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MSE News: Mortgage approvals at lowest level for seven months

"According to the BBA, mortgage approvals for house purchases fell to their lowest level in seven months in February..."
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Mortgage approvals at lowest level for seven months

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  • "Although they have cut mortgage rates, banks remain reluctant to lend given the evidence that house prices are overvalued. The Help to Buy scheme is designed to address this hurdle, but it will not start until 2014 and success is far from guaranteed."

    So can someone please explain to me how adding extra lending to something that is already overpriced is a good thing?
  • One thing the last 5 years has shown me is to balance the views from economists with the ramblings of my 5 year old. Work on somewhere between the two and you should have a true reflection of the market.
  • bigadajbigadaj Forumite
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    One thing the last 5 years has shown me is to balance the views from economists with the ramblings of my 5 year old. Work on somewhere between the two and you should have a true reflection of the market.

    Bit harsh on your five year old.
  • wymondhamwymondham Forumite
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    Maybe people holding fire waiting for the next scheme which was in the budget? or ..... maybe more people seeing that it just isnt worth the money at the mo!
  • EctophileEctophile Forumite
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    So the banks are being sensible. They won't lend money on over-priced houses to people with tiny deposits.

    The government's solution seems to be to encourage irresponsible lending again to get the house market moving.
    If it sticks, force it.
    If it breaks, well it wasn't working right anyway.
  • GDVSGDVS Forumite
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    Ectophile wrote: »
    The government's solution seems to be to encourage irresponsible lending again to get the house market moving.
    While simultaneously requiring them to lend more and increase their tier 1 capital, two more or less mutually exclusive aims.
  • JimmyTheWigJimmyTheWig Forumite
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    So can someone please explain to me how adding extra lending to something that is already overpriced is a good thing?
    It's a good thing if you don't want the price of the overpriced something to fall.
  • LesULesU Forumite
    338 Posts
    A few pieces of data are missing from the report. Mortgage approvals may be down, indicating a lack of willingness on the part of the banks to lend irresponsibly. On the other hand, where is the statistic regarding the number of mortgage applications and refusals?
    If applications are way down then the banks can't approve them.
    Could it be the public a) seeing sense and not asking for things they can't afford or b) playing a waiting game to see if the government can persuade them to do otherwise?
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