Banks creating a market crash?

ukwoody

Evening all,
As an outsider to the mortage business, but living with a broker, it seems to me personally that with all the banks withdrawing all these LTV ratios and 100+ morts, along with much more stringent borrowing qualifications, that they almost seem to be panicking thus creating a stiffied housing market. All of their own making.

I know here in an area of low income, she is finding it harder and harder to place even relatively simple cases.
What do you guys think?

woody

dunstonh

100% should never have been offered in the first place...probably.

Was it the availability or lending that pushed the house prices up or was it something else that pushed the prices up (like lack of supply and increase in investment properties) which in turn allowed lenders to consider 100% because it wouldnt remain 100% for long?

The market bubbled, burst (or is bursting) and is moving to some state or sensibility now.

UK007BullDog

Totally agree, we are one of the highest indebted countries in the world for personal debt. Personal debt itself is not bad, only if it cannot be serviced and paid back.

But on the mortgage market with mortgages of 90% and up they were just crazy. The greed of the banks took over and I feel they fuelled the housing price rises. Now since they are no longer lending these crazy amounts the market is slowly coming down. However for those on 85% or more deals coming to an end it will be mightily painfull.

For the guys at the top (bankers) it was all just paper money, peanuts (remember that scandal!?).

ukwoody

I do tend to agree with both of you, but is seems daft to change the rules by SO much SO quickly. One day you qualify... next day you dont.
woody

beingjdc

The banks are stuck in the horns of a classic "Prisoner's Dilemma"

We can have a crash now, and they can race to protect themselves from it, or we can have a crash in 18-24 months to which they are all fully exposed.

Once one starts taking steps, it's an incentive for the others to do so too.

UK007BullDog

sames happening to the loans and the credit cards. All that paper money has gone.

Gorgeous_George

The crash was created by the silly HPI of recent years and America.

GG

m.colak

When i bought my house the year before last i needed a 90% mortgage so as to get on the property ladder. I am pretty well paid and managed to get the 10% together for the deposit. If it hadn't been for greedy estate agents and mortgage brokers assisting in helping pushing up the house prices then this situation would never have happened. Funny enough i followed the old addage and made sure i could afford the mortgage before getting it and currently i have now at least 75% equity. I don't just blame the banks i blame everyone in the loop who was trying to make fast bucks and you know who you are.

The good news for me is that i can afford my house still and even if the BOE base rate went up 2% i could still afford it. However due to your greed i got a lot less for my money then i could of. So don't blame the bank when mortgage brokers and estate agents are equally as guilty.

UK007BullDog

Mortgage Brokers are not guilty!!!!!!!!!

We are only offering what the lenders give us. If the lenders would not give the products you would not be buying and we not helping you to buy it.

Estate agents yes are also at fault. But the house sellers were greedy too and some still are with houses being offered way too high compared with the general area of house prices. But then every houseowner will try to get as much as they can.

So please dont say it is us brokers as we have no control of the products a bank offers customers. And if you did not like it you could go directly to the banks and spend a week just shopping about. If there were no brokers the products would still be the same. Its the banks that created the problem for lending more than the properties were worth, and people borrowing with no savings.

ukwoody

The brokers on here (I'm not personally a broker nor in the industry) have been thru these comments before. You do not understand the full workings of the industry and the position the brokers often find themselves in. NO decent, reputable broker would ever push customers beyond their means.
By the same score they cannot just turn everyone away who turns up to buy an expensive property.

Just remember that brokers are heavly regulated and checked on, even having to give Reason Why Letters to explain exactly why they have recommended the product they have - in theory your come back.

Think the FSA doesn't check them or take action? Have a look on the FSA website and see the level of fines imposed on the rule breakers!

woody

dwsjarcmcd

Everyone is to blame, if it's blame that people are looking for!

To suggest Mortgage Brokers haven't played a role is just not the case. If there was`no demand for products, lenders wouldn't develop them. If I had a quid for everytime a broker has complained about tight criteria, I'd be a very rich man. That feeds to the BDM's who feed this centrally and lenders develop the products, which brokers sell to meet a customer demand.

It is not only the estate agents, but brokers, lenders (who saw fat margins in some of these products) and the customers who all must take responsibility.

Now the inter bank lending market has tightened, funding is an issue for lenders and consequently they are de-risking all over the place, hence the current situation.

David