Mortgage lending fall undermines recovery hopes

Really2

Thrugelmir wrote: »

I was responding to why fix......

Has the analysis of gross lending been published yet?

Well 50% of re-mortgages used to be fixed rate so that is virtually 50% of mortgages not renewing thus if re-mortgaging makes up 70% of Gross lending 35% of total lending is not being re-lent out..

The article is on about gross mortgage lending
"Gross mortgage lending totalled an estimated £10.3 billion in May, down 2 per cent compared to £10.5 billion in April"
.
Surely for market activity net new lending is the indicator not Gross

Thrugelmir

Harry_Powell wrote: »

But what happens if rates don't hit 10%? If you fix for 5 years at 6% and rates stay below 4% for the next 3 years, then you will have overpaid. Perhaps it's just because I'm an FTB and don't have 60% equity, but the mortgage products I'm seeing have an arrangement fee & valuation fee combo that amounts to about a thousand pounds. That's a lot of money to find for most people, especially if they're just buying. Many will simply add it to the mortgage and end up paying the fee for 25 years!

If people remortgage every 2 or 3 years with arrangement/valuation fees around the £1000 mark AND they keep adding them to the mortgage, it makes you wonder if they'll ever manage to repay the damned thing?

SVR's are already around the 5% mark. If lenders maintain their current margins and BOE base hits 5% thats a mortgage rate of 10%.

As a FTB can you currently borrow at 4% from any lender?

Fees are deceptive as they make the interest rates look attractive.

Adding fees to your mortgage also just adds more interest.

You end up in a situation of extending your mortgage until you retire!

In many ways its like the low minimum 2% repayments on credit cards. Which means that it takes 40 years to repay your debt.

bluey890

ad9898 wrote: »

Mmmmm, no, the US has the reserve currency so they have far more scope to print than we do, although like everything, there is a limit. We are already on a negative footing with S&P, further QE would undermine our status even more. If we were downgraded it would be a disaster, IR's would rise, whether the economy or government wanted them to or not.

Iceland is an extreme case, and we wouldn't be in their position, but that would be road we would be going down.

I disagree. China (&co) are buying resources with dollars whilst talking up the currency up. I think the dollar is in a similar position to sterling. The talking up of the dollar is by americans and anyone else that owns the currency. I don't think they have that much more scope than the UK. Besides that of US natural resource fundamentals.

mr.broderick

carolt wrote: »

http://business.timesonline.co.uk/tol/business/economics/article6526956.ece

And yes, the title's theirs, not mine. :rolleyes:

Hi carol, was just wondering at what point you will take the plunge?

carolt

Not planning to buy before mid-end 2010. Maybe later.

Harry_Powell

carolt wrote: »

Not planning to buy before mid-end 2010. Maybe later.

is that date based on a personal timetable (such as getting married, having children or savings/investments maturing) or on a belief that the housing market will have bottomed out by then?

carolt

Both.

Actually, highly doubt the market will have bottomed out by then - I'd expect it to take a few years longer. Hence 'or later'. But I'm not that bothered at buying at the bottom; I'm more concerned with how long-term monthly costs stack up versus renting. Plus, like PN, I know I want to move areas, but have no precise idea where to at the moment. I hope that will become clearer over the next year. Obviously not going to buy unless I'm sure about where I'm buying.