Government repressing house prices.

Thrugelmir

Even with FLS. Santander lent considerably less in 2012 than 2011.

Seems as if even lenders believe their capital is more profitable used elsewhere.

HAMISH_MCTAVISH

Graham_Devon wrote: »

. You appear to believe you can force people to borrow.

You can't.

Well they're certainly not able to borrow when deposit requirements are outrageously high and banks continue to ration mortgages.

Of course, if the dysfunctional and broken mortgage market were fixed, an awful lot more people would be borrowing....

Neither can you force banks to lend to high risks.

A young couple with good credit and a historically normal, prudent, and sensible 5% to 10% deposit are not high risk.

Yet just 1.8% of mortgages issued were to people like them last year because banks are rationing funds.

Are you really trying to make the absurd proposition that all historically normal and prudent lending is now "high risk"?

Graham_Devon

HAMISH_MCTAVISH wrote: »

Of course, if the dysfunctional and broken mortgage market were fixed, an awful lot more people would be borrowing....

Touche.

Which is why it's "broken" in the first place.

I'm having to write less and less to nullify your points. I'll be hitting the 10 letter word count issue in a minute.

the_flying_pig

HAMISH_MCTAVISH wrote: »

As an alternative viewpoint to the "government propping up house prices" claim that we see so often around here....

I disagree.....

The state has done naff-all meaningful to prop up house prices.

In fact, just the opposite, they've missed opportunity after opportunity to restore a functioning housing market by continuing to desire a policy of maintaining nominal terms rises of less than inflation. Which can only be achieved by continuing to exclude millions of potential buyers from the market.

Now sure, you could safely say that if the state had just sat back and let the wider economy burn to a greater extent than it did, then house price falls would have been worse.

But that was never going to happen, other than in the minds of a few desperate bears on various internet boards.

And regardless, that's not the same thing at all as insisting that there is some great effort the state is engaged in to deliberately prop them up, when at best, you can only claim the results have been minor and incidental to saving the wider economy.

You could make at least as convincing a case that the state has implemented policies which have worsened lending availability and artificially repressed house prices, such as changing mortgage rules, failing to fix the dysfunctional credit markets, changing capital requirements for high LTV lending, etc, etc, etc.

Mortgage lending remains, in the words of the CML themselves, "completely dysfunctional".

We have millions of renters paying more in rent than they would for a mortgage, demonstrating their ability to service debt, yet forced into renting thanks to mortgage rationing.

If the state really wanted to prop up prices, they'd fix that problem (as the Americans have now done with unlimited QE into RMBS) and allow the natural supply/demand imbalance to ration housing through price and genuine affordability, rather than through heavily and artificially restricted mortgage lending.

There has been an extraordinary confluence of events conspiring to keep house prices artificially low over the last few years.

Yet in spite of endemic mortgage rationing, high unemployment, record high bank margins, crippling deposit requirements, record high rents preventing saving, doom and gloom all over the media, and an incompetent government that has missed opportunity after opportunity to fix a dysfunctional and broken market, prices remain just 10% below peak and are now are rising again.

Given the next few years are going to see the biggest wave of FTB age people in history, bigger even than the boomers, come crashing into a housing market with one of the worst shortages in history, where building has fallen to the lowest levels in a century, and all in the run-up to a general election..... time is very much running out for how much longer they can keep prices artificially restrained.

When some semblance of normality returns to the currently dysfunctional lending markets, as it eventually and inevitably will, the speed and scale of prices rises will be truly eye watering.

And 3, 2, 1......

Argue.

great pozzzzzzz

Wookster

Lender forbearance

Quantitative easing

Funding for leanding

And the chap thinks the government is trying to keep house prices down?

Clearly he's delusional.

Graham_Devon

Wookster wrote: »

Lender forbearance

Quantitative easing

Funding for leanding

And the chap thinks the government is trying to keep house prices down?

Clearly he's delusional.

I remember, as I'm sure many do, how all of these things were "the end game for the bears" when announced.

Now, it's not unlimited, so not enough. How things change.

Now he want's all that (but more) and little, if any, regulation.

HAMISH_MCTAVISH

Wookster wrote: »

Lender forbearance

Quantitative easing

Funding for leanding

And the chap thinks the government is trying to keep house prices down?

Clearly he's delusional.

You could make at least as convincing a case that the state has implemented policies which have worsened lending availability and artificially repressed house prices, such as changing mortgage rules, failing to fix the dysfunctional credit markets, changing capital requirements for high LTV lending, etc, etc, etc.

Mortgage lending remains, in the words of the CML themselves, "completely dysfunctional".

We have millions of renters paying more in rent than they would for a mortgage, demonstrating their ability to service debt, yet forced into renting thanks to mortgage rationing.

If the state really wanted to prop up prices, they'd fix that problem (as the Americans have now done with unlimited QE into RMBS) and allow the natural supply/demand imbalance to ration housing through price and genuine affordability, rather than through heavily and artificially restricted mortgage lending.

Thrugelmir

We have millions of renters paying more in rent than they would for a mortgage, demonstrating their ability to service debt, yet forced into renting thanks to mortgage rationing.

Paying rent in no way demonstrates an ability to service debt.

Many are renting due to poor personal financial management and high levels of unsecured debt.

Graham_Devon

HAMISH_MCTAVISH wrote: »

We have millions of renters paying more in rent than they would for a mortgage, demonstrating their ability to service debt, yet forced into renting thanks to mortgage rationing. .

Or their inabilility to save?

It's not just mortgage payments Hamish. Rent is a one off payment each month. (plus deposit and fees).

Buying is not only the mortgage. it's stamp duty, legal fees etc, whcih can sometimes add up to a years rent.

Graham_Devon

Oh and one other thing.

Howcome what wasn't good enough for you, is good enough for everyone else?

Remember, you have told us you were in rented accomodation. You didn't want a high risk mortgage, therefore, got your parents to stump up the deposit to get you a better deal and out of rented.

You were lucky to have parents that was firstly wealthy enough and secondly kind enought to do that for you. Not everyone does.

Why expect everyone else to be shovelled into the market at higher and higher LTVs, paid for via higher and higher amounts of taxpayer risk? Were just in another situation whereby it isn't good enough for you, but you want everyone else shovelled in under you, regardless of whether thay can afford it, so that your wealth increases.

Please don't pretend the government is actually trying to repress house prices, all because you aren't doing aswell as you first imagined A) when you bought and when all these policies came out that were going to be the end game.

You really are stuck in a rut about all of this, having held on to your old house in the hope that it increased, and buying at peak. All this faux concern about FTB's not being able to get access to the market isn't concern about them, it's concern about you and your two houses, one which you kept hold of purely to gain further (or hope to). If this wasn't the case, you'd have simply sold, like most normal people.