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abharrisson

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Posts posted by abharrisson

  1. For the record, all of the figures I post about my personal circumstances are 100% true. You VIs hate it, but that's not my problem :rolleyes:.

    I rent a house for less than the interest I'd lose if I drew the money out of the bank to buy it. You don't like it? Tough, it's a fact :D.

    Oh dear oh dear it looks like brucy woocy has been caught out...

  2. I've just received a 'rent review' letter from the letting agent for the house we rent. We've been here since Jan '08, and the rent has remained the same from then until now.

    The agent 'proposes' that, from 25th Dec (happy Christmas!), the rent should increase -- by a relatively modest 4%.

    I was just wondering:

    1. What your recent experiences of rent rises (or not) are.

    2. How you think this compares with the rental market generally, and

    3. Would you just accept the agent's proposal in this case, or... what?

    Depends a little on where you live, what the currant rent is compared to other properties for rent, availabiltyof other properties , your own financial position and of course whether you can easily stomach a move.

    If there's loads of property around that would suit and you think you can get it cheaper and you don't mind moving, and the costs of moving don't outhweigh the rental elevation and you are in a sound job and would have no problem passing a credit score and could find a new deposit before you get your old one back...... then I'd say go back to them and use this as a negotiaing opportunity, let them know you have done your work, show them some examples of the property you have found that's 5% + less than you currently pay and offer them instead of a rent increase of 4% a rent reduction of 5%.......... if they come back with leaving the rent the same then you have probably done ok when you take into account the hassle and cost of moving, new contratcs, deposit, credit search , changing address and phone numbers and utiity providers etc etc.

    Moving home ( money to one side) is a little like moving banks.. there's really quite a large amount of hassle and cost associated with it and it's something I'd certainly not want to do more frequently than absolutely necessary.... balance that against a few quid either way on the rental and you'll have your answer.

    When I have rented before I have typically left homes when a rent review of ludicrous proportions have been sprung on me, and as an amateur landlord I tend to take the view that some rental is better than none and so have not raised rents for six years... but then again I have not had voids, and have managed to avoid paying the agent thier cut so it's all worked out pretty well.

  3. Thus guy is a raving nutter! He is the the jester of housing Market analysts*. I've noticed that he doesn't seem to publish his Assetzzzz house price index anymore. Or at least I can't find it anyway! Maybe he only compiles one if prices are going up.

    * can't call him an economist because he economic knowledge is plainly negligible.

    While this Stewart law chappie is clearly as on the lunatic fringe as some of the 50% HPC sheeple... he does raise an interessting point which is that if one assumes growth will remain sluggish for the next five years ( not unlikely), that mortgages will get if anything harder to get ( quite possible with the FSA'a new laws), that banks won't have access to wholesale markets like they once did for mortgage financing ( highly likely), that rates will remain low , that consumer confidence will remain muted and that prices at best will nominally hold value but lose value on a real basis then I think we will certainly see a situation where rental demand pretty much can only go upwards.... whether or not this will be enough to offset the housing benefot changes is a another matter but I do think we could end the next five years with a larger number of people renting property proportionalately and a lower number owning property... not through choice I suspect but as a fallout of the overall situation.

  4. Transactions aren't low. Thery are slightly down on last year and this is only the first month they have been down y/y. Neither bull nor bear can argue low transactions skewing the figures.

    Transactions ARE very very low compared to a more normal , historic level of activity... Nationwide themselves even go as far as warning off reading anything into their regional figures becasue of this... anyone who doesn't think all these indices are not hampered by volatility caused by low transactions must be living on planet Zog..... why do you find it so difficult to accept that low transactions make the results unreliable..... its a fact, its not something you can get away from.

    Perhaps it's becasue those who hear the unrelaibiliuty message choose not to hear it becasue they fear it might be an attack on their treasured crash speed... I'd be making ( and have made) the same point when prices were reportedly rising with low volumes.

    Whichever way you cut it though you will find it very very difficult to promote a "transactions aren't low" point of view as it's just plain wrong I'm afraid.

  5. Is that really a serious question? During the peak of the boom many were not only paying full asking, they were bidding over.

