Mortgage Approvals

[colonel faulkner]

thanks for sharing that info with us all.

Yes, I remember now that you also paid a lot less than the current market value for your house purchase at the time.

I do however think the drops will be a lot more than you are estimating BUT it's all about area & house type as well. If you're in a very good area & have a nice period house with large garden etc, then you will fair better.

good luck anyway.

I've often wondered if this is true or not. Surely a lack of money will affect all houses in roughly the same way? I hope you're right, as I'm completing on a 6-bed Georgian country house, 2.5 acres of land & excellent school catchment. Add in proximity to a lovely village as a bonus.....BUT I fully expect that if/when the downturn hits, I'll lose roughly as much in % terms as most others. Having said that, I got a hefty discount on the A.P. AND 20 grand of remedial work thrown in, so I'm comfortable with my decision.

Edited November 23, 2007 by colonel faulkner

[Realistbear]

Lowest level since records began in 1997:

http://news.bbc.co.uk/1/hi/business/7108970.stm

Apparently, a one off, yeh right

Telegraph also reporting the crash in approvals as at a RECORD:

http://www.telegraph.co.uk/money/main.jhtm...3/bcnbba122.xml

Mortgage approvals hit a record low

By Emma Thelwell

Last Updated: 11:15am GMT 23/11/2007

Mortgage approvals for home buyers fell to a record low last month, according to latest data from the British Bankers' Association, providing further signs that Britain's property boom is slowing.

Kensington halts loans to high-risk borrowers

The BBA announced that the number of approvals

tumbled 37pc during October

to 44,105, from 53,997 in September.

It is the

third consecutive month that approvals have dropped

as lenders continue to tighten their criteria and consumers struggle with shrinking disposable income.

David Dooks, BBA statistics director, said: "October's data provides evidence of a

rapidly slowing mortgage market

and of consumers limiting their personal borrowing."

If it looks like a crash, sounds like a crash and walks like a crash the probability is that it is a crash. Why don't they just accept the new reality: there is HPC going on.

Edited November 23, 2007 by Realistbear

[thedebtisreal]

Property which will never dissapear in a puff o corporate smoke.

You mean, like in a credit crunch.

In the words of Mervyn King to George Mudie.

"You need to go away and think about what you just said."

[Gone baby gone]

You mean, like in a credit crunch.

In the words of Mervyn King to George Mudie.

"You need to go away and think about what you just said."

Unforunately for many with a colossal life-crippling mortgage, or a highly leveraged BTL portfolio, the debts they have will not disappear in a puff o smoke. They will stick around, ruining their lives for years to come.

[lets get it right]

Price sensitivty just now, but not for long once BOE start dropping rates.

Chatshows on radio are full of people saying they've been let down yet again by shares by which they mean thier huge overnight losses on N Rock and A & L shares. Many comments along the lines of they will now only trust thier own investments in property which will never dissapear in a puff o corporate smoke.

The lower interest rates / the falling interest rates do not seem to be doing the trick in the States this time. Could this be because we are in the throes of a credit crunch, unlike last time they dropped the rates.

Could this be because banks are sitting on top of massive losses on CDOs, SIVs etc and are / are going to completely change their lending models? I get the feeling that everyone in the world of finance knows the game is up - but they're desperately trying to keep the plates spinning.

I get the impression you think that an interest rate cut - like August 2005 - is just going to make the billions the banks have lost go away. It is, truly, different this time.

Last time we had a slow down in 2004/5 - when you finally changed to a bear as I recall - we did not have:

• a run on a bank that the government has bailed out to the tune of 25 billion

• shares in other banks falling through the floor

• shares in builders falling through the floor

• shares in a big BTL lender - Paragon - halving in a day

• Kensington mortgages saying they are getting out of sub prime

Yep, lot different this time.

Edited November 23, 2007 by Lets' get it right

[Mr Nice]

If only! Even if mortgage lending was outlawed today, prices would still take months and years to edge down. Joe Public Vendors will resist tooth and nail.

how long did it take for HPC 1?

[The Colour]

Lowest level since records began in 1997:

Apparently, a one off, yeh right

I would urge against reading too much into one month's figures

Bernard Clarke, Council of Mortgage Lenders

[Catch22]

[Bloo Loo]

Feelings are the same, I think the government will kill the currency, and inflate the debt away, there will be a crash but the prices of family houses wont drop more than 10->20%..

Yeah, they are getting rid of the debt alright- straight into negative equity!!!

[Guest grumpy-old-man]

I've often wondered if this is true or not. Surely a lack of money will affect all houses in roughly the same way? I hope you're right, as I'm completing on a 6-bed Georgian country house, 2.5 acres of land & excellent school catchment. Add in proximity to a lovely village as a bonus.....BUT I fully expect that if/when the downturn hits, I'll lose roughly as much in % terms as most others. Having said that, I got a hefty discount on the A.P. AND 20 grand of remedial work thrown in, so I'm comfortable with my decision.

not sure about being right all the time BUT I am very, very, very, very, very rarely wrong, with stuff that I focus on.

[Rinoa]

The BBA announced that the number of approvals tumbled 37pc during October to 44,105, from 53,997 in September.

Good figures for the bears. Couple of things. Approvals down from 53997 to 44105 is not a fall of 37%, Try 16%.

The 37% refers to the fall from last October. This may have been as a result of BBA changing how they calculate the stats. We also have to remember that BBA do not include building society in their data, only banks.

NR and other banks have had funding concerns. Generally building societies have no such worries. The reason for the 37% fall YoY may simply be that the building societies are taking business away from cash strapped banks.

