Lloyds: Fifth of mortgage holders in negative equity.

Graham_Devon

Surprised this one hasn't cropped up on here today (unless it has, it usually has once I get round to posting something!)

A fifth of Lloyds Banking Group mortgage customers were in negative equity at the end of June, figures from the bank have revealed.

Halifax owner Lloyds said falling house prices were to blame for the figure, although high loan-to-value mortgages would have left homeowners at greater risk of owing more than their property was worth.

Lloyds said total mortgage lending by its high street business was £18.3 billion in the first half of the year, nearly 60% less than the figure in the same period last year.

The firm said the overall mortgage market for both house purchase and re-mortgage had "slowed considerably" with a 55% drop in lending as low interest rates on lenders' standard variable rates dissuade home owners from looking for new deals.

The proportion of customers in negative equity jumped to 20.4% by June 30, from 16.2% in December.

http://www.google.com/hostednews/ukpress/article/ALeqM5g9bOCFhasPcIK1XJ7tV6HqsroM7A


A fifth of the mortgage book seems quite a lot of exposure for Lloyds to me?!

Plus, this doesnt really correlate with the rises we have seen since feb. Prices have been going up, yet those in neg eq jump from 16% - 20%? That sounds like some kind of spin the bulls on here would use!

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Graham_Devon wrote: »

Plus, this doesnt really correlate with the rises we have seen since feb. Prices have been going up, yet those in neg eq jump from 16% - 20%? That sounds like some kind of spin the bulls on here would use!

TBH I'm seeing no rise in prices, somewhere must be I guess but not anywhere I've looked. New houses of a certain type coming on the market are coming on at the reduced prices that the ones already on are up for. And the only stuff selling is the stuff that's been reduced quite a bit, so some places must really rocketing away, but where ? who knows.

julieq

Errrm, it's not that difficult to explain Graham, but you have to engage your brain a bit.

16.4 in december, rising in the first few months of the year to above 20%, then dropping back to 20% over the past three months where there's been a rise.

Bearing in mind that because the changes over that period are marginal, the negative equity is also marginal. It's not putting the lender at significantly increased risk.

Really2

Mainly from

Within the figures, almost a third of buy-to-let mortgages and 25.9% of specialist loans - which include controversial self-certified and sub-prime deals - were in negative equity.

A spokeswoman for Lloyds said neither of the main Lloyds TSB or Halifax lending businesses had ever offered more than 100% mortgages, although she said the Birmingham Midshires arm had offered a 125% deal that was withdrawn from the market last February.

Lets face it the loan book of HBOS was dire that is why they had to be taken over.

I would say this is mainly due to halifax only becoming a big player in the mortgage markets from around 2004 onwards.

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julieq wrote: »

Errrm, it's not that difficult to explain Graham, but you have to engage your brain a bit.

Why be such a !!!!!, the guy didn't deserve such patronising drivel. Since when did he look down his nose at you ?

julieq

And then there's this

The lender also revised its predictions for house price falls today to 7% or less during 2009, from an initial 15% forecast.

Which curiously hasn't been quoted by the bears. Why would that be, I wonder?

Graham_Devon

julieq wrote: »

Errrm, it's not that difficult to explain Graham, but you have to engage your brain a bit.

16.4 in december, rising in the first few months of the year to above 20%, then dropping back to 20% over the past three months where there's been a rise.

Bearing in mind that because the changes over that period are marginal, the negative equity is also marginal. It's not putting the lender at significantly increased risk.

Are you suggesting that in one month where prices fell (january) and have been pretty much flat or rising since, those in NE went from 16.4% to way over 20% to allow a fall back from 20% since prices have risen around 5-6%.

I find that hard to chew to be honest.

Graham_Devon

julieq wrote: »

And then there's this

The lender also revised its predictions for house price falls today to 7% or less during 2009, from an initial 15% forecast.

Which curiously hasn't been quoted by the bears. Why would that be, I wonder?

Because it wasn't what the thread was about and has been discussed already today.

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Graham_Devon wrote: »

Are you suggesting that in one month where prices fell (january) and have been pretty much flat or rising since, those in NE went from 16.4% to way over 20% to allow a fall back from 20% since prices have risen around 5-6%.

I find that hard to chew to be honest.

Didn't Halifax post a rise in January ?, which adds more weight to your argument.

julieq

ad9898 wrote: »

Why be such a !!!!!, the guy didn't deserve such patronising drivel. Since when did he look down his nose at you ?

Well he didn't work it out for himself, did he? And given the level of patronising sarcasm I get from the bears, it's amusing how quickly you leap to the defence of a mild dig at someone on your team. I'll look forward to you defending me so enthusiastically.

But here come the ad hominems, I guess, which will deflect attention from the fact that the news is overegged (as usual with these stories), contains a major back track on the bad news, and is describing a marginal change only.

Graham_Devon

ad9898 wrote: »

Didn't Halifax post a rise in January ?, which adds more weight to your argument.

Can't really remember now. All I know is since around feb it's been pretty much flat or rising. Think there was a stray month somewhere in there.

But nothing near enough of a fall to throw the figures from 16.4% to the (roughly) 28% needed to allow the figures to fall back to 20%.

I would assume Lloyds are using their own figures and not the Land Registry figures. But thats only an assumption.

It may make more sense that those in NE have not fallen back from a higher figure, but Lloyds is using the LR prices for some reason, which would kind of explain the rise of those in NE on their books.