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http://uk.reuters.com/article/newsOne/idUKL0171512220080602

"The outlook statement indicates that conditions will continue to worsen on both revenues and asset quality through 2008," Alex Potter at Collins Stewart said. "Management's previous claims that buy-to-let would remain higher-quality lending than the mainstream now appear very naïve."

B&B has been under pressure since it surprised investors in May with news of an emergency rights issue, a month after saying it had no plans to do so. It said at the time it had waited for markets to stabilise before going ahead with the cash call.

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http://uk.reuters.com/article/newsOne/idUKL0171512220080602

"The outlook statement indicates that conditions will continue to worsen on both revenues and asset quality through 2008," Alex Potter at Collins Stewart said. "Management's previous claims that buy-to-let would remain higher-quality lending than the mainstream now appear very naïve."

B&B has been under pressure since it surprised investors in May with news of an emergency rights issue, a month after saying it had no plans to do so. It said at the time it had waited for markets to stabilise before going ahead with the cash call.

Naive?

Negligent or Fradulent I would agree is possible, but Naive? Do me a favour.

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Naive?

Negligent or Fradulent I would agree is possible, but Naive? Do me a favour.

"Wrong and overly optimistic" seems closer to it for me. After all, there's no real precedent for the current situation, particularly the number of amateur landlords compared to previous crashes. I suspect there's a heavy element of "gospel in, gospel out, garbage in, garbage out" about their models when it comes to feeding them with data from previous downturns for that very reason.

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Naive?

Negligent or Fradulent I would agree is possible, but Naive? Do me a favour.

I would have to agree. Anyone with even a loose grasp of logic has been able to see that BTL is going to be the epicentre of the current crash. Millions of amateur investors, with no stomach for capital depreciation and no experience of a property crash, many of whom have been self-certifying their income.

Only a child could be excused for not being able to see what was coming.

Edited by redalert
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"Wrong and overly optimistic" seems closer to it for me. After all, there's no real precedent for the current situation, particularly the number of amateur landlords compared to previous crashes. I suspect there's a heavy element of "gospel in, gospel out, garbage in, garbage out" about their models when it comes to feeding them with data from previous downturns for that very reason.

I can see what you are saying but in the end there has been plenty of evidence about the BTL sector. Look at Paragon. And there has been plenty of evidence about liar loans and new build price fixing.

If B&B have not seen the remotest possibility of the writing on the wall wrt BTl then in my view it is negligent.

Instead they have been bullish to the public and less forgivably they have been bullish to their shareholders.

Let's not forget also that we have all been told endlessly that these people are paid vast sums because they are better than everyone else at running companies.

I could have done better in the last 6 months and I am in no way suitable for that kind of role.

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Multiple defaults will sink B&B. 40 odd percent BTL and 23% self cert is a disaster waiting to happen. Nothing Preston and co. are saying remotely reassures me that B&B are solvent when you take UK sub prime losses into account - because they all base their assessments on a flawed model.

If the majority of self certs lied on their mortgages and a significant number default, how is B&B going to survive ? It isn't. With large depositors likely to react to today's news by removing cash, B&B's problems are not over - they are just beginning IMO.

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Guest mattsta1964
I would have to agree. Anyone with even a loose grasp of logic has been able to see that BTL is going to be the epicentre of the current crash. Millions of amateur investors, with no stomach for capital depreciation and no experience of a property crash, many of whom have been self-certifying their income.

Only a child could be excused for not being able to see what was coming.

Agreed.

However complicit the banking system is the destruction that's heading our way, people should have seen this coming ages ago.

I thought property was overpriced in 2001. That's my measure of how big this recession is going to be

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Guest DissipatedYouthIsValuable

Hi, 'sup peepz?

I'm Stuart Law and I know you're gong to lovez the rizing valuez of your assetz laterz this yearz.

There ain't gunner never not be a crash nevah, so load up on some of my juicy Flatz todayz.

Laterz

Stuzie

Edited by DissipatedYouthIsValuable
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I thought property was overpriced in 2001. That's my measure of how big this recession is going to be

I know how you feel. I bought a flat in London cira 2000. Even at the time I had a bad feeling and thought I might end up taking a hit on it, but after 10 years of renting it was time to settle somewhere. Imagine my surprise (and horror) when the market went crazy from 2002 onwards!! By 2005 I couldn't quite believe what I was seeing and hearing from supposedly intelligent people and swiftly sold up to a BTLer. I don't think he had any idea how much rent he would get (it wasn't enough to cover a 90% LTV mortgage).

We have lived though a historic period of collective madness.

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How come all these banking experts can see this now, when "nutters" on this forum were predicting it accurately several years ago?

When is anyone at the top level, in the banking industry going to get fired or better still arrested and thrown in prison?

And I mean fired properly, as in "you've been bin bagged" a fate they usually reserve for lesser employees. without the generous compensation package, pension pot, or on "ill health" grounds

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How come all these banking experts can see this now, when "nutters" on this forum were predicting it accurately several years ago?

When is anyone at the top level, in the banking industry going to get fired or better still arrested and thrown in prison?

And I mean fired properly, as in "you've been bin bagged" a fate they usually reserve for lesser employees. without the generous compensation package, pension pot, or on "ill health" grounds

Of course Self cert loans are in themselves not an issue unless they were LIAR LOANS in disguise

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I know how you feel. I bought a flat in London cira 2000. Even at the time I had a bad feeling and thought I might end up taking a hit on it, but after 10 years of renting it was time to settle somewhere. Imagine my surprise (and horror) when the market went crazy from 2002 onwards!! By 2005 I couldn't quite believe what I was seeing and hearing from supposedly intelligent people and swiftly sold up to a BTLer. I don't think he had any idea how much rent he would get (it wasn't enough to cover a 90% LTV mortgage).

We have lived though a historic period of collective madness.

Like you I felt property should have peaked in 2002. Since then I have felt a crash was only being averted by unrealistic lending. Now we are all being vindicated I do not feel smug because of the economic problems unwinding this madness will create.

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http://uk.reuters.com/article/newsOne/idUKL0171512220080602

"The outlook statement indicates that conditions will continue to worsen on both revenues and asset quality through 2008," Alex Potter at Collins Stewart said. "Management's previous claims that buy-to-let would remain higher-quality lending than the mainstream now appear very naïve."

B&B has been under pressure since it surprised investors in May with news of an emergency rights issue, a month after saying it had no plans to do so. It said at the time it had waited for markets to stabilise before going ahead with the cash call.

I had a look at the exact definition of the word naive....

na·ive Audio Help /nɑˈiv/ Pronunciation Key - Show Spelled Pronunciation[nah-eev] Pronunciation Key - Show IPA Pronunciation

–adjective

1. having or showing unaffected simplicity of nature or absence of artificiality; unsophisticated; ingenuous.

2. having or showing a lack of experience, judgment, or information; credulous: She's so naive she believes everything she reads. He has a very naive attitude toward politics.

3. having or marked by a simple, unaffectedly direct style reflecting little or no formal training or technique: valuable naive 19th-century American portrait paintings.

4. Northern Rock, Bradford & Bingley, BTL ers , majority of the UK, Gordon Brown, Alistair Darling, George Bush,

I though post number 4 was uncanny.

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