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House Price Crash Forum


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About soldup

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  1. A quick reminder of where the spreadfair index reckons we're going (these figures are the bottom of the spreads currently offered. Based on Halifax quarterly figures). The June quarterly figure closed at 184500-185500 if I remember correctly September 2008 170000 December 2008 158000 March 2009 147000 December 2009 135000 December 2010 130000 December 2011 129000 http://www.spreadfair.com/
  2. Looks like the government have already factored it in. Northern Rock's saver rate drops this week. hmmm bit of crystal ball reading there perhaps.. http://www.northernrock.co.uk/savings/onli...r-online/rates/
  3. BANG! http://www.thisismoney.co.uk/mortgages/buy..._id=56&ct=5
  4. They are part of HBOS. They specialise in self cert, BTL. I was with them a few years back as I'm self employed.
  5. This one I copied on a tape to tape from this forum a long while back. Compatible with ZX Spectrum 128K 10 Buy house 20 Live in house during boom 30 Sell house 40 Put profit in high interest account 50 Rent 60 Savings = savings + interest 70 If house prices are less than 3.5 * wage goto 90 80 Goto 50 90 Buy bigger better house than previous one 100 Exit
  6. This is from one of the main banks, forwarded to their brokers. I think it is the most concise step by step I've read on the subject...and yes, I know most people here know the basic facts anyway! ... The crisis of insecurity and nerves that is afflicting the global banking system continues to worsen. Two of the world's most powerful banks, Citibank and Merrill Lynch, have each lost chief executives along with billions of dollars, losses they failed to anticipate or fully account for. Share prices of British banks, and their European counterparts continue to fall in the absence of the information that will put investors minds at rest. The market for lending between banks, crucial for mortgages and commercial lending to companies, remains paralysed. The Bank of England has around 30 billion of taxpayers money tied up supporting mortgage bank Northern Rock. That bank's new mortgage business has since dwindled to a fifth of its previous level. The impact the crisis is still growing and no-one seems to know when or how it will end. Here is the easy guide: 10 frequently asked questions about the 2007 banking crisis and answers that will put you firmly in the picture. 1. How did this all start? Banks in the US have for years been falling over themselves to lend money in the property boom that has been running from coast to coast. Many of the loans were made to people who really couldn't afford to meet the repayments, but were persuaded that now was the time they could get on the housing ladder. Now many of those people can't make their repayments. House prices are tumbling, homes are being repossessed and around $200 billion of duff loans are coming home to roost. 2. Why lend to those who can't afford it? There was a time when banks got their own deposits from savers, judged who was worth a loan, and lived with the results. If the loan decision was good, repayments were made and with them came profits. If not, the bank made losses on the money it couldn't recover. Not these days. Many banks who made US property loans this time have sold them on. Instead of bankers, they were more like estate agents, earning a sales commission. They could afford to overlook a borrower's weak employment record, the poor state of the home, and many other issues because making that loan pay in a year or two's time was going to be someone else's problem. 3. Okay, that's in America. Why should it matter to us? It matters to us because these bad loans have been spread about the world, like a consignment of bad meat delivered to a global burger chain. Most banks are sitting with the financial equivalent of tonnes of burgers frozen in their vaults labelled "mixed financial product, sourced in many places." Who knows what's actually in them? Almost no-one. You just have to wait to see who falls ill after consuming them. These minced financial packages have been through a process called securitization, by sorting them into grades which could then be traded. Like supermarket burgers or sausages, some of these mortgage-backed securities would be sold as premium, in that the expected return on the mortgages was pretty tasty, some as standard fare, and some as cheap "subprime" in which there was a fair amount of financial gristle and bone, i.e. bad credit histories. 4. Why did this problem drag others in? Essentially because of clever packaging. However poor the financial quality of these products, they were spiced up to look attractive by being turned into collateralised debt obligations (CDOs). These are like an up-market financial Christmas hamper, full of a variety of products offering yummy-sounding returns, but underneath the luxury jam and the Christmas pud, quite a few of those same dodgy burgers and sausages, neatly repackaged and labelled. These CDOs were very attractive to pension funds and hedge funds, who bought them in large quantities, helped by ratings agencies (the financial equivalent of the consumer guide "Which?") that gave some of them a top-quality rating. Agencies like Standard & Poor's and Moody's have since been slated for their role in assessing the quality of these products. 5. What was hedge funds' role in this? Once banks discovered that there was something rotten in the mortgage-backed securities and CDOs they would no longer take these as collateral for other lending. Hedge funds, buccaneering financial groups dedicated to making money in good times or bad, had borrowed very heavily against these assets to fund their trading activities now had to raise money another way. They couldn't sell their CDOs because no-one really knew what they were worth, especially once their quality was questioned. Instead they sold shares, whose values are established by the stock market, an independent market place. That was when the problem first emerged to a level the ordinary investor would notice. 