How can we get the housing market moving?

Gracchus_Babeuf

Conrad wrote: »

I'm trying to avoid laundry lists as the posts end up too long and detailed.

Armchair experts also draw all sorts of incorrect conclusions.


To give one example that affects many people, the restrictions on older borrowers such as a 58 yo newly divorced needing to buy out thier ex / start over with a nnew home.

In theory lenders can lend, but in practice I assure you the bulk of applicants will be declined.

Now here's the critical point; In the past such people were trusted and 99% of em sustained a home no problem.

But now because they cannot proove beyond a doubt they can work longer into older ages / get a tesco delivery driver job at 68 / meet a new partner / get an inheritance / down size etc etc etc, they fail the responsible lending test. REMEMBER - AN EMPLOYER WILL BE RELUCTANT TO PUT IN WRITING THE EMPLOYEE CAN WORK TO SAY AGE 75 just in case of a compensation claim later on. None the less in PRACTICE people have always worked to older ages.


So perfectly capable adults are tapped on the shoulder by a nanny state, with the unwelcome news, nanny knows best, the only option is to rent.


THRUGLEMIRE - you always reply this is a return to the past, but thats flat out wrong, this is much more severe and unfair.

Obviously no bank with any sense would lend on a term that extends beyond age 65. Even beyond 60 is risky. I suppose the exceptions would be when the applicant is guaranteed a lump sum (eg. inheritance) at some point and that would be enough to clear the mortgage. I guess an interest only mortgage would make sense in that case.

shortchanged_2

Gracchus_Babeuf wrote: »

I don't think so. I just did an online quote for my partner and myself taking on a new mortgage and the maximum amount we can borrow is astonishing - around 5x our income. This is clearly insane as I would never be willing to pay such a huge part of my income on a mortgage. I'd have to live on toast and marmite.

Online quotes and getting a real offer are two totally separate things.

Eellogofusciouhipoppokunu

Gracchus_Babeuf wrote: »

I don't think so. I just did an online quote for my partner and myself taking on a new mortgage and the maximum amount we can borrow is astonishing - around 5x our income. This is clearly insane as I would never be willing to pay such a huge part of my income on a mortgage. I'd have to live on toast and marmite.

We've been having discussions with various lenders and none of them are offering any less than was offered 3 years ago when we got our current mortgage product. Hence my original point to shortchanged that I wasn't seeing this for existing lenders but that perhaps he was seeing it for FTBers?

In the end it was all 'bunkum' because it transpited that shortchanged was making it all up. He admitted as much earlier in the thread and then tried to cover it up with some off-topic nastiness. There is nothing worse than a sore loser.

abaxas

People simply dont understand the problem.

We had a 4 year aberration in the underwriting of mortgages and people assume that is the norm. So we've had 4 years of poor underwriting and 21 (ish) of good.

My money would be on the 21 years.

gagahouse

Unsecured borrowing fell 2.5 per cent in the year to September, while personal deposits grew 5.7 per cent over the same period.

There was a slight upward blip in gross mortgage lending during September, but at £7.3bn that’s still below the monthly average over the past 12 months. Consumers are in lock-down.

http://ftalphaville.ft.com/2012/10/23/1224871/uk-consumers-fail-to-read-funding-for-lending-memo/

What about the other side of the equation, borrowers' propensity to borrow is also declining, it's not just about tighter credit, look at the rise in personal deposits.

Graham_Devon

Conrad wrote: »

I'm trying to avoid laundry lists as the posts end up too long and detailed.

Armchair experts also draw all sorts of incorrect conclusions.


To give one example that affects many people, the restrictions on older borrowers such as a 58 yo newly divorced needing to buy out thier ex / start over with a nnew home.

In theory lenders can lend, but in practice I assure you the bulk of applicants will be declined.

Now here's the critical point; In the past such people were trusted and 99% of em sustained a home no problem.

But now because they cannot proove beyond a doubt they can work longer into older ages / get a tesco delivery driver job at 68 / meet a new partner / get an inheritance / down size etc etc etc, they fail the responsible lending test. REMEMBER - AN EMPLOYER WILL BE RELUCTANT TO PUT IN WRITING THE EMPLOYEE CAN WORK TO SAY AGE 75 just in case of a compensation claim later on. None the less in PRACTICE people have always worked to older ages.


So perfectly capable adults are tapped on the shoulder by a nanny state, with the unwelcome news, nanny knows best, the only option is to rent.


THRUGLEMIRE - you always reply this is a return to the past, but thats flat out wrong, this is much more severe and unfair.

Would the bank manager of the 70's have passed this then?

I doubt it.

robmatic

gagahouse wrote: »

http://ftalphaville.ft.com/2012/10/23/1224871/uk-consumers-fail-to-read-funding-for-lending-memo/

What about the other side of the equation, borrowers' propensity to borrow is also declining, it's not just about tighter credit, look at the rise in personal deposits.

Looks like there is a lot of deleveraging going on.

Conrad

Gracchus_Babeuf wrote: »

Obviously no bank with any sense would lend on a term that extends beyond age 65. Even beyond 60 is risky.

Your'e again missing the ket fact. They did lend to older folk and well above 65 at term end and the vast majoirty managed perfectly well. You keep missing this same point. TRUST people to make good decisions - repo rates indicate the vast majority do just that.

Conrad

Graham_Devon wrote: »

Would the bank manager of the 70's have passed this then?

I doubt it.

Up until Labours new tighter FSA rules, yes, a 58 yo divorcee could easily secure a 25 yr mortgage, or an int only to say age 70.
Again the vast majoirty of adults managed thier afairs perfectly well - do you get this point that people manage thier affairs in the main perfectly sensibly and do not need a nanny state tsking in the corner?

If you disagree then you are resigning millions of people to the landlords arms. One day you will see what I mean when someone you love cannot borrow despite them being perfectly sensible. You are blinded to this just now.

Thrugelmir

Conrad wrote: »

Again the vast majoirty of adults managed thier afairs perfectly well - do you get this point that people manage thier affairs in the main perfectly sensibly and do not need a nanny state tsking in the corner?

The FSA is regulating the lenders not the borrowers. As that's where the problem lies. Banking became too deregulated. Now the clocks being wound back. So best to adjust to the new rules and move forward. As we're never going back to the mortgage market of the early 00's.