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the primitive

Mortgage Lending - May2009

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So sheeple flcoking to EAs to view houses is totally irrelevant - the money ain't there to buy the houses (even if everyone is a raging bull), it's that simple.

Just on the BBC ticker at the moment, will post a link soon

http://news.bbc.co.uk/1/hi/business/8106438.stm here we go

Oh and whle we're at it, retail sales down 0.6%

http://news.bbc.co.uk/1/hi/business/8106588.stm

Edited by the primitive

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Silly question, but do they also publish the net figure at this point? That, in my opinion, is the really interesting one at the moment.

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Reduced spending form the proportion of the population reliant on savings income should be really kicking in now.

The economic dirty protest - smearing the shit round all the walls is really working well.

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So sheeple flcoking to EAs to view houses is totally irrelevant - the money ain't there to buy the houses (even if everyone is a raging bull), it's that simple.

If you want to post an article to prove a point, it helps if you actually read the article to ensure that it does prove your point........ ;)

Which that one clearly did not. :rolleyes:

From the article.......

The CML said that while lending for home buyers had been rising recently, lending to people changing their mortgage provider had dropped off.

And in case you didn't understand the implications the first time.......

"Underneath the headline gross lending figure, it's likely that a moderate improvement in house purchase lending in May has been offset by very low remortgaging volumes as borrowers stay with existing deals."

Silly bears..... :lol:

Edited by HAMISH_MCTAVISH

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If you want to post an article to prove a point, it helps if you actually read the article to ensure that it does prove your point........ ;)

Which that one clearly did not. :rolleyes:

From the article.......

And in case you didn't understand the implications the first time.......

Silly bears..... :lol:

Still not exactly the Manic situation that the VIs keep trying to pait a picture of - buy now before it is too late and other such rubbish.

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"Underneath the headline gross lending figure, it's likely that a moderate improvement in house purchase lending in May has been offset by very low remortgaging volumes as borrowers stay with existing deals."

So what you are saying that if there is low remortgaging this either means people are on very good deals or they are trapped and cannot remortgage due to say negative equity or a job loss.

Clearly more clarification is needed on this point.

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So what you are saying that if there is low remortgaging this either means people are on very good deals or they are trapped and cannot remortgage due to say negative equity or a job loss.

Clearly more clarification is needed on this point.

Either way, lending for purchase is up. Lending for remortgage has no direct impact on purchase prices.

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deleted - inaccurate.

PN

Edited by PotNoodle

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As I see it, there is lending to people buying houses, yes.

But what of the people then moving to another house ?

Normally they would stay with their original mortgage provider and borrow again.

This isn't happening.

The stats don't work that way. Remortgaging is only about people moving between mortgage products and deals.

People are choosing to stay on SVR, as in most cases it's a better deal than the best deals available today. This frees up more of the pool of finance currently available for new purchases.

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Either way, lending for purchase is up. Lending for remortgage has no direct impact on purchase prices.

Unless of course those who cannot remortgage will become distressed sellers. So your saying this won't affect purchase price?

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:lol:

Ah... but, net lending is down. It doesn't matter how you shuffle the deckchairs.

People are having to stick with their existing mortgage providers, because even though they've tried, the better deals aren't out there. (mortgage rates have decoupled from the base rate and are heading up, hee hee) Plus, given the declining volumes, this classic bull trap looks to be fizzling out. Hope you're not too heavily invested Hamish; would hate to think of you losing all that money, especially as you seem so emotionally committed to ever rising house prices.

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Unless of course those who cannot remortgage will become distressed sellers. So your saying this won't affect purchase price?

You are assuming it's can't versus won't or don't need to......

Given that the best deals on the market are around BOEBR + 2%, and the SVR for millions of people coming off deals is BOEBR + 2%..... Why would anyone remortgage? (OK, I get the whole fix for 5 years inflation argument, but I suspect most people don't look at it that closely)

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If you want to post an article to prove a point, it helps if you actually read the article to ensure that it does prove your point........ ;)

Which that one clearly did not. :rolleyes:

From the article.......

And in case you didn't understand the implications the first time.......

Silly bears..... :lol:

Patronising tw@ it's a good job you're not worth it or i might be mildly upset.

I did read it thanks, and I do understand. However, it's a million miles from your view of the true situation. The fact is there is not enough credit available to support price rises.

I know several silly people buying at the moment. Every single one has at least 25% deposit. The traditional FTBs without Bank of Mum and dad support are simply not there in any numbers, nor will they be for the forseeable future until prices fall. Once the pool of people with access to large deposits (whether equity or cash) dwindles away, prices will fall fast.

I can wait, and will still be here when you are proved comprehensively wrong.

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Well there is NOTHING bullish in this article is there, and perhaps we can stop hearing from Rinoa about 16% rises in April now, its DOWN DOWN DOWN, 58% LOWER THAN MAY LAST YEAR! Remind me again how much did property values fall last year even with lending 58% up?