    My younger was doing Saturdays with a local EA in 06 - during just one weekend they sold 7 properties and more than one buyer was offering brown envelopes to get them to the top of the bidding pile.

    To be fair to the EA, they did tell them in best officer-and-gentleman mode that this was not the way they did business.

    But then that particular EA is also very unusual in that all their blurbs are entirely literate. ;)

    Yes it is a serious question see my later response... I suppose for you I could re-phrase it and say... is there really anyone out there who thought during the boom years that they had to bid over the odds to get a property to tick their boxes ?... only those suffering from a disability of not being able to negotiate would say yes..... home many times in good times and bad have I heard people say " I wonder if I can get them to take a few thousand off"... some people apparently never ever seem to think in terms of percentages.... £30,000 off a £300,000 house is the same as £10000 off a £100000 house although I am sure you'll find hge swathes of people feeling comfortabe asking for the latter and not the former.

  6. "U.K. house prices increased to the highest in more than two years
    in October
    as the property market showed signs of
    peaking
    , research company Acadametrics Ltd. and LSL Property Services Plc said in an estimate released today."

    If you think this is well balanced you might be erring slightly on the side of minor misjudgment.

    I mean, FHS, prices have increased to where they are now at a peak? They have been falling for months. Showing signs of (present perfect) peaking? This is the worst propaganda I have seen yet. Even the NAEA would be embarassed by such misleading tripe.

    Clearly you have settled on your point of view and are selectively qutoing to try and prove the point. There's nothing I can do about that I'm afraid, other than to suggest you read the whole report and then revisit how they and the others come to their conclusions and then have a further thought about it.... as I said it's a pretty balanced report and that you insist otherwise doesn't I'm afraid change that.

  7. I remember the days when people paid MORE than asking price just to get on the ladder.

    This slump in confidence may have the reverse effect on the indices which still feed on bad news as buy signals.

    You must be older than me... I bought my first home in 1992 and have bought four times since and never paid anything more than 90% of the asking price. Although I would agree that there are a number of people out there with the British disease which is a seeming disability over negotiation.

  8. A colleague has been recently looking at a relocation to France, he has been showing me some of the more choice places he has been looking at and I thought I would look at what I could get for a similar amount in the UK, North London ( I choose this because it's where I live, obviously regions will vary):

    So lets have a look shall we:

    58325_DOM1203_IMG_14_0000_max_620x414.jpg

    House #1 - 4 bedroom detached house,country house recently renovated set in 2,000m2 (0.49 acres) of landscaped gardens. 4 bedrooms, 2 bathrooms, garage. Central heating. Beautiful setting - Price €199,500

    58120_WNKPAL007586_IMG_00_0000.jpg

    Uk Comparison in North London:

    House 2 - 1 Bedroom Flat, A well presented split level one bedroom apartment arranged situated on the top floor (2nd) of this Edwardian conversion in the heart of Palmers Green. The accommodation comprises a 13’9 reception room, fitted kitchen/breakfast room, 14’ double bedroom and tiled bathroom. Further benefits include a private section of rear garden, double glazing throughout and access to loft storage. - Price £169,950

    Pretty shocking "value" in the Uk still I think we can agree? :blink:

    I think we can agree UK prices are expensive but at the same time we can also agree that you have made a hopeless attempt at trying to compare "value" between French and British markets by choosing two such very different areas and home styles.

    Comparissons of value between markets is very difficult to achieve, and probably is best restricted to some kind of like for like eg s*****iest area of paris vs s*****iest area of london vs average income for residents of those particular areas expressed as a multiple.... as it's so veyr difficult to do , it's rarely done..... however that's no excuse for trying to read anything useful into your own effort.

  9. http://www.bloomberg.com/news/2010-11-12/u-k-consumer-confidence-drops-to-19-month-low-before-budget-squeeze-plan.html

    U.K. Consumer Confidence Drops to 19-Month Low Before Budget Squeeze Plan
    By Svenja O’Donnell - Nov 12, 2010 12:01 AM GMT
    U.K. consumer confidence fell to a 19-month low in October as Britons braced themselves for the
    deepest budget cuts
    most severe house price crash since World War II, Nationwide Building Society said.

