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The BBC says Mortgage approvals 'reach trough'.

The number of mortgages approvals in January for house purchases held steady at 31,000 the Bank of England has said.

And it suggested the slump in mortgage lending seen during the past year and a half may have now reached its trough.

...

Uhhuhh.... The only thing I've seen approaching a trough recently has been one or two redundant bankers.

Edited by Scunnered
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Why do they seasonally adjust? And £10k (50%) seems an awful lot to adjust anything by!

These are approvals, not prices. Approvals are highly seasonal, much more so than prices, so you need to do a seasonal adjustment to get the true picture. Also they need to adjust for the number of working days in a month, which varies month to month, and year by year for the same month. I hope that makes sense....

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Please help me out here......

Other than an indicator of volume I do not see how mortgage approvals in itself gives any further indication to house prices.

Allow me to explain.

There is approximatley 1 million homes for sale on rightmove. Of which 95% are probably (guess) not part of the market i.e. they are over priced therefore they are not really for sale imho.

Therefore, 50,000 homes are correctly priced, I mean priced at a level people are going to buy with 31,000 mortgage approvals to support this 5%.

Markets are made at the margins, hence the 50,000 homes with 31000 mortages is giving us the current market price?

Next:

If 31000 mortgages are being approved in the current market with current mortgage rationing, how many more mortgages would be availble when the NR, RBS etc get back in the mortgage market?

If the combined total of this gets to 70,000 mortgage approvals do we not then have market stabilisation?

I asked this another thread but did not get a proper answer, I think because when you ask these questions you suddenly raise everyone's suspicions you are some kind of bull...........for the record I most certainly am not. Only trying to understand where the bottom is going to be.

Few people, lots to choose from, choose the best value.

The extra lending NRK, RBS etc are going to do is a fraction of the 2007 total. £360bn in 2007 and they are lending an additional £40bn. Very bearish as they have not inly said they are hardly lending more this year, but they have confirmed only slightly more for next.

Once prices are at a level whereby people can afford to buy based upon old fashioned lending criteria then the market will stabilise.

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i can't beileve this slid off page one so fast..

and 60% down on this time last year which is stunning, given last year was not *great*

just looking at these figures again, i think net lending is down 60% on last month... and is 1/10th of this time last year

The Bank of England said that net mortgage lending, which strips out redemptions and repayments, stood at £690 million in January, down from £1.79 billion in December.

It was the second lowest figure on record and less than half analysts’ predictions for a £1.5 billion increase.

Mortgage lending has fallen from a peak of about £10 billion per month at the height of the market.

For January of 2008, the figure was £6.91 billion - or ten times higher than January 2009.

The total number of approvals for home loans was largely stable at around 31,000 in January, the Bank said.

http://business.timesonline.co.uk/tol/busi...icle5832391.ece

also, if the number of loans was stable, and the net amount was down 60%...

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i can't beileve this slid off page one so fast..

just looking at these figures again, i think net lending is down 60% on last month... and is 1/10th of this time last year

also, if the number of loans was stable, and the net amount was down 60%...

i.e. only activity in the hosing market is remortgaging and cash buying

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In York the other day I noticed a notice in the window of Hunters EA saying that they had sold 37 properties in January. At the bottom of the page in the smallest font possible it said subject to contract. I wonder how many went through to completion?

Edited by Yorkshire Lad
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If 31000 mortgages are being approved in the current market with current mortgage rationing, how many more mortgages would be availble when the NR, RBS etc get back in the mortgage market?

Could someone please explain the effects of this mortgage rationing. Is there a limit to the amount of funds available or is it just a case there is no demand for new loans due to property prices being to high?

I always presumed that as someone who has a good credit rating, permenant job and deposit I would be granted a mortgage if I actually wanted one but the reason I have not applied for one as there are no houses at a price that I am willing to pay. If houses fell 50% and came affordable surely the demand for mortgages would increase substancially.

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I thought it was around 80k

Approx 70-95k is the neutral rate for the housing market IIRC. The neutral rate varies depending on the rate of supply of "must sell" properties onto the market.

