97% fewer Mortgages Available

[Sybil13]

Mortgages for FTB's slow to a trickle

There are only 3% of the products available to property ladder newcomers that there were two and a half years ago

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....

..........Rates have also started rising after a year of falls. Yesterday, a number of big lenders put up the cost of their fixed-rate mortgages and experts suggest other lenders will follow suit......

.........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."

......Boulger said tightened lending criteria meant first-time buyers applying for a large loan had a two-in-three chance of being rejected..........

..............Although figures this week from the Council of Mortgage Lenders showed a rise in new borrowers in April, numbers remain low by historic standards and experts say the market cannot recover until first-time buyers can find loans.

For weeks and weeks and weeks we have had to put up with the pathetic ramping of the property market by Rinoa as he /she posted link after link with regards lenders offering new mortgage deals, this week that ramping has been put into perspective , not only with the above article but with article after article about interest rate rises , and confirmation that:

Mortgage lending by building societies fell slightly in April and was 60 per cent lower than last year, according to new figures from the Building Societies Association (BSA).

And these two gems.

Surveyors valuing at TODAYS prices

And:

Homebuyers Left High and Dry as Lenders Cancel Mortgage Offers

Both confirming what Bloo Loo says: "we live in a land of broken chains."

However, with regards the Guardian article today what seems important is that despite lenders now being reliant on already dwindling deposits building societies are not only putting up interest rates but they are reducing savings rates. A few weeks ago Nationwide chief exec , Graham Bealed said:

"Without funding, mortgage lending will dry up. To the extent that funding is restricted, it will restrict our ability to lend. The BSAs Adrian Coles reckons it is quite conceivable that lending will fall this year as funding evaporates.

We then heard that at a time when lenders are now reliant on deposits with 2/3rds of mortgage lending gone with the closure of the RMBS market, that fewer and fewer savers were depositing money yet:

The majority of building society chief executives said the levy they had to pay to the Financial Services Compensation Scheme (FSCS) would have a 'considerable impact' on their business.

Around 60% said they may have to raise their mortgage rates to offset the cost, while 53 per cent said their savings rates may have to fall.

This week Nationwide and others did both.

The other important fact in this article and one that I am interested in having explained is the one that says about 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."

At a time Rinoa and others RAMP the new products available this FACT is an important one is it not?

Available money for mortgage lending is down already nearly 2/3rds due to the closure of the RMBS market.

Mortgage approvals are down nearly 2/3rds on 2007 , and there is consensus that approvals need to get back up to 80000 + for house price stability, it is hard to see how those figures can go back up until property prices fall in line with current mortgage lending levels. Now we read that if lenders start offering higher LTV's they will be less approvals as the money just isn't there.

This leads me to the CML figures this week which just didn't seem to confirm ANY green shoots, and confirm what the CML said "that the green shoots have no roots":

The number of home loans granted in April was down 28 per cent on the same month last year.

Those loans totalled £4.5 billion which was also up 16 per cent on the total for March although the total value was down 40 per cent on April last year

...average loan to value for loans to home-movers was 67 per cent — down from 72 per cent in April last year and even down on the March figure of 70 per cent while lenders were only prepared to lend an average of just 2.63 times a borrowers income.

Edited June 13, 2009 by Sybil13

[bobmo]

Who is the Ray Boulger? He seems to pop up on almost every mortgage related story.

[cashinmattress]

It's all about how the media present the numbers.

Nothing has changed other than the seasons and our MSM/government statisticians have learned to fiddle with a bit more gusto; hence all the warm fuzzy happy headlines as of late.

Debt is not cancelled out by more debt. A jobless nation is not a prosperous one.

[Bloo Loo]

It's all about how the media present the numbers.

Nothing has changed other than the seasons and our MSM/government statisticians have learned to fiddle with a bit more gusto; hence all the warm fuzzy happy headlines as of late.

Debt is not cancelled out by more debt. A jobless nation is not a prosperous one.

wrong, they are piling wealth upon wealth.

[Guest sillybear2]

To be honest the impact of LTV's is over-stated, obviously 75% LTV subdue the market but the real kicker is the fact you cannot get LIAR LOANS anymore, without 100% IO LIAR LOANS there can be no recovery beyond the previous peak, not without years and years of wage inflation backing it up.

HPI was predicated on mass fraud with the delusion of a one way bet to ponzi riches, without that things can never get back to the "good old days" no matter how much Brown likes it. You cannot have state owned banks repeating these mistakes either, they will only crash and burn later.

Edited June 13, 2009 by sillybear2

[Sybil13]

Who is the Ray Boulger? He seems to pop up on almost every mortgage related story.

