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Bba Mortgage Loans Huge Drop


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Looking for the figures but I think amount loaned went up.

Which suggests that the market is being heavily skewed by top end, or central London most likely.

Anyway, I am sure it's nothing to worry about.

The 5000 drop in loans is probably to do with the rain/jubilee/olympics and certainly not the emerging shtstorm.

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How does this fit in re a predicted drop off after the stamp duty reimposition? Is this just the consequence of the demand having been brought forward?

Undoubtedly would have some effect, however the previous month's figure was revised down also.

A print with a 2 in front of it is real life support stuff.

It looks like a Wil E Coyote moment to me, as the irrepressible forces of gravity finally weigh on this market. That said no one expects the Government to find another way of propping it up, which means they will indeed try.

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Yes they are.

Here's the spin :

LONDON (MNI) - Mortgage approvals slumped in June, suggesting housing market activity will be weak through the summer, British Bankers' Association data show.

The seasonally adjusted number of mortgage approvals plunged to 26,269 in June from 29,567 in May, the lowest outturn since the 26,067 recorded back in January 2009. With the distortions caused by the expiry of the stamp duty holiday in March having faded from picture, these data point to underlying weakness in the housing market.

The net change in amounts of mortgage lending outstanding was Stg342 million on the month in June. Gross mortgage loans totalled Stg7.193 billion in June, down from Stg7.687 billion in May.

"Public holidays and wet weather put a damper on mortgage approvals in June and demand for unsecured household borrowing was also low. Paying off loans or overdrafts and building up deposits is the current consumer ambition," BBA statistics director, David Dooks said.

Mortgage approvals picked up at the start of 2012, with the end March expiry of the stamp duty holiday looming. They stood at 37,645 in January before fading to 31,581 in April, in the wake of the stamp duty expiry. June mortgage approvals were 20.5% down on a year ago.

The unsecured June borrowing figures showed a small rise in net credit card credit, which was up Stg255 million on the month. The amount of overdraft lending outstanding fell to Stg8.45 billion from Stg8.661 billion in May.

The amount of structured personal loans outstanding fell to Stg36.582 billion from May's Stg37.16 billion.

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Undoubtedly would have some effect, however the previous month's figure was revised down also.

A print with a 2 in front of it is real life support stuff.

It looks like a Wil E Coyote moment to me, as the irrepressible forces of gravity finally weigh on this market. That said no one expects the Government to find another way of propping it up, which means they will indeed try.

BoE approvals running >50k. Need to drop <40k for sustained fails in indices (for what they're worth) IMO. Find out on 30/7.

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Panic on the phones at Foxtons

Savills, Knight Frank, Countrywide...

I wonder to myself,

Could prices ever be sane again?

Unlikely. They will be selling to cash buyers, largely from Europe. Apparently the French are now stampeding over.

Mortgage numbers dropping is a sign of the growing inequality as those with the money pay cash.

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They've acted already. c. £100bn 'funding for lending'...extra cheap loans into the housing market. Given the total mortgage market is worth £1.3 trillion I believe, that is BIG. All depends on the extent to which it is sucked by re-mortgaging.

I suspect this money will be funneled into corespondent loans for quality money already lent.

i.e. if you've lent at 60% LTV to a good payer and you've securitised the loan on the money markets Libor +.25 why not get rid of that money market loan and use the BOE's cheaper money. They'll be forcing remortgages on people.

Ultimately, the lack of mortgage numbers is down to two things : property prices too high, mortgage criteria too strict.

So fiddle with either of those and you'll get more loans.

Pushing more money in to a system where the demand has already been broken due to above won't work as you can't stimulate the demand.

Now if they re-introduce 90% liar loans then buy anything and as many as you can.

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Not surprising really, I thought all the spare housing capacity in London has been sold.....when credit is scare and interest rates falling people are hanging on to the debt they have already got....the rest, either no one wants, got better places to put it or can't raise the huge deposits required to buy it. ;)

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You know the more I think about it, this is where that scurrillous story in the Express is from.

The banks have to be seen to be using that 100Bn for lending money.

The Express is quoting more joy for mortgage payers.

I bet we see 'forced' remortgages.

That way the banks can say they've lent the money, the Government can say we are helping, and everyone who already has a stinking great loan gets it slightly cheaper (although watch that the banks will ensure their cut goes up.).

Lending to new buyers ? Unlikely.

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The BBC take on the data:

http://www.bbc.co.uk/news/business-18968325

They are using all the excuses apart from the dog ate my homework as reasons for the poor figures:

Wet weather slows mortgage market, says BBA

Activity in the UK mortgage market was dampened in June by the spell of bad weather, a banking group has said. The number of mortgages approved for house purchases dropped by 11% in June compared with the previous month, to 26,269, the British Bankers' Association (BBA) said.

Last month was the UK's wettest June since records began in 1910, Met Office figures showed.

The BBA figures also showed that consumers were reducing debts on loans.

New borrowing on personal loans and overdrafts was outstripped by repayments by £476m in June, the figures showed.