6. I've read about off-balance sheet problems. What are they? Banks are sometimes too clever for their own good. They have for tax and regulatory reasons created so-called structured investment vehicles, whose assets and liabilities do not appear on the owning bank's balance sheet. These are almost like separate companies which issue commercial paper (i.e. bonds) in their own name, secured against the assets they hold. What were those assets? Yes, you've guessed it, they included big slabs of mortgage-backed securities. Many of these SIVs are now in big trouble, starved of funds and unable to offload their assets. The upshot is likely to be that banks have to take them back on board their balance sheets, which will in turn soak up capital which could otherwise be lent. That in short will crimp the future lending which powers the global economy's investment. 7. I thought this had finished weeks ago! So did the banks. Merrill Lynch in October set aside savings to cover losses of $4.5 billion on mortgage-backed securities, and just a few weeks later upped those provisions to $7.9 billion. That was enough to force the resignation of Stan O'Neill, the chief executive. Last week, Meredith Whitney, an analyst at CIBC World Markets predicted that Citigroup, the world's largest bank, had so much trouble stored up that it might have to cut its dividend. "We believe over (the) near term, Citigroup will need to raise over $30 billion in capital through either asset sales, a dividend cut, a capital raise, or combination thereof," she said. Citigroup now admits it may have to take $8 billion-$11 billion of losses, having only posted losses of $3.3 billion when it last reported quarterly results. The embarrassment is compounded by the fact that it took an external analyst armed only with a spreadsheet and a sharp brain to tell it what it should long have known itself. 8. But how did this affect Northern Rock? Northern Rock just happened to be standing at the end of the line when a long, long credit rug was pulled away. Once banks started to get suspicious of each other, they refused to lend in what is called the inter-bank market. Northern Rock had a much larger proportion of its funds sourced through these wholesale funds than most of its rivals, and when the tap was turned off was struggling to repay other short-term funding that fell due. The quality of Northern Rock's own lending was as good as any bank in the UK, but this wasn't really the issue. With only a few branches and a relatively small base of savers, it hadn't the inflow of money to make fresh loans until the Bank of England stepped in. Now, according to intermediaries that re-sell Northern Rock mortgages, business is running at less than a quarter of the level of earlier in the year. That puts further pressure on the embattled lender. 9. Does this affect the real economy? In some ways it already has. Though the US economy is very resilient, consumer spending and confidence there has already slowed because of the sub-prime crisis and falling house values. Though the US Federal Reserve has cut interest rates, which should make many feel better off, the rates on many new home loans are going up not down. This is partly because of the end of low introductory interest rates on many loans, and the general credit tightening for new applicants. What we have now is a generally inflationary world economy where interest rates should be higher, but because of fears for the state of the finance system have been cut artificially low. That is why, even as banks fell, shares in big commodity companies and the Chinese stock market have been ripping away. That can only go on so long. By cutting rates now, the chances of slowing this boom gently have worsened. 10. When will this end? It can't end until banks unpick the various packages of mortgage-backed securities whose value determines the CDOs and other securities on their balance sheets. It is something like a major food recall. You track down where the contaminated produce began, look at where it was distributed, who has got it in their cold stores and warehouse, and see into which other financial sausages it got mixed. Finally, the whole lot has to be packed up, realistically priced and willing buyers found. That, it seems certain, is going to take many months yet.
  7. 5.85% for me in my Coventry Building Society first current account. Rate is guaranteed for a year it is instant access, debit card and no withdrawal penalties. Max savings is 250,000 You do have to fund it with £1000 a month though. Just set up a standing order to pay that to another account then pay it back again in 5 days. nice
  8. http://www.businessweek.com/ap/financialnews/D8MJ34780.htm
  9. FTB 1999 STR 2004 "But even then I knew I'd find a much better place Either with or without you The five years we have had have been such good times I still love you" Human League "Don't you want me" Dec 1981
  10. Well no one else seems to have linked it yet... http://www.rightmove.co.uk/pdf/p/hpi/House...ptember2006.pdf
  11. Interesting that they've suddenly starting quoting 4 month moving averages? I always thought most releases spoke of 3 monthly moving averages (or to you and I - quarterly). Ah that'll be it...do the 3 month moving average of July/June/May (£177466) against June/May/April (£178095) and you'll see we're going negative-albeit by not much. Spin Spin Spin eh Halifax.
  12. ...is here http://www.hbosplc.com/economy/includes/Ho...dexJuly2006.pdf
  13. http://www.hbosplc.com/economy/includes/Ho...dexJune2006.pdf ...here we go
  14. http://www.rightmove.co.uk/pdf/p/hpi/House...ex15May2006.pdf Get chewing over the bull my fellow bears
  15. Found them, the elusive "independent" experts. Suppliers of fiction to Kirstie n Phil. www.propertyforecasts.co.uk As listed on the Channel 4 site.. http://www.channel4.com/4homes/ontv/where_..._suppliers.html Start by searching for the free short-term forecast for your area in the box on the left. You can then opt to buy the full 3-5 year forecast for just £15! Everyone join an orderly queue please
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