It's all about the rationing

Thrugelmir

Graham_Devon wrote: »

[
My question, is when does the 'rationing' end? This article even goes on to describe this as "severe rationing".

What rationing?

Either you can afford a mortgage at a given rate or not.

To fund mortgages lenders require retail funds. The old building society model required approx 20 savings accounts to fund one mortgage. So people intending to buy, save regularly. By saving over a say a 2 year period for their deposit. Provides the funds somebody elses mortgage.

There's no rocket science involved. The wholesale money market bubble has burst. Thats why the UK Treasury had to bail out the banks.

IveSeenTheLight

Thrugelmir wrote: »

92% of all new lending is provided by 6 lenders.

So where's the competition going to come from?

Ok, name the 6 and provide a link.

In the meanwhile, what about the following?
Is that not enough lenders to create competition once the lending restriction is removed?

Nationwide
HBOS
Santander
RBS
First Direct (Okay, I do no this is a sub company of the RBS)
HSBC
Barclays
Nat West
Northern Rock
ING Direct
Clydesdale Bank
C&G
Alliance & Leicster
Brittannia
Skipton BS
Chelsea BS
Yorkshire BS
Leeds BS
Woolwhich BS
Penrith BS
Barnsley BS
Norwich & Peterborough
Market Harborough BS
The Mortgage Works

Thrugelmir

IveSeenTheLight wrote: »

Ok, name the 6 and provide a link.

In the meanwhile, what about the following?
Is that not enough lenders to create competition once the lending restriction is removed?

Nationwide - The Mortgage Works
HBOS - C&G
Santander -Alliance & Leicster
RBS - Nat West
HSBC -First Direct ( lent £6.7 billion in first 6 months of 2011)
Barclays - Woolwhich BS
Northern Rock
ING Direct
Clydesdale Bank
Brittannia
Skipton BS (total advances 2010 £481 million)

Yorkshire BS - Chelsea BS - Norwich & Peterborough - Barnsley BS (funds 91% of mortgage book from retail deposits)

Leeds BS (net lending 2010 - £22 miliion)

Penrith BS (During 2010 the building society advanced 105 mortgages totalling £8 million)

Market Harborough BS ( net lending 2010 £8.3 million)

Tidied up the list for you with some more info. To put the matter into perspective.

What lending restriction? Banks with £20 billion lending pots don't materialise out of thin air.

Biggest current net lenders are HSBC, LloydsHBOS, RBS, Santander, Nationwide and Barclays.

IveSeenTheLight

Thrugelmir wrote: »

Tidied up the list for you with some more info. To put the matter into perspective.

What lending restriction? Banks with £20 billion lending pots don't materialise out of thin air.

Biggest current net lenders are HSBC, LloydsHBOS, RBS, Santander, Nationwide and Barclays.

Thanks.

Would you like to answer my question?

Is that not enough lenders to create competition once the lending restriction is removed?

Percy1983

I somebody saving a deposit I agree with the 10% deposit, I would rather wait a bit longer now, buy a cheaper house and have a bigger equity.

Rather that than buy an over priced house locked in a bidding war with anybody who turned up at the bank that week and said please give me money.

Really2

Percy1983 wrote: »

I somebody saving a deposit I agree with the 10% deposit, I would rather wait a bit longer now, buy a cheaper house and have a bigger equity.

Rather that than buy an over priced house locked in a bidding war with anybody who turned up at the bank that week and said please give me money.

What do you think of the majority of mortgages being 20% + deposit.

Do you feel that is an excessive amount to find as a potential purchaser?

StevieJ

Really2 wrote: »

I would say most products being around 10% is far nearer the average than 64% over 20%?
But AFIK most people could get a decent rate with a 10% deposit for most of the last 40 years.

I think what used to happen was any lendings over 75% were covered by insurance (MIG) with the borrower paying a lump sum premium, it may still happrn now, I don't know.

StevieJ

IveSeenTheLight wrote: »

Ok, name the 6 and provide a link.

In the meanwhile, what about the following?
Is that not enough lenders to create competition once the lending restriction is removed?

What happened to these guys? they have a few trillion yen sloshing around

Bank of China has begun offering mortgages to British borrowers, who are finding it difficult to get loans from leading UK lenders. The world’s third-largest bank is lending at lower rates than many of the deals available from more established UK lenders. It has previously focused on lending to the Chinese community within the UK.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6727253.ece

Percy1983

Really2 wrote: »

What do you think of the majority of mortgages being 20% + deposit.

Do you feel that is an excessive amount to find as a potential purchaser?

If I had to get 20% I would save longer and find it.

But there is more than enough 10% deals at the minute.

Thrugelmir

IveSeenTheLight wrote: »

Thanks.

Would you like to answer my question?

Define lending restriction.

Edit. Thought that I would help you by giving some background on NR.

In the nine years from June 1998 (the first year after demutualization) to June 2007 (on the eve of its
crisis), Northern Rock’s total assets grew from 17.4 billion pounds to 113.5 billion
pounds. This growth in assets corresponds to a constant equivalent annual growth rate of
23.2%, a very rapid rate of growth by any standards. By the eve of its crisis, Northern
Rock was the fifth largest bank in the UK by mortgage assets.

Even as total assets grew by a factor of 6.5 in this period (98-07), retail deposits only grew from 10.4 billion pounds to 24 billion pounds

Pricing is competitive at the moment.