Sex has everything.
There is the build up, the foreplay, the climax and the afterglow. For many, having a facility to borrow money is like having sex: Build up to what is going to be bought, playing with the choices, tapping in a pin number and taking away the asset. But unlike sex where you can do it all over without recourse to the last time, borrowing more debt is like catching an STD every time and not being able to get rid of it.
The UK has expensive houses that got to be expensive because of easy leverage. Like the US's subprime debacle, the UK had the likes of Northern Rock, the Bank of Ireland and RBS offering 125% LTV mortgages, no questions asked. Of course the regulators, late to the game remembered this is what happened in the 1980s and they didn't do anything about it have decided borrowing money to buy houses is a bad idea.
Hence borrowing rates are at all time lows and those with huge debt are struggling to service them. You see these greedy people were leveraging for future appreciation and capital gains. Now they are lining up outside the STD clinic hoping they are not HIV positive.
Ireland's housing market has crashed because the debt ran out and so did the demand. The UK has more people than houses and so prices are being kept up. This is not good and more houses need to be built but the developers cannot borrow the money.
So when the Bank of England (telegraph) warn us of impending defaults and foreclosures, one has to ask why didn't this happen 2 years ago like it did in Ireland or the USA?
Maybe its the psyche of the UK people. Maybe its the artificially low interest rates. Maybe its the lax immigration policies that have kept demand up. Maybe its the switch from repayment to interest-only mortgages? Maybe its the banks shitting themselves that foreclosures = bad debts = more tier 1 capital = expensive rights issues and so are holding on with dear life.
So when the Halifax change the LTV requirement on interest only mortgages from 85% to 75%, this indicates to me the Halifax, the UK's largest mortgage lender believes house prices will be falling by at least 10% this year.(money marketing)
So if you are leading the life of a Nun, then get out there are short UK real estate.
A company who said the internet would never catch on tells us tablets will die out very soon (bloomberg)
FSA kill off commissions (money marketing)
Ireland's banks need EUR24bn capital because its real estate assets are worthless (reuters)
Ireland's ghost towns (youtube)
March against debt (facebook group)
Bank of England to be turned into a youth hostel.