Jump to content
House Price Crash Forum
Sign in to follow this  
tomandlu

Are Mortgages A Thing Of The Past?

Recommended Posts

There seem to be quite a few articles about how FTBs may be frozen out of the market altogether as mortgage provision basically disappears. I may well be wrong, but the argument seems to be "well, banks are cautious to lend high multiples on over-priced houses (in comparison to wages and economic prospects), and therefore will also refuse to lend against low multiples on reasonably priced houses."

Needless to say, this argument doesn't quite make sense... am I missing something?

Share this post


Link to post
Share on other sites

If a bank only lends at reasonable prices/low multiples, then it is effectively writing off its previous loans. Only when banks can cover all of their lossless will this happen.

The government now covers the last 80%, via the asset protection programs. Hence increase margins, and get extra capital to cover the first 20%. Once they're covered, expect hell :)

Share this post


Link to post
Share on other sites

The government now covers the last 80%, via the asset protection programs. Hence increase margins, and get extra capital to cover the first 20%. Once they're covered, expect hell :)

Yep that's what I've been saying too. Which explains why the BOE rate is 0.5% yet people are paying 4% etc. That margin is filling their coffers fast.

Share this post


Link to post
Share on other sites

I'm sure young London couples earning 40k between them will be able to scrum up a 10k deposit over a couple of years and borrow 3x their income to buy a starter home at around 130k mark.

Problem is, any starter home in London (I'm excluding the titchiest boxes) currently costs about 200k.

And every year, 700,000 people die. 50% of them own their own homes and someone has to buy them.

Give it five years, a 20% drop in prices and 20% compound inflation and we'll have a market again. In the meantime, please sit back, relax and listen to some soothing music...

Share this post


Link to post
Share on other sites

There seem to be quite a few articles about how FTBs may be frozen out of the market altogether as mortgage provision basically disappears. I may well be wrong, but the argument seems to be "well, banks are cautious to lend high multiples on over-priced houses (in comparison to wages and economic prospects), and therefore will also refuse to lend against low multiples on reasonably priced houses."

Needless to say, this argument doesn't quite make sense... am I missing something?

Ive said this before and everybody thinks I'm mad, but what we're seeing now is a deliberate policy of locking people out of the

housing market, its another attempt at rigging...the aim is to screw as many people as possible into rented accomodation, to

replace the life long servitude of paying a mortgage with the even more crippling life long servitude of paying inflated rents to live

in a crap property: add in the Condems support of Nimbyism, the ongoing financial problems of housing associations and the

virtual death of the council house and you can see that a massive boom in the private rental sector is being prepared...just imagine

how effectively house prices can be kept up if institutions can buy up strings of BTLS and then get a yeild of maybe 15% or more

because people have to rent as they have no other option: this is all another step in the ongoing and deliberate impoverishment

of the general population, yet another transfer of wealth to our political masters and their corporate paymasters.

Share this post


Link to post
Share on other sites

There seem to be quite a few articles about how FTBs may be frozen out of the market altogether as mortgage provision basically disappears. I may well be wrong, but the argument seems to be "well, banks are cautious to lend high multiples on over-priced houses (in comparison to wages and economic prospects), and therefore will also refuse to lend against low multiples on reasonably priced houses."

Needless to say, this argument doesn't quite make sense... am I missing something?

young couple we know...he is a private in the army, she a part time beautician, are buying their newbuild flat...its a homebuy scheme of course.

here are the numbers.

Guide price for the Apartment ( its not a flat)...£160K...no parking space.

2K deposit....raised.

18K gifted deposit...raised by builder.

40K homebuy FREE loan...paid by yours truly and you through the LHA

100K low start mortgage...check

she is delighted...He is off to war.

the question I asked was about the Free loan....parrently, its free...thats what she insisted...course, check the press and you see its one of these pay nothing for 5 years for up to 30% of the equity things.

course, if prices rise, so does that equity share.

then there are the fees she "forgot" in 5 years...thats along time for a 20 year old...maybe she'll be having sprogs then...1.75% in year 5..not a repayment a fee, rising by RPI every year till the end of the other mortgage, or she settles.

