Saturday, Feb 20, 2010
No way back
FT: Mortgage lending at 10-year low
For reasons touched on in the article, there can be no return to a normal transaction level at current prices. Finito.
Posted by stillthinking @ 12:09 PM (1136 views) Add Comment
11 Comments
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1. devo said...
mortgage lending is over 70% less than it was in 2007
2. tenyearstogetmymoneyback said...
One slight inaccuracy / oversight is that they seem to assume that the only reason
people don't buy is that they can't afford a deposit. Personally I could afford to put
down a 75% deposit on the average house but choose to rent somewhere worth much
more than that. I wonder how many other people are in a similar position.
An interesting thought is what will happen when we do all decide to take our money from the
building society and buy something (houses or gold ?)
In the earlier Gordon Brown bashing post I was tempted to add something about MEWing which in my
opinion was the trigger for many problems. If people hadn't been able to MEW their current properties
they wouldn't have been able to put deposits on BTLs etc. In the past the fifty somethings would have
been mortgage free and putting money in the Building Society to fund the fisrt time buyers mortgages.
Jack C if you read this when did MEWing start ? The first time I heard of anyone doing it was in about
1992 (unless you count my Mums friend who kept moving house in order to withdraw some of her equity).
3. jack c said...
@tenyearstogetmymoney - I would say from memory that MEWing started around 1997
I remember back in 1993 when I was employed by one of the major banks that to get customers a £3k further advance for home improvement purposes the underwriters wanted a full re-appraisal of the existing mortgage and 3 independent quotations from the builder/kitchen fitter etc... it often took several weeks from initial customer enquiry to approval stage. In contrast by 1997 I had Northern Rock sending me letters saying I could have £10k extra on my mortgage (basically no questions asked) for the holiday of a lifetime etc... and for me this is where it all started to spiral out of control - lax lending, lax underwriting and lending for purposes that in the past would have been prohibited.
4. vindicated said...
@ tenyears....
We are in exactly the same position. Somewhere around 80/90% deposit at the mo. There's no way we'll be buying in a great hurry.
5. magnaman said...
Me and Mrs Magna(wo)man too.....about 75%. She is getting twitchy though. Thinks I am nuts and her friends don't understand why we are still renting. Comments like "you wont be able to afford to buy unless you hurry up", Exeter, where we live, "is different" (yeah right!! - mostly public sector, Met office (due to be sold - friend of mine rckons a third of the 1200 jobs are umeccessary and will be axed)) MoD (budget cuts looming) - monitor "rongmove" every day and hve noticed swaiths of venodors dropping prices, not by much but I think people are realising that it aint good. We were out last night for a dirty beer, dead - everywhere! Have a couple of buddies who are agents - its like good cop and bad cop - one, the internal optomist and the other, a realist, sales are drying up and fast!!
6. mark wadsworth said...
We are in same boat as tenants super, vindicated and the magnas.
More to the point, I am in the same boat as Mr Magna vis a vis marital strife re my complete and utter lack of 'nesting instinct'.
7. Carol said...
We're at about 100% deposit now -- for a terrace house, but now we're setting our sights a bit higher. I'd prefer to have a semi so we could have a larger garden. The way things are going, it should be within reach within a couple of years.
We've been renting the same (nice) house for the past four years. Just signed a lease for a fifth year. We've been paying the same rent the whole time. I've noticed lately that rents are starting to fall, so who knows? Maybe that sale prices will have to fall even more to tempt us to buy. My husband says he'd like to have a place we could do up to suit us, but I like the scenic view and the neighbours where we are.
Just a question of time.
8. tenyearstogetmymoneyback said...
Jack C Thanks for the comprehensive answer.
I moved both job and house in 1989. As a result of the 80s boom I had £30000 equity
but I still couldn't afford a new TV. In hindsight the TV was a better purchase than the
1989 house.
9. iguana said...
MEWing, it was always about, a simple 'fee' (sometimes unreasonably called a bung) could elicit a written quote or invoice from a builder or other provider of like paperwork, could be used to support an application for a loan for house improvement or even for a Council Grant.
10. This comment has been removed as it was found to be in breach of our Blog Policies.
11. Exiges said...
We're in the same boat as those above, we can buy our next house outright, but consider prices too high (just because we have the ££ doesn't mean we want to spend it) and renting is a better bet for now.