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abharrisson

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Everything posted by abharrisson

  1. I'm just putting a london flat up for rent renewal... its going up 17% but thats only becasue it hasn't gone up for three years. Theres no real commercial logic to keeping it, but I suppose as it returns 30% p/a of the initial cash I put into it post all costs its not bad (used to be my home). If I had been running this as an investor theres no way I could have held on to it as the yield is something like 3% of its "value".... there are loads of places where 7% is more common. Personally I think rental prices will be stable and by that I mean we can probably expect them to rise somewhere alongside inflation. While nobodys buying the demand for rental is bound to increase, although the average pricing tends to move slowly in my view becaseu some landlords don't push the price where they have good tenants etc. I don't expect rental prices to leap forward. Neither however do I expect them to fall when house prices do. You can expect a level in some areas where the mechanics for BTL'ers starts to work again and I am sure many will leap back in again when that happens... it'll probably be when yields hit around... 7% or 8% by area (unless loans get cheaper).... so in london theres miles to go, in parts of Yorkshire yields are at that level already... problem being its typically the FTB type houses that deliver the good yields and when the numbers work it'll be those that get snapped up first... and I really can't see that changing... of course it means that both BTL'ers and FTB's are going to be fishing in the same pond .... unless they have all been wiped out in the new build flat bomb then I can't see Btl'ers making the same mistake twice so it may be even worse for someone who wants a small 2 bed house to start them off. FTB's need to be ready, deposit saved, nice shiny credit record etc when prices do bottom out because those who delay may risk seeing what they wanted disappear into BTL land again ... no real need to panic as I think there will be a year or so of bumping along the bottom when the fall has finished... but still deposits of whatever level take time to save and with petrol on the rise, food on the rise, trains on the rise and rentals possibly on the rise its not exactly easy to save.
  2. You are quite right of course the real correction comes when agents start "re-pricing " their current stock of unsold property, but location by location its a waiting game, one does not want to move before the other and its usually the independant who moves first as he's trying to save his whole life.... the chains will just follow.
  3. Good luck with it, if its a repossession they probably wouldn't accept it I should think. keep us in touch with it, wouldn't surprise me if it goes to an investor for £90-£100k. A way to go yet I feel before you could get things for half an EA asking price.
  4. Slightly off topic, but the article refers to 2% of homes being in foreclosure.... I would have thought it was massively more than this after all the headlines we have seen for the US... and with many of those being in pockets many areas must have experienced very very few foreclosures. I also read somehwere that US prices had dipped by somehting like 15% from peak (it may have been 13%) and that the end was in sight. I wonder if the US has turned the corner and what that might mean for us. Certainly if the forclosure rate is 2% and the national house price drop is 15% while its clearly casued disaster in the markets doesn't seem too tough for the average US homeowner (granted though I know its been a bloodbath in some neighbourhoods). If the US has turned the corner then it may well be time for the "angry renters" to buy , problem being in the current market if prices have only dipped by 15% they may struggle to raise finance... then if the price begins to move forwards again after a couple of years of bottom bouncing they risk being forever "angry renters".
  5. If you think a depression is coming then house prices will be a relatively minor topic of discussion..... evryone would be screwed... whatever job you are in.. whether you rent or own will be somewhat of an irrelevance.....only nutters hope things get out of control to that degree.
  6. Many people will not sell becasue they do not want to sell their home. Those that want to make money out the market and feel they can sell now, rent for three or four years and then buy back in good luck to them... others want a home... and over ten years I doubt they'll lose... good luck to you whichever way you jump. me I'm not selling because having a permanent home is more important to me than renting with all the uncertaintities and limitations that brings.
  7. Correct me if I'm wrong but if the defining evidence is defaults then defaults in the USA are running far ahead of the UK are they not !
  8. Err just a minute ago you stated that you classed sub-prime as any loan which accepts adverse credit.... you are now saying its any loan which reflect irresponsible lending in your view.... bit difficult to discuss an issue if even you can't agree with yourself on a definition.
