Property crash, just maybe it really is different this time

[Inque]

 

[Axeman123]

23 minutes ago, HousePriceMania said:

proposals that would mean the Treasury coordinates with the Bank of England to provide cheap money for mortgages

BoE won't play ball, they have already signalled this by letting yields get and stay where they currently are IMO. The "£65B" gilt buying scheme isn't being run as stealth QE (which shocked me more than anyone) and really is just backstopping market functioning.

The banks aren't stupid, they are likely just asking for the impossible to deflect.

[Plan-b]

27 minutes ago, Inque said:

 

An even bigger ball with longer chain, I just hope the younger generation don't fall for it.

Yet more blighted generations - Let the prices fall FFS

[sancho panza]

4 hours ago, Stuey said:

You can't paste tables into here, all the columns get misaligned. Do a screenshot or something? 

It works on my laptop

Basic gist is inventory rising as deals collapse.This is significant in terms of liquidity

50 minutes ago, haroldshand said:

 The big thing now is are they going to do anything or be seen to do something, my money is on being  seen to do something. They have reached the maximum limit on this bubble and large incentives  and props(and they were large) to keep it inflated IMO..

 

P.S  I have always wondered what percentage it takes for a rush to the exit to destroy what is always a sensitive and fragile housing market, my guess is that it is way lower than 7%. The housing market is never truly worth £8 Trillions because that money does not truly exist. It's like a small crack in the Dam scenario where a trickle can be managed ......

They could possibly extend some equity into the big banks again which is the msot likely route of keeping the music paying.That will likely come with some serious haricuts to both equity and bond holders.

The issue is whether the UK govt could do that without creating systemic risk to sterling?

In terms of liquidity,I would think that FTBers are the main market to watchas they're the msot interest rate sensitive and also the marginal buyers.

It does look from my basic survey of Leicesterhsire that liquidity is drying up and that's a real problem as falling transactions histoircally can excaerbate the direction of the market -which is currently down I would say.

[HousePriceMania]

40 minutes ago, Plan-b said:

An even bigger ball with longer chain, I just hope the younger generation don't fall for it.

Yet more blighted generations - Let the prices fall FFS

[Democorruptcy]

1 hour ago, Boon said:

The banks bluffing that they will have to take enforcement action will have the government shitting their pants.

It will go like this:

"Look Quasi, we hate to tell you this, it's the Mortgage Guarantees and 95% Help to Buy Equity Loans backed by Governbankment that are the big problem. You are looking at huge losses mate."

Edited October 6, 2022 by Democorruptcy

[Noallegiance]

Anecdotal:

Noticeable uptick in weekly Rightmove email alerts for my search area.

Noticeable uptick in number of reduced prices in email alerts.

[Ash4781b]

2 hours ago, Inque said:

 

I can’t see that working with presumably average first time buyer age and retirement age. Though that article quotes a mortgage broker do always likely say do whatever get the biggest possible mortgage with me. Yummy yummy!

[Bus Stop Boxer]

Bad hair day. Fucking clown.

[Axeman123]

Update on the meeting earlier today between the Chancellor and banks about mortgages: "Britain's finance ministry will work closely with the financial sector on mortgage lending, finance minister Kwasi Kwarteng told banks during a meeting on Thursday, a Treasury statement said".

Thats essentially it (slightly more words at link though)

https://uk.finance.yahoo.com/news/uk-finance-ministry-closely-banks-143743377.html

Rueters via yahoo finance.

[HousePriceMania]

2 hours ago, Axeman123 said:

Update on the meeting earlier today between the Chancellor and banks about mortgages: "Britain's finance ministry will work closely with the financial sector on mortgage lending, finance minister Kwasi Kwarteng told banks during a meeting on Thursday, a Treasury statement said".

Thats essentially it (slightly more words at link though)

https://uk.finance.yahoo.com/news/uk-finance-ministry-closely-banks-143743377.html

Rueters via yahoo finance.

More guarantees that a bank can lose.

