I'm not sure the 'buy to let party is over', as one UK national paper had it this week. Serious landlords have always been into property for the long haul, and that means troughs as well as peaks, not my idea of a party! And the ten-year bull market in residential property was never going to continue. But news this week that rents are on the way down adds to a triple whammy for anyone who bought in over the last three or four years.

During last year, many were glibly asserting that as nobody was buying, they would all be renting instead. Pressure on rental properties would thus mean prices rising. Except of course, many of those who couldn't sell were simply dumping their properties onto the rental market, these 'accidental landlords' raising supply and so reducing rents - simple supply and demand. Then, there is the more nebulous element of reduced economic activity. The economy is slowing, deflating, with fewer people taking on new jobs and moving to new cities to do so - all this can only depress demand for rental property, and of course those who do want to rent have smaller salary deals, so will pay less or move downmarket.

Now if you bought into the market late, and so are operating on sub-5% yields, any reduction in rents can take you into a monthly loss. If you're on a fixed rate mortgage (or if your lender is tardy about passing interest rate cuts on, as we know they have been) then there is no equivalent cut in costs to offset lost income. Bad enough for you yet? Now to pour water on a drowning man. You're less likely to smoothly reduce rents to meet the new equilibrium rent than simply find that your flat stands empty for a while at the end of its tenancy - price in the rental market is inelastic like that. So no smooth adjustment of finances but a sudden hole punched in your monthly balance sheet. And to add insult to injury, you're now having to pay the Council Tax that the tenant previously paid. On a one-bedroom London flat that might mean the loss of £1000 pcm rent plus an additional £100pcm in Council Tax.

The smart move? Cut rents to get that void filled as soon as possible.

Poor old Gordon Brown, caught in an impossible situation of trying to fix the UK economy without actually admitting it was all his fault in the first place. Gordon of course is not the only culprit, but he is certainly guilty of encouraging the credit bubble, based on residential property, that is now so painfully deflating, with grim consequences for the UK economy. But one thing you can't fault Brown for is his barefaced nerve in attempting to exculpate himself. Clear away much of the wreckage and we have a dual problem, with one root.

Problem 1? Much of the fuel of our banking system over the last decade has been funds generated by securitised loans, the sliced, diced, repackaged and sub-prime mortgages on overpriced properties 'owned' by under-capitalised punters who from 2006 on have increasingly been defaulting on their mortgages. Result? Confidence in the products disappears, swiftly followed by confidence in the banks, meaning a drying up of trading. Result? Liquidity disappears.

Straight on to Problem 2. As liquidity disappears, so Joe Punter can't refund his mortgage as his fixed rate deal comes to an end. Or new buyers find that the super multiples of 5x earnings and 100% loans aren't there to haul them up to the elusive first rung of the ladder. So the market disappears and so prices tumble, exacerbating the problems with negative equity, and making it harder to hit the new, tighter loan-to-value requirements of the banks. You may have bought a flat at £200,000 on a £150,000 mortgage, but as the market price plunges to £175,000 you find you miraculously have an 85% mortgage rather than a 75% one.

And so the market and the wider economy deleverages and thus deflates. Now Brown has to work the impossible balancing act of trying to encourage people to spend their way out of the recession (for we truly have no option, whether it's you and I buying new cars or banks and companies buying financial products from each other, which is what our shift to quantitative easing is all about), while simultaneously urging prudence and frugality. Brown this weekend told banks they shouldn't be offering 100% mortgages anymore. That is, firstly, comical - has he looked in the marketplace for a 100% mortgage recently? If he can find one he's doing well, they've disappeared by default. Secondly, he is instructing the banks to remove the fuel that he needs to get the economy motoring again. And if he can resolve that conundrum, he's a smarter chap than the last 12 years of economic mismanagement would suggest.

But it goes deeper. Brown's lecture is staggeringly hypocritical when you realise that his 'economic miracle', the NICE decade that came in with Labour, was driven by a determined creation of the property credit bubble, masking the fact that apart from financial services and personal debt, Britain was increasingly not generating products, sustainable wealth or anything very much at all. For a superb and readable critique of the Brown timebomb, read Graham Turner's The Credit Crunch.

An interesting piece on the Radio 4 programmed 'Moneybox' yesterday (Saturday 21 February) on the protection (or not) afforded by buying on credit cards. The assumption we all make is that our purchases are insured if you buy on Mastercard or Visa - making the card issuer and retailer equally liable for meeting your loss if goods are faulty or simply don't turn up. A listener who bought on Amazon, but crucially from a Marketplace (ie third party) vendor rather than Amazon itself, made a claim as the goods were faulty, only to be told by his card issuer that the transaction WASN'T covered under the normal card insurance.

