Nationwide trying not to crash the market.

[dougless]

I spotted this on the Nationwide site in the section where they are helping members with mortgages.  Needless to say there is no help for renters but hey ho we know we are scum.  Anyway, don't worry if you have a Nationwide mortgage because they have said this:

Our commitment to mortgage members

If you’ve fallen into arrears because of the financial impact of coronavirus, and so long as you stay in touch and keep working with us to help get your mortgage back on track, we will not take any action to repossess your home until 31 May 2021. By which time we sincerely hope your circumstances will have changed.

https://www.nationwide.co.uk/support/coronavirus/mortgage-support

[Si1]

It's just a warning they're going to screw you to the wall in 2021

[spyguy]

NW - and other banks - will be writing low to no mortgages for at least 6 months.

As it stands, they have mortgage books. Some at low LTVs, some at high LTVs..

Theyve probably got a good idea of how many of their mortgages are going bad bad, but, bar the odd letter which they hope the mortgagee will respond too, they are crossing their fingers.

The UK is going to sharp shock recession at least. It might be a lot worse.

And its going into this recession with stupidly high LTV lending, just as Mr n Mrs Mortgage are at risk of losing at least one job, just when IRs are probably going to rise as both more stuff comes back from China and the C19 slush fund hits the index figures, just when the first batch of HTB try and remortgage and start paying back the 'free' money.

Houses should have been let fall in 2008. But Brown wanted to be know as the best leader ever.

The benefit and housing sector should have been started on in 2010, when the coalition came in. Instead, they had a lot of work of mopping up Browns mess, then started down the line of can kicking a la HTB.

IO mortgages should have been canned in 2010, forcing them to move to repayment in 2010. More can kicking.

UKGGIOV/FCA/BoE have put the basis for sorting out 2008. But its been too late.

Now you face all those London/SE IO mortgages, 50% of which have not been converted to a repayment or RIO, about to mature.

The high prices in London are a bit of mirage, as they are down to very lwo IRs and a even lower transactions.  Even then, London/Se has been falling for ~4 years. Once you start getting 1000s of IO property hitting the market that trickle will turn ot a flood.

 

 

 

 

 

 

[Patfig]

BEAR FOOOOOOOOD

[Si1]

I'm so glad we had the competent bold rockstar Mr Carney as airline pilot guiding our precious economy this last decade.

[spyguy]

16 minutes ago, Si1 said:

I'm so glad we had the competent bold rockstar Mr Carney as airline pilot guiding our precious economy this last decade.

https://en.wikipedia.org/wiki/Mark_Carney#Since_2020

Since 2020[edit]

Carney was appointed as United Nations special envoy for climate action and finance as he prepared to step down as governor of the Bank of England in March 2020.[43] In January 2020, UK Prime Minister, Boris Johnson, appointed Carney to the position of finance advisor for the UK presidency of the COP26 United Nations Climate Change conference due to take place in Glasgow;[44] at that time the conference was scheduled for November 2020 but was later postponed to November 2021.[45]

Now Mark, I want you to go out and collect as many carbon atoms as possible.

 

[Peter Hun]

2 hours ago, dougless said:

Anyway, don't worry if you have a Nationwide mortgage because they have said this:

I was under the impression that all lenders had made that commitment

[Speed1987]

Banks and building societies are spreading the volume, of property which comes available on the market.

They are also moving some customers to interest only payments.

This will,

1. Reduce supply.

2. Reduce volume.

3. Give owners the chance to adjust, reorganize finances and find new employment.

4. May push prices up over the next year.

Without significant volume, no crash will occur, demand is to high.

 

Edited June 26, 2020 by Speed1987

[“Nasty Piece of work”]

13 minutes ago, Speed1987 said:

Without significant volume, no crash will occur, demand is to high.

Without a job, rearranging the deckchairs by rcing around with the payment vehicle will produce very little salvage.  Your assumptions presume maintaining a wage - it isn’t happening. The situation will be made worse by telephone number, space cadet mortgages.

[dougless]

23 minutes ago, “Nasty Piece of work” said:

Without a job, rearranging the deckchairs by rcing around with the payment vehicle will produce very little salvage.  Your assumptions presume maintaining a wage - it isn’t happening. The situation will be made worse by telephone number, space cadet mortgages.

This is my view.  The BS's and Banks are trying to limit a flood of repossessions but the number of buyers who can afford current prices will be limited.  Another 'black swan' event like, heaven forbid, interest rate rises, could really help the downward slide.

[T M]

not much "help" though is it ? I read that as: "we will slap on additional interest and late payment fees and collect in a year's time"

[Timm]

10 minutes ago, T M said:

not much "help" though is it ? I read that as: "we will slap on additional interest and late payment fees and collect in a year's time"

There is a name for this.

Negative amortization.

[captainb]

33 minutes ago, dougless said:

This is my view.  The BS's and Banks are trying to limit a flood of repossessions but the number of buyers who can afford current prices will be limited.  Another 'black swan' event like, heaven forbid, interest rate rises, could really help the downward slide.

 

Number of people who can afford current prices has been limited for a ages see low transaction count. 

 

Issue is from the sell side particularly if the banks are being forgiving why sell? 

So you can avoid paying a cheap mortgage for much higher levels of rent? Hardly a suitable option for many 

[blackhole]

9 minutes ago, captainb said:

Number of people who can afford current prices has been limited for a ages see low transaction count. 

Issue is from the sell side particularly if the banks are being forgiving why sell? 

So you can avoid paying a cheap mortgage for much higher levels of rent? Hardly a suitable option for many 

Pricing is made at the edges, no doubt there, so the mirage could continue on that basis alone.

And sorry to repeat this, again, but you still need a sizeable deposit that aligns with the crazy asking prices.  

