UK mortgage approvals up 97.7 pct y/y in Oct-BBA

Emy1501

Really2 wrote: »

Do you work for RICS?

I have a family member EA and he says the cash rich were buying last year, as bigger discounts could be had as people struggled for mortgages there were better deals to be had (especially Repos.).
Around 40% of his sales are FTB and that fits in with around what the surveys are saying.

I would say the increase in 90% mortgage availability points to what Gen and others (like myself) think that FTB's are back in the market.

If not why are nearly 40% of all mortgages going to them?

Hear is a thread from Jan stating 40% were FTB, I can't see there being 15,000+ STR's coming back to the market every month for nearly a year.
http://forums.moneysavingexpert.com/showthread.html?t=1457439&highlight=

http://www.cml.org.uk/cml/media/press/2218

The above suggests to me that People who have STR'd, divorcees etc are all classed as FTB as they are mentioned in the same comment as FTB's getting help from parents.

Really2

Emy1501 wrote: »

http://www.cml.org.uk/cml/media/press/2218

The above suggests to me that People who have STR'd, divorcees etc are all classed as FTB as they are mentioned in the same comment as FTB's getting help from parents.

Such amounts remain out of reach for all but the most affluent buyers, for example people returning to home ownership after a period of renting, divorcees, or those who get financial assistance from their family.

The article is from April, i don't think there were any 10% deposit mortgages on the market then?
It does not say they are classed as FTB's though, just that a 25% deposit is out of reach for most people unless they have the above.

Even if they are reclassified as FTB's I can not see the majority of sales being made of STR's.
I still stick by what my family EA member tells me as he runs three EA offices (that discounts a bit of possible anomalies) and as told me a lot about the market.

I remember posting last year that Repo's were going for less than 50% off peak because only people with cash could purchase them (relayed by my family member).
The response by some on here was wait until you see what they are in 2009, I have and it was more than they were fetching last year because lending is not as restricted.

Generali

Emy1501 wrote: »

As for FTB's whats definded as a FTB? Is someone who has a STR fund classed as FTB?

IIRC, an FTB is defined as someone who has not owned a house in the last 6 months.

Emy1501

Really2 wrote: »

The article is from April, i don't think there were any 10% deposit mortgages on the market then?
It does not say they are classed as FTB's though, just that a 25% deposit is out of reach for most people unless they have the above.

Even if they are reclassified as FTB's I can not see the majority of sales being made of STR's.
I still stick by what my family EA member tells me as he runs three EA offices (that discounts a bit of possible anomalies) and as told me a lot about the market.

I remember posting last year that Repo's were going for less than 50% off peak because only people with cash could purchase them (relayed by my family member).
The response by some on here was wait until you see what they are in 2009, I have and it was more than they were fetching last year because lending is not as restricted.

The tight lending criteria remain a barrier to most first-time buyers. First-time buyers typically had a deposit of 25% in February, a new record. Such amounts remain out of reach for all but the most affluent buyers, for example people returning to home ownership after a period of renting, divorcees, or those who get financial assistance from their family.

The above is pretty clear in my opinion unless you are rich, get from Bank of mum and Dad, STR etc you had little chance of buying as a FTB. As for mortgages, 10% mortgages were available at the time and even last year. Back in Sept-Oct 2008 the average FTB put down 16-17%. High LTV mortgages are a lot easier to get now so I cannot see why genuine FTB would be putting down 25% now unless as I believe this area of the market is being skewed by the cash rich.

Really2

Generali wrote: »

IIRC, an FTB is defined as someone who has not owned a house in the last 6 months.

That does ring a bell, I think because after we sold we found out we could still open our old mortgage within 6 months. (we paid it off and opened it again about 3-4 weeks late as it happens).

I did not know after that period you would be defined as a FTB again though, I presumed it was held on record or asked if you had previously owned.

STR would have to have been massive though if it was the main reason behind FTB's.

Really2

Emy1501 wrote: »

High LTV mortgages are a lot easier to get now so I cannot see why genuine FTB would be putting down 25% now unless as I believe this area of the market is being skewed by the cash rich.

To get a good deal. We are talking £25K+ deposits, people may have had £10K+ before the credit crunch.
We all save money on here and there are many that have saved over 25% So yes some may be STR but not the majority of FTB's.
Like above there are divorces, inheritance, bank of M&D savings.
80% LTV looks a sensible entry point in todays market do you not think?

But many news articles this week say the average deposit size is decreasing not increasing in the UK
http://news.google.co.uk/news/search?um=1&cf=all&ned=uk&hl=en&q=%22average+deposit%22&cf=all&scoring=n

Does that not show that more people are taking advantage of higher LTV products.

Generali

Really2 wrote: »

That does ring a bell, I think because after we sold we found out we could still open our old mortgage within 6 months. (we paid it off and opened it again about 3-4 weeks late as it happens).

I did not know after that period you would be defined as a FTB again though, I presumed it was held on record or asked if you had previously owned.

STR would have to have been massive though if it was the main reason behind FTB's.

AIUI, it is the definition accepted by banks.

I don't think STR is a mass phenomenon outside of the world of Internet property forums. Not for speculative gain anyway.

Really2

Generali wrote: »

I don't think STR is a mass phenomenon outside of the world of Internet property forums. Not for speculative gain anyway.

I agree the only STR's I know about are on here.

Emy1501

Really2 wrote: »

To get a good deal. We are talking £25K+ deposits, people may have had £10K+ before the credit crunch.
We all save money on here and there are many that have saved over 25% So yes some may be STR but not the majority of FTB's.
Like above there are divorces, inheritance, bank of M&D savings.
80% LTV looks a sensible entry point in todays market do you not think?

But many news articles this week say the average deposit size is decreasing not increasing in the UK
http://news.google.co.uk/news/search?um=1&cf=all&ned=uk&hl=en&q=%22average+deposit%22&cf=all&scoring=n

Does that not show that more people are taking advantage of higher LTV products.

25% deposit deals were better than 15% this time last year so no reason why people were putting down 16-17% then and 25% now. We are also in the middle of a recession so unlikely genuine FTB's would have managed to find an extra 10K deposit this year compared to last. Personally I would expect the genuine FTB deposit to be between 5%-15%.

If what I think is true then I would expect the average deposit to fall over the next 6 months as STR fund dry up. Whether this will have an effect on price is another matter.

As for STR being an internet thing 2 years ago I would have agreed but I know up to 10 people who have STR'd and the person who was renting my house before we moved back in was a STR. I think there are more than many think.

Really2

Emy1501 wrote: »

I think there are more than many think.

A lot less than 20'000 a month entering the market for the last year or so I should imagine.

But lets bothe agree it is our personal view and can not be backed up with figures so we can move on.