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The reason a Virgin ticket from London to Birmingham costs 40 quid and has to be booked months in advance isn't just because beardy Branson likes money, it's al

by Ntrails 12y ago

The reason a Virgin ticket from London to Birmingham costs 40 quid and has to be booked months in advance isn't just because beardy Branson likes money, it's also because there are a lot of people who want to travel quickly between London and Birmingham. (I did giggle btw) They can charge more on lines which are popular, using cost as a form of rationing. That's completely contrary to "public" transport as I see it. I agree, there aren't enough trains. There isn't the capacity. And I can be certain that of the extra expense of the line Branson is only getting a cut (because he paid more for the right to operate that route). I can't speak to increasing capacity because I know so little about the technicalities. I certainly don't imagine it's easy. I note at least one comment invoked the double decker carriages (which we don't do) as an example - but God knows what that would look like to implement. I can totally understand someone not wanting Guildford though, and support any policy that helps them. London contains the world's finest exploiters of financial regulations I agree, but disagree that this is an argument for anything - I was merely stating a concept not anything that could be used as a basis for law. The obvious solution is to use business debt to cover the excess lever, thereby avoiding the problem. The fact is that as a first time buyer I cannot get a mortgage with monthly payments at 70% of my current rent. Yet if I rented it out for that rental income the maths changes and I can. There is a fundamental flaw somewhere and I don't believe that I should have easier finance - I think rental properties need to have harder terms. Unrelated, sometimes I think the reason we get in such a mess is because people ostensibly like me become ministers, and with sod all depth of understanding proceed to fiddle with things for a few years and then move on...

tomelders 12y ago
So the trains that Virgin run aren't actually owned by Virgin. As it happens, they have to lease the actual engines and carriages from ROSCOs (Rolling stock operating companies). This is the way Thatcher set it up and is one of the biggest scams ever perpetrated by her government. It turns out it's more expensive to lease a train from any of the ROSCO's than it would be to buy one. But the train operators aren't allowed to buy them. They're basically an oligopoly. Every time the government looks at them, they conclude that they're uncompetitive and in need to regulating. However, as with most things related to government and huge sums of private cash, the regulation never happens. The ROSCO's are unregulated and free to charge what they want. The train operators are forced to use them. This is one of the main reasons that train fares are so expensive. They are also the reason that our rail networks capacity can't be increased. They basically hold the rail network to ransom. They should be dissolved and their rolling stock should be seized since they basically stole it from the tax payer in the first place.
lmm 12y ago
> The fact is that as a first time buyer I cannot get a mortgage with monthly payments at 70% of my current rent. Yet if I rented it out for that rental income the maths changes and I can. It would seem grossly authoritarian to prevent people from lending money to each other on freely agreed terms. So I think you have to go after the causes of this. Why are the banks more willing to lend to buy-to-let folks? Is it because they can recover more in a foreclosure? Is it because people who buy-to-let are already wealthy so the banks know they'll get their money back?
- tomelders 12y ago
  I think it's the other way around. Landlords know you can't buy, that you're forced to rent, so they can charge more than you would pay if you had a mortgage. On the subject of the landlords mortgage. There's a couple of things at play here. Most of them bought property at significantly lower prices. My previous landlord bought the property i lived in for £270k in the early naughties. It's now worth over £800k. So not only does he have more than £500k profit in the house, he gets to charge "fair" rent which is orders of magnitude greater than his mortgage payments. My landlord has 50 properties. Another trend I'm seeing is landlords with the capital buying properties with short leases. Basically, if the lease on the property is less than 70 years, you can't get a mortgage. So there are houses out there on sale for basically half their market value, that first time buyers can't get to. Despite the fact that the cost of increasing the lease is nominal when compared to the actual value of the property. Everything is stacked against the renters and first time buyers, while private landlords are afforded all kinds of opportunities.
  - lmm 12y ago
    The GP was claiming that landlords could get mortgages when occupiers couldn't. You seem to be talking about landlords who can already afford to buy outright, who, yeah, are always going to have an advantage. > My previous landlord bought the property i lived in for £270k in the early naughties. It's now worth over £800k. So not only does he have more than £500k profit in the house, he gets to charge "fair" rent which is orders of magnitude greater than his mortgage payments. There's no double-dipping. He's made the 500k profit fairly (well, ish), he took the investment risk and could've lost money if he'd bet wrong, he now has 800k-worth, he can charge a rent that's appropriate for something that's 800k-worth just as if he'd bought it for 800k today. > Basically, if the lease on the property is less than 70 years, you can't get a mortgage. So there are houses out there on sale for basically half their market value, that first time buyers can't get to. Despite the fact that the cost of increasing the lease is nominal when compared to the actual value of the property. Sounds like a business opportunity for a bank willing to offer mortgages on those.

