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Danske - High Ltv Lending

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So Danske makes a £93 million loss in 2012.

I noticed over in MSE there's one poster who's trying for a 95% LTV mortgage on a new build and looks like the advisor said this will be no problem. :blink: The posted is also on probation with a new job.

Now I was lead to believe that one of the "problems" for house sales here was banks being overly cautious with LTV requirements. Seems this isn't really the case. How do people feel about high LTV products? Most of the big banks set caps on new build LTV to take account of the inevitable loss of the new build premium. What do Danske know that HSBC don't know? I know which bank managed to avoid the worst of the crisis and it wasn't a Danish one.

Is this why we are seeing an increase in transactions? Will it last?

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I notice they sponsor Property Pal.

I recall in dealings last year they used RV (or below) as a guide and use a 4% interest rate rise as a scenario to test affordability. They may feel with these 2 risks "covered" ie realistic pricing at market levels and affordability that, in some cases, they can be a bit more flexible on LTVs. In fairness Govt's are pushing low LTV verbally, and perhaps soon practically.

The Northern - now shiny new Danske - didn't get as badly burned on property/land as Ulster (momentum etc) and were a little (but not perhaps a lot) more cautions (or just lucky?) is my understanding. I'd be surprised if they hadn't learned from this and remained cautious and if the local small time management can't see this, I'm sure their danish masters will - given the heartache this adventure has given, and continues to give them.

Edited by Shotoflight

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better to be lending 95% when houses are 100k rather than 250k thats for sure.

I still think EVERY house purchaser should have to show they are capable of saving 10% and hence min 90% LTV but hey ho what do i know successive govts are intent on proping up prices

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So Danske makes a £93 million loss in 2012.

I noticed over in MSE there's one poster who's trying for a 95% LTV mortgage on a new build and looks like the advisor said this will be no problem. :blink: The posted is also on probation with a new job.

Now I was lead to believe that one of the "problems" for house sales here was banks being overly cautious with LTV requirements. Seems this isn't really the case. How do people feel about high LTV products? Most of the big banks set caps on new build LTV to take account of the inevitable loss of the new build premium. What do Danske know that HSBC don't know? I know which bank managed to avoid the worst of the crisis and it wasn't a Danish one.

Is this why we are seeing an increase in transactions? Will it last?

The banks dont like lending high LTV products because of basel3 and its requirement, along with that of the FSA to increase the amount of capital sit aside against higher L2v products. The old rule of thumb on fraction banking is now curtailed. Therefore, as it have been explained to me the banks can lend out many 75% mortgages for the same cash reserve as one 95% mortgage.

There is no new build premium (the should be but there isnt) quite often new build are priced lower than comparables and this a frustration for us when valuers use 20 or 3 year old houses as comparables.

Danske have never removed their 95% product since the crash. They simply only lend it to people who dont need it. The figures from the CML show the average deposit requirement still remains at around 20%.

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There is no new build premium (the should be but there isnt) quite often new build are priced lower than comparables and this a frustration for us when valuers use 20 or 3 year old houses as comparables.

Yes there is. Why do you think every other lender requires a 15%+ deposit on new builds?

Danske have never removed their 95% product since the crash. They simply only lend it to people who dont need it.

Define need? The OP isn't able to save a 10" deposit. Similar products aren't available with other lenders.

By definition, they need this.

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Yes there is. Why do you think every other lender requires a 15%+ deposit on new builds?

Define need? The OP isn't able to save a 10" deposit. Similar products aren't available with other lenders.

By definition, they need this.

I checked both the Danske and UB websites and can see nothing on separate products, lending rates or L2V for New Build.

I am sure the applicant needs the 5% deposit product mentioned in the earlier post. There are many applicants that need it. The Bank, for obvious reasons wont base their decision on need. Just because the product is available does not mean it is openly available to those who 'need' it.

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I checked both the Danske and UB websites and can see nothing on separate products, lending rates or L2V for New Build.