"Paying off loans or overdrafts and building up deposits is the current consumer ambition," said David Dooks, BBA statistics director.

Holiday effect Mortgage activity has been subdued since the end of March. The BBA said that a number of events took the heat out of the market even more in June.

"June's approvals numbers were affected by the Diamond Jubilee celebrations, Euro 2012 [football tournament], and the wet weather," the BBA said. The number of mortgage approvals for house purchases was 20.5% lower than the same month a year earlier, and was well below the average of the six months to June 2012.

Meanwhile, gross mortgage lending of £7.2bn in June was also below the six-month average.

"The ongoing eurozone crisis, which has stepped up a level in the past week, will continue to undermine consumer confidence and encourage buyers and sellers to sit on their hands until there is significant improvement," said Mark Harris, chief executive of mortgage broker SPF Private Clients.

"Any recovery in the housing market remains a long way off."

Cue next month the Olympics and the hot spell in London.

And the August / September data: Olympics, Paralympics, summer hols, back to school...

As an aside (in London) the Olympic route network combined with 1,300 traffic light reprogrammings off route have completely rogered traffic flow in London, thus making EA lives very difficult.:lol:

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Or alternatively the banks cut existing lending to make maintaining or increasing the current level easier once the scheme has started and use the new money to replace existing more expensive sources.

Offering fixed 2-5 year fixed rate re-mortgages if the bank have cheap money makes sense too, the devil is of course in the detail of which the metrics are used to measure the lending.

You know the more I think about it, this is where that scurrillous story in the Express is from.

The banks have to be seen to be using that 100Bn for lending money.

The Express is quoting more joy for mortgage payers.

I bet we see 'forced' remortgages.

That way the banks can say they've lent the money, the Government can say we are helping, and everyone who already has a stinking great loan gets it slightly cheaper (although watch that the banks will ensure their cut goes up.).

Lending to new buyers ? Unlikely.

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They've acted already. c. £100bn 'funding for lending'...extra cheap loans into the housing market. Given the total mortgage market is worth £1.3 trillion I believe, that is BIG. All depends on the extent to which it is sucked by re-mortgaging.

Not sure on the criteria for FFL but one possibility is for lenders to raise SVRs further in order to 'encourage' borrowers with equity to remortgage and thus get their lending figures up. Of course those with low/no equity stuck on them would be even more royaly focked. How very unintended that would be.

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cue someone posts that we need the cml data to have a complete view of the market

then a discussion of who exactly is in the BBA...and is it down to Santander...but Nationwide have picked up the baton...etc etc

(I've been here too long B))

So have I B)

BBA = LLoyds, RBS, Barclays, HSBC, Santander and Northern Rock

BoE trends in lending = BBA - Northern Rock but + Nationwide (BoE says this represents 75% of the mortgage market)

CML = BBA + Nationwide +other building societies and most but not all specialist lenders

The last comparable month was May 2012

Total Loan Amount | # Loans | average mortgage amount

BBA £5.926 bn | 36,414 | £162,700

CML £7.200 bn | 48,300 | £149,000

BoE £5,600 bn

my calc's:

CML ex BBA £1.274 bn | 11,886 | £107,200

On BoE estimates there is £260m a month outside the CML data

Interestingly the June BBA data the average loan went up to £166.6k.

The banks appear to be doing a lot of the high value lending and the former Building societies the lower value stuff.

Edited by koala_bear
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Now if they re-introduce 90% liar loans then buy anything and as many as you can.

I drove past a development at the weekend the had a section on their sign saying 95% mortgages available. Wouldn't surprise me if they are just loaning you a percentage seperately but I'm sure there are plenty of people who would be attracted by that number.

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http://www.bba.org.uk/statistics/article/june-2012-figures-for-the-main-high-street-banks/high-street-banking/

Interesting stuff, net secured lending for the first six months of the year is comfortably the lowest on record (going back to 1998 inclusive), on either a seasonally-adjusted or nsa basis. H1 2012 net lending was £1.1Billion, the next lowest is H1 1998 with £3.6 Billion.

The average loan value hit a new high too, up to £166,600, up on the previous record set last month of £162,700, these being the only two months in excess of £160k average loan value. The 0.9% annual growth rate in lending is the lowest ever seen too.

BBA members structured personal loan books continue to shrink, with the outstanding balance now at levels last seen in February 2000. The current monthly outstanding balance is £36.6 billion; the peak of £67.5 billion was seen in Feb 2008 and the lowest figure on record is Sept 1997 (the first month on record) at £28.1 billion. At the rate of decline seen since peak, the September 1997 figure will be equalled in around a year.

Credit card balances have grown since the onset of the crisis, but at reducing rates, now around 5% per annum. Amount outstanding is £35.2 billion, guess people make up shortfalls in other areas by spending on plastic instead as it doesn't need approval from someone who will likely say no if a personal loan was requested.

Remains to be seen how 'Funding for lending' will alter the landscape.

Edited by cheeznbreed
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