    Reality slowly dawns. Not many people are going to be paying full asking prices in this climate of doom.

    Did anyone really ever pay full asking price ?

    Consumer confidence is going to be one of the key factors which will define how this pans out ( steep and deep, long and slow etc)...... we'll see I think low consumer confidence continuing for a little while ( until the new year perhaps) when there may be a change driven by people's irrational fears about the pace of change the cuts will create not materialising, the media agenda will also have swithced by then I should think as they hate reporting one way traffic for more than a little while ( regardless of the stats).... recently it's been cuts doom and gloom but that will change as broedom sets in and they run out of ways to say double dip.

  10. http://www.telegraph.co.uk/finance/personalfinance/8126885/Property-market-faces-long-road-to-recovery.html

    Property market faces 'long road to recovery'
    Britain’s housing market faces a “long road to recovery” as figures showed mortgage lending failed to pick up last month.

    http://www.telegraph.co.uk/finance/personalfinance/8096036/Britains-property-market-in-double-dip.html

    Britain's property market in 'double-dip'
    Britain’s property market is in the midst of a “double dip”, economists reveal, as figures show mortgage lending dropping to a tenth of the level seen during the previous month.

    http://www.telegraph.co.uk/finance/personalfinance/8092757/House-prices-drop-in-value-by-more-than-average-salary.html

    House prices drop in value by more than average salary
    House prices are dropping in value by more than a typical annual salary, figures from Nationwide have showed.

    Academetrix are just plain wrong. If they are working with LR data they are behind the curve by at least 2 quarters and the LR data is not a reliable guide as it does not take into account forced sales (which are a high proportion of sales in a low turnover market), cost of recent improvements and the fact that, 6 months ago, mostly higher end properties were changing hands. They should be ashamed of themselves and deeply embarassed by publishing what amounts to EA propganda.

    And the Daily Telegraph is your new oracle..... pleeeeease................ Acadametrics results have their part to play alongside the other indeces. If you haven't worked out by now how they work after 24,000 posts then i'm afraid it's too late for you.... none of the indeces are very reliable with such low volume sales , acadametrics actually have the benefit of potentially being less volatile due to their methodology..... either way NONE of the indices will give you any clue whatsoever of what house prices are doing in your area or whether asking price of any house you are interessted in is anywhere near fair value.

    Whatever your misplaced and illjudged feeling s are about the report i t's actually pretty well balanced pointing as it does to a falling market, with prices ending the year in many regions at a lower point than they started the year.

  11. ...article misses the point ....those in quality areas who buy and sell for cash will move with ease ....where a mortgage is involved there is inflexible pricing , smell of blood by hunters who become predators and play waiting games until the victim caves in ....the nature of recession...... :rolleyes:

    I know what you mean but I don't think there's any evidence at all to suggest that buyers act anything other than individually... you paint a picture of some form of buyer colusion to sit on their hands and wait for a particular vendor to cave in.... in fact I doubt if any individual prospective purchaser even knows the identity of any other individual prosepective purchaser...... of course there will be a common reaction to news reporting and that's likely to produce actiosn which are similar where price is the most important purchase factor ( which it often isn't).

  12. I have been on hpc for 6 years today.

    I began by telling ALL FTB's to NOT buy into the scam......

    I have spent most of the 6 years trying to get people to understand the VITAL importance of understanding that

    LIAR LOANS

    were/are the main fuel invented and used by the corrupt & fraudulent Moneylenders [and all their friends] to stoke the fire of hpi -- and were [and still are] THE weapon of mass destruction which - I predicted correctly - would lead to financial disaster....

    Well - I hope I made some difference -- I hope that people understand more now.......

    I can't believe it has all gone on for so long...... :rolleyes:

    I think you'll possibly have to wait another five years before things start to get reasonable.... don't know if you have been waiting on the sidelines for the last 6 years waiting to buy but if you have I suspect there's unfortunately a long long way to go, and by my reckoning prices won't revert to 2004 ( nominally) or anything like but there we go..... if it's any consolation of course you are correct in your wider assertion that the house price boom floated on a huge increase in finance availibility even if the whole liar loans has got a little contrived along the way.

