What caught my eye this week.
Were you one of the millions who a few years ago became obsessed with the fall of the Roman Empire?
Being stuck inside during the pandemic saw minds of a certain age turn to the rise of Julius Caesar, the demise of the Republic, and how Rome was eventually overrun (and run by – IYKYK) the barbarians.
Theories abound when it comes to explaining Rome’s collapse: populism, a reliance on slavery, imported decadence, outsourcing the military, debasing the currency. All more than enough to keep anyone in podcasts for a year.
However, if the collapse of the Roman Empire is hard to figure out, then the reasons for the decline and fall of another once all-conquering force – the UK property market, especially in London and the South East – and its prospects for recovery are equally contested.
You’ll recall prime prices in London are flat over the past ten years and well down in real terms.
The rest of the capital hasn’t fared much better – one in seven property owners in the capital sold at a loss last year, according to the Land Registry – and the Covid-migration price bounce in the more scenic regions of the South East long ago unwound, too.
It’s largely only in the Midlands and the North of England where prices are still advancing.
And mostly that’s because they took so long to recover from the crash of 2008/2009.
Barbarians at the front gate
Who should disappointed homeowners blame for the down valuations, gazundering would-be purchasers, and houses that fail to sell amid a glut of similar listings?
Well, themselves in the first instance for pricing their homes too highly, of course.
But as for what did for the UK property market more generally – take your pick.
Interest rate rises surely did the most damage recently. But London was soggy long before the five-minute reign of Empress Liz Truss spiked mortgage rates up.
Higher transaction taxes and a decade-long effort to make buy-to-let less attractive to casual investors? They must be in the mix.
The overall tax take is up too. That leaves less to spend on property.
Then you have Brexit and its aftermath, and the exodus of non-dom money in London.
Most recently, Labour has thrown a wet blanket over any sparks of life in the UK economy, not least with its interminable Budget speculation. (It’ll be ‘interesting’ to see the impact of its new mansion tax on homes above £2m.)
Bread and circuses
On the other hand, incomes have risen quite a bit in recent years – in nominal terms at least – and years of price attrition has surely taken the froth off most property valuations.
The FT’s graph below shows that first-time buyer affordability has improved. Those of us who own our homes thanks to a mortgage are also typically in a better spot, as inflation has eroded the real value of our often nominally-monstrous debts.
And – whisper it – Rachel Reeves and her wonks have gone for more than a month now without floating a trial balloon to send would-be homebuyers back under their blankets.
Finally, we’re building far fewer new homes than we need to. This should help support prices, especially in London.
All that adds up to what counts for optimism in UK property these days!
Caveat emptor
Talking of the chancellor, if I were her I would have simplified and slashed stamp duty on residential property in the Budget, with the expectation it would be at worst revenue neutral.
Maybe it’s a South of England thing, but nobody thinks about moving without looking at the stamp duty bill – easily tens of thousands for a three-bed terrace in London – and quailing. And often opting not to move as a consequence.
Something needs to get the UK growing again, and everyone playing swapsies with property – and revamping kitchens and bathrooms as they do so – has helped before.
If we could have an activity boom without prices taking off again, so much the better.
As things stand though, moving home remains dauntingly expensive. And there’s far less confidence in the property market than you’d expect, given relatively low unemployment and interest rates off their highs.
Consider this selection of the week’s relevant reads:
- Homes for sale reach eight-year high as competition intensifies – This Is Money
- UK property market ‘on the up’ amid bump in housing prices – Guardian
- Is now a good time to sell your home? – Which
- What’s behind London’s house price slump? – This Is Money
- The problem with the mansion tax is it’s badly designed [Paywall] – FT
The UK property market nearly always sees an optimistic asking price bump in January. But beyond that, who knows what 2026 will bring?
Feel free to place your bets in the comments – but personally I doubt we’re off to the chariot races.
(Sorry, I’ll get my toga.)
Have a great weekend.
From Monevator
How can I make the most of my redundancy money? – Monevator [Members]
The anatomy of a platform transfer – Monevator
From the archive-ator: When to buy insurance – Monevator
News
UK inflation ticks up for first time in five months to 3.4%… – Sky News
…though rents are down for the first time in 15 years – Which
Labour’s Warm Home plan puts the heat on landlords – Landlord Today
MPs to ask Serious Fraud Office to investigate UK home insulation sector – Guardian
Norwegian sovereign fund in sell-off of London-listed stocks – Sky News
AJ Bell boss says cash ISA reforms are “doomed to fail” – This Is Money
Canary Wharf boss: boomers can redeem themselves by investing for the young – T.I.M.