I can see a problem here for the future....in fact there is one straight away...the "gifted deposit"...bye bye 2K, bye bye 18K, leaves her with a problem at sale time.....

It is a tragedy...but she is 100% going to have her own home.

Share this post


Link to post
Share on other sites

Ive said this before and everybody thinks I'm mad, but what we're seeing now is a deliberate policy of locking people out of the

housing market, its another attempt at rigging...the aim is to screw as many people as possible into rented accomodation, to

replace the life long servitude of paying a mortgage with the even more crippling life long servitude of paying inflated rents to live

in a crap property: add in the Condems support of Nimbyism, the ongoing financial problems of housing associations and the

virtual death of the council house and you can see that a massive boom in the private rental sector is being prepared...just imagine

how effectively house prices can be kept up if institutions can buy up strings of BTLS and then get a yeild of maybe 15% or more

because people have to rent as they have no other option: this is all another step in the ongoing and deliberate impoverishment

of the general population, yet another transfer of wealth to our political masters and their corporate paymasters.

I'm afraid you are right, you are mad. Short-sighted selfish greed across most people with any toe in housing is a far more plausible explanation than a deliberate ploy of making the rich richer. I don't see any signs of BTLs being bought up en masse by a small number of institutions in order to destroy any competition in the rental market, which is a more genuine market and is already over-supplied (hence what I pay in rent being far less than I'd have to pay on a mortgage if I bought the place - which I couldn't at current prices and might not be able to at a reasonable price for the place either).

Thank god for "the Condem(')s support of Nimbyism". The last thing I want is more building in an already overly built-up country under the spurious excuse of a housing shortage. It's the market that's the problem, not the houses themselves. Sure, some places have a shortage, others do not, but the prices of the latter shot up in similar proportion (although are generally less in absolute terms).

Share this post


Link to post
Share on other sites

I'm afraid you are right, you are mad. Short-sighted selfish greed across most people with any toe in housing is a far more plausible explanation than a deliberate ploy of making the rich richer. I don't see any signs of BTLs being bought up en masse by a small number of institutions in order to destroy any competition in the rental market, which is a more genuine market and is already over-supplied (hence what I pay in rent being far less than I'd have to pay on a mortgage if I bought the place - which I couldn't at current prices and might not be able to at a reasonable price for the place either).

Thank god for "the Condem(')s support of Nimbyism". The last thing I want is more building in an already overly built-up country under the spurious excuse of a housing shortage. It's the market that's the problem, not the houses themselves. Sure, some places have a shortage, others do not, but the prices of the latter shot up in similar proportion (although are generally less in absolute terms).

I certainly don't discount the possibilty that I am mad (!), but time will prove that one way or another...I think what you maybe underestimate is exactly how rigged and how destructively parasitic our financial and political sysytems are: I'm sure that house prices will drop next year, but I'd put money on that being a "flash crash" as stock that comes available will quickly end up with

large scale BTL's. Just as a side note..I saw yesterday that Foxton's chap (the former owner, apparently worth £600m or so) is going into "social housing:" what that really means is that hes going to become a slum landlord: he saw the way the market was going once, I think he can see the way its going again.

Share this post


Link to post
Share on other sites

I certainly don't discount the possibilty that I am mad (!)

I don't think you're mad, but I think you've mistaken a short-term effect for an intended effect. The problem for the banks (IMHO) is how to keep money circulating despite that fact that not enough people can afford their over-priced assets that, they think, they can't allow to fall to their real value.

The solution is to find a enough suckers with large enough deposits to take up the slack. When they're in a position to take the smaller hit that this offsets, then they'll start to repossess or ask, pretty-please, for interest rates to rise... all IMHO of course... For all I know, they'll look at it again, and decide your plan is the way to go...

