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Home reposessions are rising, and we’re all going to suffer...

We’ve all read the stories about rising house repossessions, as the people who over-stretched themselves to claw their way onto the property ladder ‘at any cost’ during the boom years suddenly realise that borrowing all that money to buy a property at a wildly inflated price probably wasn’t such a good idea after all. And it should come as no surprise to learn that around one in thirteen of repossessions over the past three months have involved Northern Rock customers, because the company’s ’strategy’ over the past decade has largely been based on lending huge sums of money to people without asking too many questions about whether they were able to pay it back. The Americans call this...

posted on: Aug 27, 2008 | author: Lance

Crosby Report on the UK housing market...

The Guardian has a fairly good summary of the findings of Sir James Crosby’s report into the UK housing market. Although this preliminary report does not make specific recommendations, it does talk about the kind of options which are available to the government if it wants to get the housing market moving again. Most of these revolve around various schemes to encourage banks to start lending more freely to each other and to invest in mortgage backed securities again – although as Crosby points out, any such measures might not be very effective in the short term. It’s encouraging to note that Crosby does seem to advise caution when considering any kind of government intervention in the property...

posted on: Jul 29, 2008 | author: Lance

Interest rates up, mortagage approvals down...

The big news today is, of course, that mortgage lending has dropped so far through the floor that it’ll soon be burrowing its way to the centre of the earth. No surprises there, houses are still far too expensive for most people and even if you were brave enough to clamber onto the property ladder at the moment, the chances of you being able to find a decent mortgage deal are becoming slimmer by the day. But that’s not all – the average two year fixed rate mortgage now stands at over 7%, the highest level in over ten years. It just keeps getting uglier and uglier out there. Six months ago the idea of a massive crash...

posted on: Jun 24, 2008 | author: Lance

Mortgage approvals still down, along with consumer spending...

According to the National Association of Estate Agents, the UK property market is now ’stabilising’ – which, if you cut through the spin, simply means that a few metrics such as the number of sales agreed and the difference between asking and sale prices have remained roughly level for the past couple of months. The NAEA itself admits that there are a lot of properties on the market, buyers are being more cautious, and more sales are falling through before completion. A more accurate picture is painted by the British Bankers Association, which says that April saw the second lowest level of mortgage approvals on recordand the month saw only a marginal improvement on March’s record low, so calling it...

posted on: May 27, 2008 | author: Lance

The trouble with bankers

Usually on this site I write features about various aspects of the financial system, leaving Lance to concentrate on the current affairs opinion pieces. But it’s becoming increasingly difficult to remain dispassionate. The financial system is having a bit of a wobble at the moment, rather like that earthquake that hit the UK recently, knocking a few glasses off the shelves and knocking a few minor celebrities off the front pages, at least for a day. What has been called a ‘credit crunch’, and ignorantly predicted to be ‘over by Christmas’ (though, like the war, nobody states which year), is actually something rather more serious: in all probability it’s a return to normality. Risk is now being priced...

posted on: Mar 25, 2008 | author: Alex

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