by Ntrails 12y ago

tomelders 12y ago

So the trains that Virgin run aren't actually owned by Virgin. As it happens, they have to lease the actual engines and carriages from ROSCOs (Rolling stock operating companies). This is the way Thatcher set it up and is one of the biggest scams ever perpetrated by her government. It turns out it's more expensive to lease a train from any of the ROSCO's than it would be to buy one. But the train operators aren't allowed to buy them. They're basically an oligopoly. Every time the government looks at them, they conclude that they're uncompetitive and in need to regulating. However, as with most things related to government and huge sums of private cash, the regulation never happens. The ROSCO's are unregulated and free to charge what they want. The train operators are forced to use them. This is one of the main reasons that train fares are so expensive. They are also the reason that our rail networks capacity can't be increased. They basically hold the rail network to ransom. They should be dissolved and their rolling stock should be seized since they basically stole it from the tax payer in the first place.

lmm 12y ago

> The fact is that as a first time buyer I cannot get a mortgage with monthly payments at 70% of my current rent. Yet if I rented it out for that rental income the maths changes and I can. It would seem grossly authoritarian to prevent people from lending money to each other on freely agreed terms. So I think you have to go after the causes of this. Why are the banks more willing to lend to buy-to-let folks? Is it because they can recover more in a foreclosure? Is it because people who buy-to-let are already wealthy so the banks know they'll get their money back?

tomelders 12y ago
I think it's the other way around. Landlords know you can't buy, that you're forced to rent, so they can charge more than you would pay if you had a mortgage. On the subject of the landlords mortgage. There's a couple of things at play here. Most of them bought property at significantly lower prices. My previous landlord bought the property i lived in for £270k in the early naughties. It's now worth over £800k. So not only does he have more than £500k profit in the house, he gets to charge "fair" rent which is orders of magnitude greater than his mortgage payments. My landlord has 50 properties. Another trend I'm seeing is landlords with the capital buying properties with short leases. Basically, if the lease on the property is less than 70 years, you can't get a mortgage. So there are houses out there on sale for basically half their market value, that first time buyers can't get to. Despite the fact that the cost of increasing the lease is nominal when compared to the actual value of the property. Everything is stacked against the renters and first time buyers, while private landlords are afforded all kinds of opportunities.
- lmm 12y ago
  The GP was claiming that landlords could get mortgages when occupiers couldn't. You seem to be talking about landlords who can already afford to buy outright, who, yeah, are always going to have an advantage. > My previous landlord bought the property i lived in for £270k in the early naughties. It's now worth over £800k. So not only does he have more than £500k profit in the house, he gets to charge "fair" rent which is orders of magnitude greater than his mortgage payments. There's no double-dipping. He's made the 500k profit fairly (well, ish), he took the investment risk and could've lost money if he'd bet wrong, he now has 800k-worth, he can charge a rent that's appropriate for something that's 800k-worth just as if he'd bought it for 800k today. > Basically, if the lease on the property is less than 70 years, you can't get a mortgage. So there are houses out there on sale for basically half their market value, that first time buyers can't get to. Despite the fact that the cost of increasing the lease is nominal when compared to the actual value of the property. Sounds like a business opportunity for a bank willing to offer mortgages on those.