Wednesday, Nov 11, 2009

The Mortgage Market is not about to Improve

Telegraph: The Council of Mortgage Lenders predicts gloomy future for mortgage borrowers

Great article shame the press didn't run it instead of RAMPING HPI .....Nothing new but good to see it in print
"Lenders, as a whole, do not have enough funding for mortgages to help promote the economic activity that will help lift the UK out of recession.....Mortgage costs have risen, and will remain higher than before the credit crunch. And with higher taxes coming through from 2010 onwards, and higher interest rates in due course, consumers’ capacity to borrow will be further constrained. ....." etc etc

Posted by sybil13 @ 02:49 PM (1898 views)
Add Comment
Report Article


1. mark wadsworth said...

Good stuff, but why is there this general perception that mortgage lending stimulates the economy? All it does is mean that more borrowers are paying more interest to more depositors.

If the depositors are from abroad, then interest payments are going abroad, which reduces the money we can spend.

If it is all domestic, then it's a break even at best, and probably mildly negative (more people working in banks shuffling paper etc).

Wednesday, November 11, 2009 02:56PM Report Comment

2. jack c said...

I cant get the link to work

Wednesday, November 11, 2009 03:03PM Report Comment

3. mark wadsworth said...

I think the "l" at the end was missing.

Try this

Wednesday, November 11, 2009 03:07PM Report Comment

5. mark wadsworth said...


Try this

I missed off the http bit first time and the admin password second time. Third time lucky?

Wednesday, November 11, 2009 03:09PM Report Comment

6. jack c said...

Thanks MW - I'll now take a look.

Wednesday, November 11, 2009 03:13PM Report Comment

7. timmy t said...

mark wadsworth said...Good stuff, but why is there this general perception that mortgage lending stimulates the economy?

Good question, and I think the key to our current problem. Cheap finance fuelled the houseprice boom which enabled MEW. I would say this fuels spending rather than fuelling the economy, the difference being sustainability.

Wednesday, November 11, 2009 03:22PM Report Comment

8. jack c said...

A rather realistic assement of things as they stand at the moment - as for mortgage lending helping promote the economic activity that will help lift the UK out of recession - I interpret this as a fall back to days gone by when people used their house as a salary subsidy (ATM machine) which fuelled spending in the high st. From memory the US and UK economy is roughly 70% reliant upon spending in the high st so if we cant get back to where we were the UK will need to re-invent itself. This ties in nicely (IMO) with an article I posted this morning from the FT - here is a relevant extract

"The western economies will need to reduce the levels of wanton consumerism of years that helped build up the high levels of debt. We are not about to enter a period of austerity but there will be more frugality. Consumers will buy less frivolously than they have done. There will be more of a ‘back to basics’ approach and sectors likely to deliver good returns for investors over the next few years include technology, mining, energy, food and agriculture, commodities and possibly transportation.

The UK will also have to reinvent its economy. It relies heavily on imports and will have to develop new industries producing goods and services that it can export. Quite possibly it will even revive old ones such as manufacturing if sterling falls so far that it becomes cheaper to produce our own goods once again.

But one thing is certain – the banks must be broken up into smaller pieces. No bank should become too big to be allowed to fail. Banks should be allowed to go bust at any time without fear of the major crisis we have seen over the last two years."

Wednesday, November 11, 2009 03:28PM Report Comment

9. rumble said...

Timmy, yeah, increased velocity. Guess it would also show banks are lending again, improving sentiment.

Wednesday, November 11, 2009 03:58PM Report Comment

10. magnaman said...

Ya see...bad news is everywhere - and the truth can't be suppressed forever. HPCers will be vindicated!!

Wednesday, November 11, 2009 04:59PM Report Comment

11. vindicated said...

@ Magnaman, I'm clinging to the hope!!!!

Wednesday, November 11, 2009 05:27PM Report Comment

12. rumble said...

Global Confidence Dips as Policy Makers Begin Exit Strategies:

Wednesday, November 11, 2009 05:35PM Report Comment

13. tenyearstogetmymoneyback said...

Completely agree with Marks 2nd comment in post 1. I can remember reading some economics
article which said that at the end of the day the balance of payments has to balance. The timeframe
might be decades but over some period things will have tto balance.

Thought the point in the article

* The development of innovative products capable of delivering real consumer benefits is being constrained. This has removed a traditional advantage for UK customers compared to borrowers in other countries, namely, widespread access to a variety of products tailored to their needs at different stages in life.

was rather ironic. Northern Rocks Together Mortgage was possibly the most innovative product ever to hit the UK high street.

Wednesday, November 11, 2009 07:54PM Report Comment

Add comment

  • If you do not have an admin password leave the password field blank.
  • If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user's views and not the views of
  • Please adhere to the Guidelines
Admin Password
Email Address

Main Blog | Archive | Add Article | Blog Policies