The bust begins

snoopy78

Any bank with a bit of spare cash is going to do very well out of the credit crunch, looks like HSBC will take a huge percentage of the market.

oldMcDonald

snoopy78 wrote: »

Any bank with a bit of spare cash is going to do very well out of the credit crunch, looks like HSBC will take a huge percentage of the market.

If they charge a fee, demand a max 80% LTV and is this is only available for 5 weeks then I think the percentage of the market HSBC grabs will not be huge. There are a lot of 'only ifs...' attatched to this and I think it was more a bit of advertising and cherry picking.

mystic_trev

snoopy78 wrote: »

Any bank with a bit of spare cash is going to do very well out of the credit crunch, looks like HSBC will take a huge percentage of the market.

I agree. The problem is, what's going to happen to new and recent FTB's, those with high LTV's and sub-prime? If you take away the first few rungs of a ladder, there's nothing left to climb!

snoopy78

mystic_trev wrote: »

I agree. The problem is, what's going to happen to new and recent FTB's, those with high LTV's and sub-prime? If you take away the first few rungs of a ladder, there's nothing left to climb!

I could not agree more, unless mortgages become a lot cheaper and fast the market can only go one way!

WTF?_2

mystic_trev wrote: »

I agree. The problem is, what's going to happen to new and recent FTB's, those with high LTV's and sub-prime? If you take away the first few rungs of a ladder, there's nothing left to climb!

Recent buyers are going to suffer the consequences of their poor financial decisions.

New buyers will hopefully dodge the bullet as a result of the credit market correcting and eventually get their house at a sensible and affordable price.

Generali

dolcevita wrote: »

This offer from HSBC is nothing but a PR exercise.

It's a pretty good one!

I worked for HSBC many years ago and it's one of the few banks I'd own shares in (not right now of course but in general).

chrisandanne

Generali wrote: »

Not directly is the short answer.

The long answer is that banking is a highly regulated industry and so the government does have a pretty big impact:

1. The Bank of England sets the base interest rate which is the price of money.
2. The Government regulates the reserves that banks need to hold - raising the reserves is the same as cutting the amounts that banks can lend.
3. There are various things at the margin such as rules on marketing, what constitutes a reasonable interest rate, contract law, OFT action on bank charges etc.
4. There is also a threat to legislate. Traditionally, although less so today I believe, much of the financial sector was regulated with a quiet word in the ear as much as by using rules and laws.

Thanks for that Generali.

I had a bit of a theory......After social housing became scarce due to the sell offs. The government were under pressure to build more for the rapidly expanding number of people wanting a house....one cheap way to get round this would be to make it possible for a lot of people..(in work, but not actually house buyers with deposits)...to be able to buy a house for themselves....offer them the money at 100% and cheap interest rates and let them get on with it. Thereby saving the government all the expense and inconvenience of building houses for the masses. So with loads of people entering the housing market who previously would not have been able to buy, prices went up.

People may say that the goverment would have forseen this happening but they closed the railways way back and then were amazed when there was more traffic on the roads and they had to build more roads. Governments often seem to work very shortsightedly (is that a word ?) Ax

Generali

chrisandanne wrote: »

Thanks for that Generali.

I had a bit of a theory......After social housing became scarce due to the sell offs. The government were under pressure to build more for the rapidly expanding number of people wanting a house....one cheap way to get round this would be to make it possible for a lot of people..(in work, but not actually house buyers with deposits)...to be able to buy a house for themselves....offer them the money at 100% and cheap interest rates and let them get on with it. Thereby saving the government all the expense and inconvenience of building houses for the masses. So with loads of people entering the housing market who previously would not have been able to buy, prices went up.

It's not really accurate although it is in parts, IMO at least. The government doesn't have expenses for a start, it spends our money on our behalf pretty much as it sees fit with the caveat that they want to be re-elected.

The only responsibility they have for house prices shooting up is the overly (IMO) restrictive planning laws in this country. The rest has been down to a bunch of idiots that are happy to bid up prices and banks that are happy to take the money of suckers.

People + get rich quick dream + borrowed money secured against a rising asset = bubble

RichyRich

chrisandanne wrote: »

Governments often seem to work very shortsightedly (is that a word ?) Ax

Of course governments are shortsighted! What government in its right mind would implement a plan to improve things in 20 years time, when they're only in power for five year terms? At the end of five years, nobody sees an improvement, so the government gets voted out, even though the wheels are in motion for improvement further down the line. If you were a rationally thinking politician (who wanted to stay in power), you'd thing "Jesus Christ, I'd better make all my policies come into force while I'm still in power otherwise people will just think I've sat on my fat @r$e all the time", hence why you never get truly long term agendas out of the government. It's a design fault with the political system that makes it inherantly short sighted.

Joseph Stiglitz wrote an excellent article on this.

Pobby

Oooo ach aye jimmye th noo,I am soooo prudent.I tell thee noo,no more boom or bust.I am the wee feller that will make sur that house prices won`t get out of hand.And and on and on and on

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