Large Deposit Requirements Exclude a Generation of FTB's

ILW

What is all the fuss about, apart from the last decade it was always required to have a 10% deposit and expect to pay about 8% IR. It just seems that things are getting back to normal.

Percy1983

IveSeenTheLight wrote: »

These are the pitfalls of a falling (or fallen) market to the lenders.
These pitfalls are not there in a stagnating or rising market.

So you have just admitted that the high deposit situation is a temp problem then, prices may fall and when full corrected will stagnate/rise slowly and mortgages will be fine again. Just the size of said mortgages will be lower meaning the future generatons will be able to own a house and have a social life at the same time.

Graham_Devon

IveSeenTheLight wrote: »

They will want their books to balance better before they release the better products.

I'm out.

That's what I have said all along. Once the falls have happened, things will start to get better.

IveSeenTheLight

Graham_Devon wrote: »

I'm out.

That's what I have said all along. Once the falls have happened, things will start to get better.

I'm glad your out because it's not what you said

Originally Posted by IveSeenTheLight

They will want their books to balance better before they release the better products.

how do they balance their books Graham?

Either
a) they require greater deposits
b) current owners overpay to redress the risk balance
c) prices rise and revert the risk issue

the better products won't become available until the lenders books and risks are at an acceptable level.

IveSeenTheLight

Percy1983 wrote: »

So you have just admitted that the high deposit situation is a temp problem then, prices may fall and when full corrected will stagnate/rise slowly and mortgages will be fine again. Just the size of said mortgages will be lower meaning the future generatons will be able to own a house and have a social life at the same time.

What about the current product on their books?
Am I repeating myself here?

what your saying is all well and great if only considering new applications from the lendee perspective, however it does not consider the lenders position.

Graham_Devon

IveSeenTheLight wrote: »

I'm glad your out because it's not what you said

[/I]

how do they balance their books Graham?

Either
a) they require greater deposits
b) current owners overpay to redress the risk balance
c) prices rise and revert the risk issue

the better products won't become available until the lenders books and risks are at an acceptable level.

Argh!!

One of the ways to offset loses, is to bring in new profitable business.

They will want this new business, so will compete against each other to get said new business.

Simple.

IveSeenTheLight

Graham_Devon wrote: »

Argh!!

One of the ways to offset loses, is to bring in new profitable business.

They will want this new business, so will compete against each other to get said new business.

Simple.

We saw this in 2008 / 2009 did we?

I understand they want new business, but the business they want would need a higher deposit to offset the losses on their books.

In essence new deals need to not only cover their own risk but also the previous.

Just do a search on the number of threads discussing how there was a reduction in mortgage products.
These were restricted on the way down and the bottom and only started easing as there was sustainable price rises.

Your so convinced that prices are going to fall. If they do, we'll see what the mortgage products are like at the bottom. You obviously have such a short memory you can't recall what recently happened.

P.s. what do you think of this t-shirt.
I think it would suit you well

Graham_Devon

Ahhh, were on to the insults. Arguing your slant on this must be getting difficult.

As optimists have so often said. "It's different this time".

Until it comes to price falls, then its all going to pan out EXACTLY the same as last time.

Last time, it was a credit crunch. THAT was a major reason mortgage lending (amongst all other lending) fell so sharply.

You'll need another credit crunch for everything to work exactly the same as last time.

IveSeenTheLight

Graham_Devon wrote: »

Ahhh, were on to the insults. Arguing your slant on this must be getting difficult.

I see you've not had your humour pill this morning.
I was trying to inject a bit of light heartedness banter as I could see your stress levels increasing on screen.
Nevermind.

Graham_Devon wrote: »

As optimists have so often said. "It's different this time".

Until it comes to price falls, then its all going to pan out EXACTLY the same as last time.

Were not talking about prices here, were talking about mortgage availability to potential FTBers and debating when it will be easier for them to get access to credit.

Graham_Devon wrote: »

Last time, it was a credit crunch. THAT was a major reason mortgage lending (amongst all other lending) fell so sharply.

You'll need another credit crunch for everything to work exactly the same as last time.

Here's a little reminder of how hard it was for FTBers to get access to credit after the falls and 6 months into the rises

Maybe if you see it from elsewhere you might have a new perspective on it instead of simply arguing because you are responding to me.

http://www.moneysavingexpert.com/news/mortgages/2009/09/first-time-buyer-mortgage-famine-gets-worse?utm_source=forum&utm_medium=sidebar&utm_campaign=box

IveSeenTheLight

Just as another little reminder, here's a post after the correction and just when prices had started to rise

http://forums.moneysavingexpert.com/showpost.html?p=21845371&postcount=13

Subject = Abandoned hope for all ye FTBs

Graham_Devon wrote: »

The affordability ratios are worthless right now though.

It's fine saying its now 4.35x wages, but you simply cannot get that money lent to you.

Mortgage product availabilty was a lot worse then than now and will be a lot worse if prices fall again.

I recall people saying a long time ago to be carefull what you wish for and that certainly came true.