FCA braced for backlash over its ‘return to office’ push – Sky News
The disclosure of aliens could cause a Bitcoin rush, says former BoE analyst – Gizmodo
Billionaires have ‘outsized’ political influence, says Oxfam – CNBC
Housing affordability has improved for UK’s first-time buyers [Paywall] – FT
Products and services
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Vanguard revamping LifeStrategy funds, reducing UK home bias – Vanguard
Best first-time buyer mortgage rates now sit below 4% – This Is Money
The savings accounts that can still beat inflation – Which
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link. Terms apply – Charles Stanley
Buy-to-let mortgage predictions for 2026 [Podcast] – The Property Podcast
Get paid to recycle beauty product packaging – Be Clever With Your Cash
Get up to £3,000 cashback when you open or switch to an Interactive Investor SIPP. Terms and fees apply, affiliate link – Interactive Investor
Full list of ‘Blue Light’ card discounts in 2026 – Be Clever With Your Cash
Homes for sale to inspire artists, in pictures – Guardian
Comment and opinion
An antidote to personal stagflation – The Root of All
Why you can’t time the market… – Of Dollars and Data
…and good luck timing bubbles bursting, too – Klement on Investing
The philosophy of money – We’re Gonna Get Those Bastards
Why are credit card rates so high? – A Wealth of Common Sense
The paradox of work [Paywall] – FT
How to know when to spend a lot of money – The Net Worthwhile
Side hustle taxes: fact versus fiction – Be Clever With Your Cash
How to get what you want in hidden markets – Thinking In Bets
Is enshittification the driver of higher corporate profit margins? – Abnormal Returns
How might changes to the RPI index impact defined benefit pensions? – S.L.I.S.
Morgan Housel: survival is wealth [Podcast] – Farnam Street
Naughty corner: Active antics
Revulsion as a buy signal – Morningstar
Biotechs are especially risky investments – Verdad
Why Elon Musk is racing to take SpaceX public – W.S.J.
2025 portfolio review – FIRE V London
The real secrets to Warren Buffett’s success – Morningstar
Kindle book bargains
How to Own the World by Andrew Craig – £0.99 on Kindle
Zero to One: Notes on Startups by Peter Thiel – £0.99 on Kindle
The Four-hour Work Week by Tim Ferriss – £0.99 on Kindle
How to Break Up With Fast Fashion by Lauren Bravo – £0.99 on Kindle
Or pick up one of the all-time great investing classics – Monevator shop
Environmental factors
Inside the first ‘zero bills’ homes where you pay nothing for energy – Sky
Why are onions turning up on Brighton beach? – Guardian
Solar batteries for the home – Independent
Scientists warn of ‘regime shift’ as seaweed blooms expand worldwide – Guardian
EV price crash has thrown up ‘jaw-dropping’ bargains – This Is Money
Dugongs are vanishing from Thailand’s shores… – Guardian
…though giant lizards are taking over its capital city – BBC
Robot overlord roundup
Cory Doctorow: salvaging something when the AI bubble bursts – Guardian
Why AI has not led to mass unemployment – The Conversation
See for yourself how massive Meta’s new data centre is – Sherwood
Many small steps for robots, one giant leap for mankind – Not Boring
Musk says work will be optional and money irrelevant due to AI and robots – Fortune
Codeless: from idea to software – Anil Dash
Track AI developments via Delta Hedge’s regularly updated thread – Monevator
Not at the dinner table
Zero-sum economics keeps failing – Noahpinion
Americans are [predictably] paying for US tariffs, study finds – Wall Street Journal
Canadian PM Mark Carney’s on-point speech to Davos [Video] – Via X
Swedish OAPs on how abolishing wealth taxes changed things – The Conversation
Trump’s year of anarchy – Foreign Affairs
Our unfinished economic republics – Aeon
America versus the world – The Atlantic
The US has become a riskier place to do business – Abnormal Returns
Economically, America is already a banana republic – The Bonddad Blog
Off our beat
Is listening to an audiobook as good as reading? – Guardian
Our algorithmic grey-beige world – On My Om
The mushrooms making people hallucinate tiny humans – BBC
Text is king – Experimental History
Why so many writers are athletes – The Atlantic [h/t Abnormal Returns]
A 10p masterpiece! The golden age of crisp packet design – Guardian
Cover your 25 miles, and then rest up – Raptitude
And finally…
“If you have money but you don’t have friends, family, relationships, health, time, or purpose, what’s the point? It’s like having a plate full of salt, but nothing to eat it with.”
