Gwen Davies

Registered with Property118.com
Thursday 4th July 2013


Latest Comments

Total Number of Property118 Comments: 40

Gwen Davies

9:42 AM, 16th December 2018
About 4 months ago

Negative equity - are the banks responsible?

Reply to the comment left by AA at 16/12/2018 - 09:30
Thanks aa so do you think it’s morally wrong?... Read More

Gwen Davies

21:45 PM, 15th December 2018
About 4 months ago

Negative equity - are the banks responsible?

Reply to the comment left by Seething Landlord at 15/12/2018 - 21:36
Thank you seething landlord for your time. I find it extremely unjust but I bow to your superior knowledge.
Thank you again... Read More

Gwen Davies

17:04 PM, 15th December 2018
About 4 months ago

Negative equity - are the banks responsible?

Reply to the comment left by Seething Landlord at 15/12/2018 - 16:55
I still don’t understand why! But clearly you know better than I do.... Read More

Gwen Davies

15:50 PM, 15th December 2018
About 4 months ago

Negative equity - are the banks responsible?

Reply to the comment left by Luke P at 15/12/2018 - 14:23
Thank you Luke for your comments. In a famous case a ship delivered sugar late. Because of the late delivery the sugar was sold at a loss and they sued the shipping company and won. The courts said it was because the shipping company contemplated at the start of the contract that sugar prices fluctuate and it could just as easily been that they were up and then they wouldn’t have sued for loss of profit but the shipping company would not have been eligible for a portion of their gain. They were having it delivered to make a gain. This was contemplated at the beginning of the contract. The court held that it’s to do with the contemplation at the beginning of the contract. The late delivery of sugar (breached the contract) and the shipping company knew that sugar prices fluctuate so delivery time was important. The mortgage company contemplated the end of contract terms and but for “the Banking Crisis “ (they were complicit in this) the contract would have completed in the contemplated manner.
Do you see my side now?... Read More

Gwen Davies

14:00 PM, 15th December 2018
About 4 months ago

Negative equity - are the banks responsible?

Reply to the comment left by Mike McDonagh at 15/12/2018 - 12:20
Hi Mike thank you for your comments you seem to be of the same opinion as everyone else on this site but can I please explain how I see the situation.
The Banking Crisis was an exceptional event.
It was brought on by the global financial crisis not anyone’s fault in this country.
However our banks in the main did not have sufficient capital to sustain what they were lending.
Mervyn King (head of Bank of England in 2007/8) said the Banking Crisis was due to reckless lending on the parts of the banks. That is they didn’t have sufficient reserve funds to sustain their business when the global crisis hit.
This situation is not likely to occur again in the future because the regulators have introduced systems to ensure that Banks hold sufficient reserves before they are allowed to operate as lenders.
These regulations have only been introduced since the Banking Crisis occurred.
So any restitution now is not likely to impact on future mortgage lending as one commentator suggested it would.
However, over a ten year period it is unprecedented that a house would remain in negative equity.
House prices do fluctuate but never in the past have they not increased to above the value placed on them 10 years previously.
This is an exceptional circumstance.
Sure I took a risk. The bank took a risk. But at the beginning of the contract we both calculated that this was a safe risk. Never over decades in the past have house prices not risen (despite fluctuations) over a ten year period.
So why has this happened now.
It is due to the exceptional circumstance of the Banking Crisis.
This was not my fault. The Banks have admitted their responsibility for the Banking Crisis and apologised for their part in it. It will also not happen again due to the new regulations.
Economics rule. And so in most areas of the UK property values have risen sufficiently to negate negative equity and even show large profits but these are mainly in cities and more affluent areas.
My houses are in a working class areas.
These areas were hit harder. Values dropped dramatically and the austerity measures introduced by the government hit these areas most. Wages were frozen businesses collapsed. Workers were asked to reduce their wages. We are recovering but at a much slower pace than the more affluent areas.
When I took the mortgages I contemplated with the mortgage company that at the end of contract there would be sufficient equity for me to refinance or sell with a profit.
The reason that this is not possible is due to the exceptional circumstances of the Banking Crisis. This was a seismic event. It impacted the whole economy.
Yes I took a calculated risk. The Bank also did after doing specialist due diligence. Clearly neither one of us would have taken this risk had we foreseen the Banking Crisis. It was unforeseeable at the formation of the contract.
I clearly had no part in the banking crisis but the banks were responsible. As such I feel they should work with me to find an agreeable solution. It feels to me as if I’m carrying the can for their recklessness. They’ve either had to stop lending or they’ve disappeared altogether and the government using taxpayers money have bailed them out. They were supported why can’t they now work with me to support me after this exceptional event.?
I wonder if you still think I’m just trying to blame it on someone else?
I suppose I am blaming the Banks. But it was a “BANKING Crisis”. It was unforseeable at the start of the contract but the effect is still being felt. All I’m asking is to be treated fairly by the “BANKS”.

Please tell me if you can see my point of view?
Thanks... Read More