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Total_Injustice

Builders Warn On Mortgage Impact

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"Two of the UK's largest housebuilders have said that lack of availability of mortgages is continuing to hamper the recovery of the UK housing market.

Both Redrow and Barratt Developments said that while the market had stabilised, would-be buyers were still struggling to get finance.

The two firms reported sharp falls in selling prices in the year to 30 June.

Redrow also said the "extreme" trading conditions meant its profits would be at the lower end of expectations.

However, it reported a "relatively stable" sales market over the past six months, with private home sales up by 22% to 600.

Redrow said its average selling price was £137,500 - down 12.4% from the previous year. Barratt's average selling price fell 14% in the same period to £157,000.

Key issue

Redrow said that the drought in the mortgage market was "without doubt... a major obstacle to the recovery of the housing market".

"We are of the view that resolving this issue can play a significant role in a recovery of the economy as a whole."

Barratt said visitor levels were up 11.9% in the second half of its trading year compared with the previous six months. The level of weekly private sales reservations was 18.6% higher year-on-year.

Earlier this month, the UK's largest housebuilder by volume, Persimmon, said its prospects were better than this time last year. "

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"Two of the UK's largest housebuilders have said that lack of availability of mortgages is continuing to hamper the recovery of the UK housing market."

Or maybe their ability to make a profit. Why does recovery equal a return to 2007 prices?

"Redrow said that the drought in the mortgage market was "without doubt... a major obstacle to the recovery of the housing market". "

The establishment want prices to go up, there's enough sheeple out their to jump in. The lack of funding is the only thing saving the housing market from itself.

""We are of the view that resolving this issue can play a significant role in a recovery of the economy as a whole." "

Mmmm, yes more of the same please. 2007 here we come.

This is exactly why market management is required. On one in the housing industry has learnt a thing.

Edited by Total_Injustice

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"Two of the UK's largest housebuilders have said that lack of availability of mortgages is continuing to hamper the recovery of the UK housing market."

Or maybe their ability to make a profit. Why does recovery equal a return to 2007 prices?

"Redrow said that the drought in the mortgage market was "without doubt... a major obstacle to the recovery of the housing market". "

The establishment want prices to go up, there's enough sheeple out their to jump in. The lack of funding is the only thing saving thhe housing market from itself.

""We are of the view that resolving this issue can play a significant role in a recovery of the economy as a whole." "

Mmmm, yes more of the same please. 2007 here we come.

This is exactly why market management is required. On one in the housing industry has learnt a thing.

OH NO A MORTGAGE DROUGHT!

LETS GET ANOTHER TRILLION FROM THE TAX PAYER!

Yet this article :

Even if they wanted to ........

confirms:

In 2007, banks made 800,000 mortgage approvals, but only 400,000 were made from their own resources. Banks today are already offering mortgages at an annualised rate of about 375,000 approvals – nearly as much as at the peak of the market.

So, how much more can banks realistically do? Perhaps they can lend another 20%, to reach a total of 450,000 mortgages. Add in the struggling building societies at 100,000 loans (a third of their peak) and 20,000 from specialist lenders (down 75%) and the total may be just 570,000 a year.

What does this mean for house prices? History suggests the balance point lies at about 900,000 approvals; below this, prices fall and above it prices rise. So, there may not be enough money in the system to keep house prices rising

This is NOT a mortgage drought, this surely is simply the market adjusting back to where it would have been if not for the RMBS market fueling a bubble that has now burst and will deflate despite all the hot air being generated as people cold turkey from house price increase addiction............

Problem is will or can the government print enough to artificially prop up the hugely inflated market?

Asked that Q here:

HPC Link

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Please make more reckless loans so that this landbanking and speculative sector pretending to be building industry can carry on producing overpriced crap and bilking the population.

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Please make more reckless loans so that this landbanking and speculative sector pretending to be building industry can carry on producing overpriced crap and bilking the population.

It beggars belief.

Nothing has been learnt

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It beggars belief.

Nothing has been learnt

The only way any of them (builders, banks) are going to learn anything about how/why to avoid speculative bubbles in future is by letting them feel the pain of this one (which they created) instead of passing it all to the taxpayer. This whole business of bailouts is creating a massive moral hazard and enriching the few at the expense of the many, as well as creating the conditions for yet more bubbles in the future.

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Or maybe their ability to make a profit. Why does recovery equal a return to 2007 prices?

The word "recovery" is bandied around willy-nilly.

I can understand the word "recovery" used in conjunction to the wider economy - a recovery meaning a return of growth of GDP.

But the recovery of the housing market seems to mean (for many) a return to 2007 prices - followed by continuing unsustainable HPC - which, if happened, would eventually result in a crash that would make the current "credit crunch" seem like a picnic. We should be talking about the end of the correction in the housing market, rather than a recovery.

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The word "recovery" is bandied around willy-nilly.

I can understand the word "recovery" used in conjunction to the wider economy - a recovery meaning a return of growth of GDP.

But the recovery of the housing market seems to mean (for many) a return to 2007 prices - followed by continuing unsustainable HPC - which, if happened, would eventually result in a crash that would make the current "credit crunch" seem like a picnic. We should be talking about the end of the correction in the housing market, rather than a recovery.

There will be no recovery.

The Government has bailed out the Banks and we will pay for that in reduced public services,

higher taxes (stealthy and not so stealthy) and reduced healthcare for decades to come.

It is impossible to return to the financial situation of 1997-2007.

It was not possible to run a country in the way it was being run.

The credit crunch was the inevitable result.

Edited by PotNoodle

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