Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
UK Housing Market Analysis, Trend Forecast 2022 to 2025 - Part 2 - 30th June 22
Stock Market Turning the Screws - 30th June 22
How to Ignore Stocks (and why you should) - 30th June 22
Top Tips For Getting The Correct Insurance Option For Your Needs - 30th June 22
Central Banks Plan To Buy More Gold In 2022 - 30th June 22
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
GOLD STOCKS ARE WORSE THAN GOLD - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Lunatics at Nationwide Offer 125% LTV Mortgage as if the Housing Crash Never Happened

Housing-Market / UK Housing Jul 09, 2009 - 08:02 AM GMT

By: Nadeem_Walayat

Housing-Market

Best Financial Markets Analysis ArticleThe Nationwide as if the financial crisis never happened, as if the housing market had not crashed, as if the tax payers had not been forced to bail out bankrupt bank after bankrupt bank have seized the moment to grab the headlines by announcing a 125% LTV mortgage reminiscence of the pre-crash housing bubble mania days.


As we have seen the giants of the high street, the too big to fail banks such as the likes of HBOS and RBS, both of which are or rather were larger than Nationwide effectively go bust requiring the tax payers to pick up the tab in the form of liabilities north of £1.2 trillion.

Not only does Nationwide's mortgage fly in the face of good practice in terms of mortgage risk, but also slaps the government and regulators in the face who are desperately trying to re-create a functioning banking system that is not prone to excessive risk taking which a mortgage of 125% most definitely falls into the camp of.

Looking deeper under the hood of the 125% mortgage reveals it to be a complex product that basically aims to lock borrowers with better credit ratings into fixed rate mortgages of at least 6.73% and as high as 7.98%. Which when one considers that the base rate is at 0.5% gives one a clear idea that the product is being targeted at desperate people in negative equity who will be burdened by extra debt amidst a continuing housing bear market that despite the recent bounce has many more years to run, as the crash turns into a housing market depression.

If the regulator, the FSA wants to preserve any remaining credibility it has after overseeing the collapse of the banking system whilst twiddling its thumbs, then it needs to send a clear message to the Nationwide that no matter how small the market the 125% mortgage is targeted towards, it is totally unacceptable and the product needs to be withdrawn with immediate effect. Off course I doubt this is going to happen given the FSA's track record of doing nothing whilst Rome burned.

UK House Prices

The unfolding bounce in UK house prices prices is inline with my May analysis that concluded that UK house prices will experience a bounce during the summer months from extremely oversold levels as a consequence of liquid buyers returning to the market and the debt fuelled economic recovery which 'should' be reflected in rising house prices during the summer months that undoubtedly will increasingly be taken by the mainstream press to conclude that the house prices have bottomed.

To receive my in depth analysis on the UK economy, interest rates and housing market subscribe to my always free newsletter.

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 250 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Dominic
10 Jul 09, 09:30
UK house prices

Do you still see another 15% drop in UK house prices from current levels?


Nadeem_Walayat
11 Jul 09, 08:48
UK housing market

The government has in its power to stop house prices falling in nominal terms, by means of inflation i.e. devaluing your money. However the housing market depression will continue for many years regardless of games played by the government to mask the true state of the housing market.

Back in December 08 and even August 07, I stated that money printing inflation was a key risk to the nominal house price forecast, to date that inflation is yet to matierialse, however the risks are now significantly higher.


david thomas
30 Jul 09, 19:19
Uk housing market

Nadeem - time has proven you to be the Vince Cable of the housing market as you've got it more right than any other source I've found. Big respect and big thanks for helping me make decisions with eyes wide open.

Many thanks, David


Post Comment

Only logged in users are allowed to post comments. Register/ Log in