Will mortgage offers be withdrawn or reduced

[notnow]

For those people who were in the process of buying, does the team think mortgage offers will be being re evaluated with some urgency right now, with many people finding that agreed mortgage offers are withdrawn ?

Or will lenders ease the path for buyers to catch a falling knife?

 

[regprentice]

Friend of mine had his sale paused and isnt expecting there to be a 2nd valuation. He's just waiting to conclude. 

I think the bigger risk is a change in circumstances. From reading threads on MSEs mortgage forum over the years it's clear any change in circumstances right up to the second the money is released will threaten your mortgage, things like losing a job, having your wages cut, reduced wages due to furlough, reduced household income due to one of a couple stopping working to look after kids. 

On the whole, looking at new products coming onto the market, Banks and Building societies seem happy to lend at low rates at 70-75% Ltv. I'd imagine most of the pressure is on the guys doing valuations, I wouldn't want that responsibility in this environment 

[captainb]

Its not the valuation job to assess where property prices are going its to asses where they are.

The issue they have had so far is that there were basically no transactions to work off and nearly all mortgage products were pulled.

With access now allowed they are coming back on - you can borrow at 90% LTV on a first time mortgage or 80% on a BTL already.

With lack of data one would expect caution. But as above its not the valuers job to say "property prices will crash tommorow" so here is a low valuation, it is to say based on todays market i estimate the value to be X. Hence any down valuation is unlikely to be in excess of 10%. (Unless the person buying is a moron and offered something silly compared to the flat that sold last month next door).

Edited June 3, 2020 by captainb

[Chunketh]

36 minutes ago, notnow said:

For those people who were in the process of buying, does the team think mortgage offers will be being re evaluated with some urgency right now, with many people finding that agreed mortgage offers are withdrawn ?

Or will lenders ease the path for buyers to catch a falling knife?

 

Mine was automatically extended from a 31st June expiry to 30th September. 10% LTV held.

EDIT: I didn't ask for it, they just decided to do it.

Edited June 3, 2020 by Chunketh

[TheCountOfNowhere]

1 hour ago, regprentice said:

 

On the whole, looking at new products coming onto the market, Banks and Building societies seem happy to lend at low rates at 70-75% Ltv. I'd imagine most of the pressure is on the guys doing valuations, I wouldn't want that responsibility in this environment 

[spyguy]

1 hour ago, captainb said:

Its not the valuation job to assess where property prices are going its to asses where they are.

The issue they have had so far is that there were basically no transactions to work off and nearly all mortgage products were pulled.

With access now allowed they are coming back on - you can borrow at 90% LTV on a first time mortgage or 80% on a BTL already.

With lack of data one would expect caution. But as above its not the valuers job to say "property prices will crash tommorow" so here is a low valuation, it is to say based on todays market i estimate the value to be X. Hence any down valuation is unlikely to be in excess of 10%. (Unless the person buying is a moron and offered something silly compared to the flat that sold last month next door).

The ads might say that.

The actual borrowing numbers say its unlikely.

Banks are OK to lend low at 60% LTV. and up to MMR 4x limit.

Outside ofthat and its a crap shoot.

 

 

 

[captainb]

11 minutes ago, spyguy said:

The ads might say that.

The actual borrowing numbers say its unlikely.

Banks are OK to lend low at 60% LTV. and up to MMR 4x limit.

Outside ofthat and its a crap shoot.

 

 

 

We dont know yet. Current figures will be for deals done in lockdown - so you would expect bugger all to be signed off.

You would expect transaction levels to be very low. That might continue.

Banks have chosen to bring back not just the 60% LTV products but phase in the others as well. That is a conscious decision. 

[regprentice]

32 minutes ago, TheCountOfNowhere said:

Still plenty of new mortgage products being posted on deal sites like hotdeals...

[spyguy]

2 minutes ago, captainb said:

We dont know yet. Current figures will be for deals done in lockdown - so you would expect bugger all to be signed off.

You would expect transaction levels to be very low. That might continue.

Banks have chosen to bring back not just the 60% LTV products but phase in the others as well. That is a conscious decision. 

15k mortgages were sold in April.

[TheCountOfNowhere]

5 minutes ago, regprentice said:

Still plenty of new mortgage products being posted on deal sites like hotdeals...

It's not the deals I'm laughing at, it's the fact you'll need to hand the banksters 25% of £500K to get one.

 

[regprentice]

4 minutes ago, TheCountOfNowhere said:

It's not the deals I'm laughing at, it's the fact you'll need to hand the banksters 25% of £500K to get one.

 

Well.... That might be 25% of 500k, or 450k, or 300k.... Who knows. 

It's a fairly clear indication that the banks don't seem to want to increase their rates though. 

[longgone]

11 minutes ago, TheCountOfNowhere said:

It's not the deals I'm laughing at, it's the fact you'll need to hand the banksters 25% of £500K to get one.

 

That`s easy no ? for your average savvy house buyer 

[captainb]

1 hour ago, spyguy said:

15k mortgages were sold in April.

When the market was totally shut? When nearly all products were withdrawn? i am shocked it is as high as 15,000!

