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Home Loans May Get Even Scarcer Says Bank Boss As Funds Dry Up

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http://www.dailymail.co.uk/news/article-1316356/Home-loans-scarcer-says-bank-boss-funds-dry-up.html#

The mortgage drought which is crippling homebuyers could get even worse, one of Britain’s most powerful bankers warned yesterday.

Funding, the money which banks need to lend money, ‘will be more scarce and probably more expensive’, predicts Barclays president Bob Diamond.

This is likely to have a knock-on impact on the number of loans handed out and the interest rates which are charged, particularly among smaller lenders who face bigger funding problems.

It comes as the latest figures from the Bank of England show the number of mortgages being handed out continues to shrivel.

This is fuelled by the potent mix of lenders being unwilling to lend to anybody without a big deposit and people being too scared to buy a home, fearing price falls and unemployment.

Just 47,372 people got a house purchase loan in August, the fourth consecutive monthly fall and the lowest figure since May last year.

Paul Diggle, a property economist from Capital Economics consultancy, described the housing market as ‘flagging’.

‘Ultimately mortgage approvals for house purchase are a much more important determinant of prices, and they look set to be very weak for some considerable time,’ he said.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, added: ‘Lack of availability of mortgage finance remains a key factor depressing the housing market, although increasing concerns about the outlook for the economy may also be impacting adversely on buyer interest.’

The Council of Mortgage Lenders warned last week that ‘the golden age of homeowership is over, for the moment’.

In a further blow, the Building Societies Association will today warn the number of interest-only mortgages could plunge if the Financial Services Authority’s proposed mortgage rules are introduced.

Paul Broadhead, head of mortgages, said many lenders could ‘withdraw from this market altogether’ under the changes.

The Bank’s figures also showed soaring numbers of homeowners are remortgaging because they are desperately worried about next month’s ‘austerity’ spending review.

More than 28,000 people switched their loan to a rival last month, the third consecutive monthly rise and the largest number since July last year, according to the Bank of England.

Experts said people are urgently trying to save some money on their mortgage, which is most people’s biggest monthly expense and often eats up more than half their take-home pay.

In June, 25,644 people remortgaged. In July, the number jumped to 27,250. Last month, it increased to 28,042, according to the Bank’s ‘Lending to Individuals’ figures, published yesterday.

Many are deciding to take out a fixed-rate mortgage to ensure they know how much money they need to find every month to pay their mortgage.

One in two people who took out a mortgage in July chose the fixed option, according to the latest figures from the Council of Mortgage Lenders.

Brian Murphy, head of lending at the independent mortgage broker Mortgage Advice Bureau, said there is a ‘clear trend towards remortgaging’, adding the spending review is ‘focusing people’s minds’.

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who would buy an asset when the costs to purchase such are at their lowest....ever.

this makes todays price, supported by debt...the high point.

As the Man says...costs are going up for borrowers, as well as being more scarce...

There is a self correcting cure for this of course...and bankers aint gonna like it...8ollocks to everyone else who would benefit.

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Paul Broadhead, head of mortgages, said many lenders could ‘withdraw from this market altogether’ under the changes.

I wonder is this a threat, to try and keep those IO mortgages going?

Or can we foresee a future of property purchasing based on either cash transactions alone, or mortgages lent only through the tax payer owned banks?

people being too scared to buy a home, fearing price falls and unemployment.

Equivalent to a buyers strike then? ;)

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http://www.dailymail.co.uk/news/article-1316356/Home-loans-scarcer-says-bank-boss-funds-dry-up.html

Home loans may get even scarcer says bank boss as funds dry up

By Becky "Rebecca" Barrow

Last updated at 8:00 AM on 30th September 2010

Comments (517)

Warning: Barclays boss Bob
"Bonuses"
Diamond claims that banks are running out of money they use to fund loans, meaning they will become scarcer and more expensive

The mortgage drought which is crippling homebuyers could get even worse, one of Britains most powerful banksters warned yesterday.

Funding, the money which banks need to lend money, will be more scarce and probably more expensive, predicts Barclays president Bob Diamond.

This is likely to have a knock-on impact on the number of loans handed out and the interest rates which are charged, particularly among smaller lenders who face bigger funding problems.

It comes as the latest figures from the Bank of England show the number of mortgages being handed out continues to shrivel.

This is fuelled by the potent mix of lenders being unwilling to lend to anybody without a big deposit and people being too scared to buy a home, fearing price falls and unemployment

At least money through the "legit" sources--shop front banks--can be supplemented by Bob's shys in the darker side of banking. Recession or depression--the shys and the banksters won't feel a ting--the loan industry and numbers rackets along with prostituion will always be around making a dishonest buck.

Edited by Realistbear

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Warning: Barclays boss Bob "Bonuses" Diamond claims that banks are running out of money they use to fund loans, meaning they will become scarcer and more expensive because they took everything there was to pay themselves bonuses.

Is this a pattern I am beginning to see?

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Warning: Barclays boss Bob "Bonuses" Diamond claims that banks are running out of money they use to fund loans, meaning they will become scarcer and more expensive demands "Print us more money or we'll make sure there's hell to pay!!"

- SNIP -

2534366549_3ef526b783.jpg

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Paul Broadhead, head of mortgages, said many lenders could ‘withdraw from this market altogether’ under the changes.

they need the income streams, building societies are un-diversified enough to have little option but to serve the whole mainstream mortgage market

this sounds like the Anger stage from the industry, takign a step back from the Bargaining stage shown by some commentators. Buildiung Socs always were the slowest to catch on however.

(Denial -> Anger -> Bargaining -> Depression -> Acceptance)

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  • 149 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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