Monday, September 1, 2008

Latest mortgage figures from the Bank of England hit a new record low

Mortgage approvals hit fresh low

The number of new mortgages approved for home buyers fell in July to just 33,000 - down by 71% on a year ago. The figures from the Bank of England are a new record low and highlight the sharp slump in mortgage lending in the course of the past year. The credit crunch has forced banks and building societies to ration their lending to only their most creditworthy borrowers. Lenders say house prices have fallen by 10% since the start of 2008.

Posted by jack c @ 09:53 AM (1430 views)
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11 thoughts on “Latest mortgage figures from the Bank of England hit a new record low

  • george monsoon says:

    This is great news! I’m not getting half the junk email from banks, offering me loans.

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  • Aparently loads of estate agents are going bust…..but have you noticed how many there were on high streets? Probably about 1 in 3 shops was an estate agent!

    Simply too many, all mopping up the money that banks were throwing at people…..who were never going to say no.

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  • ”Lenders say house prices have fallen by 10% since the start of 2008”

    They are going to come down a hell of a lot more than that!

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  • the RICS guy needs a slap “pent up demand will only exacerbate the boom bust cycle when lending returns to normal” or something along those lines. Demand is getting destroyed as this plays out, and more people see themselves or their peers/family suffer with debt poverty, repossession, negative equity etc. I have sensed the tension drop away from all but the most ignorant of would be FTBs and mover-uppers, as they quickly grasp that this “ownership” was only an illusion anyway – in fact the “ownership” was actually the other way around – pwnership

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  • George Monsoon says:

    QUOTE :- “Activity in the housing market continues to be depressed, and the approvals figures suggest this is likely to continue for some time,” said Adrian Coles of the Building Societies Association (BSA).

    “Recent falls in house prices have been widely publicised, reducing potential buyers’ confidence and keeping them out of the market,” he added.
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    Oh well thats okay then, Its the media that are responsible for this global collapse, and there was me thinking it had something to do with foolhardy lending practice..

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  • fancypants @ 4

    “pent up demand will only exacerbate the boom bust cycle when lending returns to normal” – I suggest that we will never see the lending market returning to “normal”. I seriously cannot ever see 125% mortgages or the same level of self-certification ever being available again. I really don’t see anyone getting a mortgage without having at least a 10% deposit but realistically and in the short term the banks are just not going to lend. full stop. They might, just might lend you 60-70% of the market value as the are willing for you to sacrifice your equity rather than allow their share of the equity to be diminished (I doubt whether the economists in the lending field can actually percieve a scenario where more than 40% comes of the value of property as it’s just not in their make-up!)

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  • Eternal Sceptic says:

    Who in their right mind would buy a house today, when they can be confident the same house will cost less as each month goes by.
    A more noteworthy statistic would be the level of applications for mortgages as well as those granted.
    Is it a case of frustrated demand or potential buyers waiting for the bottom?

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  • the RICS guy needs a slap

    These fools seem to think that we will return to insane & irresponsible amounts of lending…that is what he regards as ”normal”.

    Thing is, it went on so long that people actually do think it’s ”normal”. It isn’t.

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  • Your right hpwatcher

    I knew the game was up the the property market when I actually talked to a woman, about 23-24 telling her friend (at a party in London) That she would be alright in 2 years time (this was 2005) when she could remortgage and dig herself out of the poop. She had borrowed 250k for a 1 bed flat in West Hampstead (early 2005) but only earned 26k a year as a secretary. Her friends attitude was that this was “normal” as she and her boyfriend had borrowed more than that to fund a similar punt and they had borrowed nearly 500k for their flat and a BTL property.

    And the banks let this happen again and again, the guv’mint just rubbed their hands and said ,mmmm, more taxation to spend on the unwashed. The economic miracle that this country has experienced was simply based on uncontrolled lending and this will manifest itself into uncontrolled unpaid debt.

    I suspect that what people are going to experience and call normal is due for radical overhaul.

    I suggest that the RICS guy, and a few others too, derserve more than a slap.

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  • ‘The RICS guy needs a slap’
    Yes, it was his members that colluded in driving prices up by making valuations that were too high (btw can purchasers make a claim aginst this sort of irresponsible behaviour?)

    HPW – I guess we are still in an early phase of ‘coming out of denial’, people acknowledge that prices are falling but think this is wrong. I’m sure they’ll get it soon enough, i.e. that what we are doing is returning to normality.

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  • wally @ 9

    Yes RICS member and EAs drove up the price. One agent I know says he was putting prices up at least 20% every time he valued a simlar property year-on-year becasue he knew the crash (my words – “adjustment” his words) was coming and he then would have at least 20% headroom when prices strated to fall.

    That was in 2003 !

    I make that out to be about 50% of our present prices. Madness

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