Why weak lending points to lower UK house prices

macaque_2

doire wrote: »

This little graph is the Wikileak of property spin!

Thrugelmir

Blacklight wrote: »

Net mortgage lending. The answers there somewhere...

Or the lack of mortgage lending to put it more succintly.

Now that Allied Irish Bank and Bank of Ireland are going to spend the next 10 years or so unwinding their loan books. In order to contract in size. Be interesting to see if this causes further contraction in the UK mortgage market. As Post Office mortgages are funded by BOI and AIB sells direct.

StevieJ

chucknorris wrote: »

Would it be that awful? How about when you factor in:

1. You only paid 50k
2. No intention of selling until they go back up (might be 10 years, so what rental profits are exceptional and will still be good when interest rates rise)
3. Rents are still at 2007 levels but mortgage rates have plummeted (hardly a time to sell up)
4. Capital gains tax was 40% in 2007 (now 28%)
5. Selling at the very top of the cycle requires hindsight or good luck (some STR's sold up as early as 2004 according to some old threads I have seen)

Or 2000-2003, HPC was set up in 2003 and a well known poster on Motley Fool sold up in 2002 not to mention those scaremongering documentaries that were produced at that time.

Sibley

Houses that are on the market now may drop.
Most people wanting to move will just wait until banks lend and prices rise.

tyllwyd

Of course you could look at the graph and see the opposite interpretation - it was the net mortgage lending line that crashed, not house prices. So from that graph you could say that we should expect mortgage lending to increase to bring it closer to the house price line, rather than saying that house prices should crash to bring them closer to the mortgage lending line.