A&L ups FTB deposit to 15%

baby_boomer

They are the first. How many will follow?

Observer

"......A spokeswoman says the bank has a set amount of money to lend and was taking a more prudent approach.Can this be the same Alliance & Leicester that, just 17 months ago, launched a combined mortgage and personal loan called PlusMortgage that allowed people to borrow up to 125% of the value of their home? :rotfl:

pizzagirl

I think they're being irresponsible. They should be demanding at least a 25% deposit. Will they never learn?

meanmachine_2

That's nothing, Abbey, which I believe is now the UK's biggest mortgage lender (the idiots), are demanding 25% deposit on ALL mortgages.

I was genuinely shocked when I saw that.

Talk about pulling up the drawbridge...

WTF?_2

This is outrageous! The government should step in immediately with a plan to provide deposits for "hardworking families" who can't afford to buy the house of their dreams and face a life of non home ownership!

:rotfl:


As the article notes, ironic and not coincidental that A&L were one of the worst exponents of loony lending back in the bubble.

baby_boomer

It won't be long before a 15% deposit is the same size as a 10% deposit back in 2007

Any couple saving hard for two more years, and investing @ 7% along the way, will soon be in a stronger position anyway.

WTF?_2

meanmachine wrote: »

That's nothing, Abbey, which I believe is now the UK's biggest mortgage lender (the idiots), are demanding 25% deposit on ALL mortgages.

I was genuinely shocked when I saw that.

Talk about pulling up the drawbridge...

Hmmm, now that is a sign that things are worse than usual.

Is is because they can't secure enough funding or they just think the market is poised at the edge of a towering precipice, I wonder?

baby_boomer

Or because Santander, Abbey's owners, have just had to write down a huge pile of Spanish property loans by 35%, perhaps?

Several lenders have decided to give up lending, AFAIK, in order to not to extend the downside risk on their existing loan books.

fiodyl

baby_boomer wrote: »

It won't be long before a 15% deposit is the same size as a 10% deposit back in 2007

Any couple saving hard for two more years, and investing @ 7% along the way, will soon be in a stronger position anyway.

This is what we are trying to do:rolleyes: Our goal is to have 50k saved by july 2010, but house prices will still need to fall for us to be able to afford to buy anything as we can only get a 60k mortgage and cheapest houses round here are 140k

fatpig_2

My reading of this is that A&L were expecting further house price falls of up to 10%, they've now revised that figure to 15%. It shouldn't be too long before they revise that figure again to 25%. They're slow learners but they're getting there at least.

WTF?_2

fiodyl wrote: »

This is what we are trying to do:rolleyes: Our goal is to have 50k saved by july 2010, but house prices will still need to fall for us to be able to afford to buy anything as we can only get a 60k mortgage and cheapest houses round here are 140k

Don't worry - you're on the right track. House prices are falling and your savings will be increasing all the time. Also, while you wait your savings provide you with a useful safety net should any emergency crop up.

MarkyMarkD

!!!!!!? wrote: »

As the article notes, ironic and not coincidental that A&L were one of the worst exponents of loony lending back in the bubble.

That statement is completely untrue. A&L introduced their 100%+ PlusMortgage after several other lenders had entered the market, and lent hardly any money on the product - not exactly proof that they were undertaking "loony lending". They also capped LTVs in London at 90% whilst still doing 95% elsewhere, several years ago and before anyone else realised that there was a problem with London prices.

A&L have already stated that they want to reduce the size of their mortgage book in 2008. They simply don't need to undertake risky lending to achieve the level of lending they want. 2009 will doubtless be more of the same.

There's no point lenders pushing hard to get funding for extra mortgages, which will make them no money because:

(a) the marginal funding cost is so high; and
(b) the risk of losses is similarly high.

Lenders either have to charge a lot more for higher LTV mortgages (as lenders like Nationwide have done for a good while) or stop doing them.