  13. http://www.bloomberg.com/news/2010-11-11/merkel-cameron-win-investor-plaudits-for-budget-cutting-in-bloomberg-poll.html

    Cuts by Merkel, Cameron Win Investor Plaudits in Bloomberg Poll
    By Catherine "Kat" Dodge - Nov 11, 2010 5:00 AM GMT
    Merkel, 56, is viewed favorably by 68 percent of respondents in the latest Bloomberg Global Poll, top among a dozen world political and economic leaders cited in the survey. Cameron, 44, is second with a 65 percent worldwide favorability rating in the quarterly poll of 1,030 investors and analysts who are Bloomberg subscribers.
    The leader of Britain’s Conservative Party scored even better in Europe
    , where more than three-fourths of those questioned view him favorably. Cameron, whose government raised the sales tax and imposed a levy on banks, last month proposed the U.K.’s biggest budget cuts since World War II, with a goal of eliminating 490,000 jobs and wiping out a record 156 billion-pound budget deficit ($251 billion) by 2015.

    Dave will be the greatest PM in our history if he manages to keep the UK firing on all cylinders without any fallout from the Brown years and our 10TR debt. So far so good as the housing market is still strong (less a bit of froth), jobs are still being created, the balance of trade is improving, stocks are rising and manufacturing is gathering pace---oh and people are still spending. Have we ever been as well off?

    While I absolutely support the approach of erradicating the structural deficit sooner rather than later and applaud Cameron for his bravery.... let's also remember that it's by no means certain that it will succeed or when it will succeed.

    One thing is for certain is that labour for years and years failed to make any choices ( when asked an expenditure question they always said yes), and they failed to make the tough decisions. Instead what they did was spend spend spend in an effort to stay in power. From Blair to Brown and all points in between the Labour party was driven solely by a desire to stay in power and felt the best way of doing that was to bribe the electorate...... it worked, people allowed it to work becasue they were too dumb to see the truth....... I don't know if Cameron will be a success or not but one things for sure he hasn't shirked the tough decisions to satisfy a thrist for personal power like Blair and Brown and their cronies did year after year after year.

  14. V for vagina.

    What a *****

    Surely no one can be surprised that interest rates aren't going to rise...... in this economic environment it was never ever going to happen with any degree of scale.... I shouldn't think we'll see BOE rates over say 3% for years to come maybe beyond 2015....... that's one of the reasons I have long felt any housing price correction is going to be a very drawn out affair with most of the work being done by inflation and very small nominal falls....... I just can't see a wham bang crash happening with low rates.... although it would be better for all of us if we had a massive and quick correction and then could get onto an even footing again more quickly... as it is we are going to see years and years of ups and downs until we get to the end I reckon.

  15. Why do so many people think whole crisis was caused solely by a few thousand people in the city?

    Fred and Maureen at no 38 that "unlocked the value of their home" each year to visit an all inclusive cruise are also to blame.

    As is anyone who was mad enough to vote the Labour mismangement team in. It was clear as day in 1997 that they'd muck everything up, and even clearer the second time around, those who voted for them the third time must really have had their eyes closed.

  16. As Berkeley will "own and manage the houses" how will charging themselves for the maintenance make them any money?

    tim

    No one does something for nothing and I expect we'll find that if Berkely do this that everything will be judged on the return it delivers.... either the rent will be so huge that they can afford to deliver maintenance as part of the deal, or the two are charged sperarately.... in other words the council takes a fully repairing lease with Berkely as their nominated maintenance supplier.... Berkely would then make a margin on that maintentance. The fact that Berkeley will have a long term contract instantly puts them in the driving seat..... equally those who appluad this move thinking that more houses equals greater supply equals lower prices generally you need to consider that Berkely will probably build to order... so think a modern day equivalent of social housing from the past...... when /if this ever finds it's way into the owner occupied market you'll find it's at the low end of desirability and so all this building work on a % basis would have made a desirable family home an even rarer beast and we'll be left with yet more swathes of undesirable homes we don't want...... quite aside from the fact that building "all for rent" sites is likely to fundementally alter the character of the areas they are landed on especially where the council contracts to take the lot.

