Re-mortgagors borrowing extra cash soars past pre-recession levels

[Mapatasy]

Re-mortgagors borrowing extra cash soars past pre-recession levels

"Indeed, the additional value borrowed has more than trebled in value in the last two years alone with more than one in five re-mortgagees taking out additional capital in the last 12 months"

"As might be expected the data reflects the availability of credit following the recession, however the recovery has vastly overtaken the pre-recession level – suggesting other factors are pushing the market past its previous level"

http://www.mortgagesolutions.co.uk/news/2017/09/04/remortgagors-borrowing-extra-cash-booming-past-pre-recession-levels/

 

[Mapatasy]

Shame there isn't a nice little chart that shows how much of that extra borrowing actually ends up being spent on "home improvements"!

 

[Errol]

Just another way in which the UK is clearly winning the financial race.

[Noallegiance]

We have collectively learned nothing.

 

[adarmo]

37 minutes ago, Mapatasy said:

Shame there isn't a nice little chart that shows how much of that extra borrowing actually ends up being spent on "home improvements"!

 

It sort of does - what is interesting though is that the LTV stays flat. Maybe that shows that doing the right home improvements can increase the value for those homeowners not wanting to move, and this makes up for the fall in LTVs by those remortgaging to buy a car or holiday etc. 

[Houdini]

3 minutes ago, adarmo said:

It sort of does - what is interesting though is that the LTV stays flat. Maybe that shows that doing the right home improvements can increase the value for those homeowners not wanting to move, and this makes up for the fall in LTVs by those remortgaging to buy a car or holiday etc. 

Equally it could be that they are borrowing the equity house price inflation has given them without doing any improvements. if the valuation has gone from £200,000 to £300,000 borrowing £150,000 when you remortgage rather than £100,000 keeps the LTV at 50%....

 

[thewig]

are they borrowing extra cash or are they just taking on extra DEBT?

 

big difference

[Bunfight]

Purely anecdotal but a relative of mine just put their new kitchen (20k+) on the mortgage.  They also used some of the cash for a trip to centre parks.  

I know ?

They've put most home improvements on the mortgage and as far as I can tell their mortgage payments have never reduced.  They were paying 1600 a month 10 years ago and last time we spoke it was still 1600.

i remember the amount as it's so fookin huge!  Openly admits his house is worth the same (not adjusted for inflation) as it was on purchase.

good guy otherwise.

[Bland Unsight]

In aggregate housing equity withdrawal still negative:

Source is Bank of England interactive database

Still interesting to see that some people are still tapping the housing equity piggy bank confident in the knowledge that forever HPI+++ will pay off their mortgage even if they refuse to try. 

[spyguy]

20 minutes ago, Bunfight said:

Purely anecdotal but a relative of mine just put their new kitchen (20k+) on the mortgage.  They also used some of the cash for a trip to centre parks.  

I know ?

They've put most home improvements on the mortgage and as far as I can tell their mortgage payments have never reduced.  They were paying 1600 a month 10 years ago and last time we spoke it was still 1600.

i remember the amount as it's so fookin huge!  Openly admits his house is worth the same (not adjusted for inflation) as it was on purchase.

good guy otherwise.

Are Ocean finance back in business?

[Bunfight]

14 minutes ago, spyguy said:

Are Ocean finance back in business?

Ha! Took umbrage with me when he said he'd be working till 70.  I said you're presuming they'll want you when your 70...

if him or his wife lost their job they're toast.  From the outside they appear to have it all but the margins are wafer thin.

[maverick73]

56 minutes ago, spyguy said:

Are Ocean finance back in business?

Zopa the friendly lending machine ?

[Rhaegal]

1 hour ago, Bunfight said:

Purely anecdotal but a relative of mine just put their new kitchen (20k+) on the mortgage.  They also used some of the cash for a trip to centre parks.  

I know ?

They've put most home improvements on the mortgage and as far as I can tell their mortgage payments have never reduced.  They were paying 1600 a month 10 years ago and last time we spoke it was still 1600.

i remember the amount as it's so fookin huge!  Openly admits his house is worth the same (not adjusted for inflation) as it was on purchase.

good guy otherwise.

Long time lurker here, decided to sign up and be less of a leech!

What runs through my mind when reading posts like this is am I a mug paying down the mortgage month-by-month, when events outside my control could be negative interest rates or a debt jubilee? I take some solace in that I'm not after the newest car or more toys, but even so it would be galling to see behaviour you cite being effectively rewarded. Then again, I suppose it has been rewarded since the late 90s from a housing perspective.

 

 

[Guest]

6 hours ago, Rhaegal said:

Long time lurker here, decided to sign up and be less of a leech!

What runs through my mind when reading posts like this is am I a mug paying down the mortgage month-by-month, when events outside my control could be negative interest rates or a debt jubilee? I take some solace in that I'm not after the newest car or more toys, but even so it would be galling to see behaviour you cite being effectively rewarded. Then again, I suppose it has been rewarded since the late 90s from a housing perspective.

 

 

Some people gambled on rising house prices and won, youi could gamble on a debt jubilee, and win. Or you might lose. I'm not a gambler so I wouldnt take on more debt than I could afford (or stretch my mortgage out too far).

[Bunfight]

10 hours ago, Rhaegal said:

Long time lurker here, decided to sign up and be less of a leech!

