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r thritis

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Everything posted by r thritis

  1. I find that overall BBC still provides by far the highest quality of coverage. Generally their reporting team is world class when you consider the likes of John Simpson, Orla Guerin, Jeremy Bowen. The trouble wth political reporting however is that it is impossible for the reporter to be truly idependent - they have to report what they see from their own viewpoint, and this is inevitably influenced by their own ideals. ITN just reports sensationalist claptrap. It just tends to say what people want to hear and just rides the latest bandwagon in a similar way to the tabloid papers. You cant seriously compare it to the BBC. Sky news sits somewhere in the middle.
  2. "We decided to go into buy-to-let because we thought it was just the right thing to do," says Robert Hole, a retired banker from Chiswick, west London." His full name is actually Alan Robert Sydney Hole. Mr A.R.S. Hole, in line with the rest of the banking industry, has shown excellent judgement over the last few years.
  3. Yes. Every month that goes by, my modest wad of cash pays for a larger percentage of the house that I will buy in a years time.
  4. Politicians looking for a quick popularity boost are quick to jump on the popular bandwaggon that banks must do all they can before repossessing. "Extend the term, so that they can stay in their homes" is the popular mantra. Even the great Vince Cable has succumbed to this empty rhetoric. Shirley Williams was full of it last night on BBC Question Time. It is my guess that the vast majority of those in difficulty are already on interest only deals which are in effect 'infinite length' repayment mortgages, where the principal amount outstanding remains constant. If someone cant make the payments on interest only, there is no plan B. Do they really not understand this or are they just trying to score cheap points?
  5. Thankfully that is true. I used to have a Rover SD1 (2.3). The build quality was terrible. All the plastic switches and dashboard went brittle after a couple of years and everything would just crumble under your fingers. Door handles and wing mirrors just fell off.
  6. Well if your family measures success by the size of a persons house, I truly pitty you. There are far greater things to value in life.
  7. The liar loans are just a symptom as were the BTL loans, the 'affordability-based' (high earnings multiple) loans and high LTV loans. The reason for the existence of these things was the simple delusion that house prices would only ever go up. If you were suffering from this delusion (and remember that 99% of the population suffered this temporary mental illness including the policy makers), then the business model made sense - defaults didn't matter - the loan, however big, could always be reclaimed from the borrower by selling the property.
  8. 'Affordability' is a dangerous word as it was used by the lenders to justify lending ridiculously huge multiples when interest rates were at a historic low. Many of those who were given 'affordable' loans 2 years ago are now finding that its not affordable anymore. Quote from Northern Rock's advertising literature from 2006: "We base our lending criteria on affordability rather than traditional salary multiples etc etc..."
  9. A property DOES have an inherent value. Taking it back to basics, it relates to the labour and materials involved in building a house + the cost of the land on which it sits. Think of a builder building his own house. He could spend (say) 2 years single-handedly building his house, then maybe another 6 months (or whatever) working on someone elses house to earn the money to pay for the land and materials for his own house. So this builder has spent an equivalent of 2.5 times his annual salary to build his house. If he chose to work on other people's houses, or change career and become a farmer (or equivalent trade), he should still expect the house to cost him the same amount of labour. Whatever the true value of this multiple is, defines the true equilibrium point, and lending above this will result in an unstable market.
  10. Remorseful Broker - How did the commissions work? Was there ever an incentive to sell a less suitable product that carried a higher commission? Is it against any code of practice to do this? Great post - please stick around as you possess an insight that is fairly unique on this forum.
  11. You just can't have a situation where no one can afford to buy a house - it just isn't sustainable. The asking price of the average property adjusts to what the average buyer can pay. If you allow them to borrow 10 times salary they will (and did) borrow it, regardless of their ability to pay - and asking prices adjust to this figure. If you cap it at 3 times salary, asking prices will adjust to this level. Its really simple. People sometimes have to sell, and when they do, they wont sell it if there's no one who can pay the amount they are asking for.