I am sure the applicant needs the 5% deposit product mentioned in the earlier post. There are many applicants that need it. The Bank, for obvious reasons wont base their decision on need. Just because the product is available does not mean it is openly available to those who 'need' it.

HSBC, santander, nationwide, natwest, loyds, virgin, Leeds and Halifax all have LTV restrictions.

Ulster have momentum. They have offered 95% for years. Can't imaging that's worked out well for them. Can you?

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HSBC, santander, nationwide, natwest, loyds, virgin, Leeds and Halifax all have LTV restrictions.

Ulster have momentum. They have offered 95% for years. Can't imaging that's worked out well for them. Can you?

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HSBC, santander, nationwide, natwest, loyds, virgin, Leeds and Halifax all have LTV restrictions.

Ulster have momentum. They have offered 95% for years. Can't imaging that's worked out well for them. Can you?

So every lender except Northern and Ulster.

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I'm sure others offer it, but they obviously are the exception.

True,

I think all the local lenders Northern, UB, First Trust (who are now in the market again), the progressive and BoI dont have a new build L2V restriction. BoI may have a restriction on apartments.

This is a UK thing and is particularly around Apartments. There is a history to all this and I think Abbey got stung with a particular type of pricing of apartments in Manchester. To me, the Abbey were right to impose this after what happened. I was never really a problem here but policy is policy.

The local banks probably take up more than 50% on the newbuild market. If you have 20% or more of a deposit you probably can get a better deal from the UK providers.

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True,

I think all the local lenders Northern, UB, First Trust (who are now in the market again), the progressive and BoI dont have a new build L2V restriction. BoI may have a restriction on apartments.

This is a UK thing and is particularly around Apartments. There is a history to all this and I think Abbey got stung with a particular type of pricing of apartments in Manchester. To me, the Abbey were right to impose this after what happened. I was never really a problem here but policy is policy.

The local banks probably take up more than 50% on the newbuild market. If you have 20% or more of a deposit you probably can get a better deal from the UK providers.

The local banks probably make up more than 50% of sales because they obviously don't have such strict lending requirements. I can see why New Buy/First Buy wasn’t successful in N.I. (ZERO UPTAKE). If local lenders still offer recklessly high new build LTVs, there was little need for government sponsored sub-prime lending.

Of course we still have momentum and co-ownership for the truly desperate.

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The local banks probably make up more than 50% of sales because they obviously don't have such strict lending requirements. I can see why New Buy/First Buy wasn’t successful in N.I. (ZERO UPTAKE). If local lenders still offer recklessly high new build LTVs, there was little need for government sponsored sub-prime lending.

Of course we still have momentum and co-ownership for the truly desperate.

The local banks make up a large percentage of lending here as they are, well local and people have banked with them for years.

I dont think any bank is approving recklessly high LTV's or anything like it.

I get mixed up between the two schemes. One was never released in NI as although we as tax payers pay into it it was reserved for the mainland. The second was given a budget of £3m and administered by the local government with one announcement in October and only open to march the following year. It was not promoted and many mortgage brokers knew little of nothing about it.

people who wish to purchase there own home, but dont have the large deposits have to resort to co-ownership and staircase up.

Edited by BelfastVI

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Or save

Yes certainly, by all means save. With average deposits of £20k and over this can take many years whilst paying £400 or £500 per month in rent. People(who want to purchase) have been putting this off for years, whilst saving, may be getting frustrated. This is particularly evident when kids arrive and the wish to put roots down appears. I agree people can happy do this whilst renting but others want to purchase and whilst the banks hold back co-ownership is a solution.

But you are correct waiting and saving is an option. However, it delays the end of your mortgage too.

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Not necessarily. Whilst prices are still falling, which they are, waiting means a smaller mortgage or possibly a shorter term.

that has been a valid argument. However, whilst you wait you pay rent. You also push back the start and thus the completion of your mortgage. Its a decision people have been making, mostly I imagine because of the lack of sufficient deposit. I am not convinced you are making a substantial saving if one at all.

