Tris Posted September 13, 2007 Share Posted September 13, 2007 If you want to learn a bit more about the economics behind prices, have a read of this. US economy granted but everything is relevant... Link to comment Share on other sites More sharing options...
John Wright Posted September 13, 2007 Share Posted September 13, 2007 Interesting article Tris but it highlights the differences between the IOM and UK markets on the one hand and US on the other. US big country, loads of land, no actual shortagae of developable land, so price rises are artificial and were driven by a buying to invest and profit boom. IOM and to lesser extent UK suffer from shortgage of supply to demand This tends to mean that our prices will not fall Secondly, home loans in the US are non recourse. ie you default and walk away with no responsibility for the loss if sold at less than owed. In the sub prime market that means you have nothing to lose, Broker takes a big chumk for introducing you to lender and two years down line you are repossessed. Very different. Also sub prime, high risk mortgages, in UK terms non status mortgages, are generally at higher rates in IOM and UK, reflecting risk. In IOM no recourse mortgages are unheard of. The lender takes a personal promise to repay plus a charge on your prooperty, a bond and security. Of course the US problems have raised the rates at which lenders can borrow in the money market ( or even their ability to do so) meaning that as most mortgage lenders advance many times their capital and then borrow the rest (some over night, some on a month, some on a yera some on ten yeras etc) to lend on at profit when they come to have to repay, which happens daili, they can't and are technically insolvent for not paying debts when they fall due, even although if all the advances were reapid they would be massively solvent. They cannot lend to new borrowers, cannot repay short term debt and need a life boat, Northern Rock, today. From a bit player 20 years ago it granted one in 5 UK mortgages last year, lending a massive 150 billion on a capital base of about 20 billion in share capital and deposits Final difference UK/IOM market and US and in particular continetantal markets is the way mortgages are financed. Although with freeing of markets and de regulation this is not as important. In UK the borrowing for lending on used to be fairly short term meaning rates moved with base rate, on the continent borrowng to lend on was matched so if a lender gave a 30 year morgge it wouod borrow the money for 30 years. This meant less volatility in mortgage rates and less risk of a problem like Northern Rock Link to comment Share on other sites More sharing options...
bluemonday Posted September 20, 2007 Share Posted September 20, 2007 A fine example of the level of service a local estate agent provides. 1st e mail from potential buyer Your details, above ref, do not give current rent and review/s date/s Please advise at your earliest convenience. Have requested full details via your website. His reply Next review is 2009. Given the magnitude of the rent it is not going to be a significant issue. 2nd e mail from potential buyer I have requested information, if you can't be bothered I'll contact the vendor direct What wonderful service............. Link to comment Share on other sites More sharing options...
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