Abandon All Fear

What nobody else seems to be saying…

Archive for September 11th, 2007

Titanic Slowdown

Posted by Lex Fear on September 11, 2007

“A spokesman said: “This is a line-of-credit funding problem rather than an irresponsible lending problem. This is not anything to do with arrears or repossessions, which were no worse than industry norms. It’s about the global credit squeeze and the fact that funding has been withdrawn by the banks, which are generally pulling in their horns.” – Guardian Unlimited

Utter bullshit. What is a line-of-credit problem? Well, generally if you have a line-of-credit problem it means your lenders don’t think you are responsible enough to take out another loan, right?

I’ve been going on about interest rates, but it’s not just the rates rises that will finally kill it. This is what also needs to happen, banks having their own borrowing hit by the American subprime meltdown, in turn they tighten their lending belts and use better criteria. The significance of this is that less experienced Buy-to-Let’ers also have more difficulty acquiring a mortgage. Less people able to borrow, means less money able to spend on housing, meaning more difficult to sell a house, meaning sellers forced to lower prices, compete and… panic!

Two first-time buyers cling to the edge of a sinking ship and just survive. Watch those who took the plunge too early get sucked under. Witness the slowdown of the Titanic.

“And my mortgage will go on… and on”

 

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