What runs through my mind when reading posts like this is am I a mug paying down the mortgage month-by-month, when events outside my control could be negative interest rates or a debt jubilee? I take some solace in that I'm not after the newest car or more toys, but even so it would be galling to see behaviour you cite being effectively rewarded. Then again, I suppose it has been rewarded since the late 90s from a housing perspective.

 

 

You're not a mug, you're doing exactly what I do.

Im getting to a point in life were family friends and family are dying / getting to retirement.  The one constant is that those who lived beyond their means are largely either in the shit or leave their nearest and dearest in it when they pass.

Life is an endurance race and whilst it may seem some are winning short term, its the long term that matters.

when this bubble pops you won't want to be carrying debt. You'll also have the right to tell your kids that you saw it, you disagreed with it, took no part in it and profited from the foolishness and greed of those that did.

They will always be those that win despite of all the above but that just life.  Even a monkey can be coaxed into picking 6 numbers, it doesn't make it a genius for winning the lottery.

[stuckmojo]

This guy has it right

 

 

 

[VeryMeanReversion]

1 hour ago, Bunfight said:

You're not a mug, you're doing exactly what I do.

Im getting to a point in life were family friends and family are dying / getting to retirement.  The one constant is that those who lived beyond their means are largely either in the shit or leave their nearest and dearest in it when they pass.

Life is an endurance race and whilst it may seem some are winning short term, its the long term that matters.

when this bubble pops you won't want to be carrying debt. You'll also have the right to tell your kids that you saw it, you disagreed with it, took no part in it and profited from the foolishness and greed of those that did.

They will always be those that win despite of all the above but that just life.  Even a monkey can be coaxed into picking 6 numbers, it doesn't make it a genius for winning the lottery.

Well said.

[Barnsey]

1 hour ago, Bunfight said:

You're not a mug, you're doing exactly what I do.

Im getting to a point in life were family friends and family are dying / getting to retirement.  The one constant is that those who lived beyond their means are largely either in the shit or leave their nearest and dearest in it when they pass.

Life is an endurance race and whilst it may seem some are winning short term, its the long term that matters.

when this bubble pops you won't want to be carrying debt. You'll also have the right to tell your kids that you saw it, you disagreed with it, took no part in it and profited from the foolishness and greed of those that did.

They will always be those that win despite of all the above but that just life.  Even a monkey can be coaxed into picking 6 numbers, it doesn't make it a genius for winning the lottery.

Indeed, well put.

When something doesn't just feel wrong, but fills you with DREAD thinking about the devastating outcome if you HAD jumped in now through impatience and complacency for current low IR conditions, and prices then came crashing down (which they will, just to what extent?), then you have to trust yourself, YOUR instincts.

Yes, CBs have manipulated things to distort common sense but that can only carry on for so long, all it has done is prop EVERYTHING up to unsustainable levels, much worse than 07/08.

Ironic really, "responsible" central banks now scared of reigning in the very bubble that they blamed for everything last time. And this epic QE has only benefited the top 5%, naturally. Bubbles everywhere.

 

Edited September 5, 2017 by Barnsey

[Andy T]

Around here there seems to be a big spike in house extensions, second extensions or loft conversions. The type of extension that completely fills the width of the already narrow plot. How they would ever do any maintenance at the back of the house I don't know, imagine trying to bend scaffold piles through the front door, small hallway and through the kitchen to the back garden. Guess that will be the next owners problem. 

[doomed]

The debt must always increase in a debt based money system. The fun begins when the debt junkies become tapped out. 

Everybody should be cheering these lunatics on.

Edited September 5, 2017 by doomed

[Rhaegal]

17 hours ago, Grab_Some_Popcorn said:

Some people gambled on rising house prices and won, youi could gamble on a debt jubilee, and win. Or you might lose. I'm not a gambler so I wouldnt take on more debt than I could afford (or stretch my mortgage out too far).

Indeed, a lot of decisions in life come down to an attitude to risk. I'm not much of a gambler/risk taker either and wouldn't want to burden my woes or debt through greed or stupidity on anyone else or wider society. Problem is, those that have threw caution to the wind or actively pursued greedy endeavours or what could be consider to be irresponsible behaviour have profited at the expense of the prudent. I hope for the sake of society that this changes.

[Rhaegal]

12 hours ago, Bunfight said:

You're not a mug, you're doing exactly what I do.

Im getting to a point in life were family friends and family are dying / getting to retirement.  The one constant is that those who lived beyond their means are largely either in the shit or leave their nearest and dearest in it when they pass.

Life is an endurance race and whilst it may seem some are winning short term, its the long term that matters.

when this bubble pops you won't want to be carrying debt. You'll also have the right to tell your kids that you saw it, you disagreed with it, took no part in it and profited from the foolishness and greed of those that did.

They will always be those that win despite of all the above but that just life.  Even a monkey can be coaxed into picking 6 numbers, it doesn't make it a genius for winning the lottery.

Thank you for your impactful reply, certainly puts things into perspective and would serve as a good perspective for others to consider when they're thinking of equity release or living beyond their means. The last thing I would want is to cause others to clean up any mess I had caused. It would take a lot for me to change my behaviour, but clearly the central banks and governments are generally seeking to encourage increase in debt... Well until it crashes of course, then all bets are off

I will mentally note your post as it is the perfect wake up call when questioning the merits of being prudent.