Taking my ex-landlord to court

Find out how to make thousands of pounds by sending one email from this article. Yes, it’s that easy, as long as you rent from a negligent landlord (which most of us probably do!). I will share my experience and this will help add thousands or maybe even tens of thousands into your wallet and therefore get you closer to that FIRE goal!

There’s no need to learn a new skill, no long hours of number crunching and effort required. Simply check if your landlord has broken the law, if yes, then email them about it.

OK, I will dial down the sensationalism now.

I have found out that the security deposit for our previous flat was not protected within 30 days of us paying the deposit. This is breaking the security deposit protection laws and by law, a court must order the landlord to pay us 1x – 3x of the original deposit. We have sent “a letter before action” (actually an email to that effect), which was based on a template from Shelter to our landlord and gave them 3 weeks to respond. This letter is to start the process of negotiating a resolution outside of a courtroom. If we can’t agree on a resolution, then we go to court.

They waited until the very last working day of that 3 week period to respond to say that, yes they failed to protect the deposit in time etc and offered to pay us 1x the deposit amount. Quite good, if you ask me, for simply sending one email…

Their response had several factual mistakes in it, which I won’t share here, but there is no way we will accept the first offer. It looks to be a low-ball figure and clearly an attempt to get rid of us cheaply. The fact is the court would award 1x anyway as a minimum – why would I not go to court (other than the hassle of it).

For the record, we were renting from a very large faceless corporate landlord, who obviously knows the law but fails to have the necessary processes in place to avoid this type of thing. I have done lots of research and have discovered several other landlord failures of which one, on a successful claim, would have resulted in Rental Repayment Orders (as it sounds – they would repay us the rent we paid them). This is because they unlawfully let the property for a few months at the beginning of our tenancy (even though it was not safe to do so). However, that ship has sailed due to the 12-month window you have to claim for Rental Repayment Orders.

In short, they have failed to follow the law on a bunch of stuff, seem to be careless and reckless. In addition, during our second year of renting with them, we had lots of problems due to works/repairs. Back then I felt quite powerless as they simply got to walk all over us and do whatever they wanted – our complaints meant nothing and they were quick to hide behind the terms and conditions of our rental agreement. I’m quite glad to take them to court now!

The other thing I’m looking forward to is the actual court experience. I’ve never taken anybody to court and in short, the whole idea is a bit scary. However, I think it will be a very valuable experience. It can also end up lucrative if we get a good payout.

I will post updates as this progresses.

PS: I have discovered that our new i.e. current landlord has also failed to protect our deposit in time. I am not surprised at all… based on the previous issues we have had with the property.

Is gold a buy right now?

Gold is going up like there’s no tomorrow. All-time highs and all. Silver has exploded recently as well. Is this a buying opportunity?

I………………… really have no idea. Anybody who tells you otherwise is a liar and probably trying to sell you something.

Gold is seen as a store of value and as a safe-haven during times of economic difficulty. Things aren’t looking that great out there with rising unemployment and closure of businesses. Naturally, people flock to the shiny metal.

Gold itself doesn’t produce an income (no dividends) and doesn’t have many industrial uses. I know Warren Buffet isn’t that fond of the stuff either.

Have a look at longtermtrends.net where they compare US stocks and gold and silver over many decades. The charts will show that over the long term stocks have been a significantly better investment than gold.

I’m sure you have noticed there’s been plenty of positive news about a Covid-19 vaccine, which could improve the economic outlook. Stocks are doing really well and many tech stocks are at all-time highs (check out the Nasdaq 100). Or is it inflation that’s pushing stock prices up? Inflation doesn’t only increase your grocery bill… it can manifest in mysterious ways. 🙂

These days we have more alternatives to gold as well. Crypto looks very promising to me.

Gold is having a good run this year. However, nothing in the world of finance stays the same for long. It’s important to have an investment strategy and even more important to follow it. Don’t marry your positions!

Good luck!

Wealth update – 31/07/2020

We have now been living in our new home in this shoddy part of Zone 2 in London for two weeks. Aaaaand… we hate it. It’s a dump because of all the homeless people who gather around the corner from where we live. They have also been to the forefront of our building to urinate and to bless us with some of that anti-social behaviour we have previously only heard about from TV news reports. Life in Central London was much better.

In addition, we had no warm water for a full week because the boiler was broken. They actually rented us a flat with a broken boiler. Not a good start. We haven’t even had an apology from the letting agents or landlord. Who rents a property out with a broken boiler and doesn’t let you know about it? I suspect more stuff like this is to come…

We can move out in eight months from the start of the lease i.e. we can serve our two-month notice after the first six months. We feel that we are very likely to leave as soon as possible.

