Friday, Mar 06, 2015

MOAR Help-to-Lend needed, cry lenders

Guardian: Help-to-buy scheme needs replacement before it ends, warn mortgage lenders

Failure to replace the help-to-buy mortgage guarantee scheme when it comes to an end next year will choke off competition and push the first-time buyer market back into decline, lenders have warned.
“It is encouraging to see more lenders offering 95% LTV products outside of the scheme – but it would be a big gamble to rely on this continuing without the boost that the government has brought to the first-time buyer market.”

Posted by debtserf @ 09:25 AM (7546 views)
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1. debtserf said...

I call on the government to do more to help those poor would-be property speculators who are desperate to get hold of more properties to redecorate and sell on for doublw what they paid 3 months earlier.

Let's call it Lend-to-Flip.

Budding entrepreneurs can borrow up to 200% LTV, to enable them to lay as much wood laminate flooring as possible.

Friday, March 6, 2015 09:29AM Report Comment

2. Anned said...

The Bond markets are set to go 'bang', then there will be no money world wide for mortgages. Get the longest fixed term available if you need a mortgage. Help to bankruptcy will be a distant memory, one that many will wish they had never taken up.

Saturday, March 7, 2015 11:10AM Report Comment

3. Quiet Guy said...

"The Intermediary Mortgage Lenders Association (IMLA), which represents firms that market their products through brokers and advisers, said 65% of its members believed competition would fall unless a permanent indemnity scheme was brought in to replace Help-to-Buy 2."

Just as mortgage borrowers have gotten accustomed to ZIRP, mortgage lenders are getting comfortable with government subsidies. Let's hope the next government has more sense than to throw more money at the lenders. To suggest that permanent subsidies will improve market competitiveness is nonsense.

(Off topic: on my browser, the 'Admin' field seems to have disappeared. Has somebody been naughty recently?)

Saturday, March 7, 2015 12:13PM Report Comment

4. hpwatcher said...

The lenders want the profits, but don't want to take the risks. Hence this appeal to put the UK tax-payer on the hook, if it all goes wrong.

Sunday, March 8, 2015 01:34PM Report Comment

5. sneaker said...

So for our free market to continue, because of world-leading economic growth, massive continued state intervention is required.

Does this double-think not jump out and scream that something is very deeply wrong?

Monday, March 9, 2015 10:54AM Report Comment

6. Chilli said...

I'm going to bore you all with a mathematical analysis. If you are not interested, the time to stop reading would be now.

Lets view the supply of FTBs are elements entering a queuing mechanism. The rate of entry is a function of HPI, their ability to save and the demographics of the country (meaning how many people there are). Previously they needed to hit 20% to enter the queue. By allowing FTBs to only save 5%, there is an immediate supply of people who have saved within this range 5%-20% that can now enter the queue. But now suppose these people have entered the queue. We are back to the original mechanism. The bar is just lower, but the rate of FTBs entering the queue is still a function of HPI, saving rate and demographics.

So there is no hope for these people. A 5% deposit puts someone other than the FTB at risk in the event of a house price crash. They have borrowed profits from the future. They have to move the deposit requirement back to 20%, or get rid of the moral hazard in banking some other way. And let house prices revert in real terms of course. If houses were cheaper and stayed cheap there would be an immediate increase in house sale volumes and in general a greater deal of house trading in the future which is good for estate agents.

Monday, March 9, 2015 12:01PM Report Comment

7. debtserf said...

Sneaker, it's all about helping hard-working people to fulfil their aspirations, dreams and ambitions of getting on the housing ladder; and since the inspirational Tories are doing that for them out of the goodness of their forward-thinking hearts (with other hard-working people's money), how can that possibly be wrong?

(Unless you're over 40 of course - in which case you can **** off, you useless old has-been)

Vote Conservative. Yay.

Monday, March 9, 2015 12:18PM Report Comment

8. jack c said...

My Son is now looking at buying a property for the very first time however I've managed to persuade him to hold off getting seriously involved until after the forthcoming general election. Typically sweeteners are available at election time and thereafter rapidly disappear when austerity will once again become the focus. I've never been convinced of the present governments "recovery" claims and still feel a correction is long overdue (time will once again tell)

Monday, March 9, 2015 12:51PM Report Comment

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