UK Government to Underwrite New Mortgage Lending

MrRee_2

The property owners of the UK are, mostly, Tories ..... Tories are in power, there is no way on earth they will allow a Housing Crash.

Housing needs supporting, in the North ... the South seems to be recovering amazingly well currently.

the_flying_pig

HAMISH_MCTAVISH wrote: »

...There is no functional mortgage market in the UK at the moment, and what we have now bears no resemblance to historically normal, prudent, or sensible lending. ..

to be fair H the amount [as a proportion of GDP] of household debt we have secured against residential pwoperdee, is entirely without historically normal, prudent, or sensible precedent.

these two facts are somewhat interlinked.

Emy1501

Hamish I suggest your friend tries a whole of the Market broker next time as they would not have wasted his time

I know 2 people on my team who have bought in the last 6 months both with joint incomes of 60k in the south east buying a 250k house with 10% deposit. Neither had any problems getting mortgage. The only person I know struggling is someone trying to get a 95% mortgage and those rates are about 7%. the only person I know turned down for 90% mortgage is some one who had late payment on student loan debt.

Also let's be honest the government are not going to wants to know anyone with an average credit score.

toby3000

MrRee wrote: »

The UK Housing market DRIVES the UK Economy - it has been like this for decades now.

The Housing market, if very healthy, lifts growth hugely.

People move, people buy carpets, furniture, everything ... they hire in painters, plasterers, they build extensions - employing others - who then buy tools and hire others who buy clothes and cars and food and houses ....

It's the circle of life - and the Government needs to step in to breathe some life into it .... why don't they buy every house builders can build at cost price + 20% and sell at their cost +5%?

Everyone wins .....

But if houses cost a lot less, then people would have a lot more money to spend on carpets and furniture and other stuff. Or even to invest in businesses, if they felt like it.

I don't think the government offering to buy ANYTHING at what it costs to make +20% is the wisest economic policy. Why not do it with steel or cars or lampshades?

Turnbull2000

toby3000 wrote: »

But if houses cost a lot less, then people would have a lot more money to spend on carpets and furniture and other stuff. Or even to invest in businesses, if they felt like it.

I don't think the government offering to buy ANYTHING at what it costs to make +20% is the wisest economic policy. Why not do it with steel or cars or lampshades?

Lowering house prices is politically untenable. That's why the government is targeting cheaper borrowing.

Thrugelmir

EchoLocation wrote: »

the continued meddling that has held off what would otherwise have been a nailed on much needed correction - or dare I say it, crash.

You maybe witnessing an engineered correction.

MiserlyMartin

HAMISH_MCTAVISH wrote: »

There is no functional mortgage market in the UK at the moment, and what we have now bears no resemblance to historically normal, prudent, or sensible lending.

The trouble is, your idea of prudent sensible lending is what we had up until 2007 - risky, highly irrresponsible & irrational lending. Welcome to the old normal.

MrRee_2

toby3000 wrote: »

But if houses cost a lot less, then people would have a lot more money to spend on carpets and furniture and other stuff. Or even to invest in businesses, if they felt like it.

I don't think the government offering to buy ANYTHING at what it costs to make +20% is the wisest economic policy. Why not do it with steel or cars or lampshades?

If houses cost a lot less, then no-one can sell ... and won't sell.

End of that idea, let's be clear - prices cannot fall beyond a mild drop.

Houses are not cars, steel, lampshades ... the market isn't as sure a profit making incentive.

Take an example, builder builds house for £80,000 - Government buys for £100,000 - Government sells to FTB's for £105,000.

Builder builds, builder hires workers, FTB's leave home and buy own home, homebuyers buy goods from shops, shops do well and hire shop workers, Government makes a profit, so does Builder, FTB gets a house to call home.

Going4TheDream

HAMISH_MCTAVISH wrote: »

What a load of tosh.

The vast majority of applicants get turned down at 90%.

Those with an average credit score haven't got a chance. Even those with a very good score get turned down more often than not, or only offered an absurd rate.

One of the lads I work with got turned down 5 times this year, with a very high credit score. No late payments ever, no current debt, same address 5 years, stable job, low LTI, etc.

He got accepted on the 6th try... But was only offered a 7% rate.:eek:

Then it was 7th time lucky at 5%, from a different high street brand of the same banking group that turned him down twice before.

When he asked the bank mortgage advisor why, they said their criteria change all the time depending on how much they have available to lend that day, week or month. Mortgage Rationing, in other words.

It's absolute insanity out there....

There is no functional mortgage market in the UK at the moment, and what we have now bears no resemblance to historically normal, prudent, or sensible lending.

Banks are cherry picking the absolute cream of the crop, and abandoning the vast majority of ordinary families and the young. :cool:

Maybe my friends are in the minority? Two secured a mortgage recently.... both 90% and have average jobs.

thescouselander

This is just utter nonsense. The government can underwrite what it wants but the banks simply cant raise the funds to lend in the first place - we're on the verge of a second credit crunch !!!!!!.

http://www.thisismoney.co.uk/money/news/article-2062575/Bank-Englands-warning-lending-raises-new-credit-crunch-fears.html?ito=feeds-newsxml

Unless more money is added to the economy how can the prices of assets rise? Perhaps London could be a special case because foreign investors will buy but its just not going to happen for the rest of the country.