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Page 3 Of The Times Today

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Lack of mortgage finance may be hobbling first-time buyers, but a more important factor is the price of houses

:o

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This is the next thing to hit ... people cannot get the mortgages anymore.

It is not just the LTV aspect, but the security of jobs. What financial provider would want to lend to a FTB who worked in an area where there could be job losses over the next five years for a property that they know is 40 percent overvalued?

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Starts off with "Lending restrictions". Sigh. As long as they're the first block for some people we'll remain in trouble. The first block for me as a potential FTB are the prices. I'm not even interested in exploring the availability of mortgages (or lack of) until prices aren't ludicrous. Why on earth is anyone else any different?

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My wife failed to obtain the mortgage she had applied for mentioned on another thread. She has twice that deposit and the earnings multiple was very realistic. We have now 'jointly' applied for a mortgage through another provided asking for 1.5x our combined earnings and have been waiting a week or so for the decision. She is nervous as hell now and I am more relaxed than ever this time as if we fail to secure one then it'll be the same the length and breadth of Britain and no FTB will be able to buy at current prices and falls will have to come :D

They should relax a little and continue their savings regime as it gets harder to save when you get on the 'ladder'. If I was them i'd be cracking open the champagne for not acquiring a mortgage backed gamble on HPI

Edited by tomposh101

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The current housing market stalemate has far more to do with greedy vendors than stingy lenders.

Banks are returning to lending levels that have historically been the norm. Sellers need to realise this.

A house is only worth what someone is willing to pay, and in most cases, what someone is willing to pay basically means what the bank is willing to lend.

Come Spring, this will be painfully obvious when the 'bounce' doesn't appear.

Edited by rantnrave

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My wife failed to obtain the mortgage she had applied for mentioned on another thread. She has twice that deposit and the earnings multiple was very realistic. We have now 'jointly' applied for a mortgage through another provided asking for 1.5x our combined earnings and have been waiting a week or so for the decision. She is nervous as hell now and I am more relaxed than ever this time as if we fail to secure one then it'll be the same the length and breadth of Britain and no FTB will be able to buy at current prices and falls will have to come :D

They should relax a little and continue their savings regime as it gets harder to save when you get on the 'ladder'. If I was them i'd be cracking open the champagne for not acquiring a mortgage backed gamble on HPI

Having been denied a mortgage it won't look good on the next application for one. They usually ask if you've been denied credit in the past. Mortgage or other.

I don't know what previous thread youre referring to, the search facility on this forum is w4nk, or at least was. I'm a FTB and so is my GF, we had 25% deposit a joint salary multiplier of 2.2x and they were trying to give us twice what we asked for. There's no issues in borrowing, the only thing is prices are too high due to previous levels of available credit. at some point prices will fall and credit supply will rise. When they meet, prices will beging to rise again. Until then, its down. How quickly depends on, BOE IR,SVR rates and jobs..

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A house is only worth what someone is willing to pay, and in most cases, what someone is willing to pay basically means what the bank is willing to lend.

Yup -- And for the last 10-15 years - they were doling out

LIAR LOANS

like confetti -- and THAT is how house prices were artificially & fraudulently turbo-charged into the stratosphere.....

:rolleyes:

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Having been denied a mortgage it won't look good on the next application for one. They usually ask if you've been denied credit in the past. Mortgage or other.

I don't know what previous thread youre referring to, the search facility on this forum is w4nk, or at least was. I'm a FTB and so is my GF, we had 25% deposit a joint salary multiplier of 2.2x and they were trying to give us twice what we asked for. There's no issues in borrowing, the only thing is prices are too high due to previous levels of available credit. at some point prices will fall and credit supply will rise. When they meet, prices will beging to rise again. Until then, its down. How quickly depends on, BOE IR,SVR rates and jobs..

Yeah - basically we had the 25% deposit and the bank 'at least on paper' was willing to lend twice what we were asking for and it was the underwriters that brought the whole pack of cards tumbling down. If you have gone past the on-line mortgage lending calculator, the pre-approval process and sending in your payslips, p60, employment status togeter with the appropriate application fee (as we had) then you are doing considerably better than us.

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So first I read Blanchflowers dribbbling and then I had to read this sh1t3eyb0llucks on the train. By the time I go to my destination I had a mouth full of sick.

