Wednesday, August 10, 2011

It’s those pesky banks again stymying FTBs’ dreams.

House sales at two-year low, says Rics

Britain's housing market stuttered further during July as estate agents reported sales at a two-year low. Rics, the surveyors' trade body, said its estate agent members had managed to sell just 14.2 properties on average over the past three months, making it the quietest period for sales since June 2009. The majority of surveyors also reported that house prices fell rather than rose through July, and though the proportion fell slightly this figure has been in the red for more than a year. Rics spokesman Ian Perry said: "The UK housing market continued to stall during July; prices edged lower and sales levels remained subdued.

Posted by sibley's b'stard child @ 10:24 AM (2206 views)
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16 thoughts on “It’s those pesky banks again stymying FTBs’ dreams.

  • Thecountofnowhere says:

    Are the blaming the riots 😆

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  • mark wadsworth says:

    Ho hum, young people are really keen to become owner-occupiers, but the Baby Boomers are holding out for unrealistic prices? You can have a functioning market if buyers can only afford £x and sellers are demanding £2x.

    I wonder whether there’s some little tweak we could make to the tax system to level the playing field a bit and get the market moving again..?

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  • And until this new tax system is in place, a little tweak to the prices might help.

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  • Only in the uk media is falling prices of basics like shelter portrayed as a bad thing. Astonishing.

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  • mark wadsworth says:

    TT, true, but if you genuinely believe that you can make an unearned capital gain by delaying a sale for a few years and you’ve paid off the mortgage and you know the banks aren’t paying interest any more, why would you sell at all? Where’s the motivation to tweak the price?

    Paul, the same madness applies to shares. The Mail wails about £x billion being wiped off the value of pension funds, well so what, an equal and opposite amount has been added to the value of the next generation’s pension funds. High share prices are just another Ponzi scheme by which wealth is consumed now and has to be paid off by somebody else later.

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  • 4. mark wadsworth said…High share prices are just another Ponzi scheme by which wealth is consumed now and has to be paid off by somebody else later.

    ~ Ah, but where did that wealth go, in who’s hands? ‘He marched them to the top of hill and marched them down again.’

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  • This just in from CML

    The number of mortgages taken out by first-time buyers reached a 10-month high in June, according to data from the Council of Mortgage Lenders.

    There were 18,100 loans to first-time buyers, worth £2.2bn, advanced in June, 24% higher by volume and 29% higher by value than in May.

    However, when compared to June 2010 the figures represent a decrease of 8% both by volume and value.

    .Overall, there were 46,700 loans for house purchase, worth £6.7bn, advanced in June, up 22% by volume and value on May, but down 11% by volume and 13% by value year-on-year.

    Remortgaging was unchanged on the previous month in June, totalling 30,700 loans worth £3.8bn, but increased by 10% by volume and 9% by value compared to June 2010.

    The popularity of fixed-rate mortgages continued to edge up in Q2, with 63% of borrowers opting for a fixed rate, compared to 60% in Q1 and just 46% in Q2 2010.

    The CML says that while no immediate rise in interest rate rises is expected, uncertainty over when the first rise will come may have been incentivising borrowers to fix their rates.

    Paul Smee, director-general of the CML, says: “Whilst there are clearly financial uncertainties ahead, it is encouraging to see more house buyers surfacing at the start of summer.

    “Recent increases in Bank of England approvals figures also show that more completions are expected in July, so the more encouraging numbers may persist for a while.”

    SOURCE http://www.mortgagestrategy.co.uk/housing-market/number-of-ftb-mortgages-at-10-month-high/1036004.article

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  • sibley's b'stard child says:

    ‘The popularity of fixed-rate mortgages continued to edge up in Q2, with 63% of borrowers opting for a fixed rate, compared to 60% in Q1 and just 46% in Q2 2010.’

    Evidently homebuyers don’t believe IRs will stay low for too long. I wonder what the breakdown is in terms of 2yr, 5yr etc?

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  • mark wadsworth says:

    If I run Jack C’s figures through the magic fag packet, that means that about one-fifth of young people are still borrowing their way “onto the property ladder”. Damnation! Haven’t they heard about the Buyers’ Strike?

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  • Sib’s – I dont have the split between 2 and 5 year fixes however by the time you factor in the associated costs such as booking fee/application fee etc.etc.. it rarely makes sense to go for a 2 year deal – in the blink of an eye it’s up for renewal and re-mortgaging is likely incurs further costs.

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  • MW – lots of people now sell up so that they are in a better position to purchase again (reduces chain etc..) those that havent had a residential mortgage for 12 months or more are then classed as 1st time buyers – I dont have the numbers but I dont think everyone is now a FTB in the true sense of the title.

    If your wife forced your hand into buying then you would be classed as a FTB (whether you would actually get a better mortgage deal is debatable)

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  • MW,

    Your magic fag packet has forgotton something – the mean number of ‘FTB’s’ is pretty close to the number of people who set up home anew each month after falling out with their previous spouses or partners. – Try looking up the divorce rates, add in those who never bothered to get married at all, and then knock off a bit for those who stay single after separating – and you get a very similar figure..

    ..in other words, these FTBs are not real first timers, but are almost all recycled homeowners with some equity in the bank, who are being counted for the second time..

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  • sibley's b'stard child says:

    ‘those that havent had a residential mortgage for 12 months or more are then classed as 1st time buyers’

    Sheesh, didn’t know that Jack. In otherwords (as per UT’s point) STRs would also be counted as FTBs (after a year of renting)? This really casts the FTB figs into a new light.

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  • Sib’s – STR’s will be recorded by the mortgage lenders as FTB’s so long as they dont show up as having held a mortgage in the last 12 months – UT has expanded the original point I was trying to make ie the figures are maybe not quite what they seem.

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  • Technically they should be called HHAMINLTMTB’s but it doesn’t roll off the tongue in the same way.

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  • mark wadsworth says:

    Jack C, Uncle Tom, for sure, the way that different banks classify people as FTB’s is pretty ropey, and might overstate the number by fifty per cent, or maybe even a hundred per cent.

    My fag packet therefore says 18,100 loans x 12 months – knock off a third because July is heavy month = 144,800, then divide that by 150 per cent to arrive at true FTB’s = 100,000, further heroic assumption, these are all married couples doing the buying = 200,000 true FTBs every year, then chuck in a known figure, about one million people in each year of age group, 200,000 divided by one million = one-fifth.

    That’s where I got one-fifth from. The fag packet uses estimates and errors balance out because there are over and understatements in denominators and numerators, and the final figure is somewhere between 15% and 25%.

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