"mortgage Market Shows Summer Slow Down"

[Realistbear]

As the fly said as it crawled accross the mirror, that's one way of looking at it:

http://www.moneyextra.com/news/news-mortga...ket-023375.html

Mortgage market shows summer slow down

After marking time while house hunters watched Wimbledon and the World Cup in June, hopes of a rise in mortgage market activity in July were dashed, says Moneyextra.

The average value of mortgages completed by AWD Moneyextra customers

dropped by 6.68% between June and July

to £137,591.65. That's also a fall of 5.76% on the average agreed mortgage value in July 2005 of £145,944.69. The average value of loans completed during the first seven months (Jan-July 06) was £141,797.56.

Things aren't always what they seem.

[papyrus]

.. fools and their money, or rather fools and someone elses money

UK mortgage lending surged to its highest level in nearly three years in July,

suggesting that the buoyant housing market shows no sign of slowing, figures

from the Bank of England showed.

The central bank said net mortgage lending surged by 9.8 bln stg in July, the

highest level since the all-time-high of 9.97 bln stg set in September 2003 and

well above analysts' forecasts for a more moderate increase of 9.0 bln stg.

The figure is far more than the six-month average of 8.9 bln stg and follows a

9.0 bln stg rise in June.

Further evidence of a strengthening housing market -- despite house prices

already at very high levels and affordability seen as extremely stretched --

will concern rate-setters at the Bank of England and increase expectations that

interest rates will rise again in the coming months, probably in November.

The BoE also said the number of approvals for house purchases, often seen as

a good indicator of future demand in the property sector, remained very strong,

totaling 120,000, the highest since January and above expectations for a reading

of around 118,000. Approvals were last higher than this in May 2004.

Edited August 30, 2006 by papyrus

[Willy Weasel]

The average value of mortgages completed by AWD Moneyextra customers dropped by 6.68% between June and July to £137,591.65. That's also a fall of 5.76% on the average agreed mortgage value in July 2005 of £145,944.69. The average value of loans completed during the first seven months (Jan-July 06) was £141,797.56.

[/indent]

Things aren't always what they seem.

You're absolutely right there RB - these figures suggest either that people are putting up bigger deposits or that house prices are falling. The figures seem at variance with the total lending figures for July posted elsewhere. It may be that mortgages completed by AWD Moneyextra customers aren't a particularly representative sample

[DabHand]

How about: lots of btl'ers and str-ers have seen the writing on the wall and have binned the house for what appears to be BMV for a quick sale. This has drawn in a larger number of buyers thinking they got a wicked bargain, who are otherwise fully paid members of the houses will only ever go up brigade.

This would explain both lower pricing and the increased number of mortgages.

[MrBenn]

You're absolutely right there RB - these figures suggest either that people are putting up bigger deposits or that house prices are falling. The figures seem at variance with the total lending figures for July posted elsewhere. It may be that mortgages completed by AWD Moneyextra customers aren't a particularly representative sample

Surely, the data just tells it as it is - demand for housing is as strong as ever and people will do what ever they have to, in order to get on the ladder!

[needle]

Surely, the data just tells it as it is - demand for housing is as strong as ever and people will do what ever they have to, in order to get on the ladder!

These are 'approved mortgage' figures - not money actually loaned out.

Before the money is given out a surveyor will have to value the property for the bank.

Secondly mortgage lending increasing while unsecured loans are falling tells me that people are still MEWing.

Not for investment or property purchase but to pay down other debts.

Essentially they think high interest debt (CCs, store cards, car loans) taken out on short term agreements can be moved to longer term, lower rate debt.

On the surface its a smart move but it also signals that people are over-indebted and cannot service the loans they hold on the terms they hold them.

Not good. Not good at all.

Now, back to that surveyor who will value the house for the bank. If he decides its not worth that much more well..... all those short term, high interest loans have to be paid from somewhere.....

[MrBenn]

These are 'approved mortgage' figures - not money actually loaned out.

Before the money is given out a surveyor will have to value the property for the bank.

Secondly mortgage lending increasing while unsecured loans are falling tells me that people are still MEWing.

Not for investment or property purchase but to pay down other debts.

Essentially they think high interest debt (CCs, store cards, car loans) taken out on short term agreements can be moved to longer term, lower rate debt.

