And So It Begins.... High LTV lending to return

Graham_Devon

HAMISH_MCTAVISH wrote: »

Untrue. They are lending at 90% LTV today. They just charge more because they have to hold a higher proportion of capital on reserve.

The number of 90% LTV mortgage products available has risen substantially in the last 6 months.

The return of competition to the lending market, and increase of funding available, is slowly but surely raising availability of high LTV mortgages.

Hamish.

We are living in times when we have 175bn QE out there. At a time when banks are being told to lend in return for this money.

Just think about it.

mbga9pgf

Houses are already far cheaper elsewhere in the world.

Yep, because of mortgage market controls, not the number of houses.

There is an upper limit to house prices though.....

You are right, and it is far short of the 300% you talk about. Its another 600 billion in interest only lending. Past this point, ALL of our disposable income is gobbled up in interest payments. Past this point, we cant repay the debt.

It equates to a 4% rise in the cost of lending at current unemployment and savings rates. Above that point, the country is history.

HAMISH_MCTAVISH

mbga9pgf wrote: »

Watch this space hamish. The FSA havent ruled out market controls yet, and your bacon is cooked as soon as a 3.5 -4 X limit on mortgages is established.
.

Not going to happen.

That proposal was rightly kicked into the long grass, where it will remain.

HAMISH_MCTAVISH

mbga9pgf wrote: »

Yep, because of mortgage market controls, not the number of houses.

Absolutely untrue.

The primary influence on house prices is always supply and demand.

If it wasn't, there would not be the difference in cost between the different areas of the UK. There are still parts of the UK where a 3 bed terrace can be had for 50K or less. And other parts where the same type, design, size and quality of 3 bed terrace will cost you 600K or more.

And yet, mortgage availability was consistent across all parts of the UK.

If lending was all that drove HPI, then the same house would not cost 10 times more in London as it does in Preston.

You are right, and it is far short of the 300% you talk about. Its another 600 billion in interest only lending. Past this point, ALL of our disposable income is gobbled up in interest payments. Past this point, we cant repay the debt.

It equates to a 4% rise in the cost of lending at current unemployment and savings rates. Above that point, the country is history.

The current average mortgage for new borrowers only accounts for 29% of disposable income, down from 35% pre crash when base rates were at ten times current levels.

Obviously, if houses are only being bought by richer and richer people as we build less of them, that percentage can stay the same, even as prices rise.

I'll leave you to digest these two facts and then calculate why your statement is nonsense.:rolleyes:

mbga9pgf

Its not only the total amount lent hamish you dullard, its the ability to pay. If the lending wasnt there, nor the ability to pay, where would house prices be? Look at canada, with max LTV controls. THey still have price variations, as does france.

The current average mortgage for new borrowers only accounts for 29% of disposable income, down from 35% pre crash when base rates were at ten times current levels.

And what happens once rates increase back to normal levels? We also have credit card lending remember, at a much higher rate than mortgage lending (typically 25%+) as we have store cards.

You really are someone of little brain Hamish. Get a f*cking life.

SingleSue

I actually don't know anyone who purchased their house with help from their parents....apart from the stories seen on this website.

This is from a multitude of cousins, aunts, my parents, uncles, myself, friends...not one had help from parents.

HAMISH_MCTAVISH

mbga9pgf wrote: »

If the lending wasnt there, nor the ability to pay, where would house prices be? Look at canada, with max LTV controls. THey still have price variations, as does france.

And look at Germany, with no max LTV controls, and a surplus of housing after integration of east and west.

You can buy houses ridiculously cheaply in East Germany. Because they have too many of them.

And what happens once rates increase back to normal levels?

Nothing.

Base rates won't increase until the economy starts growing, which can't happen without lending being resumed, and when lending is resumed, bank margins will decrease as competition returns.

We also have credit card lending remember, at a much higher rate than mortgage lending (typically 25%+) as we have store cards.
You really are someone of little brain Hamish. Get a f*cking life.

:rotfl:

The whole bitter and angry thing really does make you look a tad desperate.... Have you thought about therapy?

After all, if prices rises of just 8.5% since february work you up like this, you'll be a nervous wreck when prices surpass peak levels next year or the year after.

mewbie_2

HAMISH_MCTAVISH wrote: »

After all, if prices rises of just 8.5% since february work you up like this, you'll be a nervous wreck when prices surpass peak levels next year or the year after.

Right, got you this time. I think the 'nervous wreck' boot will be on the other foot Hamish.