Tuesday, October 19, 2010

Call for lower LTVs and tougher regulation

Why the Bank of England must protect us from ourselves

"The review of health and safety legislation we have just seen notwithstanding, people often do need protecting from themselves, particularly when it comes to the peculiarly British obsession with the property market".

Posted by sibley's b'stard child @ 04:02 PM (881 views)
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2 thoughts on “Call for lower LTVs and tougher regulation

  • Independent: “Why the Bank of England must protect us from ourselves.”

    That’s the funniest line I have read in a while. Some may have to think about it!

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  • I think the arguments that we will see more big drops in house prices now are probably wrong, unless we see another major crisis of confidence (e.g. from the recent US mortgage paperwork/fraud issues), because they ignore the rapid devaluation of the pound, due to QE etc., thus prices of other products have risen to compensate (price inflation), thus houses get relatively cheaper without even having to change price, so I think we will see house prices continue to drop, but far more slowly than some people (e.g. here) think or hope for.

    I think there maybe a good argument to protect property buyers from over-extended mortgage folly (whether motivated by moral goodness, greed, fear, or politics), because most of the population are not smart or educated enough in maths (any more), or may not make the time to understand value, prices and debt, thus affordability over time, especially when compound interest is involved.

    Maths should never have become regarded as boring or useless (due to poor teaching) (e.g. logs and exponents have direct application to how compound interest debt and savings perform over time), and computer spreadsheets (e.g. Excel and OpenOffice) remove a lot of the drudgery from financial calculations.

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