Reckless Lending Is The Only Answer

[Mr. Piddle]

http://www.bournemouthecho.co.uk/news/9227877.Home_ownership_a_dream_in____dysfunctional____market/

The only solution to the dysfuncational housing market is for the Government to presurise the lenders into being a little more reckless says estate agent.

Prices are only 10 times the median wage in Bournemouth & 15.4 times in Christchurch. There is obviously no problem with anyone being able afford them then?

Edited September 1, 2011 by mason

[TheCountOfNowhere]

http://www.bournemouthecho.co.uk/news/9227877.Home_ownership_a_dream_in____dysfunctional____market/

The only solution to the dysfuncational housing market is for the Government to presurise the lenders into being a little more reckless says estate agent.

Prices are only 10 times the median wage in Bournemouth & 15.4 times in Christchurch. There is obviously no problem with anyone being able afford them then?

That's strange, i wouldn't expect any organisation that is basically taking a 1-2% cut of the tax payer backed mortgages to be asking for more lending.

[eric pebble]

LIAR LOAN

for anyone then?

.

[chronyx]

This post has been edited by mason: Today, 12:51 PM

Allegedly

[man o' the year]

I was in bournemouth for a couple of days.

Seems nearly every house on Sandbanks is for sale.

Edited September 1, 2011 by man o' the year

[juvenal]

I was in bournemouth for a couple of days.

Seems nearly every house on Sandbanks is for sale.

It always seems like that over last couple of years. I counted 50 boards sale/let up at one point a few months back.

[man o' the year]

It always seems like that over last couple of years. I counted 50 boards sale/let up at one point a few months back.

Try 237 !

[winkie]

It always seems like that over last couple of years. I counted 50 boards sale/let up at one point a few months back.

...like all fads and fashions they have their day.......look the sellers, agents, and all parties involved in the buying and selling processes don't care a dot how much debt the reckless buyer takes on as long as they get their commission/bonus for the month........and no one wants to be bailing out the irresponsible quick short-term gain, long-term pain lenders anymore.

[tim123]

Try 237 !

I don't think the area on the " mainland" really counts

[Mr. Piddle]

LIAR LOAN

for anyone then?

.

They're not doing them any more 'apparently' - a couple of people i know, who also live in massively overpriced bmth were talking about taking out BTL mortgages for their own homes now as they wont get residential mortgages anymore.... the farce continues......

['Bart']

The only solution to the dysfuncational housing market is for the Government to presurise the lenders into being a little more reckless says estate agent.

Would that be the same government that not too long ago had to bail the lenders out for being a little bit too reckless?

Amazing how the only solution is never to lower the fecking prices.

[Mr. Piddle]

I was in bournemouth for a couple of days.

Seems nearly every house on Sandbanks is for sale.

And as soon as I win the lottery im gonna buy one of them right on the sea front and hang my washing out the front every weekend, in between my caravan and collection of banger cars that'll reduce the prices

[Byron]

As they say in the article,

'Nationally, there is a shortage of housing'

But is there? We do not have hoards of homeless people, tent cities etc.

Perhaps all those idiot Labour politicians that kept assuring us that 'Immigration can only be good for Britain' could accept responsibility for this mess they have made .

[scottbeard]

As they say in the article,

'Nationally, there is a shortage of housing'

But is there? We do not have hoards of homeless people, tent cities etc.

But we do have a lot of people living at home or in shared housing who'd like a home of their own...

[ccc]

But we do have a lot of people living at home or in shared housing who'd like a home of their own...

And also huge numbers living in houses with numerous spare bedrooms.

How it balances out is the only question. No idea myself.

[Mr. Piddle]

And also huge numbers living in houses with numerous spare bedrooms.

How it balances out is the only question. No idea myself.

But is that because they're isnt any room for them elsewhere or is it because they couldn't afford their own room elsewhere?

[ccc]

But is that because they're isnt any room for them elsewhere or is it because they couldn't afford their own room elsewhere?

The people living in houses with lots of extra rooms ?

[Fairies Wear Boots]

And also huge numbers living in houses with numerous spare bedrooms.

How it balances out is the only question. No idea myself.

