Monday, October 20, 2008

Lending returning to normal levels?

Mortgage lending slump continues

The slump in mortgage lending continued in September, according to the latest figures from the Council of Mortgage Lenders (CML).

Posted by shipbuilder @ 10:19 AM (692 views)
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5 thoughts on “Lending returning to normal levels?

  • This is a perfect example of the huge problem with our economic system, our expectations and media reporting.
    Apparently lending levels are at the level of 2001. So in other words they are back to a pre-boom ‘normal’ level. Why is this bad?
    Now that we all recognise that 2005-2007 was the worst period of an unsustainable boom, why do we continue to expect everything to be more than last year?
    Why can we not accept that a lower level of lending is a good thing to be encouraged?

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  • japanese uncle says:

    Any serious banker with reasonable knowledge of economics and history can easily predict that house prices in UK will at least be halved in a few years time, thus may well think about lending money based on the most conservative assessment of the collateral value. A property valued 100K at this moment must be foreseen to value 50-60K in the near future. Then how can he offer 70K or 80K (given 20-30% deposit). He must know that it is suicidal to lend money for the assets that will almost inevitably turn into bad debt. The problem will never be solved unless and until the price prices hit the rock bottom, clearly.

    The next administration whether Tories or whatever, must give the greatest priority to an economic policy that will never to give rise to housing bubble, ever again, as people seem to start realizing how dangerous it is to cheer about the soaring house prices.

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  • Perhaps, just perhaps, people have come to their senses and they don’t want to borrow money? Sad state of affairs if the only way we can kickstart the economy is by people continuing to borrow beyond their means. As for first time buyers well quite frankly they’d be mad to buy property at this time anyway. Besides, it won’t be too long before Gordy and Darling offers to buy everyone a house.

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  • Interestingly I was in the shops on Saturday and i could not believe my ears…..

    Someone buying a bed borrowed 2499 on credit 27%apr, the salesman was clearly rubbing his hands on this deal, then the lady said this is what i have always wanted a large bed, then gave her address OMG it was an estate known for its crime level etc, I can only imagine she has everything on credit the big bed, the big TV, probably the biggest sofa that would fit in her lounge after the TV had been squeezed in and no doubt the BMW, but with a council house!!!! … How stupid are these people? All the salesman was probably thinking is this will keep my house for one more month before NR repo it…

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  • JU – no more boom and bust huh… where have I heard that before. Trouble is that every politician out there will chant something similar when we’re in a period of bust, but as soon as the boom starts, they will be more interested in riding the wave of popularity that it generates. I have no faith in any MP being any different. Companies are the same. That’s why the builders and banks are struggling now. How many of them said to their shareholders that they were putting money aside for when the bubble burst? None – they were all too busy looking for the next pat on the back and the pay rise that went with it. Very sad.

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