Monday, September 12, 2016

Mortgage availability

First-time buyers hit by Brexit as high-value mortgages dry up

'This reflects lenders' growing concern that the housing market could falter in the wake of the EU referendum, brokers say. High loan-to-value mortgages (where the loan represents a high proportion of the price paid) are risky, as they expose the lender and property owner to potential negative equity if prices fall.'

Posted by tom101 @ 11:50 AM (5120 views)
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4 thoughts on “Mortgage availability

  • Cherry picked headline. Lurking within is a different story, that mortgage rates of all maturities have fallen significantly since August.

    It is possible that demand for re-mortgaging on decent multiples is so damned high that there is scant finance left for first time buyers. I know, we just re-mortgaged again, to another lower rate. Once the remortgaging feeding frenzy ends, there will be scraps for first time buyers. This likely occurs every time rates fall.

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  • @1 so a country that works for the few, not the many…

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  • High-value mortgages dry up?

    “In August five first-time-buyer mortgages were removed from the market by lenders, reducing the number available from 243 to 238.”

    That’s hardly ‘drying up’, is it?

    Interesting that the house price inflation portion of the calculator in the article doesn’t have a negative element to try out.

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  • I must say I agree with the first part of Libby’s analysis. But “fallen significantly” ?? – in percentage terms maybe but in nominal / peoples pockets not really.

    Whether there has been some tightening – especially re LTVs (which some of us have advocated as using to control the bubble on the way up) remains to be seen.

    Rates are looking “bottomy” IMO. The restriction in LTVs could be the start of the squeeze. Whether the trickle turns in to a flood is the interesting question.

    Headline rate moves are not necessarily adopted – especially at the long end. Its a game of bluff between BoE and the mortgage market.

    If and when the market decouples then we shall see some interesting times. I think we are virtually there already with the US . If not then someone will, at a minimum catch a cold and maybe even pneumonia.

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