We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Guardian: 95% Mortgages "not a source of risk"
Comments
-
HAMISH_MCTAVISH wrote: »No, people taking on debt to buy a house, which amounts to less than they're already paying in rent, is good for them.
Do try to keep up at the back there Graham.
Once they have a suitable deposit and can adequately prove their ability to repay then they can. The fact they may have to wait a while will make the pleasure so much more satisfying."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
HAMISH_MCTAVISH wrote: »Oh you most certainly can.
America has done exactly that, with unlimited QE into mortgages.
So we never have to pay this funny money back as a society at some point? There is no cost to society of providing this money? Does it cause the pound to weaken and all those necessary imports such as fuel, energy, food etc. to increase in price?
Where did all the previous money in the system go? Why isn't it moving round the system to provide liquidity?
If we have to keep pouring money into a leaky bucket it must be going somewhere?
I hardly think the US is something to follow given it's experiences leading up to the GFC."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Graham_Devon wrote: »You can't magic up money either.
The funds are not there to lend loosely to everyone. Were back to you wanting 2007 all over again....yet again.
If you care so much for FTB's (which we all know you don't, but I'll humor you for a while) wouldn't you prefer BTL funding reigned in and that funding directed at FTB's instead?
If you are so keen to decrease BTL, then I think you should give some thought to why people buy them. Anecdotal evidence suggests that while there are some people who buy lots of them and make a job out of it, there are also loads of people who just get one, or maybe two at a pinch, as a sideline to their normal career. And the reason most of these people seem to give (well, the ones I've heard talking about it anyway) is that they see it as a good way to provide for their old age. Indeed, historically, we can see that the rise in BTL coincided not only with the erosion of tenants' rights in a series of changes to legislation, but also the demise of access to a decent pension at an affordable contribution rate for the vast majority of private sector workers. I don't think BTL is at all likely to decrease unless either (a) somebody puts in place a solution to the pension problem, and/or (b) the balance of tenancy rights shifts back towards the tenant and away from the landlord.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.
0 -
HAMISH_MCTAVISH wrote: »http://www.guardian.co.uk/housing-network/editors-blog/2013/mar/08/lack-of-supply-british-housing-crisis
This issue is getting more and more media attention.
Pressure is building on the BOE and politicians to get this problem fixed.
95% mortgages are riskier by definition: the less equity a homeowner has, the less likely the lender is to be able to get their money back upon repossession.0 -
95% mortgages are riskier by definition: the less equity a homeowner has, the less likely the lender is to be able to get their money back upon repossession.
I agree of course that 95% mortages are more risky (how could they not be?). But what surprises is me is when the banks restrict the ltv's, when the market is booming and getting near its peak they tend to lend more and more, but at that particular time the risk is highest. But what they tend to do is shut the stable door after the horse has bolted. Wouldn't it be more sensible to start restricting ltv's when the ratio between earnings and property values is starting to look high?
I can see where the problem might be of course, that the banks are competing with each other for the market share of the mortage market, and that is driving them on when perhaps they should start to think more about the risk.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
HAMISH_MCTAVISH wrote: »Guardian: 95% Mortgages "not a source of risk"
Why doesn't the Guardian start offering 95% mortgages then?
(Desperately tries to avoid pointing out the obvious; that lending any amount of money, to anybody, on any terms, always involves some risk. But fails.)0 -
chucknorris wrote: »
I can see where the problem might be of course, that the banks are competing with each other for the market share of the mortage market, and that is driving them on when perhaps they should start to think more about the risk.
In the last boom they were able to bundle them up, securitise them and sell them on. Get the money back and start all over again. They weren't that bothered by the long term mortgage risk.
they then each invested "in somebody elses bundles" which were seen as assets, hoping they would be better than the ones they passed on.
Happily taking the fees and any cross sales without the monitoring and control costs.
Obviously the mortgage had to pass certain upfront modelling tests to be accepted into the bundling process.
All got a bit dodgy when they were all holding bundles of unknown quality."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »In the last boom they were able to bundle them up, securitise them and sell them on. Get the money back and start all over again. They weren't that bothered by the long term mortgage risk.
they then each invested "in somebody elses bundles" which were seen as assets, hoping they would be better than the ones they passed on.
Hoping that they would be better doesn't exactly seem like a sound business strategy to me. It still doesn't get away from the point that any mortgage loan should be based upon solid principals.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »It still doesn't get away from the point that any mortgage loan should be based upon solid principals.
Exactly and you are right.
Working for aliving rather than gambling is boring though. Short term gain for long term pain."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
HAMISH_MCTAVISH wrote: »If you really want to both prevent excessive HPI, and meet housing need, then there is no alternative to building more houses.
Which, as we have now learned from the lowest house building in a century thanks to the mortgage famine, won't happen without an increase in lending.
Before the "mortgage famine", there were not enough houses being built to meet the rising requirement. I doubt there would be enough houses built (in the near future) no matter how much mortgage lending is increased.
You know this Hamish, and you expose your real desire when we see ":beer:" after you quote a positive HPI figure. If positive HPI meant that more houses were being built so that more people could buy a place of their own (borrowing sensibly), I'd share that beer with you.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245.1K Work, Benefits & Business
- 600.7K Mortgages, Homes & Bills
- 177.5K Life & Family
- 258.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards