Monday, April 6, 2009

Pricing in the future drops

Lenders still want high deposits

Mortgage lenders are still demanding high deposits from buyers as the number of deals expands. More than two-thirds of the 1,485 mortgage deals on offer require the customer to put up a deposit of at least 25%, according to Moneyfacts.

Posted by quiet guy @ 11:03 PM (900 views)
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4 thoughts on “Pricing in the future drops

  • This should not really be news.

    You don’t see the BBC being outraged at car hire purchase deposits, or business rates being too high. So why is property different?

    A lot of BBC staff have buy to let properties according to estate agents in Shepherds Bush and White City.

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  • A riddle:

    When is lending not lending?

    A: When it’s lending nobody can afford.

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  • mark wadsworth says:

    25% seems like just about sensible. If I were lending somebody money to buy a house, then I’d demand at least 40%, just to be on the safe side.

    As was pointed out last week or so, the marginal rate of interest of borrowing 90% rather than 75% is between 15% and 20%, it just isn;t worth borrowing that much.

    So if average deposit doubles, then house prices must halve, yes?

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  • Agree with you Mark W that 25% deposit is almost sensible, but more would be better.
    But don’t the government intend to scupper that and offer up to 95% LTV via the banks that they, I mean we, have bought?
    Let us hope that they charge a premium for borrowing over 75%.

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