BBA: Mortgage Approvals up 5% in March

HAMISH_MCTAVISH

sarkin1 wrote: »

HPC RULES OK

Not according to these threads.....;)

http://www.housepricecrash.co.uk/forum/index.php?showtopic=140120

http://www.housepricecrash.co.uk/forum/index.php?showtopic=141058

chucky

Batchy wrote: »

if you earn 20k, self employed and want a house that costs 200k for a family of 4 it isnt going to happen like it did in the past. The figures just dont work.

guess that you're going to rent or go down the Shared Ownership route

or either get a job that earns more or send the Mrs to work once the kids are at school.

not everyone is going to be able afford to buy - it's a fact of life unfortunately

HAMISH_MCTAVISH

Batchy wrote: »

Lending is constrained as the quality borrowers are not out there...

No, lending is constrained because the wholesale funding markets are not yet operating normally. So the banks have to ration mortgages.

Key word being YET.....

Securitisation is already returning, but it will be years before it's back to reasonable levels.

its changed back to OLD methods, Low risk is good, high risk just hasn't been worth it. Banks have burnt so very badly, i can't imagine them ever forgetting it to ever go back down that road again.

Utter nonsense.

It's changed to unheard of methods, where people with 15% deposits and perfect credit are being charged margins above base more suited to sub-prime-slime.

Where the best rates requiore 40% deposits.

Where FTB's, even on good incomes and with stability, are charged nearly double what 2TB's are.

Mortgages are being rationed, because the banks don''t have access to enough funding to supply demand.

As with all things in short supply, that rationing is achieved through price.

Batchy

chucky wrote: »

guess that you're going to rent or go down the Shared Ownership route

or either get a job that earns more or send the Mrs to work once the kids are at school.

not everyone is going to be able afford to buy - it's a fact of life unfortunately

It is and exactly my point, when i say, people who do earn more, will not be happy buying the flats with their 50k earnings and tiny terrace houses with social tenants next door.

It just doesn't work like that! Aspirational is the word, Fair is the word of the moment.

Batchy

HAMISH_MCTAVISH wrote: »

No, lending is constrained because the wholesale funding markets are not yet operating normally. So the banks have to ration mortgages.

Key word being YET.....

Securitisation is already returning, but it will be years before it's back to reasonable levels.



Utter nonsense.

It's changed to unheard of methods, where people with 15% deposits and perfect credit are being charged margins above base more suited to sub-prime-slime.

Where the best rates requiore 40% deposits.

Where FTB's, even on good incomes and with stability, are charged nearly double what 2TB's are.

Mortgages are being rationed, because the banks don''t have access to enough funding to supply demand.

As with all things in short supply, that rationing is achieved through price.

BBA shows customer deposits are INCREASING, this was always a primary source of financing for lending in all periods but the last 10 years, and certainly IS NOW.

So availability is out there, but as the average home loan shows, its only the top slice of individuals who have blue chip jobs, or blue chip parents or blue chip savings that are able to take advantage, but to be doing this in the current economic climate, taking a risk, they want more!! They want bigger houses, better houses, in better areas with bigger drives, bigger gardens and bigger bedrooms, with supreme schools, more bathrooms, etc.

Things have changed... things are still changing... the trend is moving, but as long as your indicies show increases most people think its going back to normal. This is NORMAL, this is how its going to be. GET USED TO IT.

chucky

Batchy wrote: »

It is and exactly my point, when i say, people who do earn more, will not be happy buying the flats with their 50k earnings and tiny terrace houses with social tenants next door.

It just doesn't work like that! Aspirational is the word, Fair is the word of the moment.

currently owner occupancy is somewhere between 67% and 70% depends which source that you use.

until this drops dramatically (i'm talking close to 50%) there will be no change really IMO. this isn't going to happen in the short or medium term either due to the lack of new home building.

it may sound pretty obvious; but there are many that fail to understand properly that as long as the people that can afford to buy (effective demand not demand/supply) is there then prices will not drop (in nominal terms).

Generali

HAMISH_MCTAVISH wrote: »

Versus up 1% in feb.

From the Press Release:



As the BBA doesn't claim copyright on the press release:

4.5% annual growth in the banks’ net mortgage lending substantially exceeds annual growth of just 1% across the whole market in February, as banks continue to provide the majority of all mortgage finance.

Subdued spending has led to consumer credit contracting by 1.7% over the year and lower mortgage costs have led to people holding higher deposits, which have risen 6.4% over the past year.

Reduced demand and alternative sources of company finance for large corporates saw the annual contraction in lending to non-financial companies fall to – 5.7%.

Gross mortgage lending of £8.7bn in March was less than the average of the previous six months (£9.2bn) and 0.4% lower than in March last year.

Repayments were stronger than usual as banks actively encouraged borrowers to use surplus cash to reduce their borrowing where possible. As a consequence, net mortgage lending grew by £2.4bn in March compared with £2.7bn in February, and was below the previous
six month average.

