Thursday - HPI warnings from three* high-profile figures!* - ok, one's prince charles

AndyGuil

Salary was rarely checked pre-crash so that data is a little suspect. Self certification mortgages will have made previous ratios appear smaller than there actually were.

Thrugelmir

AndyGuil wrote: »

There is very little lending compared to then and the prices are still rising.

Prices in general ( excluding much of London) are still rising because the UK has an obsession with property inflation in terms of being an investment. When the herd loses confidence then the market will turn downwards.

The stress testing of EU banks for the impact of property prices on their level of mortgage lending may expose the weakness of their balance sheets yet again.

AndyGuil

Thrugelmir wrote: »

Prices in general ( excluding much of London) are still rising because the UK has an obsession with property inflation in terms of being an investment. When the herd loses confidence then the market will turn downwards.

The stress testing of EU banks for the impact of property prices on their level of mortgage lending may expose the weakness of their balance sheets yet again.

People generally won't sell for less than they bought it for unless they have exceptinal circumstances. As before it will just stall until the demand catches up. Demand far exceeds supply so clearly it is not happening anytime soon. The banks "pass" a lot of these tests.

the_flying_pig

AndyGuil wrote: »

Salary was rarely checked pre-crash so that data is a little suspect. Self certification mortgages will have made previous ratios appear smaller than there actually were.

i suppose that's true. when did the self cert boom start? early noughties, right?

Generali

the_flying_pig wrote: »

ps apologies for the rubbish thread title - i accidentally pressed 'post' or whatever & i think that unlike posts, once you've chosen a thread title you're stuck with it.

You can amend the thread title by going to Edit and then 'Go Advanced'.

Other news today is that GDP growth for the final Q of 2013 has been confirmed at 0.7%, pretty impressive given the weather.:j

Confidence in the Eurozone is on the up which is good too.

michaels

Thrugelmir wrote: »

Prices in general ( excluding much of London) are still rising because the UK has an obsession with property inflation in terms of being an investment. When the herd loses confidence then the market will turn downwards.

The stress testing of EU banks for the impact of property prices on their level of mortgage lending may expose the weakness of their balance sheets yet again.

Aren't we conflating two issues? Stress on falling prices is all about equity and nothing to do with income multiples which seems to be the current concern. I am less worried about income multiples in London as high prices means high incomes means a larger proportion of income not spent on essentials but if it is also the case for lower value purchases then it is more of an issue but don't all recent mortgage applications go through some pretty strict affordability che ks regardless of LTV?

Thrugelmir

michaels wrote: »

Aren't we conflating two issues? Stress on falling prices is all about equity and nothing to do with income multiples which seems to be the current concern.

The issues are related. To reduce the heat on prices, lower the maximum amount people can borrow.

My first mortgage was on a 2.75 joint salary multiple for 90% LTV. Also required a full budget disclosure discussion with the assistant bank manager. Very much in line with the incoming MMR regulations next month. Only difference is that my mortgage was taken out over 30 years ago. The clock is slowly being turned back to the days of sensible lending policy.