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Housing Crash Is Over' Declares Hsbc As Bank Offers Extra £500m In Return To 90% Loans


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Housing crash is over' declares HSBC as bank offers extra £500m in return to 90% loans

Britain's biggest bank claims the housing crash is over and has promised to lend an extra £500 million to people applying for 90per cent home loans.

The pledge from HSBC is expected to end a two-year log-jam on this type of high loan to value mortgage.

The decision is seen as evidence that the UK's biggest mortgage lender is confident that house prices will not fall any further.

This view is at odds with some City analysts who claim that a recent revival in sales and prices amounts to a false dawn and the market will dip again next year.

HSBC's announcement came with a swipe at other banks and building societies, which it accused of not doing enough to open up mortgage finance.

Rivals, such as the Lloyds group, which includes Halifax, are expected to respond by increasing the amount of mortgage lending and high value loans they offer.

The pledge of an extra £500 million comes after the bank found that it had met an earlier target to lend £1billion to those who need to borrow 75per cent plus of a property's price.

Head of mortgages at the bank, Martijn van der Heijden, said there is a new optimism among buyers that house prices will not fall any further.

He said: 'We committed £15 billion to mortgage lending in 2009 – double our 2007 lending – and £1bn of this was made available exclusively to home buyers with deposits of just 10per cent.

'Demand has been very strong and we have reached this target, so we are now committing another £500 million to this vital segment of the market.'

Mr van der Heijden said research conducted in August last year found that 10per cent of Britons were keen to move house or get on the property ladder, but had decided to hold off for at least six months.

Some 37per cent said they did not want to buy while prices were falling, while 36per cent were concerned about the rising cost of living.

However, he said: 'It is a different picture today – houses prices seem to have bottomed and rates are low – and many of those who put off their purchase last year are starting to look around again. 'HSBC has been out there throughout the recession, staying open for business for our customers.

'While other lenders were in retreat, we became the UK's largest lender in the first half of 2009 on a net lending basis.

'Today we are reinforcing this commitment with a huge increase in the funds available for both first time buyers and home movers.'

However, the bank's boasts have to be seen against the fact it is making a huge profit margin on its home loans and taking big application fees.

The profit margins taken by all the banks and building societies on their fixed rate, tracker and variable rate mortgages are running at a record high.

HSBC has a two-year fixed rate mortgage at up to 90per cent loan to value (LTV) charging 5.99per cent with a £599 fee. There is a five year fix at 6.49per cent with a £599 fee.

It is also offering a two-year discount mortgage currently charging 3.89per cent, but this carries a fee of £1,199. There is also a lifetime tracker charging 4.59per cent with a £999 fee.

Details of the HSBC deal emerged as Bank of England figures showed a slight dip in the total number of new mortgages approved in August.

The figure of 52,317 was down slightly from 52,404 in July, but double the level seen at the low point of the crash in November last year.

The figures also picked up that families are trying to pay down personal debts in order to protect their finances against the threat of the recession and unemployment.

People repaid a record £309 million more than they borrowed through unsecured credit, such as credit cards, loans and overdrafts. This is only the fourth time on record that this has happened.

Within this total, outstanding credit card debt rose by £196 million, but money owed on loans and overdrafts fell by £506 million.

Howard Archer, chief UK and European economist at IHS Global Insight, said: 'The data indicate that mortgage activity is currently stabilising at a level significantly above its November 2008 record low levels, but still well down on long-term norms.

'While housing market activity has been lifted by the still significant fall in house prices from their 2007 peak levels and low mortgage interest rates, the upside continues to be limited by unfavourable economic fundamentals and tight credit conditions.'

Chief economist at the Royal Institution of Chartered Surveyors, Simon Rubinsohn, said: 'Mortgage demand is continuing to grow relatively strongly. However, it is not just the scarcity of mortgage finance which is making it difficult to satisfy this demand.

'The lack of appropriate properties on the market is compounding the problem by leaving prospective buyers with little real choice in some parts of the country.'

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HSBC has a two-year fixed rate mortgage at up to 90per cent loan to value (LTV) charging 5.99per cent with a £599 fee. There is a five year fix at 6.49per cent with a £599 fee.

It is also offering a two-year discount mortgage currently charging 3.89per cent, but this carries a fee of £1,199. There is also a lifetime tracker charging 4.59per cent with a £999 fee.

cheap at half the price.

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What period is this £500m to cover?

They had £1bn to cover these loans for 2009 and this has been used up.

So £500m is a lot if it is extra for 2009, but not a lot if it is for 2010.

I think we should be told.

