House Price Crash Discussion Thread

lil_lady_2

well im not planning on buying for at least 18 months , and im not happy where i am , but say if i did buy and my morgage was for a fixed rate for 5 years , then wouldnt i be safe ( remeber im new to any of this so im learning) or do things not work like that????

Austin_Allegro

lil_lady wrote: »

well most young people can do there lower leg but preganant women older woman and people like me with joint problems find it hard to do them things , plus try waxing the back of your own legs or further in then your bikini line and more and you'll leave your self bruised , and the facial treatments that u can do at home like home glycolic peel kits only have 2 % in them where as beauty salons have 50%...........

The problem is that whilst people want to look good in a recession, they may not have the discretionary spending power (ie, spare cash) to fork out huge amounts for waxing and posh hairdos at 'fancy saloons' (as Trevor and Simon would say). However, a savvy hairdresser/beautician would be able to take advantage of this by offering home visits and undercutting the salons on price.

Generali

brit1234 wrote: »

The problem is not the profits even though they are likely to fall as house prices come down and repossessions go up. The problem is finance for new mortgages. Northern Rock was in big trouble before the run and it is only the government keeping it afloat. Bradford and Bingley is at about the same stage as the rock before the run. The credit crunch continues means they can't get the funding from elsewhere which they did before. With out the external funding they will be forced to stop lending. There dodgy practice has caught up with them and repossessions and falling assets will hurt them bad.

The future doesn't look bright for shareholders, sure (pace the 1/6th drop in shares). However, as they state, they funded 60% of new lending from customers' savings. It's not the same as Paragon where they were looking to fund everything in the capital markets. B&B still have a viable business, albeit one that is likely to get a little smaller in the next year or two.

I don't think B&B lend on particularly high LTV. I think they mostly lend on BTL where you should have a good deposit (40% is average although not required) and it is to be hoped that you have a tenant that will finance most or all of the rent.

brit1234

RE "I don't think B&B lend on particularly high LTV. I think they mostly lend on BTL where you should have a good deposit (40% is average although not required) and it is to be hoped that you have a tenant that will finance most or all of the rent."

They own Mortgage Express, it is this part of the business that has been loaning heavily on new builds over the last few years and carried on while other lenders stopped due to all the fraud. That means the assets on which the loans are borrowed against are overvalued and as they are one of our highest repossession lenders that makes them very exposed.

B&B also only have external funding for 3 months despite their depositors. It would be interesting to see if B&Bs depositors fund Mortgage Express which has no depositors and how long can B&B depositors keep it going. All the lenders have increased saving rates to increase depositors so there is deep completion out there.

Generali

Interesting point. One that can be resolved by checking the balance sheet. I'll let you know!

Generali

They claim to have funding in place up to 2009 and are increasing rates to new borrowers to shore up margins (sensible and predictable).

They claim to have an average LTV on their books of 55% and to be cutting back on self cert lending (going from 9.1-8.5% of the self-cert market).

Mix of funding:

Retail..40%
Wholesale..23%
Securitised..17%
Covered Bonds..13%
Other..7%

Asset mix:
Buy-to-Let..45%
Self-cert..16%
Other residential..15%
Commercial and housing association..2%
Wholesale / Other..22%

It really doesn't seem that bad to me. They've lost a lot on CDO and SIV investments that they seem to have written down the value of. It's hard to say if they've been written down correctly but they must have satisfied the auditor or the accounts wouldn't have been signed off. That would be the time to start queuing to get your money back.

Generali

Interesting article from the US about entire buildings being blacklisted for mortgages:

link

Perhaps the same will happen here with new builds. I know that it used to be (still is?) impossible to get a mortgage on an ex-council high-rise flat.

Lotus-eater

The interesting bit "The lists include finished buildings and projects still under development."
I'm not in the building trade so I'm not sure, but I don't think we have so many huge developments, we have alot of smaller new build flats/apartments.
Therefore, it would surely be harder to blacklist all the dodgy ones, especially at the beginning. Wouldn't it be easier to just say, all new build flats and apartments must be looked at much closer than everything else....... and isn't that what they are doing atm?

adr0ck

flats

enough said

codger

Not to needlessly confuse things where clarity is important, but once the media gets it into its hydra-head that doom 'n gloom tales of people losing their homes makes for really great Bad News headlines, many are going to assume that these are all mortgage default repossessions.

Not true. There's now growing evidence that people are being chucked out of their homes as a result of non-payment of Council Tax, where the Local Authority has moved to declare them bankrupt and seize their assets.

Whilst this is not yet a flood-tide -- we'll need to await definitive figures from the LGA -- it's a factor that wasn't present in the last market downturn, because back then, local councils were not under the lash of "Performance Indicators" as they are now, and certainly weren't under today's pressures to recover Council Tax as soon as possible.

This isn't, by the way, a plea for the dispossessed: there are always going to be some who seem to think Council Tax doesn't / shouldn't apply to them.

The point is that as more and more Local Authorities resort to bankruptcy proceedings in order to safeguard their own "performance rating", the overall total of home-owners ceasing to be home-owners will rise -- yet that total will have nothing to do with mortgage default repossessions.

Still. One mustn't expect too much of the media in the way of careful reporting. . .