Property crash, just maybe it really is different this time (Part 3)

[Axeman123]

16 minutes ago, darkmarket said:

I wonder can they legally block sales that would leave them in the red, it reads like that's what they're investigating in their legal department. We may have a new iteration of the mortgage prisoner.

It would seem hard to dispute a RICS valuation. I wonder if they are just hoping to drag feet until after the election.

[darkmarket]

2 minutes ago, Axeman123 said:

It would seem hard to dispute a RICS valuation. I wonder if they are just hoping to drag feet until after the election.

Very possibly, or until they can create some more inflation. It may need to be revised down though by the time they reach an opinion.

[Kendo]

A few months back, I think there was some media talk or flirting with the idea of resurrecting HTB. I can’t quite remember - it may have just been the housebuilders pleading again. But imagine if they brought it back and this type of case was widespread. That could be a political own goal if the media could find enough similar stories and really wanted to stir.

[Phil]

20 minutes ago, Kendo said:

A few months back, I think there was some media talk or flirting with the idea of resurrecting HTB. I can’t quite remember - it may have just been the housebuilders pleading again. But imagine if they brought it back and this type of case was widespread. That could be a political own goal if the media could find enough similar stories and really wanted to stir.

Media are controlled by the shadowy scum lurking, plotting, planning the next heist and laughing silently as they wait to eat dead ( bankrupt) human flesh.

[One percent]

2 minutes ago, Phil said:

Media are controlled by the shadowy scum lurking, plotting, planning the next heist and laughing silently as they wait to eat dead ( bankrupt) human flesh.

Beat me to it.  

[darkmarket]

54 minutes ago, sancho panza said:

Of course they can.If you have a mrotgage,then the mortgagee has a right to decide when/how it takes  aloss.

I believe the govt is second charge on the schemes so therefore possible the taxpayer will take the loss but more likely the usnuspecting punters that took them out.25%+ down and mortgages obviously take the hit.

I'd think that easily possible already in London on that profile of purchase in particular.

There may be a tension between the bank / main lender involved and the Treasury though, the former being under more immediate commercial pressures. At least I assume their pressures are more immediate.

[HousePriceMania]

2 hours ago, One percent said:

That’s a bit cheeky. They are essentially saying that the buyer covers all the risk then.  What a bunch of grifting cunts. And this is government too. 

Seems the tax payers pay the difference and the criminal house builders keep all our money

 

Edited February 26 by HousePriceMania

[darkmarket]

Isn't it that the government share would be marked down to zero, leaving the taxpayer with a loss of the amount of the intial 20/40%? My understanding is the borrower's equity is wiped out first, then the taxpayer, then the lender.

It sounds like the HTB people are looking at postponing the sale indefinitely to avoid being marked to market. We saw how rates responded in Ireland to that approach at scale, but I suppose the equivalent pressure would be applied to gilts so more easily absorbed (until it isn't).

Below is from the most recent report:

 

Quote

 

From 1 April 2013 to 31 May 2023, 387,195  properties were bought with an equity loan. Of which, 328,346 were purchased by first-time buyers.

The total value of these equity loans is £24.7 billion.

The value of the properties sold under the scheme totals £109.2 billion.

 

https://www.gov.uk/government/statistics/help-to-buy-equity-loan-scheme-data-to-31-may-2023/help-to-buy-equity-loan-scheme-data-to-31-may-2023

Edited February 26 by darkmarket

[sancho panza]

[sancho panza]

Our old friends at spelthorne etc....geniuses. picked up the CRE none else wanted at the top of the market for a full price

 

 

[Kendo]

2 hours ago, Phil said:

Media are controlled by the shadowy scum lurking, plotting, planning the next heist and laughing silently as they wait to eat dead ( bankrupt) human flesh.

There’s an element to this but sometimes they just want a good story. In the early days of printing, pamphlets and papers were very partisan. Then, with the growth of mass media, the idea of journalistic balance and neutrality came in, not really because of ethics and not for political reasons but because the newspaper owners realised that if they told both sides of the story rather than just one then, they might attract more readers, possibly with different political views, and therefore attract more advertisers and ultimately more money. So at times (not always, of course) there could be a commercial incentive to be neutral and balanced rather than overly partisan.