– Nick Maggiulli, The Wealth Ladder
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Couldn’t access that lifestrategy page. Had to click a number of different buttons ended up finding out charges are going down. I won’t worry too much about the changes, guessing nothing too drastic for a novice to be concerned about.
@Jim — Here’s a take on the LifeStrategy changes from This Is Money with a bit of political spin:
https://www.thisismoney.co.uk/money/diyinvesting/article-15484853/Vanguard-Chancellor-UK-LifeStrategy.html
I’m hoping @TA will look into it ASAP but haven’t confirmed when yet.
@TI:
Thanks for the links.
I too enjoyed FvL’s 2025 review and reckon he must have an enormous sofa; which should hopefully become clear after reading the post! Maybe it is me, but there seem to be very few reviews of last year kicking around.
Thanks for the SLIS shout out. In a fit of unashamed advertising I would summarize that post (from comments given) as: “RIP RPI; surprisingly interesting!”
FWIW, I received an email at c.19:30 last night from V about their proposed LS changes as I guess did all their other direct customers; no idea if/how they have contacted their indirect LS customers
Re #3
apologies, I should have said Thursday c. 15:30 for V email; last nights email from them was about something else
Thanks for the excellent pieces in The Atlantic and Foreign Affairs: required reading, in my view. In coming months I’m going to be rethinking medium- to long-term risk in my portfolio and adjusting accordingly.
Looking forward to any future LifeStrategy Global reviews. The LS Global portfolio data section of Vanguard website wasn’t working at all yesterday. Nada today either.
I bailed from LS three years ago precisely because of UK bias so I may take another look but right now I’m still trying to pivot from a US bias which may not be solved exactly by any LS Global. Given TACO’s antics this week and the inevitable future costs to the USA this makes me more certain of this path. Time to diversify every which way.
On (London & SE) property matters I totally agree that the taxes and fees to move have created a constipated market. Valuation delusion just makes a bad situation worse.
I was talking to a work mate last week about house moves and he said he’d thought about keeping his current property to rent out when he buys a new home to live in – a fairly standard move for someone to foray into the landlord world – but when he looked into it and saw the taxes involved (stamp duty in particular at 5%, income tax, article 24, CGT too), all the upcoming regulations and potential fines and risks and so on, he thought nah, I’m not bothering. It’s anecdotal but I presume that same thought process is playing out across the country.
While I think a lot of the new regulation makes sense, and some extra taxes were probably needed to level the playing field with first time buyers, I suspect the government has gone too far now. Ben Beadle from NRLA listed out all the changes over the last 10 years and it is eye opening. It is a good time to be a first time buyer, but that will be a temporary boost until the rental market shrinks enough and consequently rents rise to a new higher equilibrium, at which point investing in rental properties starts to make sense again. Meanwhile the situation for renters will only deteriorate and homelessness will rise. I saw that Portugal and New Zealand are already starting to row back on some of their landlords taxes to try and improve the situation for renters.
Our Labour government’s position is still that landlords pay less tax than their tenants (and therefore could pay more), conveniently forgetting that rental properties are ultimately investments, and investors could just invest in something else less risky, less taxed, and with higher returns.
Wephway. 100%. I’ve run 3 rental properties for > decade. Returns well below Mr Market albeit who knows what happens over the next ten years.
In one flat, same tenant for 10 years, in another flat – 4 tenants, the other flat – a dozen or so (maybe its bad karma)
So I reckon 11 tenants. In every single case apart from one, the tenants have not left to buy properties – the tenants I’ve had (apart from one couple) actually don’t want to buy a property. They were moving to different parts of the country, having life changes, emigrating, don’t want the hassle of ownership etc. Renting is and has been an essential service for them. I actually reckon the tenants I’ve had could buy the flats I’ve got if they wanted to save up for a deposit. None of them do.
I only ever put the rent up when they move out (so the tenant that’s been there for a decade + is onto a winner). Then it goes back to market rates. I see supply of rental properties shrinking in the post code, which will exacerbate over the next few years. With the forthcoming changes to Section 21 I will have to think super carefully as to who I offer a tenancy too.
