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ollie plimsolls

C M L July House Purchase Lending Up On A Year Ago

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CML

Although remortgaging remained unsurprisingly weak, lending for house purchase showed its first material annual growth in July for the first time since early 2007, according to the latest Council of Mortgage Lenders' survey.

At £14.5 billion, total gross lending rose significantly for the second month running, but was still 42% lower than in July last year. Within this, house purchase lending accounted for 56,000 loans totalling £7.5 billion - up from 47,000 loans totalling £7.1 billion in July last year.

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Value of house purchase loans: Up 27% MoM.

One for the hyperinflationists I think.

spring bounce approvals materialise. course the average loan size was up too, to around £139,000.

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spring bounce approvals materialise...

I know...

But I thought the bulls should have their day while they can.

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I know...

But I thought the bulls should have their day while they can.

you are so sweet.

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you are so sweet.

:)

Where are they though?

Sibley and Daddybear should be all over this thread by now.

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Gross lending up, net lending down...

Hang on a minute, I know some people are paying down their mortgages, but would this not be the effect we would see if savers were fleeing low interest rates on their deposits, and buying houses (at say 60% LTV) off over-indebted borrowers (say 90% LTV)?

Now correct me if I'm wrong, but doesn't this report indicate a strong trend towards deleveraging, facilitated by the cash of savers?

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56,000 seems low compared to boom times considering they write

In terms of product choice, over three quarters of mortgages taken out in July were at fixed rates, with borrowers able to lock in to an average fixed rate of 4.7%, well below the average of 5.57% over the past decade

Average LTV's are low and falling. I can't see the volume recovery myself unless prices continue falling. Item club economist writes

“The current stabilization in the housing market is a false dawn,†Hetal Mehta, senior economic adviser to the Item Club, said in a statement. “Price rises largely reflect the acute shortage of available properties, with many homeowners either trapped in negative equity or reluctant to sell for fear of locking in the losses of the past two years.â€

....

“In order for the housing market to function properly it is essential that first-time buyers are bought back into the market,†Andrew Goodwin, senior economic adviser to the club, said. Otherwise, “the current status quo of a low number of transactions, dominated by speculative cash buyers, is likely to be maintained.â€

http://www.bloomberg.com/apps/news?pid=206...id=aG45IIQ6VCjw

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Gross lending up, net lending down...

Hang on a minute, I know some people are paying down their mortgages, but would this not be the effect we would see if savers were fleeing low interest rates on their deposits, and buying houses (at say 60% LTV) off over-indebted borrowers (say 90% LTV)?

Now correct me if I'm wrong, but doesn't this report indicate a strong trend towards deleveraging, facilitated by the cash of savers?

It's the story of the year - the bank has taken the honey away from the hive and the bees are merrily buzzing behind.

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Gross lending up, net lending down...

Hang on a minute, I know some people are paying down their mortgages, but would this not be the effect we would see if savers were fleeing low interest rates on their deposits, and buying houses (at say 60% LTV) off over-indebted borrowers (say 90% LTV)?

Now correct me if I'm wrong, but doesn't this report indicate a strong trend towards deleveraging, facilitated by the cash of savers?

So increasing numbers of cash rich 40% deposit buyers deciding to move into property = gross lending up. Their thinking is that cash in the bank isn't earning anything and this was the bottom of the drop in house prices.

The sellers are more highly leveraged and are going STR = net lending down. They are nursing losses and feared ending up where their friends are, in negative equity unable to move house.

I find it hard to believe that both groups have a diametrically opposed view of where the market is going.

Doesn't net lending take into account partial pay downs of existing loans not just terminated loans?

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So increasing numbers of cash rich 40% deposit buyers deciding to move into property = gross lending up. Their thinking is that cash in the bank isn't earning anything and this was the bottom of the drop in house prices.

The sellers are more highly leveraged and are going STR = net lending down. They are nursing losses and feared ending up where their friends are, in negative equity unable to move house.

I find it hard to believe that both groups have a diametrically opposed view of where the market is going.

Perhaps not, but maybe the buyers are willing to take a nominal risk to protect the real value of their wealth, whilst the sellers are just happy to avoid foreclosure?

Doesn't net lending take into account partial pay downs of existing loans not just terminated loans?

I think so, but that is more deleveraging...

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Now correct me if I'm wrong, but doesn't this report indicate a strong trend towards deleveraging, facilitated by the cash of savers?

Thats how I see it. All those low interest rates instead of encouraging people to borrow and spend has given people money to pay off debt and save. The irony.

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