How high will inflation go ?

[NickGrogan]

If we accept that the Bank of England's job is to keep inflation before 2% at all costs, why didn't they increase interest rates in

2009, 2010, 2011, 2012, 2013, 2019 and 2021 (Inflation about 2% since May, rates increased mid-December)

UK Historical Inflation Rates - 1988 to 2026

Historical inflation rates from 1989 to 2026 for United Kingdom.

www.rateinflation.com

Bank Rate history and data | Bank of England Database

www.bankofengland.co.uk

 

[Justin Smith]

Of interest (particularly to those denying most of the current inflation is down to the Government's response to Covid) :

Wasn't the late 70s early 80s recession mainly down to the the apogee of union power clashing with massive increase in oil prices ?

 

[fisicx]

Of interest (particularly to those denying most of the current inflation is down to the Government's response to Covid)

It's not the root cause of inlfation. It may have changed the timing and the shape of the curve but the rescession was going to happen anyway. That had been predicted long before 2020. The main drivers of inflation are energy and food costs - these aren't a result of covid.

 

[Justin Smith]

It's not the root cause of inlfation. It may have changed the timing and the shape of the curve but the rescession was going to happen anyway. That had been predicted long before 2020. The main drivers of inflation are energy and food costs - these aren't a result of covid.

Your view* has been noted, not sure how much sense it make though.

* that pumping unprecedented amounts of money into the economy at the same time as much of that economy was shut down (or operating at reduced efficiency) and about a third of the workforce was being paid to do nothing for many months on end.

 

[fisicx]

Your view* has been noted, not sure how much sense it make though.

I look at all sides of the argument and check my facts rather than just cherry pick data that fits my own personal viewpoint. I doubt we will ever agree. But that doesn’t mean either of us is right. The truth in nearly all cases is somewhere in the middle.

 

[Justin Smith]

As I have said before I would not be a landlord out of choice, it's just too much hassle, the balance of power between the tenant and the landlord and all the extra red tape (and its associated costs), and it's getting worse all the time. Plus, and its even worse at the moment, getting hold of decent tradesmen who will do a job quickly, reliably, well and at a reasonable cost, is a nightmare.
Latest farce, my friend's house, where the tenant is disputing the cost of repairs, the managing agent said if the tenant does not come to an agreement and it goes to the Deposit company "it could go on for 5 months".

>>The new PM has indicated she believes private landlords have been treated unfairly by previous Governments and wants to create a less hostile environment.<<

She is unquestionably right about that, but whether she'll do anything about it I very much doubt. She'll have all the Guardian readers up in arms using the example of the relatively few bad landlords to justify causing much hassle and expense to all landlords.
Take the EICR electrical reports, they really are a very expensive and bureaucratic sledgehammer to crack a relatively insignificant nut (hardly anyone gets killed by electrocution and they cost up to a quarter of a billion pounds a year just for the inspections.....), but I would eat my hat if they ever got rid of them now. In fact it's more likely they'll introduce even more stuff in the same vein.

R4 has just reported that rents going through the roof and landlords selling up to get out of the rental market.
In fact I had someone speculatively phone me the other day asking of the flats above my shop were rented and if one was available. I have never had that before.

Landlords leaving the rental market and rents subsequently going through the roof ?

What a surprise, not......

Who'd be a landlord these days ?

 

[Newchodge]

R4 has just reported that rents going through the roof and landlords selling up to get out of the rental market.
In fact I had someone speculatively phone me the other day asking of the flats above my shop were rented and if one was available. I have never had that before.

Landlords leaving the rental market and rents subsequently going through the roof ?

What a surprise, not......

Who'd be a landlord these days ?

Rachman

 

[alan1302]

R4 has just reported that rents going through the roof and landlords selling up to get out of the rental market.
In fact I had someone speculatively phone me the other day asking of the flats above my shop were rented and if one was available. I have never had that before.

Landlords leaving the rental market and rents subsequently going through the roof ?

What a surprise, not......

Who'd be a landlord these days ?

I'd be happy to be one

 

[MBE2017]

I'd be happy to be one

I could be one, but refuse too. The money made on tenants simply isn’t worth the hassle IMO. Much better ways to make money in property.

 

[Bob Morgan]

Rachman

Nicholas van Hoogstraten - He does a rather nice line in Hand Grenades!

 

[Casually made]

R4 has just reported that rents going through the roof and landlords selling up to get out of the rental market.
In fact I had someone speculatively phone me the other day asking of the flats above my shop were rented and if one was available. I have never had that before.

Landlords leaving the rental market and rents subsequently going through the roof ?

What a surprise, not......