Things have become more partisan and polarised again in recent years owing in part to a more fragmented media, proliferation of media channels, etc (target a certain audience to stand out from the crowd). Quality investigative journalism is now a dying art, it seems, but sometimes the media still like to report good stories.

[Phil]

15 minutes ago, Kendo said:

There’s an element to this but sometimes they just want a good story. In the early days of printing, pamphlets and papers were very partisan. Then, with the growth of mass media, the idea of journalistic balance and neutrality came in, not really because of ethics and not for political reasons but because the newspaper owners realised that if they told both sides of the story rather than just one then, they might attract more readers, possibly with different political views, and therefore attract more advertisers and ultimately more money. So at times (not always, of course) there could be a commercial incentive to be neutral and balanced rather than overly partisan.

Things have become more partisan and polarised again in recent years owing in part to a more fragmented media, proliferation of media channels, etc (target a certain audience to stand out from the crowd). Quality investigative journalism is now a dying art, it seems, but sometimes the media still like to report good stories.

Sorted it. Hope you don’t mind.

So at all times (always, of course) there is always a commercial incentive.

[Democorruptcy]

14 hours ago, darkmarket said:

I wonder can they legally block sales that would leave them in the red, it reads like that's what they're investigating in their legal department. We may have a new iteration of the mortgage prisoner.

They are using other tactics, like closing down departments that were handling the losses. In 2016 I did a FOI request asking how much HTB had cost taxpayers, including:

Quote

 

Q) How many of the houses sold, were sold at a loss, based on the previous sold price?
A) 420 of the 4,051 properties were sold at a loss, based on the previous sale price (the remaining 122 were sold at no profit or loss).

Q) How much money has the Treasury lost on houses re-sold at a loss?
A) From the 420 sales at a loss, the total loss was £1,007,772 against the original investment.

 

Fast forward to now when I recently asked for an update and they directed me to this document that states

Quote

During the life of the scheme there have been 33 successful claims totalling £389k

In the 8 years inbetween my information requests the number of houses re-sold at a loss hasn't gone up, it's gone down! Their recent figures look like pure fantasy to me and just something to quote if questions are asked about their next scheme.

[HousePriceMania]

6 minutes ago, Democorruptcy said:

They are using other tactics, like closing down departments that were handling the losses. In 2016 I did a FOI request asking how much HTB had cost taxpayers, including:

Fast forward to now when I recently asked for an update and they directed me to this document that states

In the 8 years inbetween my information requests the number of houses re-sold at a loss hasn't gone up, it's gone down! Their recent figures look like pure fantasy to me and just something to quote if questions are asked about their next scheme.

Can't lose on pwopatee.

[apples]

14 hours ago, One percent said:

That’s a bit cheeky. They are essentially saying that the buyer covers all the risk then.  What a bunch of grifting cunts. And this is government too. 

More fool anyone who thinks the government (any government) is their friend! Caveat emptor / suffragator.

[darkmarket]

40 minutes ago, Democorruptcy said:

They are using other tactics, like closing down departments that were handling the losses. In 2016 I did a FOI request asking how much HTB had cost taxpayers, including:

Fast forward to now when I recently asked for an update and they directed me to this document that states

In the 8 years inbetween my information requests the number of houses re-sold at a loss hasn't gone up, it's gone down! Their recent figures look like pure fantasy to me and just something to quote if questions are asked about their next scheme.

Very interesting and well captured. This country produces so much fake data it's just uninvestable.

[Boon]

1 hour ago, Democorruptcy said:

They are using other tactics, like closing down departments that were handling the losses. In 2016 I did a FOI request asking how much HTB had cost taxpayers, including:

Fast forward to now when I recently asked for an update and they directed me to this document that states

In the 8 years inbetween my information requests the number of houses re-sold at a loss hasn't gone up, it's gone down! Their recent figures look like pure fantasy to me and just something to quote if questions are asked about their next scheme.

