Jump to content
House Price Crash Forum
Sign in to follow this  
VeryMeanReversion

Bank Nationalisation

Recommended Posts

Does anybody think that nationalisation of the high street banks will make any difference to house prices?

Will the government force them to introduce long-term fixed rates at affordabe rate.

Why would we want more than one nationalised bank?

Will it make house prices fall faster or slower?

Speculation please.

VMR.

Share this post


Link to post
Share on other sites

I watched the entire press conference yesterday and the feeling I got was that the Govt is trying to save the banking system in this country rather than the house prices. Unfortunately, the banks' balance sheets are deteriorating fast as a result of sub prime loans and other foolish investments. To compound the problems, the wholesale money market has become less liquid or refusing to lend to banks.

Therefore the Govt has no option but to:

1. Provide an alternative source to the wholesale money market

2. Stop the deterioration in value of assets (i-e mortgages) held by the banks

Since the Govt has not got any reserves to speak of, the only thing possible is to print loads of money - the so called quantitative easing. If they print a lot more than the system can cope, it will result in inflation. The result could be higher house prices but it requires willing buyers. I don't think we will have enough willing buyers in 2009.

Share this post


Link to post
Share on other sites
Does anybody think that nationalisation of the high street banks will make any difference to house prices?

Will the government force them to introduce long-term fixed rates at affordabe rate.

And how would they do that?

When banks offer fixed term deals, they don't take on the IR risk themselves. They find someone in the market who is doing it and only offer loans matched to the deal that they can buy.

If the Markets aren't offering 25 year loans at (whatever you consider to be) an affordable rate, the bank can't offer it.

tim

Share this post


Link to post
Share on other sites
And how would they do that?

When banks offer fixed term deals, they don't take on the IR risk themselves. They find someone in the market who is doing it and only offer loans matched to the deal that they can buy.

If the Markets aren't offering 25 year loans at (whatever you consider to be) an affordable rate, the bank can't offer it.

tim

25 year fixed is common in the USA. The current rates are around 4.5%. If they can find the money, we can.

And yes, I believe that the liquidity injection and nationalised banks will have a big impact. It will certainly lessen the HP decline, and speed up the recovery. By how much depends on how effectively the cash gets into the system.

Share this post


Link to post
Share on other sites
Does anybody think that nationalisation of the high street banks will make any difference to house prices?

Will the government force them to introduce long-term fixed rates at affordabe rate.

Why would we want more than one nationalised bank?

Will it make house prices fall faster or slower?

Speculation please.

VMR.

Maybe rationing of credit ?

Now who gets the loans...

Edited by Ash4781

Share this post


Link to post
Share on other sites
Most people in UK still dream of having their own home.

As soon as the banks lend money again it will be back to 2007 levels.It's a simple as that.

To a point, I agree. House prices will stabilise when banks are prepared to lend again. I don't see this being anytime soon though, and it will take years for prices to reach 2007 levels, just as it took ten years for prices to re-gain 1990 levels.

Not what an estate agent wants to hear I know, but there it is.

Share this post


Link to post
Share on other sites
Most people in UK still dream of having their own home.

As soon as the banks lend money again it will be back to 2007 levels.It's a simple as that.

If you could go and get a 200% mortgage today there would be thousands of applications.

Simple as that.

Who will buy the securitised debt at 2007 prices?

Share this post


Link to post
Share on other sites
If you could go and get a 200% mortgage today there would be thousands of applications.

Simple as that.

If my Auntie had a dick, she would be my Uncle.

Simple as that.

Share this post


Link to post
Share on other sites
And how would they do that?

When banks offer fixed term deals, they don't take on the IR risk themselves. They find someone in the market who is doing it and only offer loans matched to the deal that they can buy.

If the Markets aren't offering 25 year loans at (whatever you consider to be) an affordable rate, the bank can't offer it.

tim

Easily fixed the central bank could buy the paper and keep it for 25 years, and offer a fixed rate. Job done.

Share this post


Link to post
Share on other sites
Most people in UK still dream of having their own home.

As soon as the banks lend money again it will be back to 2007 levels.It's a simple as that.

If you could go and get a 200% mortgage today there would be thousands of applications.

Simple as that.

at last Sibley sees the light!

Share this post


Link to post
Share on other sites
Easily fixed the central bank could buy the paper and keep it for 25 years, and offer a fixed rate. Job done.

It wouldn't suprise me if government sponsored 25 year fixed rate mortgages at <5% make an appearance soon. Throw in some guaranteed payment holidays in the event of illness or job loss and that would slow down the crash.

VMR.

Share this post


Link to post
Share on other sites

If you defaulted on your mortgage (leading to repossession) from a nationalised bank would the onus be on the government to rehouse you? Would you be at the head of the queue of other defaulters? There are after all certain sink estates in the UK where local councils have all but given up attempting to collect rents and council tax payments and it is accepted that they are just written off.

Share this post


Link to post
Share on other sites

I think Gordon will do everything possible to try and paper over the cracks long enough to call an election, we no longer have a 'free' banking system but a command economy so the nationalised banks behind closed doors have no choice but to obey.

After the election I think the crash will get worse, regardless of who moves into No. 10 or what the state of the economy appears to be pre-election.

Share this post


Link to post
Share on other sites
I think more people dream of escaping the UK now days.

:( i agree wish i had took that job in canada now but the bloody missus won't go, missed the boat now brown will bring in laws to stop us if to many try now

Edited by puppee

Share this post


Link to post
Share on other sites
:( i agree wish i had took that job in canada now but the bloody missus won't go, missed the boat now brown will bring in laws to stop us if to many try now

You should have gone without her

Share this post


Link to post
Share on other sites
Most people in UK still dream of having their own home.

As soon as the banks lend money again it will be back to 2007 levels.It's a simple as that.

If you could go and get a 200% mortgage today there would be thousands of applications.

Simple as that.

Sibley, I agree for once, yes as soon as the banks start lending again it will be back to 2007 levels, though I don't expect the former to happen until about 2027 and later until 2032.

On the 200% mortagages, indeed, we never run out of numpties.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.