Friday, Apr 17, 2009
A large dose of reality (no green shoots) for the housing market
FT: LTV rates hit two-year low as deposits soar
First-time buyers and remortgagers now need a 30 per cent deposit to easily secure a mortgage, as average loan-to-value (LTV) rates hit a two year low in March.
Figures released by Moneyextra.com today (17 April) reveal that the actual number of mortgage loans available have also hit a two-year low. The Moneyextra.com mortgage index found that lending to first-time buyers with deposits of five per cent was now practically non-existent. Supply of borrowing for first timers with a 10 per cent deposit has also decreased 84 per cent compared to the same time last year.
Posted by jack c @ 02:43 PM (1268 views) Add Comment
11 Comments
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1. str 2007 said...
Hi Jack
This article seems to fly i he face of various ones in the las few days suggesting that HSBC were doing 90% LTV mortgages and Halifax were looking at 120% mortgages.
What is the 'word on the street' ?
2. str 2007 said...
Also surprising how they see it as a catch 2 for FTB's as opposed to high deposits saving them from themselves.
Any FTB's reading - if they require high deposits house prices will fall further making what deposit you do have a greater percentage of the 'lower' asking price than it is now without you having to do anything.
3. Foaf said...
@str 2007 thanks for the advice. As an FTB with a sizeable deposit, I have learn't a lot this week along with all the conflicting news.
4. jack c said...
Afternoon str 2007 - word on the street is not to believe the hype and blatant ramping that has been circulating this week in particular. I have spoken to a couple of mortgage guy's today (1) 22 employee organisation dealing exclusively in both residential and commercial mortgages now reduced to 2 employees - the owner and his assistant ! (2) 5 employee organisation completely shut up shop having also dealt exclusively in both residential and commercial mortgages with BTL as a specialism.
The bulls and media can dress this market up as much as they like however for me it is on a continued downward path - end of story.
5. Sybil13 said...
Don't you just love it, time and time and time again the problem is seen not at the FACT that property is HUGELY overvalued but that lenders wont give us all that money any more, that is the money they never had to lend and left the UK broke. Will we ALL get it eventually, that is that prices have to now come down to sensible levels THEN AND ONLY THEN will the market start moving again, but that I don't mean INFLATING but simply how it always was before a few short years of reckless irresponsible lending.
6. mark wadsworth said...
As Jack C posted this, I assume that it is a fair reflection of what actually happens.
@ STR, the HSBC thing is a huge (or small?) scam. They have vaguely earmarked £1 billion for this 90% nonsense, I bet they value properties down as hard as they can and have huge up front fees and restrict it to the first 10,000 borrowers (assuming average laon £100,000, ten thousand x one hundred thousand = one billion), and *pouff* the money is gone again.
But the HSBC have earned no end of press coverage for this, so it's great free advertising - a bit like last year where they promised to give remortgagers loans on similar terms to the previous bank, I wonder what happened to that? I bet they're not doing it now!!
7. jack c said...
Agree with MW the HSBC thing is a marketing tool to get the public entering their branches or ringing in and enquiring - the odd client might meet a tight mortgage criteria but the main objective (IMO) is to widen the database and have the staff flog unsuspecting public various insurances etc... the ancillaries and add ons or much more profitable than mortgages.
8. Old_traveller said...
"We need to see some movement here in order to get the housing market moving again. Without plenty of competitive mortgages to choose from things will become even more stagnant."
WTF??? what about droping further the $odding prices?? Mortgages will be perfectly ok once those have finally reached decent levels.
9. Blackswan said...
"We need to see some movement here in order to get the housing market moving again. Without plenty of competitive mortgages to choose from things will become even more stagnant."
Why do we continually hear this crap? The primary reason that lenders are asking for deposits is simply due to the fact that they dont want to lend into a risky market - ergo, the lenders do not support the asking prices and want the buyer to fund the difference.
Lenders are not against lending and nor are they making it hard to get a morgage - it is PRICES that are making it hard to get a mortgage.
If lender really belived that we were at the bottom of the market they would cut their demands for deposits at a stroke.
10. str 2007 said...
Thanks for that guys.
I was beginning to wonder if GB and Co. were simply going to get money printed to pump through the banks (they now own) for mortgages to stabilize the housing market they feel they need to win the election.
What a cynic I've turned into.
11. matt_the_hat said...
1. str 2007 - the words you missed was "up to" 90% LTV, a bit like 99p, nominal prices, stealth taxes and the other scams not taught at school