Saturday, Jul 21, 2007
How much is your flat worth when banks would not lend on it?
Guardian: When flat buyers cannot get off the starting block
People who own properties in tower blocks struggle to sell them on, because many lenders won't get involved
Posted by confused76 @ 01:14 PM (183 views) Add Comment
5 Comments
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1. dohousescrashinthewoods said...
Yowsers - this is exactly the "convertible demand" I have been talking about for a while - even if market demand and sentiment are there, if the banks won't lend, the majority of the market is high and dry.
Why won't the banks lend? Because they have no money. Why do they have no money? Because the money markets won't buy their mortgages. If the banks can't sell debt to the markets, they can't "rinse and repeat" (re-lend the same money) and you are looking at a credit crunch.
By the figures cited in the FT article posted yesterday, there's a 96.7% reduction in corporate bonds since the end of June. I wonder if anyone has figures for UK mortgages?
2. Scott said...
Would you buy a flat in a tower block full of DHSS scumbags? Not for half price, although it may come to that!
3. Bill said...
Its the maintenance costs that are the problem do not buy
4. paul said...
Shouldn't this article's title actually be "Guardian: When flat sellers cannot get off the starting block"
5. confused76 said...
Paul,
that is a good observation...
I guess there is a certain "spin" in the title... being a OWNER can never be bad, in the popular belief.
in this case the owner problem is the asset illiquidity. now, an illiquid apartment is worthless, at least in my book.
but the press has to sell the story that it is ok to be money-poor if you are brick-and-mortar-rich.... so keep buying, you can never be wrong even if you bought a stinky high rise council flat in the hope to make a mint
So, it is always the BUYERS who are worse off !?!??