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Caveat Mortgagor

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Posts posted by Caveat Mortgagor

  1. In many professions it is in your contract of employment that you do not disclose your basic salary or total comp to anyone without prior permission. And this does apply to spouses and live in girlfriend / boyfriend.

    I am sure legislation has been brought in during the last 12 or 18 months that prevents employers from inserting these clauses.

    Edit to add: Part of equality Act that came into force Oct 2010.


    Rather than prohibit pay secrecy clauses, the Equality Act makes such clauses 'unenforceable' against employees who make or solicit a "relevant pay disclosure".

  2. A recession made in Downing Street – but not caused by cuts

    Thursday 26th April 2012, 2:23am



    IS this a recession made in Downing Street? In part, yes. Obviously, Gordon Brown is the main culprit. It will take years to recover from his mismanagement of fiscal, monetary, tax and regulatory policies, as well as from the global, cheap money bubble. But George Osborne can no longer escape blame either. His desire to cut the budget deficit is absolutely right – but his other policies have failed. There are four main domestic reasons for the UK’s poor performance (and they hold, even if as is likely, the official GDP figures out yesterday turn out to be substantially revised).

    The first problem has been the composition of the austerity package. Much of the tightening has been via tax hikes rather than spending cuts – capital gains, national insurance, stamp duty, value added tax, and now pasties and the rest. That was the wrong choice: lower taxes are good for growth, higher taxes are bad. The trick is to deliver austerity by cutting spending, not by hiking taxes.

    The next issue is that the government’s supply-side agenda has failed miserably. By now, developers should have been set free to build new airports and even cities; the labour market should have been liberalised; job-reducing red tape eliminated; the top rate of tax abolished; mad EU rules abolished, and so on and so forth. Britain needed a revolution; it was granted a few over-hyped reforms. With the exception of some small cuts to corporation tax, and some other changes, there is more red tape and more people face higher marginal tax rates now than when Labour was in power. There has been a massive onslaught on the financial services industry, much of it unrelated to sorting out the crisis. It’s madness. Add to that the ongoing war on wealth, the demonisation of successful people and business executives, and the decision to relentlessly attack – rather than reform to strengthen – the City and one begins to understand why firms are spending their cash abroad, rather than at home.

    Next, inflation. This is a recession made in Threadneedle Street, home of the Bank of England, as much as in Downing Street: excessive inflation has slashed real incomes and real wealth; this, rather than cuts, is what has depressed spending the most. Osborne should have changed the Bank’s remit, and been stricter when inflation overshot. Ultra-low rates and QE have become counter-productive.

    Last but not least, banking rules. It was right to ensure banks held more capital and that credit became priced rationally – but the reforms have spiralled out of control. UK, EU and Basel rules are forcing banks to hold too much cash in reserve against loans they make to small businesses and others, reducing supply and increasing cost. We need a stable banking system – not a dead one.

    What is most depressing is that the double-dip (if that is indeed what it is) will wrongly discredit austerity, even though the state remains incredibly profligate. The budget deficit in 2011-12 was a massive £126bn, down just £10.9bn from the £136.8bn the year before. The national debt is still rocketing: public sector net debt at the end of March 2012 was £1,022.5bn (66.0 per cent of GDP) compared with £905.3bn (60.5 per cent of GDP) at the end of March 2011. Current spending rose in cash terms from £604.8bn to £617bn in 2011-12. The OECD says UK public spending was 49.8 per cent of GDP in 2011. Public sector net borrowing remains at a catastrophic 8.3 per cent of GDP. All of this remains utterly unsustainable – yet the public have wrongly been told that the UK “is tackling its debt”. Osborne has been a disappointing chancellor – but not for the reasons cited by the left.


  3. New house price increase of 7.7pc fuels fear of a bubble

    By Ian Cowie Your Money Last updated: April 18th, 2012

    House prices increased by 7.7pc over the last year among newly built properties, raising fears that Government initiatives to help first-time buyers could be luring many to overpay their way into negative equity.

    Office for National Statistics (ONS) figures show flat or falling prices across the housing market as a whole but include a surprise surge in new house prices. Government intervention to help first-time buyers may have had the unintended effect of inflating debts young homebuyers take on while the real beneficiaries are builders.

    According to the ONS, the average house price across Britain – taking all types of property into account – increased during the year to February by 0.3pc; scarcely a significant statistic. But during the same period, the average price obtained for new dwellings increased by 7.7pc to £221,247.

    The ONS declined to comment on why newly-built homes are fetching so much more than a year ago but confirmed that the number of properties sold had increased by “about 20pc”. This points toward a significant change in the housing market during the last year, when Stamp Duty was suspended on properties purchased for less than £250,000.

