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Mortgage Lending Slows Sharply

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http://investing.reuters.co.uk/news/newsAr...AGE-LENDING.xml

Mortgage lending slows sharply

Thu Aug 18, 2005 9:34 AM BST

LONDON (Reuters) - Mortgage lending slowed sharply in July to its weakest since December 2001, the British Bankers' Association said on Thursday, while consumer credit remained weak.The group said potential home buyers may have postponed getting mortgages in July in anticipation of a widely expected August interest rate cut, which the Bank of England delivered earlier this month.

Underlying mortgage lending rose by 3.7 billion pounds in July, after a 4.7 billion pound rise in June, the BBA said. That was well below the average 4.4 billion pound monthly rise over the previous six months.BBA said net credit card lending rose by 123 million pounds in July -- less than half June's 293 million pound rise.

The BoE cut rates for the first time in two years in August to 4.5 percent from 4.75 percent as some policymakers argued lower borrowing costs were needed to lift spending.Separate figures from the Building Societies Association showed the value of mortgage approvals picked up to 3.928 billion pounds in July from 3.880 billion the month before but were down 5 percent from 4.156 billion in July last year.

Net advances deteriorated slightly to 1.004 billion pounds in July from 1.020 billion in June and were down markedly on 1.726 billion pounds in July last year. In another release, the Council of Mortgage lenders said total gross mortgage lending slowed to 25.2 billion pounds in July after 25.7 billion in June and 28.9 billion in July 2004. The CML said the number of loans for house purchase fell to 96,000 in July from 101,000 in June, and was much lower than the July 2004 figure of 130,000.

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The group said potential home buyers may have postponed getting mortgages in July in anticipation of a widely expected August interest ratec ut.

What a load of rubbish.

They better get in quick before it goes up again in October/November.

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I don't think this news will surprise anyone here. We all knew that the 'recovery' seen during the last few months was entirely attributable to seasonal factors. Throughout these months the year on year figures revealed the true facts.

The figures for the next 6-8 months will make increasingly depressing reading for the vested interests.

And all the while of course, the year on year data will continue to be negative.

It will be OK in 6-8 months however because of SIPPS and the new government FTB initiative.

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Throughout these months the year on year figures revealed the true facts.

Agreed, ianbe.

House prices are more or less where they were a year ago, if you remove

inflation.

Sales volumes are back to pre-boom figures.

There has been no spring bounce whatsoever.

IRs look to be stable or going up.

Unemploymeny has now risen for six straight months.

Debt is at unprecedented levels.

Inflation is rising.

The autumn/winter is going to be most interesting.

Last boom, it took 18months of poor sales volume until prices

began to deteriorate sharply.

We are only 12 months into the slowdown.

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Begs the question, even if there were all these buyers were waiting for the rate cut what are they goign to do when they find out that the lenders haven't dropped their rates by the full amount (or even close in many cases) and no doubt have been tweaking all the other little costs (as they have been doing for months).

This is also the last full academic year before tuition fees are introduced, now is the time when BTL's would likely be topping up their portfolios for student rent, if it is quiet this year I wonder what will happen if there is asharp reduction in live-out students in academic year 2006 - probably not enough demand for existing rental stock let alone any new stuff.

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It really beggars belief that they talk of buyers waiting for the rate cut. The banks have shafted everyone this month. Not passed on the cut and then reduced the savings rate.

GREED. This will be their downfall.

But then to make the excuse that people were waiting for the cut when they have not passed it on is unbelievable.

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CML numbers are out as well and give a similar story

Gross lending in July totalled £25.2 billion, 2% lower than in June, according to the latest data from the Council of Mortgage Lenders. This figure is 13% lower than the £29 billion of gross lending in July 2004.

http://www.cml.org.uk/servlet/dycon/zt-cml...eases_2005_0818

The net lending is still at insane levels comapared to historic precedent - and no unlike the BOE I'm not comparing to figures from the very height of the bubble mania lending, they can pat themselves on the back thinking that they've reduced the debt problem - when no such thing has been achieved. Debt is still growing at rates far outstripping savings rates, earnings increases and inflation.

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I would have bought a house in July and taken out a new mortgage but decided not to because:

1. The weather was not to my likening.

2. Someone set off bombs in a city a long way from here.

3. I thought that interest rates would drop in August and I would, somehow, miss out on the improved rates.

4. Mickey Mouse passed away.

At least four of the above are total and utter claptrap. Please tick all that apply.

p

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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