  9. Err actually this is mostly teflon tony's fault.... after all its him thats been in charge the last ten years... its him thats taxed us all into the ether and employed more civil servants than we know what to do with (and wasted the cash), and its him that appointed and supported GB and welcomed his every word and deed. make no mistake theis is a firmly Tony Blair issue and like the coniving little slimy tosser that he is he has managed with great political foresight to dodge the bullet.... my my my must Gordon Brown be feeling cross ( although granted he shares responsibility) all those years of wanting the job and just when he gets it he finds its a hospital pass and its all his fault.... so much for standing shoulder to shoulder. How many speahes of TB's do I remeber when to justify the economic performance he actually said... the lowest mortgage rates in history (claiming control over them politically which is laughable as we now see) and rising house prices... britains and british people have never been better off... etc etc etc. he actually saw all this a a badge of success. Don't balme Gordon, he's just the lackey... the real culprit is teflon tony.
  10. Of course there were sub-prime loans... my point is that I do not believe there were 100% self-cert sub prime loans... your point was that you did believe there were... The central point was in the US sub-prime loans were granted on a 100% self-cert sub-prime basis and it was that plus the nature of those loans (stepped rates) which contributed largely to the difficulties they faced.
  11. Could it be in the Uk that if there were no debt, you'd find there was also no cash !
  12. Good article although hardly unexpected I suppose... having borrowed and taxed the life out of the nation (to then waste the cash delivering very little) the govt has very very little room to manoevre... this is not an issue they can just play around at the edges with I suspect... they either have to take the hit and issue the new debt or take a recession on the chin. And its clear their view is that the recesssion is the greater of the two evils.... problem being of course that they could issue £200Bn of debt and still not solve the problem and have the country then go into recession... doesn't really bear thinking about. Heads you win tails you lose may just have become heads you lose tails you lose.
  13. I am sure there were (and are probably) all sorts of ways to get 100% lending (eg loan plus overdraft)... but not self-cert (I simply don't believe it to be the case) and certainly not 100% self-cert sub prime which was the basis of the discussion. I suppose we'll just have to agree to disagree.
  14. I don't know whether the ECB will raise rates or not... there certainly can't be the inflationary pressure in the euro zone as there is in the UK or the US or indeed China... as their currency is so strong either against oil or imported food prices or tat from china.... problem for them I had thought was not inflation in the euro zone BUT the strength of their own currency depressing exports.... if they raise the rate... exports will get even tougher. The interessting point for them is that the north and south of the euro zone are in an entirely different place economically and one size is certainly not fitting all.... the longer the dollar is low vs the euro the more likely it is there are going to be some serious political fall out between southern and northern eu countries... I'd be amazed if Italy greece etc left but I suppose its a possibility. I suppose to bring the issue back to HPC... all are facing different property scenarios... some have crashed like Spain, others have slowed considerably like France.... and I suppose others sit somwehere in the middle... I'd hate the challenge of setting Euro rates its the impossible job.
  15. Well we'll have to wait four years for the answer I think as this is getting nowhere... as you say lending standards here in sub-rpime were higher which is the point I was making and for that and all sorts of other reasons I think any sub-prime issues experienced here will not be as bad in the US... you believe differently... thats your right but I believe you are mistaken.
  16. Er... the link you posted is exactly the one A.steve posted ... see my response to him to find out the answer.
  17. Whatever everyones view on houses prices etc there is I think a very interessting thought in the above which is all wrapped up in the word "competition" Life after all can be seen as one big competition... its perhaps nasty... but there we are. So BTL'ers can be seen as competing on their own terms in the field they chose to earn money. Those who stretched the bounds of truth in their mortgage applications can be seen as competing as hard as they could to get the house they wanted. Those who "overleveraged" themselves can be seen in the same light. I think this whole competion idea has some real legs as it gets to the root of the humn condition... those who did not compete as hard are complaining (perhaps justifyingly) that the others dived in the penalty box and the ref didn't spot it. Of course those who competed hardest are perhaps about to be caught out, but it doesn't necessarilly mean that those who dream about owning a property will eventually get one... they may need to learn to win on their own terms to do that. owning property is a bit of a competition in the Uk, as is trying to make money in a difficult world.... i suspect this competition idea which gets to the root of the human condition may have more to do with the central problem of why UK house prices have got so high than any dodgy deal, or stretched truth... those may just be symptoms.
  18. Didn't disagree with much that you said... certainly agree that £50bn is a flea bite and that it will need more like £200Bn to make things better... and of course your very good point on the political motivations of it all.
