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House Price Crash Forum


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About SomethingHasToGive

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  1. The person who sells it, who usually puts it in a bank... or buys another house with a similar result.
  2. From the segment on the radio this morning the bank will get the money first if the loan goes bad. I think that from the mortgagee's point of view this is a 95% loan, so s/he is liable for any losses based on market changes. There are no downsides I can see for Lloyds. It is a pretty clever ruse by Lloyds as it allows them to increase the number of loans they can sell without increasing their capital reserves, I bet the bright spark who thought of this one will get a big bonus. I believe councils have significant amounts of money in their account at certain times, as they get income every month but spend it in a more lumpy way. Many councils got burned by the Icesave crisis as they had multiple millions in Icesave accounts, in order to gain maximum value for money for the taxpayer ( the excess money is earning interest ). I imagine that it is still the policy of councils to put excess money away in safe high interest investment. Also it will act to keep the bubble inflated to some degree, which is exactly what the banks want ( and I expect some councillors too ).
  3. How is PR within their grasp? The vote in May is for Alternative Voting ( AV ) . AV is not PR, you still have a single representative for each constituency, just like FPTP. AV was part of the Labour party manifesto in the last election. The LibDem manifesto support STV ( single transferable vote ) which is a form of PR. In order to get PR the LibDems would have to win an election or enter a coalition with a party that would accept PR. The Labour party might do this, but probably won't.
  4. The only money that exists without debt is the physical money*. It comes from the Royal Mint which keeps a certain amount in circulation at all times. Other money is created by banks when they loan someone money. Banks have positive accounts ( savings and current accounts ) and negative accounts ( loans and mortgages ). The amount of money they hold in positive accounts is a tiny fraction of the amount they have lent our in their negative accounts, it is about 5-10% at the moment, but was more like 1-3% in the boom ( this is the fractional reserve ). The higher the amount, the more stable and safe the bank is against bank runs. But ( here's the magic bit ), if a bank lends me £10k to buy a car, where does it go, into my account. I'll then spend it so it goes into someone elses account ( like a car dealers ). Let's say that the car dealer banks at my bank. Assuming that my bank has a fractional reserve limit of 10% that means my bank can now lend out £90000 more whilst keeping the same fractional reserve limit. Now in reality there are multiple people because the money I spend gets fragmented into many bank accounts ( people who work at the car dealer, people who built the car, advertisers, haulage companies ) over the 4 main banks. So in most cases with the large banks they can keep lending ad infinitum. To me it just seems insane. Please correct me if I have this wrong. * I was under the impression that this was coins and notes, but given what it says on notes it may only be the coins.
  5. I have a mental picture of your daily commute including swimming across a river I cut down massively on food recently with a small ramp up in exercise. Mainly by cutting fat down to a minimum and not eating high density carbs like pasta and rice, instead eating beans and veg. Pasta is way too easy to eat lots of calories with. Beans have the advantage of really filling you up. Over about 2 months I lost a stone.
  6. +5 But inflation is only due to one off factors... I fear deflation is around the corner
  7. Hydrogen is only cheaper because it isn't taxed as heavily and no one uses it in their cars. From an engineering point of view, Hydrogen is worse than petrol. It is harder to store than petrol as it is a gas versus a liquid, so it has to be stored under pressure. That means a larger fuel tank, made of stronger materials. It also has a lower energy density, so it provides less energy per kilogram. So you have a larger heavier fuel for the same range. This also has implications for transporting it from production facilities to fuel stations for our cars. From a production point of view, it requires energy to make. There is no Hydrogen ready for us to burn anywhere, whereas there is oil in the ground. So we have to get it from water. Unfortunately that means that any energy used in a car needs to be used to make it. This energy will have to come from power stations. So the total amount of energy we use will go up. This means more power stations and more emissions unless we move to non carbon power generation on a massive scale. From an environmental point of view, it is much cleaner as when it burns it makes steam rather than the steam and Carbon Dioxide from petrol. However you need to solve the problem of how the energy is being generated. The advantage it has is that I believe a hydrogen fueled car would be easier to dispose of than an electric car ( because of the batteries ). But you'd need a massive investment in green energy for it to work as a replacement to petrol. Basically it has many of the same problems as electric cars. Currently we are burning yesterdays trees for energy ( from millons of years ago ). In order to achieve the environmental goals of zero net carbon we'd have to be sustainable and get most of our energy from the sun ( via light, wind, biofuel or tidal power ) or nuclear sources.
  8. Either 1) Sainsburys can't do maths and we had 3% inflation over that period. 2) Sainsburys can do maths and we had 18% inflation over that period. 3) Sainsburys used the VAT hike as an excuse to raise prices by a disproportionate amount to fund its directors pay*. 4) The price of the item changed for some other reason. * They assume that the general public can't do maths and uses a 2% increase in VAT to justify a 16% ( 17.5/15) rise in prices. I suspect it is number 3.
  9. Is that from an officially stated policy or just by censorship?
  10. I believe the level of the deficit is such that if you doubled income tax you just about cover it. I don't think that is viable solution. The cuts ( as someone already said ) aren't cuts, they are actually a cut in future increases in spending. I think we are probably screwed whatever we do. I'm expecting at least a decade of crapness for this country. There are probably ways we could arrange that would deal with the problems quicker, but they will be more painful in the short term so politicians won't do them.
  11. Some mortgages have none, a previous mortgage I had was about 3%. However many mortgages have application fees of £300 or more. The 'better' deals cost more, some of the low interest deals cost £1000, which means that under a certain amount of money it no longer is worthwhile applying for them. I don't know about loans though.
  12. I must be missing something, because I just don't understand why you'd do this. Aren't mortgage repayments cheaper than loan repayments? Surely with a mortgage the property is only at risk if he doesn't keep up with repayments.
  13. I know I'm not necessarily the best person to know about this, but from purely anecdotal evidence I've gathered when talking to the few friends I know who rent it doesn't look like rents have risen significantly in the last 10-12 years ( in line with inflation or less ). Either I'm living in an area unaffected by rent rises ( Berkshire ), they are pure ******** or my sample size is much too small.
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