tag:blogger.com,1999:blog-2948538160252327076.post7431090701295835034..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: Building societies take cash out of the housing marketAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2948538160252327076.post-92114749326442592702008-08-11T20:30:00.000+01:002008-08-11T20:30:00.000+01:00For the first 6 months of 2008 net lending was 3.4...For the first 6 months of 2008 net lending was 3.4 billion and net saving was 6.3 billion:<BR/><BR/>http://www.bsa.org.uk/mediacentre/press/monthlyfigs_june08.htm<BR/><BR/>If Junes stat's continued for the second half of the year then net lending would be -3.5 billion!<BR/>A complete turn around as the graph clearly shows.<BR/> <BR/>Some of the increase in savings is no doubt attributed to investors selling off properties and stashing away their money.<BR/><BR/>The net inflows of cash clearly show the building societies are not short of cash. So it's unclear to me why they are not lending other than due to being over-cautious in a falling housing market.<BR/><BR/>On the other-hand I wonder how the building societies are actually making any money. Normally lending at a higher rate would fund some of the interest paid to savers. Where will the money come from now. Perhaps some of these building societies will go under since this finance/business model no longer makes sense...<BR/><BR/>MikeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-52245667388149318002008-08-11T17:14:00.000+01:002008-08-11T17:14:00.000+01:00I love that graph!I love that graph!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-80198683048542673872008-08-11T16:48:00.000+01:002008-08-11T16:48:00.000+01:00Hopefully this is the start of a return to the mor...Hopefully this is the start of a return to the mortgage system of 25-30 years ago, before the Big Bang loosened everything up. If you wanted a mortgage you signed up with your local building society, saved with them for a few years, thereby a) proving you had stable employment, and b) built up a cash deposit. They then, after much kissing of the managers backside, lent you 2-3 times your salary to buy your house. Which you then lived in. Not rented out as an investment, or tarted up with some emulsion and MDF and tried to flog on to some other unsuspecting idiot for 10-20K more than you bought it for.<BR/><BR/>If we could return to something approaching this, all the current capital tied up in houses could be put to more productive use in industry. Heaven forbid - actually making something!Anonymousnoreply@blogger.com