It doesn't balance out does it? People who don't care to downsize have spare rooms going to waste. Meanwhile developers take nice sized houses, chop them into flats and people pay shedloads for a small poky flat, when a while back they would have bought the whole house.

As for Reckless lending is the only answer, I'd really like to be able to put people who say this up against a wall and shoot them. I can understand the housing market being cyclical, and people getting caught up in bubble mania not believing there isn't going to be another bust. Those that flatly deny the possibility of another bust, like Krusty AllSlop, really annoy me. But those who want to get another bubble going before we've finished the bust cycle really take the biscuit.

[ccc]

It doesn't balance out does it? People who don't care to downsize have spare rooms going to waste. Meanwhile developers take nice sized houses, chop them into flats and people pay shedloads for a small poky flat, when a while back they would have bought the whole house.

As for Reckless lending is the only answer, I'd really like to be able to put people who say this up against a wall and shoot them. I can understand the housing market being cyclical, and people getting caught up in bubble mania not believing there isn't going to be another bust. Those that flatly deny the possibility of another bust, like Krusty AllSlop, really annoy me. But those who want to get another bubble going before we've finished the bust cycle really take the biscuit.

I am talking about supply here. In terms of do we actually need many more houses or not ? Or are they just spread out in a seriously ******ed up manner. I imagine the 2nd is probably closer to the truth.

[Fairies Wear Boots]

I am talking about supply here. In terms of do we actually need many more houses or not ? Or are they just spread out in a seriously ******ed up manner. I imagine the 2nd is probably closer to the truth.

Well given that the North East went down ten percent and London managed to rise over the last year, I guess so. I'm afraid I believe the undersupply theory. We don't have a decent housing stock and lots of people have been forced to live at home, and cram in. Which they will still do when the market comes down in price because of the lack of a credit bubble. The only thing is ours is coming down at a very slow pace and places like America and Ireland where you can see rows of new build empty houses it's obvious to everyone which way the market is going.

[ingermany]

Reckless lending is the only answer, although if it is underwritten and subsidised by government it ceases to be reckless. We have reached a point where mortgages are propped up by government, through SMI, housing benefits, monetary policy, and the biggest prop, government ownership of banks, releasing banks to behave in a non-commercial manner.

However this massive subsidy is all directed at those who already have mortgages. This is understandable because if they had not been bailed out a whole cohort would have lost their shirts and would have been angry. However. relaxing conditions on those with mortgage debt (effectively making repayment optional) has achieved its goal of stopping house falls at the expense of stopping house sales. This is because there is no comparable government support directed at FTBs. To put them on the same footing as mortgage holders they need to be offered 10x salary loans, with government underwriting, indefinite payment holidays, and subsidised interest repayments (tax relief and benefits). Banks would need to be indemnified against having non performing loans. It would need to be massive to work.

This is what happens when governments intervene in free markets. It creates a need to keep intervening and to increase the size of intervention. Either that or allow the market to correct by allowing lenders and borrowers to sort out their issues via the usual commercial mechanisms, For example instead of nationalised banks phoning non-paying borrowers and offering advice about getting cheaper mobile phones and gym memberships, advise said borrowers to pay what is owed or prepare for the bailiffs. Of course it won't happen, so we are stuck with this impasse unless banks are set free to rack up trillions of losses and get re-imbursed by the taxpayer.

[rantnrave]

Reckless lending is the only answer, although if it is underwritten and subsidised by government it ceases to be reckless. We have reached a point where mortgages are propped up by government, through SMI, housing benefits, monetary policy, and the biggest prop, government ownership of banks, releasing banks to behave in a non-commercial manner.

However this massive subsidy is all directed at those who already have mortgages. This is understandable because if they had not been bailed out a whole cohort would have lost their shirts and would have been angry. However. relaxing conditions on those with mortgage debt (effectively making repayment optional) has achieved its goal of stopping house falls at the expense of stopping house sales. This is because there is no comparable government support directed at FTBs. To put them on the same footing as mortgage holders they need to be offered 10x salary loans, with government underwriting, indefinite payment holidays, and subsidised interest repayments (tax relief and benefits). Banks would need to be indemnified against having non performing loans. It would need to be massive to work.

