Band Of England Mortgage Approvals June

[cht]

So from the above figures, lending for mortgages increased by 300 mill, which is equivalent to approximately 2000 new purchases.

Yet mortgages for purchase only increased by 200/300.

So most of this money is actually going on remortgaging, or have I missed something. (eg, the lending is mostly for big expensive houses).

[three pint princess]

?

I don't know if you realised but it has a referral or partner ID in the link, it could be perfectly innocent

like a Google code or something, but your post made me think it was touting for business.

We activate your partner ID in our system and your site can go live. We also take care of any changes you require at a later date at no additional cost to you.

The mortgageLinked System

Each of the system pages has different functionality to help your clients:

* Work out how much they can afford

* Work out the maximum amount they can borrow

* Understand what products are available to them

* Decide what products are right for them

* Fully understand the payment obligations that go along with any product

The benefit of this to you is that this interactivity and up-to-date information generates leads in response to looking at genuine products – not simply completing an enquiry form to find nothing else once they click Submit.

The Partner ID in this case is partners.asp?id=HSP and you said

I challenge every reader on this site to go to this mortgage wizard and find a lender that is prepared to lend to them: Be honnest with the figures. Find a property on Rightmove that you would like and enter your details.

http://www.mortgagelinked.co.uk/common/factfinder.asp?ID=

[MRMX9]

Shame the BBC thinks this non story is more important than this

http://news.bbc.co.uk/1/hi/business/8123862.stm

[Liquid Goldfish]

324 from Sky ticker

Approvals and 5.1 to 5.4 bln for purchase from boe report accessed through forexfactory calendar.

thanks, Hamish

(I'd been reading the wrong column)

[The McGlashan]

It seems that the position of the earth on its orbital procession around the sun is the external influence causing the seasonal rise which is always evident.

[HAMISH_MCTAVISH]

So from the above figures, lending for mortgages increased by 300 mill, which is equivalent to approximately 2000 new purchases.

Yet mortgages for purchase only increased by 200/300.

So most of this money is actually going on remortgaging, or have I missed something. (eg, the lending is mostly for big expensive houses).

The average loan size increased.

So only a couple of hundred more loans, but the average of all 43K loans was a larger amount of money.

[HAMISH_MCTAVISH]

thanks, Hamish

(I'd been reading the wrong column)

No problem.

[cht]

The average loan size increased.

So only a couple of hundred more loans, but the average of all 43K loans was a larger amount of money.

So rich people can swap houses. The rest of us will have to wait for prices to fall further.

[HAMISH_MCTAVISH]

It seems that the position of the earth on its orbital procession around the sun is the external influence causing the seasonal rise which is always evident.

Indeed.

But what is causing the YoY increase in both lending for new mortgages and approvals?

There is a seasonal rise in lending every year. But there are notable differences between this years rise and last years rise.

-This year both lending amounts and approvals are now up in year on year terms.

-UK average prices have bounced this year when they didn't last year.

It would be imprudent to dismiss the likelyhood of a causal link between those two facts

Edited June 29, 2009 by HAMISH_MCTAVISH

[the end is a bit nigher]

Approvals now consolidating at a level commensurate with stable prices.

Not according to Spline's chart which you continually referred to as excellent. I had my doubts about it at first but after he gave a straight and consise answer to my questions, I agree, it is excellent. Of course you aren't familiar with straight and concise answers, are you? Or in fact, giving any answers.

50k is currently the predicted stable price level, not 43k.

No, 50k isn't the level. As the number of approvals rises, so does the number needed for price stability. This is due to the change in the proportion of cash buyers. Eventually the number of approvals catches up with the number needed for stability, but the 2 rise together, if it happens. Spline explained this in his answer to one of Hammy's questions. Not what Hammy wanted to hear, but at least he understood the answer, unlike Rino.

Interesting information from KON over on TMF.

BoE approvals are published net of cancellations.

The figures published have already accounted for those sales that fell through due to chains breaking or the buyer pulling out at the last minute.

However, the BoE do still publish gross approvals, so it's possible to see the cancelleation numbers before the actual approvals were published.

KON on TMF

Cancelleations have reduced markedly over the past 4/5 months, coming down from a high of 37% at one point down to 13% now. A further sign of confidence returning to the market.

So that tells us that the number of people applying for a mortgage each month is falling, or at best that people with no hope of getting a mortgage aren't applying. And you think that is bullish? Nice.

So approvals net of cancellations up.......

And cancellations down from 37% to only 13%.......

So much for bloo loo and Sybil's much parroted "land of broken chains" theory!!!!!!

