HSBC calls end of crash, increases 90% mortgage funding

the_ash_and_the_oak

chucky wrote: »

fair enough, what was your property value?

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

Whatever value I put in it will only lend me 136!

Graham_Devon

Really2 wrote: »

IF you are unemployed buying a house is never very realistic.

Boom or Bust.

LOL!!!!

Not in that way. Unemployment rising means less can afford. No ones stating or even suggesting that the unemployed can afford or should be able to afford to buy a house.

chucky

the_ash_and_the_oak wrote: »

Whatever value I put in it will only lend me 136!

which region did you put in?

the_ash_and_the_oak

Really2 wrote: »

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.

Then this is a slightly different argument. But as long as 3.5x at 90% is what they are offering then the amount drops from 180 to 126. If you are right that others will follow with higher multiples then surely your argument is that this lower figure is temporary (but that it is current)

the_ash_and_the_oak

chucky wrote: »

which region did you put in?

London was the region

the_ash_and_the_oak

You could borrow£136,000For a property valued at£180,000This would give you a loan to value ratio of75%

Oh wait: bumped the mortage from 25 to 30 years and it will now give me 140k for the above

Really2

the_ash_and_the_oak wrote: »

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?

Sorry to simple, what about 10 people, one becomes unemployed (that is 10% unemployment). Still only one seller and they sell at the price they want anyway.

So does 9 people mean a lower sale price? the 1 person could have offered less or had a lower wages

As I said such simple statements does little to the debate.
Unemployment as been rising all this year yet so have house prices.

So either it does not effect things or demand and supply have more bearing.

At the moment demand is outstripping supply even with rising unemployment.

How would you explain this year?
not having a go just that saying unemployment lowers demand is not strictly true (well it would if you used your 50% example above :D)

Like I said if the unemployed do not outnumber the over demand (in terms of FTBs) it will not stop prices being stagnent or slightly rising. They will only be lowering the over demand.

Graham_Devon

Looks like this one is gonna be discussed to the enth degree, and everyones gonna be wrong!

the_ash_and_the_oak

Really2 wrote: »

Sorry to simple, what about 10 people, one becomes unemployed (that is 10% unemployment). Still only one seller and they sell at the price they want anyway.

So does 9 people mean a lower sale price? the 1 person could have offered less or had a lower wages

As I said such simple statements does little to the debate.
Unemployment as been rising all this year yet so have house prices.

So either it does not effect things or demand and supply have more bearing.

At the moment demand is outstripping supply even with rising unemployment.

How would you explain this year?

Pretty sure I merely mentioned the pool of buyers would decrease 'at the very moment' - therefore that unemployment reduces the pool of buyers. Didn't actually make any further inferences as to the level of effect this may or may not have.

I would explain this year as follows.
Forced sales down
People needed to sell down
Supply down
People able to buy down
Demand down
Transaction levels down.

all fairly straightforward. at this point pretty sure consensus is present

Those with high deposits or cash: less affected by credit restriction than those needing to borrow larger amounts

This secondary group less likely to be able to offer. This section of buyers reduced disproportionately.

This sections removal of credit is complete, not a reduction of amount they can borrow (lower offers), but a removal altogether (no offers).

Given reduced forced sales and undimmed sentiment, no real reason to sell.

No coincidence falls stopped as rates for existing owners plummeted. This policy was succesful

As long as no one wants to move again no real reason for prices to fall

the_ash_and_the_oak

I guess it does depend kinda where the unemployment falls - if it falls entirely on people who are not in the FTB pool then it won't reduce that pool. But if it does fall on people in that pool - imo it removes them from that pool right then (nothing to say they won't return to the pool at a later date)

tbf personally I think the role of unemployment is overstated (esp in its effects on prospective buyers in a market where people don't need to sell)