MSE News: Nationwide: House prices creep up 0.7% in March

Conrad

Percy1983 wrote: »

As much as the bulls don't care, do they not consider every 'investment' they make is potentially denying a family a home.

Benefits of a rising property asset;

Pass on some 'free' equity via release to your FTB kids / grandchildren for when they want to buy

Release equity via a downsize or equity release at retirment

Give all of us the opportunity of building a nice asset for our peace of mind.

HAMISH_MCTAVISH

Emy1501 wrote: »

This is the problem though Conard that many of you can't understand. Aprrovals are 48K when they should be around 100K. The BOE have said mortgages will not be readily available and Kate Barker said recently this will be a problem.

So where is all this money going to come from to support 100K+ mortgages a month which will allow all those who will soon need to sell to fund their retirement. People are going to realise that they need to sell to release equity.

But where on earth did you get the idea that 100K mortgages a month are normal or needed?

That was the boomtime level. When many people were buying a house and selling it 18 months later just because they fancied a change, and years of double digit HPI made moving easier than redecorating or extending.

We won't see, and don't need, that level for another decade or so.

The levels we should be seeing now are those at the beginning of a cycle,
not the end of one. We do not need 2007 levels of transactions for prices to increase.

stueyhants

Conrad wrote: »

I'm finding a heck of a lot of buyers are getting parental help, who themselves are releasing equity - why not - it's free market given money anyhow, so may as well pass some on to your loved ones.

I can't believe someone involved in the mortgage industry doesn't understand the difference between debt and free money.

Releasing equity is not free money, its debt based against an asset and has interest due.

Its only becomes free if the parents sell the house and live in a box.

Emy1501

HAMISH_MCTAVISH wrote: »

But where on earth did you get the idea that 100K mortgages a month are normal or needed?

That was the boomtime level. When many people were buying a house and selling it 18 months later just because they fancied a change, and years of double digit HPI made moving easier than redecorating or extending.

We won't see, and don't need, that level for another decade or so.

The levels we should be seeing now are those at the beginning of a cycle,
not the end of one. We do not need 2007 levels of transactions for prices to increase.

Mortgage approvals were 100K in Dec 96 They have been around the 100k ever since till 2008

Also using a property as an investment is a new thing these properties will all need to sell to release the equity.

2007 transactions were normal Hamish what you are seeing now is anything but normal.

Conrad

stueyhants wrote: »

I can't believe someone involved in the mortgage industry doesn't understand the difference between debt and free money.

Releasing equity is not free money, its debt based against an asset and has interest due.

Its only becomes free if the parents sell the house and live in a box.

Mmm, so Mr and Mrs Parent have a debt free dwelling which has increased in value 5 times. I'd say that's pretty much free money in thier eyes and many are happy to pass on some of this gain to thier children. Sure the parents / kids need to pay it back over time - no big deal if its emminently affordable, indeed, insignificant against thier assets and income.

HAMISH_MCTAVISH

DaddyBear wrote: »

I believe that current lending is normal, with people expected to save up deposits and take out affordable mortgages on proven salaries.
You seem to think that 2004 to 2007 was normal with 125% mortgages at 5 times salary and no proof if income required.

Actually I think that 125% mortgages are just silly, anything above 100% should be banned, and the vast majority of people should have to save a 10% deposit.

Less than a 10% deposit should attract a higher rate, but it should be readily available for the those that genuinely need it, for example, those that live in areas where rent is more than a full repayment mortgage.

Who is right is a matter if opinion, but in my planet we wouldn't have had complete financial meltdown.

Yes we would.

As the financial meltdown had almost nothing to do with UK mortgages.

Conrad

Emy1501 wrote: »

2007 transactions were normal Hamish what you are seeing now is anything but normal.

Yet still prices have risen neigh on 10%. Imagine the effect once lending slowly but surely improves (it will, the margins are too wide for investors to ignore especially on mild adverse cases - such as 1 default on a mobile phone 3 years ago).

stueyhants

Conrad wrote: »

Yet still prices have risen neigh on 10%. Imagine the effect once lending slowly but surely improves (it will, the margins are too wide for investors to ignore especially on mild adverse cases - such as 1 default on a mobile phone 3 years ago).

Which margins are you refering too ? Do you mean the spread between mortgage rates and the BoE base rate?

HAMISH_MCTAVISH

Emy1501 wrote: »

Mortgage approvals were 100K in Dec 96 They have been around the 100k ever since till 2008

Do you have a source for that?

Also using a property as an investment is a new thing these properties will all need to sell to release the equity.

Perhaps, but they don't all need to sell at once.

2007 transactions were normal Hamish what you are seeing now is anything but normal.

2007 volume of transactions were abnormally high.

Alan_Cross

HAMISH_MCTAVISH wrote: »

Yes we would.

As the financial meltdown had almost nothing to do with UK mortgages.

Hear, hear.

There seems to be a weird acceptance hereabouts that in some way the UK mortgage market was to blame for the credit crunch and the buy-to-let investors particularly have come in for stick.

Absolute nonsense. The UK lenders could have given out ten times as much in BTL lending and it would still have played next to no role in the crash.