The effects of the year-end change to stamp duty have now worked through, so although numbers appear subdued compared to the latter months of last year, house purchase approvals were some 20% higher than in March last year. The average value of house purchase approvals (£146,100) was 11.8% higher than a year ago.

Numbers of remortgaging and equity withdrawal approvals continue to be lower than a year earlier.

The numbers of credit card transaction was 1.3% higher than a year ago, reflecting the growth in official retail sales volumes, but average transaction values are around 5% lower than a year earlier, giving rise to the value of new spending in March being 4.5% lower than a year
earlier, compared with being only 1.6% lower in February.

New lending through personal loans eased back in March from February’s value and was more than matched by repayments.

Lending to non-financial companies continued to contract annually, as
company demand for credit remained subdued even though alternative
capital funding has not been as prevalent in the first quarter.

The construction sector continues to show the greatest contraction, with the sector’s borrowing almost 25% lower than a year ago.

http://www.bba.org.uk/content/1/c6/01/76/54 /March_2010_Monthly_Statistics_Release.pdf

So consumer finance is falling, lending to companies is falling, lending for BTL is falling (see last graph on the link), the rate of increase in mortgage lending is falling.

For fans of Generali's Deflation Watch, bank deposits are up 6.4% and a back of envelope calculation suggests that the M4 measure of money supply* fell by about £1,200,000,000 in March.







*GTS: There are lots of ways of measuring the money supply. M4 includes the amount of money created or destroyed by banks lending money or not lending money. During a credit crisis, changes in M4 should have a bigger impact on inflation or deflation than usual. That's my theory anyway, not one from proper economics.

Batchy

chucky wrote: »

currently owner occupancy is somewhere between 67% and 70% depends which source that you use.

until this drops dramatically (i'm talking close to 50%) there will be no change really IMO. this isn't going to happen in the short or medium term either.

it may sound pretty obvious; but there are many that fail to understand properly, is that as long as the people that can afford to buy (effective demand not demand) is greater than the available supply then prices will not drop (in nominal terms).

I agree in principle

BUT, effective demand ie, those in a position to buy are SIMPLY NOT exceeding supply... lol

Supply at the moment is reported to be as high as it has EVER been compared to levels in 2007.

BUT Demand, ie effective demand, ie approvals are no where near the levels seen at the last SUPPLY high back in 2007.

With so many properties vastly overpriced which have been on the market for over a year, with an expectation, prices will catch up with them. its not going to happen anytime soon maybe in the medium term.

What we are seeing at the moment is a scramble for Quality by those individuals in a strong position. ie Blue chip customers, cherry picking the bargains and the best properties cause they can and it suits them. They are not being picked up by the speculators who wouldn't normally be in a position to buy, who were playing with the banks money... risked nothing personally, but pride... and LOST.

The supply and demand theory works. You just have to look at the numbers, and not read a newspapers interpretation of it all.

chucky

Batchy wrote: »

I agree in principle

BUT, effective demand ie, those in a position to buy are SIMPLY NOT exceeding supply... lol

Supply at the moment is reported to be as high as it has EVER been compared to levels in 2007.

BUT Demand, ie effective demand, ie approvals are no where near the levels seen at the last SUPPLY high back in 2007.

i don't think it's as bad you say as the number of people that will make up the effective demand is getting larger each month especially with mortgage rates dropping consistently now

Homeowners will be celebrating, after it was revealed rates on mortgage deals have dropped to their lowest level in a year.

According to the latest research from Moneyfacts.co.uk, mortgage rates have been falling steadily since reaching a peak in August last year.

For instance, the number of 90% loan to value (LTV) mortgage deals open to borrowers has more than doubled over the past year, from 71 to 147, while those available at 95% LTV have increased from three to 19.

"A 25% deposit remains the benchmark for the majority of the most competitive deals. However, borrowers with a small deposit are increasingly getting access to a wider proportion of the market."

http://moneyfacts.co.uk/news/mortgages/mortgage-borrowers-boosted-as-rates-hit-year-low/

Batchy

chucky wrote: »

i don't think it's as bad you say as the number of people that will make up the effective demand is getting larger each month especially with mortgage rates dropping consistently now


http://moneyfacts.co.uk/news/mortgages/mortgage-borrowers-boosted-as-rates-hit-year-low/

I don't disagree or argue with you... on the facts you have provided above that there are more products available.

But, if we are back to a 95% LTV market situation, then why isnt demand back up to levels of 2007, the fact is the 95% LTV's are extremely expensive which has the effect of pushing prices lower?

the 95%ers will end up being the ones stretched when the rates increase, and will find it seriously hard, and seriously hard to even do anything about it.

Even though people who only have a 95% situation have more mortgage options, they probably have other problems on their credit record in the last 6 years. So the position is still very WEAK and unlikely to be proceedable anyway.

But good luck to them, if thats what they want... to be an owner at all costs, I hope it works for them. But I think they will be slaves to a huge debt they really can't afford.