    That Stamp Duty holiday for first-time buyers saved them £2,500 and sources including the Council of Mortgage Lenders (CML) report that thousands rushed to buy before this tax was reintroduced on April 5. Last month, the Government launched the NewBuy Guarantee scheme to help homebuyers obtain up to 95pc mortgages on homes priced up to £500,000.

    Needless to say the CML and the building industry have welcomed taxpayer subsidies for house prices that remain an average of 4.4 years’ pre-tax average earnings across Britain as a whole and an eye-stretching 6.4 times gross earnings in London, according to Nationwide Building Society.

    As pointed out in this space last November, when the subsidy was first aired with the more limited scope of affecting only first-time buyers, there are significant dangers in market intervention. Amid a credit crisis caused by excessive debt, much of it secured to overpriced property, the Government is encouraging laxer lending to people with no history of repaying debt so that they can buy overpriced property.

    You really could not make it up. Government intervention in the housing market – ranging from running negative real interest rates to the Stamp Duty holiday and, most recently, the NewBuy Guarantee scheme – have helped to underpin and even increase house prices, as today’s figures from the ONS demonstrate.

    In the short term, ‘generation rent’ or rising numbers of people fed up with renting rather than owning their home may welcome any help to get onto the housing ladder. But Government intervention is unlikely to be of lasting benefit to anyone encouraged to take on excessive debt before interest rates rise from their current historic low and more homebuyers find themselves in negative equity.


  4. Amazing they are refugees when they leave an area after the insane Hb is withdrawn, what downtrodden name were they given when they first took up their insane privilege? There was a thread about Andre Rostant a month or so ago. He only moved to his house in spring last year with the plan of save a bit of cash for 12-18 months to get another place somewhere else.

    How on earth can someone on benefits be in a position to move to one of the most expensive houses in the country whilst they get their finances sorted? And how on earth can anyone defend his position?

  5. I think after crash + 4.5 years, you can't just look at the nominal falls of 20% but also refer to the real size of the crash, -30.6% on an rpi adjusted basis (coutesy of freetrader's charts) and the wage adjusted crash aint that far behind at -26.6%.

    I take your point, but the gap between pay increases and RPi has only opened up in the latter part of the crash. Expect the margin between those two figures to widen!

    Also mortgage debt has not increased during the crash, falling from 1.25 trillion to 1.24 trillion.

    Dont mean to be rude, I'm not sure what you are getting at.

    Not a trolling bull, I was born a bear and will die a bear being of the school of thinking that crashes usually shoot under fair value.

    I consider those that think houses are fair value do have a point. Price/earnings at 4.33 on the Halifax measure are only just over the series mean (1983-2011) and probably spot on the trend mean since there has been a gradually rising trend.

    Putting to one side the lack of credibility that Halifax have, the affordability measure is as meaninglessas anything else they quote. I notice you were active in the Halifax thread earlier in the month, you may recall SeeYouNextTuesdays response



    Table 1.7a 2011 Male Full time employee mean = £36.5K +1.9% yoy, median = £28.4K +1.2% yoy

    Interestingly the mean is very nearly the 70th percentile figure :blink:

    The mean figure is getting further and further away from the 50th percentile. I have to ask 'who do they refer to when they say affordable'?

    To address the historically increasing salary multiple, the average over time will increase right now, because every month we add to the data series with a figure which is higher than the historical average. Its merely a statistical anomoly.

    The only game changer (and its a big one - in fact the biggest argument the bulls have - they just dont seem to mention it a great deal) is that tax credits have distorted any meaningful historic analysis / comparison of houseprices using salary multiples.

    But to buy now on that basis would be to ignore the history of the housing price cycle.

    I think we agree on this, those who look at history will tell of an overshoot.

  6. +1

    As I wrote yesterday on another thread:

    Price (RPI) inflation doesn't eat the debt away. Only wage inflation does that. Price inflation actually means you have less income after living costs to pay your debt, so price inflation makes you worse off in terms of servicing the debt, not better off.

    This seems to be the biggest single misunderstanding that is found on this forum. I'd like to propose that the HPC front page graph should be replaced with one showing wage-adjusted house prices, not RPI-adjusted house prices, to avoid this.Does anyone else agree?

    Freetrader keeps excellent charts (see his thread!) that we could perhaps show instead, if he gave permisssion.

    Agree completely. Its a blind spot that seems to wrong foot a lot of people on here. Sadly a lot of people have taken the rpi adjusted price of housing to claim a crash of an acceptable magnitude. See this a lot on the mse boards too! I often wonder if they are bull trolls!

  7. Big headline - Little story!

    Every year about 300,000 people graduate in the Uk.

    Report says 16K graduates recruited last year.

    So the £29k headline figure is the average of the top 5.6% of graduates. Still it makes a better headline than 94.4% of graduates will be surplus to requirements.