You are absolutely correct.  Why rent when you can buy for cheaper? 

So why are renters now approaching 50% or more of the population?

(maybe they cant afford to)

Edited June 26, 2020 by blackhole

[captainb]

2 minutes ago, blackhole said:

Pricing is made at the edges, no doubt there, so the mirage could continue on that basis alone.

And sorry to repeat this, again, but you still need a sizeable deposit that aligns with the crazy asking prices.  

You are absolutely correct.  Why rent when you can buy for cheaper? 

So why are renters now approaching 50% or more of the population?

(maybe they cant afford to)

Yes but who sells to rent? 

If you have done all the work to have a property you are not going to sell to spend more on rent than you spend on the mortgage. 

It takes both sides to cause a crash not just the buy side being restricted by deposit size. 

[Habeas Domus]

My reading:

We are going to give you a year of quiet breathing space while we offload our own BTL empire on the quiet before the SHTF in 2021

[blackhole]

5 minutes ago, captainb said:

Yes but who sells to rent? 

If you have done all the work to have a property you are not going to sell to spend more on rent than you spend on the mortgage. 

It takes both sides to cause a crash not just the buy side being restricted by deposit size. 

Nobody - they're forced to rent often by a situation out of their control.  Though not many of them about...

I'm referring to FTBs, by the way.  Many don't want to rent, they just dont have a choice in the matter.  Affordability has become a genuine problem is all i'm saying.  You sellers can ask for all you want, but there comes a time that the bid cant be met due to all sorts of circumstances.

[Speed1987]

6 minutes ago, captainb said:

Yes but who sells to rent? 

If you have done all the work to have a property you are not going to sell to spend more on rent than you spend on the mortgage. 

It takes both sides to cause a crash not just the buy side being restricted by deposit size. 

Exactly,

Why would I sell to pay 50% more in rent...

Banks are allowing people to move over to interest only repayments, will likely to be 80% cheaper than renting...

E.g.

100k house, £650 to rent. 

100k house interest only £184.

100k house, £377 repayment.

10% deposit.

Why wouldn't I just switch to a interest only payment, for now until the economy recovers?

 

[dougless]

2 minutes ago, Habeas Domus said:

My reading:

We are going to give you a year of quiet breathing space while we offload our own BTL empire on the quiet before the SHTF in 2021

Seems about right......

[blackhole]

1 minute ago, Speed1987 said:

Exactly,

Why would I sell to pay 50% more in rent...

Banks are allowing people to move over to interest only repayments, will likely to be 80% cheaper than renting...

E.g.

100k house, £650 to rent. 

100k house interest only £184.

100k house, £377 repayment.

10% deposit.

Why wouldn't I just switch to a interest only payment, for now until the economy recovers?

 

You still need a mortgage, a job, a good credit history and a deposit.

IO mortgages are much harder for the consumer to get these days.

I'm talking about the start of the chain - FTBs.

(hence the very low transaction rates which create HPI mirage pricing)

Edited June 26, 2020 by blackhole

[captainb]

1 minute ago, blackhole said:

Nobody - they're forced to rent often by a situation out of their control.  Though not many of them about...

I'm referring to FTBs, by the way.  Many don't want to rent, they just dont have a choice in the matter.  Affordability has become a genuine problem is all i'm saying.  You sellers can ask for all you want, but there comes a time that the bid cant be met due to all sorts of circumstances.

Oh i agree with that. 

Issue you have is the ask is being met for the few sellers that want to sell. 

For a genuine price adjustment mortgage costs need to rise to be more than rent. 

Frankly its non sensical that they are cheaper given its capital you are paying off rather than just a sunk cost every month. 

[Locke]

Just now, Speed1987 said:

Banks are allowing people to move over to interest only repayments

For now

1 minute ago, Speed1987 said:

interest only repayments, will likely to be 80% cheaper than renting

For now

1 minute ago, Speed1987 said:

100k house, £650 to rent. 

Dream on. Try £400

3 minutes ago, Speed1987 said:

10% deposit.

Not happening any more.

2 minutes ago, Speed1987 said:

Why wouldn't I just switch to a interest only payment, for now until the economy recovers?

It is not up to you, it is up to your landlord, the bank.

[captainb]

3 minutes ago, blackhole said:

You still need a mortgage, a job, a good credit history and a deposit.

IO mortgages are much harder for the consumer to get these days.

I'm talking about the start of the chain - FTBs.

(hence the very low transaction rates which create HPI mirage pricing)

Accept in the real world first time buyer numbers were at a 12 year high just before this.. So those problems were being overcome and at these "crazy" prices. 

Issue with sites like this is that its a perfect echo chamber. I think prices will fall but suggestions that they will collapse is believing what you want to believe rather than reality based on the current situation. 

 

 

https://www.gov.uk/government/news/housing-minister-hails-first-time-buyer-numbers-now-at-12-year-high

[blackhole]

2 minutes ago, captainb said:

Oh i agree with that. 

Issue you have is the ask is being met for the few sellers that want to sell. 

For a genuine price adjustment mortgage costs need to rise to be more than rent. 

Frankly its non sensical that they are cheaper given its capital you are paying off rather than just a sunk cost every month. 

Yes for a small amount of transactions.

Cheaper doesnt even matter.  Many simply cannot afford to rent, save a deposit and obtain a mortgage.  

The question remains - how long can this mexican standoff last?  

 

[Speed1987]

10 minutes ago, blackhole said:

You still need a mortgage, a job, a good credit history and a deposit.

IO mortgages are much harder for the consumer to get these days.

I'm talking about the start of the chain - FTBs.

(hence the very low transaction rates which create HPI mirage pricing)

Yea, I'm talking about current mortgage holders, being offered to move over, to interest only options to weather the storm of covid.