Wednesday, July 21, 2010

The nations wakes up to being sold down the river

There is trouble ahead if interest rates rises

Tracy is "one of us" in the main. But it's good to see more people writign about the "madness" of the mortgage market. More of this please!

Posted by growler @ 09:55 AM (2570 views)
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16 thoughts on “The nations wakes up to being sold down the river

  • sibley's love child says:

    Refreshing piece of common sense, although isn’t she wrong regarding the FTB average age (I thought it was more like 37)?

    “…yet the average age for first-time buyers is, nevertheless, a youthful 29)”.

    RC – work allergies (quite).

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  • The interest rate average is 6%.

    One for the ever waiting deflationists.

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  • sibleys,

    The average age is 27 for FTBs who receive assistance from the Bank of Mum & Dad, and 37 for those without. The overall average is 31 (source: BBC).

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  • mark wadsworth says:

    Of course it looks like madness to an outsider, but for the forty per cent of households and BTLers basking in the warm glow of massive mortgage interest subsidies, it is a very pleasant form of madness.

    It’s the Home-Owner-Ist ratchet at work; the benefit to a mortgage borrower of saving £5,000 a year in interest is far more measurable and far more likely to win votes at elections than the loss of £500 a year interest to ten savers (you can’t miss what you never had).

    The Tories talk a good game about “encouraging self reliance and savings” but they are in practice doing exactly the opposite (i.e. exactly the same as the Red Wing of the Home-Owner-Ist Party did when they were in power).

    recaptcha: very steal

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  • How astonishing is it that 3 years down the line from the credit crunch 40% of home loans have been of the self certified variety?

    For crazyness it ranks alongside the £5bn set aside for bankers bonuses this year.

    It seems the major decision takers in our society our all in the financial services.

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  • sibley's love child says:

    Okay, thanks Drewster; unsurpisingly (falling into the latter camp) i’ve consciously homed-in on the higher age given.

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  • Banks were only happy with these stupid lending practices because they knew they could sell the debt on; they are not really stupid enough to lend purely on the basis that house prices only ever go up. If they broke up the banks and prevented this happening, I’m sure it wouldn’t be long before we returned to the good old days of 3x salary. The problem with this, and the reason it will never happen, is because house prices would plummet, repo’s would soar, large numbers of banks would go belly up and real chaos would follow. So we are stuck with prices declining slowly in real terms over many years as inflation erodes the debt. I see no other way out.

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  • brickormortis says:

    So, I wake up a little later on my holiday, come downstairs, have a cup of tea and bow of cereal and find that STILL non-stop property programmes are beaming out through the telebox (Homes under the hammer etc.) We have learned nothing. Absolutely nothing. This brain washing is nothing less than Orrwell spoke of in 1984. It is making me feel (literally) sick in the stomach. And here’s something. BBC screening homes under the hammer, banging on about properties these f88kers are doing up and then at the very end (in little text at the bottom of the screen) November 2006 flashes up. November 2006!!! WTF? …and on the BBC no less!

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  • “According to FSA research, 46 per cent of households that took out mortgages between 2005 and 2008 have either no money left or face a shortfall every month, after mortgage payments and living costs are deducted”.

    I feel this isn’t right! The interest rates have dropped like a stone to prop up the housing bubble – what are these people spending their cash on? Is tanning and false nails genuine “living costs”? I know lots of folk who bought between 2005 and 2008, who are over-paying to reduce their mortgage LTVs.

    Anyway, what about savers – don’t they deserve a higher rate of interest for lending to less stable banks and building societies (less stable than 2002/03, ie before Northern Rock).

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  • mark w @3 – but there are other groups too – would-be home buyers who are priced out and of course the banks, who don’t want to see a fall in property prices and the value of their assets.

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  • Alan – perhaps many of those that took out mortgages between 05 and 08 fixed their rates and haven’t benefitted from the cuts. Just a thought.

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  • sibley's love child says:

    Good point Timmy T; does the CML have data as to what proportion of mortgages approved are fixed, trackers etc?

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  • mark wadsworth says:

    @ Icarus, 9.

    That’s the beauty of Home-Owner-Ism – the ‘priced out generation’ are least likely to vote as they have been brainwashed into thinking that this is all inevitable and has to happen, conversely, those who derive most of their income or capital gains from state action are most likely to be involved politically etc.

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  • Arthur Kinnell says:

    Met a jobseeker yesterday whose mortgage payments have fallen by the same amount as my savings interest. Happy to help!

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  • 5. nomad said…”It seems the major decision takers in our society are all in the financial services.”

    Lets call it a gov merger shall we. It sounds much less threatening.

    Where do we fit in, I think we are learning fast.

    “Current events form future trends”

    Recap – “are slam” Classic!

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  • 8. brickormortis

    Did you know G. Orwell aka Eric Blair worked for the BBC.

    Britians Brainwashing Corporation I call it and he may have done so too.

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