Occasionally think about buying another property and then see VMID trading at 3.9% yield at 12x p/e and think why bother…..
Struggling to see how any of these changes that have come in have helped tenants.
“I’m from the govt and I’m here to help” -> frightening words.
I’ve been pondering a move from the South Coast to somewhere with a short drive of my daughter in Manchester for some time, and have finally persuaded my husband to go in 2026. Clearly not great timing if it means getting less for the current house and paying more in the NorthWest. I hope activity levels pick up over the next few months, even if prices stay soft
Another “forced/accidental landlord” here. It’s not just the sheer complexity and volume of regulations, taxes, and faff involved – it’s the naked hypocrisy that allows large / corporate landlords (and Rachel Reeves) to blithely ignore the own rules they’ve pushed into the market. Meanwhile my agents are tearing their hair out with the council giving contradictory information about licenses and fees at every turn. This can’t go on.
Only saying this here as it’s a ‘safe space’ for us but I was really exited when I got the Lifestrategy email! Lower costs and the global option to ponder over. Like others I’d be interested on the Monevator take on the global version in a future article, particularly the equities part as its LS100 that’s powered my pension pot from “I’ll work till 70 and still have a crap retirement” to “I’ll be OK at 67 and with a bit of a tail-wind I can look at retiring earlier”.
If one was a cash buyer looking for a London studio as a place to come ‘into Town’ some days / occasionally for work (i.e. not to live), with rental potential if can’t offload it if/when no longer needed, and which is a relative bargain compared to pre-2016 peaks, what do people reckon to?:
Zone 2–3 ex-local authority blocks with partial cladding
2000s private developments near Overground / tube
Canary Wharf fringe studios (oversupply + cladding + Overseas / BTL owners’ weak hands)
South London tube adjacent new builds from 2005–2015 (Woolwich / Royal Arsenal / Abbey Wood / core Croydon stand out: Many buildings temporarily unmortgageable, mid rises with cladding etc)
Core Croydon looks especially promising (i.e. bad for sellers): heavy 2014–2019 high-rise development, speculative overseas investor sales, studio heavy towers, regeneration hype that never fully delivered followed by cladding crisis, COVID, interest rate shock and lender risk aversion (shared ownership staircases, new BTL investors late to the party, high LTV households, EWS1 fails, ground rent to value breaches thresholds,
service charges spike, lenders withdrawing).
Prices look down 30%-45% (in nominal terms, worse in real) from peak for high rise studios. Worse (for me best) discount to peak in London (outside unaffordable super prime collapse). Not Seth Klarman territory, but still maybe some margin of safety (?)
One seller’s disastrous investment / toxic asset could be a buyer’s opportunity (??) Buy when there’s blood in street and all that.
Parts of zone 1 – the most overvalued in the past, arguably, have absolutely dropped massively.
This is the UK as a whole
https://landregistry.data.gov.uk/app/ukhpi/browse?from=2000-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2026-02-01&lang=en
This is London as a whole
https://landregistry.data.gov.uk/app/ukhpi/browse?from=2000-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Flondon&to=2026-02-01&lang=en
This is Westminster
https://landregistry.data.gov.uk/app/ukhpi/browse?from=2000-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fcity-of-westminster&to=2026-02-01&lang=en
This is Kensington and Chelsea
https://landregistry.data.gov.uk/app/ukhpi/browse?from=2000-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&to=2026-02-01&lang=en
Of course the absolute values are still quite high and the charts of Kensington and Chelsea, and Westminster look like massive double tops! So they may or may not be cheap at the moment.
@Delta Hedge #12
Rental potential is pretty much everywhere. That leaves the largest discount you can get.
Some of the reasons for discounts you cite would seem to be structural. High service charges are a common one but fixing that means going through a complex right to manage process (very time consuming and you need >50% flats to agree). Similar with cladding where any resolution is reliant on the freeholder accessing the government CSS scheme (otherwise the cost goes in the service charge).
What could be interesting is buying prime flats with short leases (<80y). These are restricted to cash buyers only and have very significant discounts reflecting the fact you have to pay marriage value to the freeholder to extend the lease. However, the government plans to scrap marriage value. It's unknown if and when and what price needs to be paid to the freeholder instead other than it is intended to be significantly less, but the trajectory is promising (freeholders recently lost their case against this at the High Court).
