Tuesday, February 26, 2008

Lenders don’t want your business

Banks are kicking away the bottom rung of the property ladder

"As a consequence of the credit crunch and sub-prime mortgage concerns, lenders have become much more careful about who they lend to, and on what terms. What we're seeing now is lenders leapfrogging each other to pull deals or raise rates, effectively chasing each other down the best-buy tables. The big mortgage lenders are in competition with each other - but this time it's to be nowhere near the top of the table"

Posted by little professor @ 07:42 AM (855 views)
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7 thoughts on “Lenders don’t want your business

  • Yet again, the wrong end of the stick is grasped firmly:

    “The wider impact could be a new kind of housing slump – one caused by a restriction of supply rather than demand.”

    No, it’s a restriction of credit supply, not supply of housing.

    BIG difference.

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  • Not to worry, one of the UK’s newest lenders will arrange a deal for them. The Post Office is also conveniently situated in the High St. Buy to let, Self certification …etc.

    http://www.postoffice.co.uk/portal/po/jump1?catId=19400177&mediaId=58200695

    Wouldn’t it be easier to combine the Post Office business with NR, or is that Captain Darling’s idea of competition?

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  • Some unusually lazy journalism from the Guardian, the old one about unemployment and the last slump. It was following the end of a credit boom that prices fell, unemployment rose, etc. It’s not effect to cause. The restriction of supply argument makes no sense to me.

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  • D’oh! I think the author should have said:

    The wider impact could be a new kind of housing slump – one caused by a restriction of liquidity rather than directly due to a change in the balance of supply & demand.

    – and the word ‘directly’ would also be important ;p

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  • ”No, it’s a restriction of credit supply, not supply of housing.”

    It always was to do with the supply of credit. The housing shortage was a myth, put about by greedy estate agents to put pressure on buyers….and the fools bought it!

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  • mark wadsworth says:

    Typical Guardian idiocy – you can’t kick away the bottom rung – what will happen is that the whole ladder adjusts itself down a bit so that the bottom rung stays where it is – or even better comes down a bit or a lot.

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  • sacred contracts says:

    Ray Boulger of the mortgage broker John Charcol said: “Not everyone is unhappy about the credit squeeze. The margins they are getting on new mortgage business today are the best they have obtained for years.

    “What we’re seeing now is lenders leapfrogging each other to pull deals or raise rates, effectively chasing each other down the best-buy tables.”

    (I hope those tags I’ve used have made the above italicised… anyway that was a quote from the article)

    One of the reasons house prices slump is that it becomes difficult / expensive to buy them. This is what’s happening – it doesn’t take the BoE base rate to change, just the lenders attitudes and their money supplies…

    Anyone think the days will return when you have to have saved with a building society for a couple of years before they’ll even consider you for a mortgage???

    Well perhaps not… but maybe a history of saving somewhere might become a prerequisite for a loan – not just borrowing a huge amount from Mummy and Daddy…

    And will we eventually go back to a max of 80% LTV?

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