A generation are being priced in order to keep the value up of their parents assets.

Graham_Devon

ukcarper wrote: »

Surely the fact that you need credit and it is not available proves the point that the lack of mortages has a large impact.

Of course mortgage availability has a large impact....never said it didn;t.

But that doesn't mean the only problem with houses is the lack of mortgages. That would suggest you need to increase the amount lent continuously and indefinitely.

You simply hit a point where people can't afford the amounts lent or the lenders of the credit end up swallowing themselves up should one slight thing change.....which is what we did. Sure, there may not be many reposessions to "prove" this....but that's simply because so many other policies have been put in place to cater for the problem.

We did have Northern Rock though.

PasturesNew

I don't understand why they can't build more social housing, by borrowing the money like a standard mortgage (and they'd get it at better rates), when they can find the money for a developer to build houses and make a fat profit when they sell it to a BTL LL who borrows mortgage money at a higher rate of interest, who then pockets a high rent and has a surplus of cash from the transaction.

If money were borrowed, cheaper, to build social housing, without a developer profit, then rented out to cover costs, it'd be cheaper all round than doing it how it is now (BTL/private mortgages/everybody pocketing a wedge).

ukcarper

Graham_Devon wrote: »

Of course mortgage availability has a large impact....never said it didn;t.

But that doesn't mean the only problem with houses is the lack of mortgages. That would suggest you need to increase the amount lent continuously and indefinitely.

You simply hit a point where people can't afford the amounts lent or the lenders of the credit end up swallowing themselves up should one slight thing change.....which is what we did. Sure, there may not be many reposessions to "prove" this....but that's simply because so many other policies have been put in place to cater for the problem.

We did have Northern Rock though.

There are a given number of people who earn enough to pay the mortgage on a house no matter what the price obviously as that price increases less people can afford to pay it. At the moment the number of people who could afford the payments are higher than the number of mortgages simple really.

Graham_Devon

ukcarper wrote: »

There are a given number of people who earn enough to pay the mortgage on a house no matter what the price obviously as that price increases less people can afford to pay it. At the moment the number of people who could afford the payments are higher than the number of mortgages simple really.

But there isn';t the demand, nor supply of the credit. So you have to move on from that and look at other areas. Banks can't just magic up money to lend, there are regularity requirements for them to achieve.

One bank has already failed due to the policies you seem to imply. How many more need to fail for continuous increasing levels of debt to be seen as a problem for yourself?

ukcarper

PasturesNew wrote: »

I don't understand why they can't build more social housing, by borrowing the money like a standard mortgage (and they'd get it at better rates), when they can find the money for a developer to build houses and make a fat profit when they sell it to a BTL LL who borrows mortgage money at a higher rate of interest, who then pockets a high rent and has a surplus of cash from the transaction.

If money were borrowed, cheaper, to build social housing, without a developer profit, then rented out to cover costs, it'd be cheaper all round than doing it how it is now (BTL/private mortgages/everybody pocketing a wedge).

Good idea especially has they are selling off land to developers but it would increase national debt and they can’t do that.

ukcarper

Graham_Devon wrote: »

But there isn';t the demand, nor supply of the credit. So you have to move on from that and look at other areas. Banks can't just magic up money to lend, there are regularity requirements for them to achieve.

One bank has already failed due to the policies you seem to imply. How many more need to fail for continuous increasing levels of debt to be seen as a problem for yourself?

What are you talking about you said you can't understand why lack of mortgages are a problem I explained why.

What policies do you think I'm implying and what bank has failed because of them.

Rinoa

The usual suspects on here blame bank lending in 2007.

But that year we built 185,000 homes, last year we built 109.000.

What do the bears want, more house building or strict lending criteria. They can't have both.

Graham_Devon

ukcarper wrote: »

What are you talking about you said you can't understand why lack of mortgages are a problem I explained why.

What policies do you think I'm implying and what bank has failed because of them.

No, I said I don't get the insistence on stating it's always the mortgages that are at fault, not the prices.

All the article states is that builders won't build because they can't sell. The can't sell because people can't get the mortgages (mostly because people can't afford said mortgages).

The article also states (which I stated earlier) that builders won't lower prices, as it will compremise their investment plans.

It's not that they can't lower prices. It's that they won't. They are happy to do what they are doing, as itss working right now, especially with government support. Without that government support, they face going bust, or lowering their profits....and you can guess which any sane business would choose. As it stands, they don't have to make that choice, so why would they (and their share prices are going up as a result).

Affordiability is made up of two things when it comes to houses. We pretty much all need credit for them.

Therefore, it's the affordability of the house itself vs the ability to be able to hit the affordability of the mortgage.

Currently, potential buyers are stuck with both. The inability to afford the house itself (as a multiplier of their wage) and an inability to afford the debt.

Pricing the debt at a cheaper level can only be done by (1) increasing the amount lent (100%+), (2) changing the type of loan (interest only, self cert, fast track) or (3) changing the length of the debt (35 year mortgages etc).

Points 1 and 2 were tried and tested, and we are where we are now precisely because they were carried out. You appear to be suggesting that the solution to this problem is to carry them out again.

All I'm saying is I don't get that. There are more sides to the box to look out of.

CLAPTON

interest article in the Sunday Times about a couple wanting to do a self build in Rutland

it claims the Council imposes fees/charges of 44,000 to give permission including 23,922 as a contribution to 'affordable housing'

ukcarper

Graham_Devon wrote: »

No, I said I don't get the insistence on stating it's always the mortgages that are at fault, not the prices.

All the article states is that builders won't build because they can't sell. The can't sell because people can't get the mortgages (mostly because people can't afford said mortgages).

The article also states (which I stated earlier) that builders won't lower prices, as it will compremise their investment plans.

It's not that they can't lower prices. It's that they won't. They are happy to do what they are doing.

Affordiability is made up of two things when it comes to houses. We pretty much all need credit for them.

Therefore, it's the affordability of the house itself vs the ability to be able to hit the affordability of the mortgage.

Currently, potential buyers are stuck with both. The inability to afford the house itself (as a multiplier of their wage) and an inability to afford the debt.

Pricing the debt at a cheaper level can only be done by (1) increasing the amount lent (100%+), (2) changing the type of loan (interest only, self cert, fast track) or (3) changing the length of the debt (35 year mortgages etc).

Points 1 and 2 were tried and tested, and we are where we are now precisely because they were carried out. You appear to be suggesting that the solution to this problem is to carry them out again.

All I'm saying is I don't get that. There are more sides to the box to look out of.

Any business is there to make money if the cost of the land and building is lower that the price they can obtain why would they build and sell at a lose. There are plenty of people who could afford to buy if they could get a mortgage.