Thanks for the links. The Cory Doctorow AI article was a good read. I hadn’t come across his “Reverse Centaur” term before, must get the book when it comes out. I’m glad I got out of the software development business before before that could have happened to me. Got made redundant probably due to being a senior coder working part time. Part time was for medical reasons but decided not to challenge it – took the money got out of there before TSHTF.
@ Delta Hedge #12 > If one was a cash buyer looking for a London studio as a place to come ‘into Town’ some days / occasionally for work (i.e. not to live),
Does the Great Wen not have some of the finest hotels in the country 😉 On a dwell time of ‘occasionally’ surely the business case must add up, and not only that, you start from Zone 1 rather than the place hope went to die that is Croydon, with the sardine can that is overground rail lobbed in for extra misery. The grisly memory of doing that from Lee station to Charing X is still with me, over half a lifetime ago…
HL’s private equity takeover is already being felt as an email has just dropped declaring their “fee changes”. Quick take: they are charging me more. Thankfully they do not have an exit fee so time for a transfer.
@ermine: I need to do it (endure London grind) for just 1 year in my last 3 years of service for minimum of 2 days/ week in the London office itself to get the London 11% weighting as a boost to all 20+ years of my FSS DB accrual (plus obvs also getting weighting itself in salary for that year).
If I live 25 years into retirement and pay 20% BR on the incremental improvement to the FSS pension then, over the rest of my life, it would be worth an extra £55k (cumulatively over a quarter century but net in pocket) with retiring at 55, or £70k extra in total net over rest of life if leaving work at 60.
All amounts uncapped inflation proofed (albeit CPIH not RPI from 2030).
Croydon looks a bombsite for sure, but I see distressed sales on legally min sized studios in cladding replacement and ground rent dispute addled high rises at £95k-£125k per flat against comparable but non blighted sales at £190k-215k in 2016-2018. There’s some potential opportunity there, perhaps…..
HAK, the ‘media’ are reporting as a fee cut. Headline key changes at a glance seem to be:
Platform fee: cut from 0.45% to 0.35%
Share dealing: cut from £11.95 to £6.95 per trade
Fund dealing: new £1.95 per trade charge
Shares, ETFs, bonds and investment trusts: new 0.35% custody fee, capped at £150 per year per account
Regular investing: remains free
For ETFs, ITs and other shares held in ISA+SIPP+GIA the £245 combined fee cap now becomes £450 post changes.
Solution perhaps just move one (ISA) to AJB (£42 pa) or CS (for transfer in offer, per MV affiliate link above).
There are lots of reasons to welcome long-term house price stagnation in southern England (rather than a crash in prices), ideally for 10 years or more, as the FT recognised over the weekend [ https://archive.ph/OEOqp ].
Cheaper housing brings many benefits for the wider economy, hopefully boosting SMEs (except housebuilders) and reducing regional economic disparities, which overall should be good news for investors.
@DH
I’m very surprised that you consider that you will be a BR taxpayer in retirement. I always imagined that I would be but, eight years after retiring, a combination of fiscal drag and higher cash interest rates has put me just below the HR threshold and I have to work quite hard (low coupon gilts, Gift Aid etc.) to try to stay there.
@DH #18 Yeah, faced with those constraints perhaps the Dorchester doesn’t work. Croydon is a bombed out place for sure, I could buy this cash. The 2% of capital value service charge looks horrific to me, although I suppose landlords reckon 2% of the value of a house falls off it annually due to wear and tear. As an owner occupier it seems to be rather less than that. And of course that’s just the lease, which presumably covers you for the roof but not fixtures like a boiler.
So maybe TI is right, the bottom has fallen out of London if they’d let country mice within the city limits.
@DH (#18):
Re: “All amounts uncapped inflation proofed (albeit CPIH not RPI from 2030).”
Couple of comments/observations:
a) … the impact (of this change of meaning alone) will likely be greatest for schemes with uncapped indexation,
– AND –
b) For schemes with capped indexation, the capping itself generally remains the biggest impact, but this is very likely to be further exacerbated by the change to what RPI means.
See S.L.I.S link given by @TI for further details. Some of these IMO you may find rather surprising!
@ermine: I guess it would make more sense to find someone to lodge with for the overnight between the required 2 days in the London office each week for the extra weighting and head ‘Up North’ after each stint (theoretically possible to do it for £120 roundtrip on LNER to/from Yorkshire but each ticket has to be booked months ahead).
