Free Advertising for Mortgage Middlemen from the BBC

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The BBC a month or so ago had an article today entitled “The Dark Art of Obtaining a Mortgage“.

The article was written by a mortgage broker.

He claimed it is very difficult to obtain a mortgage even if you can satisfy the criteria. If you’re scared, you see, there is always that friendly local mortgage broker who is there to hold your hand.

The mortgage broker who wrote the article doesn’t mention how much commission the broker makes on the mortgages he sells. Nor does he explain how it is that those mortgage brokers are so amazingly well-informed about the fast-changing mortgage market. Perhaps they use price comparison websites. Or maybe they just read the glossy leaflets they get sent by the mortgage providers.

Here’s that broker’s dark tale of fear to have a typical first time buyer trembling:

There are many tales of woe from seemingly decent borrowers who have either been turned down or, more commonly, been told that they can only borrow a lot less than they need…

There has to be more innovation in the 80% to 90% loan-to-value market.

Lenders who currently operate in this area, seem to make it very difficult for many borrowers to actually obtain the offer they request…

The first hurdle to overcome is the dark art of the lender’s credit score.

This can be tightened and loosened at will as a lender decides exactly when to increase or decrease their lending levels…

Decent independent mortgage brokers will know which lenders are moving quicker than others and what they are likely to ask for at any given time.

There are many good borrowers who are being turned away every day for reasons they cannot quite fathom.

Well, the clue to the reason for all this may be the paragraph near the top of the article:

Lenders suggest they are providing almost all their applicants with the mortgages they apply for directly.

Could it possibly be that one of those “reasons they cannot quite fathom” may well be that many applicants use mortgage brokers who don’t give a toss about them except as a source of a commission, and typically have less knowledge of the mortgage market than you could get from a comparison website?

Sensible advice for obtaining a mortgage is pretty similar to the advice for buying anything:

1. Don’t use a mortgage broker. They are middle-men who add no real value to the process for you, the borrower, and often mess things up.

2. Use a price comparison website to have a look at the kind of deals that are available. Or you could simply stick with your own bank, who will know your history and therefore probably need less documentation from you. And the saving from going elsewhere might not be that great.

3. Stick to reputable companies, preferably ones you have dealt with in the past.

4. Read the lender’s documentation carefully and provide the documentation they ask for. If you need help with this, don’t go to a mortgage broker. Instead ask the lender, who will be extremely happy to help you apply for one of their products.

5. And don’t, whatever you do, go to a mortgage broker. Whatever the BBC may tell you.

Quick, Hide the Porn Lads, It’s Ed

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Oh, Ed, You’re So Masterly

At the tender age of just 42, son of a peer of the realm and novice MP Ed Vaizey has been in parliament only since 2005. With his second class degree in History, he speaks for the government on Culture, Communications and Creative Industries.

Mr Vaizey wants Internet Service Providers to stop pornography at source, unless the viewer can prove they are an adult.

The ISPs are none too sure this will work, the main problem being that your computer can’t tell what age you are, and if it could, might be lying.

But Mr Vaizey is having none of that.

This is a very serious matter. I think it’s very important that it’s the ISPs that come up with solutions to protect children.

I’m hoping they will get their acts together so we don’t have to legislate, but we are keeping an eye on the situation and we will have a new communications bill in the next couple of years.

Yes, Mr Vaizey is ready to kick ass. And he even managed to spout all this with a straight face.

But what of all those technical obstacles? How do you identify a “pornographic” site for example?

As Mr Vaizey said, “it’s very important that it’s the ISPs that come up with solutions”.

Because Mr Vaizey hasn’t got any.

Except the Chinese solution, which is to licence all websites hosted in the country and screen all sites from outside via a massive firewall. And you can bet that if the British Civil Service organised that, it wouldn’t even work.

High Speed Money Burning

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The West Coast Main Line – One of Britain’s Three Lines from London to Birmingham

The BBC says it will cost £12 billion.

The Telegraph says it will cost £33 billion.

No, it’s not a bank bailout. Not at those paltry sums.