    Edited because I read the 2011 report - 2012 report is more forthcoming with facts!

    Story based on this report

    Further edit - too late Manchester50 has captured my inaccurate ramblings

  8. Such a huge figure that the OP got the numbers muddled up in the thread title. Thats not a dig at the OP, its a reflection of the enormity and absurdity of HB.

    How can we as a country give such vast sums away and believe we are helping claimants (who will never come off benefits and maintain such a lifestyle) or the taxpayer?

  9. Rightmove price comparison report

    This estate was built circa 2004. No 13 is a mid terrace - came onto RM today at £140k. No previous sale price for it on record that I can find. Developers sold the idential houses either side for £180k and £185,500 back then. A couple of the 3 bed terraces on this street sold at around the £200k mark as we approached the height of the silliness.

    So glad I am not licking my wounds after wisely investing £205k in No 8 or £218k in No 9!

  10. so from the link,is that for real that the max HB is £400pcm for a four bedder?

    'New maximum LHA rate based upon property size – £250 for one bedroom, £290 for two bedrooms, £340 for three bedrooms, £400 for four bedrooms. This will apply to all new claimants. There will be up to nine month's transitional protection for most existing claimants to give them more time to find a new home if they cannot afford their existing one because of the benefits changes.

    Alas, that is a weekly figure Bob.

  11. I know people rightly moan about this programme but even after year's of being prepared for how bad it is, I was still shocked!

    Horseriding bloke. Sold his house and got stepdad to show him the ropes to buy at auction.

    Canilly paid 20% above guide on a house they hadn't viewed.

    The horseriding fella is obviously never going to get his hands dirty. Would look more at home in a salon getting a spray tan, so why on earth he's bought a doer upper I'll never know!

    11 months later house is upside down and over budget. But it's now become a labour of love.

    Cue the agents to suggest an initial asking price (incidentally every agent on the programme blinked at the precise moment they uttered the asking price) and it's imaginary profit all round.

    That bit I was expecting. But the presenter finished off the programme with a thought for the day for the watching sheeple. He told them 'I hope you've learned something'! FFS!!

  12. Journo's get the LR data about 2 weeks before it's official release. This gives them time to think about how they want to report it.

    By contrast NW give want to tell them how to report their figures.

    On a day like today I would expect LR to get more coverage from good journalists.

    However I expect the express to pick the report that best supports the story they want to run.

    Edit to add: -0.2%. Can't link report cos on my phone

    Further edit: beeb finally report this at 7.20am. Brush over the monthly fall and intonation draws attention to 1% yoy increase!

  13. Mate of mine from down the pub who does agency work, and is about 20 weeks in, turned up to work on Monday and they said "sorry, we terminated your employment on Friday".

    This is exactly because this law was about to come in. I wonder what it'll mean in the future. I guess lots of "dead wood" will be got rid of after 8 weeks. And a bit of protection if you are 20 weeks in.

    (edit: typo)

    Your mate needs to keep in touch with his former work colleagues and watch his agency closely.

    If they outed him to bring in someone new who has to work 12 weeks before getting rights then he takes both the employer and the agency to a tribunal.

    Anti-avoidance measures exist. Max of £10k for every instance. Could be very expensive for companies and agencies who try to break the rules. I run an agency. My clients are keen to ensure they dont fall foul of this legislation. Especially the bigger companies who have a lot of staff.

    The £30k a year H.R. drone doesn't want to have to phone head office and explain they face a quarter of a million pounds in fines because they tried and failed to save a few hundred quid.

  14. No you are not. However you soon would be if you had been reduced to sleeping in a multi storey car park to keep out of the winter rain. You'd likely find you'd be exposed to other things as well...like lack of employment opportunity, depression, drugs and booze as a relief and the occassional sound kicking for no reason at all from your housed, warm and superior fellow citizens. Well, okay, I'll grant you that with opinions like yours maybe there was a reason.....

    Sorry, not sure what point you are tryig to make. Would you care to join the dots up for me? Are you saying that I am wide of the mark in mentioning homelessness in the same sentence as mental illness, alcohol and dug dependancy and poor medical care? Or perhaps you take the view the beeb alluded to; that pissing money through our eyes in the form of out of control housing benefit would increase the average age at which a homeless person dies?

    There is a cause and effect relationship with homelessness. My experience of homeless people is that they are more likely to have existing problems such as drink drugs and mental illness and fall through the cracks into being homeless because they dont have (or are estranged from) a family (or community) support network. It is much less likely that that homelessness caused the depression or dependancy.

    Of course many millions of people have the same dependancy and mental illness but are luckier with the people around them and the love and help they recieve. They escape life on the streets. The level of housing benefit has no role to play here in providing a solution.

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