Mortgage lending down 52% on same month last year.

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Just reported on Sky News.

Edited to add link.

http://news.sky.com/skynews/Home/Business/Mortgage-Lending-Slumps-By-50-Per-Cent-In-January-2009-Says-Council-Of-Mortgage-Lenders/Article/200902315225757?lpos=Business_First_UK_News_Article_Teaser_Region_0&lid=ARTICLE_15225757_Mortgage_Lending_Slumps_By_50_Per_Cent_In_January_2009_Says_Council_Of_Mortgage_Lenders

chucky

"Mortgage lending slumped to £12.4bn during January - that is 52% below the total for the same month of 2008, the Council of Mortgage Lenders says."

That's only 8% less if you're comparing January to December.

The 52% looks a much better attention grabbing headline than somewhere around 8%

fatpig_2

ad9898 wrote: »

Just reported on Sky News.

Edited to add link.

http://news.sky.com/skynews/Home/Business/Mortgage-Lending-Slumps-By-50-Per-Cent-In-January-2009-Says-Council-Of-Mortgage-Lenders/Article/200902315225757?lpos=Business_First_UK_News_Article_Teaser_Region_0&lid=ARTICLE_15225757_Mortgage_Lending_Slumps_By_50_Per_Cent_In_January_2009_Says_Council_Of_Mortgage_Lenders

That's heartening news. Hopefully banks will never return to the grim days of lending to any old half-wit or spivvy buy to letter.

Conrad

The client sectors that are impacted most by restricted lending include;

B2L - only a handfull of lenders remain, with tough criteria, very high fees, and rates tending to be around the 6% mark. Some with eye catching rates have huge fees.

SELF CERT - very few schemes remain. Rates are too rich for most. Lenders tend to be making various checks on validity, for example; requiring up to date trading invoices to prove self employed.

ADVERSE CREDIT - here we find the most striking change. Pretty much 60% - 75% max, where as 100% was previosuly available to those with CCJs etc.
A vast number of people have been removed from the market, unable to access mortgages.
The very few schemes that remain have high rates (minimum 6% for 75%, but more typicaly 9% rates).
Those with recent mortgage arrears are now a no go.

VERY MILD ADVERSE - There is a vast underbelly of the population that used to borrow high ltv, and typicaly exhibit a pattern of paying credit commitments late. These late payments don't translate into defaults and ccjs for this sector.
These 'lazy payers' as we call them in the industry, have all of a sudden found low deposit mortgages are pretty much out of the question.


NEW BUILD - 75% is the maximum for most lenders. Builders cashbacks are now accepted as exceptions rather than the rule and close attention is paid to valuation as lenders do not want the prescence of incentives to have an un due influence on price paid (can the lender recover thier debt in the abscence of incentives)

95%+ - the majority of FTBs I used to see required 95%+, but these are out of reach for most of them now.

INTEREST ONLY - This is big news, and something which the Government are unlikely to be aware of. It was very common for people to elect interest only with the intention of switching to repayment after a couple of years in order to 'bed themselves in'.
Most lenders are now restricting this option severly, which has a knock on effect on the price people can afford to go to.

HIGH INCOME MULTIPLES - very much an exception now

TRANSIENT HISTORY'S - job hoppers, address hoppers, not on electoral role - are some examples of categories that struggle to access mortgages now

COMPLEX CASES - I have a self made file built up over years detailing every category of complex factor Ive ever come accross. There are thousand of these factors.
People exhibiting some of these factors again will very much struggle now.
Those not in the know may not realise the extent of these complex situations, but I get enquiries every day that I turn away.

All in all, I wouldn't be surprised if some 40% of the prior demand market participants have been excorcised.

ad9898_3

Great post Conrad, very informative.

FoxtonsRIP

Conrad wrote: »

The client sectors that are impacted most by restricted lending include;

B2L - only a handfull of lenders remain, with tough criteria, very high fees, and rates tending to be around the 6% mark. Some with eye catching rates have huge fees.

SELF CERT - very few schemes remain. Rates are too rich for most. Lenders tend to be making various checks on validity, for example; requiring up to date trading invoices to prove self employed.

ADVERSE CREDIT - here we find the most striking change. Pretty much 60% - 75% max, where as 100% was previosuly available to those with CCJs etc.
A vast number of people have been removed from the market, unable to access mortgages.
The very few schemes that remain have high rates (minimum 6% for 75%, but more typicaly 9% rates).
Those with recent mortgage arrears are now a no go.

VERY MILD ADVERSE - There is a vast underbelly of the population that used to borrow high ltv, and typicaly exhibit a pattern of paying credit commitments late. These late payments don't translate into defaults and ccjs for this sector.
These 'lazy payers' as we call them in the industry, have all of a sudden found low deposit mortgages are pretty much out of the question.


NEW BUILD - 75% is the maximum for most lenders. Builders cashbacks are now accepted as exceptions rather than the rule and close attention is paid to valuation as lenders do not want the prescence of incentives to have an un due influence on price paid (can the lender recover thier debt in the abscence of incentives)

95%+ - the majority of FTBs I used to see required 95%+, but these are out of reach for most of them now.

INTEREST ONLY - This is big news, and something which the Government are unlikely to be aware of. It was very common for people to elect interest only with the intention of switching to repayment after a couple of years in order to 'bed themselves in'.
Most lenders are now restricting this option severly, which has a knock on effect on the price people can afford to go to.

