Housing market continues to slow....

meanmachine_2

It's crazy to think that mortgage companies have any "long term" view about the market. As Reporter stresses, all these directors think about is securing their performance bonus at the end of the year.

The only comeback is from shareholders who are now starting to get very twitchy about the soaring numbers of defaults.

If I had shares in a bank I'd want to know the motive behind such slack lending procedures. If it was to hit short term goals, rather than secure long term market share then I'd start making a lot of noise.

And this talk of lenders wanting to offer people "assistance". How kind of them. I regard assistance as helping little old ladies across the street. Not saddling the financially inept with ridiculous debts.

But that's just me. As I say I'm a freak who lives within my means.

dougk_2

I disagee - with more lenders offering long term fixed rates (pushed by the government to do so) they need to take a longer term view, to avoid themslelves getting into serious trouble.

People tend to forget that longer term mortgages are often done outside of the UK (its not unkown in other countries to have lifelong mortgages or those that automatically pass down generations).

I agree with you principle of living within your means - The only thing I will ever borrow for is a house. Perhaps would be students should think first, work for a couple of years to earn some cash and get savings, then go to uni and be able to afford the fees? Certainly the way I would do it.

deemy2004

The actions of the banks are governed by -

1. What their competitors do
2. To deliver year on year profits growth.

They may have long-term plans but its diluted by the above... i.e. if their competitors offer 0% mortgages - so will they !

If most banks are reporting decent profits, then they will squeeze their customers to also report decent profits.

For if they fail to deliver the markets will punish the company in terms of re-rating their stock price and / or rating of their corporate debt.. Thus they could be open to a hostile bid ! and all be out of a job ! Abbey anyone ?

meanmachine_2

dougk wrote:

I agree with you principle of living within your means - The only thing I will ever borrow for is a house. Perhaps would be students should think first, work for a couple of years to earn some cash and get savings, then go to uni and be able to afford the fees? Certainly the way I would do it.

I agree with that. I only went to uni at 18 because everyone else was doing it. I was the only student in my year to leave with money in the bank, rather than high debts. And I've avoided debt ever since. I rented a crappy room in a sweet old lady's cottage - cost me £28K a week, and she made me sandwiches every day.

I'm sensible with my money. I haven't taken a holiday in years, and I like to shop around for bargains.

If I think houses are overvalued by 30%, then I'm inclined to think I'm right, judging by my past form.

Well, despite whining and bleating from Woolies et al, int rates have been put on hold, and I wouldn't be surprised if at least one BoE member was still angling for a rate rise. With oil prices starting to filter through - thanks to our old friend inflationary lag - can't see them being cut any time soon either.

John_M_Business

meanmachine wrote:

I agree with that. I only went to uni at 18 because everyone else was doing it. I was the only student in my year to leave with money in the bank, rather than high debts. And I've avoided debt ever since. I rented a crappy room in a sweet old lady's cottage - cost me £28K a week, and she made me sandwiches every day.

I think she got the good deal there. No wonder it's taken you so long to clear your debts ;-)

meanmachine wrote:

If I think houses are overvalued by 30%, then I'm inclined to think I'm right, judging by my past form.

Er. What form is that? Flat or Hurdles?

meanmachine_2

John_M_Business wrote:

I think she got the good deal there. No wonder it's taken you so long to clear your debts ;-)



Er. What form is that? Flat or Hurdles?

I meant, my instinct for not making rash decisions. And right now, housing looks like a bad risk. The problem I'm up against is that others in this country are stupid with money and are happy to have huge debts. The chumps.

And yes, oops, 28 quid, not £28K - although I'm sure some people would be prepared to pay that in mortgage repayments if they though the property was always going to go up in value (which ain't necessaily so...)

deemy2004

The problem is that when property IS much cheaper then likely credit will be more expensive.

meanmachine_2

deemy2004 wrote:

The problem is that when property IS much cheaper then likely credit will be more expensive.

Of course.

The only winners in all this will be the banks.

Lenders always have the upper hand. The rest of us are mere puppets.

dougk_2

So therefore you may as well pay £200k at 4.99% than £150K at 7%, because in reality the overall cost is the same (unless you have bags of savings!)

John_M_Business

Yes. But the only thing you don't want to be doing is paying a hefty rental sum that just disappears (although if you're 'Interest Only' then that's what you're doing in any case in the short term with static house prices).