Tuesday, Aug 20, 2019

The nequity begins: recent buyers with 5% deposits in London & SE now underwater

The Sun: First-time buyers with 5% deposits now in negative equity due to plummeting house prices

Brought a rabbit hutch with a 5% deposit + Help to Elect? Well don't worry because it's only money and anyway, you weren't going to move for a few years. And it's probably just a blip. Just overpay your mortgage, house prices always rise over time. Oh and look! This millennial mum brought her house aged 24 - and she has a son! So if you don't buy you're missing out!!

Posted by landofconfusion @ 11:40 AM (1362 views)
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4 Comments

1. jack c said...

Hopefully these people will be able to re-mortgage without penalty onto a fresh Norwegian or Danish Mortgage deal. The lender pays the borrower for taking out such a mortgage so it won't take long for the Nequity to disappear (LOL)

Wednesday, August 21, 2019 09:41AM Report Comment
 

2. jack c said...

Oh sh1t - looks like they've missed the boat !

OSLO, June 19 (Reuters) - The Norwegian government extended its restrictions on mortgage lending on Tuesday, including special measures for the country’s capital, as it sought to maintain a drive to limit growth in household debt.

“The high debt of Norwegian households still pose significant risk to the economy and to jobs,” the finance ministry said in a statement.

The rules were extended by 18 months, and will thus be valid until the end of 2019, it added.

The finance ministry tightened its restrictions on banks’ mortgages in January 2017 in a bid to limit household borrowing and prevent a potential house price bubble, with a particular focus on reining in the Oslo market.

Norway has the third-highest level of debt-to-income among OECD countries behind Denmark and the Netherlands. It was 225 percent at the end of 2017, up from around 130 percent at the turn of the century.

The rules that were introduced last year, and which were due to expire in June, force borrowers to put up more equity when buying a home by cutting the maximum loan-to-value ratio of a mortgage to 85 percent from 90 percent.

For Oslo however, current rules allow only a 60 percent loan-to-value for secondary homes, preventing many investors from buying up property, and this rule will be maintained, it added.

A borrowing cap set at five times household annual income was also extended, as were rules allowing banks to make exemptions for up to 10 percent of the total value of loans granted per quarter outside the capital and for up to eight percent in Oslo. (Reporting by Camilla Knudsen, writing by Terje Solsvik, editing by Gwladys Fouche)

SOURCE https://www.reuters.com/article/norway-finmin-housing/update-1-norway-extends-mortgage-restrictions-until-end-2019-idUSL8N1TL2DB

Wednesday, August 21, 2019 09:46AM Report Comment
 

3. mombers said...

Well, the Help-To-Elect (H/T landofconfusion!) program will come under the spotlight now - how big are the expected losses for the taxpayer now? Freddie Mac / Fannie Mae, UK edition

Wednesday, August 21, 2019 11:19AM Report Comment
 

4. britishblue said...

Note it is the revaluation price, not the sale price. Try minus 10% or minus 15% on many of these properties

Friday, August 23, 2019 06:19PM Report Comment
 

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