Sunday, 17 May 2009

Least we forget.....

...the UK is still mired in the greatest financial crisis in a century.

It is one of the intended benefits of a corrupt legislature. While voters are distracted by MPs expenses, the financial system continues to throw up huge liabilities that will end up on the public sector balance sheet.

So, the bailout continues; this time it is the turn of the building societies. From today's Times...

A RESCUE operation to save one of Britain’s biggest building societies is under way in the first of a new series of expected bailouts in the sector.

West Bromwich building society, which celebrated its 160th anniversary this year, has a loan book worth almost £10 billion. It is being secretly offered to potential white-knight bidders by the Financial Services Authority (FSA), the City regulator.

Coventry and Yorkshire building societies are both in talks with the regulator on a possible takeover of their struggling rival. If no deal can be agreed the worst parts of its loan book are likely to be nationalised, with its 47 branches and 530,000 customers passed to another society. The move follows stringent new stress tests being imposed on the sector by the FSA.

6 comments:

hatfield girl said...

We should be terrified. People have been enticed into taking on debt for social housing they should have been offered as part of a civil society, and that taxpayers were conscious was part of their reason for accepting tax levels. Debt they cannot pay, driven by the false hope they could privatise social wealth, just this once it was going to be their turn.
They can't even walk away. Without a political will that recognises what has been done to some of the poorest in our country and forgives some of this debt, they are indentured for life. And what a life. And they'll even have to vote for its continuance.

electro-kevin said...

Ajay says:

Interest rate rises are a long way off say the analysts. They expect as a minimum rates will be held to 0.5% till end of next year. I hope they are right!



Now I do not wish the recession to last but it is hard not to. Especially when you are a highly leveraged buy to let investor.



So if you are wondering where to get deposits or fees for your next purchase then save up, as you have no excuse now!



My mortgages have reduced from £40k a month to £20k a month. Some of my fixed rates expire in 2009 and the last lot expire in June 2010. This will mean my mortgage payments will go down to around £15k per month.



With rents going up to the LHA rate you could say my monthly P&L is quite healthy! These interest rate reductions have really helped out.



Like the buy to let king from the Property Watch programme said this time the government came in to the rescue. Unlike the big crash pre world war 2 where the government did nothing this time the bank came in, slashed rates printed money and kicked the FSA in to gear!



So I am still waiting for the smack on the back of the head (which will be inflation) to cancel out all these good times. No smack yet. We just have to buy as much as we can while prices are low and we have the cash to do so.



Problem is there are more buyers than sellers so bargains are going lightening quick. With my team of sourcers we are still losing deals. Can you imagine what chance a one man band or first time buyer gets? Very low. Too many professional buyers out there.



We may see the refurbish property ladder sarah beeny wannabees brigade appearing willing to take a longer term punt. i.e. buy now, complete in 12 weeks, refurb in 12 weeks, get 6 months council tax exemption and put up for sale for when the market recovers and hold out for a sale in early 2010.



Anyway enjoy this TWO year period of low interest rates. I have seen residential rates at 2.4% so you can enjoy them even if you are not on the property ladder yet.

Anonymous said...

Parasite Labour government rewards and saves parasites. 'Nuff said.

Oldftb said...

"Expected bailouts" this time.LOL.

Anonymous said...

LEST we forget that there are rumours of a London subsidiary of a US Bank, that "failed to deliver" on an overnight trade last week. Hold onto your Hollyhocks! It could get rough.

boiling frog said...

http://news.bbc.co.uk/1/hi/business/8054244.stm
West Bromwich denies rescue talks The building society said it was "well capitalised" and "able to meet all its obligations in full". Yadiyadiya. Familiar note n'est pas?

Anon: my tenterhooks are holding on to my hollyhocks.