Who'd be a landlord these days ?

Not sure where the British government thinks all this is headed......

At some stage in the near future a lot of people are going to be very very upset

Wether it be over exposed homeowners , over leveraged "investors" or simply poor bastards trying to put a basic rental property over their heads which has been grossly over inflated by some ****ed up free market capitalist model that doesn't work in a housing market

In the words of Daniel Day Lewis

" THERE WILL BE BLOOD"

 

[fisicx]

R4 has just reported that rents going through the roof and landlords selling up to get out of the rental market.
In fact I had someone speculatively phone me the other day asking of the flats above my shop were rented and if one was available. I have never had that before.

Landlords leaving the rental market and rents subsequently going through the roof ?

What a surprise, not......

Who'd be a landlord these days ?

We are doing very well as a landlord. Covers the mortgage with enough left over to make it a profitable investment.

 

[Jasondb]

I suspect it will go as high as 7% this year though not straight away.
I think the US is struggling as BRICs are turning away from using the US$ as the reserve currency so they put up interest rates to protect their currency. It costs a lot to have 800+ military bases around the world.

What has then happened is that US Banks have deposits earning rate A and now US T-bonds have gone to A++ so they are facing withdrawals faster than they can service as they cannot pull their investments out easily to deliver better rates so it becomes a liquidity problem caused by the rate hikes.

 

[MBE2017]

I suspect it will go as high as 7% this year though not straight away.
I think the US is struggling as BRICs are turning away from using the US$ as the reserve currency so they put up interest rates to protect their currency. It costs a lot to have 800+ military bases around the world.

What has then happened is that US Banks have deposits earning rate A and now US T-bonds have gone to A++ so they are facing withdrawals faster than they can service as they cannot pull their investments out easily to deliver better rates so it becomes a liquidity problem caused by the rate hikes.

No, what has happened is most banks have been very greedy, tried making a lot of money and have been caught out by interest rates increasing. If the position was reversed, the banks would be telling their depositors to stop engaging in risky get rich quick schemes.

The banks have not changed or amended their attitude since 2008, but many will not be saved. Apparently in the USA, there are 150-160 odd banks on an at risk list, the whole sector has been downgraded. I wouldn’t be surprised to see many banks go to the wall and disappear, in five years or so there will probably only be 5-20 banks left in the USA.

 

[Jasondb]

Yes banks are often greedy yet is not the profit motive that draws most into business?

So after 20 years more or less of low rates suddenly they go up, of course some might argue Ukraine or COV-ID spending yet suspect it is more about protecting the US$ as consumer demand is not high.

 

[Bob Morgan]

Not sure where the British government thinks all this is headed......

At some stage in the near future a lot of people are going to be very very upset

Wether it be over exposed homeowners , over leveraged "investors" or simply poor bastards trying to put a basic rental property over their heads which has been grossly over inflated by some ****ed up free market capitalist model that doesn't work in a housing market

In the words of Daniel Day Lewis

" THERE WILL BE BLOOD"

Probably why virtually nothing is being reported about events in France, Germany and The Netherlands!

 

[thetiger2015]

Probably why virtually nothing is being reported about events in France, Germany and The Netherlands!

Exactly - the farmers protest in the Netherlands? Hardly anything in the UK press, maybe a quarter page mention somewhere. The on-going protests in France?...tumbleweed. The concerns in the US over food production and the quick sale of farm land to investment banks. Why? Because UK media is heavily controlled by the government. They allow a little bit of flexibility but the overwhelming focus of daytime TV is 'cyclists, diesel cars, someone tap dancing with an egg'.

The UK is more restricted than Chile and Israel according to this article: https://www.theguardian.com/politic...third-tier-in-global-index-of-free-expression

The government don't want you seeing this stuff. They've lost control over Twitter, which annoys them, so they're going for TikTok now. They knew it was a Chinese based app years ago but it's only just dawned on them that young people gather information from it and they don't like it, not one bit, it's uncontrolled information. Lots of fluff and rubbish but some juicy things too.

Has anyone seen the latest Led by Donkeys investigation? Bribes all over?

 

[Bob Morgan]

Exactly - the farmers protest in the Netherlands? Hardly anything in the UK press, maybe a quarter page mention somewhere. The on-going protests in France?...tumbleweed. The concerns in the US over food production and the quick sale of farm land to investment banks. Why? Because UK media is heavily controlled by the government. They allow a little bit of flexibility but the overwhelming focus of daytime TV is 'cyclists, diesel cars, someone tap dancing with an egg'.

