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Uk Mortgage Lending To Fall To 30-Year Low

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... and Ray "banks must lend more" Boulger blames the banks for reckless lending before the credit crunch :blink:

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

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.

The slump is likely to be exacerbated by the fact that banks will have to repay £130bn they borrowed through the government's special liquidity scheme by the end of next year.

Mortgage experts said that first-time buyers and people looking for new homes were being forced to pay the price for the recklessness of the banks.

Ray Boulger of the mortgage advisers John Charcol, said: "The figures are startling. They demonstrate how much of a problem the banking crisis is causing for anyone looking to buy a property.

"It is the direct result of the reckless lending by banks before the credit crunch. It means first-time buyers will face huge obstacles, while anyone that wants to move on but doesn't have much equity will find they are trapped."

The forecasts do not take into account inflation and are based on the assumption that the UK will avoid a double-dip recession.

The council warned that the availability of mortgages for first-time buyers would remain limited as lenders have only a "modest appetite" for giving mortgages to people with small deposits. The council is forecasting that net lending, which takes into account mortgage repayments, will fall from £9bn this year to £6bn in 2011.

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

There is also likely to be a sharp increase in the number of people who fall behind with their mortgage payments or have their homes repossessed. A total of 40,000 people are expected to have their homes repossessed in 2011, up from an estimated 36,000 this year, while 180,000 are expected to end up in arrears of more than 2.5 per cent of their outstanding mortgage.

The council said: "From April next year onwards, lenders will begin to have to repay the funding advanced through official support schemes. This is likely to limit the availability of credit to support mortgage lending next year and beyond."

However, a survey by the Building Societies Association, also released today, suggests that many people believe the downturn in the market may present opportunities to buy. More than a third of people believe that the property market is currently overvalued, while nearly two thirds of those surveyed said that the best time to buy a property would be within the next year.

Paul Broadhead, head of mortgage policy at the association, said: "Barriers remain that might prevent potential buyers from acting on these perceived opportunities. Worries persist about job security, the ability to raise a deposit, and obtaining a mortgage from lenders."

Someone on here pointed out before that net lending figures are a bit misleading, but quite a few nuggets in here anyway.

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... and Ray "banks must lend more" Boulger blames the banks for reckless lending before the credit crunch :blink:

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

Someone on here pointed out before that net lending figures are a bit misleading, but quite a few nuggets in here anyway.

in a boom year - £110bn

in a bust year - £6bn

this is a hell of a drop

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I just tried out HSBC for a mortgage example, they are only leanding 107K no matter how much cash I offer as a deposit.

I raised his wages to 26K this time and debts to zero. He never took out any loans, worked full time after leaving school

and has now saved up around £43,000 in cash.

Well done Peter.

Peter Smith, aged 28, earns 26K , no debts

The minimum deposit is £10,000

The maximum LTV is 90%

The maximum they will loan Peter Smith

Property Value £100,000

You could borrow up to:

£90,000 at 90% LTV

£10,000 deposit

Property Value £125,000

You could borrow up to:

£93,000 at 75% LTV

£32,000 deposit

Property Value £150,000

You could borrow up to:

[£107,000 at 72% LTV

£43,000 deposit

Mortgage stops increasing here no matter the deposit

Property Value £160,000

You could borrow up to:

£107,000 at 67% LTV

£53,000 deposit

Property Value £170,000

You could borrow up to:

£107,000 at 63% LTV

£63,000 deposit

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... and Ray "banks must lend more" Boulger blames the banks for reckless lending before the credit crunch :blink:

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

Someone on here pointed out before that net lending figures are a bit misleading, but quite a few nuggets in here anyway.

The 36k repossession figure sounds rather high (or is it?). And then they extrapolate to 40k this year from that. Anyone put any flesh on these bones? I thought the banks were holding off repossessions.

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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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