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Demand For Home Loans Falls Sharply

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Sorry if already posted:

http://www.independent.co.uk/money/mortgages/demand-for-home-loans-falls-sharply-2177528.html

Demand for mortgages from people buying a home fell sharply during the fourth quarter as the lending drought continued, a report indicated today.

A balance of 41.5% of banks and building societies said borrowing for house purchase "fell markedly" during the final three months of the year, with demand dropping at its fastest rate since the third quarter of 2008, according to the Bank of England.

A combination of falling house prices and economic uncertainty caused by Government spending cuts caused people to delay decisions to move, and these factors are expected to continue to contribute to subdued lending.

But there was a feeling among lenders that the inability of would-be buyers to raise the huge deposits currently needed to secure a competitive rate was also constraining demand.

The level of mortgages available remained broadly unchanged during the fourth quarter, and lenders are not predicting much improvement in the coming three months.

Instead, some reported that availability had been dampened by the outlook for the housing market, while slightly tighter wholesale funding conditions had reduced their own ability to borrow.

In late November, wider developments in the eurozone also spilled over into lenders' wholesale funding markets, with some banks saying long-term funding costs had risen, while the conditions for issuing bonds had become more difficult.

These factors, combined with the ongoing economic uncertainty, are expected to continue to act as a brake on mortgage lending.

The only bright spot in the Bank's Credit Conditions Survey was that some groups thought a desire to increase market share would lead to some increase in mortgage availability.

But in a further blow to first-time buyers, banks said recent house price falls had led to a slight decrease in the availability of mortgages for people borrowing more than 75% of their home's value.

Demand for mortgages from people buying a home fell sharply during the fourth quarter as the lending drought continued

If there's no demand, there's no drought, surely?

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But Dave says the problem is the banks won't lend.

I wish someone would make their mind up as to what the problem is.

Either we need to put a gun to the banks heads to make them lend or to the peoples head to make them borrow. Clearly something needs to be done.

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But Dave says the problem is the banks won't lend.

I wish someone would make their mind up as to what the problem is.

Either we need to put a gun to the banks heads to make them lend or to the peoples head to make them borrow. Clearly something needs to be done.

I suspect that if a single person on £20k (fully verified) wanted to buy a house for £70k with a £60k mortgage, they would be fine.

However, if they wanted to buy a flat for £150k with a £145k mortgage, they would be a 'problem with mortgage availability'.

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I think the answer to that - there is clearly a drought. Lenders have significantly tightened lending criteria from credit scoring, to proof of earnings to ltv's and interest rates charged.

(...)

I don't think it's a drought - just a lack of a flood.

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I don't think there is a problem. It seems home loans have normalised. Sadly some people want lending to return to boom levels which caused the problem "which started in America" and which "no one could see coming" in the first place.

Clearly Cameron isn't reading the Treasury briefing papers. The Banks (which we allegedly own) don't want to lend to "hard working families" or small businesses. They would rather lend to each other, hedge funds and pump up stock, commodity and food prices all over the world, using the freshly printed paper provided by Merv.

If pushed they will lend with a decent deposit and reasonable verified income. This has always been the case, except during Brown's "boom" years.

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The problem is that the likes of Cameron blaming the banks allows all the numpties, EAs, greedy and the deluded to continue in the denial phase believing that once the banks start lending again that house prices will soar.

Really, Cameron needs to come out and tell people that there will be no more housing bubbles and that house prices might have to fall in order to get the economy moving.

But he won't.

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I think the answer to that - there is clearly a drought. Lenders have significantly tightened lending criteria from credit scoring, to proof of earnings to ltv's and interest rates charged.

However, they don't want to be blamed for not lending or even forced to so they have first blamed sme's not wanting to borrow and now, consumers.

Its just correction time for the overblown house prices.

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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
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