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Lenders Pull Out of Mortgage Deals

Lenders pull out of mortgage deals

By Sharlene Goff and Jane Croft

Published: March 14 2008 22:03 | Last updated: March 14 2008 22:03

Lenders are frantically withdrawing many of their mortgage offers – sometimes with less than an hour’s warning – as severe funding constraints mean that they are unable to meet demand for the most competitive deals.

Brokers had as little as 10 minutes’ notice on Thursday when Scottish Widows removed the bulk of its mortgage range.

The root of the problem is unprecedented volatility in the mortgage markets.

Three-month Libor – the rate at which banks lend to each other – yesterday climbed to 5.93 per cent, its highest level since the start of the year. “Certain lenders are pulling deals at extremely short notice,” said Paul Welch, managing director of Clegg Gifford Private Clients, the mortgage broker. “So few lenders are in the market now that those left just cannot cope with the business.”

According to Moneyfacts.co.uk, the comparison service, there are just 6,186 mortgages left in the market, less than half the number available at the end of August.

The market for borrowers without a deposit has practically dried up. Only two major lenders – Mortgage Works, a division of Nationwide, and Abbey – are now offering 100 per cent loan-to-value mortgages. Mortgage Express, part of Bradford & Bingley, withdrew from this market earlier this week.

In the past lenders would typically have given at least a few days’ notice before they withdrew rates. But some are now choosing to give little or no notice so as to avoid a last-minute stampede from borrowers desperate to secure the best deal.

Scottish Widows, which is part of Lloyds TSB, said it had withdrawn from the market for a few days because it was seeing “very high levels of applications”.

C&G, also part of Lloyds, announced yesterday morning that it was pulling a number of buy-to-let mortgage loans from brokers at the end of the day to prevent its levels of service from being flooded by new applications.

Halifax, Mortgage Express, Bank of Scotland and Woolwich have also withdrawn rates at short notice in the past month.

“Borrowers can no longer afford to delay their application once they have found a mortgage that suits them,” said Mr Welch. “I would not be at all surprised if more deals were pulled at the last minute. This could pose a real problem for borrowers.”

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its all going a bit pete tonge :lol:

with fewer mortgages available and the limited ones that are available looking unattractive this can only dampen demand and in the process increase supply- what have we heard about supply and demand?

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its all going a bit pete tonge :lol:

with fewer mortgages available and the limited ones that are available looking unattractive this can only dampen demand and in the process increase supply- what have we heard about supply and demand?

more supply more demand :rolleyes:

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The lenders took the piss out of their finance lines, making any sort of loan. Some along the end of the finance lines really didn't know any better and were fooled into purchasing whatever rubbish they could get away with. The FED, The BOE just looked on and watched and poured more petrol on the fire.

Now the lenders are going to have a financial enema.

It could have been avoided, all of it.

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NO CREDIT = NO MARKET = PRICES UNSUSTAINABLE AT CURRENT LEVELS B)

That's the point - no credit, no (or much lower than used to be) demand for property. Though one thing still struck me, namely, that there were still 100% deals available, but maybe that's only theoretical...

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That's the point - no credit, no (or much lower than used to be) demand for property. Though one thing still struck me, namely, that there were still 100% deals available, but maybe that's only theoretical...

From 2 lenders, according to the article.

2.

Somehow I don't think they'll keep playing much longer!

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House Price Crash 2007-2012

Stage One: Credit Crunch Phase One, began August 9th 2007

Stage Two: Credit Crunch Phase Two, began March 15th 2008

I remember many "experts" (usually VI's :rolleyes: ) predicting talking up the market immediately after the first crunch phase (and even after Northern Rock in September) that this was a "blip".

Some blip! :lol: Many commentators in the press this weekend admit that the game is now up.

http://www.telegraph.co.uk/property/main.j...15/pword115.xml

That Northern Rock and the freeze of the international money markets last summer was not a "one-off." Tighter lending conditions are here to stay - whatever the Fed/ECB/BoE do.

RIP UK HOUSING MARKET

I love the smell of vindication on a Saturday morning - smells like victory. :P

Edited by SlumpmonkeyII

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Unable to borrow=unable to buy=unable to keep property sky high. ;)

= falling house prices + rising costs = lower living standards

Edited by Bardon

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= falling house prices + rising costs = lower living standards

Why? Lower house prices mean smaller mortgage repayments= more disposable income to spend=greater growth.

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= falling house prices + rising costs = lower living standards

Lower living standards will apply to those who bought (or MEWed) at the wrong time, ie at the top of the market.

Lower living standards will not apply to those who enter home ownership in three to four years time as they will be paying much less for a house then than they would be paying today.

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Also in today FT page 5.

"DOORS SLAM ON MORTGAGE DEALS"

Mortgage brokers say the speed at which top mortgage rates are disapperaing is creating significant problems

for borrowers. Ian Gray, Senior Mortgage Manager at Clegg Gifford Private Clients said "Those coming off

deals now are feeling a big shock as there has been a huge jump in mortgage rates. He says, "Some clients

face monthly increases of up to £400. If they cannot afford the higher payments they might in extreme cases

have to sell."

Oh dear, oh dear, oh dear.

Oh dear.

Edited by time 2 raise interest rates

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From 2 lenders, according to the article.

2.

Somehow I don't think they'll keep playing much longer!

If I know anything about the Nationwide, their 100% loans will be restricted to people like newly qualified doctors/ accountants/ lawyers i.e. people who have been living on a shoestring for years so have no deposit, but whose earnings can expect to rocket over the next 5 years.

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From 2 lenders, according to the article.

2.

Somehow I don't think they'll keep playing much longer!

This is how the mortgage market seems to be falling apart. A major player goes from an outlying position and then the others collapse so that they don't get caught with the crud. It was 120% deals, now its 100%, soon it will be 90% and 95%.

However the no rental cover deals for buy to lets still seem to be around as do the "fast track" deals. There is still credit around at non-standard terms so the market has got a way to go.

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= falling house prices + rising costs = lower living standards

Shows how skewed the economy has become. In the old days it was falling incomes + rising costs = lower living standards

Even in the eighties people were not treating their houses as income in the same way (OK they weren't saving as much and credit card debts went up).

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  • 293 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%



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