Sunday, May 13, 2007
return to negative equity?
timesonline: return to negative equity?
hsbc is first bank to turn away borrowers with little deposit on fears that recent interest rate hikes could spark house price falls.
Posted by taffee @ 02:58 PM (193 views) Add Comment
19 Comments
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1. David20040_0 said...
They won't drop interest rates are still too low.
2. Realist said...
This tightening of credit shows how the banks are starting to sniff problems ahead. HSBC have taken a bath in the US on subprime mortgages which may be why they are more cautious here. Interesting that the media are starting to focus on the number of mortgages coming off fixed rate or discounted variable rate deals this year with borrowers getting a nasty shock at the increased payments.
3. Hurry Up And Wait said...
Its about time lenders began looking at reducing the affect a crash will have on them and here is the start of that - its going to happen very soon so everyone had better be braced.
4. Boarder said...
As a creditor of HSBC this makes me a little bit happeir about keeping my money in this bank.
5. sovietuk said...
"Borrowers must now find a 10% deposit, up from 5% before." Oh dear, something has clearly changed then.
6. enuii said...
Sounds like a sound risk management strategy to me but possibly a bit (6 months) late.
7. tony marshall said...
"Homeowners are now being urged to “stress test” their loans to check they could cope with higher rates, and take action to reduce their debts if not. " - Admission that they (the banks) have been negligent not to do this in the past..?
"Simon Tyler at Chase de Vere Mortgage Management, a broker, said: “This is a significant move"." - Indeed...
"Fionnuala Earley at Nationwide building society ... said: “We are not heading for crash territory"." - Just keep re-arranging the deck-chairs, Fionnuala...
8. confused76 said...
Check this article. Nationwide SVR will hit the 6.99% level in two weeks. This is the beginning of the end!
http://business.timesonline.co.uk/tol/business/money/mortgages/article1777162.ece
9. enuii said...
My local spiv new-builders of 1/2 bedroom flats are now offering 5% deposit paid on their over priced property. One developer in Warrington (a bland town between Liverpool & Manchester) is offering 5% deposit paid on his £336K 2 bedroom flats which are quite frankly not even worth £250K although they are marketed as luxury cos' they are state of the art and you have the use of a gym. For less money you can buy a 5-bedroom detached house in a better area only half a mile away!
I am absolutely convinced we are now in the period of lunacy prior to the inevitable reality check setting in.
10. Pr said...
"My local spiv new-builders of 1/2 bedroom flats are now offering 5% deposit paid on their over priced property". 5% deposit paid is code for a 5% price reduction!!
11. paul said...
GONG!
I do declare the house price crash has started.
HSBC are not dumb, because as a retail banking entity you don't get that big by making stupid decisions. This is significant because its only a small step away from extending the blanket lending ban to properties in other areas in London. I don't mention Birmingham or northern cities only because they haven't experienced the same extent of parabolic price speculation that London has.
Like I say, this is the start of the crash, and don't expect anyone else to talk about it because there's too much at stake to talk about it in polite company.
The crash has started nonetheless.
12. paul said...
Ooh, and just because Glorious Sunshine likes quoting song lyrics so much, here's one for him (also because I'm a little drunk on Tesco's half price wine). The full lyrics from DJ Shadow's "The Outsider" Intro:
In the twilight of a time
There emerges a need for man to comprehend his own bitter fate
Finally resigned to the inevitable beyond, he searches the ages
Desperate for stories of assurance, redemption and hope
Such tales fill page upon page with enough ink
To flood a thousand valleys, and drown the tallest tree
But there is one tale that as yet been told
The story of... The Outsider
Desolate and baron, humanities at a crossroads
The people have retreated shuttering their once carefree lives
From unseen enemies which seem to plague not only the physical form
But the innermost thought
Driven by panic, compelled by dread
The masses begin to devolve
Once dear neighbours turn wary foes
Brother against brother, sister against sister
Achievement and ambition are dismissed
As heretical, or worse, treasonous
Even nature itself is scorned
Choked with suspicion and fear
Voices do not dare to sing
Nor fingers to play
Imminent defeat is all but assured
But in the darkest hour
Whispers begin to tell of a figure emerging from the darkness
A being without a name, faceless and obscure
Part presence, part idea they say
As if the very force they describe has existed for eons
A dormant seed awaiting nourishment
Word of radical acts...
