Jump to content
House Price Crash Forum
Sign in to follow this  
Laura

Mortgage Approvals Down Again

Recommended Posts

http://news.bbc.co.uk/2/hi/business/7520834.stm

The number of new mortgages approved by the major banks fell another 23% in June to a new record low.

The British Bankers' Association (BBA) said its members approved just 21,118 new home loans in June, down from 27,499 in May.

The figures were also 67% lower than in June last year.

The collapse in sales and fall in house prices has been caused by the mortgage drought, which was triggered by the credit crunch in the banking system.

The BBA said the number of homes sold in 2008 was likely to be the lowest since the recession at the start of the previous decade.

House prices are in line for further sharp falls in the months ahead, [and] will drop by 15% this year

Capital Economics

"Another record low number of mortgages approved by the banks for house purchase means that the whole market is likely to be at its least active since the early 1990's," said the BBA's statistics director, David Dooks.

Collapse

The figures for mortgages approved, but not yet actually lent, are considered are a very good indicator of near-term trends in the market.

Mortgage approvals graph

As such, they suggest that the collapse in sales is likely to continue for the rest of the year.

The BBA's members account for about two-thirds of mortgage lending but figures for all lenders, to be published next week by the Bank of England, are likely to show the same picture.

Last month they showed that approvals had fallen by 64% in the past year.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), said: "The continuing lack of availability of mortgage finance is proving a major drag on the level of property transactions and is increasingly being felt in the real economy."

"The modest cuts in the costs of borrowing seen over the past few weeks will unfortunately provide little relief for first-time buyers," he added.

Choosy lenders

Although the Bank of England has cut interest rates since the credit crunch started last year, mortgage lenders have generally been moving their mortgage rates in the opposite directi

The average two-year fixed rate deal for a new borrowers is now around 7%.

Lenders have become much more choosy about the loans they will make as they have sought to ration their available funds.

A year ago it was easy to get a loan of 100% or more of a property's value.

Now, nearly all loans are for a maximum of 90%, and several lenders now demand higher deposits, of 15% or even 20%.

Even so, the current collapse in lending to home buyers is outstripping the worst predictions of even the gloomiest commentators.

"Housing market activity continues to be tormented by the combination of weak buyer confidence, the faltering economy and labour market, and the mortgage credit squeeze," said Capital Economics.

"House prices are in line for further sharp falls in the months ahead, consistent with our forecast that house prices will drop by 15% this year," it added.

EDIT:- To highlight the RICS twit's nonsense

Edited by Laura

Share this post


Link to post
Share on other sites
4th thread on the topic!

Sod it...i just scanned two pages to check!

Mods, wipe it out please

Share this post


Link to post
Share on other sites
Sod it...i just scanned two pages to check!

Mods, wipe it out please

More lies from RICS and the BBC. There are PLENTY of mortgages available. There is NO lack of mortgages available...in fact lenders are falling over themselves to lend PROVIDED it's not a self cert 100% mortgage .

Approval activity is NOT down because of lack of mortgage availabilty, BUT BECAUSE PEOPLE ARE WAITING FOR PRICES TO FALL TO SENSIBLE LEVELS.

vp

Share this post


Link to post
Share on other sites
More lies from RICS and the BBC.

vp

They can't stand losing..........their portfolios?

____________________

I was about to turn this into an Ignore thread vp.

Too late now? :)

Share this post


Link to post
Share on other sites
More lies from RICS and the BBC. There are PLENTY of mortgages available. There is NO lack of mortgages available...in fact lenders are falling over themselves to lend PROVIDED it's not a self cert 100% mortgage .

Approval activity is NOT down because of lack of mortgage availabilty, BUT BECAUSE PEOPLE ARE WAITING FOR PRICES TO FALL TO SENSIBLE LEVELS.

vp

not entirely the case, there is actually demand, there's not enough speculative product (at decent rates) that doesn't require big deposits. Let's not forget that folk didn't suddenly stop buying due to house prices reaching a tipping point, they actually stopped due to a lack of available mortgages. Also the rejection rate for applications is now completely different to this time last year, it's one in two as opposed to 95% acceptance. You're guilty of thinking like an HPCer, not average Joe ;)

Share this post


Link to post
Share on other sites
not entirely the case, there is actually demand, there's not enough speculative product (at decent rates) that doesn't require big deposits. Let's not forget that folk didn't suddenly stop buying due to house prices reaching a tipping point, they actually stopped due to a lack of available mortgages. Also the rejection rate for applications is now completely different to this time last year, it's one in two as opposed to 95% acceptance. You're guilty of thinking like an HPCer, not average Joe ;)

And CL, I would guess that actually forming a chain is pretty tough.

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable
not entirely the case, there is actually demand, there's not enough speculative product (at decent rates) that doesn't require big deposits. Let's not forget that folk didn't suddenly stop buying due to house prices reaching a tipping point, they actually stopped due to a lack of available mortgages. Also the rejection rate for applications is now completely different to this time last year, it's one in two as opposed to 95% acceptance. You're guilty of thinking like an HPCer, not average Joe ;)

HPC law #1 - Stupid ***** are legion.

Share this post


Link to post
Share on other sites
not entirely the case, there is actually demand, there's not enough speculative product (at decent rates) that doesn't require big deposits. Let's not forget that folk didn't suddenly stop buying due to house prices reaching a tipping point, they actually stopped due to a lack of available mortgages. Also the rejection rate for applications is now completely different to this time last year, it's one in two as opposed to 95% acceptance. You're guilty of thinking like an HPCer, not average Joe ;)

As others have said, as far as I can see there are plenty of mortgages available as long as you have a smallish deposit (10%) and no CCJs etc. So it's an inredible indictment of the former lending practices that even this modest tightening of lending criteris could lead to such a humungous drop in lending.

Share this post


Link to post
Share on other sites
More lies from RICS and the BBC. There are PLENTY of mortgages available. There is NO lack of mortgages available...in fact lenders are falling over themselves to lend PROVIDED it's not a self cert 100% mortgage .

Approval activity is NOT down because of lack of mortgage availabilty, BUT BECAUSE PEOPLE ARE WAITING FOR PRICES TO FALL TO SENSIBLE LEVELS.

vp

I suspect there is not a paucity of truth in this view.

The bottom line is that the bubble is bursting because the market can no longer bear the inflated prices that were on offer. The credit markets are slowly returning to normal and loans will be available on more sensible terms. The sort of downpayments and LTVs that preceded Gordon's boom. My guess is that anyone can get a mortgage with 20% down and a decent credit rating to back them up. No worrys at all.

Share this post


Link to post
Share on other sites
As others have said, as far as I can see there are plenty of mortgages available as long as you have a smallish deposit (10%) and no CCJs etc. So it's an inredible indictment of the former lending practices that even this modest tightening of lending criteris could lead to such a humungous drop in lending.

in answer to Bob yep keeping chains together in this climate is nigh on impossible IMHO, easiest for FTBs bizarrely which bodes well for the future......2028 :o:lol: As for the lending practices yep totally agree, brokers could use the phrase this time last year; "whatever your circumstances, I promise you I will be able get you a mortgage" not now. The lending criteria change isn't modest, it's actually massive and don't be fooled by the amount of product that are supposedly available, it isn't there. like I say in my experience one out of two is rejected at the mo for sometimes the most spurious of reasons. It's 67% down FFS!! :blink:

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 395 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.