Saturday 21 December 2013

Saturday, December 21, 2013 Posted by Jake 4 comments Labels: , , ,
Posted by Jake on Saturday, December 21, 2013 with 4 comments | Labels: , , ,

A graph on page 63 of the Bank of England's end of year report might raise an eyebrow, if not your blood pressure.

Loan to Value (LTV) tells what percentage of the value of your home you owe on your mortgage. For instance, if you have a £150,000 mortgage and your home is worth £200,000 your Loan To Value ratio is 75%.

LTV in 2013 is actually higher than just before the Credit Crash, blamed by many on people borrowing too much on mortgages. In 2007, just before the crash, around 10% of borrowers owed more than 75% of the value of their homes. In 2013 this had risen by a half to 15% of mortgage borrowers. The percentage of borrowers in negative equity in 2013 (they owe more than the value of their homes) quadrupled to 4% of mortgage borrowers. 

Bank of England Quarterly Bulletin, 2013 Q4


  1. Your analysis on LTV mortgages point to the fact that banks still have risky lending. To discover if banks were still being reckless you should compate LTV at the time the mortgages were taken out pre and post criris. Mortgages are long term assets and therefore if there is a crash and assets are re-valued lower post crisis then the LTV will naturally deteriorate even if banks aren't conducting any more risky lending. The market in the north of England has generally being flat for residential and why should help to buy be scaled back here because of risky lending in the city? Why are your cartoons so polemical and lack balance? You feed into the general populist disquiet and drive support for extreme solutions rather than engaging in debate.

    1. 1. Favourable terms for the north, generally speaking? I think that's a good idea. We think the UK should rebalance away from London & the SE.
      2. "Why are your cartoons so polemical and lack balance?" Because we are campaiging. We are not a centrist national newspaper with 200+ staff. Though we are genuinely flattered that some readers expect it of this blog.
      3. "You feed into the general populist disquiet..." Populist? Phew! Sometimes we worry not enough people are aware of these things.
      4. "...and drive support for extreme solutions..." These are not extreme solutions.
      5. "...rather than engaging in debate." What do you want me to do? Give you a phone call?! That's what the comments section is for ;-)

    2. Well done for pointing out that things are far from as rosy as Gidion keeps telling us. All his policies have achieved are higher house prices and chaos in the public sector.
      When things finally go belly up for Gidiot's economic???? strategy you will be crying out for the "extreme" policies of the Labour Party.
      We are told that the average pay rise is 3%, who has had a 3% rise in the last 5 years let alone in the last 12 months???
      And the cartoon is factual isn't it so what is the problem???????? We do have rising consumer debt and house prices and from the previous experience we know that this will lead to major problems if policies aren't introduced to alleviate / stop these problems from continuing.



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