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Home Loan Approvals Slump To 19-Month Low

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More good news for the future prosperity of the nation.

Home loan approvals slump to 19-month low

By Nicky Burridge, PA

Tuesday, 23 November 2010SHAREPRINTEMAILTEXT SIZE NORMALLARGEEXTRA LARGE

Mortgage approvals for house purchase slumped to a 19-month low during October as potential buyers continued to stay away from the market, figures showed today.

Just 30,766 home loans were approved by the major banks for people buying a property during the month, the lowest level since March 2009, when house prices were still falling, according to the British Bankers' Association.

Total mortgage advances also dived to a near 10-year low, with just £7.6 billion lent, a level last seen in February 2001.

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This latest figure must be "unexpected"... ;)

... because I see on Forex that the figure was 30.8k, against the forecast 31.3k, and the previous of 31.1k.

http://www.forexfactory.com/calendar.php

And as you say, all good news for future prosperity.

Most of those forecasts are a joke. Even though approvals have been falling for months now and all the evidence points to a seriously anaemic housing market they still forecast approvals to rise!

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I wouldn't draw any hasty conclusions from this.

While the number of BBA approvals has been falling, approvals by non-BBA lenders have been increasing steadily this year.

BoE seasonally-adjusted monthly mortgage approvals have been pretty much static since the start of the year (bound in a range of roughly 47,500 to 49,500).

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My wifes just been declined for a mortgage.

Higher rate tax payer asking for 2.5x basic earnings and a 25% cash deposit. No other debts. The underwriters won't underwrite. Not sure who they are lending to but if things are this difficult I am now more bearish than ever before.

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i just tried to compare home loan approval to house prices but couldn't see a clear correlation... maybe there is an inverse relationship between interest rates.... my point being... this doesn't necessarily mean prices will drop.

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My wifes just been declined for a mortgage.

Higher rate tax payer asking for 2.5x basic earnings and a 25% cash deposit. No other debts. The underwriters won't underwrite. Not sure who they are lending to but if things are this difficult I am now more bearish than ever before.

Seriously? Not being nosy but could it be a credit history issue? (or maybe she doesn't have a credit card, I just got my first one ever for that very reason!).

Edited by Orinoco

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Seriously? Not being nosy but could it be a credit history issue? (or maybe she doesn't have a credit card, I just got my first one ever for that very reason!).

She has got a credit card and had it years but it is a 0 balance.

:rolleyes:

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She has got a credit card and had it years but it is a 0 balance.

:rolleyes:

So she's probably not 'risky' enough! What a retarded system :(

I won't be buying (or trying to) for at least a couple of years, maybe I need to get myself in some debt by then.. :blink:

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She phoned the bank up questioning their reasoning and although they were unable to give us a straight answer in a round about sort of way it now appears Orinoco has money on the right horse. Before I married my wife I stipulated that she had to meet my marriage commitment calculator and one of the criteria was to have no debts so we worked hard to pay off her car loan (early), student loan (early) and credit card (negligible). Christ! I even made her save for our wedding and we haven't borrowed anything for over 3 years now. They did however give a figure they would be prepared to lend £46,000 which is actually less than the deposit and less than 1x salary!

I am more annoyed that we have a chunk of money sitting in the account (or rather showing) earning less than 1% per annum when it will actually be funding the banks position for someone elses BTL mortgage.

Yes Pedro this is really going to grease the wheels of our economy.

A no lending, jobless recovery!

Edited by tomposh101

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My wifes just been declined for a mortgage.

Higher rate tax payer asking for 2.5x basic earnings and a 25% cash deposit. No other debts. The underwriters won't underwrite. Not sure who they are lending to but if things are this difficult I am now more bearish than ever before.

I hope I am not being nosey, but was this before or after they knew what property she wanted to buy? Also, has she only tried one lender, has she been with her current employer for at least two years, and does she work somewhere about to be devastated by the coming cuts? Did they suggest she increase the deposit, gets another guarantor, or lies about her income? Many thanks for any answers, however brief and partial.

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She phoned the bank up questioning their reasoning and although they were unable to give us a straight answer in a round about sort of way it now appears Orinoco has money on the right horse. Before I married my wife I stipulated that she had to meet my marriage commitment calculator and one of the criteria was to have no debts so we worked hard to pay off her car loan (early), student loan (early) and credit card (negligible). Christ! I even made her save for our wedding and we haven't borrowed anything for over 3 years now. They did however give a figure they would be prepared to lend £46,000 which is actually less than the deposit and less than 1x salary!

I am more annoyed that we have a chunk of money sitting in the account (or rather showing) earning less than 1% per annum when it will actually be funding the banks position for someone elses BTL mortgage.

Yes Pedro this is really going to grease the wheels of our economy.

A no lending, jobless recovery!

Give it a year or two of lending like this and £46k will be all you'll need! :)

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Thanks guys... shes been in her job for four years and when it comes to job security (not tempting fate or anything) she is the boss and has been involved at every level with all the redunacies that the company have made over the last few years. Including spending time in the states with the CEO

:ph34r:

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Is she self employed?

