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Warning Of Second Credit Crunch As Lenders Predict Loans Will Plunge Over Next Three Months

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Warning of second credit crunch as lenders predict loans will plunge over next three months

Britain could be on the brink of another mortgage drought, the Bank of England has warned, as fears grew of a 'second credit crunch'.

The alert will worry millions of homeowners who need to take out a loan, young people hoping to finally climb onto the property ladder and anybody trying to sell their property.

Fears were triggered after the Bank published research today that asked the country's mortgage lenders about their plans for the next three months.

Sounding the alarm, the lenders said they expect the number of loans will plunge.

Banks and building societies blamed the clampdown on their fears that 'wholesale funding market conditions might tighten in that period', the report said.

Read more: http://www.dailymail.co.uk/news/article-1291203/Warning-second-credit-crunch-lenders-warn-worsening-mortgage-drought.html#ixzz0sRgO1lfq

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The alert will worry .... young people hoping to finally climb onto the property ladder....

I'm not worried, quite the contrary :)

I have to save I'm rather enjoying all this bearish MSM! It's very refreshing.

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I wonder how sentiment to home ownership would change if the government banned the use of the term 'climbing onto the property ladder', and gave custodial sentences to any journalists found using the term.

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I wonder how sentiment to home ownership would change if the government banned the use of the term 'climbing onto the property ladder', and gave custodial sentences to any journalists found using the term.

The word 'ladder' in the housing sense should be banned!

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Warning of second credit crunch as lenders predict loans will plunge over next three months

Read more: http://www.dailymail.co.uk/news/article-1291203/Warning-second-credit-crunch-lenders-warn-worsening-mortgage-drought.html#ixzz0sRgO1lfq

I and many on here have been saying it will happen for months. The Boe liquity scheme is due to end and there ain't no replacement. Neither should there be. The market correction has already begun and mortgage funds are drying up to a relatively low level. There is almost no news suggesting upward pressure on house prices anymore. Not long ago there was a mixture and before that a number of upbeat assesments talking of the 'recovery' in house prices. 'What a difference a few months make.......'

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I and many on here have been saying it will happen for months. The Boe liquity scheme is due to end and there ain't no replacement. Neither should there be. The market correction has already begun and mortgage funds are drying up to a relatively low level. There is almost no news suggesting upward pressure on house prices anymore. Not long ago there was a mixture and before that a number of upbeat assesments talking of the 'recovery' in house prices. 'What a difference a few months make.......'

Isn't there a "permanent successor" to the SLS called the Discount Window Facility where lenders can borrow from the BoE for a year at a time on similar terms to the SLS? Obviously it's not as good for lenders as it's for one year rather than three, but it still seems remarkabkly generous compared to what the other CB's are offering their lenders.

It seems a bit like what's happening with the ECB where one year funding has just expired and it's been replaced with 3 month funding. But here the BoE has replaced 3 year (SLS) funding with 1 year (DWF) funding

It seems strange though that bansk are making such a fuss about the ending of SLS. Maybe because they want somethign even better than the DWF?

Edited by oldsport

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I and many on here have been saying it will happen for months. The Boe liquity scheme is due to end and there ain't no replacement. Neither should there be. The market correction has already begun and mortgage funds are drying up to a relatively low level. There is almost no news suggesting upward pressure on house prices anymore. Not long ago there was a mixture and before that a number of upbeat assesments talking of the 'recovery' in house prices. 'What a difference a few months make.......'

Quite frankly, the housing market started to slide, the government did everything in its power to prop it up, included ZIRP and SLS. If the government doesn't extend SLS, I'd be rather surprised. They also have the idea that a crash in house prices would reflect badly on them (to the majority, not HPCers).

I'm actually surprised I haven't heard any mummurings of an extension. Is it cos they ain't allowed to under E.U. law or sumthin'?

Edit P.S. By "They also" I mean the new government.

Edited by Fairies Wear Boots

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Quite frankly, the housing market started to slide, the government did everything in its power to prop it up, included ZIRP and SLS. If the government doesn't extend SLS, I'd be rather surprised. They also have the idea that a crash in house prices would reflect badly on them (to the majority, not HPCers).

I'm actually surprised I haven't heard any mummurings of an extension. Is it cos they ain't allowed to under E.U. law or sumthin'?

Edit P.S. By "They also" I mean the new government.

Pesto was saying a few months ago that if they extend the SLS too far it will become part of the National Debt, either officially or if not then de facto

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/02/the_acute_vulnerability_of_the.html

But what if the government were to extend the £300bn of support? That too would be dangerous, because it would risk seeing the £300bn of bank succour classified (either formally or in the eye of investors) as part of our national debt, at a time when public-sector borrowing is rising far too fast.

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I spent today wandering around town looking for a bank to put my savings in.

All the interest rates on offer were very low, below 0.5% in many cases.

Two year bonds just struggled to offer 2.5% net.

Yet all the Banks were full of adverts for their low interest rate mortgage offers.

I came to the opinion that they must have plenty of funds and are just not interested in savers.

Why not put savings rates up and also mortgage rates to pay for it?

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  • 144 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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