A window opens for new mortgage deals: Stricter lending on hold

1984ReturnsForReal_2

Rinoa wrote: »

You mean "...lets pretend there is a massive problem leading to 1 in 400 homes being repossessed that can only be fixed be limiting mortgages to 50% of those who were eligible previously."

BTW if they cant afford a mortgage how can they afford to rent?

What are the figures on those in trouble that have not had their homes repossessed?

the_flying_pig

Rinoa wrote: »

Each year one in 400 homes are repossessed according to CML.

Evidently 99.75% can afford to pay using the current rules and regs.

stupid, mindless, post even by your standards since:

(1) vast numbers of people own their houses outright - there are not 20m residential mortgages out there!;
(2) even more people than that took their mortgages out an awful long time ago & have modest outstanding balances;
(3) there are currently a couple of hundred households scandalously getting their mortgages paid for them by the taxpayer;
(4) the process of struggling to keep up mortgage payments before eventually being repossessed takes a very long time... it's incredibly fallacious to take one year's reposession figures and pass it off as the total number of people who will ever struggle [which you are implicitly doing by comparing it with the total number of all houses]; and
(5) the ZIRP policy response to the housing bubble [which entirely explains the low reposession numbers] can hardly be to be something that will or should be in place for ever.

all in all, the % of people who took out certain types of mortgages in the middle and late part of the previous decade in the !!!!!! is unacceptably high & responsible lending could very easily prevent it from happening again.



more fundamentally, even if taking a few years' worth of reposession data controlling for interest rates, and taking mortgage interest support is taken out of the equation, the total # of reposessions is a very poor test for whether loose lending is damaging to our society and economy. most obviously, the pernicious seeds sown by mindless over-reliance on IO will take many years to fully bear fruit - it's a long-term issue, not a 'can people currently make the repayents?' one

Sibley

I knew it wouldn't be long before lending got back to normal:beer:

Prices will rise once people get mortgage approvals. I hope sellers are taking note. No need to drop your price.

the_flying_pig

Sibley wrote: »

I knew it wouldn't be long before lending got back to normal:beer:

Prices will rise once people get mortgage approvals. I hope sellers are taking note. No need to drop your price.

Reliable as a Swiss watch :T

Sibley

I'll say it now.

This time next year average price of a house will have risen 8%.

Remember where you first heard this.

Generali

Sibley wrote: »

I'll say it now.

This time next year average price of a house will have risen 8%.

Remember where you first heard this.

In nominal (number of pound notes) or real (inflation adjusted) terms please?

If the former, what do you think UK inflation (RPI) will be please?

Cleaver

Generali wrote: »

In nominal (number of pound notes) or real (inflation adjusted) terms please?

If the former, what do you think UK inflation (RPI) will be please?

Good luck getting answers Gen.

ILW

Rinoa wrote: »

Each year one in 400 homes are repossessed according to CML.

Evidently 99.75% can afford to pay using the current rules and regs.

How many fo those could afford to pay if it wasn't for artificially low interest rates and various government rescue schemes?

ILW

Rinoa wrote: »

You mean "...lets pretend there is a massive problem leading to 1 in 400 homes being repossessed that can only be fixed be limiting mortgages to 50% of those who were eligible previously."

BTW if they cant afford a mortgage how can they afford to rent?

Rent is unlikely to double if there is a modest rise in interest rates.

PasturesNew

Rinoa wrote: »

BTW if they cant afford a mortgage how can they afford to rent?

That's an easy one to answer. People with stretch themselves silly for a mortgage, they won't do that for rent. You can get out of renting quickly if things change, you can't do that if you own it.

So you have people renting smaller places, that cost less, without the up front fees - and able to get their rent covered immediately if they're laid off and being able to downsize or change locations as things change.

If rents are too high, you can rent 2 miles up the road where it's a bit cheaper, but if you're buying you don't want to be 2 miles up the road, so you stretch yourself to afford what you want.

I don't think I made myself clear above .... I know what I am trying to say, I am just not able to put that into words, so I give up.