The UK is more restricted than Chile and Israel according to this article: https://www.theguardian.com/politic...third-tier-in-global-index-of-free-expression

The government don't want you seeing this stuff. They've lost control over Twitter, which annoys them, so they're going for TikTok now. They knew it was a Chinese based app years ago but it's only just dawned on them that young people gather information from it and they don't like it, not one bit, it's uncontrolled information. Lots of fluff and rubbish but some juicy things too.

Has anyone seen the latest Led by Donkeys investigation? Bribes all over

On the question of "How high will inflation go?" . . . My thoughts are TWO! . . . Wheelbarrows!

 

[Justin Smith]

We are doing very well as a landlord. Covers the mortgage with enough left over to make it a profitable investment.

It was always the case that being a landlord worked great if you have good tenants.
You get bad tenants and it was a nightmare.
But now there is so much regulation, and it's getting worse all the time. Thus it is getting less and less worthwhile. The fact loads of landlords are getting out of it, my wife wants to ASAP, tells its own story.

 

[Newchodge]

It was always the case that being a landlord worked great if you have good tenants.
You get bad tenants and it was a nightmare.
But now there is so much regulation, and it's getting worse all the time. Thus it is getting less and less worthwhile. The fact loads of landlords are getting out of it, my wife wants to ASAP, tells its own story.

I can't see how much of the regulation affects good landlords. Does it not just make a requirement of what a good landlord would be doing anyway? Thereby levelling the playing field. A bit like minimum wage helps employers because they don't have to compete with bad employers who pay their staff peanuts?

 

[fisicx]

It was always the case that being a landlord worked great if you have good tenants.
You get bad tenants and it was a nightmare.
But now there is so much regulation, and it's getting worse all the time. Thus it is getting less and less worthwhile. The fact loads of landlords are getting out of it, my wife wants to ASAP, tells its own story.

If your preselection and vetting is robust you don’t get bad tenants. If something goes awry let your legal cover and insurance sort it out. We have just let a property and there was very little regulation. No idea why you find it so difficult.

 

[MBE2017]

If your preselection and vetting is robust you don’t get bad tenants. If something goes awry let your legal cover and insurance sort it out. We have just let a property and there was very little regulation. No idea why you find it so difficult.

I wish you well, but I know many landlords who have done all the right things, credit checks, references etc and they still get bad tenants. What the recent changes in legislation will do is put up rents, and increase deposits, and make renting so much harder for many people.

 

[fisicx]

I wish you well, but I know many landlords who have done all the right things, credit checks, references etc and they still get bad tenants. What the recent changes in legislation will do is put up rents, and increase deposits, and make renting so much harder for many people.

Maybe it has to do with the locality. We had 30 prospective tenants and were able to increase the rent by 20% above what we expected to get which covered the cost of the letting agent.

And what we are charging is still below the local average. The tenant we chose earns over £50k and runs his own business. It’s working well for us.

 

[WaveJumper]

Maybe it has to do with the locality. We had 30 prospective tenants and were able to increase the rent by 20% above what we expected to get which covered the cost of the letting agent.

And what we are charging is still below the local average. The tenant we chose earns over £50k and runs his own business. It’s working well for us.

I guess you've not seen your new tenants thread on the SpongeBob plan yet ?

I would agree though make sure you do your due diligence and make sure your well covered from an insurance point of view, family member here with three properties thought all was great until one tenant lost their job end of last year raked up some arrears and trashed the place so I guess you can never be 100% sure

 

[Justin Smith]

I can't see how much of the regulation affects good landlords. Does it not just make a requirement of what a good landlord would be doing anyway? Thereby levelling the playing field. A bit like minimum wage helps employers because they don't have to compete with bad employers who pay their staff peanuts?

NO !
More to organise, more expense, more hassle.

Yearly gas inspection report (is it really necessary to be yearly ? )
Five yearly EICRs (you know what I think of them....)
Energy performance certificate (soon to be tightened still further and not practically possible or economically viable)
Deposit scheme (a load of hassle and expense even if the tenant does no damage, but a massive PITA if they do, and I speak from experience)
And that's just the ones I can remember !
As for how hard it is to get a bad tenant out don't even start me on that (I once had to pay a tenant to get out despite the fact he already owed me a load of back rent....)

And now Labour want Property MOTs "an independent annual inspection would be required for all of the landlords", and even a no eviction tenancy : A "pledge to abolish no fault evictions and 'tilt the balance of power' back to renters". Do Labour actually know anything at all about the rented sector ? I would say obviously not if they think the balance of power needs tilting back toward the tenant ! As I said above I once had to pay one of my tenants to get him out ! !

Then they'll complain when rents go up to cover all that cost and the fall off in supply ! !

