lenders warn low-deposit mortgages are over

michaels

I guess it doesn't matter who 'pays' directly (in the end the customer always pays), the key bit is transferring the risk away from the bank so that they can still make the loan without running foul of Basle III.

Going4TheDream wrote: »

Do you mean like the old MIG that borrowers may have been required to take out? or do yo mean for th banks specifically?

Generali

michaels wrote: »

I guess it doesn't matter who 'pays' directly (in the end the customer always pays), the key bit is transferring the risk away from the bank so that they can still make the loan without running foul of Basle III.

Under Basle III as currently envisioned you can forget about LTVs of >75% being a mainstream bank product in the UK for BTL or FTBs.

The only ways I can think of for them to be offered would be if you had non-deposit taking financial institutions selling > 75% LTV mortgages to customers and financing them with a Freddie Mac/Fannie Mae-style Government guaranteed lending system. Alternatively it could be fudged so that if a bank lends to a non-bank that is selling mortgages then that is counted as a business loan not effectively mortgage lending.

The trouble with the former is that there's a big transfer of risk from the private to the public sector. With the latter the problem is banks are encouraged effectively to keep risks off their balance sheet. That's one of the things that allowed the GFC to happen.

Sibley

I'm glad people like Geneer are getting totally frozen ot of the housing market.
If they had kept their mouths shut they would own a house now.

A liar loan would have given them the chance to own and make enough money to retire. Now they have managed to bring that facility crashing down. All they have left if the chance to pay off somebody elses mortgage.

Serves them right.

drc

Is this a sign that banks expect house prices to fall? If they are expecting the buyer to put in most of the money nowadays in the form of a deposit then presumably the risk is now placed on the buyer losing money. If banks thought they could still make money from increasing house prices surely they would still be lending very high percentage deposits?

geneer

Pimperne1 wrote: »

Good news for bears then.

:rotfl:Predictable bull meme no 120756, Bears = all FTBS.


Sorry guys, but you appear to have forgotten that FTBS aren't a homogenous unit who all root for each other.

You appear to have forgotten that Bears wanted nothing more than see the end of oversized mortgages being handed out to every numbty with a fiver and a thumb print.

Which is strange, is this is pointed out every single time you trot out this fallacious argument. What a forgetful bunch you are.


LESS FTBS = LESS COMPETITION = LOWER PRICES.

Its that simple.

geneer

HAMISH_MCTAVISH wrote: »

Better news for landlords.:)

Says a man who owns no BTLs.
Eggs and omlettes hamish.
Eggs and omlettes.

Sibley wrote: »

I'm glad people like Geneer are getting totally frozen out of the housing market.

On the contrary simpley. Reduced competition = falling prices = less sensible FTBs with decent Deposits frozen out of the housing market.

geneer

reweird wrote: »

There is no new paradigm. The paradigm is as it has always been and always rightfully should be - Those who can buy, buy. Those who can't, rent.

I can't beleive I'm actually agreeing with the sockie.

Yes Reweird. As I said in the OP. Welcome to the new paradigm. An awful lot like the old one.

Rinoa

geneer wrote: »

LESS FTBS = LESS COMPETITION = LOWER PRICES.

Its that simple.

Like it says in the OP:

Official figures show around one million families and young people have been forced to rent, rather than buy, over the past five years.

So that's one million extra renters living in one million extra BTL's.

The competition is still there, but instead of FTB's buying for themselves, BTL landords are snapping up the FTB housing stock and renting it out to those who can't raise a deposit.

And all those new BTL properties will probably be lost to FTBs forever.

illgetthere

It would be interesting to find a statistic that showed how many people who bought a high ltv product (95%-100&+) have actually defaulted.

My first mortgage was a NR together product at 103% LTV. I haven't defaulted and don't think that i even considered the LTV. All i made sure of was the ability for me to pay, and the fact that i didn't want to rent and throw money to someone else.

It was a great product and a great opportunity to 'start to' own my home. I was 18 at the time and it seemed to be the sensible option when i wanted to move out.

Would it really be an issue if 100% mortgages were reintroduced? Were these products the main catalyst for problems in the housing market?

shortchanged_2

It's blatantly obvious that it is the house prices that are the problem.

It doesn't take a rocket scientist to realise that it is easier to save say a 10% deposit for a £100K house than it is for a £150k or £200K etc, etc.

And yet according to the bulls on here it's the mortgage rationing that's the problem.