It also surprises me that all – not even exaggerating – of our utility bills are going up. Our water bill is increasing from £20 pcm to £36 pcm (Thames Water estimate as we don’t have a water meter), electricity is almost doubling (again based on an estimate), gas is more expensive, internet is now £29 pcm (was £20, we had to change providers), council tax was £77 pcm in Central London and is now £125 pcm.

It’s also a bit of a mess to get the bills sorted. For example, the gas meter on the old gas bill was the one for our neighbour. Obviously, I don’t want to be paying for the gas somebody else uses up whilst racking up some kind of debt on the correct meter. The issue is still ongoing as it seems people who work at electricity companies struggle with sorting little things like this.

We are still waiting to get our security deposit back from our old flat. It’s been exactly three weeks since our old tenancy ended. My understanding is that they [legally] have 10 calendar days to return the deposit from the end of the tenancy. A week after the end of our tenancy we were told that they will not make any deductions and will refund the security deposit in full and it will take 3-5 working days. Of course, we didn’t get anything. We chased and were told it hasn’t been paid yet but were never given a reason for the delay. We’re still waiting.

My cash levels took a bit of a dive due to the moving expenses and the security deposit on the new place. This should even out once we get the security deposit back from the Central London flat.

My EIS valuations stayed the same, cash went down but all investments went up. My net worth increased by £9,733 this month (this includes £1,600 ISA top-up and £292 pension top-up and £50 into Premium Bonds). My net worth is now £109,846.

We also had some really good news. My girlfriend applied for and got a big promotion at work. She is now earning more than me. Her future is golden! I’m very proud of her.

On a slightly different note… I recently found out about effective altruism [Peter Singer: The why and how of effective altruism]. The idea is to support charities which do most good with the donations they receive. It turns out that the most efficient ones (i.e. charities which help the most people per £ donated) are the ones which help deworm Africans from parasites and fight neglected tropical diseases.

I’ve been donating £12 pcm to a charity which fights homelessness in the UK. This isn’t a cause I’m particularly drawn to… so I decided to switch it to a much more efficient one. I also decided to increase my donations to £15 pcm (also matched by my employer) to benefit The End Fund. Apparently it costs about 50p per person to cover a year’s worth of medicine to treat neglected tropical diseases. I’d rather save/help 60 people each month than pay for a few meals for the homeless in the UK.

In summary, it was a mixed month – some good, some bad. I’m glad my net worth improved and that my girlfriend is now in a significantly better financial position than she used to be.

Wealth update – 30/06/2020

It’s been three months since my last wealth update (30 March 2020). As you all know, the markets have gone up since then and this has helped improve my net wealth.

So what’s changed? One of the things I noticed is that some of my EIS shares have gone up a fair bit. I only have 3 EIS investments. One of them – Den (smart light switches and sockets with an app) – has already gone bust i.e. all the way to zero. I only invested £500 and got 30% tax relief on it (where I should get some loss relief)… so my loss will be about £300ish. The other two investments have done much better as the share price estimates have gone up and my EIS shares have now more than doubled (Yay… I guess!).

In all seriousness, I want to get out of my EIS holdings and just cash them in as I’m quite uncomfortable with the illiquid nature of these investments. I simply have no exit strategy. This worries me.

I crossed a big milestone on 1st July 2020 – my net worth exceeded £100,000. Apparently, the first £100K is a bitch to save up as it’s mostly made up of your savings rate, not investment returns. After that investment returns will do more of the heavy lifting in the portfolio. I’m looking forward to that.

My flat buying plans have changed. We are not buying anything this year. Instead, we decided to move and rent for a bit longer. This will reduce our costs a bit as the rent drops from £1,500 pcm for a studio flat in Central London to £1,150 pcm for a one bedroom flat in Zone 2. However, our travel costs will increase a bit (although these will still be minimal for a couple of months as we continue to work from home). There will also be a small increase in council tax. In the end we will have more flat for less money.

The new flat was listed for £1,250 pcm and we offered £100 less. At first, the landlord’s agent asked us to increase the offer but we decided to stay firm and told them we are happy to walk away if they do not accept. A few short minutes later we got an email confirming the landlord has accepted our offer. It was that easy. I would encourage everybody to negotiate a bit. This additional £100 pcm saving will add up over time.

We’ve had some redundancies at my workplace. Naturally, that worries me. However, both of us are still employed and continue to get a paycheck. It’s good to reduce our biggest expense (rent) as we’re early in this recession and I expect things to get much worse.

Let’s see how things go.

The property market will crash (I think)

We have been trying to buy a flat for months and many months ago (August 2019) agreed on the purchase with the seller. It’s taken a long time to sort out some legal paperwork on the seller’s (the estate agent loves the word “vendor”) side of things. A few weeks ago, we got word from our solicitor that he has now finally received all the paperwork he needs to continue with the purchase.

