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Realistbear

Mortgage Lending: 30 Year Low

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http://www.telegraph.co.uk/finance/economics/8202925/UK-mortgage-lending-to-fall-to-30-year-low.html

Economics
UK mortgage lending to fall to 30-year low
Mortgage lending will drop to its lowest level for 30 years as the banks struggle to pay back government bail-outs, it is predicted today.

This may explain the Daily Ramp's misleading headline today about house prices shooting up £5k?

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Is that the same Ray Boulger who is complaining that the banks aren't continuing with their reckless lending ?

Yes, but that's reckless lending AFTER the credit crunch, which is completely different.

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No mortgage lending available is one arm of the pincer in place. The other arm is forced sales. Sorry to say that for the next couple of years the only leading indicators that matter are bankruptcies, unemployment rates, actual mortgage interest rates after government subsidies - all the indicators of pain. I don't include repossessions in the list because we know banks would rather sit with the properties on their books at imaginary values than crystalise a loss.

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My god what a bearish week, more repo's coming in 2011 as well. You won't be able to give houses away.

Yeah--enough to make any Neither go back to being a Bear, hang on......wtf................ :o:o:o:blink::blink:

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Now this is BIG.

Without job losses there will not be a significant crash. Separate thread pls.

It is possible to have a crash without significant job losses. You need another factor though.

Interest rates at 10% might be interesting.

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No mortgage lending available is one arm of the pincer in place. The other arm is forced sales. Sorry to say that for the next couple of years the only leading indicators that matter are bankruptcies, unemployment rates, actual mortgage interest rates after government subsidies - all the indicators of pain. I don't include repossessions in the list because we know banks would rather sit with the properties on their books at imaginary values than crystalise a loss.

Never forget that cashflow is affected when losses sit on the books, and cashflow, or lack of it, always forces the issue.

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It think we can forget about IRs helping to push prices down due to "forced" sales in the next 2 years. The inflation we have at the moment is largely beyond the control levers of the BoE in the form of IRs (oil prices, cotton prices, wheat prices...), when wage inflation starts kicking in IR might be able to contol that but pay rises seems to have been large but in the hand of the few (banksters bonus to salary conversion to get around the new rules?) So when the other factors have started to run out of steam in a couple of years IR could then help push things lower making a very long drawn out crash.

The other factor pushing people to sell

-Death, Divorce...

-Unemployement starting to rise.

-The cash runs out, SMI JSA runs out, the big annual pay rises stop or are far smaller

But the supply that really matters is the cash available for lending and it is all bearish there (Are the CML being very bearish in one last throw of the dice to see if they get thrown a couple of monoploy "get out of jail cards"?)

-SLS repayments start in April (the SLS was actually a cash for (dodgy) assets swap so the banks get handed back the mortgages they swapped (how many will now be in arrears etc.?)

-CGS repayments to follow SLS repayments (many are already repaying early due to higher IR) nice o note they are ignoring this for the moment

-New FSA rules (we hope): reduction in IO, income multiples or LTV restrictions?

- Sensible internal risk management

The question is will the banks use the limited available cash to try to prop up the prices in the middle of the market (with very few transactions) or maximise their profit via fixed mortgage application fees by maximising the number of loans rather than the value of the loans i.e. focus on FTB?

The severe restricion in lending may not maximise the outcome we are hoping for.

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It think we can forget about IRs helping to push prices down due to "forced" sales in the next 2 years. The inflation we have at the moment is largely beyond the control levers of the BoE in the form of IRs (oil prices, cotton prices, wheat prices...), when wage inflation starts kicking in IR might be able to contol that but pay rises seems to have been large but in the hand of the few (banksters bonus to salary conversion to get around the new rules?) So when the other factors have started to run out of steam in a couple of years IR could then help push things lower making a very long drawn out crash.

The other factor pushing people to sell

-Death, Divorce...

-Unemployement starting to rise.

-The cash runs out, SMI JSA runs out, the big annual pay rises stop or are far smaller

But the supply that really matters is the cash available for lending and it is all bearish there (Are the CML being very bearish in one last throw of the dice to see if they get thrown a couple of monoploy "get out of jail cards"?)

-SLS repayments start in April (the SLS was actually a cash for (dodgy) assets swap so the banks get handed back the mortgages they swapped (how many will now be in arrears etc.?)

-CGS repayments to follow SLS repayments (many are already repaying early due to higher IR) nice o note they are ignoring this for the moment

-New FSA rules (we hope): reduction in IO, income multiples or LTV restrictions?

- Sensible internal risk management

The question is will the banks use the limited available cash to try to prop up the prices in the middle of the market (with very few transactions) or maximise their profit via fixed mortgage application fees by maximising the number of loans rather than the value of the loans i.e. focus on FTB?

The severe restricion in lending may not maximise the outcome we are hoping for.

That is IMO what they are aiming for. Their target market also thinks uni debts are a must have though, so houses are going to be very cheap, unless of course a generation just says "screw having ANY mortgage", then all bets are off. The banks just ran out of suckers to fuel the bonus machine?

