can you guess what it is yet ?

“Sorry But I am going out with Chesh on Friday”

” You are going out with ‘The Chesh’  why didn’t you say  he’s a top man”

The large print giveth…

… the small print taketh away.  This was one of several hackneyed phrases that sprung to mind (see, there’s another), when I was reading the Money section in last week’s Sunday Times Sunday 6 July 2014.  The headline, “New Websites open Door to Wealth of Property Data” revealed how Adrian Black-former head of technology at Goldman Sachs, (that well known estate agent..) has joined forces and intellect with Jeremy Priestly, previously with Knight Frank and Hamptons. Their combined acumen and wisdom has led to the launch of you-home-co.uk, which willassisted by enough data to choke a decent sized donkey-enable you to sell your home.  Well done lads.  Mr Black opines that, ” the current residential property model does not work.”[sic] Right. What level of business model are we talking about here; the macro that replicates the housing market as a whole, or the micro whereby what is happening in Knightsbridge has £$& all to do with the goings on in the metropolis of Varteg?  Let’s put aside the geography for one moment and think about what he was opining.  He continued; “Technology and public data is rapidly changing and many traditional methods of business simply no longer apply.” [sic]  That would include that old-fashioned and outdated method of two human beings actually talking to each other, I presume?  His sentiments apply totally to buying a book from Amazon, but I am slightly more dubious about their transference to the property market. As I have commented on before, there is no need for an agent to retain an office in a town centre and when the first big corporate player leaves Cwmbran or Newport town centre, the rest will follow like lemmings over a cliff.  But an agent must have somewhere for vendors (and purchasers) to come and discuss their needs and any problems, however exiguous.  Priestly added, “More than 90% of buyers make their first move by visiting websites”.  Thank you for the revelation but I return to my comment about agents and office premises; after the initial enquiry, humans need to take over – and not just at the end of a telephone line or Wifi connection.  Mr Priestly also queried the “exorbitant fees” charged in certain London postcodes that can range from 2%-3%.  Those would be the same fees that you charged at Hamptons then Mr P?  I cannot disagree that 2%-3% (think about that added on to the stamp duty), is on the steep side of vertical, but I was bemused to read that you-home.co.uk would only be charging 1%-1.25% to sell a propertyBasic rate.   No accompanied viewings, qualifying of applicants or dealing with the myriad queries that will arise. Dig through the small(ish) print and the added extras mean that that 1% is a distant aspiration, waving you goodbye as it prances off into the distance carrying the very glossy brochure of your house.  It does lead one to question an ‘exorbitant fee’ merely for hosting pictures.  Even as a self-certified technophobe, I cannot dismiss the wonders of technology, but consider the analogy of the supermarket checkout.  Which is easiest, more efficient and less stressful to use; the fully automated ones that invariably lead to a request to ‘”Call an assistant”, or the checkout with a human being who does that so last century thing of actually ringing the goods up on a till?

Jumping the gun?

The jury is still out (unlike those in the William Roche, Rolf Harris and Rebekah Brooks court cases: how much have they cost us dear public?), as to whether Mark Carney is the smoothest of smooth operators or more akin in characteristics to an “unreliable boyfriend”.  The latter was levelled at him last week by parliamentarians who were unimpressed with his seemingly faltering attitude towards interest rates.  One could not accuse him though of lacking in self belief, as in response to the taunts over his monetary policy bouncing about like a pin ball he took personal credit for the recovery of the UK’s economy.  Yes, he is the Governor of the Bank of England so any plaudits-and brickbats -will land at his door, (in a similar fashion to all those whose hard work over the years has led to their principal being awarded an O.B.E.-it isn’t referred to as ‘Other Buggers’ Efforts’ for nothing), but it is an opinion held by many that as monetary policy normally works with a lag of about a year, the policies were already in place before the Old Lady of Threadneedle Street clasped him to her bosom.  He has been in a position to oversee the benefits and rewards of such policies, but crucially he did not make them.  Recent statements about guidance on interest rate rises have dented his credibility, having said only in August that they were unlikely to rise before 2016; but then, playing devil’s advocate, ‘unlikely’ is still some way from ‘definitely’.  His statements and the rush to qualify them have created much uncertainty over future monetary policy, not least what many believe to be his ‘dovish’ views in comparison to many of the more ‘hawkish’ members of the Monetary Policy Committee.  Last week’s historic intervention by the BOE (not seen since the 70’s when people such as my father, when recruiting a new PA would start each interview by asking the lady in question to make a pot of tea and the resulting offering went a long way to determining whether she got the job – ladies, this way to burn your bras), by imposing a 15% cap on the number of mortgages at 4.5 times income, may have been premature and overly cautious.  Official figures show that mortgage applications dropped by 10% in May and are 19% below January’s peak.  The number of mortgages approved is about 25% below the average of the past 20 years (figures taken from The Sunday Times Business Section Sunday 29 June 2014) and this is despite the gradual -with the emphasis on gradual for most areas outside London-in house prices.

It would be interesting to see a report on the London housing market showing funding by cash purchases as opposed to mortgages.  One day in Claridges, (Me? A name dropper..?), I tried to discuss mortgage rates with a gentleman also enjoying the finer things of life. “What’s a mortgage?” he said.  Well that put me firmly back in my box. In Merthyr, where house prices are still somewhere below the bottom of the barrel, the comment would be more likely to be, “What’s a job?”.