Ray Boulger, of mortgage broker John Charcol

[TheCountOfNowhere]

From sky news

http://news.sky.com/skynews/Home/Business/...Research_Claims

"The number of different mortgages available to people with only a 10% deposit has dived by 97% during the past two-and-a-half years, research shows."

"She said lenders remained focused on large deposits, with many lenders reserving their best rates for people with at least a 40% deposit or equity stake."

This says to me....the banks only want people with 40% cash deposit and are enticing them in, WHY,,,,Because they dont want to take the risk of losing money when the market keeps going down.

People buying houses now must be amongst the most stupid or greedy 1% of the nation. They are being taken to the cleaners and cant see it !!!

I laugh at them and the great 2009 spring bounce recovery

Edited June 13, 2009 by TheCountOfNowhere

[Rinoa]

This leads me to the CML figures this week which just didn't seem to confirm ANY green shoots.

Loans for house purchase were up 16% MoM.

Those are the facts Sybil.

FTB's have a choice of 102 different 90% LTV mortgages. They only require one.

Those are the facts Sybil.

[tccambs]

Mods, can you PLEASE change the thread title to:

97% fewer mortgages available.

It makes our arguments look retarded if we haven't a basic grasp of the English language.

[Bloo Loo]

Loans for house purchase were up 16% MoM.

Those are the facts Sybil.

FTB's have a choice of 102 different 90% LTV mortgages. They only require one.

Those are the facts Sybil.

no, APPROVALS for house purchase loans were up.

woof woof........pssssssssssssssssssssssssss

[Bloo Loo]

Mods, can you PLEASE change the thread title to:

97% fewer mortgages available.

It makes our arguments look retarded if we haven't a basic grasp of the English language.

well even that is wrong.....there are fewer "products" ( I have no idea how a loan is a product) but lending overall is available through a lot less outlets.

the number of products is largely irrelevant.

[tccambs]

well even that is wrong.....there are fewer "products" ( I have no idea how a loan is a product) but lending overall is available through a lot less outlets.

the number of products is largely irrelevant.

Indeed, and it's only for mortgages at 90% LTV. I wasn't trying to correct the facts, just the horrendous grammar.

[Justice]

shut up mate !

it's every man for himself and i don't want to be in a full auction room in a few years time.

it's clear that people are not going to be allowed to play with pretend money in the coming years with the banks wanting 40% stakes so the sooner these people blow any real stake the soon i'll be a happy man

[Bloo Loo]

Indeed, and it's only for mortgages at 90% LTV. I wasn't trying to correct the facts, just the horrendous grammar.

well of course, the fact that the criteria published for 90%LTV is on a website or a price list does not mean that the "product" is even available.

the fact is, that a mortgage is an agreement between two entities. the entities size each other up and a rate is agreed.

the computerisation of lending has a LOT to do with the current financial crisis, as maths is applied to a human reaction....it cant be done.

[TheCountOfNowhere]

shut up mate !

it's every man for himself and i don't want to be in a full auction room in a few years time.

it's clear that people are not going to be allowed to play with pretend money in the coming years with the banks wanting 40% stakes so the sooner these people blow any real stake the soon i'll be a happy man

S**t, sorry, i've let the cat out of the bag, I thought it was obvious

How long till the great unwashed work it out ?

[Confounded]

From sky news

http://news.sky.com/skynews/Home/Business/...Research_Claims

"The number of different mortgages available to people with only a 10% deposit has dived by 97% during the past two-and-a-half years, research shows."

"She said lenders remained focused on large deposits, with many lenders reserving their best rates for people with at least a 40% deposit or equity stake."

This says to me....the banks only want people with 40% cash deposit and are enticing them in, WHY,,,,Because they dont want to take the risk of losing money when the market keeps going down.

People buying houses now must be amongst the most stupid or greedy 1% of the nation. They are being taken to the cleaners and cant see it !!!

I laugh at them and the great 2009 spring bounce recovery

This is the wealth destruction phase both in equities and housing, leverage debt is being replace with cash and will make things far worse in the future.

Patience will be rewarded.

[geoffk]

S**t, sorry, i've let the cat out of the bag, I thought it was obvious

How long till the great unwashed work it out ?

when the bank manager cuts up their cards and really enslaves them....I really think that this bit of the crash is the part in 1929 when the 90% thought it would not go down more and all piled in and then lost their shirts of the backs

Edited June 13, 2009 by geoffk

[TheCountOfNowhere]

This is the wealth destruction phase both in equities and housing, leverage debt is being replace with cash and will make things far worse in the future.

Patience will be rewarded.

Definitely.

I know 3 people who have no sold this year, one divorce, one moving abroad, one STR !!

Each one wont buy because they are just relieved to have offloaded their properties!!!

It's difficult to sift thropught the BS at the moment with the relentless ramping coming from the media and government.

That re4ally should be illegal.,

One has just got to look at the facts to see what's happening.

