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FTB Discrimination "incredibly unfair", now pay thousands more for mortgages
Comments
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HAMISH_MCTAVISH wrote: »Eh?
Whats so hard to understand?
Bears wanted restricted mortgage lending.
Bears got restricted mortgage lending.
FTB's now pay more for housing than they did, and a generation are being excluded.
Simple really.
Good afternoon Hamish,
FTB`s now pay more for housing than they did. You pointed out only a few weeks ago that it was peak affordability for FTB`s. How times have changed.
So, let`s assume that FTB`s get the low interest rates that they so richly deserve. What then happens ?
The property market picks up ? (Yes).
Property prices start picking up ? (probably).
Future FTB`s have to borrow more, thus cancelling some of the effects of lower mortgage rates. For those that do have to borrow larger amounts, the prospect of any interest rate rise from such a low rate will not be a good one.
Lower mortgage rates = short term fix for a long term problem (and a catalyst for more long term problems).
I want restricted lending, restricted to good, honest lending, where borrowers compete on a level playing field. No self-certs. No liar loans. Proper, income checked, sensible salary multiple lending. Yes, there would still be people "priced out", but the market would be more stable, and honest borrowers wouldn`t have to compete against those who use "creative" accounting. And another thing, the taxpayer may not have had to bail out the likes of Northern Rock etc. What`s wrong with wanting that ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
HAMISH_MCTAVISH wrote: »3 years ago, bank mortgage margins were an average of just 1% above base rate. They are now an average of 3% above base rate, and low deposit FTB's pay more like 5% or 6% above base rate.
Which equates to as much as a staggering £6,000 a year in extra interest costs on a 150K property, versus the pre-2007 buyer.
So, the pre-2007 (credit crunch) FTB`s paid a lot less in interest. Pre 2007 prices were increasing at quite a high rate. FTB`s were borrowing ever larger amounts of money (and the banks seemed not too bothered about dishing out that money). Wasn`t the credit crunch triggered by "loose lending" of money ? Is it any suprise that the banks have now tightened up the supply of credit ? They should have done it years ago.
Sorry Hamish, it doesn`t look like your cheap/easy credit is coming back any time soon.
Anyway, why are you so bothered ? You seem quite happy to be living in Aberdeen, with all that oil and HPI. You don`t usually seem so concerend about the financial wellfare of others. Why the sympathy for FTB`s ? You aren`t worried that the lack of FTB`s might...... might...... ahem.... cause prices to fall are you ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Wasn`t the credit crunch triggered by "loose lending" of money ? Is it any suprise that the banks have now tightened up the supply of credit ? They should have done it years ago.
The credit crunch was not triggered by "loose" lending of money in the UK mortgage market.
And banks are rationing mortgages because they don't have enough money to lend out. Not because of some sudden appreciation of risk.Sorry Hamish, it doesn`t look like your cheap/easy credit is coming back any time soon.
Makes no difference to me.
Potential FTB's are getting royally screwed though.Anyway, why are you so bothered ? ?
I'm not.
I do however never miss an opportunity to remind crashaholics that things are not quite working out as they envisioned.;)
Whatever is being saved through a lower ticket price is being consumed by both increased mortgage interest, post purchase, and increased rent, pre purchase. (On average of course, before some idiot spouts off about "round my way")
As the article points out, FTB's are being discriminated against by banks and it is costing them thousands of pounds a year.
Quite ironic that on a money saving site, a few people seem to think this is a good thing.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »As the article points out, FTB's are being discriminated against by banks and it is costing them thousands of pounds a year.
The banks effectively control the property market. "Supply and demand" is often the bull`s explanation for rising prices. I`ve always thought that the demand is created by availability of cheap credit, and that cheap credit translates into higher prices.
Guess what, there doesn`t seem to be much cheap credit around. I wonder what that means for prices ?
And if prices do indeed fall, there will not be so much need for cheap credit. The prudent FTB`er, with a decent deposit, will have no problem in buying their first home, and they won`t have saddled themselves with as much debt as they would have done if the the banks had been "dishing the dosh". Of course in this scenario there must be a loser. I suggest the loser is the person who rode the wave of high HPI, and basked in the glow of big equity. I wonder who that might be ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
hamish, your post is one of the best posts to describe why house prices will fall in the coming 2-3 years.
Congratulations.0 -
hamish, your post is one of the best posts to describe why house prices will fall in the coming 2-3 years.
And if they do, the same post also explains quite clearly why most potential FTB's will not benefit.Congratulations.
Interesting that you'd celebrate FTB's paying more.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
And if prices do indeed fall, there will not be so much need for cheap credit.
If prices do indeed fall, supply will dry up just as rapidly as it did last time around, and prices will rebound just as rapidly too.The prudent FTB`er, with a decent deposit, will have no problem in buying their first home,
Really? How well has that worked for the average potential FTB so far....:cool:
And again, how do you expect them to save such a deposit, when rents are now more than mortrgage payments in 75% of the UK, and rising rapidly?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »If prices do indeed fall, supply will dry up just as rapidly as it did last time around, and prices will rebound just as rapidly too.
Why ?
So far.Really? How well has that worked for the average potential FTB so far....:cool:
Not all FTB`s rent. I didn`t. I lived with my parents until I saved the deposit. I suspect that is still often the case. If rents have risen 10% in the past 12 months, it`s hardly going to have made a tremendous difference to a potential FTB`er who is currently renting.And again, how do you expect them to save such a deposit, when rents are now more than mortrgage payments in 75% of the UK, and rising rapidly?
FTB`er paying £80 per month more in rent. What`s that, about a grand a year less towards a deposit ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
HAMISH_MCTAVISH wrote: »Interesting that you'd celebrate FTB's paying more.....
I think FTB`s will be paying less if prices fall. That`s worth celebrating. What isn`t worth celebrating is further HPI, built on the back of extremely low mortgage rates. That`s an accident waiting to happen.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Well as neither a bull nor a bear, someone who thinks prices will stay pretty steady for the next couple of years, I am delighted at the restricted lending. Reckless lending has caused many of the problems we currently have. There is a case that an overreaction in lax lending is having an equally opposite overreaction in restricted lending but I can live with that for the time being. We do not want to get back to 125% mortgages/liar loans etc etc.
As one poster has pointed out terms are already being relaxed (40% deposits down to 25% deposits) and over time this will carry on."There's no such thing as Macra. Macra do not exist."
"I could play all day in my Green Cathedral".
"The Centuries that divide me shall be undone."
"A dream? Really, Doctor. You'll be consulting the entrails of a sheep next. "0
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