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Reduced Mortgage Lending On The Quiet?

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I moved house early last year (into rented accommodation after each and every house of interest went to best and final offers and ultimately ~10% over the asking price).

During that process, I used the barclays mortgage calculator to get an idea of what my wife and I could borrow. We went through the process and obtained a mortgage in principal for £313,145 (which matched the online calculator).

Quite often, I revisit the calculator just to keep an eye on the monthly repayments of such a mortgage since the rates have been heading lower.

Anyway today, I noticed that the total amount that they will lend (on the same salary figures) has dropped from £313,145 to £257,425 :-o

This will add to downward pressure on house prices!

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I've never used the Barclays calculator before, but they are offering similar debt levels to HSBC/FD's calculator. Wonder what's going on...

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I hear Natwest have the slackest mortgage affordability checks. Apparently they don't count childcare costs.

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I've never used the Barclays calculator before, but they are offering similar debt levels to HSBC/FD's calculator. Wonder what's going on...

Is that good or bad? I had a play with the Barclays calculator and still narked off they want to lend so much to meet house prices; more narked off with applicants though.

Is it something to do with this?

Affordability Vs Salary Multipliers
Started by selhurt sound, Sep 09 2014 09:20 PM

5-5.5x is only available until the end of this month, BOE are capping it to 4.5x although you may be able to convince the banks that you are one of the special 15%.

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The Broker Blues Thread

http://forums.moneysavingexpert.com/showthread.php?t=4907259&page=24

betmunch

07-01-2015, 1:15 PM

Also NatWest have everyone in a conference for a few days so no-one to help with new enquiries until they get back!

Shocking

amnblog

23-01-2015, 9:30 AM

Is this expansion of 4.5X LTI limit by Barclays a sign of things to come this year? Do we expect to see income to lending levels capped across the board?

Let Us See

23-01-2015, 11:16 AM

With the FCA now influencing lenders' income multiples, I think this will be the next issue addressed by lenders.

Yesterday I had my first ever decline (NatWest) due to client's overall income to mortgage debt ratio, even although most of the debt were BTLs under 50% LTV and clearly self-financing. Placed this morning without a problem with another lender.

amnblog

23-01-2015, 11:18 AM

As ever, the moment we start to make some progress the regulator makes the lenders nervous and it kicks the market back down again.

Thugelmir

23-01-2015, 1:31 PM

The BOE has legal powers to force lenders to raise the deposits that new borrowers must put down and impose new limits on the amount people can borrow to buy a home. This enables the BOE to protect the economy against another credit lending bubble. Previously the Financial Policy Committee only had power of recommendation.

Lenders can only advance 15% of total new lending on lending multiples above 4.5. Highly probable therefore that some lenders reduced their appetite for such lending as a matter of business policy.

Let Us See

23-01-2015, 1:45 PM

Which is in complete contrast to the government's HTB policy?

Thugelmir

23-01-2015, 5:54 PM

"Has the powers" is the key phrase.

Rather than looking at the mortgage market bottom up, i.e. at the micro level of the borrower. You need to look top down from macro level. As the lending markets will be shaped by the regulatory requirements on capital reserves under Basle 3 (no requirement to be fully compliant with until effective 2019) etc. So putting aside current distortions as HTB and the remnants of funding for lending. The general direction of travel is for lenders to contract their balance sheets.

Lending less to more people may be the ultimate goal for many lenders. As the excesses of the past unwind.

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