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House Price Crash Forum


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Everything posted by CharlieChuck

  1. The gilt pays 1.875% above inflation on a nominal holding. Ignoring inflation, for the 11 years the gilt has until maturity the 100 will gain 1.875% a year value after each year 1 101.875 2 103.7851563 3 105.6953125 4 107.6054688 5 109.515625 6 111.4257813 7 113.3359375 8 115.2460938 9 117.15625 10 119.0664063 11 120.9765625 so (unless I'm wrong which I probably am) you pay 121.9 now to get somewhere in the region of 120.97 back in 11 years (plus whatever inflation is). yield % = 120.97/(120.97-121.9), then divide by 11, this gives -0.084% The difference maybe because it doesn't run for exactly 11 years?
  2. I was going to say maybe they're anticipating higher inflation, then I noticed you said a negative real yield. Normal gilts are yielding less than predicted inflation, so I guess this shouldn't be such a surprise, but actually seeing it happen is something else.
  3. Something's clearly not right with it. The pictures don't give much away either, there seems to be a lot taken from roughly the same area, but none of the kitchen and bedrooms. Also, the bathroom picture's been cropped.
  4. You're right, I bet that's almost exactly what they thought. A few years there, prices go up then get enough equity for a nice little semi. This has been repeated in cities all over the country. The developments are usually next to old canals or rivers and they're always called waterfront and have expensive coffee houses and pubs nearby. The real scandal is, they're still offering the deals and people are still accepting them only now the money comes from the taxpayer.
  5. Fantastic graph, just shows what securitisation did. It would be interesting to go back further to pre-securitisation days to see what the spread was then. I think a fraction of any base rase wil be passed on. The banks will squeeze as much as they think they can get away. Obivously there comes a point where they'd damage themselves by keeping a 5% spread, but I wouldn't be surprised if base rate 2% = mortgage rate 6.5%, base rate 4% mortgage rate 7.5% etc
  6. My search is quite specific too. Three or more beds, semi or detached under 160k in a certain area (which are mostly ex-mining villages). However if I widen the search to everything, the cheaper end seems to be dropping more ( I spotted a two bed terrace for 50k the other week)
  7. I think I've found what it is. Note 7, 27 and 28 of the report. They've repurchased bonds that B&B previously issued. These bonds were now trading as near junk status, so they bought back their own sold on debt at a discount to what they originally sold it for. Hence the "paper" profit. Edit to add: there's only 339mn left of these bonds, so this level of additional bonus profit won't be achievable again.
  8. I'm a bit further up than Birmingham, Derbyshire, but I'm seeing the same. The amount of houses up for sale are increasing and the ones on for any length of time are gradually coming down. People just aren't buying.
  9. According to their report http://corporate.bbg.co.uk/~/media/Files/B/Bradford-And-Bingley-Corporate/pdf/results-and-publications/year-2010/financial-results/2010-annual-report.pdf 786mn of the 1bn profit comes from "Gain on repurchase of subordinated liabilities" whatever that is edit: spelling
  10. Thanks, that's cleared that up. So it is pure additional lending. This was my thought too. The recovery is projected on increasing house prices with some of the equity then used to fund purchases. MEW and low deposit mortgages must be making a comeback for this to happen, but it can only work if house prices increase. Over the five year course, GDP is expected to grow in real terms from 1.47tr to 1.95 tr per year. ................Total GDP................diff compared to 2010/11 2010-11 1,473,000 2011-12 1,544,000...................71,000 2012-13 1,625,000.................152,000 2013-14 1,717,000.................244,000 2014-15 1,814,000.................341,000 2015-16 1,915,000.................442,000 The total rise in GDP is 1.25 trillion. Household debt is expected to rise from 1.5tr to 2.1tr total of 0.6tr. So if £1 of borrowing equals an increase in GDP of £1 (Does it?) then half the next five years increase in GDP comes from borrowing, and most of that against houses. I can't work out if it's time to buy housebuilder stocks or tin foil hats.
  11. Who's going to lend the money to fund this borrowing. We've already got poor credit ratings and increasing default rates? What sort of idiot would lend more to someone less able to repay, especially after what's recetly happened? Just a thought but is the household debt figure the netting of debt-savings? If so the same thing could be achieved by some people spending their savings and the borrowing growing a little.
  12. The little amount we do manufacture will become uncompetitive overnight. You'd need import restrictions or levies to combat this. That would lead to trade wars and before you know it we'll be a lot more poorer than we're going to be anyway. Another and maybe better method to make work pay is to reduce benefits to what was intended, i.e., those that actually need it rather than those who want it.
