Times: Citigroup's EGG stops mortgage lending.

WTF?_2

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article4081016.ece

Egg, the internet-only bank owned by Citigroup, is pulling out of the UK mortgage market from today, the company has announced.
The bank cited “current market conditions” for the decision to stop all new lending until further notice. Customers with existing deals will be unaffected.

meanmachine_2

I'd say signficant news - in a symbolic sense. The credit crunch goes on.

But to be honest, EGG never really registered on the mortgage radar anyway.

payless

they have however had some good products up until 2/3 weeks ago

AloneWithStrangers

It's possibly more than symbolic. Although small, they were innovative & were a 'super-prime' lender. Therefore this is the first real casualty of the crunch that is not a sub-prime/buy to let lender. If one good quality lender can go down, others will almost certainly follow . . .

WTF?_2

AloneWithStrangers wrote: »

It's possibly more than symbolic. Although small, they were innovative & were a 'super-prime' lender. Therefore this is the first real casualty of the crunch that is not a sub-prime/buy to let lender. If one good quality lender can go down, others will almost certainly follow . . .

They haven't really 'gone down' - they've just decided that there are better things to do with their money than throw it into lending people money to buy a falling asset in a very unsure economic climate.

Which in itself says a lot about what the finance industry thinks is going to happen to the UK market. Potential FTBs should take the hint.

payless

!!!!!!? wrote: »

They haven't really 'gone down' - they've just decided that there are better things to do with their money than throw it into lending people money to buy a falling asset in a very unsure economic climate.

Which in itself says a lot about what the finance industry thinks is going to happen to the UK market. Potential FTBs should take the hint.

I would suggest a high % of egg's books was remortgage rather than purchase, so if this was a case a lowering of max LTV would protect just as well.

If people stop buying.. they will need to rent , a demand for rented property ( that people like - not flats ) will increase, so will rents , this in turn may soften the blow on house prices as others feel the rental yield is a worthwhile long term bet.. all IMHO

JimmyTheWig

payless wrote: »

I would suggest a high % of egg's books was remortgage rather than purchase

Not trying to prove or disprove anything with a statistic of one, but when I had an egg mortgage it was for a purchase.

zarazara

EGG has 6% of the UK mortgage market apparently. I think thats a decent sizeable figure. it will have repocussions i expect.

meanmachine_2

zarazara wrote: »

EGG has 6% of the UK mortgage market apparently. I think thats a decent sizeable figure. it will have repocussions i expect.

Completely wrong I'm afraid.

From the same article: "Egg Mortgages has 27,000 customers, less than 1 per cent of the UK mortgage market as a whole."

As I say, symbolic but a miniscule minnow.

Abbey putting up their rates will have a much greater impact.