Jump to content
House Price Crash Forum
Foreverblowingbubbles

Telegraph: Mortgage lending up (transactions down)

Recommended Posts

13 hours ago, Foreverblowingbubbles said:

http://www.telegraph.co.uk/business/2017/01/26/mortgage-lending-hits-highest-level-since-2008/

Headline paints a rosy picture. You have to read to the second half of the story before you get to the caveats that mortgage lending is only up because prices are, and actually transaction volumes were DOWN 20% on 2008 

Transactions in 2008 had collapses...are they saying the market is down 20% on that ?

 

holy ****l

Share this post


Link to post
Share on other sites
44 minutes ago, GreenDevil said:

 

No saying the same as 2008.

Which implies the government net take is the same as 2008... Oh dear.

The trouble with low sales volumes on any "luxury" comodity,. you are at the whim to the small number of rich buyers.

The UK needs to be run for the bvenefot of the 99 not the 1

Share this post


Link to post
Share on other sites
15 hours ago, Foreverblowingbubbles said:

http://www.telegraph.co.uk/business/2017/01/26/mortgage-lending-hits-highest-level-since-2008/

Headline paints a rosy picture. You have to read to the second half of the story before you get to the caveats that mortgage lending is only up because prices are, and actually transaction volumes were DOWN 20% on 2008 

Transaction volumes in 2008 were only so high because of a megs bubble.

One would hope they are substantially lower. 

Share this post


Link to post
Share on other sites
21 hours ago, Foreverblowingbubbles said:

http://www.telegraph.co.uk/business/2017/01/26/mortgage-lending-hits-highest-level-since-2008/

Headline paints a rosy picture. You have to read to the second half of the story before you get to the caveats that mortgage lending is only up because prices are, and actually transaction volumes were DOWN 20% on 2008 

In some parts of the country they're down 70%.it's very much postcode by postcoide.

Share this post


Link to post
Share on other sites
2 hours ago, goldbug9999 said:

So I had to actually read that article before in order to discover that its a meaningless gross figure, standards are slipping on HPC.

This. Thank you goldbug9999. 

Share this post


Link to post
Share on other sites
Quote

Commenting on market conditions in this month's market commentary, CML senior economist Mohammad Jamei said:

"The UK housing market, much like the wider UK economy, ended 2016 on a generally positive note.

Approvals for house purchase have recovered strongly of late, and this should feed through to lending figures in the early months of 2017. The current availability of mortgage credit is benign, and the real issue continues to be a dearth of properties on the market, which adds to the challenges facing would-be buyers.

Uncertainty associated with political factors and prospective changes to the tax treatment of landlords will weigh on prospects for the year ahead."

 

Share this post


Link to post
Share on other sites
13 hours ago, goldbug9999 said:

So I had to actually read that article before in order to discover that its a meaningless gross figure, standards are slipping on HPC.

Apologies, I was trying to make a comment on the quality and focus of the headline compared to the actual content of the article. As you rightly point out, the 'mortgage lending up' side of the article doesn't necessarily mean anything if it's up because of remortgages and not new lending. 

Share this post


Link to post
Share on other sites
14 hours ago, Foreverblowingbubbles said:

Apologies, I was trying to make a comment on the quality and focus of the headline compared to the actual content of the article. As you rightly point out, the 'mortgage lending up' side of the article doesn't necessarily mean anything if it's up because of remortgages and not new lending. 

It tells me credit is still massively available and until that changes I don't see house prices falling. We need a crunch.

Share this post


Link to post
Share on other sites

is mortgage lending only up because there's a large number of personal btl moving their property into ltd co thus having to remortgage. So transactions are up but not in real terms?

Share this post


Link to post
Share on other sites
2 hours ago, crazypabs said:

is mortgage lending only up because there's a large number of personal btl moving their property into ltd co thus having to remortgage. So transactions are up but not in real terms?

Here's an article from the BBC a couple of weeks ago, with Halifax reporting that first time buyers in 2016 were at their highest level since 2007. Up 75% on 2008. 

So the short answer is no, its not *only* because of remortgages. From what I can tell from the article (the data is not raw and not entirely clear) , first time buyers with Halifax were up 7.5% from 2015, and so will have contributed to the rise in gross mortgage lending. 