I'm loathe to say don't buy from Amazon Marketplace. It's an excellent system which I use myself both to buy and sell, and it accounts for an increasingly large part of Amazon transactions - the bringing of Marketplace vendors into the tent has also allowed Amazon to grow so quickly in turnover but more importantly in the range of stuff it sells. I make all my purchases on Amazon using the Amazon credit card - that's because it earns me bonus points rather than any insurance cover, but it does have the added bonus that Amazon (it's actually an RBS card) is unlikely to refuse to make good losses bought from itself using one of its own products. To anyone who doesn't use this card (which is most of you of course) I'd say caveat emptor and whip out your reading glasses to scan the small print.

Carpetbagging isn't nearly such big news as it was a few years back. In the early nineties it became very popular to open accounts with a host of building societies, confident in the knowledge that they would be taken over by bigger societies or demutualise to become banks. There would then be a nice little payout for members as the assets of the society were broken up. Though a lot of us have been looking wistfully at those passbooks, and there hasn't been much demutualisation action of late, there's still money in them there friendly societies. Many of us have dormant building society accounts we haven't touched in years. It's well worth having a dig through your drawers (and the older you are the more likely to have a moribund passbook mouldering away) and seeing if you have forgotten cash or, more interestingly, a demutualisation payment coming your way. Names to look out for include the Newcastle, Portman and Leeds building societies.

Tags: carpetbagging, building societies

5 January 2009
On the fifth day of my year of living frugally (the aim, you'll remember, is to save £10,000 during 2009) I turn my attention to the lovely, lovely free stuff at freecycle.org. There is no such thing as a free lunch, as we're often told, everything has its cost. But a couple of things here. First, I'm not after lunch and second there's a lot more ways to measure costs than the purely financial. In this case, the cost of getting my secondhand sewing machine from the Elephant and Castle to East Dulwich is my getting into the car and going to get the thing ... plus I put my back out in the process. These are prices I'm happy to pay. There's more than one way to measure benefits too - I get the massive boost of getting something for nothing and feeling I've slightly reduced my carbon footprint rather than increasing it.

The sewing machine's not for me by the way, it's for the wife. Who swears she is going to make curtains, tablecloths and perhaps even run me up a suit. (Perhaps not). So assuming she ever gets it out of the box, there are further savings in store. But for now I'm happy to have saved the £50 which was the price of the cheapest alternative online.

Day 5: saved £50: yearly saving so far £538

4 January 2009
Feeling very good about saving several hundred pounds yesterday merely by switching my fuel bills to online tariffs and paying by direct debit, but there's more. Last year, in an attempt to cosy up the house, we had the coal-effect gas fire (very 1970s) removed and a real fire put back in. My naive assumption that we could simply chuck some wood in there and start burning was quickly dispelled by our very efficient, if rather glum, chimney sweep. Not only must the chimney be cleared but a little hood put on top, lest homeless ravens attempt to build nests in there. Then there was a dinky metal windmill to increase the draw of the chimney. Finally, I had to have a hole drilled in my wall to install an extractor, lest their be a dangerous build up of gases and we all suffocate while enjoying 'Ant and Dec's Saturday Takeaway'.

"You're joking," I said. "This is a rickety Victorian semi. When the wind blows the curtains move. Even the floors let in a draught." The sooty-faced gloomster was unmoved. Several hundred pounds later I could light my fire safe in the knowledge that my children could watch Sky safe from physical, if not moral and spiritual, pollution. As I found out though, solid fuel ain't cheap. You burn bags of logs, coal and kindling each week, especially in winters like this one, and an open fire isn't very efficient either - 90 per cent of the heat goes up the chimney not into the room.

So a dream for later in the year is to buy one of those sealed, solid fuel burners, which are hyper efficient. But in the meantime, I have found a regular source of wood, in the skips of East Dulwich. Myself and Rennie minor go out in the van and pillage. Today we found a marvellous stash of tongue and groove (excellent for kindling), old rafter beams and oak worktops (lovely burners). The boy was very excited and asked if he could use the chainsaw once we got it home. As he's only seven, I think this unwise. But anyway, I consider this green (I'm a big reduce and re-use guy, but very sceptical about much recycling) and we got around £30 worth of firewood at a rough reckoning. The skip-waste of East Dulwich won't have to be shipped off to landfill in Essex or China and we're keeping things local. And I love using that chainsaw.

Day 4: saved £30 on firewood: yearly saving so far £488

3 January 2009
Okay, so I'm trying to save £10,000 in a year, with the added discipline of saving something different every single day. I'm well aware that by December I may be getting a little desperate for ideas - I'll probably be prising ear wax from the kids to make festive candles. But in this first month I reckon I can rack up some big ticket savings. I'm thinking insurance, energy, the car, the mortgage ... I should be able to chalk up some hundred pound plus numbers before I get into the nickels and dimes. Don't get me wrong, I love the little stuff, and I get extraordinary satisfaction from saving £1.80 on my daily paper and going to the library instead - just call me cheap.

