Availability of Credit or are We just Skint?

kriss_boy

Is it the mortgage lenders fault for being so strict these days or are we all too skint to trade up anyway?

What was once 150K in 2008 is now £120K. But why cant those who bought their propertys pre 2007/2006 not afford to trade up? Surely theres a generation of buyers from 2000-2005 that will still have made a few bob on their places as well as accumulated equity. Arent they looking at the bargains right now?

If the mortgage lenders went easy on FTB then the problem is halfway fixed surely? A mate at work is on 23K salary with 6K deposit but he needs another £10K to buy a property at only £70K.

Why dont they trust people like him? There must be 1000s like him who missed the cut for getting a low deposit mortgage in the last 18months but who have since bettered their deposit.

mbga9pgf

Why doesnt he just save another 10K? Thats about another years worth of saving.

PasturesNew

kriss_boy wrote: »

What was once 150K in 2008 is now £120K. But why cant those who bought their propertys pre 2007/2006 not afford to trade up?

What they bought in 2007/2008 for £150k on a 100% interest only mortgage is now worth £120k ... so they're £30k in negative equity and to trade up to a house now costing £150k (which would have cost £180-190k in 2007/2008) now needs a £15-22k deposit.

So now to move they need £30k + £15-22k, or £45-52lk.

They've had 2 years to save up this difference. How many people paying a £150k mortgage could additionally save £2k/month every month since the day they bought their house?

kriss_boy wrote: »

Surely theres a generation of buyers from 2000-2005 that will still have made a few bob on their places as well as accumulated equity. Arent they looking at the bargains right now?

They still want 2007 prices though. They look at the fact their house was £150k in 2007 and it's £120k now so they won't sell. Even though the house they want is now £150k, not £190k ... oh - and they MEWd every 2 years when their "deal" was up, increasing the mortgage for a new kitchen, car, settle their debts and a few holidays.

kriss_boy wrote: »

If the mortgage lenders went easy on FTB then the problem is halfway fixed surely? A mate at work is on 23K salary with 6K deposit but he needs another £10K to buy a property at only £70K.

It was mortgage lenders going easy on FTBs (and everybody else) that caused it.

kriss_boy wrote: »

Why dont they trust people like him? There must be 1000s like him who missed the cut for getting a low deposit mortgage in the last 18months but who have since bettered their deposit.

Experience and history is why they don't trust him.

An £8k deposit isn't a lot really. If he had £20k they'd listen.

Graham_Devon

mbga9pgf wrote: »

Why doesnt he just save another 10K? Thats about another years worth of saving.

I very highly doubt 10k is just another year saving on 23k.

How is the person supposed to live while they save more than half their take home pay!?

kriss_boy

Pastures new, I agree with most of your points but I meant people like a couple of my friends for example.

Some of my mates bought their places in 2002/2003. Flats for £35/40K that sold for ridiculous prices like £85/90K in 2007 but are new more realistically worth £75/80.

One of those mates is looking to buy a bigger place because even with the lull hes set to take 30/40K with him to the new house.

But I take your point on those who were interest only and remortgaged for kitchens etc. That was always going to end in tears.

The friend at work on 23K with 6K deposit is saving I believe but you know what its like. He has a car to pay for that he needs for work and he has to live. I reckon realistcally he should be able to put away £400 a month.

beccad

People need more time to save up the extra deposit now to get the better mortgage deals. My husband and I bought our flat early 2004 and we could do with a bigger place now. Assuming we can sell the flat for what we want (which is realistic) we'd still only have about 20% deposit on our next place, so we need to save to get the better deals for 25% deposit holders.

People still need to move, but it takes a while to get there!

Kev09

PasturesNew wrote: »

It was mortgage lenders going easy on FTBs (and everybody else) that caused it.


Experience and history is why they don't trust him.

An £8k deposit isn't a lot really. If he had £20k they'd listen.

Although most of what you say is spot on Pastures, I do not agree with this bit about lending to first time buyers in the UK caused the problem. It wasn't, it was Fred and his pals having a who's got the biggest spuds competition down the golf club by dipping their toe into shark infested toxic water (i.e all that US dodgy debt etc)

Now the FTB's are being punished severely as the banks are being over cautious, if someone has about 10% deposit and is only borrowing 70k and they can easily afford the repayments i.e. (they are not credit card mad or anything) then they should stop being a bunch of faires and help the people out, it was their crazy buying of toxic asset backed securities which lead to the freezing of the money markets and the subsequent recession not these people!

There is no such thing as risk free lending and we do not want to go back to the old in order to get a loan you first have to prove you do not need it stuff.

bo_drinker

Basically banks have in many ways shot themselves in the foot and the potential ftb'ers will pay along with the rest of us one way or another. And at the same time even though huge mistakes were made many bankers will get bonuses.
There is a saying when the sun shines they will loan you an umbrella, when the rain comes they want it back again. Well ITYF it's p1ssing down now.

Thrugelmir

Kev09 wrote: »

Now the FTB's are being punished severely as the banks are being over cautious, if someone has about 10% deposit and is only borrowing 70k and they can easily afford the repayments i.e. (they are not credit card mad or anything) then they should stop being a bunch of faires and help the people out, it was their crazy buying of toxic asset backed securities which lead to the freezing of the money markets and the subsequent recession not these people!

Ask yourself one question.

If a FTB only has a 10% deposit. Where does the other 90% come from to fund the mortgage?

The answer is as simple as looking in a mirror.

kriss_boy

Thrugelmir wrote: »

Ask yourself one question.

If a FTB only has a 10% deposit. Where does the other 90% come from to fund the mortgage?

The answer is as simple as looking in a mirror.

I dont understand your reasoning...

What if they saved that 10% in the last year or two, ie saving more than their repayments will otherwise be on a mortgage

I took the mickey out my mum when I moved out- joking that Id have more money in my pocket paying a mortgage than saving the deposit for one. Its not far from the truth.

Obviously you have other bills to factor in but if someone can save 6/7K in 12 months then I reckon they could afford to move out into their own small property.

Otherwise where do you draw the line- have them save a 50% deposit?

Thrugelmir

kriss_boy wrote: »

I dont understand your reasoning...

What if they saved that 10% in the last year or two, ie saving more than their repayments will otherwise be on a mortgage

I took the mickey out my mum when I moved out- joking that Id have more money in my pocket paying a mortgage than saving the deposit for one. Its not far from the truth.

Obviously you have other bills to factor in but if someone can save 6/7K in 12 months then I reckon they could afford to move out into their own small property.

Otherwise where do you draw the line- have them save a 50% deposit?

You, I and our neighbours in our streets need to save the 90% to fund the mortgage.

Thats where the money comes from.

We dont save. Theres no money to lend.

Whether people can afford it doesnt matter. By everybody saving for bigger deposits. Then the system of mortgage funding becomes sustainable. The principle that Building Societies were built on.