HIGH INCOME MULTIPLES - very much an exception now

TRANSIENT HISTORY'S - job hoppers, address hoppers, not on electoral role - are some examples of categories that struggle to access mortgages now

COMPLEX CASES - I have a self made file built up over years detailing every category of complex factor Ive ever come accross. There are thousand of these factors.
People exhibiting some of these factors again will very much struggle now.
Those not in the know may not realise the extent of these complex situations, but I get enquiries every day that I turn away.

All in all, I wouldn't be surprised if some 40% of the prior demand market participants have been excorcised.

If only lenders hadn't deviated from these sensible criteria some years back then we wouldn't be in the mess we're in now.

lostinrates

Conrad wrote: »

.....95%+ - the majority of FTBs I used to see required 95%+, but these are out of reach for most of them now.

INTEREST ONLY - This is big news, and something which the Government are unlikely to be aware of. It was very common for people to elect interest only with the intention of switching to repayment after a couple of years in order to 'bed themselves in'.
Most lenders are now restricting this option severly, which has a knock on effect on the price people can afford to go to.

HIGH INCOME MULTIPLES - very much an exception now......

COMPLEX CASES - I have a self made file built up over years detailing every category of complex factor Ive ever come accross. There are thousand of these factors.
People exhibiting some of these factors again will very much struggle now.
Those not in the know may not realise the extent of these complex situations, but I get enquiries every day that I turn away.

All in all, I wouldn't be surprised if some 40% of the prior demand market participants have been excorcised.

LOL, not good news for us then? We were advised to go IO if buying before DH's big payrise spring 2010. Made sence to us as this is contracted and as secure as anyone can claim to be really. On top of that we were looking up to a high of a quite hefty multiple of the early years pay rises (they [strike]are[/strike]) have been guidelined to be quite hefty and have no history..firm wide.. of not being fulfulled, but are not contracted and IMO would be the first risk should clamp down be made. Further more the type of properties we have been looking at...even the ones which are actual houses, are not stadard, there fore may be complex?:rolleyes:

Oh no....I'm going to have to buy a one bed flat aren't I?

Dan:_4

Conrad wrote: »

INTEREST ONLY - This is big news, and something which the Government are unlikely to be aware of. It was very common for people to elect interest only with the intention of switching to repayment after a couple of years in order to 'bed themselves in'.
Most lenders are now restricting this option severly, which has a knock on effect on the price people can afford to go to.

This is the intresting one. I know of many folk who have gone IO for the first few years (so they have money to buy furinture and whatever) and get so used to it and never switch to repayment.

Personaly, I will always have a IO mortgage because I like to have the flexability off making lump sum overpayments - but it takes discpline.

Thrugelmir

Conrad wrote: »

The client sectors that are impacted most by restricted lending include;

B2L - only a handfull of lenders remain, with tough criteria, very high fees, and rates tending to be around the 6% mark. Some with eye catching rates have huge fees.

SELF CERT - very few schemes remain. Rates are too rich for most. Lenders tend to be making various checks on validity, for example; requiring up to date trading invoices to prove self employed.

ADVERSE CREDIT - here we find the most striking change. Pretty much 60% - 75% max, where as 100% was previosuly available to those with CCJs etc.
A vast number of people have been removed from the market, unable to access mortgages.
The very few schemes that remain have high rates (minimum 6% for 75%, but more typicaly 9% rates).
Those with recent mortgage arrears are now a no go.

VERY MILD ADVERSE - There is a vast underbelly of the population that used to borrow high ltv, and typicaly exhibit a pattern of paying credit commitments late. These late payments don't translate into defaults and ccjs for this sector.
These 'lazy payers' as we call them in the industry, have all of a sudden found low deposit mortgages are pretty much out of the question.


NEW BUILD - 75% is the maximum for most lenders. Builders cashbacks are now accepted as exceptions rather than the rule and close attention is paid to valuation as lenders do not want the prescence of incentives to have an un due influence on price paid (can the lender recover thier debt in the abscence of incentives)

95%+ - the majority of FTBs I used to see required 95%+, but these are out of reach for most of them now.

INTEREST ONLY - This is big news, and something which the Government are unlikely to be aware of. It was very common for people to elect interest only with the intention of switching to repayment after a couple of years in order to 'bed themselves in'.
Most lenders are now restricting this option severly, which has a knock on effect on the price people can afford to go to.

HIGH INCOME MULTIPLES - very much an exception now

TRANSIENT HISTORY'S - job hoppers, address hoppers, not on electoral role - are some examples of categories that struggle to access mortgages now

COMPLEX CASES - I have a self made file built up over years detailing every category of complex factor Ive ever come accross. There are thousand of these factors.
People exhibiting some of these factors again will very much struggle now.
Those not in the know may not realise the extent of these complex situations, but I get enquiries every day that I turn away.

All in all, I wouldn't be surprised if some 40% of the prior demand market participants have been excorcised.

Conrad,

I remember back when you had to prove that you had the ability to repay the capital element of a mortgage, ie an assigned endowment policy (though thats an issue in itself). Are mortgage lenders now imposing this criteria?

Really2

Conrad wrote: »

INTEREST ONLY - This is big news, and something which the Government are unlikely to be aware of. It was very common for people to elect interest only with the intention of switching to repayment after a couple of years in order to 'bed themselves in'.
Most lenders are now restricting this option severly, which has a knock on effect on the price people can afford to go to.

Thats an intresting one we went IO (Well offset) Being IO/Offset made no difference to the amount we could borrow compared to repayment.

Dan:_4

Thrugelmir wrote: »

Conrad,

I remember back when you had to prove that you had the ability to repay the capital element of a mortgage, ie an assigned endowment policy (though thats an issue in itself). Are mortgage lenders now imposing this criteria?

I needed to show my lump sum pension forecast.