A few other interesting tidbits in the BBC article about the increasing length of mortgages, and average deposit. 

Having said which, remortgages also had a 'bumper year' (where does that expression come from?) in 2016. http://www.whatmortgage.co.uk/news/bumper-year-remortgaging-lenders-slash-rates/

According to the lml data in that article, value of remortgages was 65.7bn in 2016, up 21% on 2015. That would mean remortgages in 2015 were at about 54.3bn, meaning the delta in remortgages from 2015 to 2016 was +£11.4bn

Of course, the first data set in the telegraph is from Cml, and the one in what mortgage is from lol. These are different data sources, and I doubt the data from lml can be directly compared to that gross lending quoted in the telegraph article. But still, for what it's worth the increase in remortgages reported by lsl only accounts for about half of the increase in gross mortgage lending reported by the cml

I've not been able to find a chart by year of total mortgage lending broken down into new and remortgages from a single data source - although I'm sure I've seen it linked on here in the past? Does anyone have that? 

Share this post


Link to post
Share on other sites

Re FTB taking up the slack.  Yes this will happen there are plenty in the wings looking for a break and they have it.  Those that have saved maybe 5+ years being offered 30-40 yrs terms.  If many BTL don't know about S24 the you can bet many FTB don't know about S24 or what is really happening, all they see is a break locally on what they have had their eyes on and only know what the bank told them about their deposit not being enough.  The bank wants the deal as much as the FTB so they are not here to educate the FTB about the future.

The question is are there enough FTBs to sustain the market once we really see the BTL portfolios saturating the market ?  I don't think so.

How many would be FTB have 5k saving on hand ?  (there are stats for general population on that), then how long once they realize they are in with a chance to buy will it take an average salary person out of their disposable income to save up a large enough deposit ?  I don't think they can move their position fast enough to prevent major market change.

So this lag will cause market change and in that situation when you haven't quite got your deposit together you stop thinking 'I must get in the ladder ASAP or I shall miss out', and start thinking 'every day I wait my hard earned deposit is buying a better house'.

 

In absolute numbers what are we talking about.  Well we are still 2k per month on average short of FTB than the 2007 figures.  (From your BBC link)

The average transaction volume level for 2016 is 28k FTB per month.  (From your BBC link)

We need an increase of 2k PER MONTH EVERY MONTH continuously for the next 2 years to keep the market at the current transactions volumes per month to keep transactions above the 60k per month requirement to have a functioning property market, where the FTB transaction volume have now replaced the BTL transaction volumes.  Now these figures may not add up a first sight but we have a 21% transaction volume loss to make up during this time as well (see below) I am just trying to show the scale of what is needed to arrest the figures.

 

The news article that is the subject of

1.45m mortgages issued in 2016.  But 21% fewer transactions.

 

Now I maybe talking chalk and cheese numbers here, but can you see the scale of the problem yet ?   We are not yet back to 2007 FTB levels and we need to more than double the number of FTB per month to keep the market running (with sufficient transaction volumes per month) to maintain a balance of power between supply and demand.

The market can not take another year of 21% fewer transactions during 2017 without the balance of power being with the buyer.

Note the 1.45m figure of total transaction volumes 2016, 21% is approximately the entire size of the entire current FTB market.  So by deduction of 2016 is that BTL transaction volumes has reduced by more than this amount while FTB has increased a little bit and the difference (the net loss of transactions during 2016) is still the entire size of the entire current FTB market.

Do you think that gap is going to get better sooner ?  Before the balance of power is clearly with the buyer.

 

Remortgages are only going to make the above look better, but I think there will be a new term over the next few years "Remortgage Shock" this is when for whatever reason an owner is not able to remortgage and they are no longer solvent as their financial position depended on an equivalent rollover.  This has yet to come, at the moment lenders are offering sweeter than expected deals but once their quotas are full I'm sure those deals will be off the market, lower remortgage transaction volumes.

 

Share this post


Link to post
Share on other sites
22 hours ago, rollover said:

What are they going to do with thousands of luxury apartments on the market or soon to come?

Sell to the Chinese?

 

Edited by sPinwheel

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   92 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.