 

[Justin Smith]

If your preselection and vetting is robust you don’t get bad tenants. If something goes awry let your legal cover and insurance sort it out. We have just let a property and there was very little regulation. No idea why you find it so difficult.

I sometimes wonder if we live on the same planet, see above

 

[Casually made]

If your preselection and vetting is robust you don’t get bad tenants. If something goes awry let your legal cover and insurance sort it out. We have just let a property and there was very little regulation. No idea why you find it so difficult.

Getting them in isn't the issue , it's getting them out when something goes wrong or they stop paying the rent

Couple of my mates are heavily over invested in BTL's nearly every week there is another problem and they are constantly living on edge whenever the phone beeps because there is usually a Tennant on the other end

Their yield is below 5% and although the underlying assets have risen in value it would take them 5-8 years to offload them all with the gov/ taxman and bank taking a sizeable share for themselves in the process

They believe they would be lucky to get out even at this stage


they are basically property managers for the bank yet getting paid a fraction

 

[simon field]

They’re nearly all shysters in my experience!

 

[fisicx]

I sometimes wonder if we live on the same planet, see above

Read the above. Still not a big issue. Got everything done in a day.

Couple of my mates are heavily over invested in BTL's…

That doesn’t mean being a landlord is bad for everyone. We just have the one property and it makes a lot more than 5%. Probably closer to 50%

 

[Bob Morgan]

Still not a big issue.

WOW 'Big Issue' is now £4.00

 

[simon field]

Read the above. Still not a big issue. Got everything done in a day.

That doesn’t mean being a landlord is bad for everyone. We just have the one property and it makes a lot more than 5%. Probably closer to 50%

Do you not get clobbered with tax on it?

 

[Justin Smith]

Do you not get clobbered with tax on it?

Does fisicx pay any tax ? ! ?

 

[simon field]

Does fisicx pay any tax ? ! ?

He’s a Clanger, which is the opposite of a benefit in kind I believe!

 

[fisicx]

Do you not get clobbered with tax on it?

Not really. We have a very clever accountant. Last year I paid just over £600.

 

[Jasondb]

Exactly - the farmers protest in the Netherlands? Hardly anything in the UK press, maybe a quarter page mention somewhere. The on-going protests in France?...tumbleweed. The concerns in the US over food production and the quick sale of farm land to investment banks. Why? Because UK media is heavily controlled by the government. They allow a little bit of flexibility but the overwhelming focus of daytime TV is 'cyclists, diesel cars, someone tap dancing with an egg'.

The UK is more restricted than Chile and Israel according to this article: https://www.theguardian.com/politic...third-tier-in-global-index-of-free-expression

The government don't want you seeing this stuff. They've lost control over Twitter, which annoys them, so they're going for TikTok now. They knew it was a Chinese based app years ago but it's only just dawned on them that young people gather information from it and they don't like it, not one bit, it's uncontrolled information. Lots of fluff and rubbish but some juicy things too.

Has anyone seen the latest Led by Donkeys investigation? Bribes all over?

I've read about this on alternative forums and the party BBB is seen to be the biggest and they say after farms the biggest issue is mass immigration. On the EU, they say people voted to join a common market not an EU superstate. A few years back Mark Rutte the premier said he would never allow them a referendum on the EU, they might vote to come out.............

 

[amyrich]

Now that the bank free fall has been on hold (temporary, I think), inflation is likely to go up more. There seems to be no sign of the war ending in Ukraine either, eh?

 

[MarkOnline]

Not really. We have a very clever accountant. Last year I paid just over £600.

Ive heard all this "clever accountant" nonsense before. If you are a UK resident and you are consistently paying next to nothing in taxes it means one thing....you dont make any excess profit/money. Its not clever accounting , its a case of consistently making no taxable profit.

 

[fisicx]

Ive heard all this "clever accountant" nonsense before. If you are a UK resident and you are consistently paying next to nothing in taxes it means one thing....you dont make any excess profit/money. Its not clever accounting , its a case of consistently making no taxable profit.

Without knowing the details of my property or how we run the business you can’t make such a generalisation. The business does make a healthy profit and I don’t pay that much tax - because of how the limited company is set up.

I pay more tax on other activities but that’s not the point of this discussion.

 

[Jorsto]

Still there are some countries with inflation rate 20%

 

[Bob Morgan]

ARGENTINA
During the observation period from 1980 to 2022, the average inflation rate was 206.2% per year. Overall, the price increase was 902.38 billion percent. An item that cost 100 pesos in 1980 costs 902.38 billion pesos at the beginning of 2023. For March 2023, the year-over-year inflation rate was 104.3%.