This is turning into a great month. All those bear myths being debunked, no wonder they are getting desperate.

Yep, land of no chains at all. No wonder there are fewer houses coming to market. People are realising they aren't going to get stupid amounts of money any more. Realisation sets in.

One of the reasons I haven't bothered posting much is that the standard of argument you get with our current Bulls is absolutely pathetic. These 2 losers are about the best we have got which doesn't say a lot for the standard of property V.I.s these days.

Hamish and Rinoa really are a pair of thickies. (Cue General Melchett).

Edit: for clarity

Edited June 29, 2009 by the end is a bit nigher

[Dr Renter]

Indeed.

But what is causing the YoY increase in both lending for new mortgages and approvals?

A small number of cash buyers believing the government spin that we are at the bottom. Fortunately these idiots are in short supply. This really is a non-story and shows the bulls' desparation. This is turning out to be the worst 'bounce' ever. Roll on autumn.

[HAMISH_MCTAVISH]

A small number of cash buyers believing the government spin that we are at the bottom. Fortunately these idiots are in short supply. This really is a non-story and shows the bulls' desparation. This is turning out to be the worst 'bounce' ever. Roll on autumn.

Since when did cash buyers need mortgages????

Just to be clear, you stated that cash buyers are responsible for increasing numbers of mortgage lending and mortgage approvals.

Genius.

[Shunnyonions]

Not according to Spline's chart which you continually referred to as excellent. I had my doubts about it at first but after he gave a straight and consise answer to my questions, I agree, it is excellent. Of course you aren't familiar with straight and concise answers, are you? Or in fact, giving any answers.

No, 50k isn't the level. As the number of approvals rises, so does the number needed for price stability. This is due to the change in the proportion of cash buyers. Eventually the number of approvals catches up with the number needed for stability, but the 2 rise together, if it happens. Spline explained this in his answer to one of Hammy's questions. Not what Hammy wanted to hear, but at least he understood the answer, unlike Rino.

So that tells us that the number of people applying for a mortgage each month is falling, or at best that people with no hope of getting a mortgage aren't applying. And you think that is bullish? Nice.

Yep, land of no chains at all. No wonder there are fewer houses coming to market. People are realising they aren't going to get stupid amounts of money any more. Realisation sets in.

One of the reasons I haven't bothered posting much is that the standard of argument you get with our current Bulls is absolutely pathetic. These 2 losers are about the best we have got which doesn't say a lot for the standard of property V.I.s these days.

Hamish and Rinoa really are a pair of thickies. (Cue General Melchett).

Edit: for clarity

70-80k is the norm for 0% HPI or price stability according to Spline's historic data chart also. Based on pure approval numbers we need another approx 100%. That's a long way to go.

[General Melchett]

Well, if anything, some might be getting desperate at how bad you are in grasping the economics, i.e. ignoring the most basic laws of economic gravity despite plenty of arguments and facts thrown your way. At the moment you are looking at that cup and seeing it half-full. Realists are seeing it half-empty and drying out with some distortion added by some government intervences (quantitative easing), which add nothing to cushion the HPC, simply create a short-term bounce to facilitate political ratings.

Exactly. Gordon is currently metaphorically shoving anything that will burn on the fire in order to try to keep the housing market and the economy looking not quite as dire as it should in order that he can try to get the electoral victory he craves. Obviously, there are problems with this approach: When you've burnt everything, you have nothing left and no way to keep the fire going.

You'd have to be some sort of fool to participate in this madness by buying a house in a market which is so obviously being rigged for short term political purposes using such unsustainable methods.

Edited June 29, 2009 by General Melchett

[Jim B.]

It seems that the position of the earth on its orbital procession around the sun is the external influence causing the seasonal rise which is always evident.

Wow. Really like that first graph. It is almost uncanny in its symmetry. I think any bull would have a hard time arguing that seasonal factors are all that's at play here.

[Kazuya]

Since when did cash buyers need mortgages???? :

I'm sure he meant cash-rich buyers i.e those needing a low LTV mortgage.

[Bruce Banner]

Net mortgage lending = gross lending - repayments and redemtions?

Well, to begin with gross lending also includes remortgages as well as mortgage for house purchase. And we know that remortgaging is generally falling as people stay on SVR's.

It's obviously easier for borrowers to pay down their mortgages when rates are low. Combined it's easy to see why net lending is falling.

Lending soley for house purchase has increased this month.

[jborg]

324 from Sky ticker

Approvals and 5.1 to 5.4 bln for purchase from boe report accessed through forexfactory calendar.

What, instead of 223?....in that case i change my view completely. Crash over eh lads and lasses....

