House Sales rise in January, + 4k YoY

Graham_Devon

To back up what I was saying earlier, heres the director of the BBA's thoughts:

“While general economic growth stalls, low consumer and business confidence generates a natural tendency to restrain borrowing appetite, repay borrowing where possible and to build up cash and savings as a buffer.”

It's OK suggesting lending isn't s high, but then if people don't want it, and certainly not high cost borrowing, how are you going to force it?

DervProf

I remember needing to have a 10%+ deposit when I bought my place.

What we see today is the result of several years of "fast and loose" lending by the banks. The property market "adapted" to the supply of high LTV money.

If 5% deposits become the "norm", the market (and prices) will soon adapt again, then we'll get call from Aberdeen for 98% mortgages.

chewmylegoff

Graham_Devon wrote: »

No no no no no.

The average deposit required is very different to that of the average deposit offered.

Confusing the two is silly. It doesn't add weight to what you are saying about rationing.

I genuinely don't understand what you are saying here.

What do you mean by offered? Do you mean the average of deals advertised by banks as being available to new buyers? I've no idea what that number is but would have though it would be impossible to calculate using publicly available information as you don't know how much lending is on offer in respect of each deal advertised so you cannot calculate a weighted average (I.e. if bank A says it will lend to FTB who have a deposit of 5% that doesn't mean much if it has only earmarked £1m to lend at that level).

Surely the only figure possible to calculate is the actual FTB LTV which is published by e.g. The CML on the basis of real data.

I.e. you can only know what was required by the lenders for actual transactions and anyone who tries to quote an "offered" figure is making it up. I assume hamish is quoting CML figures although a quick google suggests 80% average LTV is for all mortgages for house purchase not just lending to FTB, but I didn't look hard and it is possible that both figures are the same.

moneyinmypocket

Prices are rising say cheeseeeeeee

wotsthat

Graham_Devon wrote: »

It's OK suggesting lending isn't s high, but then if people don't want it, and certainly not high cost borrowing, how are you going to force it?

Borrowers aren't having money forced down their throats. Far from it; there has been a banking crisis and they're now rebuilding balance sheets. There's always reduced demand for borrowing in a recession but, on balance, it seems lack of appetite on the lenders part rather than vice versa is the most significant part of the equation

Graham_Devon

chewmylegoff wrote: »

I genuinely don't understand what you are saying here.

What do you mean by offered?.

What the punter offers up as a deposit.

I.e. the buyer decides to pay 10 or 20% as a deposit instead of 5%.

HAMISH_MCTAVISH

chewmylegoff wrote: »

I assume hamish is quoting CML figures although a quick google suggests 80% average LTV is for all mortgages for house purchase not just lending to FTB, but I didn't look hard and it is possible that both figures are the same.

CML's most recent data is as follows:

FTB
Dec 12
Number of loans - 19,100
Value of loans £m - 2,400
Average loan to value - 80%
Average income multiple - 3.28
Proportion of income spent on interest payments - 13.2%
Proportion of income spent on capital and interest payments - 19.9%


Home Movers
Dec 12
Number of loans - 25,900
Value of loans £m - 4,300
Average loan to value - 70%
Average income multiple - 2.90
Proportion of income spent on interest payments - 9.9%
Proportion of income spent on capital and interest payments - 19.0%

HAMISH_MCTAVISH

Graham_Devon wrote: »

What the punter offers up as a deposit.

I.e. the buyer decides to pay 10 or 20% as a deposit instead of 5%.

:rotfl::rotfl::rotfl:

Awwww, bless.

wotsthat

Graham_Devon wrote: »

What the punter offers up as a deposit.

I.e. the buyer decides to pay 10 or 20% as a deposit instead of 5%.

Are you suggesting that FTB's have access to plenty of 95% loans but might be so credit averse they're saving up another 15% to be on the safe side?

chewmylegoff

wotsthat wrote: »

Are you suggesting that FTB's have access to plenty of 95% loans but might be so credit averse they're saving up another 15% to be on the safe side?

I'm sure some people do choose to do so but I expect they are in a pretty small majority. I am currently looking to buy somewhere with 60% LTV so the mortgage is cheap, I could afford to buy somewhere significantly more expensive but I don't want it - but again most people probably don't do that.