Nationwide March -0.60%

lawrie28

The problem with the market at present is liquidity - banks either don't have enough cash to fund new lending on a day to day basis, so are borrowing, or they don't trust the other banks to lend to them at a cheap rate. This means that banks need to increase the return on equity to maintain profits on a smaller lending book. They also want to decrease bad debts, so they are being cautious about who they lend to. But, if like some people in this thread, people sell up and put the equity in the bank, it gives the bank a bit more liquidity, so means they can reduce prices.... cheaper to pay someone base rate+ a bit than LIBOR plus a bit (at present). thats why some banks (A+L) are offering 10% (don't quote me) interst on an account. So by taking your equity by selling and renting you are helping the liquidity problem a tiny bit. This, in theory, should help reduce strain on the money market, and make it easier to borrow at a lower rate, holding house prices a little higher.

Of course, this doesn't change the fact that banks will now be looking for better LTV and have stronger underwriting criteria, which will contribute to the situation in a negative way.

Best plan? If you need to sell, do it fast, and if you need to buy haggle hard. If you don't need to do either, then don't. All prices are relative, so if in a house you will be in about the same position as before. If you are happy renting/ living with family do that. If you have to move, then you have to move. The best anyone can do is to try and make sure there credit rating is as high as possible, so they can attract a better rate when they need it.

In my head this sounds OK, but I'm sure there is someone out there more qualified than me to comment on this. I don't mind if you can correct me, it's better than me spouting rubbish all the time. Just make sure you are 100% right, otherwise when I spout off the stuff you correct, I will look stupid. Possibly more stupid than on this post.:)

meanmachine_2

And from that scary article...

"analysts at Merrill Lynch maintained their “buy” recommendation...for Northern Rock shares"

Dear god, Lynchy, I hope you're proud of your "expert analysis".

Shows these people know as much as me. Diddly.

si-mate

!!!!!!? wrote: »

Congrats. Though it was partially luck, you've just landed on your feet by cashing in on your equity near the peak of an unprecedented housing boom :j

Now, find yourself a decent place to rent (which your interest should mostly or even entirely cover) and enjoy the show as you see the house purchasing power of your stash of cash rocket over the next few years. Be sure to pick a place whose landlord is actually a professional so you don't face the prospect of being turfed out of a BTL repossession though.

You will look back on this as a very, very lucky break. It's not often that life gives us good luck so enjoy it to the max.

Thanks, I hope you are right.

We've been really lucky on the rental side as my parents are good friends with an estate manager who is letting us have a small cottage for £450 / month which we can 2/3rds fund from interest from our equity. The downside is that it'll be a 'caretaking' tenancy so we may have to leave if they need it for a worker.
If this does happen then we could move in with my parents or simply find a rental property on the open market.

dannyboycey

si-mate wrote: »

small cottage for £450 / month which we can 2/3rds fund from interest from our equity.

You are laughing! You will be able to stash some serious cash away with a set up like that.

neverdespairgirl

pinkshoes wrote: »

I like my home and don't want to live in rented accomodation. It sucks.

I've lived in rented for the last 10.5 years - same place. I love it, it's a great flat. I also love the fact that our rent is half what we'd pay on the mortgage interest.

neverdespairgirl

moneysavinmonkey wrote: »

, particularly the quotes from adam applegarth given that in less than 6 months from when it was published there had been the first bank run for 50 years and the bank had been nationalised :eek:

Great article - less than 2 months after that the run happened, though!

I particularly loved this one "....I don’t really see a credit crunch on residential lending.” :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

I feel smug. OH owned £25k of N Rock shares. He bought in Jan 2005, and sold in April 2007, although his broker kept telling him not too, because I bullied him until he agreed.

tr3mor

neverdespairgirl wrote: »

I've lived in rented for the last 10.5 years - same place. I love it, it's a great flat. I also love the fact that our rent is half what we'd pay on the mortgage interest.

Hmm. If you had bought the same place in 97 you'd probably be paying half what you're paying in rent now.

:money:

$$$_12

neverdespairgirl wrote: »

I feel smug. OH owned £25k of N Rock shares. He bought in Jan 2005, and sold in April 2007, although his broker kept telling him not too, because I bullied him until he agreed.

Your OH is a very lucky chap - having a financially savvy lass like you (I only wish my missus was able to diversify out of shoes as her primary investment strategy).

I'm very happy with my rental - the rent isn't covering the landlord's mortgage (but the interest on my savings is covering the rent - and I'm still saving). Lovely. The house is kinda cool too.

neverdespairgirl

tr3mor wrote: »

Hmm. If you had bought the same place in 97 you'd probably be paying half what you're paying in rent now.

:money:

I estimate it would be about the same.

Irrelevant to me, though, because I was 19 at the time, and about to start my 2nd year at Uni.

neverdespairgirl

$$$ wrote: »

Your OH is a very lucky chap - having a financially savvy lass like you (I only wish my missus was able to diversify out of shoes as her primary investment strategy).

I'm very happy with my rental - the rent isn't covering the landlord's mortgage (but the interest on my savings is covering the rent - and I'm still saving). Lovely. The house is kinda cool too.

So renting is a good decision for you too.

I don't really do shoes - they are great for keeping my feet dry, though!