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

Mortgage Plan Will Force House Prices Down, Cml Warns

Recommended Posts

http://www.bbc.co.uk/news/business-11390764

House prices will fall if the City regulator gets its way and restricts mortgage lending, the Council of Mortgage Lenders (CML) has warned.

The Financial Services Authority (FSA) is currently consulting on ways to stop "excessive" mortgage lending.

Its aim is to stop lenders offering mortgages to people who cannot prove they can repay their loans.

But the CML says the FSA has admitted its plan will lead to house prices falling.

"This is just one of a number of unintended consequences of the FSA's well-meaning but misguided proposals that the CML believes the UK's existing 11 million mortgage borrowers have every right to be concerned about," said the CML's director general Michael Coogan.

'Significant falls'

Mr Coogan was citing a footnote in the FSA's consultation document, which was published in July.

This said that economic modelling of the consequences of its proposals "did project significant falls in house prices from the reduction in lending".

"In addition, the impact of a drop in lending on house prices was also modelled using the Oxford Economic Forecasting model, another model of the global macroeconomy," the FSA document said.

"This gave similar house price impacts to those from [the National Institute of Economic and Social Research]", the document added.

We can't have lower house prices can we.

Share this post


Link to post
Share on other sites

Thanks for posting - makes me really angry thaht article!

Check this line out:

"The unintended consequences of new mortgage regulation are likely to stifle innovation and opportunity," said Mr Coogan.

So lack of regulation and high house prices means innovation and opportunity, does it?

Makes me sick.

Share this post


Link to post
Share on other sites

http://www.bbc.co.uk/news/business-11390764

We can't have lower house prices can we.

If only we had this about 10 years ago - then we would not need to 'worry' quite so much about house prices falling as they would not have got so stupidly high in the first place.... Idiots.

God forbid one day an average family with an average salary may be able to afford an averageish home on a sensible mortgage.

Share this post


Link to post
Share on other sites

http://www.bbc.co.uk/news/business-11390764

We can't have lower house prices can we.

Sorry I just re read it:

"Its aim is to stop lenders offering mortgages to people who cannot prove they can repay their loans."

Are they ducking idiots - why have mortgages been given to people who have not be able to prove they can repay their loans... :angry:

Share this post


Link to post
Share on other sites

Uhhh, if the FSA have said that the plan will cause house prices to fall, and the CML are complaining because it will cause house prices to fall, then why are they saying that this is an unintended consequence of the plan?

The whole drive of any mortgage reform has to be to reduce risk, ensure that a bubble cannot be blown up again that could wreck the entire financial system, which by definition means that prices have to move down to a level at which they can be afforded by Joe Public without them blowing a gasket.

Share this post


Link to post
Share on other sites

Sorry I just re read it:

"Its aim is to stop lenders offering mortgages to people who cannot prove they can repay their loans."

Are they ducking idiots - why have mortgages been given to people who have not be able to prove they can repay their loans... :angry:

yep.. PROOF from a VI that LIAR LOANS are the cause of the bubble....LIARS in the form of borrowers, agents, valuers, bankers and Government.

Share this post


Link to post
Share on other sites

Sorry I just re read it:

"Its aim is to stop lenders offering mortgages to people who cannot prove they can repay their loans."

Are they ducking idiots - why have mortgages been given to people who have not be able to prove they can repay their loans... :angry:

What care the VIs or the bankers? Muggins taxpayer will foot the bill in the end.

Share this post


Link to post
Share on other sites

Uhhh, if the FSA have said that the plan will cause house prices to fall, and the CML are complaining because it will cause house prices to fall, then why are they saying that this is an unintended consequence of the plan?

The whole drive of any mortgage reform has to be to reduce risk, ensure that a bubble cannot be blown up again that could wreck the entire financial system, which by definition means that prices have to move down to a level at which they can be afforded by Joe Public without them blowing a gasket.

