Monday, 17 September 2007

More on Northern Rock

A few follow-on thoughts from my previous post on Northern Rock and on the housing market today.

  1. If Northern Rock are facing being put out of business, why in the name of all that is fiscally prudent are they running longer opening hours to allow more people to withdraw more money?
  2. There was a letter into Metro this morning saying that it is the banks' fault for over-lending in sub-prime markets and that it isn't fair that customers should be punished by higher interest rates. Sorry to pass the buck back to you, but if you are pushed closer to default by a rise in interest rates then you have borrowed too much. Yes, the banks must take some responsibility for over-lending, but you too should take responsibility for over-borrowing.
  1. Another letter to Metro slated property developers for making profit from doing up flats and houses and making them inhabitable again. The correspondent said that they were to blame for higher house prices. I'm afraid that in your ignorance you have blamed the wrong people. Property developers are putting their own funds at risk to make a small profit on each property. Furthermore, they are not raising house prices. By making more places inhabitable/desirable, they are in fact increasing the supply of homes and therefore diluting house price rises.

What is most interesting of all is how the Labour government has presided over a Thatcher-style credit boom while it has been increasing its tax take.
Sorry to get all 'political and stuff'.

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