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BTLlivingthedream

Dt: Mortgage Refusals Soar As Lenders Tighten Up

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Dont get too stressed out about the RM figures. The structural fundamentals are in place for HPD going in to 08. Stricter lending criteria, SP resets, debt ceiling, over-stretched affordability and so on. The whole housing cycle doesnt work to days, weeks or even months(in terms of profound change). Ive said it before that the best metaphor is one of a long tanker that turns around.

Of course, there are accelerants out there e.g. BTL drying up and the wave of distressed SP resets that are on the horizon.

Will we have a HPC next year i.e. 20+? No. Will we see turmoil and drops in HP next year? Personally i think that is guaranteed.

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Mortgage refusals soar as lenders tighten up

By Emma Thelwell

Last Updated: 11:04am BST 15/10/2007

The number of rejected mortgage applications has risen by 60pc in the last six months, according to latest research from MoneyExpert.

# Flat prices may be hit by HIPs

# Roger Bootle: Enough humble pie, house prices will fall

The financial comparison website found that more than 738,000 people have been turned down by mortgage firms since March, thanks to banks and building societies enforcing stricter lending criteria.

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In the previous six months, to March, figures show that around 463,000 people had their applications rejected.

With house prices averaging 10pc more expensive than this time last year – and 20pc more than 2005 – the worst hit were first-time buyers between the ages of 25 and 34.

According to MoneyExpert, around 382,000 young mortgage applicants were denied.

However, Sean Gardner, chief executive, warned: "With so many applications being rejected it's unlikely that only first-time buyers are being affected. Anyone looking to remortgage should apply with caution – too many failed applications could affect your credit rating."

The Bank of England has pushed through five interest rate rises since August 2006, with two since May this year – driving up the base rate from 4.5pc to 5.75pc and adding around £1,320 to the annual cost of a typical £150,000 variable rate mortgage (over 25 years on a repayment basis).

Mr Gardner added: "Lenders quite reasonably do not want to take risks when there are pressures on how much people can afford, so it's up to the applicant to convince their bank that they can cope with the repayments."

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