Monday, Mar 17, 2008
The BBC resorts to direct scaremongering of the public to support the housing market
BBC "News": Mortgage brokers 'act fast' tip
This is a new low in journalism. There really should be an investigation into how the BBC has portrayed the housing market as a one-way bet. Whether its from editors' private interests or government pressure, its corruption.
Posted by paul @ 02:47 PM (795 views) Add Comment
11 Comments
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1. Landedgentry said...
Never thought the license fee went towards advertising.
2. Eric Pebble said...
I agree paul --- It is an absolute scandal. Defies belief. I loathe them - and despise their ignorance.
3. plato said...
Quite right paul.
This is nothing more than cheap tried and tested EA stunts. BBC must be overflowing with VIs. So the good thing is they are going to be among the biggest losers if they've got the guts practice what they preach.
4. jack c said...
It is (IMO) an accurate reflection of current market conditions to say that deals are being pulled at short notice and replaced with less attractive terms for the public, as illustrated below -
Abbey website - 17-03-2008 Importance: High Lending Criteria Changes
Lending Criteria Changes
We are making a number of changes to our lending criteria with effect from Wednesday 19th March for any new applications. These are designed to ensure we meet our obligations as a responsible lender.
CHANGES TO MAXIMUM LOAN TO VALUE (LTV)
For New Build properties (i.e. where construction completed within the last 12 months), the maximum LTV will be:
Houses - 85% LTV
Flats - 75% LTV
Buy to Lets (all types of property) - 65% LTV
Interest Only
Interest only mortgages with a repayment vehicle - 90% LTV
Pure interest only - remains at 85% LTV
ASSESSMENT OF AFFORDABILITY
Interest Only with a repayment vehicle
To determine affordability, our decisioning system will now use the repayment amount based on the capital and interest equivalent rather than interest only.
If applicants have an existing repayment vehicle, where the combined cost of this and the interest only mortgage payment is greater than the capital and interest equivalent payment, the higher amounts must be used in the affordability calculation.
Pure Interest Only
Our decisioning system will continue to use the mortgage payment calculated on an interest only basis.
MORTGAGES INTO RETIREMENT
Evidence of both current income and retirement income is required where:
Applicant is within 5 years of the intended age of retirement, or:
The mortgage loan term extends beyond applicant's 70th birthday and the LTV is over 85%
The evidence must be obtained even where the case is eligible for Fast Track.
Acceptable evidence
Pension Income
Company, Personal and State Pension statements
Investment income
Full details of their savings and investments portfolio
Property income
Tenancy agreements or accounts where the applicant is letting the properties as a business
5. Sold My Soul To The Never Never Never said...
Some smaller lenders only offering a 65% loan to value? Must be expecting a crash of at least 35% then to recoup their dues!
6. new user 2007 said...
What gets me is the odd way everyone is looking at the credit crunch. The banks got cheap funding from unsustainable sources rather than deposits. When the excessively cheap financing, which allowed the bubble to form to begin with, disappears, everyone is acting like this cheap money was normal and should be brought back.
There is a huge difference between innovation that improves the allocation of resources and creating money out of thin air for non-productive reasons (BTL). Deposit growth as the main source of financing for mortgages makes sense because it implies house prices are rising in line with people's ability to save i.e. is related to incomes.
We have a debt financed economy. Once a country starts using about 35% of its revenue toward paying just interest it is in trouble. And that is even though countries have access to more resources than individuals. The BoE's and govt's logic that debt should remain cheap is mind-boggling, particularly because of what ist is being used for.
7. Duncan said...
I completely agree with new user 2007.
A few months ago we kept hearing the expression "Log Jam".
In practice what has happened is that cheap credit has dried up completely.
When companies like the Chinese bank CITEC have only just escaped losing $1 billion
in Bear Stearns they will look far more warily when making any other investments.
On the Channel 4 news the former LLoyds chairman said that future funding for mortgages
will have to come from deposits and when Banks are having to offer 6.5% to attract these
he couldn't see how mortgages could be offered at a cheaper rate.
:- Duncan
8. titaniccaptain said...
Very well put new user 2007. just wish I could work out how long this mess is going to play out for before the real trouble starts....or before a solution (not that I can think of one) is found.
9. Maihem said...
@ Landedgentry
The BBC has been all about advertising for some time now (They mostly just do it off the books "We'll waive our £100,000 fee for appearing if you waive your £100,000 fee for advertising during the appearance"). They've been getting more and more brazen about it this last year, though.
10. planning4acrash said...
Cold turkey is the only solution for this sham. Imagine if the capital spent had been spent on resource efficiency, renewable energy, farming, mining and manufacture. It is ridiculous that we left manufacture 2 China. We put cash in't houses we alreadyhad
11. planning4acrash said...
Cold turkey is the only solution for this sham. Imagine if the capital spent had been spent on resource efficiency, renewable energy, farming, mining and manufacture. It is ridiculous that we left manufacture 2 China. We put cash in't houses we alreadyhad