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All banks in the clear, seemingly very comfortable this time around, BTL not so much...

"Today’s stress tests also found that buy-to-let mortgages would suffer the bulk of the losses if there was a financial crisis.

Loans to owner-occupiers would be much more modest.

In other words, families would keep paying off their mortgages even if the economy went into recession, but some buy-to-let lenders might struggle to meet their obligations."

https://www.theguardian.com/business/live/2017/nov/28/bank-of-england-stress-tests-financial-stability-released-live

Carney's narrative is that the banks will survive a disorderly Brexit, and worst case house prices will fall 33% PROVIDING nothing else accelerates the downturn

 

Edited by Barnsey

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21 minutes ago, Barnsey said:

All banks in the clear, seemingly very comfortable this time around, BTL not so much...

"Today’s stress tests also found that buy-to-let mortgages would suffer the bulk of the losses if there was a financial crisis.

Loans to owner-occupiers would be much more modest.

In other words, families would keep paying off their mortgages even if the economy went into recession, but some buy-to-let lenders might struggle to meet their obligations."

https://www.theguardian.com/business/live/2017/nov/28/bank-of-england-stress-tests-financial-stability-released-live

Carney's narrative is that the banks will survive a disorderly Brexit, and worst case house prices will fall 33% PROVIDING nothing else accelerates the downturn

 

I was sitting thinking last night....I bet all the banks pas the stress test.

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23 minutes ago, Barnsey said:

All banks in the clear, seemingly very comfortable this time around, BTL not so much...

"Today’s stress tests also found that buy-to-let mortgages would suffer the bulk of the losses if there was a financial crisis.

Loans to owner-occupiers would be much more modest.

In other words, families would keep paying off their mortgages even if the economy went into recession, but some buy-to-let lenders might struggle to meet their obligations."

https://www.theguardian.com/business/live/2017/nov/28/bank-of-england-stress-tests-financial-stability-released-live

Carney's narrative is that the banks will survive a disorderly Brexit, and worst case house prices will fall 33% PROVIDING nothing else accelerates the downturn

 

Bank losses of £50bn in a disorderly Brexit? More than compensated for by the £140bn in helicopter money they're being gifted through the Term Funding Scheme.

Carney did mention the TFS in his presentation, right? No? Thought not. <_<

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13 minutes ago, Bruce Banner said:

The mere mention of a 33% house price fall will, no doubt, cause the usual suspects to redouble their efforts on this forum.

Are you saying there are trolls about ?  

 

Shhh, people will start telling you they bought a house in 2010 and it's doubled in price, they've been lurking since 1980 and they're lucky but they want prices to crash too so they can be poor.

 

MV5BMTk4Mzk2Nzc5N15BMl5BanBnXkFtZTcwNTIz

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11 minutes ago, frederico said:

Time to hang the banks out to dry then, those poor little innocents.

Siding with Venger, we all make our choices in life.  Maybe 10/20 years ago before social media and information on the internet you could be excused, but innocent, no, I dont think so.  They're happy to take massive unearned untaxed gains but are innocent if they lose out.

 

Or were you being sarcastic and saying the banks were the poor little innocents ?

 

Edited by TheCountOfNowhere

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Just now, TheCountOfNowhere said:

Does anyone believe this ?

 

If I were being cynical I'd say they just want to boost peoples belief in the banks.  

It's complete ******, like every other utterance the Canadian dummy has ever made.

The real story is below the fold: Relentless and unforgiving hpi, driven forvever upwards by govt subsidy, money printing and ZIRP.

http://www.telegraph.co.uk/property/house-prices/london-house-prices-now-record-145x-average-earnings-barclays/

Quote

House prices in the capital are now 14.5 times the earnings of an average Londoner, according to Hometrack, hitting the highest level on record.

This is up from last year's high of 14 times average income, despite house price growth having slumped in London over the last 12 months. This year's level is 42pc higher than the long-term average over the last 15 years.

The measure gives a good indication of where the most acute affordability problems can be found. While house prices in the capital are around 60pc higher than 2007, this ratio has been boosted by mortgage rates falling over the period, increasing the buying power of households, as well as real wages across the UK declining. The average house price is now £496,000, while earnings are £34,200 a year.

London was followed by Cambridge, where the average property is 14.3 times earnings, Oxford (12.6) and Bournemouth (10.1). In most cities outside the South East, this ratio has stayed largely unchanged in the last 15 years, and in Glasgow, Liverpool and Newcastle it is lower than the long-term average.

It comes as house price growth in the UK's biggest cities rebounded, increasing 6.1pc in the year to October, up from 2.8pc in May, and the highest level since September 2016.

Manchester and Birmingham recorded the highest rates of growth, at 7.9pc and 7.4pc respectively, both overtaking Edinburgh, which last month had the fastest-rising prices.

 

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Accumulating all the knowledge in one place....

 

Banks ok for 1/3 off house prices.

Interest Rates rising

Term Funding ending but been bumped up.

MSM all over the crash

BTLers being thrown to the lions.

Now, I wonder what's coming next :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: 

I'd just personal like to thank all the mug BTLers for helping to bail out the bankers, enjoy your house repo and living in a rental.