On the surface its a smart move but it also signals that people are over-indebted and cannot service the loans they hold on the terms they hold them.

Not good. Not good at all.

Now, back to that surveyor who will value the house for the bank. If he decides its not worth that much more well..... all those short term, high interest loans have to be paid from somewhere.....

Yep, good argument - makes sense.

[Guest Shedfish]

..and just the amount itself - a 'mere' £137,591.65 mortgage. buttons

soft landing huh?

[Fudge]

Does the BoE new mortgage lending include those people moving up the ladder?

If so it still all depends on those houses at the bottom of the ladder selling which is becoming increasingly difficult.

[tenroom]

*Yawn*

Yadda yadda. . . . more "damning evidence" eh ?

There IS another reason why there were fewer completions . . . and this may come as some surprise to all the jokers who CONTINUALLY spout conflicting claptrap and - obviously - scour the web looking for more and more obscure evidence of the impending HPC that they've been banging on about for nigh on 3 years . . . . er . . . there isn't enough supply of property to meet demand

Jesus H Christ !! Yes the HPC will come but holding every f***ing piece of bo*lox out as "proof" so you can say "I was right" is pretty sad. Remember you've been saying it for an awfully long time now . . .

[MrBenn]

Yep, a compelling argument also, a shortage of supply is plausible.

Edited August 30, 2006 by MrBenn

[grey shark]

*Yawn*

Yadda yadda. . . . more "damning evidence" eh ?

Jesus H Christ !! Yes the HPC will come but holding every f***ing piece of bo*lox out as "proof" so you can say "I was right" is pretty sad. Remember you've been saying it for an awfully long time now . . .

Yadda yadda .............. you is de man with de big mouth ........yadda yadda .............

You sound like a frustrated bear , everything is in place , no one can predict the very top and bottom of a cycle these things can take years to play out , but as you write " Yes the HPC will come " so whats your guess when HPC will happen , next week , next month , next year , errrrr tommorow even

[tenroom]

Yadda yadda .............. you is de man with de big mouth ........yadda yadda .............

You sound like a frustrated bear , everything is in place , no one can predict the very top and bottom of a cycle these things can take years to play out , but as you write " Yes the HPC will come " so whats your guess when HPC will happen , next week , next month , next year , errrrr tommorow even

er . . . ok Mr Missing the Point which was that some of these bears are so desperate to have their theories proven correct they're willing to wheel out ANY old mickey mouse set of figures that appear to lend weight to their argument . . . . even if they've been banging on about it for YEARS.

It's not clever or astute to trot out someone else's wack statistics and to do so whilst ignoring perfectly plausible explanations for them - ie lack of suitable property on the market to purchase - just proves that you've more time to sit at your screen researching useless information than everyone else. Yes the HPC will come . . . eventually . . . but so will death. Either way, prizes won't be handed out particularly when the persons making said predictions are a couple of years out.

I choose not to guess when it'll happen but take stock of the MEANINGFUL indicators and plan my strategy accordingly. I was fully aware of the waffle spouted two years ago and took no action cos I had a feeling it wouldn't go tits up. This time, things appear to be a little more dire but mortgage approvals don't mean squat . . .

[needle]

.....some of these bears are so desperate to have their theories proven correct they're willing to wheel out ANY old mickey mouse set of figures that appear to lend weight to their argument . . . . even if they've been banging on about it for YEARS.

I quite agree. RB has a habit of over-egging the pudding.

...to do so whilst ignoring perfectly plausible explanations for them - ie lack of suitable property on the market to purchase

I think there is a shortage of property in some sectors and in some areas - but like any crash it wont be uniform.

My area, for example, is swimming in flats but lacks terraced housing. There are (literally) a million 3 bed semis but they are over-priced and not selling. Likewise with larger housing 4 beds/detached. The bottom of the market has all but collapsed and if you cannot sell the first place, you cannot move up the ladder.

This time, things appear to be a little more dire but mortgage approvals don't mean squat . . .

I agree on mortgage approvals meaning bugger all.

But you have to admit that VIs are using them to ramp the market.

Mortgage lending is up therefore they imply both house sales and house prices are up.

Doesnt hold water.