However, Covid-19 happened and he asked us if we were still planning on to continue with it. At first, we thought that this is fantastic news and we should buy the place. After some thought, we got more cautious as the UK economy is headed into a massive recession, no-deal Brexit is more real than ever before and my employment isn’t that secure.

Yes, we’re lucky that both of us can continue to work from home but I can see business drying up in the coming months (although summer is always a bit slow). My girlfriend doesn’t worry as her job (in mobile gaming) is going well and her employer is making record sales as more people are at home and have time on their hands.

We decided that we should renegotiate the price on the flat and offered to buy the flat at a 5% lower price. The estate agent replied a week later and declined our offer as property only goes up in value (paraphrased and read between the lines a little). This was disappointing news and we decided to pull out.

Luckily it’s only £250, which we lost out on, which were some legal fees we incurred early on in the process.

I’m a bit of a crashist when it comes to the property market. We have 7.5 million people on furlough as of 10th May 2020. Most of them are earning less now (80% of salary up to £2,500 gross p.m. where the employer could voluntarily top-up to 100% of salary), which means there’s less demand to buy properties. Similarly, I predict, quite many of today’s furloughed staff will have no job to go back to in a couple of months’ time.

Unemployment is at 4% as at Feb 2020 but this is expected to double once we have the numbers available. This is not good for property prices.

Millions of people have requested mortgage holidays. A lot of people here are already unable to pay their mortgage, what’s going to happen in a few months’ time when the furlough ends? There will be defaults and people will lose their homes.

The estate agents such as Knight Frank and Savills etc have come out with predictions of 3% or 5% falls for the year, which will rebound in 2021 – what a joke. They have a vested interest in saying that things are all good and we should all be buying property left, right and centre. The fall in property prices will be significantly more than just single digits. This crisis is going to be huge as big parts of the economy are shut down.

How do you imagine the airlines go back to normal? The tube with wings where everybody breathes the same air is impossible to make safe for travellers. How do you do social distancing on a plane without big increases to ticket prices? I like many would be unable to fly to, say Spain, for a holiday if a condition of entry to the country was for me to self-isolate for 2 weeks on arrival. The travel industry will be in a new world of pain.

London has many AirBnb’s as well. Guess what, they’re empty because nobody can travel. That’s not going to change for a while. I expect these chaps will flood the market with either long-term rental properties or try to sell and get out of this business. We shall see. This is good news for lower rents and lower property prices.

What about a vaccine? Well, mostly the fact that it doesn’t exist. Even if it did, it would take many months to produce it and distribute it all over the world for everyone to feel safe again. I’m not saying they won’t find a vaccine or develop a cure, I’m saying it will take time, during which the economy will suffer.

OK, back to property prices. Some of the highest earners are in the tech sector – programmers and what not. They can work from home and many (e.g. Twitter) companies have already said they are happy for all their staff to continue working from home even after the plague. This has increased demand for homes outside of cities. Why would somebody on a six-figure salary pay £3,000 on rent in a Central London flat, if they could own a nice home outside the city? I expect a lot of high-earners to relocate further outside big cities where their money buys more happiness. This will drive prices down in big cities but increase them in smaller towns.

My friend asked me how long do I want to defer buying and paying rent for nothing. If I buy now, I’d still be building equity and have an asset. The problem here is that I’m not looking to buy a forever home. I’m not sure I will be in London long term. Therefore, buying now and selling within a couple of years may be very expensive if property prices crash. I could, of course, rent the property to tenants when I move elsewhere but that’s not something I want to do – I don’t have an overwhelming desire to be a landlord and deal with fixing boilers, washing machines and water leaks. It would also be difficult to re-mortgage a few years down the road if I was in negative equity and there’s a risk I’d end up paying more in interest.

Why take all the above risks? The only way I’d take these risks is if the upside was proportional to them. I’d be happy to buy if I got a price 20%+ cheaper than the prices in the pre-Covid-19 world i.e. in Feb 2020. I think it’s a bad idea to go ahead with a property deal agreed in the pre-Covid-19 world now that we are in the post-Covid-19 world. You should only consider doing that if you are buying something for the long term.

My plan is now to sit tight and adopt a wait-and-see approach. We also decided to move to a cheaper rental flat as living so centrally doesn’t have the benefits it used to have (everything is closed – cafes, restaurants etc, walking distance to work isn’t that attractive as we work from home). We are paying too much for the luxury of living in Central London in Lockdown London.

My employer has also said that they will take a much more cautious approach to get back to normal compared to any Government guidance as a big part of our clients are elderly and more likely to suffer health problems from Covid-19 infections. My girlfriend was told that they expect most of staff in her company to work from home until at least September 2020.

Taking all of the above into account, I think we have made the right decision by not buying the flat. I will keep you updated once this changes. In the meantime, we will continue to squirrel away money for an even bigger deposit.

Take care!