House prices bottomed ?

Thrugelmir

kennyboy66 wrote: »

I would suggest then that you check the last annual report.

Nationwide has for at least 10 years borrowed from the commercial markets.
While it is no Northern Rock, approx 30% of their funding comes from the wholesale market.

Stand corrected. Though obviously didn't go done the securitsation route as the other now defunct BS's.

StevieJ

Graham_Devon wrote: »

Can I suggest if you are going to ridicule peoples thoughts, you at least have a little backup as to why your ridiculing, and at least have the decency to back up your little one liners?

The banks are rebuilding balance sheets based on high product margins at the moment, the govt are quite happy with this at the moment, being shareholders, when the economy picks up interest rates will rise and margins will normalise because global competion will return.

kennyboy66_2

Thrugelmir wrote: »

Tesco are moving into banking. Though only in a small scale way. Cherry picking a selective part of the market. Though they have had a tie up with a bank for a while so have taken that operation over.

On the scale that Kenny is suggesting is fantasy dreaming.

In the early 1970's local councils offered mortgages, in fact they once had about 20% of the market.
Then again, it used to be that mortgage market was dominated by building societies.

Perhaps you think things always stay the same.

Tesco is a good example, it would be fairly easy for them to cherry pick parts of both the savings and mortgage market with simple products.

Credit cards is somewhat different in that is unsecured lending and it would seem improbable that their will ever be a 3rd competitor to VISA and Mastercard.

I reckon one sure thing going forward will be that the difference between pretty secure lending (plenty of people who want to borrow less than 40% of their property value, when they re-mortgage) and those who want to borrow 95% or get a BTL mortgage will get wider still.

Thrugelmir

kennyboy66 wrote: »

I'm on a fixed for another 15 months and my prodct reverts to BMR rather than SVR.
I think they replaced SVR with BMR (Base rate mortgage) sometime in the last 8 years. The differential (BMR) is currently 2.0%.

To be honest, I don't think it will increase above 2.5%, although I think Nationwide have generally had one of the lowest spreads of the major lenders.

Then again they also have something called their Standard Mortgage Rate (SMR) which is 3.49% above base.

I suspect they are replacing BMR with SMR.

A bit confusing.

If you are already on a fixed product at 30/04/2009 you revert onto BMR at end of term. BMR will always be 2% above base for life of mortgage.

However if you switch onto a another fixed term product then you'll revert onto SMR. You cannot return onto BMR at all.

They are rewarding their long term customers but changing the rules for new.

Graham_Devon

StevieJ wrote: »

The banks are rebuilding balance sheets based on high product margins at the moment, the govt are quite happy with this at the moment, being shareholders, when the economy picks up interest rates will rise and margins will normalise because global competion will return.

Fair enough.

But this all stems from when you started laughing at my post.

I included in that post the part about when interest rates go up, so do defaults, which also leads to bankrupcies which you have missed in your post, which yes, does sound very very simple and it sounds simple as it sounds so easy in these times because you have missed all the added factors.

Do you think the banks will have built up enough capital, after they had their backs to the wall, and RBS the worlds biggest bank nearly caved in, to just bear the brunt of these defaults and losses?

And pay back bailout money?

And do without QE?

And lend in a turbulant market?

StevieJ

Excuse me I have a newly painted fence in the garden that needs watching

sabretoothtigger

kennyboy66 wrote: »

In the early 1970's local councils offered mortgages, in fact they once had about 20% of the market.
Then again, it used to be that mortgage market was dominated by building societies.

Perhaps you think things always stay the same.

I think the banks were largely excluded from housing lending till the 80's
Something like less then 10% market share by all banks hence why they've been so eager to snap up the building societies who went private.

Of course now we know why they were excluded, one of those bits of knowledge that fell away in the gap between generations maybe thus we have our current reminder

Between 1977 and 1987, it fell drastically from 96% to 66% while that of banks and other institutions rose from 3% to 36%. The banks and other institutions that made major inroads into the mortgage market during this period were helped by such factors as:

• relative managerial efficiency;

• advanced technology, organizational capabilities, and expertise in marketing;

• extensive branch networks; and

• capacities to tap cheaper international sources of funds for lending.[3]

By the early 1990s, UK building societies had succeeded in greatly slowing if not reversing the decline in their market share. In 1990, the societies held over 60% of all mortgage loans but took over 75% of the new mortgage market

http://en.wikipedia.org/wiki/Mortgage_loan#Mortgages_in_the_UK

kennyboy66_2

Graham_Devon wrote: »

Apart from China would undercut the existing providers by max of 1%.

If as you are suggesting markets worked that way, the energy firms would not all be pocketing vast swathes of money while keeping prices high. One of them would have seriously rocked the boat by cutting to the bone.

They haven't, never have, and probably never will.

Not really, because the regulaated Utility companies (including water) profitability depends on the return on capital employed.

It is more important for them to pesuade the regulator that they need to spend vast amounts upgrading power supply or water quality, than it is on winning market share.

Graham_Devon

StevieJ wrote: »

Excuse me I have a newly painted fence in the garden that needs watching

See ya. :wave:

And try not to ridicule next time if you are going to get stuck as soon as someone asks you a question.

Thrugelmir

kennyboy66 wrote: »

Perhaps you think things always stay the same.

No not at all. We are going through a fundamental readjustment. The lending years of 1995-2008 have gone. Assets became wildly overvalued.

I am merely looking back at previous times. Listening and reading to the proposals in regulation for the banks. And speculating on how its all going to pan out.

I don't believe that Tesco's will add capacity to the mortgage market. Merely take a share from other lenders.