Tuesday, March 17, 2009

The BBC is roiling and squealing about mortgage plans

New measures to control UK banks

Note the BBC gives the last word to the House Builders Federation. They don't even bother using quotes in the fourth from last paragraph, they just recycle HBF opinions as facts. The BBC news website editors must be seething as their buy-to-let empires crumble under the prospect of common sense returning to the property sector. To think of all the hard work they've put into ramping property - what a waste!

Posted by paul @ 11:13 PM (1340 views)
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13 thoughts on “The BBC is roiling and squealing about mortgage plans

  • “roiling and squealing”

    Thanks paul. I laughed out loud at that.

    ———

    ‘the House Builders Federation (HBF) said.

    “If the FSA and government go down the route of mortgage control to try to head off future asset bubbles they are likely to entrench and worsen future housing under-supply that is rooted in the constraint of land supply,” said the HBF’s executive chairman Stewart Baseley.

    “House price booms are caused by an imbalance between supply and demand …’

    No wonder it took so long for the beeb to publish this story; finding a VI prepared to ignore the role of cheap credit in the boom isn’t so easy these days.

    Reply
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  • inflation is eating my savings says:

    I think the guy from the law firm sums up the predicament well.
    They can’t be too heavy handed here, it would be strangulation of a limping impala.
    But they don’t really need to be either, it is not as if anyone really wants to borrow or lend at the moment.
    The value of any “measures” is not about lending, it is perhaps about confidence.

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  • City wire published a brilliant article yesterday:

    http://www.citywire.co.uk/personal/-/comment/morning-line/content.aspx?ID=333093&Page=1

    Quote referring to Telepgraph article about capping being “suicidal” :

    ” Any regulatory cap on mortgage lending – perhaps to a maximum of three times income – would be ‘suicidal’, the newspaper declares on its front page this morning, quoting ‘property experts’ ……..As it turns out pretty quickly, however – though not until you’ve bought the paper and turned to page 2 – these property experts include a former president of the National Association of Estate Agents (originator of the headline ‘suicidal’ line), a gaggle of mortgage brokers, and a spokesman for the Council of Mortgage Lenders.

    With the greatest respect, none of these – with the possible exception of the CML – can be seriously considered to be ‘property experts’.

    Rather they are salesmen and media-friendly self-publicists, happy to provide a handy sound-bite at short notice. “end quote

    This BBC too seem to have turned to the same kind of expert, the House Builders Federation.

    When will people realise that what WAS “suicidal” was allowing irresonsible overlending and overborrowing leading to inflating property prices that were not sustainable , how can anyone have ever thought that property prices did not have to have any relationship with wages?

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  • it_is_going_with_a_bang says:

    The financial sector won’t like controls one bit – never have never will. It means a control on profits.
    I just don’t agree with the idea that it’s an issue of land supply – complete rubbish. The US has no land supply problem and yet suffers the same fate. There is plenty of land developers are sitting on. the only reason they are not doing anything with it is because they are using them as banks.

    The HBF members no doubt have millions / billions tied up in land waiting to be developed. These controls would make this land worth far less than it is now.

    Stopping people taking out too much credit is a ‘must do’. Prices will then be forced to reflect what people can afford long term.

    Reply
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  • Bill Turnbull was having a go at some weasly looking character from John Charcoal on the back of this story this morning. The only thing the Weasle could say was that these proposals are wrong because everything has moved towards affordability measures. I just wish Turnbull had pointed out that affordability measures that assume that interest rates will stay at 0.5% are probably riskier than 10 times lending, but he didn’t.

    All we need now for stability in the housing market is a tax on second homes. Conspiraloons who think this is all engineered should be looking out for a plethora of “locals priced out of market” stories, and “second homes fire-bombed” before the government starts looking towards those people who are wealthy enough to afford more than one house for some tax revenue.

    Then it’s the right time to buy.

    Reply
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  • There will be people, up to their ears in property or BLT, sh’tting themselves now. A fair price for property is one that is within the affordability range of people. We really need to lance the boil of property as an investment (get rich quick scheme). If that decimates an industry so be it; every time we have had a property bubble it has brought down the economy. These parasite must die.

    Money in the economy – and any credit – needs to be directed to the productive elements of the economy.

