Interesting dinner last night with a bunch of guys involved in the housing markets.
These are some of the UK's largest property lenders and managers.
By way of example, one gentleman was telling me about his wealthy client with £100 million property portfolio … the client was trying to restructure their financing and he accused the bank of 'usury' on the basis that the bank was going to charge a 2% fee purely for the restructuring contract. The bank simply does not want more property on their books, and will charge a prohibitive fee to avoid it.
Another fact that came out last night, which has been under-reported, is that we hear lots about house prices falling and being bad, but what about the number of houses actually sold?
Last year was apparently the worst year for houses sold. In 2007, over a million houses were sold, and in 2008 it dropped to around half a million.
This is houses actually sold, not remortgaged.
The actual sale of houses was, in fact, the worst on record … more houses were being sold just after the Second World War than were sold last year.
Finally, the bit that amused me the most, was a board director who sits on the board of a firm which has a few other notaries, including a former Chancellor of the Exchequer.
This is the role that Gordon Brown filled for many years before dumping handing over the reigns to Alistair Darling.
Anyways, this former Chancellor apparently sat in one board meeting where the Managing Director presented the results of the last year with the bad news that profits would be down 12% this year.
The right honourable so-and-so whispered to my board director colleague, "how much is that?"
My colleague was surprised at such a question as it was obviously 12% of the amount of last year's profit, and duly informed the esteemed Chancellor as such … to which the leading politico luminary replied: "and how much is that?" as he couldn't work out what 12% was.
Hmmm … no wonder the economy is in such a state.