What about the unintended consequences of Liar Loans???? Imagine the cheek of daring to ask for valid proof of your ability to repay?

The FSA is worried that despite the banking crisis and economic downturn, and the current severe rationing of mortgages, too many people are still being given home loans even though they cannot show that they can afford them.

In July it pointed out that so-called self-certified loans, where the borrower merely asserts that they can afford the monthly repayments, still made up 43% of all home loans granted in the first three months of 2010.

And the FSA said its own research had shown that almost half of households either had no money left, or had a shortfall, after they had paid their monthly mortgage bill and deducted living costs from their income.

Despite this the mortgage industry has been alarmed at the prospect of any new formal restrictions, such as being obliged to demand that borrowers prove they can pay.

Share this post


Link to post
Share on other sites

What care the VIs or the bankers? Muggins taxpayer will foot the bill in the end.

This FSA plan wouldnt be needed if we let banks fail.

And we would save loads of money by not employing FSA people to do stuff that doesnt need doing.

Share this post


Link to post
Share on other sites

What about the unintended consequences of Liar Loans???? Imagine the cheek of daring to ask for valid proof of your ability to repay?

The FSA is worried that despite the banking crisis and economic downturn, and the current severe rationing of mortgages, too many people are still being given home loans even though they cannot show that they can afford them.

In July it pointed out that so-called self-certified loans, where the borrower merely asserts that they can afford the monthly repayments, still made up 43% of all home loans granted in the first three months of 2010.

And the FSA said its own research had shown that almost half of households either had no money left, or had a shortfall, after they had paid their monthly mortgage bill and deducted living costs from their income.

Despite this the mortgage industry has been alarmed at the prospect of any new formal restrictions, such as being obliged to demand that borrowers prove they can pay.

Shoto, I was just talking about the unintended consequences of the new FSA plan. I think we know that liar loans are a bad idea, especially if you have a bailout friendly government.

Share this post


Link to post
Share on other sites

Shoto, I was just talking about the unintended consequences of the new FSA plan. I think we know that liar loans are a bad idea, especially if you have a bailout friendly government.

Nothing personal L - just highlighting the very one sided nature of the article.

Wonder are these risky loans given by niche lenders or are they all at it? though back to your point - they are more like risk free as the taxpayer will, on previous form, underwrite and house prices remain artificially high.

Share this post


Link to post
Share on other sites

This is the FSA consultation paper referred to by the CML.

http://www.fsa.gov.u.../cp/cp10_16.pdf

Found some interesting snippets:

I think this is the footnote the CML are pointing at:

you would think the regulator would know a house is POSSESSED not REPOSSESSED...the bank isnt lending the house to a Lease taker ( leessee or leessor...cant remember which)

Share this post


Link to post
Share on other sites

Why is everybody so hot under the collar?? Did anybody expect this Coogan guy to say anything else? He is there to look after his members interestsand If he didn't he would be out of a job. We are all VI's if you think of it. We want lower house prices-they want the status quo or better. IMO we have the moral high ground as we feel it is better for the majority to have low, STABLE house prices. He represents a minority interest but lets not villify him for doing his job-we just have to prove that what he says is not in the interest of UK PLC. It isn't.

Share this post


Link to post
Share on other sites

Are they ducking idiots - why have mortgages been given to people who have not be able to prove they can repay their loans... :angry:

Because they have to. A pyramid always needs more contributions. Once you run out of folks who can afford to "invest" you have no option but to recruit those that can't.

Share this post


Link to post
Share on other sites

If only we had this about 10 years ago - then we would not need to 'worry' quite so much about house prices falling as they would not have got so stupidly high in the first place.... Idiots.

God forbid one day an average family with an average salary may be able to afford an averageish home on a sensible mortgage.

Yeah, this is all feeling a bit surreal.

Its good that our offspring will have tough limitations on what they can borrow - isn't it?

General society doesn't live to serve the interests of people like senior CML staff and city traders - do they seriously think this?