Certainly less agro in aggregate to finding oneself with an illiquid, South of the River flat, clad in flammable materials, in a block beset by more problems than you can shake a stick at.
Or worse still, when the studio flat’s no longer needed but then can’t be sold, as an involuntary landlord (a role which I’d be especially, indeed constitutionally, unsuitable for).
Problem is I’m a sucker for a bargain, in shares as in housing:
https://monevator.com/best-commodities-etf/#comment-1879067
I probably should apply the Buffet axiom to housing that he applied to shares: better to own something good at a reasonable price than something terrible at a great price.
@Al Cam: crickey, those numbers get frightening later on. No wonder HMG wants to move away from RPI. I was guessing the change wasn’t to my benefit but….
Our house went on the market March last year (5 bed, home counties commuter town) to deafening silence for many months then sold in a mini bidding war last week. One minor data point but consistent with the broad theme of a modest uptick.
On the London BTL conversation I would personally add at least a 500 basis point mental health spread to the required cap rate of any prospective purchase, for all the reasons articulated above and in the comments that is a truly hostile market, I escaped a couple of years ago and still haven’t recovered.
@DH (#23):
The ONS numbers from the 1970’s (in Annex 1) are, I would imagine, very scary for anyone on uncapped indexation. FWIW, I do rather question the ONS CPIH data from before 2006*, but it is there for all to see and wonder at?!?
*no small part of the motivation for my model
@DH #18 – yes, an update for the broker table, looks like I’ll be stumping up an extra £150 pa. Annoying, but not horrific. Possibly offset from reduction in Life strategy fees that I hold elsewhere. I do need to have a spring clean on expenses this year. I think I could save a couple of hundred a month if I put some effort in.
@Rhino #26: thinking about it again, perhaps the optimum ‘move away from HL’ strategy would be to take GIAs to Charles Stanley rather than the HL ISA (or SIPP).
Presently I pay nothing as a platform fee to HL for my GIA as it’s all in a mix of low coupon Gilts and some low dividend ETFs, ITs and (I should know better but obviously don’t) some eclectic individual company shares.
HL GIA is only £142k valuation/ balance in it currently, but I’ve got a legacy Nutmeg (now JP Morgan), from a much earlier MV affiliated link offer, with ~£17k in it IIRC now, and a ‘just for fun’ T212 account with just under £5k.
Looks like the CS transfer in cash back offer allows you to transfer multiple GIAs to them to max out the cashback.
Here’s what their T&Cs say: “combine the transfer-in value of different accounts held with one or more providers when making a transfer to your account(s), for the purpose of qualifying for the minimum amount of cashback. For example, if an ISA worth £10,000 is transferred and a General Investment Account worth £10,000 is also transferred, cashback of £300 would be payable, based upon the combined transfer-in value of the individual accounts transferred..” There’s also a 6 month fee waiver.
Fidelity and IG also have decent cashback offers.
My £384k HL ISA gets me £2,840 cashback split between the two and knocks £60 off annual fees.
Not a big platform hopper in general but there’s a bit of incentive on this one plus leveraged buyouts not making the most reassuring custodians.
@DH@Ermine. What you’d save in not paying in service charges and council tax on a flat indeed possibly wouldn’t stretch to the Dorchester, but there’s nothing wrong with Premier Inn. They’re reliably clean and quiet and dotted all over Zones 1 and 2 at a price such that the annual combined service, council tax, utility costs, etc. involved in owning a London studio would easily cover a night a week staying in them.
@Keith #29: excellent points. Thank you. Looks like £50-£80 per night for Premier Inn near Croydon centre, as compared to 2% p.a. service charges on a £200k, sub-500 sq ft, flat (per the Rightmove listing @ermine linked to); so £4k p.a. ongoing sunken costs for buying (plus SDLT, council tax etc etc), versus £2.5k-£4k for doing a year of one night per week at Premier Inn.
Homestay.com and SpareRoom.co.uk also seem to have plenty of Mon-Fri lodging possibilities at £50-£100 p.w.
@AoI: I suppose the first question is how sound is the platform going to be in the future? Return of money over return on money.
HL still sounds grand, but it’s the facade of an English country home with the substance of a US LBO now, which, frankly, makes me nervous. Is Fidelity and CSD going to be from the frying pan to the fire, or are they both going to be solid as a rock? I’ll have to do a bit of research to find out.
