Home Purchase Mortgages Slide 29% In A Year

[Monkey]

http://www.introducertoday.co.uk/News/Story/?storyid=4005&title=Home_purchase_mortgages_slide_29%25_in_a_year&type=news_features

Mortgages approved for home purchase last month were 29% down on a year ago, say bankers.

The dire state of the UK mortgage market at the start of 2011 has been shown by the January figures from the British Bankers Association.

The BBA said mortgages approved by its members in January for home buyers were 29% lower than a year ago.

The bank approved just 28,932 loans for house purchase, although the BBA said this was slightly higher than in December.

Meanwhile the lack of progress in property sales in the UK was also highlighted by HMRC figures, with just 54,000 homes sold across the UK last month, unchanged from January last year.

“We are seeing little change in the borrowing environment for households or businesses at the start of 2011,” said the BBA’s statistics director, David Dooks.

The BBA’s picture of the housing market is slightly different to that reported last week by the Council of Mortgage Lenders, although equally gloomy. The CML reported that lending to home buyers in January dropped by 13% from December, and was its lowest level for a year.

The CML warned that lending will continue to stagnate because of the subdued state of the economy and the lack of funds available for lending.

On Monday, property portal Rightmove said the UK property market faced “paralysis” this year, as would-be sellers failed – or were unable – to drop their prices to realistic levels in line with sales prices achieved. Instead, sellers new to the market have raised their prices by 3.1%.

Housing expert Henry Pryor said the chances of vendors selling their home this year is less than 40%. He warned that sellers who had raised asking prices had “completely misread the market”.

He added: “Worryingly, Rightmove saw 121,635 new homes come to the market, a 35% jump on last year. Volumes of sales have not risen by a similar amount, leaving an over-hang of property for sale which will put downward pressure on sale prices.”

The yawning gap between asking prices and actual prices is huge: the average asking price on Rightmove is now £230,030. According to the Land Registry, the average selling price is currently £68,846 lower at £163,184.

For the whole of last year, HMRC recorded just 884,000 sales with 560,000 mortgages. Some 43% of sellers found a buyer.

the realisation is kicking in now, it looks like the warm up for the race to the bottom is starting to happen

Edit: fixed broken quote

Edited February 24, 2011 by Monkey

[SarahBell]

On Monday, property portal Rightmove said the UK property market faced “paralysis” this year, as would-be sellers failed – or were unable – to drop their prices to realistic levels in line with sales prices achieved. Instead, sellers new to the market have raised their prices by 3.1%.

If that don't make you smile a bit then nothing will.

[OnlyMe]

Just wait till the public's finances get hit by another doubel digit increase in basics this year. For many they won;t be thinking of how much they can borrow to overpay on a house they will be more concerned about keeping warm , being able to get to work, or put food on the table as at the end of each month before payday they have run out of money every month of the year.

Edited February 24, 2011 by OnlyMe

[bobthe~]

In other news, temperatures in London reached a seasonally adjusted 88C

[The Knimbies who say No]

In other news, temperatures in London reached a seasonally adjusted 88C

[Reck B]

On Monday, property portal Rightmove said the UK property market faced “paralysis” this year, as would-be sellers failed – or were unable – to drop their prices to realistic levels in line with sales prices achieved. Instead, sellers new to the market have raised their prices by 3.1%.

If that don't make you smile a bit then nothing will.

I wonder what the ratio is of sellers who are able to drop (those with high equity) against sellers who are unable to drop their prices (those with high debt)

Stacked too heavily in favour of those unable to drop and sales will stay low. (they'll all just rent it out instead )

The other way round will be more helpful to a HPC.

I reckon a higher proportion of sellers are unable to drop their prices as too many people have mewed and/or taken on high levels of unsecured credit which they planned to clear with a remo.

[SarahBell]

I wonder what the ratio is of sellers who are able to drop (those with high equity) against sellers who are unable to drop their prices (those with high debt)

Stacked too heavily in favour of those unable to drop and sales will stay low. (they'll all just rent it out instead )

Isn't there a NE mortgage to enable people to move?

[Reck B]

Isn't there a NE mortgage to enable people to move?

i did hear this, though unsure how it works. They probably use renters' deposits as collateral, or something.

[Monkey]

Just wait till the public's finances get hit by another doubel digit increase in basics this year. For many they won;t be thinking of how much they can borrow to overpay on a house they will be more concerned about keeping warm , being able to get to work, or put food on the table as at the end of each month before payday they have run out of money every month of the year.

Quite.

[Caveat Mortgagor]

In other news, temperatures in London reached a seasonally adjusted 88C

That made me chuckle. Would love to see someone say this on bbc breakfast whilst they have the VIs on!

[zebbedee]

Just wait till the public's finances get hit by another doubel digit increase in basics this year. For many they won;t be thinking of how much they can borrow to overpay on a house they will be more concerned about keeping warm , being able to get to work, or put food on the table as at the end of each month before payday they have run out of money every month of the year.

Almost everyone I know is like this and have been for a couple of years, putting the last week, at least, on thier credit cards. Makes no sense to me, spend a bit less for a couple of months and then not be paying the interest thereby forcing yourself to have less each month. So when it comes to the point that they can't afford to do that the brown stuff will really hit the fan. i'm coming round to thinking that TPTB have managed to prevent, thus far, the collapse in HP's seen elsewhere at the cost of ending up with the largest crash in the world in the long run. All good, give it a year or two and I may look to buy for cash from some fecking distressed seller and hope they plead so I can tell em to p!ss off and knock andother £10k off my offer.