  19. I wouldn't disagree with you that its deep do do do, the only reason the sub-prime issue matters is thats what the thread was about.... otherwise every thread may as well merge into one happy glad handing session on every peril we face all wrapped into one.
  20. God save me... my argument is not circular.. its straight forward... The point being that the UK will not face the same sub-prime crisis as in the states becasue lending practices within sub-prime have been much stronger in the Uk than in the US.... do you agree or disagree? What I have not said is that Uk lending to sub-prime will not face problems if house prices slide and we enter a recession... of course we will.... ever was it thus even before the last ten years. Your examples of fraud while absolutely valid in a discussion about fraudulent behaviour are not relevant becasue the discussion is not about whether UK lenders face massive losses through mortgage fraud .... it is however about whether the sub-prime secotr lending practices and policies of UK lenders mean that that secotr is going to be in a similar position to the US..... and my point is that it is not.
  21. dabhand may be your handle but it certainly has no reflection on your ability to debate an issue. The issue at hand in the macro is to repeat (and it appears at the top of your screen if in doubt)... britain does not face the same sub-prime crisis as in the US... it doesn't... and it doesn't because lending criteria in the Uk have been a very great deal tighter in the UK than in the US. As I think I have tried to explain. A different question would be are UK households generally overborrowed or more overborrowed than in the US and still a different question would be what are the drivers for the UK house price increase and how if at all do these differ from the US. if you really want to put forward a point of view on those and debate them with fellow HPC'ers them then by all means start a thread to that effect.
  22. I just wonder ( and no one I think has raised this yet) if the following ever took place.... MR BB goes to the market with his bundle of mortgages which he wants to swap for cash so that he can lend some more.... they are taken by the very nice guys at the investment banks... when he returns with some more, the invetment bank guys say to him " you know I bet you are really happy we are helping you in this way".... " he says yes of course"..... the investment guy then says to him... " well you know how you used to operate generating savings and then lending what you had in mortgages, well now theres a chance to COMPLETLY change how you work, you have already seen the benefit of raising extra funds to lend by selling us your mortgage securities.... well why not square the circle and also buy mortgage backed securities from us with your customers deposits".... " oh yes said then man from BB, what a great idea".... The sellers of mortgage backed securities were also the buyers of mortgage backed securities with the main investment abnks in the middle. I just wonder how much pressure was brought to bear to make sure sellers were also buyers.
  23. This whole discussion as if you had not realised was that britain does not face the same subprime crisis as the US... and this particular element of the discussion has centered around the tightness or not of the lending practices of UK lenders.... you have chosen a perfectly valid case of mortgage fraud (if the discussion had been about mortgage fraud... which it isn't) ... so actually its not a start and I think you ought to start again.
  24. A.steve.... plEEEESe... have some sense... this site is NOT a broker site... those who own it are not licensed by the FSA.... all they do is try to attract enquiries and leads which they then try and sell to brokers..... any broker getting a lead for a 100% self-cert mortgage would today throw it in the bin as 100% for proven income went by the wayside when Abbey pulled out a week or so ago.... 100% self-cert and certainly with adverse NEVER existed as I said...why is people believe these things just becasue its written on the internet... and then to try and arrogantly post it as as sort of "case proven" statement is really pretty pathetic. Get real. The guys you found are just internet guys who try and make a buck conning fools like you, I knew it wasn't right within 1 second of looking at it.
  25. I laughed when I got to the end of this... so 99% of mortgages made in the last ten years have been junk status... have they indeed. If you had said that some of them especially those made in the last two or three years on high LTVS or to bad debt customers or within some new build environments would experience a higher than normally acceptable loss ratio... then I'd agree with you... but to say 99% of mortgages made in the last ten years are junk status i'm afraid is simply unsurportable by any fact and will be proven to be wrong.... when you look at mortgages granted over the last ten years (in three or four years time when the bottom of the market has arrived) you'll see that defaults have risen over the previous ten years... but on the basis that the average default rate on a mortgage is something like 1-2% I'd be very surprised if when judged when you say out of the universe of all mortgages granted over the last ten years this figure would have moved very much at all... and default rate of course is not recovery rate... the loss ratio in pound notes I suspect is much less than 1% when the repossession income is taken into account.... to be junk it has to be many many multiples of that. Another guilty of over egging a point.
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