"Secret" 95% mortgage proposals to help FTB's

Graham_Devon

Was an interesting discussion on this earlier on on the radio at work.

The CML and several large banks have been in discussions and believe the route to attempt to ease the housing problems is to offer 95% mortgages.

The piece on the radio interviewed an estate agent. The EA agreed that 95% mortgages are desperately needed and the pendulum has swung too far the other way. Believes more also needs to be done to help people with that 5% deposit. Didn't say what this help should be, but assume he was talking government grants, lend a hand, or builder incentives.

An economist was part of the interview, who stated 95% mortgages are not the answer. Stated you cannot use the straw that broke the camels back, to fix the camels back. Ageed more could be done with shared ownership, though ultimately prices need to fall in line with affordability as they have done at all other times in the past....this time is no different.

Stated that the proposals will only propell house prices further, which leaves us in the very same position....to which I have to agree looking at the proposals!! Prices of houses will increase to pay into the fund....

Secret talks have reportedly been held between senior executives from several FTSE-listed companies, leading banks and the Council of Mortgage Lenders in an attempt to ease the supply of finance.


It was claimed that all the main lenders, including Lloyds and Santander, and some of the country's largest house builders, including Taylor Wimpey, Barratt and Persimmon, attended the meeting.


One proposal understood to have been discussed during last week’s talks would involve house builders creating a special fund, in which significant sums of equity would be injected into.


The fund, which would be ring-fenced for each house builder, would then be used by banks to underwrite mortgages for up to 95 per cent of a property’s value.


But any move could lead to a fresh backlash against banks, as such high mortgages are thought to have contributed to the credit crunch.

http://www.telegraph.co.uk/property/propertynews/8546863/Secret-95-pc-mortgage-proposals-will-help-young-first-home-buyers.html

Really2

Graham_Devon wrote: »

95% mortgages are not the answer. Stated you cannot use the straw that broke the camels back, to fix the camels back.

Are they the straw that broke the Camels back?
We purchased in 2001 on 95% and they were available way before then (1993 or before that)

Surely they are a sign of a normally operating market and not the cause of house price crashes?
If every one was on a 95% mortgage those in the deepest NE would be in it by -5% (appox using UK average price fall) at the moment?

100% + mortgages to the wrong people was the straw that broke he camels back (and CDO's etc) not 95% mortgages IMHO.

Graham_Devon

Really2 wrote: »

Are they the straw that broke the Camels back?
We purchased in 2001 on 95% and they were available way before then (1993 or before that)

Surely they are a sign of a normally operating market.

Low (or no) deposit lending (and schemes, which he is talking about) is what he references.

Have you read the article or my quote? This isn't normal 95% lending. Yet again, it's another dreampt up scheme.

doire_2

Believes more also needs to be done to help people with that 5% deposit.

Whats wrong with people taking some responsibility and saving some money?

Graham_Devon

doire wrote: »

Whats wrong with people taking some responsibility and saving some money?

House prices might fall.

Really2

Graham_Devon wrote: »

Low (or no) deposit lending (and schemes, which he is talking about) is what he references.

Have you read the article or my quote? This isn't normal 95% lending. Yet again, it's another dreampt up scheme.

I was reading this

The piece on the radio interviewed an estate agent. The EA agreed that 95% mortgages are desperately needed and the pendulum has swung too far the other way. Believes more also needs to be done to help people with that 5% deposit. Didn't say what this help should be, but assume he was talking government grants, lend a hand, or builder incentives.

An economist was part of the interview, who stated 95% mortgages are not the answer. Stated you cannot use the straw that broke the camels back, to fix the camels back. Ageed more could be done with shared ownership, though ultimately prices need to fall in line with affordability as they have done at all other times in the past....this time is no different.

It seems to me in your written extract they are talking about 95% mortgages in general?
So are you saying they talked about this one thing or about 95% mortgages in general? If it is just the one product the written aspect was as clear as mud.
I thought the summary may have been relevent, my mistake if it was not. But if it is not why write it?

Graham_Devon

Really2 wrote: »

I was reading this


It seems to me in your written extract they are talking about 95% mortgages in general?

OK.

If it wasn't obvious.... The reason they were discussing this on the radio is precisely because of the article I linked up to, and the dicussions referenced in the article. It's why I started the OP with "interesting disucssion ON this".

FTBFun

doire wrote: »

Whats wrong with people taking some responsibility and saving some money?

Do you think the 5% is made out of paper mache?

Really2

Graham_Devon wrote: »

OK.

If it wasn't obvious.... The reason they were discussing this on the radio is precisely because of the article I linked up to, and the dicussions referenced in the article. It's why I started the OP with "interesting disucssion ON this".

But it is obvious they are talking about a need or not for 95% mortgages in general?

or why would the EA say 95% mortgages were needed?

You may disagree on this one product but I think the need for 95% mortgages was discussed, sparked by this solution.

So what have I said that is out of turn in my first post????

HAMISH_MCTAVISH

Do you think we needed a second thread on the topic?

Graham_Devon

Really2 wrote: »

But it is obvious they are talking about a need or not for 95% mortgages in general?

or why would the EA say 95% mortgages were needed?

You may disagree on this one product but I think the need for 95% mortgages was discussed, sparked by this solution.

So what have I said that is out of turn in my first post????

Ok Really.

They were discussing something else. They must have confused themselves aswell as myself by talking about the meetings with the CML. My bad. You know best.

I think you are simply trying to take issue with what I said (badly). Therefore, I'll agree you are right and they weren't talking about the news out today, on todays show.

So...what do you think of the fund and 95% mortgage idea?