Share this post


Link to post
Share on other sites

There seem to be quite a few articles about how FTBs may be frozen out of the market altogether as mortgage provision basically disappears. I may well be wrong, but the argument seems to be "well, banks are cautious to lend high multiples on over-priced houses (in comparison to wages and economic prospects), and therefore will also refuse to lend against low multiples on reasonably priced houses."

Needless to say, this argument doesn't quite make sense... am I missing something?

I don't think that FTBs ar completly frozen out of the market, I think that we (yes I am one of them) all had to realised that the dream time of easy access to your first property was over and that it was time to revise our expectations and start saving like crazy.

Partner and I are living in an expensive part of the country (near Bath), been saving for 3 years and will be reaching 10% deposit on a reasonable house within the next 6 to 10 months.

Bank already looked at our finance and our expectation property wise and said that unless there is any major change in the lending criteria we should be able to get a mortgage (well I am still waiting for a decision principle when I will need to mortgage to believe it completly!).

Anyway my point is yes there are refusing a lot of mortgage to FTB applicants but I still have friend going with their 5% or 10% deposit to the bank looking for a 4 or 5 times their combined salaries and then being all confused when the bank say NO!

I think that it is first time buyers like us which will get the prices to become a bit more reasonable (lets not lie to ourselves properties won't never be cheap in th UK!). All the FTBs that have their heads screwed right that I know, still need 1 or 2 years of saving to get to a reasonable deposit, will not consider borrowing more than 3 times their salaries, will consider properties which mortgage repayment represent less than 33% of their monthly income (the less the better) and awaiting for the prices to either have gone down by 10% or to be in a position to say to sellers: " sorry that it is the amount of money that I want to spend so take it or leave it!"

Share this post


Link to post
Share on other sites

I don't think that FTBs ar completly frozen out of the market, I think that we (yes I am one of them) all had to realised that the dream time of easy access to your first property was over and that it was time to revise our expectations and start saving like crazy.

Partner and I are living in an expensive part of the country (near Bath), been saving for 3 years and will be reaching 10% deposit on a reasonable house within the next 6 to 10 months.

Bank already looked at our finance and our expectation property wise and said that unless there is any major change in the lending criteria we should be able to get a mortgage (well I am still waiting for a decision principle when I will need to mortgage to believe it completly!).

Anyway my point is yes there are refusing a lot of mortgage to FTB applicants but I still have friend going with their 5% or 10% deposit to the bank looking for a 4 or 5 times their combined salaries and then being all confused when the bank say NO!

I think that it is first time buyers like us which will get the prices to become a bit more reasonable (lets not lie to ourselves properties won't never be cheap in th UK!). All the FTBs that have their heads screwed right that I know, still need 1 or 2 years of saving to get to a reasonable deposit, will not consider borrowing more than 3 times their salaries, will consider properties which mortgage repayment represent less than 33% of their monthly income (the less the better) and awaiting for the prices to either have gone down by 10% or to be in a position to say to sellers: " sorry that it is the amount of money that I want to spend so take it or leave it!"

Just be aware, that the no bank mortgage advisor will turn a potential customer away before there's a deal on the table. You're basically just a sales lead.

They almost always work on commission, and in my experience will sit on the phone for hours arguing with their own employer's lending department begging them to approve a loan. An advisor who was ringing me three times a week to check on progress was almost in tears when my house purchase fell through and then took 6 months to return a £1,500 application fee!

Share this post


Link to post
Share on other sites

Just be aware, that the no bank mortgage advisor will turn a potential customer away before there's a deal on the table. You're basically just a sales lead.

They almost always work on commission, and in my experience will sit on the phone for hours arguing with their own employer's lending department begging them to approve a loan. An advisor who was ringing me three times a week to check on progress was almost in tears when my house purchase fell through and then took 6 months to return a £1,500 application fee!

Just take out a LIAR LOAN..... :rolleyes: After all - everyone's done/doing it - and - they don't realise that THIS is what drove up "prices".

LIAR LOANS - Pure Rocket Fuel..... :rolleyes:

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 145 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.