Defaults, demand falling, mortgage availability increasing

Really2

Graham_Devon wrote: »

Regardless, it's helped them! You asked me a question, I answered.

Who the poilicy was there to help is neither here nor there. Feel we could go down the route of titt for tatt here with absolutely no purpose.

The answer is more likely payment breaks than just rates falling.

Rates have fallen every other recession also so if it was just that every other recession would see falling reposessions also would it not.?

The point is you put this.

Seems all we are waiting for is the whole game to change, when interest rates rise. Certainly it all seems to be stagnating at the moment, and that's WITH a helping hand from interest rates etc.

Who are waiting for the game (what game) to change for someone who thinks we are still in the trouble (like I do) why do you keep holding on to interest rate increases to cause a change.

Why are some still waiting for a perfect storm (rate increase, further GDP falls, increasing unemployment)? In reality any fragility will mean low IR rates unless forced but I do not think we are at the IMF stage really.

Generali

StevieJ wrote: »

The original BOE release.

http://www.bankofengland.co.uk/publications/other/monetary/creditconditionssurvey100701.pdf

It paints a reasonably cheery picture IMO. Not fantastic but steady.

Supply
• Lenders reported that the availability of secured credit to households had risen slightly in the three months to early June 2010. But availability was expected to fall back in the next three months, in part reflecting some lenders’ expectations that wholesale funding market conditions might tighten in that period.
• Unsecured credit availability to households was reported to have remained broadly unchanged for a second consecutive quarter.
• The overall availability of credit to corporates was reported to have increased in 2010 Q2, although by less than lenders had expected. Availability was expected to increase slightly in the next three months.
Demand
• Demand for secured lending for house purchase was reported to have fallen somewhat in the past three months. Demand for secured lending for remortgaging was reported to have risen for the first time since 2008 Q4, but only a small balance of lenders was anticipating demand to increase further in the next three months.
• Lenders reported that demand for unsecured credit increased in 2010 Q2, especially for non credit card lending. Lenders expected
demand for credit card lending to stabilise in the next quarter and demand for non credit card lending to fall back a little.
• In the past three months, demand for credit from private non-financial corporations (PNFCs) rose among small businesses but
fell unexpectedly among large companies. Lenders expected demand from small businesses to rise further in the next three months, but anticipated a continued contraction in demand from large companies.
Defaults
• The default rate and losses given default on secured loans to households were reported to have fallen unexpectedly in the
previous quarter. Abstracting from one-off effects, the default rate and losses given default were expected to remain stable in the
coming quarter.
• In line with lenders’ expectations, default rates on unsecured loans to households fell in 2010 Q2 while losses given default continued to rise. But, for the first time since 2008 Q1, lenders were not expecting losses given default for credit card lending to rise further in the coming quarter.
• Default rates on loans to private non-financial corporations fell unexpectedly over the past three months among medium and
large companies but rose for small businesses. Losses given default fell sharply among small businesses.
Terms and conditions
• Lenders reported that spreads on secured lending to households had narrowed in 2010 Q2 and were expected to narrow further
in Q3. Maximum loan to value ratios rose for a third consecutive quarter, but lenders were not anticipating that trend to continue
in the next three months.
• Terms on unsecured lending to households had been stable in the past three months. Lenders reported some relaxation in scoring criteria for credit card lending, the first instance of such a loosening in credit conditions since 2008 Q2.
• Spreads on corporate lending continued to fall for medium and large PNFCs in the past quarter while they were broadly unchanged for small businesses. Lenders expected price terms to improve modestly for large PNFCs in the coming quarter but remain broadly stable for small and medium businesses.

silvercar

In the banks interest not to repossess. With all the 125% mortgages they gave out, repossessing now means a guaranteed shortfall. Waiting means giving the borrower a chance to sort themselves out and a later repossession means a chance house prices will improve and the shortfall reduced.

Really2

lemonjelly wrote: »

We have also seen a lot of people happily chugging along on their trackers. Can't think of anyone in particular at the mo, but allow me to ponder that for a mo

People who's fixed rates have ended have slid onto the lenders SVR, which has generally been a reduction in their payments.

I really don't think we can argue that low IR's aren't helpful to mortgage payers, as invariably they do help reduce their payments, especially if the IR's stay low for a period of time.

You forgot to add their ability to repay debt quicker

But that is my point yes some may have cheaper mortgages some may pocket it some may repay more but the vast majority will be in a better situation than when they were before rates fell (2-3 years of repayments tells us that)

That means the vast majority will be able to jump when rates increase so the point of "waiting for rates to increase" is not rally going to have that much effect IMHO as things will have to be a lot better in terms of the economy for that to happen.

michaels

Good to see you back GD

A couple of ancdotals - I just rang first direct as they have shaved another 0.1% of their offset tracker rates so it was time to 'switch' again

Locally housing supply is up strongly and houses are seeing price cuts rather than selling and even initial asking prices are starting to soften.

As far as stagnation is concerned I think most would probably see that as the best long term trend but I am not sure it can be acheived. Because the market is so lumpy I am concerned that expectations are a key driver with a positive feedback loop - either prices are rising so it becomes a matter of 'buy now what you won't be able to afford later' or they are falling in which case it is why buy now when you will get it cheaper later' - both self-fulfilling prophecies.

Thrugelmir

1984ReturnsForReal wrote: »

It's true.

It also helped (like it or not) that Labour ordered the likes of Lloyds (Cheltenham & Gloucester etc) & Northern Rock to default only as a very very last resort..

New FSA regulations that came into force yesterday. They place further onus on lenders to advance money responsibility. Which in turn will result in tighter lending criteria.

Thrugelmir

Generali wrote: »

It paints a reasonably cheery picture IMO. Not fantastic but steady.

Against this you need to look at business lending reported by the banks. The banks total net lending has been in contraction every month since last September. There is a credit squeeze. Very slow and barely noticable. With a long long way to go.

Generali

Thrugelmir wrote: »

Against this you need to look at business lending reported by the banks. The banks total net lending has been in contraction every month since last September. There is a credit squeeze. Very slow and barely noticable. With a long long way to go.

Oh I agree and it's why I think deflation could be a problem long term. However the survey reports what it does and the picture is one of bouncing along a bottom, albeit one that is pretty low. At least big falls haven't come back.

1984ReturnsForReal_2

Thrugelmir wrote: »

New FSA regulations that came into force yesterday. They place further onus on lenders to advance money responsibility. Which in turn will result in tighter lending criteria.

Excellent news which will lead to more stability.

Hardly right that they could default someone in seconds for not liking the tone of their voice..

chucky

http://www.bankofengland.co.uk/publications/other/monetary/creditconditionssurvey100701.pdf

Generali wrote: »

It paints a reasonably cheery picture IMO. Not fantastic but steady.

so it's not really bad news story after all...

these bad news stories arent as good as they used to be :eek: