TheEngineer
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Posts posted by TheEngineer
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..purchasers will look elsewhere, trouble is how many who'd have bought from comet will now just buy online?
Seb James addressing this -
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In Emptage v Financial Services Compensation Scheme, Ms Emptage and her partner had sought advice from a mortgage broker in 2005 as to how they could reduce the balance of their mortgage and the number of years it had left to run. They owned a property with a repayment mortgage balance of £40,000 and 10 years left to run.
On the advice of the broker, Ms Emptgage remortgaged her property for £110,000 on an interest only basis and invested the £70,000 surplus in a property investment in Spain. It was planned that the Spanish investment would produce a return that would pay off the entirety of the increased mortgage liability.
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If the judgment is not appealed then this has a significant impact upon the levels of future compensation payments (and of course, the levies that firms must pay to fund such compensation).
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I am surprised no-one has replied to this yet. I've had more than a few glasses of vino so apologies in advance for the rant.
What is needed in this country is a new political uprising. The celebrity loving populous (especially those below 35) should be outraged. ******ing incensed. The most expensive thing any of us will buy all our lives is three times more expensive than it was for anyone 15 years ago. Thats if you can still afford a house. All because banks decided to to use disregard decades of sensible lending practices for a quick buck.
The UK financial sector (city of london) needs to be savagely beaten back to a normal size. I mean beaten back to a bleeding pulp. Bonuses are you joking? The sector has grown massively out of proportion to the rest of the economy. How much tax do these behemoths actually pay ffs?
Lending should be stringently regulated or the market should be allowed to mean revert in a normal fashion. How is it fair to have a credit boom massively inflating asset prices (not wages) and then the state massively intervening to prevent gravity from reasserting itself. By doing so pricing out and destroying the natural dynamic of progression for a generation. For what? To protect 50 year old property speculators and the banks from going bust? If you bought at the wrong time bad luck. F*ck you - thats capitalism. Buying a house is a leveraged bet - especially you interest only fools. Where were the 0% interest rates and unlimited government support in the 90's?
Separate investment banking from retail with a huge iron curtain. Megabanks banks politically intertwined that go bust are now TOO BIG TO FAIL and must be supported with tax payers money. WTF?
And don't get me started on those massively irritating halifax adverts.
GB
Excellent summary - Are you Nick Abbot?
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The only answer is a land value tax funding a citizens wage but that would stop the transfer of all wealth to the rentiers and would return people to a decent fair life,so wont happen.
Above, from your very good posting, but am curious. I can see land is a relatively easily detected indication of wealth (in the UK at least) but why not base income tax, as in
any incoming cash streams, upon ALL amassed wealth. So ... If you have plenty already AND you're adding to it you pay most income tax.
I'm uneasy of any taxation method that presents a cost out of an uncertain income - Or is LVT proposed to alter income tax level only?
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Heard on the radio just now that IDS is looking to cut 10 billion of the welfare budget.
Isn't rent control the obvious way to go? The topic seems to be casually dismissed and never discussed on the MSM despite its stable implementation around the EU
He'd best hurry as if folk start to retire (if ever) still in rented pads he's going to get a nasty surprise.
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It should be mandatory for sellers to stipulate the area of the property in sqM. In Germany it's done like this, I think it excludes the kitchen and bathroom too.
Or at least specify 'Parker-Morris compliant' in the listing - I suspect few new-builds would pass.
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The property market has blown up before to 9 times household incomes in 1949, in particular, and to a lesser extent in 74 and 89. These events did not hobble the economy. The situation is under control, -33% real deflation already from August 2007.
-33% for houses; all very well but what of real incomes over the period?
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I watched a BBC Spotlight (Northern Ireland) last year where an EA said that their only sales where to cash buyers - I can understand - The banks hardly need to be directed toward prudent lending since their previous risk-reduction mechanism, predictably, blew-up in their faces. As Michael Lewis wrote in his recent book, The Big Short, however did banks delude themselves that anything else could happen?
So with responsible lending reinstated, a future generation deftly burdened with student loans, gov support to help banks' forbearance and through a period of deflating collateral, it is just a matter of time before the dam breaks. The forces behind it are, inter alia, margin calls? bankruptcy, divorce, illness, job loss, death.
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Blast! Where's the EDIT link gone.
As far as Shapp's Granny being forced out. Well using the my suggestion above she'd be safe since her low in come would be under the tax theshold, despite her mansion wealth. However, if she couln't afford to RUN the place on her pension she really would not any business remaining in such a house.
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As far as "mansion tax" goes, the Tories biggest mistake is not reforming the tax system. Oh yeah, they've tried a little bit of fiddling at the edges with tax credits and such, but by not making changes to reduce taxes on work and increase taxes on unearned income, they are doomed to fail at the next election.
I think that the Mansion tax as proposed was just too easy to deflect. If the Libs had argued that house value, as just one indicator of wealth amongst other assets, should affect the *income tax* people pay then it would have been easier. After all: If you've already got a sizeable net wroth then it's fair that you pay higher income tax than the person on the same income but who has fewer assets.
