Jump to content
House Price Crash Forum

First time buyers frozen out by withdrawal of 90% mortgages - Telegraph.


Recommended Posts

Very interesting read in the Telegraph. The article initially suggests that the market is going nuts because a few building societies are saying they have had their busiest few days in years since the market re-opened, but then you learn that it is only building societies offering 10% deposit mortgages, and these are now being withdrawn or only a few offered each day to get the footfall.

“The lack of options could leave first-time buyers or movers without access to mortgages at a critical time for the housing market.

Mr Sykes said the reason for the withdrawals was that many banks were still grappling with reduced capacity as staff worked remotely and applications took longer to process. 

“Lenders are also trying to avoid taking on riskier propositions,” he added. “They’re making loans more difficult to process and less attractive to riskier borrowers.

“An already restricted market has become significantly more restricted and very few options remain for first-time buyers and small deposit borrowers.”

There are currently no mortgages available for buyers with a smaller deposit than 10pc of the property's value.”

 

https://www.telegraph.co.uk/personal-banking/mortgages/first-time-buyers-frozen-90pc-mortgages-pulled-sale/

 

Link to post
Share on other sites

This suggests to me that banks and Building societies are pricing In a guaranteed drop of 10% for most of the market (high end properties in a few country locations are going above asking for cash buyers, but they do not support the market).

Link to post
Share on other sites
1 minute ago, longgone said:

good make it 40% minimum 

If the market starts to fall at a considerable pace, then I think 20% mortgages will go the same way as 10% mortgages...banks will advertise them available, but unless you have been in a job for 5 years in a super safe industry, forget it. There is an element of chicken and egg vs musical chairs. If they don’t offer high LTV mortgages, the market will implode due to lack of bottom end buyers, but at the same time they don’t want to be holding on to bad loans. It is clear our economy is going to hell in a basket because the parts I voted for are completely useless, and I think the penny is dropping with the banks that there are going to be a huge number of job losses.

Link to post
Share on other sites
6 minutes ago, HovelinHove said:

Mr Sykes said the reason for the withdrawals was that many banks were still grappling with reduced capacity as staff worked remotely and applications took longer to process. 

Yes I'm sure that's why 90% mortgages are being withdrawn! If they want a deposit bigger than 10% that means they expect falls to be bigger than 10% - also presumably if they thought that risk was remote they'd leave 90% mortgages out there but just price the risk (i.e. the interest rate they charge you) to reflect that - the fact they're withdrawing them completely suggests to me they think that fall is pretty much a certainty.

Link to post
Share on other sites
1 hour ago, HovelinHove said:

If the market starts to fall at a considerable pace, then I think 20% mortgages will go the same way as 10% mortgages...banks will advertise them available, but unless you have been in a job for 5 years in a super safe industry, forget it. There is an element of chicken and egg vs musical chairs. If they don’t offer high LTV mortgages, the market will implode due to lack of bottom end buyers, but at the same time they don’t want to be holding on to bad loans. It is clear our economy is going to hell in a basket because the parts I voted for are completely useless, and I think the penny is dropping with the banks that there are going to be a huge number of job losses.

Now i`m no economist but if i ran a bank i would be worrying about the loans i already had and how to offload the risky ones before worrying about new one`s. 

but yes higher LTV lower risk to them, trouble is its warped by deposit contributions from you know who.  

they should just let it go this time clear the decks. 

 

Link to post
Share on other sites
1 hour ago, longgone said:

Now i`m no economist but if i ran a bank i would be worrying about the loans i already had and how to offload the risky ones before worrying about new one`s. 

 

Average LTV in UK is around 40%. Its new loans only that are a risk. 

Link to post
Share on other sites
1 minute ago, Simhadri said:

Seems FTBs will have to wait few more years to get onto housing ladder.

No problem, few more years of rent to pay unless Boris unleashes 20% FREE deposit to FTBs.

Rishi Sunak is toying that idea.

Nah, 30% discounts to FTB. Funded by you.

Link to post
Share on other sites
3 hours ago, HovelinHove said:

.

“The lack of options could save  first-time buyers or movers from their own greed and stupidity at a critical time for the housing market.

 

Ftfy

Link to post
Share on other sites
1 minute ago, Peter Hun said:

Nah, 30% discounts to FTB. Funded by you.