    As for the BBC, the are a disgrace, biased and corrupt (BTLers), certainly not the impartial Aunty we should expect.

    Reply
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  • Well, I looked at my watch, and it was time to go.

    The band leader said, “We ain’t payin’ no more.”

    And we was roiling’, roiling’ and a-squealing’
    .
    We was roiling’ and a-squealing’, well, till the break of dawn.

    Reply
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  • If house price booms are caused by imbalances between supply and demand shoudn’t it also be the case that house price falls are caused by imbalances between supply and demand (i.e. there is too little demand out there at 2007 prices)? Or is it that rises are caused by fundamental factors such as demographics while falls are due to mortgage shortages?

    Obviously this is idiotic. Just as the current falls are due to a return to more sensible lending criteria, the house price bubble was due to totally absurd lending (and borrowing) practices based on the belief that house prices always rise.

    Reply
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  • 7. rm96696

    It is that simple.

    That’s why the top (money) dogs are in control.

    Reply
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  • mark wadsworth says:

    They had Ray Boulger on Radio 4 this morning, he is a surprisingly nasty piece of work. The interviewer trotted out the “it all started with US sub-prime” nonsense.

    @ It is going with a bang, you overlook a few things:

    1. Banks were lending in an uncontrolled manner – was this good for profits? Well no, absolutely not. Had they all stuck to 3 times earnings, they wouldn’t be in this mess.

    2. The US is two distinct markets. East and West coasts with strict planning laws (like UK) they had the biggest price rises. Everywhere else with liberal planning laws didn’t have big price rises and neither have prices fallen significantly.

    3. UK home builders have maybe a couple of hundred thousand of plots with planning permission, enough for a year or two’s supply. Apparently they have lost more money (£10 billion and counting) in one year’s land price falls (that are falling twice as fast as house prices) than they made profits in the previous ten years. Not much of a bank?

    @ Inbreda. We don’t need a tax on second homes (far too complicated – what about unmarried couples who nominate one house each as main residence?), we need Land Value Tax, full stop. It should not make any difference whether you have a home worth £300,000 or a home worth £150,000 and a second home also worth £150,000 – the tax would be the same. LVT would also level the playing field between tenants and owners – each then has to pay ‘ground rent’ for the value of local amenities.

    I’m a tenant at present, and I don’t mind paying market rent. It is what it is. I’d guess less than half the total rent I pay relates to rent for the bricks and mortar value of the house and half relates to the value of local amenities (schools, shops, railway station).

    Seeing as I pay out of my own money for the schools, shops and railway, what does rankle is the fact that my landlord is charging me for the right to spend my own money on things which do not belong to him, which he has not created and does not pay for. So why not make my landlord pay LVT/ground rent for the value of amenities? That would make a handsome chuck of tax which we can use to cut other far more awful taxes (like VAT, National Insurance etc).

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    Tuesday, Mar 17, 2009The BBC is roiling and squealing about mortgage plansBBC ‘News’: New measures to control UK banks
    Note the BBC gives the last word to the House Builders Federation. They don’t even bother using quotes in the fourth from last paragraph, they just recycle HBF opinions as facts. The BBC news website editors must be seething as their buy-to-let empires crumble under the prospect of common sense returning to the property sector. To think of all the hard work they’ve put into ramping property – what a waste!

    Posted by paul @ 11:13 PM (491 views) Add Comment
    Report Article 9 Comments1. quiet guy said…”roiling and squealing”

    Thanks paul. I laughed out loud at that.

    ———

    ‘the House Builders Federation (HBF) said.

    “If the FSA and government go down the route of mortgage control to try to head off future asset bubbles they are likely to entrench and worsen future housing under-supply that is rooted in the constraint of land supply,” said the HBF’s executive chairman Stewart Baseley.

    “House price booms are caused by an imbalance between supply and demand …’

    No wonder it took so long for the beeb to publish this story; finding a VI prepared to ignore the role of cheap credit in the boom isn’t so easy these days.

    Tuesday, March 17, 2009 11:39PM Report Comment

    2. inflation is eating my savings said…I think the guy from the law firm sums up the predicament well.
    They can’t be too heavy handed here, it would be strangulation of a limping impala.
    But they don’t really need to be either, it is not as if anyone really wants to borrow or lend at the moment.
    The value of any “measures” is not about lending, it is perhaps about confidence.