They can ramp but they will fail.

The only way to recovery is prices dropping and/or inflation. Both paths lead to a s**t load of pain for homeowners.

[winkie]

Look at it logically lenders are in the business to make money...they only make money if they believe they will get the money back plus interest, 60% to 40% risk seems fair for the best rates.

You get out of it what you put into it..if you have nothing to put into it you either don't get it or if you only have a little get the best rates.

House prices have got to go lower, unless the plan for the future is you are born with debt and die with debt.

[Guest DissipatedYouthIsValuable]

BoE Lending report

Mortgage lending growth has slowed further, with net and gross lending flows having weakened in

March. Mortgage applications have risen in recent months and approvals for house purchase have

edged higher, though remain close to historical lows. The number of high loan to value products

being offered has stabilised in recent months, though spreads on those products are particularly high.

Edited June 13, 2009 by DissipatedYouthIsValuable

[Rinoa]

no, APPROVALS for house purchase loans were up.

woof woof........pssssssssssssssssssssssssss

CML Stats

Show me where it says approvals.

Or maybe you're being deliberately naive because you can't handle the reality?

[TheCountOfNowhere]

House prices have got to go lower, unless the plan for the future is you are born with debt and die with debt.

Well, funny you should say that, Ive worked with some Japanese before and they had 600 year mortgages that they had to sign their children up to pay !!!!!! Maybe someone can find a link to this on the net somewhere.

P.S. And we all know what's happened to Japanese house prices over the last 20 years...down, year on year.

Edited June 13, 2009 by TheCountOfNowhere

[Neil B]

Good to see someone picking out the vital statistics for a change. It seems that the majority of posts and articles on the site these days are trying to keep the Bubble inflated by producing vapour-like statistic that equate to (but never do) green shoots and recoveries.

The real statistics that mortgage approvals are at their lowest for 80 years and posts like this highlighting the lack of FTBs is more representitive of the current housing market: DEAD

The current bubble is only being kept aloft by efforts from the government (who all have multiple properties) with stupidly low interest rates and schemes to try and halt defaults. However, these methods only serve existing mortgage holders not those taking out new mortgages. What we are seeing in 'increased activity' is actualy just the slow trickle house movers and downsizers.

People seem to latch on to LTV percentages being the driving factor of house prices, however, it is actual mostly driven by the salary multiple of the loan. With the current (asking) prices of houses this excludes the majority of FTBs and those wishing to upsize as their salaries dont come anywhere near the required amounts.

I dont think that we will have the same type of collapse as we have had in the past: This one is being supported but the supports are weak. All it takes is an increase in interest rates, which is inevitable as a lot of investors are pulling out of sterling at the moment. When it happens I think we will have an implosion.

[barrabus]

This is the wealth destruction phase both in equities and housing, leverage debt is being replace with cash and will make things far worse in the future.

Patience will be rewarded.

If rampent inflation does not get your cash first.

[Sybil13]

Good to see someone picking out the vital statistics for a change. It seems that the majority of posts and articles on the site these days are trying to keep the Bubble inflated by producing vapour-like statistic that equate to (but never do) green shoots and recoveries.

The real statistics that mortgage approvals are at their lowest for 80 years and posts like this highlighting the lack of FTBs is more representitive of the current housing market: DEAD

The current bubble is only being kept aloft by efforts from the government (who all have multiple properties) with stupidly low interest rates and schemes to try and halt defaults. However, these methods only serve existing mortgage holders not those taking out new mortgages. What we are seeing in 'increased activity' is actualy just the slow trickle house movers and downsizers.

People seem to latch on to LTV percentages being the driving factor of house prices, however, it is actual mostly driven by the salary multiple of the loan. With the current (asking) prices of houses this excludes the majority of FTBs and those wishing to upsize as their salaries dont come anywhere near the required amounts.

I dont think that we will have the same type of collapse as we have had in the past: This one is being supported but the supports are weak. All it takes is an increase in interest rates, which is inevitable as a lot of investors are pulling out of sterling at the moment. When it happens I think we will have an implosion.

Thanks for that, someone reading what the thread posted by a "bear of little brain" was trying to say regardless of grammar / spelling or trying make more of CML figures than even the CML have done.

It is really really hard being seen as STUPID, I get so upset by it.......

Most of you know how hard it is for me to post on this website, feeling that I am not intelligent enough to have an opinion, I try to focus on deciphering facts from articles instead of reading the spin. By doing this I hope that it helps others feeling somewhat shaken by the constant ramping etc to keep perspective. I know by grammar is awful + spellings, but what is better a grammatically correct post by a bull lacking in FACT or a badly worded thread by a "bear of little brain" attempting to help other bears of little brain decipher facts and find perspective?

Edited June 13, 2009 by Sybil13