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Debate House Prices
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Officially in recession
Comments
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Graham_Devon wrote: »Thought so. This normal lending won't be tied to any normal market rates or influences
A BOE plus 1 tracker with a collar (not a cap, a minimum collar) of 4% to 5.5% is perfectly normal.
Normal lending. Normal market rates.
It just annoys you that such a solution exists.:D“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: »A BOE plus 1 tracker with a collar (not a cap, a minimum collar) of 4% to 5.5% is perfectly normal.
Normal lending. Normal market rates.
It just annoys you that such a solution exists.:D
It's not normal at all though, is it. That's the problem. Show me another mortgage being offered under todays market conditions operating like the one you suggest.
I have a couple more questions:
1. Would the £1tn be on a first come first serve basis? Therefore once the funds have gone, no one else can benefit? So you only get a select number benefitting from something such as QE? And only benefitting if they buy a house? I.e. would it be rationed?
2. Could people remortgage with this bank, or would you only allow people buying new homes to work with your fairy bank?
3. Do you still wish to proceed with the pretence that this shower of nonsense would work?
4. What is "normal" based on? I could claim the use of 4 star petrol is perfectly normal, if I don't define the timeframe and conditions I'm referring to.0 -
Graham_Devon wrote: »It's not normal at all though, is it. That's the problem. Show me another mortgage being offered under todays market conditions operating like the one you suggest.
Oh it's perfectly normal.
It's not on offer in today's dysfunctional lending market, because there is no competition. This obviously solves that problem.1. Would the £1tn be on a first come first serve basis? Therefore once the funds have gone, no one else can benefit? So you only get a select number benefitting from something such as QE? And only benefitting if they buy a house? I.e. would it be rationed?
Not just a house, also small business lending and some other types of lending.
And that amount of funds would get normal lending levels back into the market for the better part of a decade. By which time the recession and global financial crisis will be a distant memory and there will be no need for it anymore.2. Could people remortgage with this bank, or would you only allow people buying new homes to work with your fairy bank?
Some remortgaging would be allowed, mortgage prisoners with low LTV that can't get a loan elsewhere, etc. But in general not if you can get a mortgage elsewhere. We don't want to strip business from other banks in the areas they are actually lending.3. Do you still wish to proceed with the pretence that this shower of nonsense would work?
Until you actually provide a single valid reason why it wouldn't, sure.
It's more entertaining than putting the SLA on ignore....4. What is "normal" based on? I could claim the use of 4 star petrol is perfectly normal, if I don't define the timeframe and conditions I'm referring to.
Not the absurdly tight lending of today.
Not the absurdly loose lending of 2007.
A happy medium.“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: »Until you actually provide a single valid reason why it wouldn't, sure.
Well I was thinking we could do some other things...
We could invent another £1tn to pay the welfare bill for a while, no need for caps then. £2tn to pay for the NHS for a while. £3tn to go to war with whoever and whatever we see as a "problem" and the country not "doing it's job" regardless of the pressures the country is under.
Infact, there are quite a few problems pressing just a few buttons will solve.
Do I need to go further, or will you gloss over this too, and pretend I'm just talking a load of rot and your idea is actually worthy?
We could even start a telly box show, called "Merv'll fix it".0 -
HAMISH_MCTAVISH wrote: »
Not the absurdly tight lending of today.
Not the absurdly loose lending of 2007.
A happy medium.
Are we following FSA guidelines on lending criteria?0 -
Mctittish just wants to be able to borrow more money.
But he is beginning to realise that if he wants the banks "lend more" and do all the other things he suggests, then the only way that can happen is with a significant fall in house prices.
It is because he cannot reconcile these two opposing thoughts that he is confused and continues to contradict himself.
But let's all remember he is an addict in withdrawal and needs help not ridicule.
One slight correction....he wants other people to borrow more money.0 -
Graham_Devon wrote: »One slight correction....he wants other people to borrow more money.
The main misunderstanding is about cheap easy credit. Some think yes it was cheap easy credit that drove up the property bubble but now it is no longer with us. Hamish and others want it back to keep the bubble inflated.
The truth is however that cheap easy credit never went away. It got a little more difficult for some to get a mortgage but not compared to the historical norm for the UK. As far as cheap money goes it never went away we still have relatively cheap easy money available.
When the next round of bailouts in the Eurozone run out again, it will start getting very expensive for banks to borrow more units of fiat currency. We have a bigger emergency going on than most realise and soon we really will have an end to cheap easy credit, then we will see the bubble in property finally pop.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
HAMISH_MCTAVISH wrote: »
Not the absurdly tight lending of today.
Not the absurdly loose lending of 2007.
A happy medium.
So come on then Hamish, what is your definition of the happy medium for mortgage lending?
Because loose lending went on for a lot longer than just 2007.0 -
shortchanged wrote: »So come on then Hamish, what is your definition of the happy medium for mortgage lending?
Because loose lending went on for a lot longer than just 2007.
The happy medium would be historically prudent, normal and sensible lending.
The sort of lending I was offered in 1990, and my parents were offered in 1967.
Where a 5% deposit, a stable employment history and a decent track record of paying your bills were enough to get a mortgage without any difficulty.
And before you start on multiples, my first mortgage was around 4 times joint income, and my parents bought at slightly over 3 times joint in 1967. You can't look at the once-in-a-lifetime cheap houses of the mid 90's and think that's normal, because it isn't.
Of course 100% mortgages were available at least as far back as 1982, and interest only has been around for decades as well, but I do think it's right that those should be limited to very specialist applications.
The sort of excesses we saw in the mid 2000's like 125% mortgages and self cert should of course never return, and they have been gone for several years now anyway.“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 -
That would include endowments, and making an arrangement to sit down with your bank manager though Hamish. You up for that too?0
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