This is the government’s vision for our transport future. It is a new high speed rail line to whisk travellers from London to Birmingham in under an hour. That’s – ooh – quite a few minutes less than the three lines that already cover that route.

It’s a snip – just loose change for a government that has so much money to burn, and doesn’t have other priorities that need the money. Never mind investing in our kids’ schools. They might grow up uneducated – but they’ll have no less than four options when they want to visit their gran in Brum.

And all for just £500 per man, woman and child in the country. Assuming the project doesn’t go over budget.

Philip Hammond, the Transport Secretary:

We need to up our game to maintain our standard of living and prosperity. Construction will not begin until 2016 and it’s not just about high speed, it’s also about capacity. We will be out of capacity on the West Coast Main Line by the early 2020s.

It seems he has realised the “enormous” reduction in journey times is not much of an incentive to support the plan. Now it’s about capacity. And running more and longer trains on the existing three lines from London to Birmingham doesn’t have the glory of opening a shiny new high speed railway.

Anyway, the French have got one, so we should too. Can’t have those foreigners stealing a march on good old Blighty.

As a means of burning our money, this new scheme should nicely take up the slack once the fires from bailing out the banks have died down.

In fact, this is such a good idea, that Mr Hammond should announce that the private sector will be expected to pay for it, with no government subsidies. After all, that’s the line they have taken with the new nuclear power stations and with tidal power.

Who knows, maybe those bankers are now so confident that they would be falling over themselves to add their cash to the High Speed bonfire.

Still Think Man-Made Global Warming is Real?

Like I did a couple of years ago?

Read this.

And this.

…just to balance out some of the “consensus” stuff you hear on the BBC…

The Climate Change Clown’s Greatest Performance Yet

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The Government’s Star Clown Turns in a Bravura Performance

The government has decided to “guarantee prices for low carbon electricity” to encourage the power generators to invest in it.

Secretary of State for Energy and Climate Change Chris Huhne (stop laughing at the back, there) told the House of Commons that the proposals were:

• to increase the long-term certainty about investment in power generation by providing greater support to the price of carbon to encourage new entrants into the market
• to introduce long-term contracts for low carbon generation to make clean energy more attractive, including top up payments to low carbon generators if the wholesale price of electricity is low
• to make additional payments to develop reserve plants to ensure “the lights stay on” during periods of high demand
• to limit the amount of carbon emissions from “dirty” power stations, including reinforcing current requirements that new coal power stations must incorporate carbon capture and storage.

Mr Huhne really is extremely funny, but distressing if you care about Britain’s future.

To paraphrase, he’s going to encourage new nuclear stations by forcing their competitors to subsidise them. (That’s what “providing greater support to the price of carbon” means.)

And he’s going to pay generators to build windmills, and also pay them to build gas fired stations as well just in case people dare to turn the lights on, or in case the wind isn’t blowing. Or perhaps the subsidies to the “reserve plants” are designed to help them pay their subsidies to the windmills.

And he’s going to stop anyone following the example of the Chinese, who have been building one new coal fired station per week.

And after Cancun, he’s also going to pay the Chinese to help them handle climate change.

In Mr Huhne’s world, a generator could be building windmills, and claiming subsidies for building “reserve” gas fired plants that, surprise surprise, turn out to be used more than the windmills. And selling carbon credits from the windmills to itself to run the gas fired stations.

But Mr Huhne had more, to make us all laugh until tears stream down our faces. He claimed that electricity bills would rise by £160 a year for the next 20 years because of his proposals. And then he claimed they would rise by £190 a year if his proposals didn’t go ahead.

Mr Huhne’s interventions are designed to get generators to build more expensive green power stations, rather than less expensive fossil fuelled ones. And yet he thinks his interventions will reduce bills.

And there was yet more merriment as he declared:

We’ve got to replace about a quarter of our ageing coal and nuclear power stations anyway, and since energy companies are not the Salvation Army and are going to have to make a return if they are going to make this investment, there is going to be a rise in energy bills [anyway].

In Mr Huhne’s world of fun, Tesco would argue they needed to increase the price of Mars Bars every year to fund their capital investment.

And he said that

there would be extra support for what are described as younger technologies like offshore wind and wave power.

