Rise In Mortgage Approvals Points To Housing Recovery

[ks1234]

Found this article in the Independent!!

http://news.independent.co.uk/business/new...ticle315547.ece

[Guest The_Oldie]

I think it's a piece of spin based on increased level of mortgage approvals. However, 36% of all approvals are remortgaging, probably due to existing fixed rate mortgage deals coming to an end.

David Dooks, the BBA's statistics director, said: "Stronger remortgaging activity, representing 36 per cent of all approvals, suggests that borrowers are shopping around for better deals, and gross lending will hold up in the coming months."

[apom]

200,000 people re-mortgaged last month..

average mortgage of £97,000

ending two year fixed rates at 3.5% and moving up to 4.9 %

thats 200,000 people over £1300 a year worse of..

..

or a recovering housing market.. if you lie..

[Economic Sensation]

200,000 people re-mortgaged last month..

average mortgage of £97,000

ending two year fixed rates at 3.5% and moving up to 4.9 %

thats 200,000 people over £1300 a year worse of..

..

or a recovering housing market.. if you lie..

Apom thats gross manipulation of figures. How on earth can you base your figures that everyone took a fixed rate mortgage at 3.5%, the lowest figure, and then put the next round of mortgages at 4.9%, when current rates are 4.5%. For a start a lot of people would not have fixed at 3.5% because it was only there for a few months and secondly there are currently loads of mortgages on the market for 4.19% - 4.65% http://mortgages.charcolonline.co.uk/mortg...?type=fixedrate

If you are basing it on the base rate then more accurately it would be £970 more a year, or £81 a month.

Also many people believe that rates are set to continue to come down so are more likely to pay the variable rate and then fix at a lower rate in November or next year.

Please get your figures right first, genuine first time buyers might actually use this site and believe you

ES

[OzzMosiz]

Also many people believe that rates are set to continue to come down so are more likely to pay the variable rate and then fix at a lower rate in November or next year.

ES

Lets hope they believe that, cos I don't reckon it'll happen!! Shoot themselves in the foot as it were!

[teddyboy]

I think its quite clear from the whispers around my area that the sellers and EA's are getting quite picky who buys their houses. Sounds like a strange statement is a depressed market but think about it and it does make sense.

Agents are finding that a lot of people are putting in offers and finding out they dont actually have the funds available. This is not only disasterous for that sale (I will try not to laugh, but it is hard) but it also harms the other sales up the ladder. Therefore it could affect up to 6 sales which could be worth maybe £2m!!! So a lots of agents are asking sellers to make sure that they have their finances in place before making offers, in the same way that they are not taking offers from people who have not sold their existing property.

I have a mortgage approval in place so IF I see a house I like and want to put in a SERIOUSLY reduced offer on the premise that the money is there waiting - I have a strong case. I AM ON THOSE FIGURES but the chances of me BUYING are slim at best! I think there are a lot of people like me, money in place waiting for the DIRE winter months, ready to pounce on a desperate, suicidal seller.

I also agree that what's been approved and what's been completed are 2 different things.

I thing there is a percentage that are getting mortgage approval now because I honestly feel that the MPC will realise their mistake and put IR back to 4.75% - whilst the mortgage quote is valid for 60 days (correct me if im wrong).

I could of answered this in 1 word

SPIN

Edited September 28, 2005 by teddyboy

[Dicky]

Also many people believe that rates are set to continue to come down so are more likely to pay the variable rate and then fix at a lower rate in November or next year.

Err, just hang on a minute there old sport, the US usually sets the rate for the world and guess what?

If we don't follow that inflation will force us to.

There are going to be alot of sad faces in November.

[Economic Sensation]

I thing there is a percentage that are getting mortgage approval now because I honestly feel that the MPC will realise their mistake and put IR back to 4.75% - whilst the mortgage quote is valid for 60 days (correct me if im wrong).

SPIN

Well its obvious that you know what you are talking about and all of the highly paid economists and analysts employed by the banks as well as the Bank of England members who are forecasting that rates are going to fall are wrong!!!! Sorry but unless you have credentials to back up what you think is right i am going to stick with the over-paid hacks who actually get these things right. It amazes me how people on this site think they know better than the highly paid analysts and actual BoE members about economics just because they have read a few posts and are desperate for house prices to crash.

The bank is very unlikely to raise rates again if growth is falling and unemployment is rising, and will only do so if inflation gets out of control, which so far it hasn't. Lower consumer spending alone will pressure inflation and keep it under control, so at the minimum they will leave rates where they are. The Bank of England is also acutely aware that raising rates could send us into recession as it could force the house price crash that you are all so desperate for, increase unemployment and cut growth.