If not how long has she employed at her current place?

Banks are running a mile from non PAYE earnings. The major part of this is the negative swing from all those non verified lonas made up til 2008ish.

As far as I can make out, although banks current claim they will loan up to 80% LTV, in reality, the typical LTV is around 60%.

But that should not be problem. All those self-certed mortgages showed everyone in the UK earing at least 150K ;-)

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Thanks guys... shes been in her job for four years and when it comes to job security (not tempting fate or anything) she is the boss and has been involved at every level with all the redunacies that the company have made over the last few years. Including spending time in the states with the CEO

I heard a completely unsubstantiated rumour on another forum that banks "will not lend a penny against BMV properties"

I questioned whether this was possible/ likely at the time with no response (how would they determine BMV etc...)

But just to test a supposition.. would you say the price she was expecting to pay was vastly under market value? Has she tried various lenders? Or is this just a mortgage in principle?

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She phoned the bank up questioning their reasoning and although they were unable to give us a straight answer in a round about sort of way it now appears Orinoco has money on the right horse. Before I married my wife I stipulated that she had to meet my marriage commitment calculator and one of the criteria was to have no debts so we worked hard to pay off her car loan (early), student loan (early) and credit card (negligible). Christ! I even made her save for our wedding and we haven't borrowed anything for over 3 years now. They did however give a figure they would be prepared to lend £46,000 which is actually less than the deposit and less than 1x salary!

I am more annoyed that we have a chunk of money sitting in the account (or rather showing) earning less than 1% per annum when it will actually be funding the banks position for someone elses BTL mortgage.

Yes Pedro this is really going to grease the wheels of our economy.

A no lending, jobless recovery!

have you checked simple things like a complete record on the electoral register for the past 5 or so years, a long term UK bank account, and have you sent off for credit agency files to make sure there are no errors on her credit record? no dormant store cards with a £6000 available balance that haven't been closed? old mobile phone contracts in arrears by 10p? these thigs matter.

also, having no credit agreements for the past 3 years (I am implying from the above) is bad for credit referencing purposes - you don't need to spend the money, just have an overdraft facility you never use, and it builds up a positive record for her.

don't tell me you didn't check this, easily enough googled...???

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I hope I am not being nosey, but was this before or after they knew what property she wanted to buy? Also, has she only tried one lender, has she been with her current employer for at least two years, and does she work somewhere about to be devastated by the coming cuts? Did they suggest she increase the deposit, gets another guarantor, or lies about her income? Many thanks for any answers, however brief and partial.

More detail :

There was no suggestion of an increase in deposit or a guarantor. The deal we were looking at is fixed over a longer period than 5 years so choice is limited between maybe 3 providers and the proposal was to pay off the entire loan with 10 years by committing less than a quarter of her net month income. i.e. repayment mortgage over 25 years but overpaying and bearing the penalty (7% on overpayments). We have seen the house we want. B)

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Is she self employed?

If not how long has she employed at her current place?

Banks are running a mile from non PAYE earnings. The major part of this is the negative swing from all those non verified lonas made up til 2008ish.

As far as I can make out, although banks current claim they will loan up to 80% LTV, in reality, the typical LTV is around 60%.

But that should not be problem. All those self-certed mortgages showed everyone in the UK earing at least 150K ;-)

No she is PAYE salariat B)

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I heard a completely unsubstantiated rumour on another forum that banks "will not lend a penny against BMV properties"

I questioned whether this was possible/ likely at the time with no response (how would they determine BMV etc...)

But just to test a supposition.. would you say the price she was expecting to pay was vastly under market value? Has she tried various lenders? Or is this just a mortgage in principle?

She got the mortage in principle. The bank was willing to lend but then the underwriters failed to underwrite ???

What is BMV ? The house is in a very desirable area and not much comes up.

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She got the mortage in principle. The bank was willing to lend but then the underwriters failed to underwrite ???

What is BMV ? The house is in a very desirable area and not much comes up.

Just a conspiritorial claim that banks weren't lending on below market value properties. I have no idea what the guy thought the specific criteria might be.

Just thought that perhaps if you got it at, say, 30% off peak and several lenders had refused to lend enough it might add a glimmer of credibility to the idea...

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Just a conspiritorial claim that banks weren't lending on below market value properties. I have no idea what the guy thought the specific criteria might be.

Just thought that perhaps if you got it at, say, 30% off peak and several lenders had refused to lend enough it might add a glimmer of credibility to the idea...

Seems a little odd - will the banks lend on above market value properties then?

I thought there was no such thing as above / below market value - whatever the place sells for *is* the market value.

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Thanks guys and Sarah...

We'd love to buy outright and that was originally the plan. However we now have schooling to worry about and it's either pay handsomely and send them private or move to the right area.

Si1... I know, I know - silly me/us. The only credit agreement we have in place right now is for the car insurance over 12 monthly installments. She has a credit card with no balance outstanding and also a 250 overdraft facility with her bank that she has never actually used.

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  • 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%



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