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Latest BOE mortgage data.... Rationing continues.
HAMISH_MCTAVISH
Posts: 28,592 Forumite
-80% of new mortgages now taken on fixed rates.
-Arrears and repossessions continue reducing.
-% of new mortgages that are BTL now 12.79%...
-In 2007, £1 in every £25 was lent at 95% LTV, now its more like £1 in every £300
-When the credit crunch hit there were 15.7m mortgage accounts in the UK, now just 13.9m....
And perhaps most interesting for those who think the market is being flooded with high LTV lending...
-Issuance of mortgages at 90% LTV or greater still under 2% of mortgages being issued..... Versus 11% before the credit crunch.
http://www.bankofengland.co.uk/pra/Pages/regulatorydata/mortgagelending.aspx
So few mortgages have been issued since 2007, that nearly 2 million people have been excluded from market.
And historically normal, prudent and sensible 90% to 95% LTV lending still absurdly restricted, even with govt schemes.
A long way to go before the lending markets return to functionality from their currently dysfunctional state.
-Arrears and repossessions continue reducing.
-% of new mortgages that are BTL now 12.79%...
-In 2007, £1 in every £25 was lent at 95% LTV, now its more like £1 in every £300
-When the credit crunch hit there were 15.7m mortgage accounts in the UK, now just 13.9m....
And perhaps most interesting for those who think the market is being flooded with high LTV lending...
-Issuance of mortgages at 90% LTV or greater still under 2% of mortgages being issued..... Versus 11% before the credit crunch.
http://www.bankofengland.co.uk/pra/Pages/regulatorydata/mortgagelending.aspx
So few mortgages have been issued since 2007, that nearly 2 million people have been excluded from market.
And historically normal, prudent and sensible 90% to 95% LTV lending still absurdly restricted, even with govt schemes.
A long way to go before the lending markets return to functionality from their currently dysfunctional state.
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
0
Comments
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I would argue that it was the excessively loose lending in the run up to 2007 that was "disfunctional" rather than the current set up. The last thing that is needed right now is a loosening of mortgage criteria.0
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I would argue that it was the excessively loose lending in the run up to 2007 that was "disfunctional" rather than the current set up. The last thing that is needed right now is a loosening of mortgage criteria.
Yes, you would argue that.
And you'd still be wrong.
2 million people have been excluded from mortgages over the last 7 years while house building consequently fell to record lows, worsening an already critical housing shortage, and rents reached all time highs.
The number of FTB-s fell by 50% despite prices falling 20% and the cost of borrowing falling by a third.
Those people have missed a once-in-a-generation opportunity for the combination of cheaper house prices and what will almost certainly be a decade of cheap borrowing in which to pay down the mortgage.
Instead they've been forced to enrich their landlords and massively increase their lifetime housing costs. Thanks to mortgage rationing.
The last 7 years have proved pretty decisively that you can't fix a housing shortage through restricting lending....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
What we actually need is fixed rate 25 year mortgages, so you know what you'll be paying for the life of the mortgage.
What we actually need is companies to move out of london, and set up in the rest of the UK, and what we also need is more houses built.0 -
lHAMISH_MCTAVISH wrote: »Yes, you would argue that.
And you'd still be wrong.
2 million people have been excluded from mortgages over the last 7 years while house building consequently fell to record lows, worsening an already critical housing shortage, and rents reached all time highs.
The number of FTB-s fell by 50% despite prices falling 20% and the cost of borrowing falling by a third.
Those people have missed a once-in-a-generation opportunity for the combination of cheaper house prices and what will almost certainly be a decade of cheap borrowing in which to pay down the mortgage.
Instead they've been forced to enrich their landlords and massively increase their lifetime housing costs. Thanks to mortgage rationing.
The last 7 years have proved pretty decisively that you can't fix a housing shortage through restricting lending....
Much of what you say here is true, although it is also not relevant to the point that I am making. I am not denying that there has been restricted mortgage availability in recent years, and this has impacted supply .It's why HTB1 was such a good idea, even though I share the widespread concerns about HTB2.
However, the situation today is rather different. 95% LTV is available (and this was the case through Natiowide and others even before HTB2, people forget that), and anyone with a 5% deposit and a decent credit history can access funding at a reasonable rate and a good income multiple. For those with 10%+ desposits, some truly eye watering multiples are available. The current mortgage market position is therefore not imho compatible with the statement that "mortgage rationing continues" , and further loosening of mortgage availability from thew current position would imho be harmful.0 -
I would argue that it was the excessively loose lending in the run up to 2007 that was "disfunctional" rather than the current set up. The last thing that is needed right now is a loosening of mortgage criteria.
if you believe that the lending pre 2007 was dysfunctional then presumably that showed itself is some way over the next 6/7 years.
so presumably you have evidence of large numbers of defaulted mortgages or other mortgage delinquency?0 -
95% LTV is available.
Yes, but nowhere near easily enough....
Issuance of mortgages at 90% LTV or greater still under 2% of mortgages being issued..... Versus 11% before the credit crunch.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »And historically normal, prudent and sensible 90% to 95% LTV lending still absurdly restricted, even with govt schemes.
No need to wind down HTB2 then.
Don't blame me, I voted Remain.0 -
I find that rather depressing.HAMISH_MCTAVISH wrote: »-80% of new mortgages now taken on fixed rates.
-Arrears and repossessions continue reducing.
-% of new mortgages that are BTL now 12.79%...
-In 2007, £1 in every £25 was lent at 95% LTV, now its more like £1 in every £300
-When the credit crunch hit there were 15.7m mortgage accounts in the UK, now just 13.9m....
And perhaps most interesting for those who think the market is being flooded with high LTV lending...
-Issuance of mortgages at 90% LTV or greater still under 2% of mortgages being issued..... Versus 11% before the credit crunch.
http://www.bankofengland.co.uk/pra/Pages/regulatorydata/mortgagelending.aspx
So few mortgages have been issued since 2007, that nearly 2 million people have been excluded from market.
And historically normal, prudent and sensible 90% to 95% LTV lending still absurdly restricted, even with govt schemes.
A long way to go before the lending markets return to functionality from their currently dysfunctional state.0 -
I find that rather depressing.
The absolute numbers of BTL mortgages being issued are still well down from pre crunch, it remains restricted and rationed.
The % is up because FTB lending hs been restricted and rationed even more.
That's what is depressing about it....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Could a factor also be that FTBs are being outbid by investors?HAMISH_MCTAVISH wrote: »The absolute numbers of BTL mortgages being issued are still well down from pre crunch, it remains restricted and rationed.
The % is up because FTB lending hs been restricted and rationed even more.
That's what is depressing about it....0
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