BOE warns that fewer mortgages will be given in 2012

Graham_Devon

Home buyers will find it even harder to obtain a mortgage in the coming months, the Bank of England says.

Its quarterly survey of lending activity shows that lenders are going to be even fussier about prospective customers.

"Lenders expected a tightening of credit scoring criteria for granting new secured loans to households," the Bank said.

It said lenders were worried about the poor economy and falling house prices.

"Factors such as the cost and availability of funds, the economic outlook and expectations for house prices were all expected to pull down on credit availability," the Bank reported, in its survey of credit conditions.

Sounds like the banks are now expecting falling house prices, and are going to price this into the mortgages they offer.

This isn't some journo stating this. It's the Bank of England.

So they are probably completely and utterly wrong

http://www.bbc.co.uk/news/business-16425582

Any increase in lending in the next few months, the lenders said, was likely to be concentrated on those borrowers who could afford to put down a large deposit.

Fair enough to start calling it rationing now, I guess. But it's rationing for a reason.....because they think house prices are going to fall....and they must be thinking they are going to fall some way if they are pulling products?

Graham_Devon

Some other interesting bits from the BOE report:

- Demand for new mortgages has fallen in Q4. However, demand for BTL lending has increased again.
- Demand for unsecured lending has decreased.
- Credit demand from small business has decreased sharply.
- Default rates have fallen slightly, but actual losses have increased.
- The small expected increase in secured credit (mortgages) was due to the government schemes, such as shared equity, where lenders are happy to lend.

System

Hope they give me one, planning to move in March/April

wotsthat

Graham_Devon wrote: »

Sounds like the banks are now expecting falling house prices, and are going to price this into the mortgages they offer.

Confirmation bias at it's finest. In the 17 page BOE credit conditions report prices was mentioned 4 times - fancy you focusing on that.

Graham_Devon wrote: »

Fair enough to start calling it rationing now, I guess. But it's rationing for a reason.....because they think house prices are going to fall....and they must be thinking they are going to fall some way if they are pulling products?

Secured lending to households was flat in Q4 and is expected to increase a little in Q1. Credit conditions remain tight - banks are not so much pulling products as further concentrating on those with decent LTV's.

Prices might fall but only to the benefit of rich people who will have even less market competition from FTB's. More people having to rent and more concentration of house ownership with the rich.

Happy days.

Graham_Devon

wotsthat wrote: »

Confirmation bias at it's finest. In the 17 page BOE credit conditions report prices was mentioned 4 times - fancy you focusing on that.

My apologies. I didn't read the full 17 pages before posting the thread.

:wall:

Aberdeenangarse

wotsthat wrote: »

In the 17 page BOE credit conditions report prices was mentioned 4 times.

What's you're other hobby? Train spotting? :rotfl:

Thrugelmir

Graham_Devon wrote: »

Sounds like the banks are now expecting falling house prices, and are going to price this into the mortgages they offer.

Called managing expectations. If people believe its going to happen then it will.

wotsthat

Aberdeenangarse wrote: »

What's you're other hobby? Train spotting? :rotfl:

That and obsessing about house prices in Maidstone.

wotsthat

Thrugelmir wrote: »

Called managing expectations. If people believe its going to happen then it will.

That's quite an interesting viewpoint. If people believe that prices will fall and rates rise then they just will?

MacMickster

Thrugelmir wrote: »

Called managing expectations. If people believe its going to happen then it will.

I'm not sure how they will manage the expectations of some posters on this forum; in particular those who use multiple identities to post.

I am convinced that these posters have come across a new offer from Specsavers - Buy one pair of rose-tinted glasses and get another pair or two free.