Monday, January 16, 2012

Yes, I know that some us bears are very selective, but the other side are worse…

First-time buyers alive and well as house prices become affordable, says CML

"First-time buyers are alive and well as house prices become more affordable, according to the Council of Mortgage Lenders (CML). Despite higher deposits being required, reports of the disappearance of first-time buyers are greatly exaggerated because falling house prices are making property more affordable, banks and building societies claim. Paul Smee, director general of the CML, said: “While the number of first-time buyers – and indeed all buyers – has declined markedly since the credit crunch, the proportion of loans advanced to first-time buyers has remained remarkably steady, fluctuating between 34pc and 40pc of the total since 2005. In November, first-time buyers took up 37pc of the house purchase market, the same as in October.”

Posted by mark wadsworth @ 01:48 PM (2885 views)
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16 thoughts on “Yes, I know that some us bears are very selective, but the other side are worse…

  • sibley's b'stard child says:

    Yes, quite, MW.

    The dark side are also running a similar article. Honestly, us plebs have never had it so good.

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  • Thecountofnowhere says:

    “First-time buyers alive and well as house prices become affordable,”…if you dont mind mortgaging your soul to the banking devils and resigning yourself to living in the same shoe-box for the next 30 years,

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  • mark wadsworth says:

    SBC, as per usual, the Homey’s can’t even agree a consistent line (lie) to take:

    From EAT: “Typical mortgage payments for a new borrower – both first-time buyers and home movers – stood at 27% of disposable earnings in the fourth quarter of 2011. This is well below the average of 37% recorded over the past 27 years, said the Halifax. Mortgage payments have nearly halved as a proportion of income, from a peak of 48% in 2007.”

    From CML/Telegraph: “However, housing costs continue to absorb about one in eight pounds earned by first time buyers, compared to less than a tenth of the income of second or third time buyers. CML figures for last month show that first-time buyers continued to see a decline in the proportion of their income accounted for by mortgage interest payments – it fell to just over 12pc in November compared to 13pc a year ago. Mortgage interest payments for home movers, however, remained unchanged at 9.2pc for the second month, still the lowest proportion in nine years.”

    So do our darling little FTB’s have to pay 27 per cent or 12 per cent of income on mortgages? That’s one heck of a discrepancy which leads me to believe that one or other of the figures is entirely misleading 🙂

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  • “the proportion of first time buyers has remained fairly consistent”

    Around HALF ‘peak market’ transactions in 2006 (Land Registry) . So that’s good then?

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  • sibley's b'stard child says:

    Well, Halifax claim 27% and CML claim 12%.

    Clearly the Halifax are wrong. Long live the CML who have the FTBs’ best interests at heart. Not like those nasty Halifax.

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  • mark wadsworth says:

    Will, that is yet more failed Homey propaganda, isn’t it?

    Last year they were telling us that the number of cash buyers had rocketed, when they had done no such thing, all that happened was the number of mortgage buyers (and esp. first time buyers) plummeted. Now they are trying to tell us that the number of FTB’s is stable, when clearly it’s fallen by half or two-thirds. Presumably next week they’ll be saying that the number of people trading up or down has rocketed. And so on.

    Remember: house prices can only go up.

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  • A further distortion (which I’ve pointed out before) is that of what constitutes a FTB? many lenders will allow borrowers who have been mortgage free for 12 months or more to access FTB deals and thus they are recorded as such.

    Chinese New year 2012 is the year of the Dragon, in Great Britain (judging by the garbage in the press to date) it is the year of contradiction

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  • dragons ass for britain you mean

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  • The 12.5% figure is very odd. Using average incomes and average house prices, I estimate mortgage payments would be at least 35%, and that’s assuming 20% deposit and the cheapest mortgage rate. The only way they can get a figure like that (apart from being innumerate) is by including those “FTBs” who bought 15 or more years ago, which makes the figures almost pointless.

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  • nonsense

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  • Guys – the CML are talking about mortgage INTEREST payments. They conveniently leave out the cost of repaying the capital. They really are devious……

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  • Long term average ratio of affordability is 3.5x individual income.
    Long term base rate is at 5%

    Which would mean over a 50% reduction from peak.

    The attempts by the CML to keep the Ponzi scheme going, whilst immoral, fraudulent, and clearly violative of ethical business conduct, deceitful, anti-democratic and abusive, will pull in a few suckers, but ultimately house prices will return to their long term median.

    I wonder how many of these FTB have been pulled in via their local councils Local Authority Mortgage Schemes?

    Whereby the council underwrites 20% of the loan?

    As Councils are now actively targeting First Time Buyers. Grant Shapps idea………

    But by acting as a guarantor for First Time Buyers, the Council is actually encouraging young people to take on increasing amounts of debt.

    These schemes are not designed to help First time buyers.
    Both the the president of the Law Society and the IPPR have spoken out against these supposed affordable schemes for FTB’s.

    The biggest beneficiaries of the governments Homebuyers Direct Scheme, are not First Time buyers, but are in fact,
    large housebuilders, and the main effect of the government scheme is to ‘prop up’ weaker housebuilders.

    [Under the scheme, the government and a housing developer jointly fund a loan of 30% of the cost of a property.]

    The Councils lend a hand scheme, is being voted on by councillors who have investments in property so stand to benefit personally.

    Yet they will not guarantee that Interest Rates will not rise again, over the next 29 years, and that the beneficiaries of this scheme will not be left facing negative equity and repossession.

    The Class action legal firms will have field day, when FTB’s default on these schemes. And as the Law Society pointed out. FTB’s under these schemes, are at the greatest risk of defaulting. In fact its almost a forgone conclusion.
    And who takes the fall?

    The Council taxpayer. Yep. The local Council taxpayer is taking the risk of default squarely on the shoulders when your local council begins acting like a bank, and underwrites 20% of a FTB mortgage.

    What business do the councils have becoming banks? Lenders?

    The last time junior councillors tried to be bankers, they lost hundreds of millions in icelandic banks.

    Yet, Lloyds, who are behind these schemes, wins whatever happens.
    If these schemes are such good ideas, why dont Lloyds lend directly?

    Why? Because the Government has given them all the glory and none of the risk. Because the government is owned by bankers.

    They are underwriting slavery, and spinning it, in a cynical attempt, to suggest that they are ‘helping’ First Time Buyers.

    CML………..Biggest crooks in the country

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  • Someone should do a little survey to find out how many current FTBs really are FTBs. The numbers have always been inflated by people getting counted more than once during their lifetime.

    There’s a whole load of difference between the economic circumstances of a true FTB and those of people who’ve owned a home before, built up some equity and then leave the market (mainly due to break-up with their partners, or working abroad for a while) before starting again.

    I suspect the number of true FTBs is very small now.

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  • Well it looks as if the CML members can stop lobbying the government for free money now then, as happy days are here again for the CML … ?

    I always knew they’d eventually be hoisted on their own petard of over-optimistic ramping.

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  • The 27% figure from EAT is “Total mortgage payments, (Capital plus interest) as a percentage of income, the CML 12% figure is “Mortgage Interest only” payments as a percentage of income.

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  • Even excluding capital, 12.5% is still low and could only be achieved by including those with v large deposits. With minimum deposits it must be much higher.

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