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Mortgage Lending Plunges To Its Lowest Level In Ten Years

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http://www.dailymail.co.uk/news/article-1323549/Mortgage-lending-plunges-lowest-level-2000.html

Mortgage lending dived to its lowest level for a decade during September as activity in the housing market remained subdued, figures showed today.

Net lending, which strips out redemptions and repayments, was just £1.6 billion during the month, well down on the previous month's total of £2.5 billion and the lowest figure since October 2000.

Lending showed little sign of picking up in the near future, with the number of mortgages approved for house purchase dropping for the fourth consecutive month to hit an 18-month low, the British Bankers' Association said.

The BBA figures come a week after the Council of Mortgage Lenders said total advances during September had fallen to their lowest level for the month for a decade.

The BBA said the muted net lending figure reflected the fact that gross lending remained subdued, with only £8 billion advanced during the month, the lowest level since May 2009 and 11 per cent down on September last year.

At the same time, it said banks were encouraging customers to pay down their mortgages, contributing to the ten-year low for net lending.

Demand for mortgages remains muted as low interest rates put people off remortgaging, while potential buyers sit on their hands until the outlook for both the property market and the wider economy becomes clearer.

But the number of properties being put up for sale has increased in recent months, putting downward pressure on house prices.

Howard Archer, chief UK and European economist at IHS Global Insight, said: 'The BBA data showing mortgage approvals sinking to an 18-month low in September puts further downward pressure on house prices.

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'It reinforces our belief that house prices will trend down over the final months of 2010 and in 2011 to lose around 10 per cent in value.

'In our view, the housing market has got very little going for it at the moment, apart from low mortgage rates - and that is if you can get a mortgage.'

Demand for unsecured borrowing also remained muted during September.

Credit card borrowing increased by £200 million during the month, but this was offset by a £200 million contraction in the amount owed through loans and overdrafts.

As a result, the amount of money owed through consumer credit was unchanged, in line with August.

Consumers' cautious approach was reflected in a further rise in savings levels, with people increasing the amount they had deposited by £2.7 billion, well up on the recent six-month average of £1.7 billion.

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ahh, normality.

Not that you'll ever hear the papers and propaganda box spin it like that.

It's just a matter of time before house prices get to normality too.

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Foolish people! The government will borrow on your behalf. They have a magic printing press and they aren't afraid to use it.

£200trillion every day printed should sort it out.

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Now all we need is some forced sellers to put downwards pressure on prices.

With the british mentality towards houseprices mortgage lending could drop to almost zero and house prices wouldn't drop as people will refuse to sell. What will the trigger be and when will it come?

Rising interest rates is the main trigger that I could see tipping the market over the brink but I also think it will be 3 - 5 years before we see rates of more than 1%

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Halifax -3.6%, mortgage lending down dramatically.

Are they going for the reverse swing in October? MAMMOTH increases compared to September to be shouted from the rooftops?

Or is it just a full on charge by the banks to demand more QE?

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Halifax -3.6%, mortgage lending down dramatically.

Are they going for the reverse swing in October? MAMMOTH increases compared to September to be shouted from the rooftops?

Or is it just a full on charge by the banks to demand more QE?

Or could it be that houses are now so affordable that nobody needs mortgages anymore? :lol:

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Great comment - please click the Green Arrows:

The media are at it again!

Look, the ONLY CONCERN about house (HOME) should be because they are 50 percent too HIGH, you idiots, not because they are edging down.

Would you be so concerned if FOOD prices weren't going up, and the rest of the population, yet to get on the "shopping trolley" ladder, were slowly starving?

I sincerely hope the answer to that question is "YES", otherwise the country is in a worse mental state of greed than I feared.

Then again, look at our obscene spendaholic recent past, and maybe we shouldn't be surprised at our own demise.....

Repeat after me;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

LOW HOUSE PRICES ARE A GOOD THING, to repeat;

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Foolish people! The government will borrow on your behalf. They have a magic printing press and they aren't afraid to use it.

£200trillion every day printed should sort it out.

It would appear the people will be forced to borrow whether they want to or not.

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Nohpc, I agree to the extent that raising IRs would prove a huge catalyst for the next leg down but with the very real possibility of a double-dip recession and all that entails, even with low IRs, I think we will still see a MIMINUM 20% fall from now till end of 2011.

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I am hearing a lot of news about rising commodity prices. A small symptom of this was the announcement that some Hovis loaves will no longer be stocked by Tesco, the cost of grain makes the profit margin too low to make selling to Tesco at the price they want to buy at, to be profitable. I am expecting more of this.

Even a monopsony such as Tesco will find price rises in commodities an irresistible force. They can either allow their suppliers to pass the cost on to them, or they can bankrupt those suppliers. They might choose to bankrupt a few to make a futile point, but in the end they will have to accept the higher price, and they will in turn pass those costs on to consumers.

We have lived in an environment of low to zero price inflation, other than housing (thought I had better to mention that), since the mid 1990's. The change to this paradigm caught out a lot of people who were used to rising prices, it certainly fooled Equitable Life and their regulators, allowing Joe Taxpayer to pick up a £1.5 billion bill. Switching back to high inflation is going to be 'interesting' to say the least.

And one thing that will happen is that the Bank of England is obliged to raise interest rates to bring inflation under control. I dont quite understand why they have kept interest rates so low, given that even on current measures, inflation is well above where it should be.

I bet all those headline writers and the bleeding hearts leftie press are just waiting for this. There will be lots of people repossessed, and there will be a high enough percentage of families amongst them to bleat on about the unfairness of it all. Not once will the mention the fairness brought about by the people moving into those homes, those who have worked hard and saved responsibly so that they can afford them, whilst forgoing a decent living space.

This site has to represent those dispossessed unfairly, in the name of fairness.

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I am hearing a lot of news about rising commodity prices. A small symptom of this was the announcement that some Hovis loaves will no longer be stocked by Tesco, the cost of grain makes the profit margin too low to make selling to Tesco at the price they want to buy at, to be profitable. I am expecting more of this.

Er, yeah, Hovis got caught out by the grain problems - notably the Russian drought - over the summer. Meanwhile some of its bigger rivals had hedged their grain supply and ended up with a competitive advantage.

That leaves Hovis struggling a bit while the hedging advantage works its way through. This article hints at a six to nine month timescale.

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What will the trigger be and when will it come?

The age old answer, marriages, divorces, deaths, births, job losses have a pressure on the market.

I think it's too soon for the dam to break (unfortunately) but the pressure is mounting daily.

Unlike the panic of 2007/2008 I don't think we have any "triggers" left, all the bad news is out there (if not felt).. the public think the recession has been and gone.

Meanwhile those in jobs are overpaying their mortgage at massive rates, so "gaining equity" in their eyes, and those out of jobs are having their mortgages paid/overlooked.

Edited by exiges

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  • 259 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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