So good figures for the bears, but it may be prudent to be cautious.

[notthereyet]

this months figures just released 44,000 (cnbc news flash - no link yet)

is that low?

....it did say that the oct 06 number was 70,000.

I wonder how much of this 37% YOY drop on mortgages is due to refusals by the lenders compared with afordability.

[Converted Lurker]

I wonder how much of this 37% YOY drop on mortgages is due to refusals by the lenders compared with afordability.

The market has had approx. 40% of product stripped out, however, these latest BBA figures 'lag' a bit so IMHO they refer more to 'activity' in September as opposed to when the crunch began to bite. These figures relate more to five interest rate rises, we havn't even started on the effects of the crunch...scary

[Culpability Brown]

I think the percentage drop in these figures relates largely to the decline in Equity Release Loans. In 2002 HSBC were approving 2000 mortgage loans a month , a good 70% of which were ERLS's.

It's this lack of consumer spending power that's really going to dent the economy and the mortgage market over the next year or so.

How that impacts housing is yet to be seen still in my view.

[Converted Lurker]

Good figures for the bears. Couple of things. Approvals down from 53997 to 44105 is not a fall of 37%, Try 16%.

The 37% refers to the fall from last October. This may have been as a result of BBA changing how they calculate the stats. We also have to remember that BBA do not include building society in their data, only banks.

NR and other banks have had funding concerns. Generally building societies have no such worries. The reason for the 37% fall YoY may simply be that the building societies are taking business away from cash strapped banks.

So good figures for the bears, but it may be prudent to be cautious.

with respect, my deeply in denial chum, your statements are silly. These figures are a recorded low, even a 16% swing month on month (Sep-Oct) is unprecedented. I spoke to the BBA 'stats guys' and pr guys at length this morning, they were that surprised at the data they double checked it with the sources...it was that bad....and next months' figures will be apocalyptic...Merry Xmas

[OurDayWillCome]

The 37% refers to the fall from last October. This may have been as a result of BBA changing how they calculate the stats.

Below is an explanation form the guy who brought us PropertySnake (he seems like he knows what he's talking about but feel free to cross reference him if it makes you feel better Croppers):

They have gone back and revised all their old data to reflect the seasonal adjustment, so the comparison with 2005/6 still stands up. If you go back and look at their old releases, the approvals for Dec/Jan were often 50,000 or so, but in the latest release they have been seasonally adjusted upwards.

Ouch! The 37% stands

[kagiso]

how long did it take for HPC 1?

Go look at the Nationwide HPI against inflation index, in the last two crashes, from peak to trend took just two years. If the same happens again that means 20% pa real drops, 16% pa nominal drops by winter 2009.

But it's different this time, BTL will make it faster.

[Guest grumpy-old-man]

Below is an explanation form the guy who brought us PropertySnake (he seems like he knows what he's talking about but feel free to cross reference him if it makes you feel better Croppers):

They have gone back and revised all their old data to reflect the seasonal adjustment, so the comparison with 2005/6 still stands up. If you go back and look at their old releases, the approvals for Dec/Jan were often 50,000 or so, but in the latest release they have been seasonally adjusted upwards.

Ouch! The 37% stands

nice one ourdaywillcome.

mind you Mr Cropper has a good sense of humour iirc, & boy will he need it very soon.

[OurDayWillCome]

nice one ourdaywillcome.

mind you Mr Cropper has a good sense of humour iirc, & boy will he need it very soon.

Thank you very much Sir

I'm sure Mr Cropper will be fine

[Alice Cook]

Here is a nice chart tracking mortgage approvals over the last three years.

Alice

http://ukhousebubble.blogspot.com

Visit My Website

[Guest grumpy-old-man]

Here is a nice chart tracking mortgage approvals over the last three years.

Alice

http://ukhousebubble.blogspot.com

Visit My Website

Hi Alice,

you can't beat data in a graph to get the message across can you ? that's a big, big drop compared to the last 2 years.

you won't be a bitter renter for much longer by the looks of things, I see you transformed into a very happy renter for 2-3 years, then a happy buyer........what do you think ?

[Rinoa]

mind you Mr Cropper has a good sense of humour iirc, & boy will he need it very soon.

Hi GOM

Hope you're around on November 29 when the BoE reveal the combined figures for banks and building societies.

BTW, although low approval numbers are often a precursor to price falls, it may be that the current low approvals are simply down to HIPs reducing supply.

Soon be Q1 2008. Good luck with the January YoY indices.

[Ash4781]

http://www.bba.org.uk/content/1/c6/01/15/5...ease_231107.pdf

Are the weak personal deposits due to the effects of inflation in the economy?

Looks to me like people are getting squeezed !

Edited November 23, 2007 by Ash4781

[Guest grumpy-old-man]

Hi GOM

Hope you're around on November 29 when the BoE reveal the combined figures for banks and building societies.

BTW, although low approval numbers are often a precursor to price falls, it may be that the current low approvals are simply down to HIPs reducing supply.

Soon be Q1 2008. Good luck with the January YoY indices.

yes, that'll be the problem, HIPS & supply issues, not enough houses'n'stuff like that.

Edited November 23, 2007 by grumpy-old-man

[Bloo Loo]

Hi GOM

Hope you're around on November 29 when the BoE reveal the combined figures for banks and building societies.

BTW, although low approval numbers are often a precursor to price falls, it may be that the current low approvals are simply down to HIPs reducing supply.

Soon be Q1 2008. Good luck with the January YoY indices.

not forgetting the 40 odd percent of mortgage rejections