Wednesday, January 12, 2011

More Good News for the UK Housing Market?

If ever you needed conclusive proof that the UK housing market is rigged in order to transfer wealth from the young to the old, then please read this from Barratt Developments statement this morning...

Today we are also announcing a tie-up with Hitachi Capital (UK) PLC that will allow parents to borrow money to help their children onto the property ladder.  The product is unique in the market and is specifically designed to address current mortgage restrictions on loan to value.
In other words, we've given up focusing on getting young people into debt in order to prop up UK house prices. Instead, let's cut out the middle man and just get the parents directly into debt instead.

Meanwhile, in the six months to December, their completions were down to 4,832 from 5,053 last year. However, the average selling price was up 6% to £176k. As for the growth outlook...

Mortgage lending remains at unusually low levels and we view this restricted availability of mortgage finance as continuing to be the key constraint on market growth in the near term.
So much for the restructuring in the banking sector.

Although, one thing that has gone back to normal is that Lloyds CEO Eric Daniels looks set for a £1m bonus, whilst Stephen Hester has £2.5m lined up. Meanwhile, Bob Diamond thinks its time for the banks to stop apologising for the credit crunch.

Aside from the moral issues, the banking sector underperformed benchmark indices in 2010.


Prices up, supply growth slowing, the banking sector not lending money and now, parents are having to borrow money to pay for their parents houses. Meanwhile, the banking sector looks set to award itself £7bn in bonuses-of which Savile's estimates 1.6bn will go into the London housing market- after having seen increases in their salary in 2010 to counter weight the tax last year.

When will this madness end?

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