  12. Entrench the maximum lending amount as 3*Income (or whatever makes sense), as an FSA membership requirement. It needs to be stronger than a guideline or it would be ignored. The lenders have demonstrated their complete incompetence in the management of lending criteria and risk. As a penalty for being bailed out by the tax payer, they must now relinquish the trust that they have abused. Edit: Alternatively, labotomize anyone who seeks to borrow more than this amount, castrate them and then shoot them.
  13. The graph will level out when this happens, i.e. we will have reached a constant yoy figure. See here for discussion: link
  14. I think the crucial thing is that they must retain the responsibility for their debt. Beyond that, I see no problem in engineering easier terms by extending the payment period etc. Although what to do about someone who is in trouble on an interest-only mortgage (where the term is effectively infinite already).? I think these people are beyond help and repossession is the only answer. There must be no debt amnesties - this will just set up a precident for the future (moral hazard and all that). Unfortunately, it must be recognised that this government will not do what is best for the country - their only goal is short-term popularity.
  15. Landlord stopped by the other day to see if we are interested in buying the house we have been renting for the last few years as they are about to put it on the market. We have had a really good relationship with them over the years - they have never put the rent up and we've been good tenants, I think. I said we'd give it some serious thought (and we will) but I suspect their sale price expectations will be overly optimistic, given the unrealistic asking prices of other properties in the immediate area - many of which have been on the market for over a year. Given this situation, I had a quick search for similar rental properties in the area and I am genuinely amazed at how much there is available out there and the rental prices - I guess its a classic over-supply situation as people unable to sell are looking to rent as an alternative. Many are both for sale and for rent. One local new-build, asking price 285K is up for rent at 900pcm. By my calcs, an i/o mortgage on this would be over 1200pcm even at a rate of 5%. What a great time to be a tenant.
  16. Wonderful contradiction in this thread. Here we are castigating Joe Public for their inability to think - but then we fail to display the intellectual prowess to figure out why someone might be eating their lunch in the night time.
  17. Have to agree that they are showing spectacular incompetence at the moment. This uncertainty over stamp duty is just laughable. The reality is that whatever they do with stamp duty - be it holidays, deferals or whatever, wont make much difference. However the one thing that will kill the floundering market stone dead is to suggest that perhaps, maybe they will change the stamp duty rules in a few months time. Caroline Flint was interviewed on Newsnight last night and did just that, following Darling's mixed messages a couple of days earlier. If they had any competence at all, they would categorically state that there will be no changes in stamp duty for the foreseeable future.
  18. To the BTL landlord bemoaning his mortage resets on his declining portfolio (after years of hearing the 'Inside Track' mantras). Its just as well that you already made the profit when you bought it, not when you come to sell it.
  19. Stating the obvious here, but the BBC annual HPI graph will level out when we reach a constant YOY figure, i.e. when all the rises of last year have finally dropped out of the YOY figures. At that point, the graph will go horizontal-ish. This will presumably happen after about November this year. As most of the 'experts' seem to fail to grasp the most elementary maths: I hereby predict that this will be falsely interpreted by all those with a vested interest, as the market bottomming out. Of course the real bottom will be when the graph rises to zero again.
  20. Yeehar! - I've got a link to my Jan 2006 HPC post in the comments section of this telegraph article - where I first spotted the "together" mortgage.
  21. This is because we have more to be miserable about than anyone else.
  22. One side effect of stamp duty holiday rumours will be to kill the floundering market absolutely stone dead. Any one who was even remotely thinking of buying now will now 'wait and see'. If Darling had any shread of competence, he would have squashed these rumours by categorically stating that stamp duty rules will not change, instead of mumbling about possible changes in the autumn.
  23. So the vendors and Agents anticipated all this. And there was me thinking that it caught them by surprise.
  24. What a truely excellent article. It just says it like it is - nothing emotive, nothing controversial.
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