And no the US does not set rates for the whole world, otherwise why have ECB rates been on hold for the last 2-years and why are our rates falling. They influence them but don't set them, otherwise our rates would be rising. They have a different cycle to us, and remember their rates are still .75 basis points below ours and are likely to peak at 4.5%.

Durch I would rather first time buyers were put off by facts rather than figures made up to support a viewpoint.

[apom]

Apom thats gross manipulation of figures. How on earth can you base your figures that everyone took a fixed rate mortgage at 3.5%, the lowest figure, and then put the next round of mortgages at 4.9%, when current rates are 4.5%. For a start a lot of people would not have fixed at 3.5% because it was only there for a few months and secondly there are currently loads of mortgages on the market for 4.19% - 4.65% http://mortgages.charcolonline.co.uk/mortg...?type=fixedrate

If you are basing it on the base rate then more accurately it would be £970 more a year, or £81 a month.

Also many people believe that rates are set to continue to come down so are more likely to pay the variable rate and then fix at a lower rate in November or next year.

Please get your figures right first, genuine first time buyers might actually use this site and believe you

ES

Figures were released by the council of mortgage lenders..

not me..

sorry...

panic.. lol..

bless you.

[HPCheese]

...i am going to stick with the over-paid hacks who actually get these things right.

You must be referring to the economists who predicted this housing boom and the early 90's tech crash...umm...could you recommend an economist who has consistently predicted the market movements over the last decade please, I may believe something they say.

[Economic Sensation]

You must be referring to the economists who predicted this housing boom and the early 90's tech crash...umm...could you recommend an economist who has consistently predicted the market movements over the last decade please, I may believe something they say.

True but consensus opinion on rates is usually better than predictions of a crash. Many of you guys who have been calling for a crash for years must know that by now and it still doesnt faze those on this site who want a 50% crash in the next year.

[HPCheese]

True but consensus opinion on rates is usually better than predictions of a crash. Many of you guys who have been calling for a crash for years must know that by now and it still doesnt faze those on this site who want a 50% crash in the next year.

True, but consensus changes so quickly there's no telling what it will be in a couple of months. In the meantime the MPC may vote to hold rates and we may see them going up in a few months - anything's possible. Not saying I know what's going to happen, but the consensus has been wrong before and sentiment changes very quickly. Admittedly the masses of frontpage headlines by highstreet stores calling for cuts isn't going to help.

[Economic Sensation]

True, but consensus changes so quickly there's no telling what it will be in a couple of months. In the meantime the MPC may vote to hold rates and we may see them going up in a few months - anything's possible. Not saying I know what's going to happen, but the consensus has been wrong before and sentiment changes very quickly. Admittedly the masses of frontpage headlines by highstreet stores calling for cuts isn't going to help.

Very true, but most professional economists are looking at the same information as the Bank of England and have a good idea of how they think. You are right, if inflation figures suddenly come out as being very high it will chance the landscape completely, but thats a big if. OK i will change my wording. On existing figures and expectations interest rates are expected to be cut in November and again next year taking them to 4%.

[rent slave]

While it is true that some members of the Monetary Policy Committee do seem determined to cut rates to stimulate general economic activity, there is no getting away from increasing inflation. The target for the MPC to aim for is 2%- inflation is currently at 2.3% with signs that it will continue to creep up. Whatever the short term response it seems likely that interest rates will have to increase in the medium term to bring inflation under tighter control.

As for economists, have you never heard the saying, "If you laid all the world's economists end to end, you still wouldn't reach a conclusion". I think common sense is called for - if housing is priced beyond the means of those who are expected to buy it, then clearly a correction will have to take place at some point. The only point of debate really is when and by how much. That I accept is anyone's guess!

Well its obvious that you know what you are talking about and all of the highly paid economists and analysts employed by the banks as well as the Bank of England members who are forecasting that rates are going to fall are wrong!!!! Sorry but unless you have credentials to back up what you think is right i am going to stick with the over-paid hacks who actually get these things right. It amazes me how people on this site think they know better than the highly paid analysts and actual BoE members about economics just because they have read a few posts and are desperate for house prices to crash.

The bank is very unlikely to raise rates again if growth is falling and unemployment is rising, and will only do so if inflation gets out of control, which so far it hasn't. Lower consumer spending alone will pressure inflation and keep it under control, so at the minimum they will leave rates where they are. The Bank of England is also acutely aware that raising rates could send us into recession as it could force the house price crash that you are all so desperate for, increase unemployment and cut growth.

And no the US does not set rates for the whole world, otherwise why have ECB rates been on hold for the last 2-years and why are our rates falling. They influence them but don't set them, otherwise our rates would be rising. They have a different cycle to us, and remember their rates are still .75 basis points below ours and are likely to peak at 4.5%.