At the end of the day, people will insist on dying, divorcing & losing their jobs which brings a certain minimum level of supply onto the market every month. If the demand isn't there to clear that supply then eventually prices must fall until the supply has been cleared. Essentially every month that goes by at the current rates of house purchase just increases the total backlog of supply to be cleared, depressing future house prices further.

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I know net lending figures are worked out by taking redemptions and repayments off the total of new mortgages given.

Anyone know how the MEW figures are worked out ?

I imagine it is total MEW released minus ???

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In York the other day I noticed a notice in the window of Hunters EA saying that they had sold 37 properties in January. At the bottom of the page in the smallest font possible it said subject to contract. I wonder how many went through to completion?

http://www.home.co.uk/guides/house_prices_...=york&all=1

counts-york-200004-200811.gif

there were 140 sales in Jan accross the whole of york, 37 is about 25-30% of the entire market. are there 4 estate agents in york? The graph above shows qty of sales in york by month and should give you a good idea of how many are going to completion.

Edited by moosetea
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http://www.home.co.uk/guides/house_prices_...=york&all=1

counts-york-200004-200811.gif

there were 140 sales in Jan accross the whole of york, 37 is about 25-30% of the entire market. are there 4 estate agents in york? The graph above shows qty of sales in york by month and should give you a good idea of how many are going to completion.

The 37 must include all the phantom offers and shills the EAs are using to hoodwink suckers into buying.

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Could someone please explain the effects of this mortgage rationing. Is there a limit to the amount of funds available or is it just a case there is no demand for new loans due to property prices being to high?

I always presumed that as someone who has a good credit rating, permenant job and deposit I would be granted a mortgage if I actually wanted one but the reason I have not applied for one as there are no houses at a price that I am willing to pay. If houses fell 50% and came affordable surely the demand for mortgages would increase substancially.

In my recent experience (mortgage offered in December, will complete in a few weeks) their is no credit crunch for those with:

a) little debt

B) reasonable family income,

c) deposit in cash at a good level, (i.e savings or Sold, completed cash in the bank, in rented / back with parents)

d) and a good credit rating (you can have borrowed / mewed all you like as long as you pay it back on time and in full)

For those in this situation you can even stretch the income multiples that are now much stricter.

Basically now you need between 20% to 40% deposit to hit 60% to 80% LTV for the best rates. This only favours long term FTB savers who have been strict, inherritors or STR. The banks (and developers now) have little faith or interest in the "equity" locked into the OO property that cant sell becasue the OO wont drop the price becasue then they can't afford the trade up on the bargin they want.

If you have lots of loans / credit card debt they will heavily offset it against you deposit so in that case your "good deposit" may be of little help to you.

If you have gotten sloppy or overstretched in the last few years and missed a few credit card or loan payments, have any kind of default against you no matter how small then forget it. They wont touch you with a barge pole now.

And you cant lie about your family income now unless you want to pay 7% interest rates. You need those 3-6 months of bank statements, pay slips and your last P60. Good luck if someone wishs to try a forge all that lot.

And along with those high LTV % you also now have strict income multiples, of betwwen 3-4 x max. None of this 5 x or 6 x anymore. Even the old 90s style 3.5 x single or 3 x main 2.5 x second income are about a lot now.

Now all these factors added together are excluding huge swathes of people for any one of the 4 reasons, let alone having more than one apply to you.

Take my situation. STR in 07 so had six figure deposit, family income was over £60k, main wage earner income over £30k, very good credit rating, lots of past issued credit but no missed payments and little outstanding debt, and only wanting to borrow 59% LTV to buy the house. Had all the genuine income proof via employeed earnings.

Had no trouble getting mortgage offers from anyone and had access to 100% of all deals available in December. end up taking a 1.49% tracker with HSBC.

But............families like mine are very rare right now, hence mortgage appovals are very low. they want to make sure you are very low risk of defaulting and they can sell your house at auction 20% BMV if you do and get their cash back.

Dont get me wrong we were not angels but £20k of credit card and loan debt from 2000 - 2007 was cleared in one foul swoop when we STR in 07. And a good chunk of that debt was home improvements in 04/05 (new ktichen and bathroom) so it fueled the STR price in 07.

But you cant do that in 09.

M

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  • 442 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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