how long before the first 100% mortgage to return

B_Blank

Loughton_Monkey wrote: »

Don't agree.

When Brazil had hyperinflation in the 1980's, mortgages were well over 100%. In fact I believe they had to pay up to 430% on their loans at the worst point.

I can guarantee that when BOE Base Rate approaches 75%, the Halifax will be looking at 100% mortgages. Don't know what LTV they will apply, though!

Brazil is not the UK.

Next please. This is getting too easy.

Thrugelmir

LillythePink wrote: »

What is the salary multiples for mortgages in the UK?

Currently averaging 3.11.

Thrugelmir

Niksan wrote: »

Didn't Lloyds offer a 100% recently or talk of it? not for FTB's though.

95% with Lend A Hand, though parents had to deposit money to offset and in effect provide a guarantee.

In principle new scheme with Councils is similar with a 5% deposit still and the council underwriting 20%.

Generali

Thrugelmir wrote: »

Who by? I wonder.

Well there is plenty of pressure around the world to change aspects of Basle III. For example, the German Landesbanks and savings banks have no way to comply with Basle III for the most part without breaking rules on state aid because of their ownership structure (they are mostly or entirely owned by the Lande, the German political regions).

Smaller banks in Spain will struggle to put together enough capital to be compliant and it would mean the end of the last of the building societies in the UK.

vivatifosi

Generali wrote: »

Smaller banks in Spain will struggle to put together enough capital to be compliant and it would mean the end of the last of the building societies in the UK.

Out of interest Gen, would that be purely as a result of failing to raise the capital for compliance? I'm asking purely because the mutuals in my mind come closest - though far from identical to - the LLP model you mentioned the other day. Clearly these aren't the companies that you were thinking of, I just wondered if there was a way of turning the model round.

Generali

vivatifosi wrote: »

Out of interest Gen, would that be purely as a result of failing to raise the capital for compliance? I'm asking purely because the mutuals in my mind come closest - though far from identical to - the LLP model you mentioned the other day. Clearly these aren't the companies that you were thinking of, I just wondered if there was a way of turning the model round.

UK building societies won't be able to raise the finance required to get reserve levels to where they need to be in the vast majority of cases IMO. They'll need reserve levels of 10% in a couple of years rising to 13% by, from memory, 2016.

Mutuals find it harder to raise extra finance than banks due to their ownership structure as they can't raise money by diluting existing shareholders like a bank or other stock exchange listed company can.

The only way they can raise cash in large amounts is using PIBs (a sort of high interest bond) and the cost of interest would wipe out their ability to give competitive returns.

They are being legislated out of existence which is a great pity to my mind as I think they are a great capitalist institution. They show that you could set up a small institution to take on the world's largest companies if you didn't like how they did business. It's another example of well meaning legislation killing the small guy in favour of large corporate groups.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Which is why, ultimately, it is likely to be changed.

Can't get re-elected with a housing market in the doldrums....;)

Basle III will be changed purely to suit the UK housing market?

B_Blank

Graham_Devon wrote: »

Basle III will be changed purely to suit the UK housing market?

No, no Graham. It will be changed to suit the will of Hamish.

HAMISH_MCTAVISH

B_Blank wrote: »

No, no Graham. It will be changed to suit the will of Hamish.

Now you're learning.

Generali

vivatifosi wrote: »

Out of interest Gen, would that be purely as a result of failing to raise the capital for compliance? I'm asking purely because the mutuals in my mind come closest - though far from identical to - the LLP model you mentioned the other day. Clearly these aren't the companies that you were thinking of, I just wondered if there was a way of turning the model round.

Having re-read your post I'll answer the actual question rather than the question in my mind.

If the mutuals (or indeed any other financial institution) isn't compliant with the new rules then at first they would be warned that they must comply. If they were still unwilling or unable to comply they'd be fined. The final action would be forced nationalization of the organization and possibly the imprisonment or fining of the directors for some crime or another (trading while insolvent?).

In reality it wouldn't come to that. When it becomes clear that the mutuals (possibly ex-Nationwide) can't get the reserves in place that they need they'll be sold to a bank or maybe to Nationwide as a super-mutual that is Too Big To Fail.