When I was little, my old Nanny used to make me eat my plate clean with the words :
" Eat up your highness, people in Europe are starving."
As this was post war, I'm pretty sure the Brits were doing much worse than the French and Italians, and even the Germans were starting to get there. British Nannies, especially of that era, were quite sure that Europe was never as acceptable as Britain.
I spent part of the morning with an old and dear friend of mine who has retired from the property game.
He still gets stuff offered to him, so it was not a huge surprise when he told me he had bought a "wee shop in Edinburgh" let as a sandwich bar.
Being the cagey Scot he is, he didn't give me much more information - except to say that he had lopped 35% off the asking price and it had immediately been accepted.
There can only be one reason for this - whoever the vendor is, his Bank have told him to get some cash in - any cash at any price. I'd be almost willing to bet it's HBOS. The yield on the deal is more than 10% and makes no sense as even in these times the vendor won't be paying more than 4% maximum.
The word in the market is that there is a gigantic overhang of property on HBOS' books - perhaps as much as £20 billion still, but they can't actively sell it. It would completely destroy the market. They don't want to pay liquidators when they can effectively get it done for free by the existing management.
So for a start all the busted flushes out there are being left to get on with it, but all cash coming in goes straight into the hole, with nothing coming back out. I know at least 3 people who are personally at their wit's end as they have had nothing - nada - into their own hands since October last year. Another friend of mine is busily paying his daughter's children's school fees, and the weekly shopping. God knows what the mortgage company, the car leasing company, the council tax people etc etc are doing for cash from she and her husband - whistling I suspect.
Secondly, through third parties, emails and letters are being sent to potential buyers, so it doesn't look as if it's coming from the Banks. I'm getting on average 20/30 per day. Not particularly attractive, but then I would only need one....
So vent your anger on MPs by all means ( it's all Brown's fault after all), but spare a thought for those ex-property magnates. Even the biggest companies are dying - SEGRO ( ex-Slough Estates) is down from over £6 to below 10p. ie a drop of some 99%.
That's what leverage does to you.
Eat up, for people in Britain are starving....