Nationwide to limit mortgages to first time buyers

[Deleted User]

Other lenders have already done similar and being a building society Nationwide will be relying on customer deposits to help fund mortgages and I imagine those might be down a bit in the current climate. 

[Deleted User]

danlightbulb said:

Spent almost 8 years saving for a 10% deposit which I now have. Really would be sods law if prices start dropping but I still cant buy because deposits have increased to 15% or even 20% minimum. 

10% of £180k house = £18k. Have it.
20% of £150k house = £30k. Dont have it.

Just as I get in a position to buy, the universe throws a curve ball in.

To take advantage of possible falling prices I need 90% mortgages to still be available.

A similar thing happened to me in 2008. I was just about to buy and everything went tits up and lenders started pulling mortgages right, left and centre. A lot of my friends had managed to get on the ladder a year or two before using Norther Rock’s 100%+ LTV mortgages. I was gutted at the time but it all came good in 2009 when I was able to buy a larger/nicer property for less.  I don’t have a crystal ball but I guess what I’m saying is that it might not end up as bad as you think. 

dani17

@blue_max_3
it may be  diffent depending on the area. but i am not seeing any type of drop at all in the area i al intrested in. houses with intresting prices are sold very very quickly and only overpriced houses stay on the market. Even rightmove talked about an increase in the asking prices recently.

Thrugelmir

Storm clouds were on the horizon once the UK entered lockdown. Seems sensible not to allow FTB's to become burdened with negative equity.  Besides which the banks have plenty of problems already to deal with relating to existing borrowers. 

dani17

@Thrugelmir exact. credit risk is already costing a lot to the banks recently. it is not about protecting the ftb from being in negative equity , it is more about cutting the growing credit expoqure they have. The mortgage holidays made the situation worse for the banks as well. I think we need to wait until at least the furlough scheme and mortgage holodays stopped before observing any impact on the prices.

blue_max_3

dani17 said:

@blue_max_3
it may be  diffent depending on the area. but i am not seeing any type of drop at all in the area i al intrested in. houses with intresting prices are sold very very quickly and only overpriced houses stay on the market. Even rightmove talked about an increase in the asking prices recently.

I'm sure it is dependent on area. Short supply certainly helps buoy up prices. You make a distinction between interesting prices and overpriced. A correctly priced house taking account of area, desirability and demand is the art. It will take the media to be writing headlines about a property crash to really shake things up. 

RelievedSheff

Vestraun said:

Wow, that seems quite a severe response, I wonder if nationwide are seeing something that we’re not. 

Accord seem to think not

https://www.ftadviser.com/mortgages/2020/06/17/accord-resumes-90-ltv-mortgages-for-first-time-buyers/

Vestraun

RelievedSheff said:

Vestraun said:

Wow, that seems quite a severe response, I wonder if nationwide are seeing something that we’re not. 

Accord seem to think not

https://www.ftadviser.com/mortgages/2020/06/17/accord-resumes-90-ltv-mortgages-for-first-time-buyers/

That’s only 90% not 95%. And also a very high interest rate. 

tom9980

Requiring a 10% deposit should have been the minimum since the last crash.

This ultimately will make it harder to buy and be a much needed shot in the arm for landlords as more tenants with savings and good credit require good housing. It will hurt the poor as less supply is available at a time when more landlords leave the market than ever due to all legislation, extra cost and general hatred that has come their way in the last 5 years.

dani17

RelievedSheff said:

Vestraun said:

Wow, that seems quite a severe response, I wonder if nationwide are seeing something that we’re not. 

Accord seem to think not

https://www.ftadviser.com/mortgages/2020/06/17/accord-resumes-90-ltv-mortgages-for-first-time-buyers/

they are offering 3% rate. In the current market , it is a big joke.
the only lender who continue to offer 90% for low mortgage with a "acceptable" rate is HSBC.