Durch I would rather first time buyers were put off by facts rather than figures made up to support a viewpoint.

[E Powell]

Very true, but most professional economists are looking at the same information as the Bank of England and have a good idea of how they think. You are right, if inflation figures suddenly come out as being very high it will chance the landscape completely, but thats a big if. OK i will change my wording. On existing figures and expectations interest rates are expected to be cut in November and again next year taking them to 4%.

Economic Sensation

To call members of the MPC professional ecomonists is a joke. These people are friends of

Gordon Bling and will be rewarded for their services, once phoney tony is out office.

[apom]

Am I right in thinking that inflation figures have recently cut out the housing market and also tax.?

If so... as these are two of the biggest expenditures each month.. and their increase would force down the cost of food etc..

Are current inflation figures relevent.?

am I mistaken?

What I am trying to say is that if true inflation is what effects the economy..

Then changing the percieved inflation to remove two areas that have grown hugely. (tax and mortgage)

Will not mean that the economy is not effected by the true inflation.

For example could huge increases mortgage debt and debt cost and Tax burdens potentially impact the hight street... 2/3rds of our economy..

Is this what is happening now?

If this is the case... does that mean that current house prices could not be supported by the economy..

The debt burden caused by this inflation would impact other areas of the economy.. and therefor..

I speculate..

Has true inflation been much higher then percieved for years.. and we are now seeing its effect?

[Economic Sensation]

While it is true that some members of the Monetary Policy Committee do seem determined to cut rates to stimulate general economic activity, there is no getting away from increasing inflation. The target for the MPC to aim for is 2%- inflation is currently at 2.3% with signs that it will continue to creep up. Whatever the short term response it seems likely that interest rates will have to increase in the medium term to bring inflation under tighter control.

As for economists, have you never heard the saying, "If you laid all the world's economists end to end, you still wouldn't reach a conclusion". I think common sense is called for - if housing is priced beyond the means of those who are expected to buy it, then clearly a correction will have to take place at some point. The only point of debate really is when and by how much. That I accept is anyone's guess!

But core inflation fell to 1.7% from 1.8%. This strips out the volatile cost of energy and food and is focused on more by the MPC. If houses are really too overpriced then the crash would already have happened, and is rates come down it is less likely to happen because houses become more affordable. And as i keep on saying they will not raise rates if growth is falling and unemployment is rising, basic economic theory tells you that becaue slower growth and lower consumer spending will lower inflation. Interest rates are raised in periods of increasing growth as a way of controlling inflation.

E Powell the MPC members are not cronies of Brown, they were given independence and do things for economic reasons, and only rarely does politics have an influence. Your just being paranoid. They are actually quite highly thought of in the industry and are less political than most central banks

Apom if inflation figures took into account housing prices, well housing prices are easing so surely that would lower inflation?

[theChuz]

In terms of commodity coverage, CPI excludes a number of items that are included in RPI, mainly related to housing. These include council tax and a range of owner-occupier housing costs such as mortgage interest payments, house depreciation, buildings insurance, estate agents' and conveyancing fees.

http://www.statistics.gov.uk/cci/nugget.asp?id=181

[apom]

But core inflation fell to 1.7% from 1.8%. This strips out the volatile cost of energy and food and is focused on more by the MPC. If houses are really too overpriced then the crash would already have happened, and is rates come down it is less likely to happen because houses become more affordable. And as i keep on saying they will not raise rates if growth is falling and unemployment is rising, basic economic theory tells you that becaue slower growth and lower consumer spending will lower inflation. Interest rates are raised in periods of increasing growth as a way of controlling inflation.

E Powell the MPC members are not cronies of Brown, they were given independence and do things for economic reasons, and only rarely does politics have an influence. Your just being paranoid. They are actually quite highly thought of in the industry and are less political than most central banks

Apom if inflation figures took into account housing prices, well housing prices are easing so surely that would lower inflation?

Only if your playing with figures..

I attempted the maths to the old measures..

seems like we have been running at about 6% for the last few years...

If the conservatives measures were used.

Economic sensation...

Can current house prices be supported within the economy if they stay where they are.

Looking at normal market behaviour over say 5 years..?

can this not cause more debt...?

[right_freds_dead]

think they know better than the highly paid analysts and actual BoE members about economics just because they have read a few posts and are desperate for house prices to crash.

unless its because these 'highly paid analysts' have made some great pensions and investment blunders in the past. maybe its the fact that they cant control inflation or how the public spend. perhaps its simply because they are paid by the banks to make as much from a population as possible.

perhaps we feel their advice is simply vested ?

[marzipan]

could be that the number of loans approved has increased because house prices have FALLEN, therefore making the mortgages more affordable, which in turn means more people are able to get their mortgage approved.