But today I tackled the energy issue, and it WASN'T as straightforward as I'd hoped. My assumption was I'd be able to tart my account around to one of the big suppliers (Npower, E.on, EDF and the rest) and they'd be able to knock 10 per cent or so off my bills. After all, their spotty salesmen are always knocking at my door telling me they can slash my energy bills. No such luck. The problem is, it's just too bloody complicated at the moment. The energy market is in a complete state of flux, with dozens of different tariffs. If you are with Npower in London you could easily be paying a different tariff to a customer in Scotland. Added to the confusion is that prices ARE likely to drop in the coming months. Wholesale prices are down by around half from last year, when all anyone talked about was that commodities were the new gold. (Remember oil at $140 a barrel?)

Truth is, the power companies have been as miserly as the petrol companies in reducing prices, but that's likely to change over the next months - firstly because prices generally take a scandalously long time to feed through to the consumer, but secondly because the general slowdown in the world economy is reducing demand for power, and thus its price. So my decision was to do nothing for now. BUT there are savings. To my shame we were still paying quarterly by post for energy and moving my Npower tariff to direct debit got me a 10 per cent saving. I also moved to the company's online tariff and this got me a further 10 per cent off.

A 20 per cent saving on the heinous fuel bills for this drafty Victorian pile, is a biggie, £300 a year in fact. Now that does give me a warm glow. And I'll be going back in search of a cheaper tariff later in the year ... it's up to you to keep my business Npower!

Day 3: saved £300 on fuel: yearly saving so far £758

2 January 2009
Flushed with success at my first day's saving - £456, or 4.56% of my yearly target of £10,000, I relate my triumph to the wife. 'But of course you're going to have to do that every day now aren't you ... or you'll feel like you've failed.' Is this what you call tough love? Hard motivation? She may, in her unique way be trying to raise my game, but I think a reality check is needed here. My quest is to save £10,000 over the year, with a combination of little tweaks and grand gestures.

Yesterday's was the grand gesture, today I go for the little tweak. I am due in the pub at noon to watch the football with my brother in law and a few friends. I'm not drinking anyway as it's January and would normally take the car. I think carbon footprint, problems with parking ... expense! I reckon I can save a couple of quid by taking the bus. Bus, schmus, I haul the fold-up Brompton bike from under the stairs and try to remember how to unfold it. This was the bike I bought for £500 three years ago to 'save me money' and which has seen so little daylight that I swear it blinks when I get it out the front door. You know the way the newspapers calculate the price of big money football failures with the old 'three million pounds a goal' routine? (Liverpool fans just need to think about Robbie Keane here). Well these guys have nothing on the cost of each journey on my Brompton - it would have been cheaper to have a cab on standby.

Finally got the thing together, and only missed the first five minutes. It's free (I've not yet got into the madness of costing the calories that I'll have to put back into my body to pay for the exercise) and I'm getting my day's exercise too. Now that gives me an idea for tomorrow's saver.

Day 2: saved £2 on bus fare: yearly saving so far £458

1 January 2009
The last year has been tough, we all know that. And, having already lived been a working grown-up during a couple of recessions, I can say this is the worst yet. Of course, the more you have the more you have to lose, and this one has been a stinker. Lucrative freelance work disappearing; first-hand experience as an online retailer (holidays and travel) of people keeping their cash in their pockets; and an estate agent who managed one of my properties going down the swannee and taking £1500 of my cash with them.

Okay, so enough of the sob stories. The bottom line is that money in the Rennie household is not quite so plentiful as it once was. This made me think. Though I lecture other people on how to save and, most especially, how not to waste money, am I really walking the walk here. I reckon I've got into some lazy habits. So this is the task. Every single day for a year I'm going to do something to save money. My aim is to save £10,000 by the end of the year. I'm going to do it either by cancelling something that's currently costing me, replacing something with a cheaper good or service, or finding a new way to make cash.

A few ground rules. I can't simply cancel my morning paper and use that one for every day bar Christmas (they don't publish papers on Christmas Day, I know, I used to work on them). I can't say 'I fancy buying those £100 shoes ... No, I don't. There, I just saved £100'. And I can't simply take a job (and in any case I will never work for anyone, ever again). As my wife kindly pointed out to me just today 'Nobody would give you a job. At your age, and with your background, you are now unemployable'. Thanks Jane. So genuine savings.

And we begin today by cancelling that daily paper (it's the Financial Times by the way). That has immediately saved me £456 (I already got a reduced rate as a subscriber if you're wondering). I do NEED to read the FT everyday of course, but that's fine - I have all the papers I need in the local library, which I already pay for via my grossly overpriced Council Tax, the rest of which Southwark Council seem to spend on 'parking attendants' to ensure that I and my neighbours can't park anywhere in South East London. I shall be in the library at 8am tomorrow, with the rest of the old folk seeking a free, warm place in which to while away the endless days.

Day 1: saved £456: yearly saving so far £456