Old Conservatives don't understand

[gas112]

Don't think you've ever been able to answer the question.

OR are you saying you agree they shouldn't be forced to sell ?

Do you think councils should be forced to sell houses but private landlords not be forced?

It's quite simple

and my thoughts on it matter to you because ?

 

[denso13]

and my thoughts on it matter to you because

I don't think it matters really, it would help the discussion as to which side of the fence you're on..

 

[carmanmemoranda]

and my thoughts on it matter to you because ?

Doesn't matter to me.

But you need to be able to understand and explain a bigger picture to make sense of a lot of your comments.

 

[gas112]

and why would it help knowing what side of the fence i sit on , i can see both sides of the discussion sitting on the fence .

 

[carmanmemoranda]

and why would it help knowing what side of the fence i sit on , i can see both sides of the discussion sitting on the fence .

You don't show that you see both sides, on any discussion. I think you've fallen on 1 side of the fence

I'm left thinking that you're OK with councils being forced but private landlords not. Your arguments appear to back that up.

 

[motorbiking]

[/QUOTE]
Did you read it?

30 year business plans. It really is the basics of asset valuation and the worth of the housing stock.

Some very basic principles of accounting will tell you otherwise. Your below link is an excellent example and takes account of the right to buy impact. But it is nothing more than an assessment of what might happen. It is not and cannot be a valuation or forecast for accounting purposes if it ignore the performance obligations asserted. It of course doesn't, but you repeatedly attempt to say RTB impacts these assessments.

They are accounted for, as is the capital earned through the sale.

Oh dear, here's one, Bristol. If you need more I'm sure I could post them all day. You'll notice the rental income increase assumptions over 30 years. How do you think selling off properties affects rental income?

2.2. Overview of methodology and assumptions

Overall The plan is based on the following overarching principles:

31 year projections from 2021.22 based on most recent forecasts, including those for 2022.23
Core inflation projected at 3.4% for April 2023, 2.2% for April 2024 and then 2.0% thereafter with exemptions as detailed below;
Rents increasing at CPI+1% per annum up to and including April 2024 in-line with the current social policy and then CPI thereafter. The forecasts include a provision for re-lets at formula rent levels based a reducing balance of 3% per year.

View attachment 333374

https://democracy.bristol.gov.uk/documents/s68685/Appendix%20A4%20Business%20Plan%20Commentary.pdf

You appear to have ignored the forecast of right to buy sales, how that is applied to maintenance cost and the ability to re-invest the right to buy capital. I know accountancy is not your bag, but come on denso Read your own links.

 

[denso13]

You appear to have ignored the forecast of right to buy sales

I did in that reply, so what? It was in response to a claim that 30 year plans don't exist.

Accounted for or not, RTB purchases affect the overall asset value in a negative way.

 

[motorbiking]

Actually what you said was:

30 year business plans. It really is the basics of asset valuation and the worth of the housing stock.

A lot of council/HA's business plans are 30 years long. You lose a property, you also lose 30 years of income in the books. It isn't a straight bricks and mortar cost.

Misleading perhaps?

Given you know:
1, RTB is accounted for in the plan, as is the revenue
2, A business model/plan is not the basis for an asset valuation or forecast of revenue if it ignores performance obligations.

Your example makes a strong case to support the model I earlier proposed.

 

[Notch7]

i can see both sides of the discussion

We all know that’s not true

 

[motorbiking]

If a council builds a property, let's say in 1990

In 2024, 34 years later, the house is still perfectly usable to rent out.

The council paid say £100k, the property is now worth £300k

The cost to the council to rent it out is just the cost of maintenance and repairs

If the council instead paid out housing benefit to a tenant in a housing association property, the cost of that rent would be linked to market rent, and that market rent is linked directly to house values.

Whether the council pays to maintain its own property or pay housing benefit to pay a 3rd party for maintenance cost, the cost exists either way....its a false argument to look at maintenance, that's not where the benefit lies.

