Twenty years on – the winners and losers of Britain’s property boom

mwpt

cells wrote: »

I choose to call that mortgage rationing you can call it the hookypoky for all I care, the end result is that a portion of the population now cannot buy whereas they could in the past.

What past? 200x-2007?

I am suggesting that if you want fewer renters and more owners you need a return of honest self cert (ticking a box saying I am confident I can service this mortgage) and to a lessor degree but also important a return of Interest only mortgages. Of course the security for the lender and society is 20% down

We know what happens next. House prices rise 20% a year and people of the same means are priced out in a few years time. I keep asking, what then? I don't get a response to this either.

wotsthat

cells wrote: »

Then we are just trying to define a word lets forget the word mortgage rationing and go to basics

Interest only has gone
100% LTV has gone
Self cert has gone
Salary multiples have been caped (self cert in the past would have got around this)
Age limits have been caped (self cert in the past would have got around this)

The artificial removal of those products will clearly mean that people who could buy using them no longer can today

Everyone on this thread agrees lending has fallen, they know why it's fallen and they know it's impacted the level of owner occupiers. However, it's the Internet and we need to find a point of disagreement so let's argue about whether to call it mortgage rationing or sensible lending.

And, being the Internet, any suggestion that the current mortgage criteria might have been an over-reaction to the banking crisis is interpreted as wanting a free for all where everyone gets a 125% mortgage.

westernpromise

wotsthat wrote: »

Everyone on this thread agrees lending has fallen, they know why it's fallen and they know it's impacted the level of owner occupiers. However, it's the Internet and we need to find a point of disagreement so let's argue about whether to call it mortgage rationing or sensible lending.

And, being the Internet, any suggestion that the current mortgage criteria might have been an over-reaction to the banking crisis is interpreted as wanting a free for all where everyone gets a 125% mortgage.

the 125% mortgage must have had a negative effect on sales volumes. You'd spend the extra 25% and then you can't move until prices have inflated 25%, which in many places takes years if ever.

Good thing they're gone.

cells

mwpt wrote: »

What past? 200x-2007?

Without checking I think ownership peaked in 2005 at close to 70% of the stock. That 70% is actually close to 100% of the buy-able stock because nearly 20% was social and you need a bare min of about 10% rentals for people who have to rent (eg students, people working far from home, people new in town etc)

So back in 2005, when prices were cheaper in the south and virtually everyone who could own did own. Things were not so bad. If I were a crash-wisher I would look back on 2005 fondly so I am not sure your argument of "prices would boom" is that good an argument. Prices did boom in 2000-2005 but so what the benefit was to everyone because vitally every owned

mwpt wrote: »

What past? 200x-2007?

We know what happens next. House prices rise 20% a year and people of the same means are priced out in a few years time. I keep asking, what then? I don't get a response to this either.[/QUOTE]


Maybe maybe not (From 2000 to 2005 prices in London went up average 11.2% a year so 20% per year every year seems far fetched)

Prices are going up now regardless. up 5.6% in England and wales over the last 12 months.

anyway you dont have a magic situation where houses are two for a shilling and ownership is 100%, the option seems to be what we have now, which is a rapid fall in ownership the rental sector expanding by 440,000 units last year. Or a return to having self cert, 100% LTV, interest only and likely a stop in the expansion of the rental sector.

Graham_Devon

cells wrote: »

The idea I am putting forward is that their disappearance will mean a certain portion of the population can no longer buy and will have to rent. I doubt anyone disagrees with the above. I choose to call that mortgage rationing you can call it the hookypoky for all I care, the end result is that a portion of the population now cannot buy whereas they could in the past.

They could for a very short window in history.

Go back to pre 2003(ish) and they would be in the same position as now.

The mortgages you talk off were the exception, not the norm. All this talk of "mortgage rationing" which has been going on since 2009 is all based on a tiny window in history where sub prime was booming, the libor rate was at the hands of criminals and the system came crashing down.

cells

Graham_Devon wrote: »

They could for a very short window in history.

Go back to pre 2003(ish) and they would be in the same position as now.

If you said pre 2001(ish) maybe

But the point is ownership kept going up until about 2006.
Do you want ownership levels to return to 1990 levels?

Graham_Devon wrote: »

The mortgages you talk off were the exception, not the norm.

Yes they were perhaps only 10-20% but those small figures add up to more than a million households you are denying a mortgage to

Graham_Devon wrote: »

All this talk of "mortgage rationing" which has been going on since 2009 is all based on a tiny window in history where sub prime was booming, the libor rate was at the hands of criminals and the system came crashing down.

the Americans crashed the system not the English

and yes it was a tiny window in history that is because modern history is tiny. We didn't even really enter the electricity age until the 1950s


anyway what would you rather have

1: the rental sector expanding by 440,000 units a year thanks to mortgage rationing

2: potentially higher prices (although not necessarily) and lower growth in renting with a return of self cert and other such products?

Of course if you couple 2 with more building you could have both more owners, less renters, and no higher prices

Graham_Devon

cells wrote: »

the Americans crashed the system not the English

Yawwwwwnnnn. How many times must we do the same thing?

Graham_Devon

wotsthat wrote: »

And, being the Internet, any suggestion that the current mortgage criteria might have been an over-reaction to the banking crisis is interpreted as wanting a free for all where everyone gets a 125% mortgage.

This being the internet we have people like you, doing this.....just about every post.

Cells has been very clear that he wishes to see 100% mortgages given back out again.

He's also suggested 90% (I think it was 90%) interest only mortgages should be given out to anyone who can afford the deposit without checks. They would, afterall, have a 10% interest in the property and therefore want to keep up the repayments. He has suggested that the ability to find 10% shows their ability to save, so they should be able to borrow money without any affordability checks taking place.

He also wants self cert, interest only back.

I'd consider that a free for all.

cells

Graham_Devon wrote: »

This being the internet we have people like you, doing this.....just about every post.

Cells has been very clear that he wishes to see 100% mortgages given back out again.

He's also suggested 90% (I think it was 90%) interest only mortgages should be given out to anyone who can afford the deposit without checks. They would, afterall, have a 10% interest in the property and therefore want to keep up the repayments. He has suggested that the ability to find 10% shows their ability to save, so they should be able to borrow money without any affordability checks taking place.

He also wants self cert, interest only back.

I'd consider that a free for all.

just because you label something a 'free for all' a notion that is intrinsically linked to negative it does not make it so

Banks should be free to lend a bit out to group X a product Y and observe defaults and arrears and on the data price the risk accordingly? That is not a 'free for all' that is a business doing what it does manage risk on loans


Anyway lets ignore for a moment that argument as neither of us have the power to sway the regulators. do you at least accept that with higher mortgage regulation there is no choice but to see more renters than there otherwise would be? Is it a coincidence that the owner stock increased all the way towards 2006 and then post crash and overreaction and overregulation the rental sector has been growing rapidly?

mwpt

wotsthat wrote: »

Everyone on this thread agrees lending has fallen, they know why it's fallen and they know it's impacted the level of owner occupiers. However, it's the Internet and we need to find a point of disagreement so let's argue about whether to call it mortgage rationing or sensible lending.

I know why it fell in 2008 and I've not denied this would have had a detrimental affect. Since then though, low rates contributed in so many ways to the rise of prices and now that we have a good range of mortgage products available but high prices are causing problems for people wishing to borrow.

ONS agrees with this, and also, during the loosest period of lending in UK history from early 2001-2007, home ownership declined. The peak was 69% in 2001.