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Debate House Prices
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Federal Reserve: No recovery without housing market recovery
Comments
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we need to get lending again to people so they can buy a house. IMO they should scrap deposits for first time buyers and judge them on affordability. Loads of my friends can afford the monthly payments on a house just cant get the dep together due to such high rent and other cost of living - in a lot of cases (doing the maths) its cheaper to have a morgage than rent for them.0
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moneyinmypocket wrote: »IMO they should scrap deposits for first time buyers and judge them on affordability. Loads of my friends can afford the monthly payments on a house just cant get the dep together due to such high rent and other cost of living - in a lot of cases (doing the maths) its cheaper to have a morgage than rent for them.
I believe the high deposit requirement relates to the anticipation of falling house prices and provides a buffer of protection for lenders. So scrapping it's not going to happen.
It's a vicious circle and I empathise greatly with first time buyers; but it's the situation our irresponsible financial system has led us into.0 -
I believe the high deposit requirement relates to the anticipation of falling house prices and provides a buffer of protection for lenders. So scrapping it's not going to happen.
Sorry, but that's just not the case.
High deposits and extraordinarily high credit scoring requirements are in place to shrink the pool of eligible borrowers until it matches the pool of limited funding.
It's how the banks are rationing mortgages, plain and simple.
From the BBC....
"Rigorous mortgage rationing has been in force in the UK since 2007 and the onset of the international banking crisis.
Not only did the crisis dry up the supply of funds for lenders to make available to home buyers, it also provoked a fall in house prices, undermining the security of home loans already made.
As a result, lenders have moved to demanding much larger deposits from would-be borrowers, typically amounting to between 20% and 25% of a home's value."
http://www.bbc.co.uk/news/business-16425582It's a vicious circle and I empathise greatly with first time buyers; but it's the situation our irresponsible financial system has led us into.
Wrong again.
It's the situation the global financial crisis has led us into, as a result of American sub-prime slime being fraudulently mis-sold as AAA investments.
UK mortgage lending standards had absolutely nothing to do with the onset of the credit crunch.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »It's the situation the global financial crisis has led us into, as a result of American sub-prime slime being fraudulently mis-sold as AAA investments.
UK mortgage lending standards had absolutely nothing to do with the onset of the credit crunch.
Mis-sold?
The people who bought this junk were not exactly naive grannies. Mis-bought is just as true.0 -
Mis-sold?
The people who bought this junk were not exactly naive grannies. Mis-bought is just as true.
Make no mistake, this was outright fraud, with sub-prime slime being represented as AAA and it collapsed the financial system.
"US authorities are to sue 17 major banks for losses on mortgage-backed investments that cost taxpayers tens of billions of dollars.
The Federal Housing Finance Agency said it was taking action against banks including Goldman Sachs, Barclays, Bank of America, Deutsche Bank, and HSBC.
The agency says they misrepresented the quality of the mortgages they sold during the housing bubble.
"Based on our review, FHFA alleges that the loans had different and more risky characteristics than the descriptions contained in the marketing and sales materials provided to the Enterprises for those securities," the statement said."
http://www.bbc.co.uk/news/business-14771936“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
And it never occurred to the buyers to check?
Does due diligence not apply in the banking industry?
These packets were not sold to the general public, but to so called professionals.0 -
HAMISH_MCTAVISH wrote: »Wrong again.
It's the situation the global financial crisis has led us into, as a result of American sub-prime slime being fraudulently mis-sold as AAA investments.
it was the NINJA loans being made in the first place which was ultimately the problem, what then happened only served to amplify the effect.0 -
HAMISH_MCTAVISH wrote: »Well it seems the Americans have at last grasped the basic fact that there can be no sustainable economic recovery without a housing market recovery.
I agree, but a housing market recovery does not necessarily mean an increase in house prices.
There would be an economic recovery if house prices, for example, fell by 50%, as there would be a huge influx of first time buyers who would spend vast amounts of money buying white goods, furniture, garden products etc.0 -
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There would be an economic recovery if house prices, for example, fell by 50%, as there would be a huge influx of first time buyers who would spend vast amounts of money buying white goods, furniture, garden products etc.
Yeah..... that's worked out really well for the Irish. :cool:
Where are their legions of first time buyers spending vast amounts of money buying white goods, furniture, garden products etc?
Oh wait.... That's right. They all left, thanks to the 50% falls in house prices destroying their economy.
http://theweek.com/article/index/212558/irelands-exodus-by-the-numbersTens of thousands of Irish people are leaving their country for continental Europe, the U.S. and elsewhere, in a wave of emigration not seen since the potato famine.
The severe financial crisis in Ireland is spurring a wave of emigration that threatens to decimate the country's population.
Their prices are down 50%, and their economy was flushed down the toilet.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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