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that has been a valid argument. However, whilst you wait you pay rent. You also push back the start and thus the completion of your mortgage. Its a decision people have been making, mostly I imagine because of the lack of sufficient deposit. I am not convinced you are making a substantial saving if one at all.

Since 2007, the annual fall in prices has been greater by far than the annual cost of rent. Factor in the usual interest, rates and maintenance costs associated with buying and you're so far ahead by renting it's not worth thinking about.

Edited by yadayada

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Since 2007, the annual fall in prices has been greater by far than the annual cost of rent. Factor in the usual interest, rates and maintenance costs associated with buying and you're so far ahead by renting it's not worth thinking about.

Certainly comparing with peak prices and 50% drops this is the case. However, currently the falls have been significantly less and are largely due to the effect the increasing distressed and auction sales have been having on some surveys. Most would agree that this decision is getting more difficult to make.

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Certainly comparing with peak prices and 50% drops this is the case. However, currently the falls have been significantly less and are largely due to the effect the increasing distressed and auction sales have been having on some surveys. Most would agree that this decision is getting more difficult to make.

Do the surveys not smooth out high/low prices or does such data devalue them and render them all but useless/unrepresentative? Perhaps repos and auctions have stabilised and its now the middle market's turn to drive the falls - in the absence of smoothing?

Edited by Shotoflight

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Again, no. Smaller mortgage, better rates available with higher deposit, overpaying, shorter loan term- some of the many things you are conveniently ignoring.

Your blinkered view shows a startling lack of understanding. Remember PRICES ARE STILL FALLING.

You seem to ignore that too.

As someone who is selling quite a few houses across different sites I have a fair idea of what house prices have been doing.

I am willing to agree that buying is not for everyone and renting has its place, particularly lately. I do believe that is changing. The increasing number of reported sales would appear to indicate that. People who purchase now think long and hard about it. They have been bombarded with bad housing stories for some time (the opposite to the boom days) and they are weighing up the pros and cons and still purchasing.

I dont believe they are blinkered at all. It is my belief that this number would dramatically increase with the return of 10% deposits.

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As someone who is selling quite a few houses across different sites I have a fair idea of what house prices have been doing.

I dont believe they are blinkered at all. It is my belief that this number would dramatically increase with the return of 10% deposits.

And the number of repos and distressed mortgage debtors would dramatically increase with the return of normal interest rates (or even a marginal rise) as would further price falls and negative equity

Edited by Shotoflight

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You should read the title of this thread VI. 95% deposits are alive and well. Even the progressive mentioned in another thread offer 90%. You mentioned 50% of your sales are by buyers using local banks. Locals appear to be the only ones silly enough to be lending at 95% on new builds. So why are sales not up more? Is demand the issue? I'm betting its price.

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Certainly comparing with peak prices and 50% drops this is the case. However, currently the falls have been significantly less and are largely due to the effect the increasing distressed and auction sales have been having on some surveys. Most would agree that this decision is getting more difficult to make.

Yes, but just a couple of percent of depreciation is enough to leave the renter comfortably ahead. Even static prices would still make buying less attractive, and that includes the lucky few who can buy a house without a mortgage. Their capital sum would be much better employed lying in National Savings, while someone else pays the rates bill and insurance.

Edited by yadayada

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You should read the title of this thread VI. 95% deposits are alive and well. Even the progressive mentioned in another thread offer 90%. You mentioned 50% of your sales are by buyers using local banks. Locals appear to be the only ones silly enough to be lending at 95% on new builds. So why are sales not up more? Is demand the issue? I'm betting its price.

As explained before offering products is not the same as approving them. The CML shows that the average deposit rate in NI is around 20%. If you have facts to show otherwise please provide.

The Progressive is a local bank. They don't have and never had a separate policy on new builds. They posted £3.5m of profit last year. What ever they have been doing must not have been so silly after all.

The average deposit requirement of 20% is, in my view the barrier to increased sales.

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  • 239 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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