This is what happens when governments intervene in free markets. It creates a need to keep intervening and to increase the size of intervention. Either that or allow the market to correct by allowing lenders and borrowers to sort out their issues via the usual commercial mechanisms, For example instead of nationalised banks phoning non-paying borrowers and offering advice about getting cheaper mobile phones and gym memberships, advise said borrowers to pay what is owed or prepare for the bailiffs. Of course it won't happen, so we are stuck with this impasse unless banks are set free to rack up trillions of losses and get re-imbursed by the taxpayer.

Good post.

[GordonBrownSpentMyFuture]

Reckless lending is the only answer, although if it is underwritten and subsidised by government it ceases to be reckless. We have reached a point where mortgages are propped up by government, through SMI, housing benefits, monetary policy, and the biggest prop, government ownership of banks, releasing banks to behave in a non-commercial manner.

However this massive subsidy is all directed at those who already have mortgages. This is understandable because if they had not been bailed out a whole cohort would have lost their shirts and would have been angry. However. relaxing conditions on those with mortgage debt (effectively making repayment optional) has achieved its goal of stopping house falls at the expense of stopping house sales. This is because there is no comparable government support directed at FTBs. To put them on the same footing as mortgage holders they need to be offered 10x salary loans, with government underwriting, indefinite payment holidays, and subsidised interest repayments (tax relief and benefits). Banks would need to be indemnified against having non performing loans. It would need to be massive to work.

This is what happens when governments intervene in free markets. It creates a need to keep intervening and to increase the size of intervention. Either that or allow the market to correct by allowing lenders and borrowers to sort out their issues via the usual commercial mechanisms, For example instead of nationalised banks phoning non-paying borrowers and offering advice about getting cheaper mobile phones and gym memberships, advise said borrowers to pay what is owed or prepare for the bailiffs. Of course it won't happen, so we are stuck with this impasse unless banks are set free to rack up trillions of losses and get re-imbursed by the taxpayer.

Great post.

I have to say, of all the possible outcomes to the expanding credit bubble and it's inevitable collapse the outcome I least expected was the one we have now. We live in a world where action does not lead to consequence, where cause does not lead to effect and where crime does not lead to punishment.

Food, fuel, gas, electricity, phone - you name it - if it costs more then the people complain but houses that cost 10x salary? Not a problem. In fact, it should be celebrated.

I have to say that I love the UK but the longer this drags on the deeper my loathing and contempt towards the people who live here. Greedy, self-serving, deceitful idiots. They'll never learn because they don't need to and they deserve everything they're not getting. Present company excluded, of course.

[tim123]

But we do have a lot of people living at home or in shared housing who'd like a home of their own...

Perhaps they would.

But 99% of people living at home or in shared housing are doing so because that is all that they can afford. It isn't because there aren't enough homes for them.

Building more homes for these people would only work if the prices charged were so low that it wouldn't be worth the builder's effors in building them.

tim

[VacantPossession]

Reckless lending is the only answer, although if it is underwritten and subsidised by government it ceases to be reckless. We have reached a point where mortgages are propped up by government, through SMI, housing benefits, monetary policy, and the biggest prop, government ownership of banks, releasing banks to behave in a non-commercial manner.

However this massive subsidy is all directed at those who already have mortgages. This is understandable because if they had not been bailed out a whole cohort would have lost their shirts and would have been angry. However. relaxing conditions on those with mortgage debt (effectively making repayment optional) has achieved its goal of stopping house falls at the expense of stopping house sales. This is because there is no comparable government support directed at FTBs. To put them on the same footing as mortgage holders they need to be offered 10x salary loans, with government underwriting, indefinite payment holidays, and subsidised interest repayments (tax relief and benefits). Banks would need to be indemnified against having non performing loans. It would need to be massive to work.

This is what happens when governments intervene in free markets. It creates a need to keep intervening and to increase the size of intervention. Either that or allow the market to correct by allowing lenders and borrowers to sort out their issues via the usual commercial mechanisms, For example instead of nationalised banks phoning non-paying borrowers and offering advice about getting cheaper mobile phones and gym memberships, advise said borrowers to pay what is owed or prepare for the bailiffs. Of course it won't happen, so we are stuck with this impasse unless banks are set free to rack up trillions of losses and get re-imbursed by the taxpayer.

Another thumbs for excellent post.