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:lol:

There's a funny thread here from yesterday - you might like to read it. ;)

http://www.housepricecrash.co.uk/forum/index.php?showtopic=156158&view=findpost&p=2822145

No--you missed the point. Where are all the Bear/Bull/Neither designations gorn?

Edit: Oh yeah--I see. They were dropped. Now everyone has gone stealth and can cover their tracks if they make a stand one way or 't other and it doesn't pan out.

I think this was done to nip the goldbugs in the bud? Too many crackpots telling the kettle it is very dark grey to put it into PC terminology.

Edited by Realistbear

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'The Council of Mortgage Lenders has forecast that net lending will fall to just £6bn next year, the lowest since 1980. Before the credit crunch hit in 2006, net lending totalled £110bn.

Property sales are expected to remain stagnant at 860,000, down from 1.6m before the credit crunch. '

so low net lending on shrinking volume.mmmmmm..

Two more planks are needed:

-government cuts driving wages down across the country.

-government cuts driving btl support down across the country.

These will be the catalyst.

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RB, your posts are always entertaining...

So are the poisons hatching yet?

Hatching? Its like a scene from Alien with those nasty face sticking lobsters hatching out everywhere.

Crimbo predictions anyone?

Might not be able to top lasts years deadly accurate forecasts on the £ and Euro--anyone make out like bandits and short both? ;)

2011--lets see: Another 20% off house prices. This year looks like 12% down for my area. Sterling and Euro to have another bad one.

Some possible black swanns: A snap GE, IMF downgrade, arrest of a large number of banksters

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It think we can forget about IRs helping to push prices down due to "forced" sales in the next 2 years. The inflation we have at the moment is largely beyond the control levers of the BoE in the form of IRs (oil prices, cotton prices, wheat prices...), when wage inflation starts kicking in IR might be able to contol that but pay rises seems to have been large but in the hand of the few (banksters bonus to salary conversion to get around the new rules?) So when the other factors have started to run out of steam in a couple of years IR could then help push things lower making a very long drawn out crash.

The other factor pushing people to sell

-Death, Divorce...

-Unemployement starting to rise.

-The cash runs out, SMI JSA runs out, the big annual pay rises stop or are far smaller

But the supply that really matters is the cash available for lending and it is all bearish there (Are the CML being very bearish in one last throw of the dice to see if they get thrown a couple of monoploy "get out of jail cards"?)

-SLS repayments start in April (the SLS was actually a cash for (dodgy) assets swap so the banks get handed back the mortgages they swapped (how many will now be in arrears etc.?)

-CGS repayments to follow SLS repayments (many are already repaying early due to higher IR) nice o note they are ignoring this for the moment

-New FSA rules (we hope): reduction in IO, income multiples or LTV restrictions?

- Sensible internal risk management

The question is will the banks use the limited available cash to try to prop up the prices in the middle of the market (with very few transactions) or maximise their profit via fixed mortgage application fees by maximising the number of loans rather than the value of the loans i.e. focus on FTB?

The severe restricion in lending may not maximise the outcome we are hoping for.

The problem is that cost push inflation unmatched by interest rates can feed on itself. Currently the majority of our inflation is cost lead rather than demand lead. But if people start to believe that inflation will continue to rise whithout the interest rates to match it then they will protect themselves against, giving demand inflation on top of the cost inflation we already have. And then you get a spiral which will be very difficult to stop. That's why the BOE are watching inflation expectations so closely. If they rise then they're in trouble.

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My pet theory was that you were the one who requested this change.

Is this a double bluff?

(don't answer that or I'll start having to think about triple bluffs)

Gawsh:

http://www.singingpig.co.uk/forums/post/1139824.aspx

If that was not enough:

http://boards.fool.co.uk/realistbear-is-now-bullish-about-uk-property-12117499.aspx

and

http://news.sky.com/skynews

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Hatching? Its like a scene from Alien with those nasty face sticking lobsters hatching out everywhere.

Crimbo predictions anyone?

Might not be able to top lasts years deadly accurate forecasts on the £ and Euro--anyone make out like bandits and short both? ;)

2011--lets see: Another 20% off house prices. This year looks like 12% down for my area. Sterling and Euro to have another bad one.

Some possible black swanns: A snap GE, IMF downgrade, arrest of a large number of banksters

It wouldn't surprise me to see the Fed engineer some sort of a crisis first Q of 2011 to get Ron Paul off their backs...

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Not much demand for house purchase then if net lending drops from £110bn in 2006 to £6bn in 2011.

I agree, but there are probably a few people on this board who don't appreciate what net-lending is-it doesn't just reflect demand for house purchase (if it did then demand for house purchase would have dropped by 95% 2006 to 2011).

Net lending is also increased by MEWing and decreased by paying off your mortgage. MEWing was rampant in 2006 still, and at the moment many existing mortgagees are enjoying very low IRs enabling them to pay off their debt much faster than normal.

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  • 311 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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