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Bland Unsight

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About Bland Unsight

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    "There's no joy, there's no life"

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  1. Coincidentally, saw this on Twitter this morning: Credit where it’s due: A historical, theoretical and empirical review of credit guidance policies in the 20th century and it includes this figure: Might be worth a read in order to situate MMR and Basel 3 in a broader context.
  2. As per the article: It's actually compelling evidence of the effectiveness of MMR that 3x joint and 4x single are considered high loan to income. Pre-MMR there was no income verification for over half of new mortgages: Source (Same source as above) Pre-crisis, half of employed people were taking out loans where the income wasn't verified. If you think that the mortgage market hasn't changed, try borrowing interest-only at 85% LTV at five times earnings on an income of £35k today. Perfectly possible pre-2008 (this 2003 BBC documentary gives a flavour of how self-certification led to LTIs as measured against the borrowers actual income which make 4x look decidedly cautious).
  3. From the 'report' Also That sentence about "a form of financial stability" is a corker. Basically, it's industry lobbyists arguing that the rock bottom mortgage interest rates that are entirely the result of extraordinary monetary policy needed to rescue the banks from the consequences of their collective insanity pre-2008, having already persisted for a solid decade, are now going to persist for the next 30 years as well and therefore the banks should be freed from having to entertain the idea that interest rates might ever go up again and start lending as if it's going to be permanent emergency forever.
  4. It's another PR push on the 'report' they released last week: Intergenerational mortgages: Building on the Bank of Mum and Dad. Just the weird world of UK mortgage lending. In 2012 lending 100% LTV against a rubbish flat in some outer London borough was too risky, now six years down the line the ratio of that house price will have gone from eye-watering to horrifying and the price is up by 70% but, by some perverse logic, it now won't be risky to lend if you can get Mum and Dad to promise to be good for 5% of the price if things get sketchy.
  5. Bland Unsight

    HPC Memes [Fresh OC]

    Just my tuppence worth, but I think this meme is a banker's dream. It sites the problem in herd thinking by punters (who are re-imagined as moronic NPCs) and completely sets aside the role of the the financial sector in providing a limitless spigot credit money ex nihilo de novo. The herd thinking holds that house prices always rise because they do always rise (for decades on end, and they always rise faster than earnings). House prices behave in this way because of a chronic systemic crisis in our system of money. A meme which suggests that the root cause of the problem is stupid punters is essentially the opposite of what this forum has given me - which is a trail of breadcrumbs into the puzzle and a conversational space to engage with the actual problem. YMMV
  6. Hang on now! Some of these investors have been paying good money to the best of the best in order to devise tax structures of infinite cunning that the Revenue will never defeat...
  7. Bland Unsight

    A Goodbye To All That Buy To Let

    Always worth bearing in mind that most of the buy-to-let investors don't own most of the buy-to-lets. The 1 or 2 investment properties types account of about 80% of the investors, but the remaining 20% of the investors hold the majority of buy-to-let mortgages (54% of all loans are held by people who hold three or more loans). All figures as per the CML's Profile of UK Private Landlords (December 2016)
  8. Tax planning that's not unduly focused on the numbers? (Emphasis added) Well, they've certainly picked the right guest. "We now turn to our next guest who is going to tell us about how buy-to-let is the perfect investment if your life priorities involve leaving your family and friends and fleeing to some armpit of a tax haven and living in a crap flat in order to give yourself a chance of avoiding bankruptcy - dependent of course on the willingness of the HMRC to share your views regarding the effectiveness of your innovative tax planning."
  9. That's not really how the whole standing on the shoulders of giants things really works. One of the things that made GR compelling was that it both explained the precession of the the perihelion of Mercury and gave the same answers as the Newtonian synthesis in situations where the metric could be approximated as flat. Newton was the ultimate badass. The George Washington of physics. <Language advisory> </Language advisory>
  10. Bland Unsight

    A Goodbye To All That Buy To Let

    Another thing that there's some suggestive evidence of is a geographical component to these flows, i.e. leveraged landlords are being driven out of London and the South East by the interaction of low yields and section 24/PRA SS13/16 but rather than just closing off their leveraged bets on property they are reinvesting the money in other geographical markets which presently have higher yields. Hence, for illustration purposes, you could have 16k disposals a month of BTLs from London and the South East. The sale proceeds of 6.5k of those are reinvested in other parts of the country and there are 5.5k new loans for purchase (again mainly being invested outside London) and as a result the net change is 4k/month decrease in the PRS in aggregate but money is flowing out of London at a much greater rate.
  11. Oops.. Link Still, can't go wrong with bricks and mortar.
  12. Bland Unsight

    A Goodbye To All That Buy To Let

    Worth pointing out that the line that there are "4,000 rental homes are being sold off by landlords each month" as per the Which report is slightly careless way of saying what's going on. That's the net change in the PRS but other contributory flows include landlords selling to landlords (no net change), landlords purchasing additional buy-to-lets and owner occupiers becoming landlord by taking out buy-to-let mortgages on homes that were previously their residence. Hence it could be that there are 8,000 disposals and 4,000 additions, giving a net change of 4,000. And of course, this is the entire PRS of which only about half is held on a buy-to-let mortgage.
  13. Bland Unsight

    A Goodbye To All That Buy To Let

    It looks to me like it's rather belated reporting of the data released back in May and referenced here on this thread in this post a couple of pages back: The numbers tally exactly - EHS figures for the PRS in that data were 4,832k and 4,876k for 2016 and 2017. The difference between them (given the four s.f. in the EHS data) is 46k which is exactly the figure some enterprising churnalist has got for the net change in the stock. Of course that means the 4,000/month figure describes how the sector was selling off between 1 March 2016 and 31 March 2017 and the possibility exists that the rate of disposals at the time that the Mr Maunder is writing (August 2018, about 17 months later) could be significantly different.
  14. The level of ignorance often on display on both PovertyLater and PovertyTribes is shocking. The really crazy thing about that quote is this bit; "There will now not be any tax relief but with the tax credit against interest". Back in the day, when they were first arguing against section 24, some of the better informed landlords correctly pointed out that it was spin to call section 24 a restriction of "finance cost relief for individual landlords" as the government have been doing because the process actually had three steps to it Section 24 changes the way in which taxable income is calculated Section 24 then introduces a relief that did not previously exist Between 2017 and 2021, as it tapers in, section 24 restricts the relief created in section 24 Hence the muppet from PovertyTribes is completely wrong - there was no relief relating to mortgage interest until section 24 introduced one and what they are calling a "tax credit against interest" is the bloody relief
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