The other thing of course is if the council built a house for £100k and still owns it now worth £300k it's gained the council £200k.

`Your model is way off. You haven't applied the cost of money or inflation.

According to Denso's link £46k per year is spent on maintenance avg. Reverse apply Inflation at say 3%. over the last 20 years alone thats £642k per unit. (£942k for the whole 34 years). (in 1990 it was £8,627)
Then the Money at todays value is £336k

This suggest 2 things:

- local government are really bad and maintaining and managing their housing stock or their tenants suck
- They would be vastly better off building new stock and selling it off at 50% discount after 5 years. competing with house builders.

I respectfully disagree, for the following reasons:

1) “market rents are linked to the local market for rental properties- basic supply and denand”

That’s is of course true, however high demand in popular regions, for example where there are plentiful high paid jobs….means property prices are high and rental prices are high.

2) “what’s been driving rents up is that demand has been rising”

As far as I know the primary reason rents have gone up is due to interest rates: it has put up mortgage rates and that has increased costs for landlords.

Furthermore landlords are selling up because they are losing money, which reduces rental supply, raising demand for the remaining market.



But the evidence shows that rent and houses prices always follow together

Expensive city with lots of high paid jobs, eg Sevenoaks, Tunbridge Well: property expensive, rents expensive
Poor city with high unemployment, eg Hull: property cheap, rent cheap

Where the demand for rentals is high, the demand for property is high

I fail to see how you can argue otherwise TBH

He is right. Rent and value is not linked at all. A quick search on right move will show you that. They are linked to supply and demand but not the supply and demand of each other. They are independent. Thats why you get hot spots and cold spot areas. Rental yield is not uniform.

 

[carmanmemoranda]

`Your model is way off. You haven't applied the cost of money or inflation.

According to Denso's link £46k per year is spent on maintenance avg. Reverse apply Inflation at say 3%. over the last 20 years alone thats £642k per unit. (£942k for the whole 34 years). (in 1990 it was £8,627)
Then the Money at todays value is £336k

This suggest 2 things:

- local government are really bad and maintaining and managing their housing stock or their tenants suck
- They would be vastly better off building new stock and selling it off at 50% discount after 5 years. competing with house builders.




He is right. Rent and value is not linked at all. A quick search on right move will show you that. They are linked to supply and demand but not the supply and demand of each other. They are independent. Thats why you get hot spots and cold spot areas. Rental yield is not uniform.

Of course rent and value is linked.

How on earth can you suggest otherwise.

Know anywhere with low prices and high rents or high prices and low rents

 

[motorbiking]

Not the places you might think either..

Rental Yield Hotspots

Make your investments based on data, not whims.

propertydata.co.uk

UK Buy-To-Let Yield Map 2024 | Track Capital

Track Capital have analysed the best and worst places to invest in property in the UK based on rental yield data from 1350 postcode districts

www.trackcapital.co.uk

 

[denso13]

Misleading perhaps?

No, I stand by it.

Given you know:
1, RTB is accounted for in the plan, as is the revenue
2, A business model/plan is not the basis for an asset valuation or forecast of revenue if it ignores performance obligations.

1, Irrelevant, that doesn't make the loss go away.
2, I'm not writing a business plan here, I'm making it simple that the worth of an asset isn't just the bricks and mortar valuation.

 

[denso13]

They would be vastly better off building new stock and selling it off at 50% discount after 5 years. competing with house builders.

No they wouldn't when lost rental income is taken into account.

 

[carmanmemoranda]

Not the places you might think either..

Rental Yield Hotspots

Make your investments based on data, not whims.

propertydata.co.uk

UK Buy-To-Let Yield Map 2024 | Track Capital

Track Capital have analysed the best and worst places to invest in property in the UK based on rental yield data from 1350 postcode districts

www.trackcapital.co.uk

Not sure that shows what you are trying to imply.

Didn't find anywhere where rent versus price wasn't relevant