Friday, Nov 14, 2008
Mortgage availability update (LTV's)
BBC: Low-deposit mortgages evaporate
Mortgage deals for people offering a 10% deposit have almost evaporated from the market, according to figures obtained by the BBC.
Only 66 deals of this kind are still available, compared with 586 three months ago and 1,197 in February. The figures, from Moneyfacts, reveal how the dramatic financial downturn has almost killed off traditional deals for those without large savings. Mortgage brokers say they will not return until house prices level off.
Posted by jack c @ 03:52 PM (735 views) Add Comment
16 Comments
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1. alan said...
"The mortgage market is effectively closed to almost all new buyers".
A good summary.
2. mark wadsworth said...
That's all good background stuff Jack C, keep 'em coming. How did your mate get on with his 40 remortgages? All they all on SVR or what?
3. need-a-crash said...
This is quite significant as I had assumed that anyone with a 10% deposit would always be acceptable to pretty much any mortgage lender, as that has traditionally been the normal amount for a deposit.
4. montesquieu said...
I just looked at local property prices for the first time in ages - the local freesheet just popped through the letterbox while I was on my way to the loo.
New build was the dumbest - £400k for crappy looking one garage, 4 bed newbuild on soulless outskirts of Reading. Still £250k for a 2-bed 'luxury' flat. Quite nice 4 bed older houses in Wokingham still stratospheric up, around £700k.
It's like nothing has happened. The sheeple still haven't noticed there's a problem yet. And I guess some proportion of these (though obviously well down on a year and a bit ago) must be selling at these prices.
Like stepping into the twilight zone. Meanwhile the article above in the FT talks about an asset price 'collapse' on the scale of Japan. Well round here the sellers at least are busy going lalala with their fingers in their ears.
5. 51ck-6-51x said...
need-a-crash -
If you were in the mortgage broking business and could not simply pass the debt straight off to another investor (e.g. through a C.D.O.) and you were expecting a fall in prices of x% you would surely want at least x% deposit (well discounted back from the time to expected default)
Effectively the current mortgage market is transmitting it's collective view on the medium term future of the underlying asset - housing stock.
This market implied outlook is fairly aligned with this site by the looks of it!
6. hash browne said...
Well this means one of two things for me....either....
I clearly need to save more and for longer or.....
this will accelerate the crash and my 10% deposit will soon become a 20% deposit on the same house.
I hope its the latter because I'm not sure I can live with the gfs parents that much longer!!! Pleeeease god pleeease!!
7. jack c said...
@mark wadsworth - "How did your mate get on with his 40 remortgages? All they all on SVR or what?" - yes Mark as the fixed rates expire the borrowers are getting stuck with the lenders SVR - at the moment it would be poor adviceto try and roll them onto either a tracker or new fixed rate because of (a) the rates (b) the associated costs of a new loan ie application/valuation/legal fee etc... Furthermore he cant place them anyway because the LTV's dont fit anymore
In most cases you really need a minimum 25% deposit or equity if re-mortgaging and despite what the Gov would lead people to believe the conditions from a borrowers perspective is worsening by the day.
8. Vstor said...
The market is starting to tank.....the banks aren't stupid
9. mark wadsworth said...
@ Jack C, thanks for update.
10. Markus said...
some good news at last
11. str 2007 said...
Stopping 90% LTV's is currently saving FTB's from themselves.
Ironically as discussed before the nature of doing so pushes prices down further.
Everything but 75% and less LTV's will probably vanish soon.
12. str 2007 said...
BTW Jack C I came back on yesterdays link about BBC programme.
13. jack c said...
@str 2007 - Thanks, we can possibly carry this forward to debate in a bit more detail. J
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