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Tricksy

Interesting (?) Anecdotal

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I am looking (half-heartedly) to buy a large family house with some land in Surrey. Most of what we've looked at over the past year is still on the market unsold, so fundamentally overpriced.

An agent showing us some more possibles yesterday said that one particular reason nothing is moving at this end of the market is the surprising number of vendors sitting on "non-status" loans that they would have no hope of refinancing in today's lending environment. So even if they are not struggling with the interest payments (and weren't before ZIRP either) they can't move to a new place and carry the same shape of financing with them. Apparently 50% LTV loans of even £1m+ were relatively easily available on a non-status basis a few years ago - presumably as lenders were confident that the collateral at this level was bombproof. But today there are no lenders operating non-status even at super low LTV's.These then aren't necessarily over-leveraged people with liar loans who are going to go under as soon as rates rise, just people whose income profile no longer supports typical lending criteria. They don't want to downsize so they'll stay where they are until other circumstances (loss of income and exhaustion of "rainy day" funds?) force them to consider pricing at a level that buyers are prepared to accept. Could be a long wait apparently.

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What is a non-status loan? Is it the same as a liar loan?!

Earn £40k a year in employment and you have "status". Switch to earning £150k a year in contract and you no longer have "status", as you're not employed. Mad.

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What is a non-status loan? Is it the same as a liar loan?

Eric!

Some may be liar loans most will be where the person was truthful but their income is from unstable sources. E.g. before the crash it was easy to get expected bonus income taken into account now it's most often base pay only.

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It's already been a very long wait. I'm giving up in 9 months time.

You obviously have no concept of time. 5-10 years is a longish time. 9 months is a blink.

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I am looking (half-heartedly) to buy a large family house with some land in Surrey. Most of what we've looked at over the past year is still on the market unsold, so fundamentally overpriced.

An agent showing us some more possibles yesterday said that one particular reason nothing is moving at this end of the market is the surprising number of vendors sitting on "non-status" loans that they would have no hope of refinancing in today's lending environment. So even if they are not struggling with the interest payments (and weren't before ZIRP either) they can't move to a new place and carry the same shape of financing with them. Apparently 50% LTV loans of even £1m+ were relatively easily available on a non-status basis a few years ago - presumably as lenders were confident that the collateral at this level was bombproof. But today there are no lenders operating non-status even at super low LTV's.These then aren't necessarily over-leveraged people with liar loans who are going to go under as soon as rates rise, just people whose income profile no longer supports typical lending criteria. They don't want to downsize so they'll stay where they are until other circumstances (loss of income and exhaustion of "rainy day" funds?) force them to consider pricing at a level that buyers are prepared to accept. Could be a long wait apparently.

Tried HSBC in principle quotation thing (on their website), enter same criteria, and now max loan is about 10% less than few months back...

Is that interesting also?

Edited by easybetman

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I am looking (half-heartedly) to buy a large family house with some land in Surrey. Most of what we've looked at over the past year is still on the market unsold, so fundamentally overpriced.

An agent showing us some more possibles yesterday said that one particular reason nothing is moving at this end of the market is the surprising number of vendors sitting on "non-status" loans that they would have no hope of refinancing in today's lending environment.

As these people either lose their incomes or retire they will have to reduce the price and sell at whatever they can get. Also, as prices fall over the next couple of years they will conclude (they're smart, see) that prices will fall for ever and they will stampede to sell. Simples.

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To be honest, if the cml tell us that half of all loans in the last five years would not have been proferred under the FSA's proposals, I wouldn't be surprised at all if people just stay where they are.

well, apart from the Dead, Divorced and Debted

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:rolleyes::rolleyes:

Yup!

LIAR LOAN!

That's just not true to call them one and the same.

I did a self cert mortgage in 2006, and put down half of my income on the application forms as that's all we needed. Not much lying involved in that.

That's not denying that it was rampantly abused, it's just to make the point that normal people who do just want a home do need some facility like this.

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I'm not sure that Non Status is necessarily a liar loan. I took £75k non status in 1986.My income at the time would certainly have qualified me for it as I was drawing £18k taxes paid from my business,which would have corresponded to about £25k gross.The lender,Chemical Bank,was only interested in the fact that I had a 40% deposit and didnt ask any income question.I recently sold my house and my bank manager at Lloydstsb has told me I can borrow what I like as long as I put 50% down.

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I am looking (half-heartedly) to buy a large family house with some land in Surrey. Most of what we've looked at over the past year is still on the market unsold, so fundamentally overpriced.

An agent showing us some more possibles yesterday said that one particular reason nothing is moving at this end of the market is the surprising number of vendors sitting on "non-status" loans that they would have no hope of refinancing in today's lending environment. So even if they are not struggling with the interest payments (and weren't before ZIRP either) they can't move to a new place and carry the same shape of financing with them. Apparently 50% LTV loans of even £1m+ were relatively easily available on a non-status basis a few years ago - presumably as lenders were confident that the collateral at this level was bombproof. But today there are no lenders operating non-status even at super low LTV's.These then aren't necessarily over-leveraged people with liar loans who are going to go under as soon as rates rise, just people whose income profile no longer supports typical lending criteria. They don't want to downsize so they'll stay where they are until other circumstances (loss of income and exhaustion of "rainy day" funds?) force them to consider pricing at a level that buyers are prepared to accept. Could be a long wait apparently.

This just means they have to take responsibility for their own debt without punting it on to a greater fool or re-mortgaging bank? The probems start  when they HAVE to move, for whatever reason?

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  • 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%



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