Mortgages scarcer than ever

Realy

Heyman wrote: »

Your 0 buyers = 0% drops theory is a non-reality, as there will always be sellers and buyers, and sellers who NEED to sell will have to price accordingly to attract the scant amount of buyers around at the moment.

I agree and that is why credit cannot be relied on to the accelerate price decreases.
The same people who argue this must believe as soon as 90%LTV mortgages become available we will have rampant HPI

Realy

ixwood wrote: »

lol. Your arguments have a few too!

The "People just won't sell" argument is rubbish. There's always forced sellers. Repossessions, divorces/splits, deaths, BTL numpties in far too deep etc. These set the prices for the rest of the market.

Plus, now prices are plummeting, why would a FTB buy and not wait? It's the opposite effect on "must get on the ladder!!" on the way up.

Not too mention the debt crunch.

Or the recession/depression/unemployment etc.

Or the trillions that have disappeared via stock markets.

Sorry must have missed the bit where I said there will be no forced sellers.:rolleyes:
In this market people will not sell if they don't need too.
I think you want to read some of my other posts I am more than aware of the economic situation but to say people are not putting their houses on the market because there are to many houses for sale is madness.

There are less houses coming on the market at the moment that will most probably go up again as recession kicks in. But is that really an offensive observation at the moment.
I get less emails of houses coming on to the market than I did 6 months ago yes most houses are staying on unsold but there are less coming on at the moment, just an observation perhaps things are better where I live if other people are saying different.

Heyman_2

Realy wrote: »

I agree and that is why credit cannot be relied on to the accelerate price decreases.
The same people who argue this must believe as soon as 90%LTV mortgages become available we will have rampant HPI

Your post makes no sense. You just agreed with me that your previous theory makes no sense - so which side of the argument are you on?

LACK of credit and mortgages will accelerate price decreases. And there are still 90% deals available now, I should know, I just signed up for one.

Realy

Heyman wrote: »

Your post makes no sense. You just agreed with me that your previous theory makes no sense - so which side of the argument are you on?

LACK of credit and mortgages will accelerate price decreases. And there are still 90% deals available now, I should know, I just signed up for one.

As the post says there are less mortgages available than ever SO LESS 90% DEALS. So if lack of credit accelerates falls so ease of credit will cause HPI (have you not heared of the theroy of relativity) acording to you
I think falls are down to affordability and confidence lack of credit as only pointed that out to people.

Heyman_2

Realy wrote: »

As the post says there are less mortgages available than ever SO LESS 90% DEALS. So if lack of credit accelerates falls so ease of credit will cause HPI (have you not heared of the theroy of relativity) acording to you
I think falls are down to affordability and confidence lack of credit as only pointed that out to people.

*sigh*

I'm beginning to wish that horseinhatman hadn't been banned.

Realy

Heyman wrote: »

*sigh*

I'm beginning to wish that horseinhatman hadn't been banned.

My argument is that house prices are based on what people pay for them not what they are valued at (like you think) and people pay what they think they can afford or want to pay.
Credit has little to do with price but does to affordability.
All lack of credit as done as opened everyones eyes that prices do not only go up!
I do not think lack of credit will increase falls nor will the avaiblilty of credit make HPI.
The market is now entering the forced seller stage and no one will sell a property unless they have to as they will not achive the price they want.
What is your point exactly? I take it you are now buying a house as you have just arranged a mortgage?

Heyman_2

Right, ok I understand what you are saying now, and I apologise for my earlier flippancy which was basically bourne out of frustration of not being able to understand where you were coming from. The horseinhatman rib was because at least I knew where I was with that guy!

I disagree with you that availability of credit does not cause HPI. That's exactly the scenario we've seen for the last few years. People went to see mortgage brokers and banks, who told them they could borrow x amount, with x amount usually being well well over what they could afford.

Similarly, I disagree that lack of credit will not increase falls. That's one of the biggest reasons why there are hardly any buyers about at the moment. But there ARE still some buyers around, and the sellers who are on the market who NEED to sell will have to price accordingly to attract them. Also, once a distressed sale at a low price is recorded for a street, that brings the valuation price down of every other comparable property in that road. Therefore, lack of credit will result in drops.

I agree with your other points though.

neverdespairgirl

Heyman wrote: »

LACK of credit and mortgages will accelerate price decreases. And there are still 90% deals available now, I should know, I just signed up for one.

There are a lot fewer around, though, and they tend to be quite expensive.

Have a look at this recent thread on the mortgages board, stating that 95% deals are a dying breed:

http://forums.moneysavingexpert.com/showthread.html?t=1202611

Heyman_2

Yeah - I know that some on here would interpret it as good news and a return to sensible lending. And to be honest, they're right. If the banks can now stick to 75% LTV and 3.5x salary for lending, whatever the economic climate and shape of the housing market, we'd be looking at some long-term stability.

teabelly

Distressed sales are usually repos and their value doesn't always appear on the land registry. Also a surveyor's valuation is based on a buyer free to buy and a seller free to sell not a seller that is desperate. There would have to be quite a few 'low ball' sales before it started to bring local prices down significantly. There are still sellers that can't take below a certain amount as the property is mortgaged, again this limits what sellers can sell for. If banks don't agree to the property being sold then either the seller has to wait until they are offered a better amount or they will be repossessed which again won't show on the land registry necessarily.

If the banks do return to 75% ltv and 3.5x salary then there is going to be serious wage inflation to make up the difference. The population has also been conditioned to believe property is always worth more than you paid for it so they just aren't going to roll over and start selling houses cheaply either. Ultimately banks need to lend to generate cash. GB has demanded that banks must start lending again so can you imagine the fall out if banks suddenly said they weren't going to lend *our* money to us?

The ones laughing in this will be the very wealthy and the BTL landlords with equity left. They'll be buying a lot of the property that will be around so don't expect FTBs to have an easy ride all of a sudden. Rental stress is more flexible than income so it will be the landlords that can buy not the FTBs in the main. Also if mortgages are restricted that much then all those priced out will have to rent somewhere. Again more reason for landlords to buy more. Ultimately renters can choose to rent where most of their joint income is paid out in rent. Buyers have affordability constraints so it will limit them more and make renting more attractive and more profitable for landlords.

Banks need to lend. They will lend to those that are least likely to default which are the wealthy, the high salaried low debt people and landlords with a track record. FTBs won't get a look in unless they can do some serious saving which will exclude most of them.

There are also plenty of rumours that interest rates are going to come down quite a lot - towards 3 or even 2.5%. With interest rates that low landlords will be filling their boots while everyone else has to look on in dismay as they won't have had time to save up the suddenly necessary 25% deposit.