Tuesday, January 4, 2011
Mortgage approvals and net lending latest
U.K. Mortgage Approvals Stayed Close to Lowest in Eight Months in November
U.K. mortgage approvals stayed close to an eight-month low in November as banks kept up their squeeze on lending, constraining the property market. Lenders granted 48,019 loans to buy homes, compared with 47,315 in October, the Bank of England said today in London. Economists forecast 46,500, according to the median of 11 predictions in a Bloomberg News survey. Net mortgage lending was 788 million pounds ($1.2 billion) compared with 1.2 billion pounds the previous month.
Posted by jack c @ 10:37 AM (3294 views)
23 thoughts on “Mortgage approvals and net lending latest”
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hpwatcher says:
This won’t necessarily help a HPC along. If people aren’t being thrown out of their homes – like in the 1990’s – then they can’t be a HPC, because folks will be able hold out.
mark wadsworth says:
I’m not sure if it’s necessary for there to be repossessions for there to be an HPC. In theory, all the heavily over-debted people could just go out and do forty hours overtime a week and forsake all other earthly pleasures.
The price is housing is ultimately decided by what FTBs are willing and able to pay/borrow, is all.
taffee says:
what you need is people determined to sell….they will undercut the market and once they have done this surveyors will use this as a comparable and so on and so forth
hpwatcher says:
The price is housing is ultimately decided by what FTBs are willing and able to pay/borrow, is all.
But that is only one factor.
what you need is people determined to sell….they will undercut the market and once they have done this surveyors will use this as a comparable and so on and so forth
People will only sell for what they see as the market rate – if they can’t sell, they will rent and cover the costs that way. The renting is now very, very attractive.
mark wadsworth says:
HPW, for sure, there is now a total mismatch between what FTBs are willing and able to pay/borrow and the fantasy prices that vendors are asking, which is why sales figures are down enormously.
And for whom is renting more attractive? For the deluded vendor who wants a 2007 price plus 10%, or for the FTB who can thus avoid buying a house that is falling in value?
crash bandicoot says:
I think that house builders may yet be the agents of the crash. I can see that winding things down for a couple of years until the good times returned was the strategy that they followed, but I can’t see that doing not very much for a further three or more years is a viable business plan.
The guys who bought their land banks as agricultural land have plenty of room to cut their selling prices, while still making a profit. Those who bought overpriced land will have to face the consequences. I see that builders near to me have started offering cash back and other sweeteners. They will obviously try their hardest to maintain the pricing facade whist cutting a deal with each customer on an individual basis. This after all is what happened in the 80’s/90’s.
Crunchy says:
1. hpwatcher said…This won’t necessarily help a HPC along. If people aren’t being thrown out of their homes – like in the 1990’s – then they can’t be a HPC, because folks will be able hold out.
Your thinking too much about private property holders. I think it rests on the people who ramped the market up to bring it down.
By past performance, btlers will not think twice about throwing people out to realise profits or alternatively painful losses. IMHO
a saver says:
Mass selling of empty/holiday homes might finally happen, with all this bad news for property market investors- prices/mortgage approvals down, warnings of IR increases etc.
There seems to be quite a drop in Edinburgh prices at last-almost every property on the Ed solicitors property centre is either at a fixed price instead of ‘offers over’ and/or ‘below valuation’ but still almost nothing marked as under offer/sold subject to contracts. If there was ever a place where everyone said prices would always go up it’s Edinburgh, so perhaps the message is getting through, with the city’s heavy dependence on the financial and public service sectors, not to mention BTL.
Doc 53 says:
House prices have to fall. I am afraid it is just numbers.
I earn approx £40k in the West Midlands, nearly twice the average wage in the area.
Even though I have a £40-£45k deposit all the main banks will lend me is £140k. In other words I can afford to pay a £180k for a house. Now 180k gets a pretty crap house around here, I have no intention of living in one.
Houses are worth whatever anyone is willing and CAN pay. The banks will decide whether there is a HPC or not, we are just bystanders.
Most people on the money I can earn are Uni educated and have the associated debt. Two income families have to pay child care, etc, etc. In short banks are going back to the original and feasible 3.5 x main salary (I cannot remember what they would lend for combined income) and a 25% deposit.
How the hell does an indebted uni qualified proffessional save for a 25% deposit when the average FTB house is now £100k+. each average housing chain needs to loose £30-£50k.
In short either houses drop to allow money to move or the economy is stuffed.
tyrellcorporation says:
@Saver.
I did think this may be an option but actually I reckon any seriously indebted second home owner will simply rent the place out. If the second homes are in a nice scenic location you can bank on about £1000 a week in high season. Only a hike in taxes applied to second homes will start to make them unviable.
