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Bergy100

Mmr To Dampen Prices Further?

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So just wondering if anyone has begun a mortgage application under the new MMR rules yet and if so could they share any anecdotes?

Rang a bank yesterday (First Direct). I had to go through a 40 minute process over the phone before I get to a telephone interview with their mortgage advisor which is then going to last approx 90 minutes. Currently there is a one month wait before a mortgage advisor will be available to discuss details with you (UK Wide queue). So things are pretty busy and the new rules are creating a hold up at their end.

Long and the short of it, I was asked about all standard monthly outgoings (oil, rates, electricity, life insurance, home insurance, car insurance) plus any TV, broadband, line rental packages, mobile phone packages, whether or not my partner or I smoked. How much store card or personal loan debt we had and how many dependents we had. Surprisingly they did not include child benefit as an additional income despite it being pretty much guaranteed each month.

Despite having no debt, the maximum I was told I would be offered at this stage (it may increase or decrease in the next meeting) was 3.2 times joint salary.

I have to say I was very surprised at the lowness of this offer, even though it probably is sensible.

So, just wondering if anyone has had the same outcome, as surely this is bound to affect prices of those looking to step up into a second time buy?

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I'm surprised FD even offered as much as 3.2 x joint. It's pretty high. If FD/HSBC are offering that, you can expect Halifax and barclay to be closer to 5X joint.

I personally think 3.2 times joint it's loads.

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As reported on this forum, first direct would not lend us £100k 50% LTV on joint salary of £55k because my wife is in the probationary period and £35k is not enough income to borrow £100k stress tested to 7%.

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As reported on this forum, first direct would not lend us £100k 50% LTV on joint salary of £55k because my wife is in the probationary period and £35k is not enough income to borrow £100k stress tested to 7%.

I remember reading that thread and being very surprised now you mention it but I wasn't aware it was FD. Of course, we haven't spoken to their mortgage advisor yet so it is possible my original "offer" may not even apply at the end of the process.

It sounds like FD are possibly reluctant to lend.

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I'm surprised FD even offered as much as 3.2 x joint. It's pretty high. If FD/HSBC are offering that, you can expect Halifax and barclay to be closer to 5X joint.

I personally think 3.2 times joint it's loads.

I hadn't considered it to be high tbh, I thought around 4% Joint would have been the minimum, hence my surprise.

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IMO mortgage affordability isn't going to get any better - hence these new stringent rules, so I can only conculde that prices topped out back in/before April. I am seeing lots of reductions locally and better value property come to market.

At this point im quite happy to sit it out for 6/12 months as I see the risk of prices rising much lower than the risk of prices falling.

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Yes to the question but only part of the jigsaw.

Interest rate rise noises rumbling like thunder in the background.

People continue to get poorer on average - wage rises against new CPI inflation - and no return on savings

Student loans coming to the fore

A fractured increasingly part time, zero hours, grant aided, benefit supported, public bloated, self employed workforce, many with a high debt appetite and many with high debt/negative equity.

Usual local political nonsense, irrespective of grant aided call centre jobs, sending negative vibes to the wider world. Wider political instability/uncertainty nationally in next 12 months

Any big national (BOE) sticks waiting in the wings to beat down london bubble (in addition to the likes of Lloyds restricting lending multiples) to feed in here locally - common sense to ripple out

Still getting my head round the thousands that were paying, and allowed to, 9.1 times salary in 2007.

I hear what the RPPI is saying - 7% rise in past 12 months (though belfast dipped 2% last quarter) but I'm not sure what fundamentals support this burst of confidence/sentiment. I'm also not seeing many houses (apart from the lower end, and even then.......) coming on at close to the 2005 price less 6% at which, apparently, the average house sells. Don't live in Belfast but I'm not getting any burst of optimism here - still plenty renting till the 'market improves - won't give it away' and a few chancers coming on at aspirational prices. Still seeing price drops and repos. And this is 'the busy spring/summer period'. Perhaps cash sales/investors playing a part?

Estate agent survey, through UUJ continue to have an average of £135k - on NI wages????????

And where are the rest of these cuts?

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FD not too good. I went through the whole process only to find they would lend me £500 more than they were already lending me. A waste of my time and I told them so - got a much better deal elsewhere with a lot less hassle.

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FD not too good. I went through the whole process only to find they would lend me £500 more than they were already lending me. A waste of my time and I told them so - got a much better deal elsewhere with a lot less hassle.

I imagine a lot of people do just that when it comes to FD/HSBC.

Best rates out there, they can affort to pick and choose.

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I hadn't considered it to be high tbh, I thought around 4% Joint would have been the minimum, hence my surprise.

No not at all. 4.5 -5x according to a broker I talked to in Halifax (about 9 months ago) was common. MMR has hopefully change that.

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Northern Ireland Asking Price Index - last August NIHE

http://www.nihe.gov.uk/northern_ireland_asking_price_index.pdf

http://www.nihe.gov.uk/index/corporate/housing_research/completed/recently_completed.htm

It is noteworthy given the extent of the price correction in the residential sector across Northern Ireland that with the exception of the second half of 2012, the NIAPI is consistently higher than achieved prices (NIQPHI). This serves to highlight the complex nature of asking prices allied with
unrealistic seller expectations particularly in the re-sale market, which in part at least can be attributed to a hangover from the mid-2000s house price bubble and an initial resistance on the part of home owners to ‘crystallise’ the decline in the value of ‘their’ property. Unsurprisingly, the longer term trend shows that, overall there has been significant decline in the average listed asking price reflecting the difficulties in the property market since 2007.
Asking prices gradually declined in a smoother fashion, in tandem with achieved prices until mid-2012 when there was a sharp decline until the end
of the year, at which stage the listed asking price fell below the average selling price for the first time in almost 4 years. The fact that the average sale price surpassed the average asking price in the second half of 2012 provides tentative evidence that the market has ‘bottomed out’. This trend suggests that it has taken 4 years for the resale market sector to correct itself in respect of seller’s expectations of asking price and provides supporting opinion of the erosion of price sentiment and potentially the psychological turning point in the market for sellers in the second half of 2012. Figures for the first quarter of 2013 show an uplift in average asking price, bringing it back into equilibrium with achieved average selling prices. The second quarter of 2013 is characterised by continuing uplift in the average asking price which may be related to stabilising market conditions and confidence.
Edited by Shotoflight

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Thank feck for that!

It's approvals that really need to fall hard, let me explain:

You have 10 people with 'approval' looking for property within a specific area, 6/10 of these are actually processable and will be allowed to borrow what they are offering. All 10 people will be bidding up the priced to the detriment of others involved in the process, regardless of whether they will actually be able to draw down on the mortgage.

If banks like Nationwide actually went through a full application (like first direct do) then there wouldn;t be so many people running around making silly offers that a) push up prices and B) fall through.

I use nationwide and first irect as examples as I had a reasonable 100k mortgage in principal turned down by First Direct, then subsequently gained an online mortgage in principal for £200k (yes, really) from nationwide.

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