How can we get the housing market moving?

Eellogofusciouhipoppokunu

shortchanged wrote: »

Look Eellogofusciouhipoppokunu, basically the banks have realised they were stupid and gave away mortgages far too easily in the previous decade, hence the term loose lending.

Your argument here isn't about banks putting a lower ceiling on the amount they are prepared to lend, it's about the banks tightening up criteria on who they will lend to.

Are you going to withdraw your comment that banks aren't lending 'because house prices are too high', or are you going to provide solid evidence of this?

Time to stop the rhetoric and stop the bluster. Put up or shut up?

shortchanged_2

Eellogofusciouhipoppokunu wrote: »

Are you going to withdraw your comment that banks aren't lending 'because house prices are too high', or are you going to provide solid evidence of this?

No I am not going to withdraw this argument.

What is your explanation for low levels of sales?

Yes you'll probably say high deposits etc. But why are banks insisting on high deposits now. I'll give you a little clue. It gives them more protection from further falls in house prices.

Eellogofusciouhipoppokunu

shortchanged wrote: »

No I am not going to withdraw this argument.

What is your explanation for low levels of sales?

Yes you'll probably say high deposits etc. But why are banks insisting on high deposits now. I'll give you a little clue. It gives them more protection from further falls in house prices.

And yet you keep trying to dodge your own argument and start a new one, building a strawman along the way. I'll give you a clue. You need to justify your statement that banks are not lending because house prices are too high.

That's the 'argument', nothing else..... :cool:

shortchanged_2

Eellogofusciouhipoppokunu wrote: »

And yet you keep trying to dodge your own argument and start a new one, building a strawman along the way. I'll give you a clue. You need to justify your statement that banks are not lending because house prices are too high.

That's the 'argument', nothing else..... :cool:

Like I've said all along renoman, there is a gap between what people are asking for houses and the amount that banks are currently willing to lend.

So there are two ways around this, one is for banks to lend more like in the past (not a good thing) or two for house prices to fall back in line to a more sustainable long term level.

Gracchus_Babeuf

shortchanged wrote: »

http://www.bbc.co.uk/news/business-19989028

Even with a greater choice of mortgage products there is still little appetite for house buying at present.

So what does that tell everyone?

It's not just mortgages. In the mega expensive south-east most properties fall into the 3% and higher SDLT bracket, which means at least £7,500 to cough up just to pay tax. For most people this pushes up the buying costs way too high. I think SDLT should be tiered, with the 3% charge imposed only on the amount above £250k, not the whole price of the property. At present the SDLT is a tax heavily weighted against London & SE England, which is unfair.

Linton

shortchanged wrote: »

No I am not going to withdraw this argument.

What is your explanation for low levels of sales?

Yes you'll probably say high deposits etc. But why are banks insisting on high deposits now. I'll give you a little clue. It gives them more protection from further falls in house prices.

My take...

If the banks wanted to get more borrowers competition would ensure that rates and deposit requirements dropped. The high deposit requirement is the easiest way the banks have of rationing mortgages and it has the incidental benefit of reducing their risk. Its not just house buyers that banks dont want to lend to, companies are finding access to credit difficult.

Perhaps it has something to do with their need to bolster their reserves. Lending out money both reduces the money they hold and requires that they hold even more in their reserves.

paulmapp8306

Banks are currently lending 3.5 times income in general. You can still get 5x but the rates are higher and the criterea harder.

given the average JOINT income for a COUPLE is £40k, that means for a FTB your ceiling is around £140k. for a single person it will be lower.

I earn £37k, and was offered up to £138k when I looked (admitedly Easter - and things move so quickly). That £140ishK wont but a first home in a great part of the country.

There is still a desire to buy. Most couples I speak to, and younger singles who are working want to own their own homes - but its not currently attainable for a lot, due to deposits required, maximum lending available, and general criterea for lending.

Personally, I bought in August - a FTB and managed a 4 bed house. OK its E Council and in a cheap part of the country (East Midlands) but it came in under what I could borrow and I had a 20% deposit -but given the rental prices in the area it was a no-brainer to buy, despite having to find new employment towards the end of next year.

If I end up having to sell, I can afford to take a 20% hit if needed without being in neg eq, and could take a drop of around £5k and still be up v if Id rented over those 18 months/2 years.

wotsthat

shortchanged wrote: »

So there are two ways around this, one is for banks to lend more like in the past (not a good thing) or two for house prices to fall back in line to a more sustainable long term level.

or

..banks could lend more but not like in the past. It doesn't follow that increased lending means all mortgages will be 120% LTV

..people could save for longer

..people could forget about home ownership and rent

..house prices could stay the same and wages rise

House prices could, of course, fall back to a more sustainable (but never specified) level but it's just blinkered to think banks aren't lending because people think house prices are 'simply' too high. It's quite a bold statement to make especially when you've made it without having any supporting evidence.

ILW

abaxas wrote: »

Easy.

Marketed at a price no-one is willing to pay within 3 months of initial price or within the same 3 months of price changes.

3 months is the definition of a 'normal market'.

Why 3 months?

Would you also define something that sells within a week as underpriced?

shortchanged_2

wotsthat wrote: »

or

..banks could lend more but not like in the past. It doesn't follow that increased lending means all mortgages will be 120% LTV

..people could save for longer

..people could forget about home ownership and rent

..house prices could stay the same and wages rise

House prices could, of course, fall back to a more sustainable (but never specified) level but it's just blinkered to think banks aren't lending because people think house prices are 'simply' too high. It's quite a bold statement to make especially when you've made it without having any supporting evidence to support it.

My statements are no more bold than people with other view points.

Most people on here have an opinion on what they feel are the reasons for house prices or whatever, hence the reason why not everyone agrees with each other.

Is it bold for someone to say that inflation is going to rise, while others say it is going to fall? We all look at the evidence or trends in front of us and form an opinion, which of course is often different depending on a persons certain train of thought. Most of the time some of us are right and some of us are wrong.

With regards to my statement that banks are not willing to lend enough I am basing on the fact that the volume of house sales remains very low with an increased level of cash buys over the past few years. To me I see very little appetite of the banks to lend at the current level of house prices. Call it mortgage rationing if you like.