Tuesday, Mar 24, 2009
Does not compute!
BBC: Mortgage approvals signal change
If lending is increasing, but customer deposits have gone down slightly, where's all this extra money coming from? Oh ... I see.
Posted by mark wadsworth @ 10:55 AM (2286 views) Add Comment
21 Comments
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1. Foa4 said...
Would seem to be correct.
Stability is returning to the market and I predict house prices falling by 10% to Dec 09 before going up 5% next year.
2. 51ck-6-51x said...
The RICS commentator said, "It would be premature to conclude that some semblance of order has returned to the housing market", so the journalist uses the headline "Mortgage approvals signal change" - why have they even bothered printing the article text, they may as well have only published the headline.
3. str 2007 said...
28000 approvals in a month is the figure that used to be 120,000 in a month. Have I got that right ?
4. 51ck-6-51x said...
str 2007 - yes it peaked at 129,000 in Nov 2006.
5. 51ck-6-51x said...
Remember that the RICS 2009 forecast predicted a fall in average price of 10% (with skewed risk to the downside) and sales volume to increase 10% (from just over 30,000 per month).
6. Sybil13 said...
I am not sure on what basis anyone is expecting prices to rise? I can't see lending limits increasing beyond 4x's income, the FSA have said they will cap at 3x's or lower to stop prices going up if lenders start to lend irresponsibly again. Even at the HBOS average wage of £360000 , (which according to the Times "FTB's on an average wage which is different from the population as a whole" which is £24000), do your sums, prices have to fall. The Telegraph said "most economists are expecting prices to fall" most 40% or more. One hopes this is not a finally irresponsible flurry of FTB's believing that at 3x's income they will never afford a mortgage, and lenders doing a few quick deals at 6x's income before the regulator steps in. FTB's only have to wait a few more months and prices will be falling faster than you can say HOUSE PRICE CRASH!
7. sold out said...
so we are still 100,000 per month down from the peak/bubble activity.
resume crash positions
8. quiet guy said...
I don't think we should dismiss this out of hand. What I'd like to know is how much this rise in lending is due to cheap rates? If you've a good deposit/equity then getting a mortgage that is cheap by historical standards sounds possible but just how long can we keep rates at 0.5%?
9. george monsoon said...
Rubbish !
Sorry, but I have been trying to get enough money together to buy a house for over 5 years, and I am further away now than I ever was.
The banks want me to put down anything from 20 to 30 k before they will lend me enough to buy even a modest terrace, and I haven't had a pay rise for nearly 3 years, so my spending power is fallling.
I don't subscribe to the view of a stabilising market, this is Pants of the smelliest order.
We are entering a dark age of low wages and high living costs.. it aint going to go away quickly folks.. don't get your hopes up, I know I'm not.
10. Mansmoking said...
The money is coming from the place it came from before........thin air!
11. letthemfall said...
george m
It is hard to imagine how things could suddenly spring back. Are the bad debts going to evaporate overnight? Is lending going to skyrocket back to where it was. No. You could be right. Perhaps the worst really is yet to come.
12. mark wadsworth said...
@GM, sorry to hear that, but there's no hurry - it took prices five years to bottom out after the 1980s bubble burst (and that bubble was only half as big as the present one).
If it is true that "We are entering a dark age of low wages and high living costs" (and it quite possibly is) then something has to give, and that something is house prices - they are a function of disposable incomes, i.e. if net incomes are flat and costs of living go up, then the amount left over to pay mortgages or indeed rent must be going down to balance (seeing as we aren't all living off credit any more).
13. str 2007 said...
letthemfall
In a strange way the bad debts are vanishing overnight. As I understand money is being 'Created' to purchase them with. In effect they therefore vanish.
So even if they go belly up they take away money that didn't used to exist.
Whatever part of them comes good is effectively pure profit.
Please feel free anyone to correct this - it's just my observation. I could be holding the binoculars back to front.
14. crunchy said...
Don't close the case now Rodders!!!! there's still some closin time puntus knockin about. Where that last blow up dowl?
Stick a pony in me pocket,
I'll fetch the suitcase from the van.
Cos if you want the best 'uns,
But you don't ask questions,
Then brother, I'm your man.
Cos where it all comes from is a mystery,
It's like the changin' of the seasons,
And the tides of the sea.
But here's the one that's drivin' me beserk,
Why do only fools and horses work?
La-la-la
La-lala-la
La-la-la
La-lala-la.
We've got some half price cracked ice and miles and miles of carpet
tiles,
T.V.s, deep freeze and David Bowie L.P.s,
Ball games, gold chains, whatsnames, pictures frames and leather
goods,
And Trevor Francis track suits from a mush in Shepherds Bush,
Bush, bush, bush, bush, bush, bush, bush ...
No income tax, no V.A.T.,
No money back, no guarantee,
Black or white, rich or poor,
We'll cut prices at a stroke......
God bless Hooky Street,
Viva Hooky Street,
Long live Hooky Street,
C'est magnifique, Hooky Street,
Magnifique, Hooky Street,
Hooky Street (to fade)
Written & Performed by John Sullivan.
15. letthemfall said...
str 2007
I think it's kind of sweeping them under the carpet. I haven't paid much attention to this, but isn't the US getting people to buy up the toxic assets by guaranteeing 90% of them? But still no one knows the true value of these, and the only way the debt will truly evaporate is though inflation. Enter QE. I'm not sure where the TARP thing is now. Did you see the programme last night about Latvia? I wonder if that could be a portent for other countries nearer to home, including us.
16. str 2007 said...
letthamfall
Sorry I missed the programme last night, what was the essence of it ?
17. letthemfall said...
Well, economic collapse in short. Loan from the IMF means strict conditions imposed. Activity just about okay at the moment but shortly to dwindle away as the new IMF terms kick in. It could happen here. An IMF loan would presumably mean higher rates of interest and reduced public spending.
18. str 2007 said...
I am no expert on these things, but at what point do the Bank of England decide they can't 'print' any more money and need a loan from the IMF?
What is the trigger that says you must now stop printing and come to us (IMF) for a loan. (which they will no doubt print themselves to give us)?
19. uncle tom said...
100k pm is about 'normal', so a small rise from the fantastically low levels seen is no big deal - the market is still crashing
20. letthemfall said...
str 2007
I'm not either, but I imagine it would happen in the case of a run on the pound and inflation (the two would go together), whereupon money with value would be needed from the IMF, who get theirs from creditworthy nations (eg China?). Perhaps there is an economist around here who could give us more detail. I think bob1 was one, but he seems to have gone (along with a good few others), perhaps because he got drawn into, as I remember, the abusive rubbish that has infected this site lately - and who can blame him? Still, the good guys are in the majority.
21. rumble said...
Printing evens things out, transfers value from good things to bad things eg devalues savings and devalues debt, so we end up with a nice, happy medium. If you have good things.