Rents are booming in the SW hence I’m buying a house in about 4 weeks – I can’t afford to rent anymore, simple as that.
str 2007 says:
I want to comment but not sure what to say on crash/reduction theories.
To a degree they’ll always be some sales, death, divorce etc. Relocation can involve old being rented out and new house being rented so that doesn’t help much.
I’venoticed a couple of 5 beds near me that went on in September getting withdrawn just before Christmas. One has lots of equity (bought in 2000) the other bought in 2007 and was offering it at £10k above what they paid. I doubt they had no deposit in 2007 but no-one wants to sell a house for a loss, so it will be interesting to see what happens.
I can’t quite believe rents are going up, but if they are then that shows a definate shortage of property as a landlord can’t stand more than 2-3 vacant months before they have to drop the price.
The government have/are changing the rules on planning permission. If numbers of new houses aren’t increasing where they are needed within a year then serious questions need to be asked about the implemented policy.
Further land has an immaterial value until permission is granted, therefore it can’t be that difficult to push things through for those in power.
IE Mr. Farmer, your field is worth £10k an acre at present and we need to build 100 houses, do you want £100k an acre or not. That would put a plot price of about £15k each plus infrastructure. Way off the current going rate of £2-300k per plot In the South East.
A move such as this would bring prices down, but I suspect there are too many vested interests in Power.
Interesting how commercial property has dropped the 40% odd you’d expect residential property to have done.
str 2007 says:
I also suspect the number one reason alot of btl and holiday properties are held I’d future gains in capital value.
Quite a fine point of dealing with hassle for only capital gain when the evidence starts to point to no further capital gain for 10-15 years.
I think we may see quite a few coming to Market before long. Just as an example £1000 gets you quite alot of good camping equipment.
A good programme on the BBC about adventure camping or some such could suddenly change British holiday makers attitudes to shelling out £2k for accommodation alone for their summer break.
Actually thinking about it that has the potential to make a pretty good holiday series, Adventure Camping UK or some such title.
alan says:
Three houses in my street (Essex, M25) were bought in November/December. The sellers cited: downsizing (x2) as kids moved out and one seller moved to an expensive old folks home.
alan_540 says:
Has anyone got a graph of mortgages per month going back to the last crash? I’m surprised that 48,000 mortgages per month are being approved and wondered how this compares historically.
mark wadsworth says:
Adventure Camping UK, brilliant.
We used to stay in Keswick, it was top campsite, flat as anything with shower block, on site shop, playing field in the middle, a nice tarmac track running round it so that cars didn’t get stuck, five minutes walk from town and direct on the lake. It was a bit like being on a normal housing estate except with tents, really.
cynicalsoothsayer says:
@Saver
Edinburgh prices have reduced a little, but the real story is in the viewings. Lower priced property convenient for the centre still gets some interest but anything out in the sticks is lucky to get even one viewing unless it is something special.
hpwatcher says:
And for whom is renting more attractive? For the deluded vendor who wants a 2007 price plus 10%, or for the FTB who can thus avoid buying a house that is falling in value?
It’s good for both. All the first time buyers are now renting – they aren’t buying!
I know a few people who have bought a new property AND kept their old one, because they can’t bear to let it go for what they see as a low price.
str 2007 says:
Mw
I took my children to Keswick last Easter, climbed Cat Bells & rowed around Derernt Water all in one day, Keswick Town and Aera Force the next day, perfect weather, we were very lucky.
Check out Low Briery Holiday Village, not on lake, but next to river 3/4 mile outside Keswick.
str 2007 says:
Hpwatcher
Yes it’s worrying, I see is moving towards European type renting but with little in favour of the tenant.
letthemfall says:
I recall reading about 2 or 3 years ago about the stickiness of house prices, and it would seem that a combination of extraordinary low interest rates and the mental glue that is the Brits’ creed of ever-higher valued housing has preserved the housing market in amber – for the moment.
But there is only one way this can be preserved indefinitely: either by restoring credit to the state which caused the boom (which is not likely), or those with money sinking all they’ve got into housing (which presumes the Church of House the King is a cult that has that sort of mileage left in it.)
In the absence of either, people refusing to sell will have a limited effect, especially as prices slowly edge down.
hpwatcher says:
Yes it’s worrying, I see is moving towards European type renting but with little in favour of the tenant.
BOE and the Government have put absolutely EVERYTHING they have into keeping the housing market stable.
str 2007 says:
Hpwatcher
Absolutely everything in ?
You reckon they’ve used all their dry powder ?
I hope you’re right, have a gut feeling we’ll see more propping before we’re finished.
Hope not though – let’s get back to reality and get on.
hpwatcher says:
I hope you’re right, have a gut feeling we’ll see more propping before we’re finished.
sadly, i think you are right.