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He said: 'We committed £15 billion to mortgage lending in 2009 – double our 2007 lending – and £1bn of this was made available exclusively to home buyers with deposits of just 10per cent.

'Demand has been very strong and we have reached this target, so we are now committing another £500 million to this vital segment of the market

Clever move.

They have loaned £15bn so the best way to try protect that money is to try talk the market up by throwing a little extra at it. It's a try at a cheap insurance policy.

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Come on fellas.

I'd have more respect for you if you admitted defeat now.

It's over. There ain't gonna be a HPC ever.

You slagged me off but it turned out I was right about everything.

I didn't have to be brain of Britain to work out politicians and business people weren't going to lose their dough so you lot could buy a cheap house. World doesn't work like that.

You were on a winner until they changed the rules. Once QE started you must have known the score.

All you're doing now is batting around bad news.

Put your hands up.

You've been banjaxed. :lol:

Hey, I'm getting worried my Bullish predictions (peak boom prices to be exceeded next year) will be proved wrong. The news has turned decidedly bearish of late. Getting bad vibes from EAs again, after a brief period of summertime elation.

Edited by gruffydd
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Come on fellas.

I'd have more respect for you if you admitted defeat now.

It's over. There ain't gonna be a HPC ever.

You slagged me off but it turned out I was right about everything.

I didn't have to be brain of Britain to work out politicians and business people weren't going to lose their dough so you lot could buy a cheap house. World doesn't work like that.

You were on a winner until they changed the rules. Once QE started you must have known the score.

All you're doing now is batting around bad news.

Put your hands up.

You've been banjaxed. :lol:

1 January

1.1 Saturday 06 JAN 1990 - The Times - Recovery forecast for house prices in market awash with loan funds

1.2 Saturday 06 JAN 1990 - The Times - House prices in 2% year-end fall

1.3 Saturday 20 JAN 1990 - The Times - House prices in London drop by 10%

2 February

2.1 Sunday 18 FEB 1990 - The Sunday Times - House prices may fall still further

2.2 Tuesday 27 FEB 1990 - The Times - Price of houses 'to fall 10%'

3 March

3.1 Wednesday 07 MAR 1990 - The Times - House prices rise but trend is down

3.2 Friday 09 MAR 1990 - The Times - Switch to poll tax 'may lift house prices 15%'

http://www.housepricecrash.co.uk/forum/ind...howtopic=126354

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"Martijn van der Heijden"???

Expect him to get a "Martijn Call" pretty soon.

Should have done more "Heijden" of his bets.

seeing as Property Guru has now correctly called the turn and start of the 2nd leg down, this guy is out of a job inside 6 months.

love the avatar PG. I'm nitpicking i know, but surely it's Dr Blubb as oposed to Bubb. ;)

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And £500m is hardly a "bet" from an institution that can access hundreds of billions. Who are they trying to kid?

yep, it's only half of what that dragon who looks like ricky gervais and hitachi have raised/commited for their crack at

stamp duty free mortgages. Or something like that.

All these VI's have called the bottom, and now they need to flog that story for all it's worth.

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£500,000,000 divided by 160,000 (ave property price) = 3,125. Nothing to see here, move along quietly. :rolleyes:

That was my first thought too.

A lot of news about ATM but mostly fluff.. I can't see prices going anywhere quickly for now. The press will make a big deal of the YoY data as we get towards Christmas, but MoM I recon it will be pretty flat from here to the election.

After that someone will have to pay the bill for Gordon's party.. and when the hangover kicks in there are going to be some pretty miserable faces. I can see public sentiment being very low this time next year.

My seat on the sidelines will be all the more comfortable in the knowledge that I don't have a mortgage to worry about. If I lose my job, I will rent somewhere cheaper or move in with a relative for a while.

Ho Hum

eating_popcorn.gif

Edited by libspero
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1 January

1.1 Saturday 06 JAN 1990 - The Times - Recovery forecast for house prices in market awash with loan funds

1.2 Saturday 06 JAN 1990 - The Times - House prices in 2% year-end fall

1.3 Saturday 20 JAN 1990 - The Times - House prices in London drop by 10%

2 February

2.1 Sunday 18 FEB 1990 - The Sunday Times - House prices may fall still further

2.2 Tuesday 27 FEB 1990 - The Times - Price of houses 'to fall 10%'

3 March

3.1 Wednesday 07 MAR 1990 - The Times - House prices rise but trend is down

3.2 Friday 09 MAR 1990 - The Times - Switch to poll tax 'may lift house prices 15%'

http://www.housepricecrash.co.uk/forum/ind...howtopic=126354

Just read it - great thread.

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