The bank only became massively overextended once the need for liquid cash well outstripped the mandated reserves available. That only happened because everyone started demanding their money.

Their mortgage book indeed became pretty much a write-off, and as a result their market capitalisation plummeted. That wasn't what caused the consumer crisis though (although it caused quite the investor crisis), because their mortgage book value didn't materially affect their cash reserves in the short term.

What on earth do you think caused the customer crisis? The papers weren't saying "Northern Rock has no cash because one of the cashiers lost it on the way to the paying in desk".

No, the papers were saying "Northern Rock on verge of collapse".

That's enough to trigger a panic in account holders.

80% of people with a savings account wouldn't know what balancing a mortgage book means. By "the papers", I'm of course not referring to The FT.

I'll back down to the point of accepting split cause.

I still think that as with most of corporate finance, image is everything, and the image of Northern Rock was far worse than it's [sic] actual finances, and that's what really caused the disaster. The perception that everything was much, much worse than it was caused a crisis of consumer confidence, which caused a plummeting spiral of available cash funds.

I'll accept that the finances were indeed very bad, but I don't think that alone was enough to make it the disaster that it was.

Anyway, that's beside the point. Companies that undertake risky borrowing should deal with the consequences without government intervention.

Of course it was. However, I'm maintaining that if the consumer confidence crisis hadn't happened, the bank would not have become insolvent.

however they absolutely were not at the point of insolvency when the consumer crisis started.

They were not insolvent. The BoE wouldn't have offered them the lifeline they did had they been.

EDIT - Craster, I was wrong about the level of depositor withdrawls (£1 billion), but that was still only 5% of their deposit business.

I didn't exhaustively read all articles everywhere, but my understanding is that NR made use of a loan facility that the BoE had created specifically for those banks that needed, or might need, a bit of cash in light of the sub-prime crisis. I remember reading, even after millions of idiotic peons decended on the bank, desperate to withdraw their PROTECTED £50, NR hadn't utilised any of the loan.

It's certainly correct that NR took up none of the loan pre-rush.

Edit: Ironically, and just like the last two times people started panic-buying petrol, I bloody need some, so will look like part of the problem (apart from not being in Scotland).

Does anybody know of a place to check what's going on regarding the costing of houses? I need to make some urgent desicions but need the info to base them on. I don't even know if there is such a thing, but ta anyway.

Sites like UpMyStreet have quite granular (as in, per-street) statistics on house price changes, if that's what you want. All those sites work off the same Land Registry data, so try and find a site that doesn't charge you for reading it.

Rightmove let you search for sold prices. I think the data they use (presumably Land Registry) are about 3 months old.

That happened to my mum when dickheads everywhere were stocking up on bottled water before we attacked Iraq for a laugh. She looked like a right muppet, even though she did the same thing every few weeks anyway.

Aye, same data. Just have to find a site with non-hateful interface that lets you do a bunch of searches for free (most of them start to charge you at some point because the Land Registry charges a chunk of change itself).

(I'm looking, but I'm not going to buy in the current market)

Has there been any noises as to when this might be changing does anybody know?

Rents don't really seem to be changing round here. Which sucks, because tomorrow our landlady's lender is taking her to County Court to begin repossession, for the second time in less than a year. Except this time we can't get in touch with her at all, unlike last time, so it's quite possible she has no idea it's happening

Hopefully not for a long time.

It's not going to screw over all the buy-to-let people, only the poorest ones. It's going to be a huge help to richer people.

I thought there was something that protected tenants in the event of a property being reposessed, that meant they couldn't be forced out without decent notice?

When does the middleman ever get screwed over? The only people really getting hurt are the people selling the houses and the people trying to pay the rent.

It seems an odd thing to be happy about.

Whilst that would help me greatly in terms of ever being able to afford a house, it's majorly screwing several of my friends, and whilst it may also screw over the buy-to-let bastards, that in itself could very well lead to higher rental prices.

So their options are:

Pay 400 quid a month extra for a still massive future asset effectively for well less than half price.