HSBC calls end of crash, increases 90% mortgage funding

Really2

the_ash_and_the_oak wrote: »

I'm a bit confused on this one (tho Im ok w your point about comparing FTB w ave prices)

What they are able to buy or not aside - isn't Thrugelmir just saying that a single FTB on 40k had access to 180 and now has access to 126? that the amount available to a single buyer (in this scenario) is reduced?

Lets not blur the facts HSBC have always been 3.5X on their calculator.

The simple fact is they are the first to market of the big lenders with a 90% LTV fixed.

So in truth affordability or multiple with this lender as not changed. It has with other lenders, and Thrugelmir 5X example refers to them not HSBC.

chucky

the_ash_and_the_oak wrote: »

I'm a bit confused on this one (tho Im ok w your point about comparing FTB w ave prices)

What they are able to buy or not aside - isn't Thrugelmir just saying that a single FTB on 40k had access to 180 and now has access to 126? that the amount available to a single buyer (in this scenario) is reduced?

he assumed that an FTB could only borrow 3 times income.
if you enter in £40k it comes back that you can borrow 3.75 times income.
http://www.hsbc.co.uk/1/2/personal/mortgages/first-time-buyer;jsessionid=0000yix2y-6V8Gvbhz3wl5ADHLf:12ntf1tru

doire_2

the_ash_and_the_oak wrote: »

true but if unemployment rises does it not reduce the pool of available buyers?

You win a prize

the_ash_and_the_oak

Really2 wrote: »

Lets not blur the facts HSBC have always been 3.5X on their calculator.

The simple fact is they are the first to market of the big lenders with a 90% LTV fixed.

So in truth affordability or multiple with this lender as not changed. It has with other lenders, and Thrugelmir 5X example refers to them not HSBC.

That makes sense re: that specific lender. But isn't the wider point still that the 5x mob are gone? (or is the inference that now the 3.5ers are back the 5x will soon follow?)

Really2

the_ash_and_the_oak wrote: »

true but if unemployment rises does it not reduce the pool of available buyers?

Only if they are long term, also it depends on if the amount unemployed is greater than demand.

If 500,000 FTB's are made unemployed but there was an over demand of 1,000,000 it would not change anything. It would just change for thoses who were employed.

The dynamics of the market are much more indepth than these simple statements. But also no one on here as worked them all out either.(or in the country I believe)

In truth we do not have a clue on what the the average affordable house price should be in this country.
So we always go back to be the open market price as the example.

chucky

the_ash_and_the_oak wrote: »

true but if unemployment rises does it not reduce the pool of available buyers?

but isn't unemployment impacting the 18-24 year old group more than any other?

there are not going to be a huge amount of home buyers there are there

the_ash_and_the_oak

chucky wrote: »

he assumed that an FTB could only borrow 3 times income.
if you enter in £40k it comes back that you can borrow 3.75 times income.
http://www.hsbc.co.uk/1/2/personal/mortgages/first-time-buyer;jsessionid=0000yix2y-6V8Gvbhz3wl5ADHLf:12ntf1tru

I get 3.4 when I do it (136 from 40k)

chucky

the_ash_and_the_oak wrote: »

I get 3.4 when I do it (136 from 40k)

fair enough, what was your property value?

i put in to borrow £200k, came back with £150k = 3.75 times

Really2

the_ash_and_the_oak wrote: »

That makes sense re: that specific lender. But isn't the wider point still that the 5x mob are gone? (or is the inference that now the 3.5ers are back the 5x will soon follow?)

I believe that is what the OP is getting at.

HSBC /FD have done very well getting the top borrowers in this crash, again I presume they will do the same with this product.

But buy launching it, it will make other banks have to think about competing. There can be no doubt about that, they will need borrowers incomes in the future or they will be stuffed, the only way to do that is to compete on all products.

I believe other lenders already offer over 3.5X just not on a 90% product. Stands to reason some will offer the same if they offered a 90% product. it may be wrong but I dare say it will happen.

the_ash_and_the_oak

Really2 wrote: »

Only if they are long term, also it depends on if the amount unemployed is greater than demand.

If 500,000 FTB's are made unemployed but there was an over demand of 1,000,000 it would not change anything. It would just change for thoses who were employed.

The dynamics of the market are much more indepth than these simple statements. But also no one on here as worked them all out either.(or in the country I believe)

In truth we do not have a clue on what the the average affordable house price should be in this country.
So we always go back to be the open market price as the example.

I don't get this. If there are two people bidding for one house and one is made unemployed doesn't that reduce the pool to one? not long term but at that moment? so doesn't unemployment have an effect on the number of buyers at that particular time?