What is more CML confirm yet again that it is funding that dictates property values not sellers refusing to reduce.

"limited access to funding will constrain activity for some time to come".

See :

Homebuyers Left High & Dry as Mortgage Offers Are Withdrawn

Realistic Valuations See Chains Break

Edited by Sybil13

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Either way, lending for purchase is up. Lending for remortgage has no direct impact on purchase prices.

I would have thought that in the past, people coming off fixed deals (2 or 5 year) would shop

around and often change mortgage provider to get the best deal.

Now, they aren't.

They are UNABLE to get the best deals going because they can't jump through the required hoops.

Long term, this means increased stress on mortgage payers.

Which, long term, WILL have an impact on prices.

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We are hardly into this present crash.

The hordes who "re-mortgaged" pre-2007, and borrowed up to the hilt on the "ever growing"

value of their property are now paying back large mortages and have about 20% less equity

than they did when they re-mortgaged.

Now, they can't "re-mortgage" any more...... they are stuck.

BTL is still creaking away, the bandwagon considerably less stable than last year.

We used to chat on here, pre-2007 wondering what the "trigger" to a crash would be.

Well, the triggers for the deepening crash abound :-

Rising IRs

Rising taxes

Rising unemployment

Rising amateur BTL collapses

Rising Inflation

A year isn't much in a property crash

The next twelve months should be interesting.

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IMHO we are at the start of a vicious feedback loop. The banks need more money to come through the front door to increase lending volumes. Where does this money come from? Savers. What are savers doing at the moment? Withdrawing their cash either to put down as a deposit on a house (because they've fallen into the bull trap) or invest in a different asset class. Either way the amount of money available for banks to lend is falling which will result in the money supply continuing to fall.

By the way folks, that's a signal that the HPC STRers' superhero is on the way...

De De De De De De De De

DEFLATION!

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Ah... but, net lending is down. It doesn't matter how you shuffle the deckchairs.

People are having to stick with their existing mortgage providers, because even though they've tried, the better deals aren't out there. (mortgage rates have decoupled from the base rate and are heading up, hee hee) Plus, given the declining volumes, this classic bull trap looks to be fizzling out. Hope you're not too heavily invested Hamish; would hate to think of you losing all that money, especially as you seem so emotionally committed to ever rising house prices.

Got an arm full of screaming baby typing one finger so can only link net lending April BSA figures:

Net lending by building societies in April 2009 was minus £722 million compared to £704 million in April 2008.

Edited by Sybil13

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Patronising tw@ it's a good job you're not worth it or i might be mildly upset.

I did read it thanks, and I do understand. However, it's a million miles from your view of the true situation. The fact is there is not enough credit available to support price rises.

I know several silly people buying at the moment. Every single one has at least 25% deposit. The traditional FTBs without Bank of Mum and dad support are simply not there in any numbers, nor will they be for the forseeable future until prices fall. Once the pool of people with access to large deposits (whether equity or cash) dwindles away, prices will fall fast.

I can wait, and will still be here when you are proved comprehensively wrong.

Even bank of mum & dad isn't working:

This week, Britannia Building Society re-entered the first-time buyer market with a market-leading two-year fixed rate of 5.09%. However, borrowers have reported problems obtaining the loan. One first-time buyer said he had been turned down by Britannia because a large chunk of his deposit had come from his parents.

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Can I just add a thought?

The point has been made that very few owners could actually afford to buy their own houses at current prices.

This means that many owners have signifcant equity in their house and hence their mortgage is far lower % of total value than what they believe it is worth.

In view of this, it strikes me that the main risk of default lies with recent FTB's and not owners of family homes who have owned for many years. These owners are likely to benefit from mortgage deals as their equity is way above the 25% demanded for reasonable deals.

Edited by BlackSwan

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In view of this, it strikes me that the main risk of default lies with recent FTB's and not owners of family homes who have owned for many years. These owners are likely to benefit from mortgage deals as their equity is way above the 25% demanded for reasonable deals.

Whilst there's an element of truth to that, unemployment doesn't tend to discriminate. I can certainly think of at least three (without trying) pre-boom buyers who're sitting on at least 50% equity in £0.5m+ (at todays prices) houses, and whilst that's one hell of an equity cushion, it's also a hell of a big mortgage and their jobs don't look all that secure (commercial property related...), their wages even less so. All three would struggle terribly to replace their jobs with anything paying even half their current wages if things went bad.

It all comes back to the size of the debt relative to actual achieved income by the debt holder, not necessarily the level of equity. You can plod along in negative equity for years, or find an apparently secure position demolished in seconds. Okay, the high equity holder is likely to be a forced seller rather than a repo, but the end result is much the same.

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These owners are likely to benefit from mortgage deals as their equity is way above the 25% demanded for reasonable deals.

Then why are they not taking advantage and re-mortgaging ?

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