Home Loan Approvals Slump To 19-Month Low

[Si1]

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.

sorry I don't mean to be a bitch, it's a sort of natural tendency of mine - honestly, check your credit records from experian and equifax if not done yet - you can do it for £2 for a printed credit report (a legal requirement for them to offer this) - avoid using their expensive credit report subsciption service, search for the £2 credit report file option on their websites, comes in about a week or two

even telecoms and some utility contracts represent credit agreements and can be noted, including any minor or unknown (or just plain spurious) arrears

things like a consistent set of address-records all with electoral role registration on them are very helpful

I has problems oonce with a 10p arrears on a 5 year old mobile phone bill, and also a credit card I had closed but had errponeous info about alleged balance, it is surprising the mistakes that are made against your record

Edited November 23, 2010 by Si1

[council dweller]

Sod em.

Save and buy outright.

I love it when you talk dirty!

[longtomsilver]

Thanks again Si1 I don't see it as bitching at all.

We got hold of her credit file a few years back (£2) and it did show a mobile phone bill outstanding from her university days - she took a mobile phone contract with orange on behalf of her ex student boyf and he stopped paying (as it came out of his account). It was only £70 and we didn't dispute it so contacted Orange and paid it off pronto. Nothing else.

[The Ayatollah Buggeri]

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

BMV = below market value.

The suggestion is that banks are wary about lending to buy properties at a price substantially below that for which comparable properties have sold in the recent past for fear that there might be something wrong with them (expensive repairs needed, leasehold with not long left to run, etc. etc.).

[SarahBell]

BMV = below market value.

The suggestion is that banks are wary about lending to buy properties at a price substantially below that for which comparable properties have sold in the recent past for fear that there might be something wrong with them (expensive repairs needed, leasehold with not long left to run, etc. etc.).

Or just it devalues the rest of the pile of overpriced sh&t?

[athom]

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?

Well that would seriously effect house prices and might explain why they haven't fallen like every sensible person knows they should. But surely it would be so obviously artificially inflating the price of houses the government would have stepped in...... no, wait a minute

Either way, seriously evil if true.

[longtomsilver]

Hi guys, I was a little slow on the uptake and the penny finally dropped! Basically the price ageed is 20% off peak price and would set the floor in the area as nothing else has sold of late. The banks balance sheets for all the current mortgages would then look very shakey indeed. A BMV conspiracy indeed.

I hope the VIs read this. We have given up hopes of ever owning in the UK. My wifes current job can be based from any of her employers offices in Europe and next year we now plan to relocate to France and rent. Aiming for April/May '11. The treasury will lose many tens of thousands in income tax and NI contributions annually. I plan on taking time out to raise the family and I doubt my job will be released to the jobs market, it will just be divvied up amongst the current workforce. I'll update when this happens.

[wild card]

Maybe the lender has blacklisted your wifes employer. You did mention that she has helped in the redundancy process,if the pay offs are common knowledge the lender may think that the whole company presents a risk to them.

[The Ayatollah Buggeri]

The theory that banks are refusing to lend on BMV purchases for fear that doing so will accelerate gradual price falls into a short-term, full scale HPC is an interesting one.

For one thing, the fact that they seem to be regarding 80% LTV (loan to value, i.e. as a proportion of) mortgages as an absolute maximum suggests that they know full well that houses are overvalued. Declining loans on significantly below LTV offers might slow the correction process down, thereby reducing the speed at which an inventory of loans on their books turn bad (on paper). In other words, they're not suddenly going to end up with hundreds of thousands of properties on their books, the mortgagees of which paid significantly more than their home is now worth. Useful for accounting purposes, to say the least. But on the other hand, all it takes is a very small minority of cash buyers to make what Boulger and Bien would call a 'silly' offer and have it accepted because the seller doesn't want to wait for the buyer to faff about trying to get a mortgage and can afford to eat the nominal loss (i.e. most sellers who have owned a property since the late 1990s or earlier), and the MV of a given property type in a given area will drop like a stone, very quickly. Given the existence of Propertysnake and other Internet valuation tools, all it's going to take is one atypical transaction to drop the MV significantly, and in one fell swoop.

[Executive Sadman]

Do these figures include BTL or non owner occupier loans?

Every house ive been watching that has sold recently quickly reappeared for rent.

[athom]

The theory that banks are refusing to lend on BMV purchases for fear that doing so will accelerate gradual price falls into a short-term, full scale HPC is an interesting one.

For one thing, the fact that they seem to be regarding 80% LTV (loan to value, i.e. as a proportion of) mortgages as an absolute maximum suggests that they know full well that houses are overvalued. Declining loans on significantly below LTV offers might slow the correction process down, thereby reducing the speed at which an inventory of loans on their books turn bad (on paper). In other words, they're not suddenly going to end up with hundreds of thousands of properties on their books, the mortgagees of which paid significantly more than their home is now worth. Useful for accounting purposes, to say the least. But on the other hand, all it takes is a very small minority of cash buyers to make what Boulger and Bien would call a 'silly' offer and have it accepted because the seller doesn't want to wait for the buyer to faff about trying to get a mortgage and can afford to eat the nominal loss (i.e. most sellers who have owned a property since the late 1990s or earlier), and the MV of a given property type in a given area will drop like a stone, very quickly. Given the existence of Propertysnake and other Internet valuation tools, all it's going to take is one atypical transaction to drop the MV significantly, and in one fell swoop.

Not so sure about that. Estate agents can simply ignore the odd market anomaly, put it down to any number of things that don't apply to the other houses in the area.