Wednesday, Oct 17, 2007
More of the same
BBC News: Lenders withdraw mortgage deals
UK lenders have withdrawn 40% of their mortgage deals in the past three months, according to the financial information company Moneyfacts.
Posted by nacho99 @ 11:47 AM (621 views) Add Comment
4 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. tyrellcorporation said...
'Moneyfacts said lenders had become more cautious due to the increased riskiness of lending.'
Riskiness of lending has not increased, the risk was just ignored in the first place.
2. inbreda said...
too right tyrell.
I am getting sick of these intentionally stupid comments from VIs to talk up the market or remove themselves from blame.
On the plus side, 40% of the 'riskiest' (read : BTL, self cert, 100%) mortgage deals have been removed, which means tha the people at the bottom of this house of cards have just lost any chance of holding onto their properties over the next couple of years, and there is no-one left to bid up the prices anymore.
I think prices will rise and volumes will fall significantly in the next few months, as the people at the bottom can no longer get a mortgage. The only transactions will be people moving from one house to a similarly priced house, both at the top end of the market - i.e. older people with lower mortgages for whom mortgage deals (or lack thereof) and absolute prices have no real impact.
Then comes the crunch.
3. dugmug said...
Inbreda...certainly you have highlighted a factor to watch for when the various price indices come out.
But then with a lot of people already struggling (can't remortage out of SVR rate because of withdrawal of sub-prime mortgage products, higher interest rate even if they can remortgage because of credit-crunch and rates having been raised by BoE anyway, 1 million people funding the mortgage from their credit card as reported today, etc), and this having been going on for a few months already, there should in fact be extra sales at the bottom end to compensate, namely more repossessed properties at auction and increasingly more purchases the buy-to-rent-back brigade (these sales still get recorded through the Land Registry, and at the "discount" amount too!).
PS. also, it's 54% of sub-prime products that have been withdrawn, the 40% is the overall figure including prime, and these figures are for total withdrawals of products so they don't even take account of still existing products that have nevertheless had lending criteria/LTV tightened. Fewer people will be able to buy now, and more people will have to sell now; it's only going one way unless some miracle occurs to make all the lenders become cavalier again!
4. dugmug said...
"these sales still get recorded through the Land Registry, and at the "discount" amount too"
Sorry, not always true actually, I just remembered the story about some companies using the "market" value to obtain funding, rather than the 20%-off value they actually paid, and using the difference to fund more purchases.