  17. http://www.bloomberg.com/news/2010-11-09/barclays-third-quarter-profit-declines-76-as-investment-bank-reports-loss.html

    Barclays Plc, Britain’s third-largest bank, said its capital ratio remained “strong” as
    quarterly profit fell 76 percent
    on lower revenue at the investment banking unit.

    http://www.telegraph.co.uk/finance/newsbysector/epic/barc/8119052/Barclays-bonuses-rise-to-2.2bn-despite-challenging-markets.html

    Barclays bonuses rise to £2.2bn despite 'challenging markets'
    Bonuses at Barclays have reached just over £2.2bn so far this year as the lender has set aside more than £1bn in cash to pay its staff despite what it said were "challenging markets".

    http://www.bloomberg.com/news/2010-11-08/british-banks-warn-of-asian-exodus-as-cable-urges-moderation-over-bonuses.html

    BanksTERS Warn of Asian Exodus as Cable Urges Bonus Moderation

    These Banksters are nothing but cheeky monkeys in my view.

    I may be a lone voice but I have no problem whatsoever with this situation... if I was a Barclays shareholder then I might, but then again it might also be that their share price has held up better than some in the banking world and as far as banks go I might be happy with that.

    While Barclays clearly benefitted from the universal savings guarantee this didn't actually cost me as a tax payer any money specifically I believe and while they also benefitted from the SLS I think the UK has arguable earned money from this ( not as much as it could or should perhaps but thats hardly barclays fault), I am not also aware that Barclays have been playing particularly fast and looses in the gambling stakes so as to put us all at RBS sort of levels of risk....... so actually while Barclays have clearly benefitted from the scenario ithey also have not cost us psecifically much if anything I think.... that being the case why oh why oh why should I care if I am also not a shareholder... if Barclays feel they can justify £2.2Bn in bonuses to their shareholders then actually I am more than happy as our tax take on bonuses is higher than our tax take on company profits... would that all companies made no profits and paid it all out in bonuses, it'd solve a lot of financial problems.

    I am more than happy to have Barclays within the UK operating within whatever rules are in place at the time, earning money and paying bonuses......... it doesn't help in my view that the governement simply does not know what it wants to do..... they appear to want to have a strong banking industry, have banks with 100% capital ratios, no market activity at all, no leverage, the same pre-eminence in world markets, the same levels of employment and the same tax take.... guess what it's not going to happen.

    I suspect if the G20 don't agree a common appraoch ( which they won't) and Europe doesn't impose it's own unilaterally ( which would be a hge mistake so I suppose is likely) then all we'll see is common capital ratios being imposed and much huffing and puffing about bonuses but very little will actually be done.

    Politicians have still not been able to seperate retail banking from commercial banking from market betting ( effectively) within their own minds or that of Joe Public....... they say for instance that nostate owned banks employees should get bonuses but find that very difficult to make happen when at Llyds for isntance most of the bonus pool is made up of 10% salary for admin staff and cashiers whereas at a larger full service bank you might find most of the bonus being made up of rewards to risk takers or deal doers......... is it wrong that someone who sells a £1bn loan to a company buying another company gets rewarded for it, is it wrong that someone who earns a fat fee for simply advising on a deal gets rewarded for it, is it wrong that someone who manages a pension fund better than their peer group gets rewarded for it ????? none of these things fall into the famous "casino" operations and yet bankers will still get bashed for getting bonuses for their performance in these sectors.

    I expect the situation to continue until someone decodes what sort of banking industry they want in the UK.

  18. I think you are ignoring the margins made by housebuilders in normal times. These are iirc around 30%. This means the price the builder has paid for these units, both land and construction, are significantly below market retail value. A 5% yield on a retail price amounts to a 7% yield on a builders price. And because they are a large concern they can manage the units at a much lower cost.

