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Article Regarding The Uk's Distorted Housing Market

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My ideas so far

On the supply side factors that have caused supply to increase, but by less than it should have done

1. Lender forbearance

2. Welfare benefits which allow the unemployed to pay their mortgage

On the demand side - factors that have artifically inflated demand

1. Housing benefit

2. TBTF / Glass-Steigall / suicide banking

3. Low interest rates

Have I missed anything?

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Think it was in Eric Pebbles, sig, but the old sky video of self cert buyers being encouraged to lie about their income.

There should be hundreds of mortgage brokers in prison by now, but i doubt there are any...

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Think it was in Eric Pebbles, sig, but the old sky video of self cert buyers being encouraged to lie about their income.

There should be hundreds of mortgage brokers in prison by now, but i doubt there are any...

And it's still happening a collegue of mine saw a broker last week. He said to borrow more all he needs is false payslips and to pay in £2000 per month for three months before applying so the bank statements match up. Then he can borrow 9 times his income! I was shocked!

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My ideas so far

On the supply side factors that have caused supply to increase, but by less than it should have done

1. Lender forbearance

2. Welfare benefits which allow the unemployed to pay their mortgage

On the demand side - factors that have artifically inflated demand

1. Housing benefit

2. TBTF / Glass-Steigall / suicide banking

3. Low interest rates

Have I missed anything?

Supply side: restrictive planning policy

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And it's still happening a collegue of mine saw a broker last week. He said to borrow more all he needs is false payslips and to pay in £2000 per month for three months before applying so the bank statements match up. Then he can borrow 9 times his income! I was shocked!

Amazing, this should be a thread in its own right!

Who was the lender?

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And it's still happening a collegue of mine saw a broker last week. He said to borrow more all he needs is false payslips and to pay in £2000 per month for three months before applying so the bank statements match up. Then he can borrow 9 times his income! I was shocked!

Failure of regulators - Clearly what should happen is Self-employed are able to borrow as anyone else - with earnings taken as those stated for HMRC tax purposes. This is so straightforward and clear, and yet not remotely imposed by regulators or lenders

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Amazing, this should be a thread in its own right!

Who was the lender?

Ill see if I can get some more details and post a new thread on later.

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Ill see if I can get some more details and post a new thread on later.

nah, at 2.99% its sensible lending.

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Failure of regulators - Clearly what should happen is Self-employed are able to borrow as anyone else - with earnings taken as those stated for HMRC tax purposes. This is so straightforward and clear, and yet not remotely imposed by regulators or lenders

What about tax-exempt earnings?

Mine will be in four figures this tax year. In fact I think they'll top the £1k next month! B) Some people have very much higher tax-free investments.

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My ideas so far

On the supply side factors that have caused supply to increase, but by less than it should have done

1. Lender forbearance

2. Welfare benefits which allow the unemployed to pay their mortgage

On the demand side - factors that have artifically inflated demand

1. Housing benefit

2. TBTF / Glass-Steigall / suicide banking

3. Low interest rates

Have I missed anything?

1. Housing benefit has not caused it, just propaganda set up by a few to get the public to back the cuts hitting the poor rather than hitting the rich, and you all are falling for it.

Whats caused this was the lack of social homes, the easy to which anyone can buy a home in the UK( this included no british passport holders), the easy of credit and most important off all the push of traditional social renters into the private market, reducing demand on the state but increase demand in the private sector.

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In London and the South East we have

1. Small flats in large developments built instead of family houses or small houses or even family sized apartments. Lack of quality new housing in desirable areas close to transport.

2. Lots of "investment" from abroad. I'm renting in a development of new builds that was marketed to people from aboard. Flats were bought as holiday homes or "buy to sit". Lots of empty properties.

3. Older people in the desirable large houses in good areas close to transport and shops etc. Older people using their homes as the basis to buy BTL's and become LL's

4. Developments built for the over 55's

5. Prices went up and up more quickly than FTB'ers could save. First time buyers needed to save a deposit but this went up as the prices did. Already wealthy investors (like the Greek tycoon who bought flats in my block didn't have that worry). UK BTL Investors (often older people as above) didn't have this problem as their existing homes escalated in price at the same time. My LL had a huge home with little mortgage left and it is escalated in value, was able to buy flats on this.

6. UK currency became cheaper (foreign buyers)

Edited by Flopsy

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1. Housing benefit has not caused it, just propaganda set up by a few to get the public to back the cuts hitting the poor rather than hitting the rich, and you all are falling for it.

Whats caused this was the lack of social homes, the easy to which anyone can buy a home in the UK( this included no british passport holders), the easy of credit and most important off all the push of traditional social renters into the private market, reducing demand on the state but increase demand in the private sector.

Err.... what? So the social renters being paid for by housing benefit caused it, but housing benefit didn't? Have I read that right?

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3. Older people in the desirable large houses in good areas close to transport and shops etc. Older people using their homes as the basis to buy BTL's and become LL's

That is a big one IMO one debt free house became three or four highly leveraged interest only assets...the rents pay the bills....how to get rich using other peoples money....famous last words. ;)

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The bubble sentiment:- Prices were seen as going to continue to go up so property became an investment. If you weren't quick enough you would miss the boat and be watching all those who bought becoming rich just from their 'investment'.

Peer pressure.

The wish to be 'middle class' by owning ones own home and to be respected as a property owner.

BTL and the tax breaks given to BTLers.

Poor legal protection for renters.

Reduction of building of social housing.

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It's all about lending.

First the FSA stood aside while we had such as Northern Rock's 125% mortgages and then when they started to rein it in the government blocked them.

Latest FSA figures on the percentage of non verified income mortgages

Q1 2010: 42.60%

Q2 2010: 37.38%

Q3 2010: 32.44%

Q4 2010: 30.10%

Q1 2011: 30.40%

Q1 2011 the percentage of potential liar lons has actually edged up.

The 5% reductions per quarter stopped in Q4 2010 coinciding with November when Grant Shapps said restricting mortgages "was like shutting the stable door after the horse has bolted" and the FSA were "going too far".

http://www.independent.co.uk/news/business/news/i-would-have-been-denied-mortgage-says-minister-2145051.html

Then Cameron called on lenders to return to 'respectable' bubble lending in order to stimulate growth.

http://www.dailymail.co.uk/news/article-1344568/The-housing-market-stuck-David-Cameron-criticises-excessive-home-loan-restrictions.html

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Think it was in Eric Pebbles, sig, but the old sky video of self cert buyers being encouraged to lie about their income.

There should be hundreds of mortgage brokers in prison by now, but i doubt there are any...

:rolleyes::rolleyes::rolleyes:

How else can 98% of ordinary folk "afford" pwoperty...? :rolleyes:

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My ideas so far

On the supply side factors that have caused supply to increase, but by less than it should have done

1. Lender forbearance

2. Welfare benefits which allow the unemployed to pay their mortgage

On the demand side - factors that have artifically inflated demand

1. Housing benefit

2. TBTF / Glass-Steigall / suicide banking

3. Low interest rates

Have I missed anything?

ON the supply side we have lenders withholding repossessions from the market in SPVs which are at least partially funded by "special" programs. They ought to release them onto the market to accelerate the process whereby volumes reach a sufficient level that we can safely declare that marginal transactions reflect the market clearing price.

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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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