    Tuesday, March 17, 2009 11:41PM Report Comment

    3. it_is_going_with_a_bang said…The financial sector won’t like controls one bit – never have never will. It means a control on profits.
    I just don’t agree with the idea that it’s an issue of land supply – complete rubbish. The US has no land supply problem and yet suffers the same fate. There is plenty of land developers are sitting on. the only reason they are not doing anything with it is because they are using them as banks.

    The HBF members no doubt have millions / billions tied up in land waiting to be developed. These controls would make this land worth far less than it is now.

    Stopping people taking out too much credit is a ‘must do’. Prices will then be forced to reflect what people can afford long term.

    Wednesday, March 18, 2009 08:35AM Report Comment

    4. inbreda said…Bill Turnbull was having a go at some weasly looking character from John Charcoal on the back of this story this morning. The only thing the Weasle could say was that these proposals are wrong because everything has moved towards affordability measures. I just wish Turnbull had pointed out that affordability measures that assume that interest rates will stay at 0.5% are probably riskier than 10 times lending, but he didn’t.

    All we need now for stability in the housing market is a tax on second homes. Conspiraloons who think this is all engineered should be looking out for a plethora of “locals priced out of market” stories, and “second homes fire-bombed” before the government starts looking towards those people who are wealthy enough to afford more than one house for some tax revenue.

    Then it’s the right time to buy.

    Wednesday, March 18, 2009 09:17AM Report Comment

    5. tinker said…There will be people, up to their ears in property or BLT, sh’tting themselves now. A fair price for property is one that is within the affordability range of people. We really need to lance the boil of property as an investment (get rich quick scheme). If that decimates an industry so be it; every time we have had a property bubble it has brought down the economy. These parasite must die.

    Money in the economy – and any credit – needs to be directed to the productive elements of the economy.

    As for the BBC, the are a disgrace, biased and corrupt (BTLers), certainly not the impartial Aunty we should expect.

    Wednesday, March 18, 2009 09:23AM Report Comment

    6. crunchy said…Well, I looked at my watch, and it was time to go.

    The band leader said, “We ain’t payin’ no more.”

    And we was roiling’, roiling’ and a-squealing’
    .
    We was roiling’ and a-squealing’, well, till the break of dawn.

    Wednesday, March 18, 2009 09:23AM Report Comment

    7. rm96696 said…If house price booms are caused by imbalances between supply and demand shoudn’t it also be the case that house price falls are caused by imbalances between supply and demand (i.e. there is too little demand out there at 2007 prices)? Or is it that rises are caused by fundamental factors such as demographics while falls are due to mortgage shortages?

    Obviously this is idiotic. Just as the current falls are due to a return to more sensible lending criteria, the house price bubble was due to totally absurd lending (and borrowing) practices based on the belief that house prices always rise.

    Wednesday, March 18, 2009 09:45AM Report Comment

    8. crunchy said…7. rm96696

    It is that simple.

    That’s why the top (money) dogs are in control.

    Wednesday, March 18, 2009 09:57AM Report Comment

    9. mark wadsworth said…They had Ray Boulger on Radio 4 this morning, he is a surprisingly nasty piece of work. The interviewer trotted out the “it all started with US sub-prime” nonsense.

    crunch- It all started with financial institutions massively overleveraging on the way up, then laying a sub-prime guilt trip on the masses for bailouts when that greedy leveraging went against them!

    To some,with creative money managing, It’s called a one way bet!

    Reply
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  • 9. mark wadsworth said…They had Ray Boulger on Radio 4 this morning, he is a surprisingly nasty piece of work. The interviewer trotted out the “it all started with US sub-prime” nonsense.

    crunch- It all started with financial institutions massively overleveraging on the way up, then laying a sub-prime guilt trip on the masses for bailouts when that greedy leveraging went against them!

    To some,with creative money managing, It’s called a one way bet!

    Do not know what went wrong above? Sorry folks!

    Reply
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  • Take HBF’s executive chairman Stewart Baseley advice, so in 10 years time based on supply-demand a 3 bed house will cost 1 million and income should stay around £ 26 000 per annum and expect financial system to work just fine.

    And house builders they need to make sure they will build few homes and charge the maximum so great profits are made and an acute housing shortage is maintained in the same time.

    How about that?

    Reply
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