    Besides, no matter which way you view it, it's all new supply, and there should not be a single HPCer who does not welcome that.

    Add that to the undoubted truth that others will follow, and this is quite a story.

    Errr, no I'm ignoring margins made by builders in normal times.... what you have to think about is what their cost of funds are and what their targetted internal rate of return is and then consider what the cost of upkeep etc is....... you state somewhat simplistically that housebuilding of this nature should be appluaded... not striktly true... I for one wouldn't a builder like this stiffing my local council into an unflexible contract that guarantees future revenues for them.... what happens when the market drops... answer ... you can bet the council will continue to paying or rather overpaying the builder... secondly I wonder why you think its OK for someone to applaud building these homes and renting them out an yet at the same time are more than happy perhaps to stick the boot into the Wilsons.... both are after all looking to make money through renting houses out, they are both investors of the same ilk with the same motivations... the only difference being that the Wilsons got a builder to build their homes for them....... while I have never been against buy to let per se, it seems a bit rich to suggest we should all applaud build to let where the taxpayer is at huge risk through a contract vs buy to let where the risk is spread round many operators and the monthly rental payments can be self-adjusting to market... I know which model I would prefer to buy in services from if I was looking to save money for my local council.

  19. erm, think you'll find that that is what average does - it averages out all of the anomolies, and gives you something to compare like for like.

    Do you not think the average house price:average salary tells us anything at all??? :unsure:

    yes of course you are quite correct about the use of averages, the point I was making is however that they are seldom relevant to individual circumstances ( prices are supposed to have dropped by 10% but they haven't round here etc) and to be frank in many areas they are of scant use.... One could also argue that the volumes have been so low for the last two to three years that much of the house data is pretty useless to start with.

    You ask what relevance tracking average salaries vs average house prices is.... and for my money the answer is not much as long the current affordability measures remain in place... if those changed to what they were twenty five years ago then of course they would have some relevance.... as it is though I don't think there's any merit whatsoever in judging the value of the current house price levels against single income measures...... we have seen what happens when cash is thrown at the housing market ( it booms) and a key plank of that boom has been the way maximum loan size calculations have evolved.... unless these are paired back then I really don't think single incomes will tell you anything about average house prices moving forwards.... don't get me wrong, the market is still clearly overvalued , it's just I don't believe based on any sensible measure theres any justification whatsoever for using the single income argument as the mainstay of a prediction that prices will drop by 40%/50% or whatever the average single income converts believe.

  20. I have never much been swayed by those who use a static description of average salary and not a household income measure, mind you neither have I been swayed by those who hang their whole argument on such things. Apart from anything I am sure with a bit of effort and digging around you could find pockets of the country where avaerage earnings and house prices do not seem obscenely seperated... you never know you might even find some where housing looks to be undervalued based on even the crude single income measure.

    Whether the guy in article using a single income figure is right or wrong I really care not............. but I do find it fascinating that everyone appears to question his/ the telegraphs/ nationwide's idea of average salaries and appear to have better ideas themselves, but none of them seem to want to be equally diligent with the house price data, or the whole basis of what measure of average earnings it's correct to use... for many the correct measures seem to be simply those that they feel back up their arguments to the greatest degree... no change there then.

  21. Pidgley takes Berkeley into rented housing

    Veteran house builder Tony Pidgley is diversifying into building and owning affordable rented homes.

    The chairman of Berkeley Group said the house builder was setting up a rented housing fund to build 380 homes next year.

    This is Berkeley Group’s second foray into a homes for rent deal and comes after Chancellor George Osborne unveiled plans to offer grants for rental homes pegged at 80% of the market rate.

    Pidgley said the move would help finish sites as buyer demand slowed and take advantage of the new Government funding initiative.

    Berkeley’s first rental scheme was built under the Housing and Communities Agency’s private rental initiative, which sees the agency retain a 20% stake in the homes.

    This latest deal is being set up with a council and will see Berkeley own and manage the homes.

    Pidgley predicted that more developers would follow as long as mortgages remained hard to secure and rents remained high because of housing shortages.

