Just taking stock

lostinrates

the_ash_and_the_oak wrote: »

agree w that - but sentiment is something nationwide surely - not a subsection of informed/intelligent (defined however you wish) people?

yes, I agree: my point is that the informed nd intelligent are undecided, these are the people making decisions on policy for lending etc.

I think on balnce I'd agree, sentiment is up. The sun is shining more the financial headlines are less shocking.

Graham_Devon

Just noticed something about the mortgage approvals.

We all consider that because mortgage approvals have gone up in numbers, that banks are willing to lend more.

However, this seems not to be the case:

Total lending to individuals rose £900m in March, which was below February's rise of £1.5bn and the £1.6bn average over the past six months.

So it seems, actual lending fell in terms of progressing towards whats needed last month, but it just went to more people, meaning more people required less....i.e. it's either remortgaging, or people with a lot of cash in the bank as a deposit, which would fall in line with the hard to get mortgage deals, requiring 25-40% deposits.

So the headline rate of mortgage approvals being up 4%, doesnt actually mean that lending is up, infact, it fell, by around a 3rd.

dervish

StevieJ wrote: »

And quite simply you are either a sockpuppet or a !!!!!!!! :rolleyes:

there's no need to be rude

Degenerate

Graham_Devon wrote: »

Total lending to individuals rose £900m in March, which was below February's rise of £1.5bn and the £1.6bn average over the past six months.

So it seems, actual lending fell in terms of progressing towards whats needed last month,

A rise is a rise, not as much as February, but "actual lending fell" - how do you work that one out?

StevieJ

Generali wrote: »

Because AIUI, that's the level of mortgages that equates to a normally functioning market.

To be honest don't know one way or the other, I do know that is the view of the experts, the experts also said you couldn't have low inflation and full employment.


They aren't right now but when the economy starts recover, inflation should take off pretty rapidly given base rates at 0.5% plus 'printing money'. Base rates will have to rise in the face of rising inflation as Gilt yields will have to rise and you can't have a massive disconnect between short term Gilt yields and the base rate.

True but this could be a driver for higher asset prices (or not reducing), people more likely to hold on if house price increasing, also plenty of upward movement in IR before it is worse than before, also many sensible borrowers will be fixing now or soon.


Because they are going to have a huge amount of extra Government debt to service through their taxes plus also in many cases people will have lost a job in the family or seen overtime, bonus and/or commission payments fall

I thought the economy was improving in this scenario so overtime/bonus etc likely to be increasing not reducing, even though unemployment will be still increasing in some areas, the public should see light at the end of the tunnel.


See above.

My views above.

Graham_Devon

Degenerate wrote: »

A rise is a rise, not as much as February, but "actual lending fell" - how do you work that one out?

Like I stated, which you took and changed to suit....

Actual lending fell in terms of progressing towards what is needed.

I'd welcome your thoughts though into discussing in this thread as it's gone quite well so far without people changing goalposts. Thanks

StevieJ

Graham_Devon wrote: »

Like I stated, which you took and changed to suit....

Actual lending fell in terms of progressing towards what is needed.

I'd welcome your thoughts though into discussing in this thread as it's gone quite well so far without people changing goalposts. Thanks

You mean the rate of increase has declined

Generali

All fair points StevieJ.

The 70,000 mortgages thing AFAIK is just a piece of number crunching - it's not really economics at all, more stats really. The inflation/unemployment thing was never accepted by all economists, far from it in fact although it was economic orthodoxy.

House prices aren't going to rise until unemployment stops rising (and probably until it's fallen substantially). Unemployment usually starts to fall about 18 months after the end of a recession. As the recession hasn't even ended yet it is fair to expect at least another 18 months of rising unemployment and my guess is probably more like another 4 years until unemployment reaches a peak.

The current recession has a lot in common with the early 80s IMO only this time instead of heavy industry contracting markedly it's financial services and a lot of the legal and IT infrastructure that services it.

If that is the case, then there is a bigger problem than in the early 80s. At that point, much heavy industry was nationalised and subsidised to a large extent (because the companies used 'marginal cost pricing' - Google it if you want to die of boredom). Those companies closing didn't have a massively negative impact on tax revenues as the personal taxes lost could be balanced against reduced subsidies and (later) privatisation receipts. Ok, the banks are being subsidised right now but this is only meant to be a short-term thing, not Government policy as such. Collapsing tax revenues that are unlikely to bounce back any time soon is going to become a very big problem I suspect.

Degenerate

Graham_Devon wrote: »

Like I stated, which you took and changed to suit....

Actual lending fell in terms of progressing towards what is needed.

I'd welcome your thoughts though into discussing in this thread as it's gone quite well so far without people changing goalposts. Thanks

Funny how above my reply I quoted exactly what you said, so how exactly I "changed the goalposts" (I think you mean moved) is beyond me. Now getting back to the point, "in terms of progressing towards what is needed." is gobbledygook. Did you mean to say the rate of increase reduced?

Graham_Devon

Yes, that's what I meant to say. It's not the biggest error of all time, so come on lads. If you want to discuss, please, do discuss, but I'm trying to keep this topic on track and picking up on silly little wording errors will just drag it down with all the other threads. Hope you see where I am coming from. Indeed, you are correct, that's what I meant to say.

Again, I would welcome some "bull input" into this thread, as in to actually debate, not just pick up on little errors. That's my last plea, feel free to post how you like.