People will adjust their spending habits in order to afford their mortgage

ukcarper

neverdespairgirl wrote: »

That leaves £440 for the extra stuff you mention, not £240.

Remember that is after mortgage rates increase to 7.5% at the moment they would have an additional £321 or £144 if rates rose to 6%.

Rinoa

OffGridLiving wrote: »

I'm not interested in getting involved in this spat, but I have to ask...

If your views/analysis are being attacked from almost every quarter, do you ever wonder if that's because you're wrong?

Graham thinks we're daily on the brink of catastrophe. It's doubtful if logical arguments will ever dissuade him from his beliefs.

crash123

neverdespairgirl wrote: »

Our current car cost £5.5k in 2000. It was 2 or 3 years old then. Still working absolutely fine, always starts, no major work needed the whole time we've owned it, which is 13 years.

It's almost certainly worth far less than £1k, but is completely reliable. In 13 years, it's needed the odd new tyre, one new exhaust, and 2 new batteries. That's it.

Timing belt? Very costly if this goes.

Thrugelmir

ukcarper wrote: »

Makes interesting reading average FTB advance against income didn't exceed 3.4x in boom

Many advances were made on an interest only basis in the boom rather than a repayment basis.

grizzly1911

HAMISH_MCTAVISH wrote: »

I already answered this post in another thread.

It claims that the average deposit size has barely changed in several decades.

And that the average deposit was around 20% in 2007. (when the CML claim it was 11%, and the various housing bears on here claim it was lower still)

So either that data doesn't mean what you think it does, or the claims of "lax lending" are a complete myth.

Which is it?

What do you think it means I am only taking it mean what it says on the tin. Especially as it is from housing.statistics@communities.gov.uk

There are no doubt other tins with different labels.

It is simple averages after all.

Thrugelmir

Originally Posted by HAMISH_MCTAVISH
I already answered this post in another thread.

It claims that the average deposit size has barely changed in several decades.

And that the average deposit was around 20% in 2007. (when the CML claim it was 11%, and the various housing bears on here claim it was lower still)

So either that data doesn't mean what you think it does, or the claims of "lax lending" are a complete myth.

Which is it?

The CML's figures are undoubtably correct as they account for around 95% of all mortgage lending.

If the average deposit was 20% as you say. Then account for the fact that that Northern Rock were granting around 1 in 6 new mortgages in 2007. NR of course being the worst culprits of no deposit lending.

grizzly1911

Thrugelmir wrote: »

The CML's figures are undoubtably correct as they account for around 95% of all mortgage lending.

If the average deposit was 20% as you say. Then account for the fact that that Northern Rock were granting around 1 in 6 new mortgages in 2007. NR of course being the worst culprits of no deposit lending.

Why would the government openly publish obviously erroneous information sourced from the Regulated Mortgage Survey?

HAMISH_MCTAVISH

grizzly1911 wrote: »

What do you think it means I am only taking it mean what it says on the tin. Especially as it is from housing.statistics@communities.gov.uk

There are no doubt other tins with different labels.

It is simple averages after all.

So if we take that data at face value....

According to that dataset, in 1972 the average FTB mortgage advance was 81%.

And in 2007 it claims the average FTB advance was 82%.

Where's the lax lending?

How is an increase in average mortgage advance of just 1% in over two decades compatible with the market being primarily driven by "lax lending"?

If you believe that data then you have to accept that.....

1) An increase in LTV had little or nothing to do with price increases

2) The range of mortgages being issued and aggregate borrowing behaviour in 2007 was almost no different to that in the early 70's

and

3) The highest average LTV mortgages (over 90% on average) were being issued when prices were at their cheapest, not at the "peak of the bubble" in 2007 as some would say, and in fact deposit percentages doubled between the mid 1990's and the mid 2000's

How is any of that conducive to supporting claims that smaller deposits caused higher prices?

grizzly1911

HAMISH_MCTAVISH wrote: »

So if we take that data at face value....

According to that dataset, in 1972 the average FTB mortgage advance was 81%.

And in 2007 it claims the average FTB advance was 82%.

Where's the lax lending?

How is an increase in average mortgage advance of just 1% in over two decades compatible with the market being primarily driven by "lax lending"?

If you believe that data then you have to accept that.....

1) An increase in mortgage advances had little or nothing to do with price increases

2) The range of mortgages being issued and aggregate borrowing behaviour in 2007 was almost no different to that in the early 70's

and

3) The highest average LTV mortgages (over 90% on average) were being issued when prices were at their cheapest, not at the "peak of the bubble" in 2007 as some would say, and in fact deposit percentages doubled between the mid 1990's and the mid 2000's

How is any of that conducive to claims that lending drove prices?

I don't know you seem to have all the answers. Doesn't that tie in with what you have been telling us?

You could keep the LTV similar but still lend more just to a lower credit risk audience? It is an average so perhaps the the high LTVs form a low proportion of the overall market?

Cornucopia

There are two elements to mortgage risk - LTV and affordability (ie. earnings multiple).

It's entirely plausible that average LTV remained about the same whilst non-status and high earnings multiples increased the risk.

Having said that, what would be really relevant is a comparison of default amounts and reasons..