    He said: “The industry has got to change its approach. The days of a house builder buying it, building it, selling it and walking away are, I think, gone.

    “If the sites don’t get developed there will be no homes. So what we’re saying to local authorities is that we’ll lock them in and we’ll rent them at a discount. It’s just a private sector company doing what the RSLs do.”

    /source: http://www.constructionenquirer.com/2010/1...rented-housing/

    One thing you can be absolutely sure of is that somehwere somehow they will be making huge profits from this ( otherwise they wouldn't be doing it)..... if they use borrowed money to build then as a minimum the houses will need to return 6% , but in fact they are likely to have to return something more like 15% once you consider cost of maintenance, insurance etc.... to me that means the sites are only likely to be in the southeast where rentals are higher. Also the council will need to relax certain planning regulations and provisions ( eg tcontributions ot infrastructure and schools etc). Pidgely won't see his return on capital employed reduce so will get the return from the taxpayer.

  22. Have to fear for the lenders at the fringe as lenders' margins shrink in a competitive frenzy. How far do they have to go before demand gets kick started? give them away at below cost?

    I suppose with low rates though the impairments are distorted.

    It was always likely that as volumes fell margins would be cut... people often forget that the income ( and bad debts) generated from lending books is one thing but in many cases without the fees that new lending or re-financing generates lenders would go out of business....... where volumes get low lenders are happy to reduce their marigns on borrowing in the hope of generating more business and more fee revenues.

    I have always thought that those who look at current margin levels and believe that they will not reduce are not thinking straight, lenders will always try and generate more business through reduced lending margins where volumes are small as otherwise they will effectively signaling their exit from the market.

  23. Pretty sure I heard yesterday that Worricker is discussing 95% mortgages coming back on his slot today

    While of course you could from a personal perspective decide to call whatever mortgage you liked "sub-prime" , traditionally that description has applied to the credit quality of the person applying rather than the specfic loan to value. In fact even in their pomp real sub-prime lending rarely got over the 85% mark in terms of LTV.

    The return of 95% LTV lending ( if it's true) is of course worthy of discussion as would the return of sub-prime lending but the two are not necessarilly related.

  24. http://uk.finance.yahoo.com/news/lloyds-sheds-420-personal-finance-jobs-reuters_molt-83e32cb4ead9.html?x=0

    13:49, Tuesday 9 November 2010
    LONDON (Reuters) - Bailed out lender Lloyds Banking Group (LSE: LLOY.L - news) said it would shed a further 420 jobs, taking the total number of job cuts since it bought rival HBOS two years ago to 22,500.

    NO doubt to help raise cash for the Crimbo round of super-bonuses.

    The latest round of redundancies I think relates to their BLack Horse Personal Finance area where they used to write personal loans. It always struck me as a bizarre operation ... what they used to have is 60 secondary retail "shops" where they would get people in through local direct mail and typically write loans of around £1,000. What was truly bizarre is that they used to write these loans on a personal basis, with each manager responsible for his/her own book and making sure payments were up to date etc....... it really wasn't the most efficient way to operate a lending book, but the personal and local touch ensured it made a bag load of cash.... which by the by it could hardly fail to do as some of the APR's were many 100's of %... alongside the sixty store closures there will be mass redundancies in Cardiff as well, which I suspect has already had quite a few Halifax redundancies to cope with.

    I think they are still running the Black horse finance vehicle lending operation you see in many garages and it's just the dodgy loans they have stopped taking new business into...... I imagine they realised that the economy at the end of the market they fish in was not going to turn around soon and as probably the only lender in that secotr they recongnised that now was the time to pull out and leave it to the loan sharks.

  25. The costs incurred would invariably be far higher than currently. The question isnt would you be willing to pay equal/slightly more than currently, but a far higher cost than currently.

    I don't see how you can maintain that the costs would be "invariably" higher than currently... I think you are leaping to that conclusion without considering the ramifications properly.

    You then ask if I would be wiling to pay if the cost is slightly more than currently... yes is the answer

    I don't understand the final point... but if you meant if the cost is far higher then yes again.

    We cannot keep paying people for doing nothing

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