[Timm]

Interesting information from KON over on TMF.

BoE approvals are published net of cancellations.

The figures published have already accounted for those sales that fell through due to chains breaking or the buyer pulling out at the last minute.

However, the BoE do still publish gross approvals, so it's possible to see the cancelleation numbers before the actual approvals were published.

KON on TMF

Cancelleations have reduced markedly over the past 4/5 months, coming down from a high of 37% at one point down to 13% now. A further sign of confidence returning to the market.

So approvals net of cancellations up.......

And cancellations down from 37% to only 13%.......

So much for bloo loo and Sybil's much parroted "land of broken chains" theory!!!!!!

This is turning into a great month. All those bear myths being debunked, no wonder they are getting desperate.

I must admit, I've not been a great subscriber to this "land of broken chains" theory. I haven't seen an unusually high or low number of cancellations. I spent ten years as an EA and I'd say about a quarter of agreed sales got cancelled over that period. The percentage varied a lot agent to agent, area to area and month to month. However, it didn't seem to vary as much as you might think because of how hot the market was. So huge numbers of abortive sales came as a bit of a surprise to me. It also didn't tally with what I was seeing in my local market. But hey, I figured it must be because "Oxford is special", or we were in a "new paradigm".

But 13%? Nah, you'd see more than that in a mega hot market. So what's going on?

Well first up, these are not cancellations of sales agreed. They are cancellations of mortgages approved. Obviously sales where the mortgage is approved are further down the line, and one might expect a lower percentage of cancellations (probably dependent on a failure elsewhere in the chain). Also, the mortgage tends to get cancelled not straight away, but after the offer expires: typically six months later , as acknowledged in the link Rinoa helpfully provides. So to calculate a percentage fall through rate, the cancellations need to be compared with approvals six months earlier.

OK, lets look at the cancellations in that link of Rinoa's and calculate the percentage compared to the number of approvals six months previously.

		   Number	Cancellations		  LPMBV87	LPMBV95	% Cancelled31-Jan-08	71624	22836	31.88%29-Feb-08	81572	17923	21.97%31-Mar-08	78119	16147	20.67%30-Apr-08	84328	19195	22.76%31-May-08	64123	17319	27.01%30-Jun-08	57037	15386	26.98%31-Jul-08	54457	15315	28.12%31-Aug-08	44989	12782	28.41%30-Sep-08	48645	14328	29.45%31-Oct-08	47595	13179	27.69%30-Nov-08	37993	13148	34.61%31-Dec-08	34623	11598	33.50%31-Jan-09	33509	12633	37.70%28-Feb-09	41911	 8154	19.46%31-Mar-09	56234	 9701	17.25%30-Apr-09	56637	 9848	17.39%31-May-09	58134	 7821	13.45%

Bull friendly May, which shows a cancellation rate of 13.45%, would (if calculated on the number of cancellations in the current month compared to mortgage approvals six months previously), be 20.5%, much more like what I would expect.

OK, so much for May. What about the bear-tastic January, which showed a cancellation rate of 37.7%? Well, based on the same formula as above we see a cancellation rate of... 23.2%!!! So I'd say this looks pretty much like business as usual.

So, there we have it. The cancellation rate (based on this data source) has fallen by 2.7 percentage points.

Wow. Break out the bull smileys.

[HAMISH_MCTAVISH]

I'm sure he meant cash-rich buyers i.e those needing a low LTV mortgage.

Wait...... People make mistakes when typing??????????

Nooooooooo........

Good thing I'm not ccc or this entire post would have consisted of.........

TROLL!!!!!!!!!!!!! TROLL!!!!!!!!!!!!! OUTED!!!!!!!!!!!!!!!!

[Timm]

Wait...... People make mistakes when typing??????????

Nooooooooo........

Good thing I'm not ccc or this entire post would have consisted of.........

TROLL!!!!!!!!!!!!! TROLL!!!!!!!!!!!!! OUTED!!!!!!!!!!!!!!!!

Have you read my post?

[scuuzeme]

Wait...... People make mistakes when typing??????????

Nooooooooo........

Good thing I'm not ccc or this entire post would have consisted of.........

TROLL!!!!!!!!!!!!! TROLL!!!!!!!!!!!!! OUTED!!!!!!!!!!!!!!!!

There's a big difference between one poster commenting their opinion on another posters post, and the same person telling obvious porkies.

You were caught out there, good and proper, and you are now showing your weakness.

You are a liar. Full stop.

No "Mistake in typing involved" in your case. You lied, and as bullshitters like you are wont to do, you are now trying to cover it up with bluster and flannel.