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TheCountOfNowhere

Mortgage Lending Surge...

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Get this:

"UK mortgage lending up by a fifth, says lenders' group"

"Figures from the Council of Mortgage Lenders (CML) recorded gross mortgage lending of £14.7bn in May.

This was up 21% on the previous month and 17% higher than in May last year, assisted by government schemes to boost the market."

Meanwhile the main lenders have no money and need to plug a funding gap and a credit crunch is starting in China.

WTF :blink:

They do go on to sayL

"However, the UK housing market is still driven by rising sales and prices in the South East of England and especially London."

So I'm guessing they have frightened the last of the greater fools onto joing the pyramid in the S.E. before they miss out....

Still..scary numbers!!!

EDIT: Can anyone explain this ? We'll have to wait 3 months for the Land registry figures to see how it translate into actual sales.

My only explanation is:

1.2 * 0 = 0

Edited by TheCountOfNowhere

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WTF indeed

http://www.cml.org.uk/cml/media/press/3581

The Council of Mortgage Lenders estimates that total gross mortgage lending in May increased to £14.7 billion, representing a rise of 21% from £12.2 billion in April and 17% higher than the total of £12.6 billion in May 2012. This is the highest monthly estimate for gross mortgage lending since October 2008.

Commenting on market conditions in this month's Market Commentary, CML chief economist Bob Pannell observes:

“The imminent change of guard at the Bank of England takes place against the backdrop of a modestly improving UK economy, albeit one that appears to rest upon a pick-up in consumer spending and a recovering housing market.

“Funding conditions, helped by the funding for lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.

“While the direction of travel is clear and fits well with the more positive housing surveys from RICS and others, our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year”.

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.

2. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly Regulated Mortgage Survey and gross lending press releases relate to mortgage advances only. A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender.

3. Next month’s gross lending press release and market commentary will be published on 18 July 2013.

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EDIT: Can anyone explain this ? We'll have to wait 3 months for the Land registry figures to see how it translate into actual sales.

This is an initial estimate. Wait till the full data from the CML or even more usefully from the BSA and BBA. It may just be that lots of people have re-mortgaged! Until we get more data we can't tell.

Edit to add

Just looked at the BSA April data (the most granular available to give a flavour):

This would have to be mostly nationwide at 65% of BSA market share...

# approvals in april 2013 up 41% on April 2012

Principle repayments (total inc regular monthly and lump sums) up 13% on the average for the last 3 years and the 2nd highest month this decade.

2013 YTD repayments up 29% on 2012 comparable months

Gross Lending + 54.9% on April 2012

Net Lending +45.7% on the average monthly for the last year

Nationwide lending like a bumble bee on heat that the moment...

Edited by koala_bear

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Ah, don't worry about it. It will all blow over/up in a year or two.

In a way you should be cheering new houses being built and prices rocketing, as that's what happened in Ireland before the final collapse.

The UK is a long way off Ireland but if you would like extrapolate...

The BTL brigade here aren't laughing now. Anyone who bought after 2000 is crying into their cereal - the same will happen in the UK, it just go uninterrupted in 2008.

Once prices/lengine peak out everything is back to square 1, but the props have already been used.

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This is an initial estimate. Wait till the full data from the CML or even more usefully from the BSA and BBA. It may just be that lots of people have re-mortgaged! Until we get more data we can't tell.

Edit to add

Just looked at the BSA April data (the most granular available to give a flavour):

This would have to be mostly nationwide at 65% of BSA market share...

# approvals in april 2013 up 41% on April 2012

Principle repayments (total inc regular monthly and lump sums) up 13% on the average for the last 3 years and the 2nd highest month this decade.

2013 YTD repayments up 29% on 2012 comparable months

Gross Lending + 54.9% on April 2012

Net Lending +45.7% on the average monthly for the last year

Nationwide lending like a bumble bee on heat that the moment...

But on another thread Nationwide need to raise capital #doesnotcompute

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But on another thread Nationwide need to raise capital #doesnotcompute

So they are increasing the lending of money they don't have to people who can't repay. And the government is chipping in 20% of every bad loan.

The problem for HPC is that house price rises are becoming a matter of national survival. The financial system, and even the state, is so heavily invested in the scam that HPC now will wipe the country out and leave us nationally destitute. Perhaps we are already destitute and don't know it yet?

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Thanks for that chart. Media releases never give you the full picture.

A 2yr new high break-out from the £15m-£10m range would however be a significant event.

Wake me up when it is above £17m.

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I had a think about this on the way to work today.

The government give away £80 Billion of our money and lending goes up £2 billion.

Somebody, somewhere, is taking the P888

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So they are increasing the lending of money they don't have to people who can't repay. And the government is chipping in 20% of every bad loan.

The problem for HPC is that house price rises are becoming a matter of national survival. The financial system, and even the state, is so heavily invested in the scam that HPC now will wipe the country out and leave us nationally destitute. Perhaps we are already destitute and don't know it yet?

This is my current thinking. All I see are retrograde measures to give the illusion of power and control.

The help to buy scheme is blatantly far worse then the sub prime lending in fe US (of course we never did it here), the results are known and plain.

If we has anything to protect we wouldn't be doing this, the destitution and lack of control means the gov will just do whatever, it doesn't matter.

Depressing.

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This is my current thinking. All I see are retrograde measures to give the illusion of power and control.

The help to buy scheme is blatantly far worse then the sub prime lending in fe US (of course we never did it here), the results are known and plain.

If we has anything to protect we wouldn't be doing this, the destitution and lack of control means the gov will just do whatever, it doesn't matter.

Depressing.

The government like to give the impression they are in control, when in fact their position is rather fragile and can change quite quickly.

Several governments have toppled over the last 2 or 3 years.