  13. I wasn't arguing against the principle of the state pension (a not for profit pension run by the state would be ideal), my point is the way it has always been a generation in arrears. Of course it would have been impossible and unfair to have phased it in, but to allow it to remain in arrears indefinately was asking for trouble, and has added to the strain on national finances. Everything else seems to have escalated from there to the point of being ridiculous, benefits seen as a right rather than a backstop and paid at a level that makes you wonder whether it's worth working or not, free health treatment for life to an increasing and longer living population, these have all made us too state reliant and too reliant on the next generation paying more than we did. Add to that the national hobby of using house prices to measure wealth (which I do blame Thatch for) means this was always going to happen. North sea oil just delayed it twenty years.
  14. I think you have to go back further to get to the real root of our problems. Beveridge. The creator of our ponzi state pension scheme. Setting up a scheme whereby todays workers pay yesterdays workers was always going to blow up. Succesive governments since '48 are to blame for ignoring the problem and not setting aside some of the NI payments each year. Over 40 or 50 years we could have created a soverign wealth fund able to pay off the state pension liabilities, but we didn't. Short termism all the way. Never thinking ahead further than the next election is what got us in this mess.
  15. Finally found the BBC website's reporting on it. It's tucked away amongst the business news. http://www.bbc.co.uk/news/business-12882548
  16. This seems a strange anomaly. Although there are other reasons as to why they could be contaminated. It would be interesting to know if that's been independantly verified or if it's straight from the Chinese propoganda machine.
  17. I worked at a nuclear research site nearly twenty years ago and we were given little badges that reacted with exposure. Every year they were replaced and if the white dot went black in any year, you'd had you're full dose/allowance (for want of a better phrase). Surely there must be something similar now, maybe even more advanced than that?
  18. I listened to this and thought it needed picking up too. My memory's a bit hazy, but by taking out PFI and fiddling didn't the reported borrowing figure fall when in reality the actual debt rose? I'm sure some things wre excluded from the borrowing figures.
  19. I think you're right, it is a small difference, 4% in their example. I can't see that being enough to attract institutional investors or funds, especially when there is still a large downside risk. Current rental yields, especially on newbuilds don't make this attractive enough either. Most rental properties currently yield less than the FTSE, and recession plus higher costs and more redundancies on the way don't make for good conditions for these yields to improve. I can see a few funds starting up and people will pile into them only for the returns to never outweight the charges and capital loss.
  20. Some housebuilder shares seem to be doing alright on the news. Top 10 winners value change % Barratt Developments 110.20p +3.90 +3.67 Redrow 129.70p +4.10 +3.26 Taylor Wimpey 41.97p +1.05 +2.57 In some ways this might be a good sign. It shows they're concerned prices are about to start falling again, and what affect that would have on GDP and the recovery (and unemployment). Or am I just reading too much into it?
  21. It seems to me that whole policy is designed to stop the housebuilders having a few more really bad years. You're right, these are chainless new builds, it's not going to help anyone else on the proverbial ladder.
  22. In the big scheme of things, 17bn isn't that huge an amount of money. I always thought more was invested in these, the interest bill at current RPI would be about 1bn a year. If they do introduce them I think they'll be more restrictive, both in the amount you can buy and also on the early withdrawls side - it wouldn't surprise me if early withdrawls were banned or no interest paid at all if withdrawn early.
  23. In the physics forum link above, there's another picture, this one seems to be taken at a similar time to the lower one and shows whatever it is better. The building looks in a similar state to the top picture too, it might have just been the angle that makes it look like the wrong order.
  24. I'm not sure if you meant to reply to my comment or not? Agree about owning outright, though it seems to me a huge waste of money/resources/lost interest to effectively give yourself a lifestyle job, and a job that is long hours too. If you borrow to finance then you need regular cashflow to make the payments, which I suppose is why the number of special offers is increasing. Tourism always gets hit hard in a recession, it's the easy thing to drop. I'm guessing it'll be even worse domestically this time as Spain/Portugal are in trouble too, so their prices will drop and if you only get one holiday a year, people will head to the sun. I wonder how the other cheaper end will do this year, camp sites, caravan parks etc?
  25. Someone at work told me that his dad has been virtually living in hotels recently on special offers all over the south coast. He pays about 80 for a week. It includes breakfast, not sure about evening meal though. I suppose the hoteliers are hoping to make a profit from the bar and other extra services.
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