Wednesday, Jul 23, 2008
More hard evidence that the crash is in full swing
BBC Business: Mortgage approvals hit fresh low
The number of new mortgages approved by the major banks fell another 23% in June to a new record low. The British Bankers' Association (BBA) said its members approved just 21,118 new home loans in June, down from 27,499 in May. The figures were also 66% lower than in June last year. The collapse in sales, and the current sharp fall in prices, has been caused by the mortgage drought, due to the credit crunch in the banking system.
Posted by jack c @ 10:12 AM (821 views) Add Comment
19 Comments
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1. beartil2010 said...
and the hits just keep coming
2. nooneo said...
The dead cat has stopped bouncing - The soft landing was a fantasy - First time buyers can neither get or martgage or are sensible enough not to buy into a falling market - And now we can no longer even hear the POP the bubble made when it burst last year.
House price crash, what house price crash?
3. mark wadsworth said...
Beautiful, this is a combination of Buyers' Strike and lending strike. Everything is falling apart most gloriously (TM John Lydon).
4. martin said...
I know you've all heard this before but I have just got off the phone having been called by the Halifax EA regarding a house I have put an offer on (relax before you all pounce and try to beat me to death with sticks and broken bottles, the offer was 40% below asking price). My offer has been declined as it was seen as unrealistic. After quoting a few figures to them I was passed over to the "valuer", a very articulate and well informed lady who told me that they have seen no slow down in in home sales AND could help me secure a mortgage should I wish to make a more acceptable and sensible offer!!!!!
I consider myself told and corrected.
5. gardeniadotnet said...
>Everything is falling apart most gloriously (TM John Lydon).
Would you describe yourself as an anarchist, Mark?
6. mark wadsworth said...
I'd call myself a small government free market liberal, actually.
The biggest VI in this whole shambles is the government - a house price boom leads to an illusion of wealth and debt fuelled economic growth. The Tories tried this in the Barber Boom and the Lawson Boom, it didn't work then and it won't work for Nulab either.
Furthermore, MPs are also very likely to be second home owners (which is why the capital gains tax exemptions for second homes are so generous).
7. Ten Years To Get My Money Back said...
It would be very interesting to know what would have happened if you had offered 20% less.
The fact that they didn't put the phone straight down says something.
:- Duncan
Bought 1989 £65500, Best offer in 1996 £48000.
8. layers said...
@Martin - More like being lied to and set-up! Or then maybe I'm being unfair and the particular area you made an offer in has experienced no problems - wouldn't bet the house though!
9. mr_smith said...
yeah small governmet free market liberal is mostly a good idea. except that free markets is what got us into a lot of this mess. not that I would prefer a planned economy. small government liberalism is a good idea though....
10. paul said...
martin, articulately point out to the valuer that according to the Halifax index, house prices are dropping at the rate of nearly 4% a month. Tell her you'll come back in six months when the sellers have become more realistic.
"Seen no slow down"? well of course she's gonna say that ...
11. mark wadsworth said...
Mr Smith - house price bubbles result because of the LACK of free markets. If planning laws were more liberal (the carrot) and we had Land Value Tax (the stick), house prices would be low and stable.
e.g. in the 1950s and 1960s we were building 400,000 new homes a year and they had Schedule A taxation of imputed homeowner rents and Domestic Rates that more or less added up to a Progressive Property Tax (a close relative of Land Value Tax)
The result? House prices as a multiple of earnings were flat for twenty years or so.
12. martin said...
Paul,
Just had another conversation with Halifax to say that the offer I made was the maximum and would be reduced in line with their own month on month figures. Gonna do the same with a few more EA's in the area.
13. mr_smith said...
@ mw
not going to disagree with the 50s and 60s thing cos I haven't looked into it. i do know they built a lot of crap houses then 'cos I can see them everywhere inlondon!!!
wrt free markets I was meaning the excessive unregulated lending and the possibly soon to blow up derivatives market. that sort of stuff is where free markets left to their own deveces cause problems
14. beartil2010 said...
The market is not free beacuse IRs are set artificially - the government caused the housing boom, in concert with the central bank, not the market.
'Free' markets is a misnomer - truly free means anarchy. Light-touch but enforced unbiased regulation is the necessity for all forms of free market. Unfortunately we don't have that here!
15. icarus said...
The unregulated financial institutions which caused the mess didn't get to their size and power under free market principles in the first place.
16. mark wadsworth said...
Beartil2010 "The market is not free beacuse IRs are set artificially - the government caused the housing boom, in concert with the central bank, not the market."
EXACTLY! NULAB just copied the Barber and Lawson templates (only even more extreme).
17. wally said...
My missus made an offer on Monday - 135k on asking price 170k. Rejected on the same day then yesterday the agent phoned up and tried to get a higher offer, she declined. This morning we get a letter rejecting the offer (not had that before). They just phoned back to find out if we are still interested!!
18. jack c said...
Back to basics for these people I'm afraid - a house is only worth what someone is willing and able to pay - when will people wake up to this fact
19. crash bandicoot said...
My mate went to see a house that was on for £270k a couple of months back. It had been on for six months with little interest. He offered the owner £220k then and there - a little naughty I know - and she practically chased him out of the house. I was thoroughly shocked, he should have been closer to £180k if he was being serious........ The EA phoned him back the other day to see if he was still interested.......