Several western European governments were replaced by a meritocracy at the (last) peak of the euro crisis.

If you ask me, there are too many people governed by too few people. We either need less people or more localized smaller streamlined government. There are too many fingers in too few pies and the people at the bottom are getting sick of it.

Edited by TheCountOfNowhere

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But on another thread Nationwide need to raise capital #doesnotcompute

Exactly - this aligns with Nationwide surprise at having to raise more capital. They have been lending as if they weren't going to need more for the existing activities.

Possible outcomes:

1 ) Argue with the BoE till they agree they won't need any more - unlikely to be fully successful as they will eventually have to comply with Basel III in 2019.

2 ) Reverse the existing FLS generated spike in lending - the question is how soft a landing they go for i.e. gentle reduction or turn off the taps ASAP. Making a quick decision here is key to avoiding making the problem bigger carrying on lending massively for 3 months in the hope that Carney will fold might not be the best option.

Barclays appears to be in similar position.

Edited by koala_bear

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Exactly - this aligns with Nationwide surprise at having to raise more capital. They have been lending as if they weren't going to need more for the existing activities.

Possible outcomes:

1 ) Argue with the BoE till they agree they won't need any more - unlikely to be fully successful as they will eventually have to comply with Basel III in 2019.

2 ) Reverse the existing FLS generated spike in lending - the question is how soft a landing they go for i.e. gentle reduction or turn off the taps ASAP. Making a quick decision here is key to avoiding making the problem bigger carrying on lending massively for 3 months in the hope that Carney will fold might not be the best option.

Barclays appears to be in similar position.

Wonder how long this deal will last in light of the above:

http://www.telegraph.co.uk/finance/personalfinance/10132744/Nationwide-launches-lowest-fixed-landlords-mortgage.html

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From Twitter: "Wells Fargo website shows its mortgage rate to 4.5% at 11 a.m. from 4.38% at 7 a.m. vs. 4.13% on June 18 and 3.88% on May 22."

See what happens to mortgage lending here when we get some of that...

And when will that happen? Presumably capital flows are going away from UK bonds and mortgage lending to more tasty returns... which I assume means our currency will be further trashed.

Might buy some more shares then.

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Wonder how long this deal will last in light of the above:

http://www.telegraph...s-mortgage.html

Hopefully not that long - though they might just be able to count that as SME lending which gets prioritised under the tweaked FLS rules to keep St Vincent de Cable happy.

...but that deal should generate some tasty upfront fees for NW though so it might just be nearly neutral capital wise if they use all the upfront profit as capital and is relatively low risk at 60% LTV.

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From that chart earlier in the thread it's clear why they say stuff like highest lending since 2009 or lending up by a fifth because if they went further back it would be something like lending at around year 2000 levels - which doesn't sound so good.

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From that chart earlier in the thread it's clear why they say stuff like highest lending since 2009 or lending up by a fifth because if they went further back it would be something like lending at around year 2000 levels - which doesn't sound so good.

Yep, back to 2000-2001 ;)

Gross_ML_BackTo2001_zpsfb790779.jpg

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And when will that happen? Presumably capital flows are going away from UK bonds and mortgage lending to more tasty returns... which I assume means our currency will be further trashed.

Might buy some more shares then.

yep that did great whilst your currency was being trashed last time against the dollar in 2008 apart from the 30% fall in currency on top of the 50% fall in share prices, maybe this time itll be different and theyll be an equities surge whilst reserve currency risk off positions are being accumulated :rolleyes:

Edited by georgia o'keeffe

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yep that did great whilst your currency was being trashed last time against the dollar in 2008 apart from the 30% fall in currency on top of the 50% fall in share prices, maybe this time itll be different and theyll be an equities surge whilst reserve currency risk off positions are being accumulated :rolleyes:

You're probably right, but I bought into the SM about 15 months ago in chunks every couple of months. I don't mind losing a bit, I see it as evidence that interest rates will go up, and therefore other asset prices will fall.

Where else can I put it? It's not like holding cash isn't risky either...

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Exactly - this aligns with Nationwide surprise at having to raise more capital. They have been lending as if they weren't going to need more for the existing activities.

Possible outcomes:

1 ) Argue with the BoE till they agree they won't need any more - unlikely to be fully successful as they will eventually have to comply with Basel III in 2019.

2 ) Reverse the existing FLS generated spike in lending - the question is how soft a landing they go for i.e. gentle reduction or turn off the taps ASAP. Making a quick decision here is key to avoiding making the problem bigger carrying on lending massively for 3 months in the hope that Carney will fold might not be the best option.

Barclays appears to be in similar position.

Isn't that going to screw up their calcs quite badly ?

I thought there was some issue with FLS in the respect that if they cut the amount they lend their interest rate goes up ?

The whole thing is completely schizophrenic. Sooner or later the banks will say screw this, why should we bother. Either that or they will just lend out at the highest penalty rate.

Edited by Gigantic Purple Slug

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Hopefully not that long - though they might just be able to count that as SME lending which gets prioritised under the tweaked FLS rules to keep St Vincent de Cable happy.

...but that deal should generate some tasty upfront fees for NW though so it might just be nearly neutral capital wise if they use all the upfront profit as capital and is relatively low risk at 60% LTV.

I wonder whether that deal would have seen the light of day if the report citing Nationwide as having a shortage was released a few days prior. 60% LTV is worth noting as you say though.

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You're probably right, but I bought into the SM about 15 months ago in chunks every couple of months. I don't mind losing a bit, I see it as evidence that interest rates will go up, and therefore other asset prices will fall.

Where else can I put it? It's not like holding cash isn't risky either...

everything is risky, which is exactly as it should be

Edited by georgia o'keeffe

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  • 244 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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