If I'd have seen a "hard - working" btler beeging for my tax money to bail him out I would have blown all that sick in his face.

Honestly it would have been like a scene from little britain with the 2 old ladies and the sick pipe.

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I could imagine a situation whereby a large cohort of would-be FTBs build up big deposits (big in real terms as in able to buy plenty of loaves of bread, holidays etc) but they never end up having enough to buy the type of house they want (possibly due to nominal prices rising faster than they can save) and so put off buying indefinitely.

Socioogists might call them CRABs - Cash Rich but Avoiding Buying.

The couple in the article are a case in point £24,000 is a lot of money and should be more than enough for a deposit on a nice house with plenty to spare to buy furniture.

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This lack of lending adds a whole new dimension to the HPC theories. Levels of IRs, unemployment etc have all been discussed and seen in the past to have an impact on hps.

How is a mortgage famine going to affect things in the next 6-12 months?

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I could imagine a situation whereby a large cohort of would-be FTBs build up big deposits (big in real terms as in able to buy plenty of loaves of bread, holidays etc) but they never end up having enough to buy the type of house they want (possibly due to nominal prices rising faster than they can save) and so put off buying indefinitely.

No need to imagine it, that's the world we're living in. A £4k deposit on a £40k starter home in 1996 was chickenfeed in terms of how many loaves of bread etc it would buy you. With £24k in 2010 a couple could spend a year or two going all around the planet doing pretty much anything they wanted.

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This lack of lending adds a whole new dimension to the HPC theories. Levels of IRs, unemployment etc have all been discussed and seen in the past to have an impact on hps.

How is a mortgage famine going to affect things in the next 6-12 months?

I guess it depends on what happpens to lending for BTL. If that continues to be restricted then maybe this time the game is up?

Surely properly falling prices will eventully become too much for the media to hide and the masses will be so spooked no one will want to buy anything?

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The sizeable deposits are also a burden on the employed. It took this couple five years to save £24k and if either of them were to lose their jobs then they would not qualify for means tested benefits. Worst case scenario is that it would keep them afloat for 18months, Maybe the government has the right - keeping house prices out of reach of us proles. This money should be ring-fenced like a pension or kept under the mattress, in the freezer, a coffee jar or one of those concealed baked beanz cans.

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bebmf6.jpg

Hmm... 40% deposit needed... so that's how much the banks think prices are going to crash...

IMHO the banks are just waiting until they've got enough new suckers hooked (at 40%), and then they can afford to start repos on the backlog... until they've got enough new blood, a crash would bring them down.

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I guess it depends on what happpens to lending for BTL. If that continues to be restricted then maybe this time the game is up?

Surely properly falling prices will eventully become too much for the media to hide and the masses will be so spooked no one will want to buy anything?

See the news board from earlier about the government expecting landlords to cut rent and keep their existing HB tenants.

They are testing the water with lower HB rents for new tenants from next April.

The penny should drop in the banks pretty quickly as they see the achievable rents in an area drop and refuse to accept the figure plucked out of the air on any mortage application.

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Hmm... 40% deposit needed... so that's how much the banks think prices are going to crash...

IMHO the banks are just waiting until they've got enough new suckers hooked (at 40%), and then they can afford to start repos on the backlog... until they've got enough new blood, a crash would bring them down.

Probably expecting a 20% crash so there would still be a 20% of the initial equity left if people bought in now. (Based on sensible continental banks implementation of basel 2 practices in a rising market that min 15% and preferably 20% deposit which they would want to maintain after a price drop)

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They don't know how lucky they are.

The banks' current lending policy, which is in place to protect themselves from the coming falls in house prices, is also protecting potential first time buyers from throwing their hard earned deposits down the drain.

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Yup -- And for the last 10-15 years - they were doling out

LIAR LOANS

like confetti -- and THAT is how house prices were artificially & fraudulently turbo-charged into the stratosphere.....

:rolleyes:

"WERE"?

A slip of the tongue? You speak as though it's ended!

According to the FSA itself:

non-income verified mortgages continue in the form of fast-track, with fast-track accounting for 43 per cent of all mortgages sold in Q1 this year.

http://www.moneymarketing.co.uk/mortgages/fsa-defends-fast-track-ban/1020763.article

Edited by Redhat Sly

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  • 312 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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