Good grief - Fifty Seven Billion pounds of aid for Northern Rock

ManAtHome

Generali wrote: »

I'm not sure it is any more. The banks seem increasingly to want to recapitalise.

And/or flog themselves to people with equivalent amounts of money and sense (generally (no pun intended) somewhat to the east of Dover).

Wonder if we'll be trading our average houses (£x.zillion) for a couple of Wii games in 20 years time.

nelly_2

Generali wrote: »

Well officially it's [EMAIL="enquiries@bankofengland.co.uk"]enquiries@bankofengland.co.uk[/EMAIL] but I'd try [EMAIL="mervyn.king@bankofengland.co.uk"]mervyn.king@bankofengland.co.uk[/EMAIL] - please post any responses you get.

Nice one mate.

And I most definately will!

merlinthehappypig

This is an interesting new report from the Halifax. I should have posted it on the HPC crash thread, but that seems to have been taken over by lunatics (well, a lunatic) at present - everyone sensible seems to be on this thread though. The implications, to me, are quite frightening, though the report doesn't go into them at all. Firstly, there are far fewer FTB's about. That is self-evident I guess, but no FTB's, no property sales at all eventually. If the people owning FTB houses can't sell, then they can't move up the ladder either.

More worrying, for the wider economic picture is the evidence that FTB's have been priced out of the 'traditional' FTB's housing and have turned to flats instead. Whilst none of us know for sure what will happen with the housing market next year, it doesn't take a genuius to work out what will happen (is already happening) with flats, especially new builds. The implications are that there are going to be an awful lot of people already in negative equity (perhaps not realising this yet) and many more to come and these won't just be speculative BTL's. Combine this with the jump in mortgage repayments as fixed rates end and we could see the end of the 1980's all over again.

The affordability crisis hitting the British property market has been revealed by a report showing the number of first-time buyers is at the lowest level since 1980.

An estimated 300,000 first time buyers entered the market in 2007 - 44% less than 2002, according to research by the Halifax.

The study also highlighted that the majority of first-time buyers can no longer afford to buy a terrace house, traditionally the least expensive property type and once considered the typical new homebuyer property.

An average terrace house was beyond the reach of first-time buyers in 71% of towns across the UK, compared to just 11% in 2002.

This has led to more new buyers either looking for more parental help, or opting to purchase a flat, with 37% doing so in 2007, compared to 24% in 2002.

Martin Ellis, chief economist at Halifax, said: 'Rising property values have priced many potential first time buyers out of the housing market. When they do enter the market first-time buyers are now more likely to be in their thirties rather than their twenties and buy a flat rather than a terraced house. First time buyers are also proportionately more in cities than towns as they opt for convenience over size.'

The average house price paid by a first time buyers rose above £175,000 in 2007. It increased by 15% to £175,093 compared to £95,995 in 2002. Meanwhile, Council of Mortgage Lenders figures show that the days of first-time buyers being able to purchase a property on their own are gone, with the earnings of new borrowers well above the average wage.

CML figures for October show the average earnings of individual or joint first-time buyers at £35,400, while the Office of National Statistics gives Britain's average wage as £23,500.

devils_advocate

!!!!!!? wrote: »

Here’s the terrifying statistic.
Morgan Stanley has now valued the super-senior AAA securities at between 30 and 35 cents in the dollar.
That’s a two thirds write-down for an investment which was supposed to be investment grade.

I met Mr Morgan and Mr Stanley about 6 months ago and I asked them if they were worried about possible falls in the value of the debt securities which they hold. No, they told me, they can afford to service the funding cost, it got them on the debt ladder, and the falls were bound to be temporary. Besides, they said, it didn't matter as they were in it for the long term, and the price of debt securities only ever went up, didn't it?

I called them last week to ask if their being long term investors meant that's why the good Peoples Republic of China wanted to pay £2.5billion for 10% of their business. Strangely, they haven't returned my call.

Parallels anyone?