One Million FTB-s prevented from buying

HAMISH_MCTAVISH

Running_Horse wrote: »

Big deposits are not rationing

They're how banks reduce demand so that the number of people getting mortgages matches the limited amount of money the banks have to lend.

Rationing is defined as....

"The controlled distribution of scarce goods or services."

It's rationing.

. They're just big deposits, like there used to be.

We were offered a 95% mortgage in 1990.

My parents were offered one in 1967.

And 100% mortgages were available at least as far back as the early 80's.

So when is this "used to be" you're referring to?

anyone with the required deposit and a good credit history can have a mortgage. That's not rationing; just common sense in a moribund market.

And that's where you're wrong.

If more people came up with the required deposit and credit history than do now, then banks would have no choice but to move the goal posts again.

They don't have the money to lend to 500,000 FTB-s today, even if they ALL had 25% deposits and perfect credit scores.

Jimmy_31

HAMISH_MCTAVISH wrote: »

They're how banks reduce demand so that the number of people getting mortgages matches the limited amount of money the banks have to lend.

Rationing is defined as....

"The controlled distribution of scarce goods or services."

It's rationing.




We were offered a 95% mortgage in 1990.

My parents were offered one in 1967.

And 100% mortgages were available at least as far back as the early 80's.

So when is this "used to be" you're referring to?



And that's where you're wrong.

If more people came up with the required deposit and credit history than do now, then banks would have no choice but to move the goal posts again.

They don't have the money to lend to 500,000 FTB-s today, even if they ALL had 25% deposits and perfect credit scores.

If house prices came down then lots more people would be able to get a mortgage without the banks moving the goal posts.

HAMISH_MCTAVISH

Jimmy_31 wrote: »

If house prices came down then lots more people would be able to get a mortgage without the banks moving the goal posts.

And if house prices were a tenner each, nobody would need a mortgage.

But they're not.

Jimmy_31

HAMISH_MCTAVISH wrote: »

And if house prices were a tenner each, nobody would need a mortgage.

But they're not.

But they are heading in the direction of a tenner which is very good news for FTBs who want to buy a home.

shortchanged_2

HAMISH_MCTAVISH wrote: »

And if house prices were a tenner each, nobody would need a mortgage.

But they're not.

And if house prices were more reasonable there would be a lot more house sales than there currently is.

But they're not.

HAMISH_MCTAVISH

shortchanged wrote: »

And if house prices were more reasonable there would be more house sales than there currently is.

But they're not.

And if there was more lending then FTB-s would be able to compete with BTL.

But they're not.

shortchanged_2

HAMISH_MCTAVISH wrote: »

And if there was more lending then FTB-s would be able to compete with BTL.

But they're not.

Still doesn't explain why the number of house sales is currently so low though does it Hamish.

ILW

If the definition of rationing is based on price and affordability, surely everything in a free market is rationed. Think of a different word Hamish. Anyone one that has the wherewithall can get a mortgage.

HAMISH_MCTAVISH

shortchanged wrote: »

Still doesn't explain why the number of house sales is currently so low though does it Hamish.

Because the banks are rationing mortgages.

They only have enough money to lend to 200,000 FTB-s, not 500,000 FTB-s.

So they must find a way to ration those funds. In this case, through high deposit requirements.

Cleaver

Jimmy_31 wrote: »

But they are heading in the direction of a tenner which is very good news for FTBs who want to buy a home.

Do you think? All the information I see seems to suggest that prices are heading more and more towards nominal price stagnation.


Source: Nationwide.

Over the last 36 months we've seen the positive and negative results all come closer to zero, there's been a pretty even distrubition of negative (19) and positive (17) months and after a 2008 of largely falls, and a 2009 of largely rises, we're just seeing noisy, random positives and negatives each month around the zero mark.

So as I say, looks like stagnation to me and I think it'll stay like this for years to come as buyer struggle to get mortgages and sellers refuse to sell. I reckon that ss wages and inflation start to creep up over the next five years or so the nominal house price will stay the same, so will slowly become more and more appealing and affordable to buyers.

Obviously you see the stats differently though Jimmy, and see prices heading towards a tenner. I guess we all see stuff differently.