Nah, even with 30% discounts, they can't buy with 5% deposit :)

https://www.moneywise.co.uk/news/2020-06-09/lenders-pull-first-time-buyer-mortgages-again

Why are lenders pulling mortgages?

Lots of lenders have had to stop working on mortgages because of staffing issues as a result of the pandemic.

Banks and building societies have also had to shift resources because of the volume of calls from borrowers looking to take out a mortgage holiday.

 

So those FTBs in their 30s will be pushed few more years to wait for HPC.

But even with 30% drop, they can't buy unless they've bigger deposit which is difficult with current job market.

So wheel will rotate again and HTB will be unleashed again with smaller deposits and market starts moving.

Until then, most of sellers will sit tight on properties instead of offering any salivating discounts.

Nobody wants to lose their money.

 

Link to post
Share on other sites
3 minutes ago, Simhadri said:

.

So wheel will rotate again and HTB will be unleashed again with smaller deposits and market starts moving.

 

 

In your dreams dude. Govt is wetting its pants over future inflation

Link to post
Share on other sites
9 minutes ago, Simhadri said:

Nah, even with 30% discounts, they can't buy with 5% deposit :)

https://www.moneywise.co.uk/news/2020-06-09/lenders-pull-first-time-buyer-mortgages-again

Why are lenders pulling mortgages?

Lots of lenders have had to stop working on mortgages because of staffing issues as a result of the pandemic.

Banks and building societies have also had to shift resources because of the volume of calls from borrowers looking to take out a mortgage holiday.

 

So those FTBs in their 30s will be pushed few more years to wait for HPC.

But even with 30% drop, they can't buy unless they've bigger deposit which is difficult with current job market.

So wheel will rotate again and HTB will be unleashed again with smaller deposits and market starts moving.

Until then, most of sellers will sit tight on properties instead of offering any salivating discounts.

Nobody wants to lose their money.

 

divorce and death still occur 2nd wave who knows.  FTB can save hard over the next 12 month and be cash buyers ?

they can invest in hertz and make 800% in 3 days,  

Link to post
Share on other sites
25 minutes ago, Simhadri said:

Seems FTBs will have to wait few more years to get onto housing ladder.

No problem, few more years of rent to pay unless Boris unleashes 20% FREE deposit to FTBs.

Rishi Sunak is toying that idea.

With the OECD forcast of 11% shrink in UK gdp, with 14% predicted with a 2nd wave, me thinks the Chancellor will have more pressing issues on his hands in the near to mid term future.

Schools being one, Statues being the other...ok I'm joking there.

Link to post
Share on other sites
9 minutes ago, Roman Roady said:

With the OECD forcast of 11% shrink in UK gdp, with 14% predicted with a 2nd wave, me thinks the Chancellor will have more pressing issues on his hands in the near to mid term future.

Schools being one, Statues being the other...ok I'm joking there.

Agreed. I think house prices going down 20% are quite acceptable to the government given they won't get blamed for it.

Link to post
Share on other sites

Simple answer - let house prices fall.

If a £200k house price falls to £100k their £20k deposit means than can get an 80% LTV instead of a 90% LTV and pay off their mortgage much faster!

A sort of help to buy scheme which actually helps FTBs!

Edited by MARTINX9
Link to post
Share on other sites
32 minutes ago, Simhadri said:

Nah, even with 30% discounts, they can't buy with 5% deposit :)

So those FTBs in their 30s will be pushed few more years to wait for HPC.

But even with 30% drop, they can't buy unless they've bigger deposit which is difficult with current job market.

So wheel will rotate again and HTB will be unleashed again with smaller deposits and market starts moving.

Until then, most of sellers will sit tight on properties instead of offering any salivating discounts.

Nobody wants to lose their money.

 

Nobody wants to lose money, but people do lose money when they are forced to sell. Others won't sell, but those who have to...happy days.

Link to post
Share on other sites
12 minutes ago, Roman Roady said:

With the OECD forcast of 11% shrink in UK gdp, with 14% predicted with a 2nd wave, me thinks the Chancellor will have more pressing issues on his hands in the near to mid term future.

Schools being one, Statues being the other...ok I'm joking there.

Problem is Rishi, the Cabinet and Tory MPs - and most MPs - have their wealth tie up in housing assets. On a personal level that may matter?

Lets get construction and related jobs moving - more help to buy helps save jobs?

Edited by MARTINX9
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 415 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%



×
×
  • Create New...

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.