When are going back to 10% or even 5% deposits

brit1234

iandury wrote: »

I think it is now widely accepted that property is not going to fall in value all that much if at all in the next few years. So why are new buyers having to cough up at the very least a 15% deposit.

:rotfl::rotfl::rotfl::rotfl::rotfl:

Please tell me where you got this information from and why you believe it.

Its widely expected that house prices will continue to fall especially when interest rates rise. The only question for debate is how much they will fall and over what time period?

Even BBCs newsnight was taking about 30-40% house prices falls and the effect on the economy last night.

http://www.bbc.co.uk/iplayer/episode/b010v8gn/Newsnight_27_04_2011/

Getting a 5-10% deposit at the moment is extremely expensive now and rates go up suicidal. Especially as prices fall and you enter negative equity and have to re mortgage.

Conrad

We are past the bottom now. I was a bear in 06 - and sold some B2L property.
Now I'm confident it's a good time to buy.
You can fix into a rate now that will be lower than any offered going forward.
In good areas price will not fall, and even if they did a litlle, so what, it's place to live and enjoy. More to life than hanging about being beholden to a landlord, in order to POTENTIALY make a saving were the market to fall.

Manufactuing is growing, exports at highest ever levels, pound low. Gov't cuts take us back to the level of expenditure we had in 2007 - not a huge deal in the great scheme of things.

Unemployment from public sector is spread over 5 years, much will be mopped up by natural wastage and in any event the private sector is putting on jobs.

The doom is way over done by the Hyde Park corner types, they are nearly always wrong, and they are wrong again now. Thier mind always overdoes the downside. Think about what a recession actualy means. It means instead of an economy growing month on month, there are times when it shrinks a little - so what, one can't expect growth and an ever increasing resource consumption ad - infinitum.

At ALL in times in Human history, a proportion of people portend armaggedon. In a million years it will be no different. This is explained by simple Darwian evolution, where the survival imperative of the gene pool always disperses a proportion of pessimists as they are the warning sign - the canary in the coal mind that just reminds the rest of the tribe to always be careful as this underpins long term gene and meme survival.

Thrugelmir

Typhoon2000 wrote: »

I would expect as bank finances to recover over the years and they will have enough capital to support lending at 90 or 95%. Otherwise those that haven't bought already may never be able to get on the ladder

Banks will be deleveraging for a number of years yet, i.e. lending less. While at the same time increasing margins on lending. Not least to cover the PPI payout that could run into billions of pounds.

The property market will therefore adjust to the availability and price of credit in the years to come.

Yorkie1

Conrad wrote: »

Unemployment from public sector is spread over 5 years, much will be mopped up by natural wastage and in any event the private sector is putting on jobs.

I'm afraid that isn't correct in practice. Local government (at least those councils in my county) are having to find a significant percentage - approx 50% I think - of their savings in the first year rather than spread it equally over a number of years.

My friend's central government department has to lose 50% of its headcount in what was originally set at 4 years, then reduced to 3. In fact it have lost 40% in the first 15 months. And that department is not unique.

The amount of vitriol poured on former civil servants is, if true, evidence that they are not considered employable by the private sector.

And the private sector is not growing sufficiently strongly to mop up the current losses in any event. Anecdotal evidence which I hear, indicates that newly created private sector jobs in new businesses are not replacing like with like - so former civil servants continue to be reserved in their outlook and spending.

Yorkie1

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ManAtHome

Thrugelmir wrote: »

Banks will be deleveraging for a number of years yet, i.e. lending less. While at the same time increasing margins on lending.

Quite - mortgage lending isn't exactly cracking the flags, but you can easily get BoE+2.5% and over on savings. If el Banko doesn't print up any more looks like a bit of a battle between between the various Sovs and Bankstas - not looking good for the ZIRP devaluers...

opinions4u

House prices from 1997 onwards rose because of the availability of wholesale capital, not an increase in the size of the nation's personal savings balances.

That wholesale capital drove increased mortgage lending, with more 100% mortgages, the 125% mortgage, sub prime mortgage lending from mainstream lenders, buy-to-let explosion. Increase supply of mortgage funds increased demand for property which pushed prices up.

When the Credit Crunch hit, and the wholesale funders pulled their funds out, the banks crashed.

Even if the wholesale funders come back to the party, only a very stupid bank is going to entertain significant chunks of their balance sheets being propped up with this sort of finance. Because they now realise it can vanish as quickly as it appears.

The likes of Lloyds and RBS are going to take a few more years yet until they've reduced their lending to reflect the size of their customer deposits. Wage inlfation will continue to be low. Public sector employment will drop and any pick up in the private sector will be painfully slow.

Anybody who really thinks this is a mix of circumstances that will drive house prices up at anything more than a very slow rate is barking mad.

Joe_Bloggs

In some areas cash is king. the CML say an average of 40% of all property transactions are for cash. This could be far higher than this average in some areas. So mortgage lending is not the whole story.

J_B.

opinions4u

Joe_Bloggs wrote: »

In some areas cash is king. the CML say an average of 40% of all property transactions are for cash. This could be far higher than this average in some areas. So mortgage lending is not the whole story.

J_B.

Lack of mortgage lending is the reason why 40% of transactions are for cash.

smk77

Thrugelmir wrote: »

Demonstrates that the borrower has the ability to manage their money in a responsible manner. Regular saving creates a discipline .

Not when 'Bank of Mum and Dad' are contributing large amounts towards a deposit for the majority of FTB.