Mortgage Approvals July

RichOneday_2

Down 65% compared to July 2007.

Anyone still think there is nothing in what the bears have been saying? Is this really the sort of thing that goes on in a minor blip?

pickledpink

The banks aren't lending at the moment - that's why they're down by over half.

Once the banks start lending again people will start buying again.

RichOneday_2

pickledpink wrote: »

The banks aren't lending at the moment - that's why they're down by over half.

Once the banks start lending again people will start buying again.

Except they won't be lending 100%/125% LTVs and what makes you so sure they are going to change anything soon? They are lending now, they haven't stopped.

What they have done is gone to a more traditional lending model with higher deposits/lower LTVs. I can't see any compelling reason or them to get cavalier again anytime soon, certainly not the next 2-3 years.

obsessed_saver

pickledpink wrote: »

Once the banks start lending again people will start buying again.

FTB's can't afford it.

BTL's won't buy because there is no capital growth left in houses, and rents won't cover mortgage interest.

Are you buying a second home for your pension, pickledpink? Surely you can help the "situation" since you're already mortgage free on your own home. Plus the banks will love you as a customer, surely! Come on, be a good citizen. Buy a second (or third or fourth) home for the good of the country's economy.

pickledpink

RichOneday wrote: »

Except they won't be lending 100%/125% LTVs and what makes you so sure they are going to change anything soon? They are lending now, they haven't stopped.

What they have done is gone to a more traditional lending model with higher deposits/lower LTVs. I can't see any compelling reason or them to get cavalier again anytime soon, certainly not the next 2-3 years.

You're right - the banks are still lending - but only to squeaky clean people with large deposits.

And quite frankly I don't think they should go back to lending 125% LTVs! That would be insanity at this time.

Meanwhile, people will hust have to adjust and realise that they can only borrow what they can afford to pay back. Quite simple really.

OK, that may mean some people will have to lower their aspirations as regards the property they want to buy, but that's what people did 30 years' ago! They never bought their dream home first time round; they traded up in stages.

Why can't people do that now?

wymondham

pickledpink wrote: »

You're right - the banks are still lending - but only to squeaky clean people with large deposits.

And quite frankly I don't think they should go back to lending 125% LTVs! That would be insanity at this time.

Meanwhile, people will hust have to adjust and realise that they can only borrow what they can afford to pay back. Quite simple really.

OK, that may mean some people will have to lower their aspirations as regards the property they want to buy, but that's what people did 30 years' ago! They never bought their dream home first time round; they traded up in stages.

Why can't people do that now?

I think the difference now is that even with a good deposit the basic first home is still not within reach of most FTB's due to the silly prices. Prices have to come down for the market to work again.

pickledpink

It's highly likely that it will just be stalemate. Homeowners won't sell - they'll just stay put.

The properties which will become available will be the hard-to-sell ones which no-one ever really wanted anyway, or repossessions.

A few forced sellers who can no longer afford their repayments will sell.......but other than that most homeowners will just sit tight.

As there's fewer decent properties available (and there may be even fewer until things pick up) FTB's will have even LESS choice.

lostinrates

pickledpink wrote: »

OK, that may mean some people will have to lower their aspirations as regards the property they want to buy, but that's what people did 30 years' ago! They never bought their dream home first time round; they traded up in stages.

Why can't people do that now?

I was under the impression that climbing the ladder so aggressively was a more recent thing..based on nothing.

Incidently around 30 years ago DH was born, in the first house his mother had bought (rather than move up the ladder they bought a second home in the country instead) and it was sold last year. I think quite frankly, 30 years ago fewer people excpected to ever have their dream home so lots of people took the home they could have and made it as sound and safe and suitable for them as they could.

Austin_Allegro

pickledpink wrote: »

You're right - the banks are still lending - but only to squeaky clean people with large deposits.

And quite frankly I don't think they should go back to lending 125% LTVs! That would be insanity at this time.

Meanwhile, people will hust have to adjust and realise that they can only borrow what they can afford to pay back. Quite simple really.

OK, that may mean some people will have to lower their aspirations as regards the property they want to buy, but that's what people did 30 years' ago! They never bought their dream home first time round; they traded up in stages.

Why can't people do that now?

Because affordability has peaked. At the top of the boom last summer, property for FTBs was so expensive that crackpot schemes like IO mortgages without repayment vehicles, shared ownership and 'buy with a friend' (not to mention under the counter methods like lie-to-buy) had become the only way to 'buy' property.

So every trick in the book had been employed to inflate property prices, but they had got to the point where no more could be loaned by the banks because whatever silly scheme they used, monthly payments were beyond most FTBs.

If the FTBs can't come in at the bottom of the pyramid, the pyramid has to collapse. This would have happened around 2005 or so but Buy to Let propped up the market for a while, with investors taking the place of FTBs. This prop was kicked away earlier this year and now the whole structure is wobbling on matchsticks like let-to-buy and good old fashioned denial.

It can't be kept up much longer unless FTBs can be enticed into the market again. Most banks have had their fingers burned and won't lend large amounts anymore so prices will have to fall, or the market will collapse entirely, bringing down most of the UK economy with it.

Incisor

pickledpink wrote: »

The banks aren't lending at the moment - that's why they're down by over half. Once the banks start lending again people will start buying again.

And once they start lending too much prices will go crazy again. And greedy people will eat too many cream cakes until they learn that too many cream cakes make them sick.

pickles110564

pickledpink wrote: »

The banks aren't lending at the moment - that's why they're down by over half.

Once the banks start lending again people will start buying again.

Only if the prices have fallen low enough for ftb's to fit the new lending rules and have enough deposit to do so.
This might not happen for a very long time