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Economics is arithmetic for fraudsters.
Brilliant! That's going into my book of quotes.
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Aside of GDP has an alternative measure ever been seriously considered?
I often wonder, maybe someone could set me straight, whether GDP takes into account the *cost* to society of its constituents?
Would super profitable CasinoGablingHouse plc or LoanShark plc contribute, or suck, from GDP ?
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Nothing revelatory, just some bearish writing from a normally bullish site.
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Lots of MSM talk of country-wide price falls. I'm not yet seeing any departure from 2007 prices in Bristol.
Anyone?
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That's a 95% drop. That's mad!
And a world away from VI spin I have read that lending is 20% down from 2008 which struck me as very odd since the lenders criteria changed so dramatically.
So pretty much pm;y greater-fool cash buyers left in the market?
Or would you read it differently?
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Also this thread: http://www.housepricecrash.co.uk/forum/index.php?showtopic=176420
Thanks Mr Chairman. Good content in that thread.
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You may be right about this, in which case it's going to be ugly all the way for a long time.
I think the wave of IO mortgages maturing where the borrower has made little provision for payback; relying on ever-increasing prices and optimistic of the greater fool to buy from them.
To get an idea of the wave developing and identify some likely dates would be a chart of the number of IO mortgages taken out over the past 15 years.
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Can anyone expand on what this is about? Bank buck passing?
Connells Survey & Valuation, one of the largest panel management and survey organisations in the country put aside a contingency for claims concerning property valuations which lenders now feel were too high.
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... Rent controls were an utter disaster - I can remember what rental properties were like in the 1970s and 1980s: the quality and amount of private property for rent was far, far worse than the average rental property now.
This was true yet rent control as applied in Germany does not appear to have the effect. of creating poor standards. Perhaps, alongside any rent control model must be a compulsory license and policing of standards?
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Corby cites the German model which seems to work successfully despite it's Town Hall controlled rents, standards of upkeep, secure tenancies and the like. Given it's German effectiveness it seem inarguable that it couldn't work in the UK but it does put a longer-term investment emphasis on landlords. I understand that in Germany these are often organisations and banks.
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Jeremy Corbyn MP plans to introduce a Private Member’s Bill to regulate the private rented sector, which he called an ‘utter disaster’.
Tenure and rent control addressed:
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Do the banks have to submit the truth or ate they signed up to some form of disclaimer that suggests their Libor submission is an estimate and is not the banks view etc etc
Zerohedge has been referring to Liebor for an age. It's becoming clear now but must be assumed as normal behavior in the biz?
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Does it really make a difference if you have an income to your person that comes from a windfall, an inheritance, through working, or from renting something out? At the end of the day, all the taxman *should* be looking at is how much money has come to you - through whatever source.
I prefer the idea that the tax payable from income should be based upon the total value of accrued assets. vis.
- Your archetypal 'hard working family' would pay low tax as they are starting out
- Mr Murdoch would pay maybe 90% as a result of existing wealth
- Entrepreneurs without significant assets would pay almost no tax on income
- Little-old-lady would be low income would be below income tax threshold so would be ok despite her big house
- Inheritance would remain untaxed but if sizeable would lead to higher income tax.
Could it work?
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A bit rambling but perhaps useful for its 'insider viewpoint'. This is from the Mortgage Finance Gazette
Even though interest rates are not going to rise until late 2013 at the earliest according to the Bank of England, lenders are already increasing their standard variable rates to reflect the reality of what is happening in the wholesale funding markets.
The question remains when are borrowers going to be hit by higher mortgage repayments, not if. There’s also the challenge of the hundreds of thousands of people with interest-only mortgages and without adequate repayment strategies. It is, and will, remain a major concern for everyone in the industry until a solution that is fair to the borrower and the lender is found.
What’s more, increasing pressure on lenders’ for the risk associated with their lending to be completely transparent could force them to repossess, rather than continue an expensive strategy of forbearance.
In some instances it will be fairer to the homeowner to force an early sale and leave them with less debt, than keep them in a home they cannot sustainably afford. Director general of the Council of mortgage lenders (CML) Paul Smee confirmed this in its latest repossession and arrears forecast: “Anyone worried about their mortgage should be assured that lenders will try to help them get back on track, as long as it’s a realistic prospect.”
And while selling repossessed houses in a flat market is also an issue for lenders and borrowers, there is some cause to be optimistic. During 2011 HML sold 94 per cent of repossessed properties through estate agents, recouping an average of 99 per cent of open market value.
Telegraph Rant Piece Against Rent Control
in House prices and the economy
Posted
We bought our place in Berlin, Germany, for cultural reasons but German friends thought we were crazy for locking up a pile of money in property unnecessarily. That's why they often rent - because they don't have to buy to get adequate security of tenure and price.
From our experience in Berlin rent controls work extremely well and can see no reason why the UK should not do the same here. The bonus is that the lightweight landlords sell-up leaving only those that can face the task of responsible rental in the business. Rents are set by the local town hall and maintenance appears to be policed.