new lending crackdown means lower UK house prices

yertiz_2

Conrad wrote: »

The interest only crack down was well underway 3 years ago. The only noticable recent change event has been Santander limiting I/O to 50%.

I was expecting this to go down badly, but honestly, people are just shrugging shoulders and accepting it.
I'm finding people are going for 35 year repayment mortgages, or part into only / part repayment, and as such finding the jump in payments to be pretty unspectaculour.

Didnt something like this happen in Japan 20 years ago. I seem to recall that people were taking out two generation 60 year mortgages. Could that happen here then?

Jimmy_31

MrRee wrote: »

House prices are only going ONE WAY - UP!

That was a bit weak.

Have you come to accept the inevitable:D

Graham_Devon

Conrad wrote: »

The interest only crack down was well underway 3 years ago. The only noticable recent change event has been Santander limiting I/O to 50%.

I was expecting this to go down badly, but honestly, people are just shrugging shoulders and accepting it.
I'm finding people are going for 35 year repayment mortgages, or part into only / part repayment, and as such finding the jump in payments to be pretty unspectaculour.

Who offers these 35 year mortgages?

IveSeenTheLight

Graham_Devon wrote: »

Who offers these 35 year mortgages?

http://lmgtfy.com/?q=35+year+mortgages+uk

Thrugelmir

The-Joker wrote: »

But the big question is: why the crackdown now?
The horses bolted ages ago – why shut the stable doors now?

Easy to answer. Banks require (a) Increased Capital to comply with Basle 3 by 2018, and (B) the size of mortgage books.

By being stricter with i/o mortgages. Banks will be able to reduce their mortgage exposure. By still advancing new funds but at a lower level than mortgages are being repaid.

In the process they enable the property market to remain stable. If property markets were to fall rapidly. Then they would need to increase capital reserves further. Thereby creating a downward spiral.

The BOE is intentionally pumping liquidity into the market to keep asset prices high. While the wholesale money markets under go a fundamental readjustment, i.e. contraction.

Thrugelmir

Conrad wrote: »

The interest only crack down was well underway 3 years ago. The only noticable recent change event has been Santander limiting I/O to 50%.

Barclays £1m in pension funds.

Lloyds no cash ISA's. Minimum ISA £50k of which only 80% will taken into account. This applies to both existing and new customers.

macaque_2

moneyinmypocket wrote: »

House prices are the engine of the economy

Like the furniture in a burning house.

The-Joker

The-Joker wrote: »

Just a kind request to the Mods on here. I am sure by now Hamish has requested this thread be removed because it shows how wrong he is.

I am no more abusive than Hamish has been in threads that are allowed to stay.

There is no reason to remove this thread, please ignor his requests this time.

I must congratulate the mods for not deleting this thread which proves Hamish wrong.

It has been obvious for a while that any time Hamish loses and is proved wrong the thread gets deleted.

Thank you for the fairness this time mods :beer:

Hamish has been sticking to his famous prediction "gold and silver were going to crash, 100% guaranteed" since he joined in Jan 2009. Silver was £5oz then it had doubled from being around £2.50 for a long time, and instead of crashing like he predicted it doubled again to £10oz.

He still insisted it would crash back down but what happened Hamish? IT DOUBLED AGAIN! NOW ITS £20oz and picking up speed :T

Dom Frizby will continue to be right

"In gold terms, UK housing has fallen by just over 78% from its high of 725 ounces in 2005 to 156 ounces in January. It is below its lows of the early 1990s, but has not yet reached its lows of the early 1980s or 1930s (50-100 ounces for the average UK house) - where, by the way, I am convinced it will be in a few years’ time."


http://www.moneyweek.com/investments/property/uk/uk-house-prices-valued-in-gold-20700

The house price/gold ratio is going to 50:1 and the HP/silver ratio is going to back to 500:1.

You still havent given us your prediction Hamish, what do you think will be the bottom of the gold and silver to house price ratio? Or do you once again think we are at the bottom now?

The-Joker

Hamish predictions

Gold @ $500 an Oz...in a Bubble
Gold @ $700 an Oz...in a Bubble
Gold @ $900 an Oz...in a Bubble
Gold @ $1100 an Oz.in a Bubble
Gold @ $1300 an Oz..in a Bubble
Gold @ $1700 an Oz..in a Bubble
GOLD HITS $2K is in a bubble
Gold @ $1500 Bubble.
Gold @ $ 1774 an Oz(24/02/2012) in a Bubble
All this talk of Gold and silver being in a bubble means only one thing...i can buy more as Idiots think its in a Bubble!Talk about the "Haves" and the "Have Nots" !

Graham_Devon

IveSeenTheLight wrote: »

http://lmgtfy.com/?q=35+year+mortgages+uk

Who offers them then?

The first result on your search gives Ray Boulger backing up 35 year interest only mortgages in 2006. He's a silly boy.

Lenders are increasingly seeing demand from young people looking to extend the term of their mortgage from the traditional 25 years to as long as 30 or 35 years in a bid to reduce monthly payments. They are also increasingly opting for interest-only mortgages.

The longer the mortgage, the greater the amount of interest that will be paid over its lifetime. Even so, for some people at the beginning of their working lives this could make sense.

"If you are in your early twenties there is nothing wrong with a 30 or 35-year mortgage or even going interest only, because the chances are that you will change product within a few years anyway," says Ray Boulger, the senior technical manager at John Charcol, the mortgage broker.

Ha, you'd be screwed by now following that fools advice....who would you remortgage with?!

Another of his insights...He sounds liek MrRee.

"First-time buyers who are graduates expecting their salary to go up rapidly would probably be better off stretching themselves to get the most expensive property they can by going interest-only, because with the high costs of moving house they are better off buying somewhere they will want to stay for a long time," adds Boulger.

Thanks for the link ISTL