Saturday, January 28, 2012

The Great Housing Sell-off

The Great Sell-off

The great sell-off: Property tycoon to raise £3bn by selling 1% of ALL UK homes to clear his debts 250,000 homes are up for grabs in the sale The portfolio has 15,000 homes in London alone

Posted by james stephenson @ 06:08 PM (4823 views)
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15 thoughts on “The Great Housing Sell-off

  • LOL

    Comments are funny

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  • I think he’s selling the leases….Mr Tchenguiz, don’t sell. House prices only ever go UP!

    reminder….”Mr Tchenguiz, along with his brother Robert, were arrested in March 2011 as part of an investigation by the Serious Fraud Office, into the collapse of Icelandic bank Kaupthing”.

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  • Sittingtenantman says:

    I think that he is selling the freehold ground rents.

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  • He could organise the properties into tranches at different values. Sell the top tranche as A because guaranteed above market value, then B about market value, and C being a bit of a flutter, slightly iffy.

    BUT to restrict the exposure and manage risk, he could additionally mosh each section together into new slices…

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  • @3 – he’d need to buy a rating agency first, but once he had the whole thing set up he could start betting against the investors who bought the dicey slices.

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  • This man owns the freehold but not the leases on these buildings and technically not the buildings. He was a major land bank/ground rent speculator that’s realising he could get burned if things continue to slide.

    Under LVT, he’s be a gonner.

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  • A little background on this Kaupthing crook. This account is culled from various reports on Iceland by Michael Hudson:

    Wikileaks published a Kaupthing report from September 25, 2008, detailing the loans to insiders that had helped drive the bank into insolvency. Major stockholders had borrowed against their bank stock to bid it up in price and give the appearance of prosperity and solvency. Evidently deciding that the time had come to take the money and run, the bank owners emptied out the coffers by making loans to themselves (this DM report mentions the bank’s £1.7bn loan to this guy’s brother) . Brown of course then tried to use the IMF to pressure Iceland into bankrupting itself to pay off depositors in Kaupthing et al. The collapse of Iceland’s banks in 2008 caused a huge loss of savings of Icelanders and to Deutsche Bank, Barclays and their institutional clients.

    Stuck with bad loans and bonds from bankrupt issuers, foreign investors in the old banks including Kaupthing sold their bonds and other claims for 30 or 40% to buyers specialising in ‘distressed assets’ – vulture funds. There’s a widespread belief that some of these are working with the previous owners of the failed banks, including Kaupthing, operating out of offshore tax havens and currently under investigation by a Special Prosecutor.

    Initially Iceland’s government set up and owned 100% of three new ‘good’ banks, which bought the discounted debts from the old ‘bad’ banks. It wanted the new banks to pass on to these write-downs the debtors. It wanted to take account of the reasonable ability of households and businesses to pay back loans that had become unpayable as the currency had collapsed and import prices had risen accordingly.

    But the vultures – probably including the crooks from the old banks – bought much of the debt (at around the 70% discount) and became owners of two of the new banks. These then went into debt-collection mode (effectively with IMF backing “maximise asset recovery”) to hound debtors for as much as they could squeeze out of them (just as vulture hedge funds bought Greek debt at distressed prices and held out for full payment when Greece tries to buy them off with European taxpayers’ money).

    Worse, Icelandic mortgages and many other consumer loans are linked to the country’s soaring CPI. Owners of the loans not only try to get 100% of face value, but also can add on the increase in debt principal from the indexing. Thousands of households face poverty and loss of property because of loans that, in some cases, have more than doubled as a result of the currency crash and subsequent price inflation. But the IMF and Iceland’s Government and Supreme Court have affirmed the price-indexation of loan principal and usurious interest rates in order to bolster the restructured banking system.

    Furthermore, the new banks have written off claims on major corporate debtors because these are cash cows for the banks’ vulture owners. Meanwhile household debts (acquired at 30% – 50% of face value) have, as mentioned, been re-valued at up to 100%. The government accepts the banks’ assertion that they lack the resources to grant meaningful debt relief to households but the value of the banks’ share equity has soared.

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  • i just cant imagine a couple of bailiffs knocking on the door of greece lol

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  • mark wadsworth says:

    Paul beat me to it!

    The clever clogs like to say “Ah, but how will Land Value Tax work if one person owns the freehold and somebody else owns a long leasehold?”

    That’s easy – if LVT is based on rental values, then we just look at the lease agreement and if the ground rent on a house is £1,000 a year, the LVT on the freehold is a %age of £1,000. It’s no more complicated than income tax. The LVT on the leasehold of the house is the same as the freehold house next door but minus the LVT paid by the freeholder.

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  • Out of curiousity MW

    If there were 4 adults in full time employment living a council house, aka social housing, what would be the formula for calculating LVT on this property?

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  • rbs and hbos lent heavily to tchenguiz who then bought flats,freeholds(including hbos head office) and care homes under a new economic miracle of ‘securitisation”

    this basically means borrowing loads of money buying stuff then extracting as much out of the people as you can.

    also a tory donor I believe

    spends #2 million of legal fees a week

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  • if he is being investigated for fraud etc why are his assets and company assets not frozen? i understand under law if found guilty of obtaining assets or money by criminal means the police could confiscate them, imagine that 250,000 houses at the local police auction lol

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  • he was raided by serious fraud office started huge legal action against them and they had to back down on some stuff..google.it.

    astonishing to say the least…I’ve come to the conclusion that if you have enough money or influence you can do pretty much anything you like.

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  • mark wadsworth says:

    Mr G: “If there were 4 adults in full time employment living a council house, aka social housing, what would be the formula for calculating LVT on this property?”

    For every smaller area, let’s say a local council ward or a postcode sector, the average rental value of land is calculated, by taking a percentage of selling prices to arrive at a fair estimate of rent levels (keeping an eye on actual local rent levels), this gives you a £ amount/sq yard of land per year and the tax on every plot is just plot size x that £ rate.

    Whether a plot is commercial, derelict, residential, owner-occupied, private let or council let, with or without a mortgage or any combination thereof is completely and absolutely irrelevant.

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  • taffee

    yes money is power, but eventually the “man” finds you via your doctor and then you are dead, while your doc then stands trial for killing you goes to prison and who knows

    or you have a strange car crash or maybe you commit suicide then whilst dead climb inside a suitcase locking it to stop anyone finding you

    lol

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