But that largesse does not include tidal power – Mr Huhne himself has already rejected the Severn Barrage, which could have provided 5 percent of our electricity.

You couldn’t make it up. But Mr Huhne did. He is a comic genius.

Russians love the circus. Maybe Mr Huhne should do a tour of Siberia. Preferably a very, very long tour.

Stopping Global Warming Isn’t Enough. Now We Must Stop Evolution!

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It’s Not Too Late to Save the Polar Bear!
But If He Chooses the Wrong Mate, We Should Shoot His Babies

You will be pleased to hear that, according to the BBC, it’s not too late to save the Polar Bear.

The article claims that if global warming is kept to 1.25 degrees by emission cuts, then the bears will survive.

It then goes on to note that as Polar Bears come into contact with North American Grizzly Bears, interbreeding is starting to happen.

[Dr Brendan Kelly of the US National Marine Mammal Laboratory] and his team have found 34 possible examples of such hybridisation among sea mammals in the region. Cross-breeding between the bowhead whale and the endangered North Pacific right whale could quickly push the latter towards extinction, he warns.

“Plans must be developed immediately to monitor the genetics of Arctic animals and to deal with hybrids before current discrete populations merge and at-risk species are bred out of existence,” the team write in Nature.

I am assuming that “deal with” means kill.

So those people at the National Marine Mammal Laboratory think we should try and stop species interbreeding by killing any hybrids. It is clear they haven’t really thought this through very well.

When Polar Bears interbreed with Grizzlies and produce hybrids, that’s evolution in action. The species are breeding in such a way as to create animals that are better suited to the changed environment. Sure, they might not be cuddly and white, but they will be adapted to the current world.

When bowhead whales interbreed with North Pacific right whales, the offspring may not be North Pacific right whales. But they will be better suited than the right whales to the current environment. And the right whales won’t be “bred out of existence”. Their genes will have been mingled with bowhead genes to create something new.

All this is evolution. Evolution is not evil. In fact, it is enormously encouraging. It shows us once again, that no matter how the world changes, life will change and adapt to make the most of it.

Do we really want to try and stop that by killing any animals that don’t conform to man’s idea of species purity?

More Special Pleading on Health

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“Join in the Debate” – But they Really Don’t Want to Listen

“NHS and social services tested to limit by cuts – MPs” screams the headline on the BBC’s latest bit of public sector whingeing.

The Health Select Committee has apparently produced a report that says the NHS will struggle to cope with the “cuts” it faces over the next few years.

There’s more scary stuff in the BBC piece:

NHS chief executive Sir David Nicholson has estimated the health service needs to make efficiency savings of between £15bn and £20bn over the next four years.

Mr Dorrell, a former Conservative health secretary, told BBC Radio 4′s Today programme that in real terms, the NHS budget was being broadly maintained, but: “We’re having to find ways of doing more with the same amount of money.”

Ah yes. It’s those “real terms” again.

In the case of the NHS, those “cuts” don’t even exist in real terms. The NHS is getting a real terms increase every single year over the next four years. In other words, its budget will go up by more than inflation. (Provided, that is, that the Bank of England doesn’t let inflation roar away out of control.)

[Stephen Dorrell, Chairman of the Committee] said the committee had asked many experts in the world of health and local government about the challenge of making savings while maintaining standards.

“Nobody has told us it’s impossible. Everybody has said it is extremely challenging.”

So there you have it. “Many experts in the world of health and local government” have told them it’s going to be hard. And they believed it.

Which is fine. Except that both those areas – health and local government – are notorious for being extremely inefficient.

Everyone knows that demand for healthcare will rise over the next few years, and therefore that the NHS will need to make savings to pay for the increased demand. But finding savings at the rate being talked about should not be hard, given the huge amount of fat in the system. The NHS financial settlement is extremely generous given the state of government finances, and is also extremely generous by the standards of the hard-pressed private sector.

When was the last time you heard a car-maker wailing that their customers were demanding more features but wouldn’t pay higher prices and that it was all too hard?

All together now: Britain’s NHS is the envy of the world.