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12 minutes ago, zugzwang said:

It's complete ******, like every other utterance the Canadian dummy has ever made.

The real story is below the fold: Relentless and unforgiving hpi, driven forvever upwards by govt subsidy, money printing and ZIRP.

http://www.telegraph.co.uk/property/house-prices/london-house-prices-now-record-145x-average-earnings-barclays/

 

We perhaps might see some falls....some BIG falls.

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14 minutes ago, zugzwang said:

It's complete ******, like every other utterance the Canadian dummy has ever made.

The real story is below the fold: Relentless and unforgiving hpi, driven forvever upwards by govt subsidy, money printing and ZIRP.

http://www.telegraph.co.uk/property/house-prices/london-house-prices-now-record-145x-average-earnings-barclays/

 

And still people dont think prices will collapse.

Total mania

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Quote

The seven biggest lenders passed a stress test that was as tough as if the UK crashed out of the European Union, the Bank said, with sterling slumping, interest rates rising to 4 per cent and a record housing crash.

Wow. Rates at 4%. So severe!

Quote

However the report warned politicians on both sides of the Channel to take several important actions to reduce the risks from Brexit, including agreeing a swift transition period and passing legislation to resolve potential contractual conflicts on trillions of pounds of derivative contracts.

What they are saying here, is be prepared to give banks more money. Bank profits must be maintained even by more taxpayer money.

I'm really not sure what to make of all this. As long as credit is flowing to idiots willing to spend every last penny on a pile of bricks then the bubble remains inflated. Yet I don't trust half of what's being said here. It's the usual forecasts and their unexpected results to follow.

 

Edited by Parkwell

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Too many vested interests to make bank stress tests anything more than a joke.

See Ireland, Italy, German Landesbank, etc.

The test for house price fall is wrong - they need to test for falls to earning mutiples - London prices fall to 3 x median wages.

The only thing to take away from the farcical effort si that the BoE wants more capital from the banks.

Every 2 years, the BoE will ask for more + more capital, as the banks have to hold more capital for loans, pushing up the cost of bank lending.

The stress test of base rates @ 4% is meaningless without have a estimate of how much spread over base rates banks will face and if they will be able to borrow.

Like economics, it all sounds clever and thought out but its a pile of BS speculation.

 

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In order to make the title more accurate, I would change it to...

UK banks pass stress test specifically designed to ensure that almost every UK bank always passes

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1 hour ago, Tempus said:

In order to make the title more accurate, I would change it to...

UK banks pass stress test specifically designed to ensure that almost every UK bank always passes

They run up behind them and shout "Boo!" Congratulations you passed the stress test.

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2 hours ago, TheCountOfNowhere said:

Does anyone believe this ?

 

If I were being cynical I'd say they just want to boost peoples belief in the banks.  

That's how it felt to me.

Quick, there is a shed load of bad economic news on the horizon; run a 'Bank Test' and throw in a Royal Wedding for good measure and no one will notice!?!

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"House prices in the capital are now 14.5 times the earnings of an average Londoner...."

Pretty, pretty, please, just give me a pin......

balloons.jpg.28a7c736084a44295341a72f4593c455.jpg

Available to buy, just in time for Christmas.

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4 hours ago, zugzwang said:

It's complete ******, like every other utterance the Canadian dummy has ever made.

The real story is below the fold: Relentless and unforgiving hpi, driven forvever upwards by govt subsidy, money printing and ZIRP.

http://www.telegraph.co.uk/property/house-prices/london-house-prices-now-record-145x-average-earnings-barclays/

 

Quote

This is up from last year's high of 14 times average income, despite house price growth having slumped in London over the last 12 months. This year's level is 42pc higher than the long-term average over the last 15 years.

Spoiler: the theme for the next 5 years is this: Lower, for longer

House prices in London will fall to match incomes. During the recession, incomes will fall in real terms.

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5 hours ago, TheCountOfNowhere said:

Does anyone believe this ?

 

If I were being cynical I'd say they just want to boost peoples belief in the banks.  

Actually.....had a meeting with a Natwest Manager today since at some point will want to borrow and put my capital to better use than sitting in a house or some of it anyway.

Personally I was very surprised at the stringent way they look at loans IO out of the window unless very well proven £75k+ one income over three year average  BTL and residential we lump it all together and stress test up to  nearly 7% the rent just counts as income as with S24 (wasn't after BTL by the way)

So on balance probably a lot better prepared than other global banks. The interesting thing for me was if they are doing it all the major banks are playing the same game and a bit like LR figures being behind will start to have an increasing impact next year

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"RBS, 70%-owned by the taxpayer, and Barclays only passed the hurdle rate set by the Bank because the regulator took account of efforts they had already made to increase their financial strength since the end of last year, when the tests were applied. "

 

Does this mean they failed at the point when the test was done?

A 33% house price crash?  Surely that's one of the criteria for a best case scenario?

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5 hours ago, TheCountOfNowhere said:

We perhaps might see some falls....some BIG falls.

For London to revert to mean, we're looking at 80-90% falls.

No doubt these jokers will write memoirs one day congratulating themselves for nationalising banking capital shortfalls that no-one could have possibly seen arising...

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  • 407 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%



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