Gross mortgage lending likely to fall in 2012, says AMI

Aberdeenangarse

Bad new for those looking to buy.

The report says: “Insufficient equity blocks the market because tighter lending criteria mean many borrowers end up without the borrowing capacity to get a mortgage.

“Someone who bought on an 85% LTV in 2007 would now have only around 5% equity, nothing like enough to remortgage or move up the housing ladder.”

http://www.mortgagestrategy.co.uk/economy/gross-mortgage-lending-likely-to-fall-in-2012-says-ami/1040048.article

lisyloo

“Someone who bought on an 85% LTV in 2007 would now have only around 5% equity, nothing like enough to remortgage or move up the housing ladder.

I think that's somewhat selective.
People that bought in 2001, 2002, 2003, 2004 etc. are probably in quite a good position (leaving out the years I'm not totally sure about but you get the picture).

geneer

lisyloo wrote: »

I think that's somewhat selective.
People that bought in 2001, 2002, 2003, 2004 etc. are probably in quite a good position (leaving out the years I'm not totally sure about but you get the picture).

What about 1998, 1650 and 1210?

IveSeenTheLight

geneer wrote: »

What about 1998, 1650 and 1210?

Seems quite a stupid question, but I'll attempt a response nonetheless.

1998 - Property is markably increased since then, rents have also increased in the last 13 years. Likelyhood is that the property is at least half way to being paid off. Buyers would be better off in this instance

1650 & 1210 - Very much dowbt the original purchasers are still around and quite possibly neither would the properties.
If the properties was still of sound structure and habitable, I'm sure the decendants of the buyers in 1650 & 1210 would be better off too.

Was your point that people buying in these years would not have been better off?

RenovationMan

“Someone who bought on an 85% LTV in 2007 would now have only around 5% equity, nothing like enough to remortgage or move up the housing ladder.”

Even if they bought in London?

Graham_Devon

RenovationMan wrote: »

“Someone who bought on an 85% LTV in 2007 would now have only around 5% equity, nothing like enough to remortgage or move up the housing ladder.”

Even if they bought in London?

It's based on averages.

Articles can't highlight every single area.

IveSeenTheLight

RenovationMan wrote: »

“Someone who bought on an 85% LTV in 2007 would now have only around 5% equity, nothing like enough to remortgage or move up the housing ladder.”

Even if they bought in London?

I've just re-mortgaged a property I bought in Jan 2007.
There needed to be a valuation report to verify the LTV of the loan.
Turns out the property has increased on paper by 9.6% in that time.

Also during that time, due to a rapid repayment strategy, the property outstanding mortgage has decreased by 17.4%

Of course however the quoted line is based on averages and does not consider local applications or those reducing their outstanding debt, but it does go to highlight that falling prices restricts the market from remortgaging or moving up the ladder.

Dan:_4

Anyone who buys in 2012 will be beter of in 25 years time.

robmatic

lisyloo wrote: »

I think that's somewhat selective.
People that bought in 2001, 2002, 2003, 2004 etc. are probably in quite a good position (leaving out the years I'm not totally sure about but you get the picture).

Indeed. I wonder how many first time buyers there were in 2007?

IveSeenTheLight

Dan: wrote: »

Anyone who buys in 2012 will be beter of in 25 years time.

My user name is derived from when I realised that overpaying your mortgage (even by a small amount) dramatically reduces both the total interest paid and the amortization period.

I would recommend that everybody overpays where they can.

It's amazing how even just a little extra goes a long way

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Overpaying £20 per month on a £100k 5% repayment mortgage would save £5,515 in interest and 1 year and 8 months.

Of course if you can increase this year on year by another £5 or £10 per month, you'll save even more and find that you will save even more interest and repay the mortgage in a an even quicker timeframe.

RenovationMan

IveSeenTheLight wrote: »

My user name is derived from when I realised that overpaying your mortgage (even by a small amount) dramatically reduces both the total interest paid and the amortization period.

I would recommend that everybody overpays where they can.

It's amazing how even just a little extra goes a long way

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Overpaying £20 per month on a £100k 5% repayment mortgage would save £5,515 in interest and 1 year and 8 months.

Of course if you can increase this year on year by another £5 or £10 per month, you'll save even more and find that you will save even more interest and repay the mortgage in a an even quicker timeframe.

Totally agree. We have always bought the most expensive house we can afford and then we have always enbarked on a rigid overpayment exercise. It's worked like a dream for us and has helped us jump up the housing ladder several rungs at a time.