House price fall hits hopes of remortgaging for millions

chucknorris

chewmylegoff wrote: »

can't really be that surprising for you unless you haven't been looking at any of the indices for the last couple of years.

That's it exactly I hadn't been looking, I don't intend to sell until the market is better (probably in 8-12 years time), I was probably guilty of assuming the worst but hoping for better. In fact I was obviously continuing with my pessimistic attitude (posting in this thread) looking at your graph, but this is all of course irrelevant until I actually sell up.

EDIT: I don't get too interested or overly excited at what is happening right now, the important time is when I sell, other times are just notional losses and gains, rather than real ones.

Zero_Sum

HAMISH_MCTAVISH wrote: »

A false hope for most, as most of them cannot get mortgages. And that won't change materially even if prices fall.

absolute nonesense. If you can't save a 10% you shouldn't be buying a house in the 1st place. I'm currently moving house & was offered 5x salary mortgage by both Halifax & Nationwide

HAMISH_MCTAVISH

Zero_Sum wrote: »

absolute nonesense. If you can't save a 10% you shouldn't be buying a house in the 1st place.

If they could all get mortgages with a 10% deposit, that would be fine.

But as most applications are refused at 10% because banks are rationing mortgages, then it's of no relevance.

Just 1.88% of mortgages issued these days are for a 10% deposit or less. That statistic tells you all you need to know.

I'm currently moving house & was offered 5x salary mortgage by both Halifax & Nationwide

I've highlighted that relevant word.

Zero_Sum

HAMISH_MCTAVISH wrote: »

If they could all get mortgages with a 10% deposit, that would be fine.

But as most applications are refused at 10% because banks are rationing mortgages, then it's of no relevance.

Just 1.88% of mortgages issued these days are for a 10% deposit or less. That statistic tells you all you need to know.



I've highlighted that relevant word.

This was without selling mine, ie I was effectively a 1st time buyer, but not able to get the various deals open to FTB's

shortchanged_2

RenovationMan wrote: »

I've just looked at the land registry figures for my area between now and since I made an offer on our home in 2010. Houses have fallen by 6.4% overall. The house was valued at £475k by the estate agent and we dropped it to £450k when we bought it, so going off the original estate agent valuation minus 6.4%, it looks like my house has a valuation of £444,600.

That's well within my LTV 60% range for the best mortgage deals, so although the calculation was a bit 'rough and ready', I'm happy to be on track with my financial aims.

Why are you quoting an EA' s valuation when you know they are worthless in the valuation of your house particularly when it is for mortgage purposes?

EA's valuations and surveyors valuations are very unlikely to be the same and we all know which one is going to give a lower valuation and that is the one which will be important for you renoman for your equity challenge.

HAMISH_MCTAVISH

Zero_Sum wrote: »

I was effectively a 1st time buyer, but not able to get the various deals open to FTB's

You must be thanking your lucky stars.

As FTB-s don't get "deals" these days, they mostly just get refused a mortgage unless they somehow manage to save up an absurd 25% deposit while paying record high rents at the same time.

Zero_Sum

HAMISH_MCTAVISH wrote: »

You must be thanking your lucky stars.

As FTB-s don't get "deals" these days, they mostly just get refused a mortgage unless they somehow manage to save up an absurd 25% deposit while paying record high rents at the same time.

OK, they were weren't exactly 'deals' more small bonuses. ie 50% stamp duty paid, or £500 cashback etc.

How about staying with parents for a few years while you save?

RenovationMan

chucknorris wrote: »

That's it exactly I hadn't been looking, I don't intend to sell until the market is better (probably in 8-12 years time), I was probably guilty of assuming the worst but hoping for better. In fact I was obviously continuing with my pessimistic attitude (posting in this thread) looking at your graph, but this is all of course irrelevant until I actually sell up.

EDIT: I don't get too interested or overly excited at what is happening right now, the important time is when I sell, other times are just notional losses and gains, rather than real ones.

I've exactly the same attitude, I haven't been looking at my area because I've no interest in house prices because I'm neither buying or selling, but with all the threads that get created on here everything an index inches down I had assumed that house prices were well down. I was really surprised to find that they had actually dropped so little since I bought.

Graham_Devon wrote: »

444k asking value, yes.

More like £421k real value. However, as you've done so much, it's hard to say. Most likely around the same price you bought at?

Glad to see that you now agree with my earlier point that banks are undervaluing properties for mortgage purposes. It just goes to show that logic can get through to you sometimes.

If my home is valued at £421k, with my mortgage now standing at £243k I will have LTV at 57% which is nicely under the 60% LTV threshold. Excellent.

NEO72

HAMISH_MCTAVISH wrote: »

If they could all get mortgages with a 10% deposit, that would be fine.

But as most applications are refused at 10% because banks are rationing mortgages, then it's of no relevance.

Just 1.88% of mortgages issued these days are for a 10% deposit or less. That statistic tells you all you need to know.

No it doesn't tell you that at all.

You've (mis)interpreted the 1.88% figure as meaning most 90% LTV mortgage applications are being refused. It could equally mean that of all mortgage applications, only a minority are for high LTV products - which makes more sense given the costs at higher LTVs.

BTW, why do you think that higher LTV mortgages are more expensive? Its at least partly because they are pricing in the risk of falling prices i.e. we'll lend you the money but since there is a higher probability that we won't be able to recoup the money if you default, we'll charge you extra for the risk. But I'm sure you realise this already.

However when lenders do think that prices have stopped falling (prices falling - crazy notion I know) then there should be less of a differential between low and high LTV mortgages.

HAMISH_MCTAVISH

NEO72 wrote: »

No it doesn't tell you that at all.

You've (mis)interpreted the 1.88% figure as meaning most 90% LTV mortgage applications are being refused. It could equally mean that of all mortgage applications, only a minority are for high LTV products - which makes more sense given the costs at higher LTVs.

LOL.

You really don't get it.

Banks ration mortgages through several ways. Raising the price is one of them, rejecting applications is another.

Both are designed to reduce the number of mortgages issued.

The high prices on 90% mortgages eliminates most potential FTB-s, and then banks reject a majority of applicants on top of that.

That only 1.88% of mortgages issued are at a historically prudent 10% deposit is a national disgrace. No two ways about it.

BTW, why do you think that higher LTV mortgages are more expensive? Its at least partly because they are pricing in the risk of falling prices i.e. we'll lend you the money but since there is a higher probability that we won't be able to recoup the money if you default, we'll charge you extra for the risk. But I'm sure you realise this already.

However when lenders do think that prices have stopped falling (prices falling - crazy notion I know) then there should be less of a differential between low and high LTV mortgages.

How is it possible you've posted so much on hpc, and learned so little?

Banks price high LTV mortgages the way they do not because they think prices will fall, but because they are forced to because of new capital adequacy regulations requiring them to withhold 6 times as much capital for a 95% loan as for a 60% loan.

That won't change no matter what happens to prices.

And the problem is compounded by the overall shortage of money to lend, with the credit markets remaining dysfunctional.

Unless the government changes the rules, and intervenes to significantly increase lending, then FTB-s will remain just as screwed even if prices fall.