As far as I read it though that 33 claims bit is on the mortgage guarantee scheme, that's where someone defaults and then the taxpayer has to make up the loss. The average claim size does make me wonder if any banks bothered to take out the insurance, as they had to pay for it. 

A HTB can sell at a loss still and not enter this stat if the buyer pays up their mortgage.

There will be some losses but considering that HTB loan takes 20% of the sale value I'd imagine the gains are larger than the losses.

Of course I would think most of those gains accrued would be in the first half of the scheme, where I saw some of those flats jump 40% in the space of a few years. I would bet the second half is loss making or will be eventually, as that includes people buying at peak and covid madness.

[Democorruptcy]

2 minutes ago, Boon said:

As far as I read it though that 33 claims bit is on the mortgage guarantee scheme, that's where someone defaults and then the taxpayer has to make up the loss. The average claim size does make me wonder if any banks bothered to take out the insurance, as they had to pay for it. 

A HTB can sell at a loss still and not enter this stat if the buyer pays up their mortgage.

There will be some losses but considering that HTB loan takes 20% of the sale value I'd imagine the gains are larger than the losses.

Of course I would think most of those gains accrued would be in the first half of the scheme, where I saw some of those flats jump 40% in the space of a few years. I would bet the second half is loss making or will be eventually, as that includes people buying at peak and covid madness.

My FOI request was answered by the Homes And Communities Agency. That's now conveniently defunct. Despite the -£1m from properties sold at a loss, overall they made a net profit of £22m on properties re-sold by 2016.

Quote

 

Q) How much did these houses cost in total?
A) The original purchase price for these properties was £909,174,280 (of which the HCA share  was £180,237,225).

Q) How much did these houses then accrue in total sales?
A) The total proceeds from these sales was £1,023,842,762 (of which the HCA share was £202,594,535)

 

Plus without me asking about stamp duty they also mentioned they were also making money from that. No doubt pleased it had gone up with property prices rising.

It's no wonder the BoE ended mortgage affordability tests in Aug 2022 with mortgage rates rising and the Mortgage Charter keeps people in homes they can't really afford. It all helps to try protect the value of the HTB assets/liabilities.

[Plan-b]

2 hours ago, Democorruptcy said:

My FOI request was answered by the Homes And Communities Agency. That's now conveniently defunct. Despite the -£1m from properties sold at a loss, overall they made a net profit of £22m on properties re-sold by 2016.

Plus without me asking about stamp duty they also mentioned they were also making money from that. No doubt pleased it had gone up with property prices rising.

It's no wonder the BoE ended mortgage affordability tests in Aug 2022 with mortgage rates rising and the Mortgage Charter keeps people in homes they can't really afford. It all helps to try protect the value of the HTB assets/liabilities.

Reads like part Pyramid Scheme and Protection Racket all rolled up into one. Governments - do as they say do as they like themselves legal or not.

[spygirl]

3 hours ago, Democorruptcy said:

My FOI request was answered by the Homes And Communities Agency. That's now conveniently defunct. Despite the -£1m from properties sold at a loss, overall they made a net profit of £22m on properties re-sold by 2016.

Plus without me asking about stamp duty they also mentioned they were also making money from that. No doubt pleased it had gone up with property prices rising.

It's no wonder the BoE ended mortgage affordability tests in Aug 2022 with mortgage rates rising and the Mortgage Charter keeps people in homes they can't really afford. It all helps to try protect the value of the HTB assets/liabilities.

BoE ended IR stress testing,thats all.

The affordability -75% mortgages lending less than 4.5 household income minus reg spend, is still in place.

You don't need to stress test IR whilst SCRs are well north of 4%.

 

 

[Axeman123]

[onlyme]

 

[onlyme]

US, Chinese, Canadian now German property markets in trouble and UK to sail through.

Nope.

 

[onlyme]

London leads.

 

[spygirl]

5 hours ago, onlyme said:

London leads.

 

Again, London/SE us ground zero for IO resi mortgages.

All the last 10y of grunt work from BoE, moving IO to repayments is rapidly unraveling as they can't afford the higher repayments.