Disobedience, non-compliance spread among the people
At first fearful, then defiant, as the legend grows
Whispers turned to cries and the cries into screams
And tend to cower no more the fury of the people
Whose talent behold as they exact revenge on their captors
Spare neither the repentant nor the bold
Now the fire is lit, smouldering in the belly of humanity
It cannot be extinguished, for the stories The Outsider endure
Even as evidence of its presence is debated with the passing years
Messages, dictations, warnings
Stories, such as these...
13. Ticktock said...
Paul,
Would you say the outsider was a religious man, or a 'backward looking terrorist' ? He must be one or the other, right? Or is there little difference between the two?
This is a serious question for you mate, and I ask it because I am a little confused as to how somebody who frequently posts such insightful comments, can also seemingly not know 'his real enemy'?
If , by chance, or by design,you have found a way of 'blocking it out' that doesn't involve chemical substances then please let me know how. I have a wife and 3 children that would like to see me smile.
PS - That half price wine wouldn't be the Castilo San Lorenzo Rioja would it? If so, I concur that it is indeed an absolute bargin, although having presented the 6th recieved bottle of said wine to the host of the party that I attended tonight, I must accept a little shame. Its amazing how many serve The Tesco in our land of 'free choice' isn't it?
14. Ticktock said...
Paul,
Would you say the outsider was maybe a religious man, or a 'backward looking terrorist' ? He must be one or the other, right? Or is there any difference between the two?
This is a serious question for you mate, and I ask it because I am a little confused as to how somebody who frequently posts such insightful comments, can also seemingly not know (or at least suspect) just who, and what, 'his real enemy' is?
If , by chance, or by design,you have found a way of 'blocking out the truth' or ignoreing it, that doesn't involve chemical substances, then please let me know how. I have a wife and 3 children that would like to see me smile.
PS - That half price wine wouldn't be the Castilo San Lorenzo Rioja would it? If so, I concur that it is indeed an absolute bargin, although having presented the 6th recieved bottle of said wine to the host of the party that I attended tonight, I must accept a little shame. Its amazing how many serve The Tesco in our land of 'free choice' isn't it?
' BRITONS NEVER NEVER NEVER SHALL BE SLAVES' ........Its funny how many Brits. sing this song too, whilst being both oblivious, and seemingly happy, in the service of their Masters.
Don't you think?
15. talking rot said...
Paul
I've always enjoyed your rational thoughts in the past. However, I believe it is a little early to sound the GONG. One swallow doesn't make a summer. If, however, we see other lenders following this lead, then I'll eat my hat and agree with you that the first great House Price Crash of the 21st Centuary was annouced on May 13th, 2007, in The Times.
I wonder what Noshbag will be writing about soon?
16. talking rot said...
I enjoyed this line immensely:
"Many homeowners have so far been insulated from the pain because they took out fixed rates two or three years ago, but analysts said about 900,000 borrowers were set to come off these deals in the coming months and face a severe 'payment shock'."
Oh dear, what a pity, never mind.
17. Orwell said...
She said: “We are not heading for crash territory. We may see falls in some areas or some monthly national drops, but I don’t expect a sharp deterioration in property values.
And .... what hurricane as Michael Fish said? LOL!
18. paul said...
ticktock and TR,
Someone said they like the last bit when I posted it the other week, and in a haze of cheap wine (yes, Rioja I think) I thought it would be a laugh to post the rest.
It wasn't rational I know, and it's only a song lyric, which is probably nicked from somewhere anyway.
Reality? There is no reality, only now and erm, there are no answers only choices.
There ye go.
19. uncle tom said...
This is the first significant evidence of UK lenders covering their backs in the wake of the US sub-prime crisis. It will probably spark a more general trend.
The immediate consequence will be lot of borrowers coming off their 'golden hello' fixes, and finding themselves trapped on their original lender's SVR (at vastly increased cost) because no-one else will give them a better deal.
The consequences are not difficult to work out...