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

New Record Low For Mortgage Approvals - Boe

Recommended Posts

..vs 114,000 June 2007.

wow. :ph34r:

...and to tie it in with Crown's post HERE - just how many people qualify for "normal" lending? Damn few, it appears.

ED: Usual stupidity.

Edited by yellerKat

Share this post


Link to post
Share on other sites
So 42,000 mortgages approved. I take it this is combined new mortgages AND remortgages?

No, it's just house purchase. Remortgages are additonal, and were 87,000 NSA in June.

The 84,000 SA figure for remortgages was the lowest since July 2002.

Share this post


Link to post
Share on other sites
http://www.bankofengland.co.uk/statistics/...8/Jul/index.htm

36000 for home purchase SA down 68% YoY

42000 for home purchase NSA down 69% YoY

A 20% drop YoY would be regarded as a crash in new mortgage activity. After all, that represents a one fifth drop in lenders commissions.

A one-third or 33.33% drop would be a crash + with a clear and present danger to lender's viability as a business and an indication that the market was in free fall.

A 50% drop in mortage activity would be catastrophic placing lenders under imminent threat of closure with the loss of thousands of jobs.

A 67% or two-thirds drop in activity is unspeakable in its gravity.

Its a lagging indicator just like unemployment data and when it hits it hits HARD.

Share this post


Link to post
Share on other sites
What was the low in the last crash? About 80,000 transactions per month?

Unfortunately the bank of england data only goes back to 1993, so we don't know what the approvals levels were during the big falls from 1989 to 1992. Anyone know of other data sources that go back that far?

Share this post


Link to post
Share on other sites
Unfortunately the bank of england data only goes back to 1993, so we don't know what the approvals levels were during the big falls from 1989 to 1992. Anyone know of other data sources that go back that far?

http://www.houseprices.uk.net/

graph has between 90,000 and 60,000 approvals

Share this post


Link to post
Share on other sites
A 20% drop YoY would be regarded as a crash in new mortgage activity. After all, that represents a one fifth drop in lenders commissions.

A one-third or 33.33% drop would be a crash + with a clear and present danger to lender's viability as a business and an indication that the market was in free fall.

A 50% drop in mortage activity would be catastrophic placing lenders under imminent threat of closure with the loss of thousands of jobs.

A 67% or two-thirds drop in activity is unspeakable in its gravity.

Its a lagging indicator just like unemployment data and when it hits it hits HARD.

Is there a precedent for this sort of drop off in mortgage activity and its effects on HPI - I know there isn't in the UK so was thinking of other countries?

Although simple supply and demand (i.e. mortgage availability) doesn't seem to apply to house prices, I wonder if there will be a tipping point caused by a massive build up of despearte sellers followed by a massive acceleration of HPC

Share this post


Link to post
Share on other sites

Remortgaging levels will be high - this is largely thanks to both the lenders and the brokers enjoying their carousel commission and fess two year mortgage deals.

Always stunned me how these mortgages were sold primarily with the title of being fixed! You can see why they were so popular - they allowed huge amounts of churn and fees, all as long as investors were keen on taking 2 year revolving credit - which they weren't. What a very very risky game, it really is amazing it didn't fall apart way earlier.

So forget the overall numbers the only numbers that matter here as com parables are the number of mortgage approvals for new purchase.

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.

  • 396 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.