I'm delighted - both my lads will probably be looking to buy about 2015/6 which will probably be a good point in the cycle by pure luck.

If I feel property is a strong buy I might step in with a top up to get them into a small house rather than a flat, but they will owe the additional money to me not some evil, thieving banker.

Share this post


Link to post
Share on other sites

Yeah, this is all feeling a bit surreal.

Its good that our offspring will have tough limitations on what they can borrow - isn't it?

General society doesn't live to serve the interests of people like senior CML staff and city traders - do they seriously think this?

The CML are VI without shame. Everytime there is some news regarding the housing market they release their statement A)We expect steady growth over the next year and a return to pre-recession levels or Statement B )We are concerned that this measure will hold back the housing market and stop first-time buyers getting a foot on the property ladder.

I almost tune out whenever I hear or read anything on the news coming from the CML. It might be nice if the BBC would warn viewers/readers that the CML is a vested interest that wants every man, women, child and pet dog in the country to borrow money and buy property. ;)

Share this post


Link to post
Share on other sites

what the f has mortgage lending got to do with innovation?

Precisley. It is such a shame that the trillions sunk into non productive assets has done just that, produced nothing and certainly nothing innovative.

Share this post


Link to post
Share on other sites

If only we had this about 10 years ago - then we would not need to 'worry' quite so much about house prices falling as they would not have got so stupidly high in the first place.... Idiots.

God forbid one day an average family with an average salary may be able to afford an averageish home on a sensible mortgage.

Couldn't agree more - all those who are bleating about 'forcing' house prices down and berrating Turner for actually attempting to re-establish common sense lending critieria - which would prevent further untold misery from buyers who might be caught out in future - are making the proposed changes appear unreasonable. Such nonsense. Roll on the day when property prices go back to fundamentals - and ordinary people will be able to buy without getting themselves into unsustainable debt or having to start off in an over priced rabbit hutch.

Share this post


Link to post
Share on other sites

Don't all jizz your pants.

The fact the consequences have been modelled speaks volumes. The VI's are looking to deflate the bubble in the most controlled way possible. I.E slllloooowwwwllllyyy. Or put another way not some apocolyptic crash, the time line being a lot longer than most on here can contemplate.

Share this post


Link to post
Share on other sites

what the f has mortgage lending got to do with innovation?

Good question ! Perhaps what 'innovation' means in this context is 'lets get the banks to relax their mortgage criteria so irresponsible lending can go full stean ahead again while some people are still clinging to the idea that property prices can only go up - then banks can get back to their behind the scenes inventing of 'instruments' to make themselves shed loads of money and engage once again in massive leveraging to buy these new fangled 'instruments'.

We're all going to suffer now for the 'innovation' that went on before and led to this unholy global mess.

Share this post


Link to post
Share on other sites

Precisley. It is such a shame that the trillions sunk into non productive assets has done just that, produced nothing and certainly nothing innovative.

I agree, but I'd also go further than that. How do you innovate when:

- a skilled workforce is required to innovate

- they need a greater salary than you can pay them at the innovation stage

- because they are forced to line the pockets of people that are sitting on property and aren't innovating at all?

Such an effed up situation. I sometimes wonder how many wonderful ideas that could have become something useful to the world and produced wealth for the UK have come to nothing because of this.

Share this post


Link to post
Share on other sites

On the Homepage of the CML homepage is a survey of just over 2000 adults.

This is a line from the survey report:

"The biggest problem is seen as the fact that young people cannot afford to buy, or take on too much debt to do so, cited by 80% of respondents."

So despite the majority of their respondants hoping for lower house prices and restrictive lending, the CML still insist on publishing nonsense such as this. Total VI Bill-ooks.

On a slightly brighter note, the article mentions the FSA report and a footnote in the FSA document that read:

"did project significant falls in house prices from the reduction in lending".

Could this mean that Dave and his Government have given the green light for house price falls? (possibly just my imagination though)

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.

  • 261 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.