The headline cash back offers (Fidelity, IG and CSD) all look great though, and, for the latter, I like the £50 per 6 months trading credits, the £600 fee cap across all accounts and the 6 months’ fee holiday.
@DH @Keith @Ermine — Let’s not discount the possibility of a London flat ever increasing in value again, eh? 😉 Even just 1-2% a year in capital gains over a ten-year ownership period will help the maths, if one is inclined to go down that route.
@DH couldn’t agree more and the broker landscape is getting trickier from that perspective with HL’s changed ownership. I think it leaves AJB and ii as the only ‘large’, publicly listed, pure play asset managers / custodians with no proprietary trading or lending businesses and net cash balance sheets. Solvency wise those and HL in it’s prior form are/were the gold standard in my view.
@TI #31 > Even just 1-2% a year in capital gains over a ten-year ownership period will help the maths
Eh? With the unreachable BoE inflation floor of 2% and the fact that this is not DH’s primary residence so presumably liable for CGT and extra SDLT, plus all the random tail risks on a flat he needs to hit it a bit more than that to get ahead. TBH if it’s only worth £55k integrated over the entire rest of DH’s life if it were me I’d let it go, on the whole return of capital before return on capital principle.
But I am exceptionally jaded on the value of residential property. IMO the only reason I hold residential property is because I really, really, hate landlords and landlordism with a bitter vengeance from my experience of the tender ministrations of the breed in London 28 years ago and before. I don’t own res prop as an investment. I hold it for power and self-determination over my own life.
@ermine — Yes, you are exceptionally jaded on the value of residential property. 😉
Remember he’d probably buy with a mortgage, and your inflation would erode the value of that debt for one thing.
To be clear I’m not banging the table saying buying a one-bed pied d’terre is the right move here. I haven’t done the maths! 🙂 I am saying though that it’s bold to think a London flat wouldn’t see any capital gains over the next decade — approaching a million people are forecast to move here, and last year we built approximately no new homes in the capital, rounding down — and that it should be a factor in the maths, even if you discount it… and that it’s striking nobody had raised the potential so far.
One might even say a bullish sign? 😉
Personally I would have more moral than financial qualms about making this investment work. I don’t mind BTL where someone is providing a home for somebody, especially now the playing field has been mostly levelled, but I’m not at all sure I could stomach taking a first-time buyer home off the market just for my convenience from Tuesday to Thursday. 🙂
Well, if I *were* to buy a distressed studio
somewhere relatively cheap ‘in Town’ which was impaired by cladding issues and whatnot; then I’d want to be doing so unlevered and getting out and sold on to the next poor SOAB as soon as it became surplus to requirements. I can’t imagine a worse landlord than myself, so it’d Buy Not to Let/BNtL, not BTL!
On the whole morality thing, I take quite a nihilistic view, especially when it comes to money issues. Shit happens. It’s not always about right or wrong, or for any reason:
https://youtu.be/VUJSsfbcMh0?si=VOTJh5ezjAT40eV-
I mean, if it was about the entire future of intelligence and human ‘values’ in the universe then, yeah, obv’s the collective wins over the individual. But if it’s just a case of my needs or those of the next Biggins, then not so much. Or as Roy Bland put it to George Smiley: “As a good socialist, I’m going where the money is; as a good capitalist, I’m sticking with the revolution…..Don’t look like that, George. It’s the name of the game these days. You scratch my conscience, I’ll drive your Jag, right?”
Damn.
> in London 28 years ago should be 38 years ago 😉
Don’t they charge 2% or more interest on mortgages these days? Plus no doubt an arrangement fee, mortgage indemnity fee and whatnot, rinse and repeat because people use serial fixes nowadays. But yeah, sure. London property, number go up, because it does, though poleaxing some of the parasites seems to have helped of late. Temporary blip rather than putting the fire out.
The sort of unoccupied investment property for international investors thing should never have been facilitated from the get-go. You go and try do that game in Switzerland and see how far you get.
I was amazed they’d allow a country mouse in past the city limits. But: Croydon. Sarf London. Transport misery. I want Bloomsbury or South Ken or nothing.
I’m all for DH residing in Premier Inn, I have but one physical share certificate, Whitbread, for sentimental reasons because it was part of my Dad’s sharesave holding from when he worked in Moorgate. Bonkers but it’s a connection to the old boy. Companies really, really hate individual share certs, I keep on getting snowed with invitations to sell up (at usurous rates compared to transferring in to my GIA) and otherwise quietly sod off.
