Thursday, October 10, 2013

Buckle up. Don’t assume crash position :(

Lending to households increases 'significantly'

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the cheaper mortgage rates, which were been driven down by the Bank of England's Funding for Lending Scheme, and Help to Buy were creating an opportunity for would-be-borrowers that was "just too good to miss". Coupled with the lower rates, increasing consumer confidence and rising house prices also player their part, he said. "Borrowers feel more confident about job prospects and the wider economy, while fear getting priced out of the property market further still if they don't take the plunge now," he said.

Posted by quiet guy @ 12:15 AM (2995 views)
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16 thoughts on “Buckle up. Don’t assume crash position :(

  • Propaganda
    British lenders have reported a “significant” increase the availability of mortgages to borrowers with a deposit of less than 25pc in the third quarter………demand is expected to rise….blah blah..

    Even their chart shows that secured credit availability has declined.

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  • “Even their chart shows that secured credit availability has declined.”

    Actually what are those triangles in Q4? I thought they were part of the chart showing a contraction of around -5%

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  • @titaniccaptain – If everyone is trying to make a profit from property, then how can anyone win?

    The sheer number of ‘kite flyers’ (yourself now included) is partly what holds back any kind of nominal national recovery. After your house has been on the market for 9 months will you drop the price or just leave it there languishing?
    The other major think holding pack prices is the decline in real wage growth, this has been partly offset by the lowering of interest rates. Unless rates go negative they aren’t going any lower.

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  • TC – I read your post and a little bit of me died

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  • Indeed,
    why would you sell your house for less than the best price?

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  • @titaniccaptain – The new normal you talk of is only about 30 years old and running out of gas fast!

    Where do you see the upward price pressure coming from? Lower lending standards? Lower mortgage costs (affordability improvements)? Wage inflation?

    I can’t find a single bull who can give a coherent explanation where they think the extra money to service ever increasing amounts of debt is actually going to come from.

    Not sure what you make of this chart, but I don’t see much downside to it 🙂

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  • [email protected] – I think the answer to that is that it’s no longer about fundamentals, it’s more about sentiment.

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  • tc @15 “house prices should be falling…….but they are not.”

    Really? The Real House Prices on the HPC home page seems to show that we’ve had a decent fall, and are at the bottom of the trough right now.

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  • titaniccaptain – you are talking absolute sense.

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  • @10. khards “Where do you see the upward price pressure coming from? Lower lending standards? Lower mortgage costs (affordability improvements)? Wage inflation?”
    I agree with titaniccaptain @11, @12, @ 13 + inflation + currency depreciation. One can keep on with mantras about “prices must fall”, but it doesn’t mean they will, definitely not in nominal terms.

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  • Titanic Captain,

    Trust all is well. I’ve come to largely the same conclusion for very similar reasons.

    It’s not that the likes of Khards etc. are necessarily wrong – we’re just lumping credit expansion upon credit expansion, and one has to wonder about the end point.

    That said it is just perverse to suspend belief in relation to the impact that determined government interference can have on the property monopoly.

    HTB was a turning point for me. When the government starts to hand out free money to support the market there’s virtually no sensible limit to where the “market” might go.

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  • And to add to your 11, 12 and 13

    Free money.

    The recovery (if you prefer fake recovery) that comes from the improved sentiment, and the economic spin offs from that. Labour squeezed nearly a decade of growth out of that sort of thing, maybe we can get 5 this time.

    Lowered lending standards, ultimately accelerating to 125% mortgages, self certification and multiples of 7.

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  • sibley's b'stard child says:

    When a seasoned HPCer brags about their unearned income you know the game is up

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  • Time to start keeping an eye on the gold/silver price, methinks.

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  • khards
    Thanks, I don’t think the time is quite there yet. I find Bullion Value a reasonably safe option, and they have been, for a while, offering positions in silver and gold.

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