Thursday, Nov 22, 2007
UK lender pulls sub-prime range
BBC News: UK lender pulls sub-prime range
Kensington Mortgages is pulling out of the sub-prime mortgage market because of current market conditions !
Posted by frustrated gardener @ 02:29 PM (959 views) Add Comment
11 Comments
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1. jack c said...
This latest announcement is highly indicative of the way the mortgage market is now moving – the willingness/ability to lend is drying up week by week (and not just in the UK sub-prime sector) which ultimately will have a downward effect on prices in the UK housing market. Those that contend that demand will continue to outstrip supply and therefore support prices need to come to terms with the fact that many people who could previously obtain a mortgage can’t now do so and nor are they likely to in the future.
2. jack c said...
This latest announcement is highly indicative of the way the mortgage market is now moving – the willingness/ability to lend is drying up week by week (and not just in the UK sub-prime sector) which ultimately will have a downward effect on prices in the UK housing market. Those that contend that demand will continue to outstrip supply and therefore support prices need to come to terms with the fact that many people who could previously obtain a mortgage can’t now do so and nor are they likely to in the future.
3. uncle tom said...
The financial services industry is retreating to safe ground - back to textbook banking and away from modern fads.
This makes BTL lending problermatic, as it breaks one of the hallowed principles of banking - you do not lend money for the purpose of funding a financial investment.
Now you can construct an argument that BTL lending doesn't really break this rule - but everyone knows that's not really true.
What is true is that a private individual living in their own home will suffer negative equity when house prices fall, and keep making the mortgage payments (assuming they can) - whereas a person who has borrowed millions for a portfolio of BTLs is more likely to throw in the towel and go bankrupt when they are faced with a 6 or 7 figure equity deficit.
Even BTL portfolio holders who want to stick it out may well find themselves unable to keep up the interest payments.
4. alan said...
"It will also be re-pricing its range of prime mortgages and removing some of its other products such as a self-certified buy-to-let mortgage for first-time buyers".
The "upward re-pricing" will happen just as the BoE cuts rates....just watch!
5. jack c said...
Fully agree with your last 2 posts guy’s - Part of the trend that is now developing involves a much slacker relationship between the lenders rates (Standard Variable, Discount and Fixed) and that of the BOE base rate as lenders seek to improve margins. The only way borrowers will truly benefit from a cut in base rates is if they have a full term tracker mortgage (ideally without any early redemption charge) and there are not that many of these currently available in the market. In addition in a further effort to improve margins lenders are cutting their procuration fees payable to mortgage brokers/intermediaries – RBS made an announcement on this today.
Tougher times ahead for both borrowers and mortgage intermediaries (IMHO) irrespective of whether the BOE cuts rates sooner rather than later.
6. dohousescrashinthewoods said...
What can I say, except "spot on". This article exemplifies the return to the old paradigm.
Not that lenders wouldn't still be handing out funny money hand over fist if they could, but those further up the chain have closed the floodgates.
7. confused76 said...
Kensington pulls products, Paragon down the drain, N Rock belly up...
after the damage that these pirates have done to society through rampant housing and rent inflation my comment can only be:
AUAHAHH AH AHHHHHHHHHH HA HHhH UAAAAAAAAAA UAUUUUUUUUU
AUAUAHAHH AH AHHHHHHHHHH HA HHhH UAAAAAAAAAA UAUUUUUUUUU
AUAUU UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUAUU UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU
AUAHAHH AH AHHHHHHHHHH HA HHhH UAAAAAAAAAA UAUUUUUUUUU
AUAUU UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU
AUAHAHH AH AHHHHHHHHHH HA HHhH UAAAAAAAAAA UAUUUUUUUUU
AUAUU UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU
8. down wave said...
In a few weeks or so from now, they will only be able to recover their loses by issuing 30 days notice to BTL business mortage holders to pay up. If the BTL's are not covered by trading under limited company vehicles, they will also lose thier residential properties. All the Idiots should have attended business schools.
9. Fedupwithhouseprices said...
At last the BTLers are getting their come uppance! It was all wrong and still is. The damage they have done to the housing market is unbelievable. I just hope all those who have been damaged by the greed and selfishness of these people will be able to recover soon.
10. Orwell said...
After speaking to my Conveyancing collegaues, I thought it was going to be Kensington next, not Paragon. But I was right about the Crock..
11. planning4acrash said...
Just wait, Kensington will come! I doubt you'll be far out.