Squatters’ lights
Published 13 January 2009
The value of homes could be significantly augmented if homeowners can demonstrate existence of traditional bulbs throughout the property. John Griffiths-Colby provides enlightenment...
Exciting news amid the economic gloom about the emerging market in 'Lamping'
Emerging markets: with UK domestic repossessions at an all time high, the emerging market for so-called ‘Lamping’ continues to expand. London trading in HIPs, where homeowners have specified even a limited installation of incandescent lamps, was described as ‘furious’ during the last week.
There is a growing confidence amongst homeowners that the value of their home could be significantly augmented if they can demonstrate existence of traditional light bulbs throughout the property. The market, although in its infancy, has already experienced a clear dichotomy into a traditional Spot market and that of Fixed Bayonets – where evidence of wattage, vintage and assumed hours already burned are factored into a discount rate to be traded. It is forecast that Dimmer Derivatives will be the next big opportunity for dealers but this area clearly raises the issue of regulation and the need for transparency.
In reality this is a massive potential ‘out’ for lenders; faced with an ever-expanding portfolio of repossessed property they face a second wave - some predict tsunami - from the realisation of toxic debt in terms of further falls in value of this book. Those that have seen the light have fought short of public support for the trading activity conscious that legal advice is likely to point to the Gaming Act of 1745.
In the meantime householders, desperate to retain their properties, are flocking virtually at least, to the mushrooming websites linked to the London market. The double whammy of using the Lamp Wrapper in either the Maxi [freehold] or Mini [leasehold] format, attributes implied additional value to the property as well as the underpin of the actual value of the lamps. Having identified this, householders can then re-enter the housing market directly themselves having effectively upgraded their property – the equivalent of adding an extra bedroom or en suite - or allow the HIP itself to be traded to raise cash for immediate needs.
Whilst trading of HIPs gets brisker by the day with margins there for the taking, homeowners seeking to capitalise on this new potential value in terms of a boost to the real equity in their property, are likely to be disappointed in the medium term. Representing as it does, an unregulated market, the developing and currently virtual London Lamp Exchange [LLE] is yet to apply to the FSA for a formal status meaning in simple terms, that it is a market devoid of consumer protection.
Therefore, increases in property values should only reflect the written down value of the lamps themselves particularly as the fixture or fitting debate rages on at the sidelines in the now familiar Jaffa Cake Syndrome. So far the Treasury and FSA lawyers have failed to reach agreement on whether a removable, fragile consumable such as a light bulb could be subject to freehold or leasehold contracts. It may well be that trading of HIPs is technically illegal with speculators already eyeing a potential subordinate Inventory market.
Gordon Brown is likely to take a dim view of current activity, flying in the face as it does, of his own personal objective to reduce household carbon emissions by eliminating the supply of traditional lamps. However, in a sinister turn of events that may yet save the PM’s night, Scotland Yard has now thrown its helmet into the ring, reporting a rise in ‘Light Crime’ - the trafficking of filaments, bayonet caps and raw argon gas on the so-called white market. Dutch Police and security agencies have already been contacted to provide their experience of tackling speculative bulb trafficking and how to avoid the economic catastrophe visited upon the low country in the spring of February 1637.
In a limited comment, the opposition shadow spokesman sought only to paraphrase Disraeli in concluding, ‘Once again the government uses this particular lamppost for support rather than illumination.’
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