Tumbling mortgage demand

FTBFun

shortchanged wrote: »

Well what are most of the tracker deals at these days, around 3% plus base rate. I am ignoring these very low rates that some people are currently on because they will NEVER be that low again. Plus SVR's are slowing increasing.

So even on your example of the new norm you are looking at 5.5% rate mortgages.

Err....the bank I have my mortgage with has a 5 year fix at 3.99% with 80% LTV. I'll probably go for that when I hope to move later in the year. Why have you only focused on trackers?

macaque_2

HAMISH_MCTAVISH wrote: »

So not tumbling demand at all, but rather increased mortgage rationing.

Hamish, what you describe as rationing is simply supply and demand.

There is a plentiful supply of higher risk lending (credit cards, unsecured loans etc) at interest rates of 10-30%. There is also a plentiful supply of low interest debt for secured lending. The problem is that lenders seem to believe that less than 60% of current property prices qualify as secure for lending purposes.

What you are looking for is cheap debt for high risk borrowing. This is not being rationed, it is just not available at all. For that kind of borrowing, people need to talk to the bank of mum and dad.

On the one hand you support free market economics, but when the outcome fails to align with your dreams, you want state subsidies/bail out protection. This is not consistent.

HAMISH_MCTAVISH

shortchanged wrote: »

Well what are most of the tracker deals at these days, around 3% plus base rate. I am ignoring these very low rates that some people are currently on because they will NEVER be that low again. Plus SVR's are slowing increasing.

So even on your example of the new norm you are looking at 5.5% rate mortgages.

OK.... try again and see if you can actually answer the question this time.

I've put it in bold below, in case you're struggling.

Perhaps you'd care to explain the economic mechanism through which you think long term mortgage rates from here will average above 4.5%.

Particularly when even the BOE admit the neutrality point for base rates moving through the next cycle will likely be 2.5% or so versus the 6% it was in the last cycle.

I'd still be fascinated to see if you can spark two brain cells together and connect the dots.

shortchanged_2

HAMISH_MCTAVISH wrote: »

OK.... But I'd be prepared to bet you don't like what we see.





Absolute nonsense.

I'll quote from a recent BBC article on the topic, based on a BOE research paper.

Would this be anything to do with existing homeowners who suddenly saw a massive increase in their equity by doing absolutely nothing.

Lets face facts Hamish. There were more total homeowners in the UK before the house price boom than the total of people who entered the market during this period.

HAMISH_MCTAVISH

Crikey, poor shorty is getting absolutely trounced in this thread.

I'm almost starting to feel sorry for him.

shortchanged_2

FTBFun wrote: »

Err....the bank I have my mortgage with has a 5 year fix at 3.99% with 80% LTV. I'll probably go for that when I hope to move later in the year. Why have you only focused on trackers?

I'm focusing on trackers because there is a large number of people who are on some form of tracker or are looking to go onto trackers because they view these low rates as the norm.

Yes that is a very good deal you mention but lets face it even the fixed rates are going to start heading upwards in the near future.

shortchanged_2

HAMISH_MCTAVISH wrote: »

Crikey, poor shorty is getting absolutely trounced in this thread.

I'm almost starting to feel sorry for him.

Thanks Hamish. I still don't buy into your arguments though.

FTBFun

shortchanged wrote: »

I'm focusing on trackers because there is a large number of people who are on some form of tracker or are looking to go onto trackers because they view these low rates as the norm.

Interesting. I'm sure you're happy to provide some evidence of that?

Yes that is a very good deal you mention but lets face it even the fixed rates are going to start heading upwards in the near future.

I see you completely ignored my earlier post then.

HAMISH_MCTAVISH

macaque wrote: »

What you are looking for is cheap debt for high risk borrowing. .

Wrong again macaque....

Lets objectively look at the risk.

In 2010-11 just 2% of all households had members who had at some time in the past given up a home due to mortgage difficulties.
.
Around 40% of those who had given up a home had sold the home in order to avoid getting into possible arrears with the mortgage.

A further 21% had got into arrears and sold the home in order to avoid court action by their lender.

In only 39% of cases, or just 0.78% of total houses, had the mortgage lender taken over the property.

So in the last 3 property cycles combined, just 0.78% of households have been repossessed.

You have a strange definition of "high risk"....

HAMISH_MCTAVISH

FTBFun wrote: »

I see you completely ignored my earlier post then.

He's getting rather good at that.

I've lost count of the number of questions he's ignored in this thread alone.