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Banks Approve Just 1,000 Mortgages A Day

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Quality bear food from Telegraph:

Average house prices dropped 0.5 per cent in July to just under £170,000, according to Nationwide. Economists have predicted that prices could fall a further 20 per cent if confidence fails to pick up.

David Dooks, statistics director at the BBA, said demand for mortgages continues to be “subdued”.

He explained: “The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.

“Consumer credit outstanding continues to reflect high repayments together with pressure on household finances and job uncertainty while companies are tending to retrench and reduce their bank borrowing.”

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I read this article and thought, 'wow thats an odd statistic'...... Only 1000 a day!' its sort of hard to get a grasp on if that is a lot, or not a lot.

As Paul Daniels says 'not a lot'.

Equates to about 30k a month, or about 25% of peak.

Edited by frozen_out

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Had an EA tell me today that he cannot get a mortgage for a new build starter home for a couple who earn 24K between them - the house is on the market for 99,995K.

OK, they earn 24K between them but that is effectively 4 times salary which is not a made multiple by recent times. House has been completely gutted inside by the builders with newer kitchens, bathrooms put in but apparently no bank will lend.

So this shows not just how the banks are reigning in the spending but how the FTBs are finding it impossible in the market.

The banks are not as stupid as we think - 600,000 public sector job cuts coming. Why lend out what you probably will never get back?

A crash is in the bank's interests in some respects as it would allow them to lend again... Ah, but then they would go bust due to all the bad mortgages they already are owed... I can see a huge write-off coming on UK mortgages in the coming years.

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Quality bear food from Telegraph:

He explained: “The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.

So he assumes that if there are more houses for sale, and prices are not going up quickly, that people are going to be rushing to buy. More pent-up demand bolux.

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So he assumes that if there are more houses for sale, and prices are not going up quickly, that people are going to be rushing to buy. More pent-up demand bolux.

+1

We won't see an improvement in approvals until prices have fallen noticeably, not just a few percent of the averages.

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Like virtually all boomers already have homes and mortgages. And only the boomers really make enough money to manage mortgages of the size neccessary to buy housing at current prices.

For the younger generation good jobs are few and far between. So not too many will be getting a mortgage anytime soon.. unless there is a catastrophic fall in house prices. Like >50% off current levels. Then the younger generation will be able to afford to buy into the market with a mortgage proportional to their income.

Most boomers are dangerously out of touch though in how there is just no one coming up underneath them who can ever buy at these prices.

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+1

We won't see an improvement in approvals until prices have fallen noticeably, not just a few percent of the averages.

Reading about areas like parts of the southwest USA where there has been catastrophic falls in real estate prices.. like 50-75% off.. there is now a great amount of volume happening.

Average young people, with average incomes are finding they can buy a house, and enjoy the stability and freedom that comes with that. In that area like in parts of the UK there are many recent immigrants as well. And many immigrant couples are finding they can buy a modest home.. get a stake in the community and stand on their own feet.

Edited by aa3

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Had an EA tell me today that he cannot get a mortgage for a new build starter home for a couple who earn 24K between them - the house is on the market for 99,995K.

OK, they earn 24K between them but that is effectively 4 times salary which is not a made multiple by recent times. House has been completely gutted inside by the builders with newer kitchens, bathrooms put in but apparently no bank will lend.

So this shows not just how the banks are reigning in the spending but how the FTBs are finding it impossible in the market.

The banks are not as stupid as we think - 600,000 public sector job cuts coming. Why lend out what you probably will never get back?

A crash is in the bank's interests in some respects as it would allow them to lend again... Ah, but then they would go bust due to all the bad mortgages they already are owed... I can see a huge write-off coming on UK mortgages in the coming years.

First Direct will only lend us 2.5x salary. When i say only, that is as sensible as i've seen it. Its still 5x our single salaries should one of us lose our jobs. However the total repayment mortgage is half our rent. So affordability ratios are a bit skewed.

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First Direct will only lend us 2.5x salary. When i say only, that is as sensible as i've seen it. Its still 5x our single salaries should one of us lose our jobs. However the total repayment mortgage is half our rent. So affordability ratios are a bit skewed.

Wow - that is interesting. You need to have a really good combined salary to buy, well, anything under 2.5 combined.

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+1

We won't see an improvement in approvals until prices have fallen noticeably, not just a few percent of the averages.

Agreed - and presumably, with more sales at lower prices, the crash will gather pace...

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total repayment mortgage is half our rent. So affordability ratios are a bit skewed.

Nah rents are perhaps a bit high (And you're not counting the deposit you've got saved?)

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I fail to see where "confidence" comes in.

I see all around me plenty of people are "confident" about buying a house, indeed, they dont feel truly Adult unless they get one for themselves.

Banks are bust, and have been for some time...they are "confident" that most applicants cant afford to borrow as the banks were lending 3 months ago.

I wonder how many are being turned down.

This may not be about "confidence", more about sensible lending.

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First Direct will only lend us 2.5x salary. When i say only, that is as sensible as i've seen it. Its still 5x our single salaries should one of us lose our jobs. However the total repayment mortgage is half our rent. So affordability ratios are a bit skewed.

so, they are lending at 5 times salary in an record low environment.

God help you if you have a sprog or lose an income....and rates go up.

As for your rent, you are either a poor negotiator, or you are living in a much larger house than you could possibly afford to buy. Or a combination of both.

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so, they are lending at 5 times salary in an record low environment.

God help you if you have a sprog or lose an income....and rates go up.

As for your rent, you are either a poor negotiator, or you are living in a much larger house than you could possibly afford to buy. Or a combination of both.

It isn't quite 5 times i have fudged my rather basic maths its 4x + deposit.

the rent seemed appropriate for the area.

you've made too many assumptions, each situation needs to be based on its individual merits. not sweeping generalisations which may or maynot be correct.

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Why doesn't that get splashed across the BBC website then?

Even if it was there, the Beebs Fat Controllers would manage to make it sound like a slight inconvenient blip in the UKs continuing meteoric recovery from that mild recession that we've just had: eg

'Pause' in Scottish housing market recovery" :angry:

Edited by Captain Cavey

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It isn't quite 5 times i have fudged my rather basic maths its 4x + deposit.

the rent seemed appropriate for the area.

you've made too many assumptions, each situation needs to be based on its individual merits. not sweeping generalisations which may or maynot be correct.

Yes I shouldnt make assumptions, but you said it was five times your single salaries, and I do rent in the UK.

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Yes I shouldnt make assumptions, but you said it was five times your single salaries, and I do rent in the UK.

Fair enough.

My fingers were going quicker than my brain. the value of the house in total is 5x. single salary.

The area we live in, SE, M4 corridor seems to have quite high rents, i think its a lack of rental properties perhaps. Rightmove only throws up 8 properties for rent of ANY description within a mile radius which doesn't seem much and if you start getting specific (1bed, 2 bed so on) theres only 1 or 2 entries, i will assume this has something to do with stubbonly high rents, there's no competition....yet.

There's a complete 2 tier housing market now, its very cheap to live with a big deposit (or equity), though you may not have that deposit in 18months time... those that don't have much deposit or any and have to rent get raped. The time will come when this evens out, how long, who knows.

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  • 150 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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