Friday, Nov 30, 2007
James Harding on the moon
Times: Correction, not crash
"banks and building societies have been more conservative in managing loan-to-value ratios than they were in the late-1980s" AHH AHHHHHA HHHHH MWUAAAHHHHHHA HHHHH AHHH A MWUAUUUUUUUUAHHAHAAHH
Posted by confused76 @ 10:05 AM (489 views) Add Comment
4 Comments
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1. planning4acrash said...
Correction, its a crash!!!
2. the reaper said...
' banks and building societies have been more conservative in managing loan-to-value ratios than they were in the late-1980s. '.Is he having a laugh?
3. inbreda said...
"despite the concerns about reckless lenders, banks and building societies have been more conservative in managing loan-to-value ratios than they were in the late-1980s."
Ummmmmm...... that kind of depends doesn't it. To begin with, I don't beleive it. Secondly, the market is so full of BTLers who will see declining (or even stagnant) prices as indicating that they are losing money and who will therefore sell irrelevant of what their LTV is, and thirdly LTV relies on two numbers - the outstanding loan (which of course should really include ALL outstanding debt including credit cards, loans, HP etc etc) and value - which of course is entirely fictional until the property is sold.
Surely by the times calculation, if houses fall in price just slightly it actually makes the LTV worse, which presumably makes price falls more likely? thereby worsening the LTV calculation. Which of course will lead to further price falls. Which in turn.....
...well. You get the message.
4. Ihopeitgoeswithabang said...
Business Editor???
"The mortgage lenders and property analysts are these days a chorus of gloom,not doom"
Exactly which mortgage lender is he talking about? Northern Rock obviously.
He acknowledges the boom is over yet can't bring himself to acept that Bust follows Boom as surely as night follows day.
"For most people, though, a house is not a short-term investment. They may as well sit out the correction – at home."
Well provided you can afford to sit back and watch it tumble in value. Yes of course.