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House Price Crash Forum

Boe Mortgage Approvals: 47.6k


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HOLA441
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So mortgages starting to flow companies announcing better conditions and the FTSE going up mmmm starting to look like a recovery. Guess i will need to be happy with my average 25K off as it looks like thats it :-(

You'd better buy a house before it's too late, then. <_<

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HOLA448
Survey: 47k, last 44.2k (revised from 43.4k)

As an article in the Independent said in June regarding the May figures:

Figures from the Bank of England yesterday confirmed that the banks and building societies remain reluctant to lend to any but the most secure of businesses and home buyers. Mortgage approvals barely improved during May, remaining stuck at a little over 43,000 – some way above the nadir of 27,000 last winter, but under half of their normal level. Analysts at Capital Economics said the figures were "consistent with house prices falling at double-digit annual rates".

However, we cannot deny approvals are going up as people panic to get on the ladder before prices start to go up!!

We also know however, that money for lending is very limited, with the CML recently confirming they were not expecting lending to be over the £145billion they predicted at the start of the year .

Mortgage lending 2007 - £363bn

Mortgage lending 2008 - £258bn

And we know that the earliest records – dating from April 1993 when the UK was recovering from the last recession – show mortgage approvals at 87,291.

Healthy activity is around 100,000 approvals month, according to Ray Boulger, but he says : "We may not see this for some time." It took until October 1996 for approvals to hit 100,000 after the last recession – almost four years after it had officially ended.

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I know of 2 people who are buying ASAP as they think prices are going to go straight back up, one of them works in an estate agent.

Meanwhile I will bide my time, keep saving and when all the chuff have bought overvalued property and are paying back swathes of cash to a bank until retirement then in a few years I will pop in and find somewhere nice and affordable.

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Like it or not prices are stabilising. I think HPI is dead which is good but I still chuckle to myself when someone makes moronic predictions of 40% further falls.

Prices may well be stabalising for now, but only in a very artificial environment of state owned banks, low base rates etc. At some time rates will rise, further unemployment will kick in and more repos will come to market. This recession and housing crash has a long way to run yet. Only when there are tangible reasons for economic improvement will there be light at the end of the tunnel.

Edited by BalancedBear
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HOLA4419
And so therefore the average earnings of those actually being approved for mortgages MUST be well above average.

Can't last.

Can it...?! :blink:

well the figures would seem to suggest that

previous months

126,785 average 5.07 times earnings

118,916 average 4.76 times earnings

118,536 average 4.74 times earnings

looks like there was some merit in Hamishes point that the richer are buying,

and as prices only went up .1%, it also indicates that possibly its not cash buyers but bigger loans that are pushing the market.

course, mortgage rates have JUMPED in the last few weeks.

Edited by Bloo Loo
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Like it or not prices are stabilising. I think HPI is dead which is good but I still chuckle to myself when someone makes moronic predictions of 40% further falls.

Its not far off John Calverley's prediction of 50% real terms peak-trough drop. He was writing about the bubble back in 2004 and and updated it post-crash, the analysis is very good and easy to follow so is recommended. He covers yields, taxation, sentiment, bubble psychology, pensions and govt policies in his explanation of house prices changes. He was one of the view Chief economists to write about this in advance of the crash and I put him in the same league as Fred Harrisson for credibility.

A drop in average prices down to £95-100K is at the low end of my expectations but quite possible with 3+ million unemployed, reduced credit, and now we have gone passed the peak the house buying demographic in 2006. That's still around 4x median income.

In 1997, a suggestion of a tripling in house prices in 10 years with low inflation would have been seen as moronic. Unfortunately, there is an ample supply of volunteers.

VMR.

Edited by VeryMeanReversion
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Like it or not prices are stabilising. I think HPI is dead which is good but I still chuckle to myself when someone makes moronic predictions of 40% further falls.

That might well depend upon the governments ability to continue subsidising the banks which in turn depends upon the governments ability to continue creating/borrowing the money.

Like Bloo Loo says the average mortgage is still 5.2 * income.

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Wow look at consumer credit!

(...)

Look at Net lending to individuals secured on dwellings...

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ive not seen a buyer in months now, here in Boston, and ive tried dropping the price, all to no avail. so i dont know where the banks get there price rise figures from. my guess would be city areas, where people earn more and dont worry so much about the cost of borrowing.

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ive not seen a buyer in months now, here in Boston, and ive tried dropping the price, all to no avail. so i dont know where the banks get there price rise figures from. my guess would be city areas, where people earn more and dont worry so much about the cost of borrowing.

I can give some anecdotal support to that.

I live 10 miles outside Oxford and commute in.

The city market is still red hot, but the village market has died.

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