These Inflation Blips are Becoming a Habit

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The Bank of England – Loving Inflation

Yet again, the inflation figure has risen.

The headline CPI figure has risen to 3.3 percent. (That’s the index that was introduced by Gordon Brown to make inflation look better.)

The Retail Prices Index (RPI) rose to 4.7 percent. That was driven by rises in the prices of food, drink, clothing, furniture, household equipment and maintenance.

Given the huge amount of quantitative easing we’ve seen over the last couple of years, as well as the historically low interest rates, that is not surprising.

The authorities, however, are still in denial on this. It’s just a blip. As the BBC says:

But with the new government having announced the biggest round of budget cuts since World War II, the Bank still expects the resulting slowdown in spending to bring inflation down over the next two years.

Dream on.

First, the budget “cuts” are not all that big – in fact, the government expects spending to increase in cash terms every single year of its term in office. It is only in the “real terms” world so beloved of the public sector that spending is being cut.

And second, if government spending really were to fall, that would leave room for the private sector, including households, to borrow more. In turn, that would ease the availability of finance. So it is very doubtful whether spending overall is really likely to fall.

We’ve seen more evidence of an inflationary bubble in the economy in the most recent trade figures, which showed an increase in our already unsustainable deficit. Exports were up, boosted by the weaker pound. But imports were up by more.

The inflation demon is stirring. Unfortunately, David Cameron has chosen to continue with the Labour policy of madly low interest rates.

And because of Gordon Brown’s bad decision to make the Bank of England independant, he can blame it all on the Bank.

Of course, it is possible that the rise in inflation is deliberate policy, designed to inflate away our debts. If so, we have been there before. The lesson of history is that it is much easier to trigger off inflation than it is to stop it once it has started.

Local Council Settlement Isn’t Really Even a Cut

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Councils average 4.4 % spending power cut screams the BBC headline over today’s article explaining the local council grant settlement for next year.

It’s worth pointing out yet again that the figure of 4.4 percent is in real terms. In other words, it’s after inflation.

Now let’s see. What’s the current inflation rate?

The current retail prices index is 4.5 percent. RPIX (the rate excluding mortgage interest payments) is 4.6 percent.

All of which means that the 4.4 percent “cut” is actually an increase of 0.1 percent or 0.2 percent.

Caroline Flint, for Labour, said that the figure would mean “unprecedented” cuts in jobs and services.

Stuff and nonsense.

What it actually means is that if council workers want pay rises next year, then some of the posts that fall vacant naturally through retirement or people leaving will need not to be filled, to provide the money for the rises.

These aren’t cuts. They are restraint on increases. And if local councils cut services as a result of this settlement, then they are doing it because they want to.

At Least Eric Pickles Gets It

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Eric Pickles, Local Government Secretary and Former Leader of Bradford Council

The BBC reports that local councils are just about to learn how the cuts will affect them.

The cuts overall are expected to be 15 percent over four years – in real terms.

In other words, their money will “only” increase by a few percent over that period. As I’ve said before on this blog, that kind of discipline is normal in the private sector. But to the public sector, it’s a bit of a shock.

The BBC quotes Tony Travers of the London School of Economics, with the usual doom-laden mutterings from the Left:

There’s been nothing like this in modern times … If you look at, for example, Denis Healey’s efforts in the late ’70s to cut public spending, it had a one or two year impact on public expenditure – including on councils – but nothing like this.

And he said there would be nasty impacts on local services “including social services for elderly and children”.

Eric Pickles, as ever, was robust in his response:

I believe it is possible to cut significant sums out of local authorities by simply improving the way local authorities operate … I’m expecting local authorities to be able to provide more for less, I’m expecting them to be able to provide a reasonable level of service and I think local authorities shouldn’t have some kind of alibi in feeling that these have been imposed from the centre and therefore they’ve got to provide every single cut on the front line.

Well said. The bloated public sector really needs to get its head around this. The words on every year’s council tax bill about how tax increases have been limited by “efficiency savings” need to stop being just words.

The private sector has to actually deliver on increased efficiency every year, or go out of business. The public sector needs to stop treating the private sector as a cash cow, and start treating efficiency as a serious issue.