Latest BOE mortgage data.... Rationing continues.

HAMISH_MCTAVISH

Bantex wrote: »

Could a factor also be that FTBs are being outbid by investors?

Biggest factor by far is that mortgages for FTB-s are still heavily rationed.

Less than 2% of mortgages issued at 90% LTV or more, even with all the govt schemes.

Percy1983

I see sensible lending continues and Hamish still likes to call it rationing.

Its quite simple to see how pre 2007 was wrong, the problem was anybody could walk into a bank and say 'mortgage please' and be accepted.

So if lending was sensible form the start the criteria would be a little looser know (marginal) and more importantly instead of the 2 million being froze out since 2007 we could have 2 million froze out since 1999, whats the difference you say? quite simple instead of your chance of buying being based on your year of birth birth it would be based on your own merits not all the stock would be taken by those who simply got there first.

wotsthat

Bantex wrote: »

Could a factor also be that FTBs are being outbid by investors?

If FTB's are facing mortgage restriction then why do investors need to outbid them?

It's been the story of the recession. Prices fell and FTB's were the least able to take advantage. Investors pick up cheap properties with little competition and further benefit as the same mortgage restrictions create demand for their rental properties.

As mortgages were restricted there's a bigger shortage of property now than in 2007 and an improving economy is leading to capital gain on top.

It's been a funny old recession.

Thrugelmir

CLAPTON wrote: »

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?

Nothing to do with defaults per se. Poorly regulated banks created cheap money by securitising debt and tapping the wholesale money markets. Ask yourself why are interest rates so low?

thor

HAMISH_MCTAVISH wrote: »

A long way to go before the lending markets return to functionality from their currently dysfunctional state.

Unemployment down, economic growth exceeding even most optimistic hopes, house prices on the rise so it's about time the boe rate also returns to 4 or 5% from it's current dysfunctional rate?

HAMISH_MCTAVISH

thor wrote: »

Unemployment down, economic growth exceeding even most optimistic hopes, house prices on the rise so it's about time the boe rate also returns to 4 or 5% from it's current dysfunctional rate?

When the recovery is locked in, rates will quite rightly rise.

However the BOE has already stated that the new 'normal' for rates will be significantly lower than the 5% or so it was previously.

I'd expect to see base peaking between 3% and 4% at the top of the next boom, and averaging less than that through the cycle.

Mortgage margins will also shrink further as competition returns to the markets, so mortgage rates will not rise nearly as much as base rates do.

thescouselander

Just looks like sensible lending to me. I see no reason why banks should expose themselves to risky lending on the housing market. In fact I'd be more comfortable if the lending criteria was tightened.

Thrugelmir

thescouselander wrote: »

Just looks like sensible lending to me. I see no reason why banks should expose themselves to risky lending on the housing market. In fact I'd be more comfortable if the lending criteria was tightened.

It is. Have no fear. Affordability will become a key issue going forward.

At long last with have a regulator with teeth. The FCA will have a lasting impact on UK consumer credit.

CLAPTON

Thrugelmir wrote: »

Nothing to do with defaults per se. Poorly regulated banks created cheap money by securitising debt and tapping the wholesale money markets. Ask yourself why are interest rates so low?

The issue was MORTGAGE lending pre 2007

if it was dysfunctional then there would have been a high level of mortgage defaults and mortgage missed payments.

With the benefit of hindsight what are the facts to support this?


Interest rates are low because of QE which was due the the bad (non UK mortgage) lending.

Graham_Devon

CLAPTON wrote: »

if it was dysfunctional then there would have been a high level of mortgage defaults and mortgage missed payments.

There would have been if no action had been taken to stop them happening.

You are kind of implying that so long as there is a solution put in place, there was never a problem.