[Axeman123]

18 minutes ago, HousePriceMania said:

More guarantees that a bank can lose.

There are a lot of rumours as to what was discussed. GB News was claiming lenders were worried about misselling claims in the future, and wanting regulations relaxed to protct them.

Now there are rumours about gauranteeing 95% loans for FTBs. In a rising market that is essentially free, whereas in a falling one it isn't. I can't see it myself.

[HousePriceMania]

5 minutes ago, Axeman123 said:

There are a lot of rumours as to what was discussed. GB News was claiming lenders were worried about misselling claims in the future, and wanting regulations relaxed to protct them.

Now there are rumours about gauranteeing 95% loans for FTBs. In a rising market that is essentially free, whereas in a falling one it isn't. I can't see it myself.

We'll see.

 

Most sensible approach was to tell that desperate **** to f*** off.

Myself I think they wont say anything because the £ will fold again.

They'll try and make a quiet change somewhere.

 

[Democorruptcy]

2 hours ago, Axeman123 said:

Update on the meeting earlier today between the Chancellor and banks about mortgages: "Britain's finance ministry will work closely with the financial sector on mortgage lending, finance minister Kwasi Kwarteng told banks during a meeting on Thursday, a Treasury statement said".

Thats essentially it (slightly more words at link though)

https://uk.finance.yahoo.com/news/uk-finance-ministry-closely-banks-143743377.html

Rueters via yahoo finance.

If saving interest rates went up more it would be some sort of sign that banks aren't expecting cheaper funding? I checked a couple of websites for rates today. I opened a live chat at Coventry and got this reply:

Quote

No, the website isn't broken. Those are the current interest rates we have. We are increasing the vast majority of our variable rates tomorrow however.

 

[Boon]

95% guaranteed already exists (albeit for first 7 years)

Problem is current rates have made this a real niche now. At 1.5% rates one could buy a £300k house for under £1k a month. At 5.82% (Barclays current rate for 95%) it is £1,676.

I do think the government will be forced into something. One thing they both want is that they don't want big price declines. So there could be some kind of 'soft' repossession, where the bank can own the house but the defaulter then has to pay them rent, but can buy the house back at a pre-agreed price.

[Axeman123]

2 minutes ago, Boon said:

I do think the government will be forced into something

I am almost certain they will oil the wheels by letting lenders mark to book on mortgages where the borrower is are paying something and making co-operative noises. As you say maybe they will otherwise take equity but grant a more secure tennancy, although I can't imagine many lenders wanting to maintain houses.

I was pondering the misselling angle above, what if lenders are worried about all the mortgages in the COVID boom? In hindsight the valuations were ridiculous and interest rates rising sooner or later innevitable. Even HTB which created demand at prices above what the market could otherwise support could be seen as such. Maybe what the lenders really want is a blanket protection from that on their previous loans.

[Bus Stop Boxer]

6 minutes ago, Axeman123 said:

I am almost certain they will oil the wheels by letting lenders mark to book on mortgages where the borrower is are paying something and making co-operative noises. As you say maybe they will otherwise take equity but grant a more secure tennancy, although I can't imagine many lenders wanting to maintain houses.

I was pondering the misselling angle above, what if lenders are worried about all the mortgages in the COVID boom? In hindsight the valuations were ridiculous and interest rates rising sooner or later innevitable. Even HTB which created demand at prices above what the market could otherwise support could be seen as such. Maybe what the lenders really want is a blanket protection from that on their previous loans.

 

[HousePriceMania]

12 minutes ago, Axeman123 said:

I am almost certain they will oil the wheels by letting lenders mark to book on mortgages where the borrower is are paying something and making co-operative noises. As you say maybe they will otherwise take equity but grant a more secure tennancy, although I can't imagine many lenders wanting to maintain houses.

I was pondering the misselling angle above, what if lenders are worried about all the mortgages in the COVID boom? In hindsight the valuations were ridiculous and interest rates rising sooner or later innevitable. Even HTB which created demand at prices above what the market could otherwise support could be seen as such. Maybe what the lenders really want is a blanket protection from that on their previous loans.

