George Mainwaring

Last time around it happend quietly. There was no real talk about it in the media apart from the Halfax claiming every few months that house prices would go up 20% next year. But there was a general awareness that prices were coming down and if you looked in Estate Agents windows regularly you'd notice every few months that houses looked a bit cheaper than they had few months before. Negative Equity and reposessions were reported in an "other news" kind of way but it wasn't a national calamity. It didn't rank with the three day week and winter of discontent and other similar blanket coverage type things. But there are some key differences this time. The boom last time was much shorter and borrowing money and using your house as security was rare rather than common. This will make it bigger news I think. Also I expect amatur BTL will become A Great Investment Scandle and I'll be surprised if there are not a lot of "My BTL Hell" stories about people loosing their shirts once this become widespread and enters the news agenda.

As we transition from a benign economic environment to a harsher one, Mr Clown will not be able to keep all the plates spinning. So he needs to select a position and fight it out from there. All the indications I see are that he will choose inflation (as recorded by CPI) as his position. So he'll stand or fall on controlling inflation. Whatever else happens the reply will be "but look, we're controlling inflation". Also, if he want's to be re-elected in 2010 he'd be better to take his medicine early rather than try and perpetuate things only for the whole thing to tank at election time. Of course new information may contradict this but that's how it looks at the moment to me. Another thought I had, and I don't have a definitive answer to this (laziness / other fish to fry) but CPI is a statistical model which is weighted according to how much is spent on what. If, as might be expected, discretionary spending declines maybe CPI will trend higher as the increases in the cost of living will have a greater bearing on measured inflation? Just a thought.

Oracle - do you really see this as a likely scenario? (Curious - I know from previous posts you watch the money supply / currency / CB reserve holding side of things)

ARM Mortgages have been the norm in the UK for decades - it's the fixed rates that are new. 20 years ago you couldn't get a fixed rate mad, but they just wern't available to the man in the street.

A mixture of sustained monthly falls and credit tightening. The market is unstable (being so far above it's kong term stability point), and is venerable to an economic shock. It's only a matter of time before something gives it the economic equivalent of a dead leg.

The current state of the housing market is irrational. So you can't predict it's short term behaviour by rational analysis which is, for the most part, what happens here. You can predict the end result: ave house price = 3 x ave income, but not the path and timing of that transition. Plus the lenders have not ordered in the rubber pants yet. Although I wonder how much they carry the risk these days as I gather they sell (some?) of it on as mortgage backed securities. So maybe the money dries up when the buyers of the debt (hedge funds et al?) reach for the leak free underwear.

Personal Loan fees and the way repayments are applied have been used for a long time to manipulate APR's down so they don't represent the true cost of the loan. Looks like the same thing is being done with Mortgages now. As ever the only way to compare loans of any kind is on a total cost basis - the headline interest rate is becoming meaningless.

It's a nasty tax on mobility. You work to pay off the debt and then the Treasury confiscates some of it.

Operating Profit and Net Profit are not the same. (Net being after HIPS write offs presumably).

What's the lag on the Nationwide report? It's Mortage Advances so the lag must be 3 months or so. So this tells us nothing about the impact of the rate rise and the numbers come from the Spring Bounce (Spring Surge?).

If he's serious about this then RPI-X needs to be constrained. This implies IR policy will be hawkish.

When displaying topics the page load often hangs for several seconds a few times on each load before completing. Obviously something is loading but it's very annoying. Any chance of getting rid of whatever this is? (the web monkeys must know what it is).

Nope. In the 1960's there were credit controls which limited what people could borrow. Since IR's were not the only instrument in contolling this they could be lower.

Looks to me like a sly way of offering 7% and only giving 3.5%.

Nice find. Is the media beginning to move onto the new big story (HPC in effect)? BTL will be the biggest investment scandle of our time - and I imagine most of these developments will be hoovered up by housing associations in the end. I feel sorry for any OO occupiers who have stranded themselves in these places through ignornace and misinformation.