Need the figures for June, July, August to actually see. Which is market open in May, had time to actually view and then make an offer and get (or not get) a mortgage. 

Point remains though that they chose to bring back 75% / 80% mortgages as well as 60% ones. If they had no intention of lending at those levels, why bring them back? why spend on advertising? Surely you would just bring back the 60% LTV and leave it if that was your intention. 

[Burbujista]

31 minutes ago, captainb said:

When the market was totally shut? When nearly all products were withdrawn? i am shocked it is as high as 15,000!

Need the figures for June, July, August to actually see. Which is market open in May, had time to actually view and then make an offer and get (or not get) a mortgage. 

Point remains though that they chose to bring back 75% / 80% mortgages as well as 60% ones. If they had no intention of lending at those levels, why bring them back? why spend on advertising? Surely you would just bring back the 60% LTV and leave it if that was your intention. 

Let me remind you that the consensus of economist was expecting 34,000 applications under the lockdown circumstances. A normal month is around 66,000.

Edited June 3, 2020 by Burbujista

[TheCountOfNowhere]

2 hours ago, regprentice said:

Well.... That might be 25% of 500k, or 450k, or 300k.... Who knows. 

It's a fairly clear indication that the banks don't seem to want to increase their rates though. 

It's a clear indication they only want borrowers who are stupid enough to hand over a large sum of cash to get a depreciating asset and a noose round their necks.

[TheCountOfNowhere]

2 hours ago, longgone said:

That`s easy no ? for your average savvy house buyer 

Easy for someone new-ing and levering up their unearned untaxed pwopatee wiches

Difficult for anyone else

https://www.statista.com/statistics/824450/average-cash-saving-united-kingdom-by-age/

 

[captainb]

1 hour ago, Burbujista said:

Let me remind you that the consensus of economist was expecting 34,000 applications under the lockdown circumstances. A normal month is around 66,000.

Have you got a link? They expected during lockdown where you couldn't view properties and all estate agents were forced to close, surveyors couldn't value etc would only reduce approvals by half????

[scb]

1 hour ago, captainb said:

Have you got a link? They expected during lockdown where you couldn't view properties and all estate agents were forced to close, surveyors couldn't value etc would only reduce approvals by half????

I would imagine a large number of mortgages are not first time buyers but people remortgaging so the number is hardly that strange.

[captainb]

18 minutes ago, scb said:

I would imagine a large number of mortgages are not first time buyers but people remortgaging so the number is hardly that strange.

A "normal month of 66,000" would exclude remortgages on existing properties.

On average there are around 75,000 property sales a month in the UK, excluding cash transactions 66,000 mortgages would make sense.

Therefore expecting 34,000 to occur in a shut market seems a bullish prediction, and 15,000 confirmed doesn't seem out of place (if anything still high) given market is shut..

Edited June 3, 2020 by captainb

[Burbujista]

3 hours ago, captainb said:

Have you got a link? They expected during lockdown where you couldn't view properties and all estate agents were forced to close, surveyors couldn't value etc would only reduce approvals by half????

It’s in many pages like forex factory.com

[Burbujista]

1 hour ago, captainb said:

A "normal month of 66,000" would exclude remortgages on existing properties.

On average there are around 75,000 property sales a month in the UK, excluding cash transactions 66,000 mortgages would make sense.

Therefore expecting 34,000 to occur in a shut market seems a bullish prediction, and 15,000 confirmed doesn't seem out of place (if anything still high) given market is shut..

People in April would have been just closing deals agreed in February or early March. If something it highlights how many people backtracked or tried to renegotiate before completion.

[Burbujista]

1 hour ago, captainb said:

A "normal month of 66,000" would exclude remortgages on existing properties.

On average there are around 75,000 property sales a month in the UK, excluding cash transactions 66,000 mortgages would make sense.

Therefore expecting 34,000 to occur in a shut market seems a bullish prediction, and 15,000 confirmed doesn't seem out of place (if anything still high) given market is shut..

So... you know more than the economist of the main banks... Clear case of hindsight bias

Edited June 3, 2020 by Burbujista

[stuckinlimbo]

28 minutes ago, Burbujista said:

3 hours ago, captainb said:

Have you got a link? They expected during lockdown where you couldn't view properties and all estate agents were forced to close, surveyors couldn't value etc would only reduce approvals by half????

It’s in many pages like forex factory.com

I really like the charts here from the BOE: https://www.bankofengland.co.uk/statistics/visual-summaries/household-credit

[captainb]

32 minutes ago, Burbujista said:

So... you know more than the economist of the main banks... Clear case of hindsight bias

Ive queried the source and now would query how upto date the forecasts that website is tracking are - a lot seem way off which suggests its still including forcasts made pre-CV19 in its aggregate. 

The net lending to individuals figure being the most obvious example.

Edited June 3, 2020 by captainb

[xxxx]

5 hours ago, Burbujista said:

Let me remind you that the consensus of economist was expecting 34,000 applications under the lockdown circumstances. A normal month is around 66,000.

The actual number of mortgages for house purchases in April was 15,848, down from 56,161 in March.  The number of remortgage applications in April was 34,357, down from 42,551 in March.