Yeah, guess it’s the Prem Inn if I were to do it. The last one I stayed in there was a fire alarm at 4 am, and so out onto the street into the bitter cold.
On the share cert’s, I was amazed last year to receive an invite to Lindsell-Train’s AGM (on really beautiful quality paper). It’s literally the only IT to have sent me any invite, and I’ve got God alone knows how many fraction of a percent each allocation per IT in the ISA/ SIPP/GIA now. Had it not been hundreds of miles away in old ‘London Town’, I might have taken a day’s leave to go along.
@Delta Hedge #37 > I was amazed last year to receive an invite to Lindsell-Train’s AGM (on really beautiful quality paper)
I got one too. Indeed I received two for some reason. I hold this in the Scottish Widows ISA, nominee a/c. Cynical devil that I am, I presumed it was a forestalling attempt to drum up support against that horrible man SABA. Given LTI is the worst dog in my ISA, I could see the value in investing in some fancy-schmancy stationery…
Premier Inn at Blackfriars £157. Stuffed if you want to park there, but I think you said you’d use the train upthread. That’s 15 grand for 52 weeks of it plus LNER, plus you get to invest the remaining £185k on that Croydon hovel. Though I do take TI’s point, bombed out London flat + tail risks might be less chancy than whopping 200k into the AI never never at this stage. However, you’re much more chipper on the merits of AI than I am, so you’re eating a bigger implied opportunity cost on the flat 😉
Of course, nobody is disputing it’ll cost. Council tax etc too. 🙂 My total guess based on doing estimates in my head as I type is the monthly cashflow out from owning a basic flat versus the Holiday Inn option/whatnot option is probably going to be 25-50% higher. And you’ll have to find your own breakfast 😉 (Let’s assume porridge).
So it’ll only work with house price growth. Let’s say an 80% mortgage on a £350K flat. With 2% pa growth you might end up with £75K or so *additional* equity once you clear the mortgage, or £7,500 a year. Probably very tight to make it worth it, but again someone would need to spreadsheet it out.
I suppose DH could AirBnB it at weekends when not using it on weekdays. That’d help the economics but work against the ‘own place versus anonymous hotel room’ so maybe a non-starter.
Personally as I say I’d probably go with the hotel room option too. I like clean sheets, as well as a clean conscience! But there’s maths to be done here if one wanted to. 🙂
@Ermine, if you buy another 63 Whitbread share you get 2 free breakfasts every time you stay at a Premier inn.
It’s not bad for a £1600 investment – I probably do ten nights a year
I really must look up all those perks for shareholders – 33% off Clark’s shoes etc
https://moneyweek.com/439384/the-best-shares-to-hold-for-perks-and-freebies
Ps isn’t DH’s objective to get a London Weighting bump on his salary, does he need a residential address rather than hotel room?
@DH @Ermine What about one of those capsule hotels?
Zedwell Capsule hotel Piccadilly is showing places for around £40 tonight. I thought it would be pretty bad to be that cheap in central London though, it looks like sleeping in a coffin but without the smell of embalming chemicals. This chap’s review didn’t paint a too awful picture of it though https://thesaucemag.com/zedwell-hotel-review/
That’s a super interesting point on the address @Boltt. I think the answer is no as I know two ex colleagues who historically did mega commutes into London from Sheffield and Nottingham. Years on end. Madness. One was a Sheffield native the other stayed in Nottingham for the cheaper housing.
So, I think I just have to log on at the London site (they track which office you log in from), and to be seen by top brass there, in order to be classified as working in London and to qualify for the weighting, which is office location based, rather than residential address based, and which then should trigger the 11% uplift to the legacy FSS (it’s CARES now), which has a couple of decades of accrued service benefits under it. I’d need to do twelve months of London working though to get the full benefit, as the reference income is the highest 12 months of earnings in the last 36 months’ in work.
Very interesting idea about the breakfast benefits of Prem Inn share ownership. I wonder if any of our Monevistas have successfully managed to take full advantage of that offer.
@BillD: what a fantastic idea. I’m definitely up for the capsule! Like in Tokyo 😉 £40 is an absolute bargain for central London.
@Boltt #40 > if you buy another 63 Whitbread share you get 2 free breakfasts every time you stay at a Premier inn.
Ta – I have 80 so I ought to clear the bar. All I need to do is find out how to get into MUFG again, who manage their shareholder records.
Adnams for 10% off could be another win for me 😉