Like they wont get protected if it all collapses  

[Democorruptcy]

7 minutes ago, Bus Stop Boxer said:

 

Don't forget George Osborne, I can't face a photo, so instead his 2013 Tory conference speech about Help to Buy:

Quote

 

And we’re the party of home ownership too. I’m the first person to say we must be vigilant about avoiding the mistakes of the past. That’s why I gave powers to the Bank of England to stop dangerous housing bubbles emerging. But too many people are still being denied the dream of owning their own home.

So instead of starting the second phase of Help to Buy next year, we’re starting it next week.

There are some people – many living in the richest parts of London – who say we shouldn’t be doing these things. I have this to say: Take you arguments down the road to Nelson or Colne, where house prices have fallen for the past five years. Take your arguments to Bury, or Morecambe, where young working couples are still living at home with their parents. Take your arguments to our great towns and cities where there are families who have saved for years, earning decent salaries, who can afford the mortgage repayments but can’t possibly afford the deposit being asked by the banks these days.

Take your arguments to those families and say: ‘This policy is not right. You shouldn’t be allowed to get your home.’ I tell you what they’ll say back: ‘It’s alright for you. You’ve got your own home. We’ve been saving for years. What about us?’

I know whose side this Party is on. We are the party of aspiration. The housebuilding party of Macmillan. The party of Thatcher’s right to buy. And now the party of David Cameron’s Help to Buy. We are the party of home ownership and we’re going to let the country know it.

https://www.ukpol.co.uk/george-osborne-2013-conservative-party-conference-speech/

 

 

 

[sancho panza]

35 minutes ago, Axeman123 said:

I am almost certain they will oil the wheels by letting lenders mark to book on mortgages where the borrower is are paying something and making co-operative noises. As you say maybe they will otherwise take equity but grant a more secure tennancy, although I can't imagine many lenders wanting to maintain houses.

I was pondering the misselling angle above, what if lenders are worried about all the mortgages in the COVID boom? In hindsight the valuations were ridiculous and interest rates rising sooner or later innevitable. Even HTB which created demand at prices above what the market could otherwise support could be seen as such. Maybe what the lenders really want is a blanket protection from that on their previous loans.

The govt can let lenders do that(and alreayd do via the use of IRB approach to risk weighting as opposed to standardized-loads of room for skew)

problem you have here is that more braodly investors are watching which banks look the most likely to fold and much like 08 it becoems a self fulfilling prophecy as the rumours start,the withdrawls beging and then the rumours accelerate.

Looka t credit suisse(although leveraged at 75/1 doesn't really take much of a rumour to question their safety)

[HousePriceMania]

Can anyone disagree with this statement

 

 

[Democorruptcy]

2yr SONIA Swap rate, plus markup for 2 yr fixed mortgages, now up to 5.198%

https://www.chathamfinancial.com/technology/european-market-rates

[HousePriceMania]

14 minutes ago, Democorruptcy said:

2yr SONIA Swap rate, plus markup for 2 yr fixed mortgages, now up to 5.198%

https://www.chathamfinancial.com/technology/european-market-rates

FACT

[Democorruptcy]

1 minute ago, HousePriceMania said:

FACT

Yes, it's strange. yesterday they said the 2yr mortgage was over 6% for the first time for ages but the swap rates were higher 2 weeks ago. I don't believe it. I'd posted on 30th the swap rate was 5.7% and the HSBC mortgage rate was 6.65%. The swap rates then dropped to 4.8% but have been going up again this week. FACT.

[HousePriceMania]

7 minutes ago, Democorruptcy said:

Yes, it's strange. yesterday they said the 2yr mortgage was over 6% for the first time for ages but the swap rates were higher 2 weeks ago. I don't believe it. I'd posted on 30th the swap rate was 5.7% and the HSBC mortgage rate was 6.65%. The swap rates then dropped to 4.8% but have been going up again this week. FACT.

Mr Quirk, sounds desperate when you read all his posts.