Saturday, Jun 13, 2009
Why would this be in a bull market?
Guardian: Mortgages for first-time buyers slow to a trickle
"First-time buyers who want to get on the housing ladder have seen the number of mortgages available to those without a large deposit slump by 97% over the last two and a half years, according to new research released today."
Posted by quiet guy @ 03:02 AM (845 views) Add Comment
5 Comments
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1. gone-to-colombia said...
Very significant data, first time buyers are the meat that goes in one end of the sausage machine, without them the wealth is not generated further along the. Any talk of 'green shoots' or 'green roots' are premature by several years.
2. dbc reed said...
Could be that any activity in the housing markets is just existing homeowners selling houses among themselves.
3. enuii said...
All the people I know who are moving houses at the moment are either a) simply relocating or b) trading down and none of them has had a FTB viewing their properties.
What we are seeing is the background noise of middle aged people simply moving homes amongst each other.
4. sybil13 said...
"First-time buyers who want to get on the housing ladder have seen the number of mortgages available to those without a large deposit slump by 97% over the last two and a half years, according to new research released today"
Kind of puts it all in perspective doesn't it?
As does:
"Ray Boulger, of mortgage broker John Charcol, said the increase in price had been driven by a lack of competition and by new rules under which lenders have to set aside more capital to cover high loan-to-value mortgages. "The cost to the lender of making one 90% LTV loan available can be four or five times the cost of offering a mortgage at 60% LTV," he said. "We're in a situation where the more lending a lender does at 90% the less lending they are able to do overall."
So with limited lending power with RMBS market closed and mortgage lending already down nearly 2/3rds along with approval numbers lenders are not only now reliant on dwindling deposits but if they offer more than 60% LTV , due to the capital needed to over high ltv mortgages they can offer fewer mortgages .So on what basis are people speaking of green shoots and HPI?
5. techieman said...
sybil - only on the basis of the monthly gains in the price. its like a "dead calm" for THIS WAVE probably most of the people who have had to sell have done so, and the cash (or neo cash) buyers will look to pick up what they consider a bargain. So no sellers and people that want to buy in case they "miss the boat" means that they will put all sensible argument to one side. Sharp counter trend moves on low volumes are a normal characteristic of a market.
We shall see.