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London dominates 'high risk mortgage lending' league table

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Who knew?

https://www.estateagenttoday.co.uk/breaking-news/2018/7/london-dominates-high-risk-mortgage-lending-league-table

Locations in the capital dominate a league table of locations where the largest numbers of so-called ‘high risk’ mortgages are taken out.

According to Bank of England guidance, mortgages are considered high risk if they are lent at 4.5 times or more of the applicant’s salary.

Now a peer-to-peer lending platform, Lendy, has drawn ip a league table having analysed mortgage lending ratios in all 2,578 UK postcodes during 2017.

The UK average was 39 risky mortgages per area last year but Croydon saw the highest number of all - 463. 

Other London areas including Walthamstow, Wandsworth, Streatham, Tooting and Wimbledon are in the top 10 high risk mortgage locations. 

In total, Lendy says the number of risky mortgages in the UK jumped by 15 per cent last year, with 101,380 approved by banks.

The top 10 are:

1. Croydon, 463 

2. Walthamstow, 421

3. Wandsworth, 363

4. Streatham, 322

5. Tooting, 319

6. Brighton, 313

7. Hove, 296

8. Battersea, 296

9. Farnborough, 294

10. Wimbledon, 276.

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I hadn't thought Croydon would top that list till I thought about how the ranges of salaries might spread in London.

With 3.3% in the top 10 'areas' ... kind of confusing though because one area is a different size from another (in terms of number of postcodes, or perhaps more importantly in terms of population).

Data at this level is intensely difficult to interpret - meaningless to present the top 10 postcodes in terms of this metric, too.

And proportion of risky mortgages per capita per region doesn't make a great headline.

At the national level, I don't know how big an issue this is (even if it got 15% bigger than it was).

101k mortgages of this 'tier' issued last year ... what is that relevant to the total number of mortgages sold? Anyone got that number to hand?

I am not saying it isn't an issue, I am just saying I don't know how indemic this issue as.

That said, if the number of mortgages (generally) issued in the last year has fallen (as I think, anecdotally, it has) and the number of mortgages that are 'high risk' has (very significantly) grown ... then it could be indicative if it getting worse really fast.

 

Edited by Aidan Ap Word

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I dont think the banks are being totally honest with the mortgage risk, which, in Loondon,  is just not limited to IO and high LTV.

'Hello? Is that [Pavel from Gdansk, Amir from Mumbai, etc]. You have defaulted on your mortgage payments...

National mortgage banks should never lend to non nationals. Too much risk.

 

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37 minutes ago, spyguy said:

I dont think the banks are being totally honest with the mortgage risk, which, in Loondon,  is just not limited to IO and high LTV.

'Hello? Is that [Pavel from Gdansk, Amir from Mumbai, etc]. You have defaulted on your mortgage payments...

National mortgage banks should never lend to non nationals. Too much risk.

 

I am assuming that you believe they will default if the loan becomes a higher number than the house 

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Good point SpyGuy.

PaymentToIncome (PTI) on a mortgage is definitely not the only risk metric on a mortgage.

But if the average PTI on mortgages is getting slowly worse then this is *another* indicator that people are 'business as usual' even as the tide turns against the Titanic?

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42 minutes ago, spyguy said:

I dont think the banks are being totally honest with the mortgage risk, which, in Loondon,  is just not limited to IO and high LTV.

'Hello? Is that [Pavel from Gdansk, Amir from Mumbai, etc]. You have defaulted on your mortgage payments...

National mortgage banks should never lend to non nationals. Too much risk.

 

2 minutes ago, vincent said:

I am assuming that you believe they will default if the loan becomes a higher number than the house 

I wonder how many international mortgages are money just "parked" in UK ... in which case PTI is probably not relevant/maybe less important. Since 'I' is probably marked in another currency anyway. And since the mortgage is probably held as a hedge against other international problems.

In the OP, I wonder how many of the inspected mortgages were international ones?

 

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53 minutes ago, spyguy said:

I dont think the banks are being totally honest with the mortgage risk, which, in Loondon,  is just not limited to IO and high LTV.

'Hello? Is that [Pavel from Gdansk, Amir from Mumbai, etc]. You have defaulted on your mortgage payments...

National mortgage banks should never lend to non nationals. Too much risk.

 

I have a friend who works for an Indian IT company  (not an oxymoron) called NNIT where a lot of Indians are based in London quite a few have purchased houses in london the problem is they will all be losing their jobs, as it has lost its contract with OFCOM due to being useless 

 

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On 11/07/2018 at 12:16, vincent said:

I am assuming that you believe they will default if the loan becomes a higher number than the house 

For non nationals Id expect them to just leg it.

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What about areas where manufacturing (such as automotive) may potentially take a huge hit because of  hard Brexit scenarios?.. ie: swindon, burnaston, sunderland, oxford, castle bromwich, birmingham, halewood, solihull, luton... for starters?

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On 11/07/2018 at 12:34, vincent said:

I have a friend who works for an Indian IT company  (not an oxymoron) called NNIT where a lot of Indians are based in London quite a few have purchased houses in london the problem is they will all be losing their jobs, as it has lost its contract with OFCOM due to being useless 

 

Doesn't surprise me.  There ARE many good Indian IT guys, I have worked with some of them, but due to their culture they need careful management by Europeans or Americans who understand Yes-Yes and Yes-No etc.  If NNIT was using Indian managers then it was a dead man walking.  All the best Indian managers ignore Europe and go straight to the USA or stay in India.

Edited by hotblack42
correction

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19 minutes ago, hotblack42 said:

Doesn't surprise me.  There ARE many good Indian IT guys, I have worked with some of them, but due to their culture they need careful management by Europeans or Americans who understand Yes-Yes and Yes-No etc.  If NNIT was using Indian managers then it was a dead man walking.  All the best Indian managers ignore Europe and go straight to the USA or stay in India.

NNIT is a European fronted IT company, think Thomas pink shirts and loake shoes, but they have hollowed it out and now it has lost the contract with OFCOM

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  • 301 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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