First-time buyers were 8% lower by both volume and value in June this year than last, the Council of Mortgage Lenders has reported.
There were 18,100 first-time buyer loans, worth £2.2bn, in June. Despite the annual drop, the figures were up 24% by volume and 29% by value on May’s dismal figures, and the highest for any month since last August.
It was a similar story for home movers. They took out 28,600 loans worth £4.6bn in June – down on the year, but up on the month.
Home movers took out 28,600 loans, worth £4.6bn, in June – up from 23,800, worth £3.7bn in May, but down from 32,800 loans, worth £5.3bn, in June 2010.
Overall, there were 46,700 loans for house purchase, worth £6.7bn, in June, up 22% in volume and value from May, but down 11% by volume and 13% by value on June 2010.
Remortgaging was unchanged in June, totalling 30,700 loans worth £3.8bn. Unlike lending for house purchase, however, remortgaging was up 10% by volume and 9% by value on June 2010.
Over the quarter, between April and June, there were 122,000 loans for house purchase, worth £17.6bn, up from 97,200, worth £14.1bn, in the first quarter.
But lending for house purchase was lower than in the second quarter last year, when there were 138,300 loans, worth £20bn.
There was little change in lending requirements for either first-time buyers or home movers in June. First-time buyers on average paid a 20% deposit, unchanged since February. First-time buyer deposits are lower than the high of 25% seen throughout 2009, but higher than the historic norm of 10%. Home movers took out a mortgage worth 70% of their property’s value for the second month.
Commenting on the data, new CML director general Paul Smee said: “Whilst there are clearly financial uncertainties ahead, it is encouraging to see more house buyers surfacing at the start of summer.
“Recent increases in Bank of England approvals figures also show that more completions are expected in July, so the more encouraging numbers may persist for a while.”
However, Nick Hopkinson, director of property company PPR Estates, was much less optimistic, saying: “As the post credit-crunch lending slump continues, it is no surprise to see that the total value of home purchase mortgages taken out in June is 13% lower than even last year’s amounts.
“The monthly number of UK property sales remains roughly half the level needed for a properly functioning market to flourish.
“In a world where western Government debt viability is constantly being questioned by the bond markets and economic uncertainty abounds at a corporate and personal level, it is totally understandable that potential home buyers are sitting on their hands and mortgage lending continues to shrink.
“Amongst other things, higher fuel bills hitting the doormats this month will only add more financial stress to many struggling households.
“With economic headwinds likely to reach gale force, I fear we are looking at further falls in house prices and mortgage lending over the rest of this year.”
Comments
rant: "I'm not even going to pretend this is logical though..."
EUREKA!! I think he's got it!
There is NO LOGIC in the housebuying process. It is simply that you decide; you want; you buy. Clunk, click, kerching!! Deal done - here's the keys.
You, on the obverse side of the coin, are LOOKING for logic. Your entire argument is based upon logic; trends; patterns; and statistics. The reality is, however, 'yer average' homebuyer, as you have said yourself, takes longer choosing who to vote for on X Factor than which house to buy!
Do I think you are a mug? Nope. I think you are far from it. If I did, I would have told you so long ago, and we wouldn't be having these chats - which I enjoy immensely, thank you ;o)
You have a choice - a free will like everyone else. You are entitled to your opinion, and to follow whichever path you take. Who am I to say you are right or wrong - I simply have a different viewpoint.
SayI was tasked with selling you my favourite address - 27 Acacia Avenue..MY tack with you or any other potential buyer is, once they have viewed, to ask them if they would like to buy it.
If you say "no", I would ask you why. If you had a damn good reason why not, then I would wish you well in your search, and move on to the next potential buyer. You will buy something, some day. If I am nice to you today, then I might be lucky enough to sell to you tomorrow.
One way or another, I would have done my bit.
I cannot MAKE you buy a home, rant. Wouldn't try to. I simply hope, however, that my words make you think more objectively - more positively - about a future purchase. I hope that one day you WILL buy - and that I am in some small way partially responsible for that decision.
If that is the case, then I have done my bit. In the meantime - here's to continued debate, mate! ;o)
Pee Bee - thanks for taking the time to reply, and in such depth with some more background of your boys' situation too.
I must confess, I didn't know about the Last 30 Stories link. You know us Gen Xers - terrible attention span. It's got to be immediate, in front of our eyes etc. Now I'm left wondering how many more of these discussions that I thought had been terminated abruptly are still out there with comments I never got to read...
Since there is unlikely to be anyone else reading this, let me share a bit more of the thinking I have towards the current situation re buying now or holding out for lower prices. I'm not even going to pretend this is logical though...
No doubt you are familiar with the gambler who gets in too deep, loses their initial stake and ends up playing on in the hope of recouping what they've lost and getting back to zero? Us committed HPCers (not the loons who pop up here all too often and just make themselves unpopular without contributing much) have the reverse of this dilemma. If we see prices rising, then we think they're even more unrealistic and can only come down etc. And so we wait. If prices appear to be falling, then we think that, yes, we've been right all along and they are going to fall quite a bit more. And so we wait. Basically, if it's heads we decide not to buy a house now and if it's tails then we decide to wait a bit longer. Hope you can get this meaning.
No doubt you're thinking that we must be mugs for paying off someone else's BTL mortgage etc in the meantime (in my case, it's a retired couple's old family home - they downsized and kept the bigger house to rent out as a supplement to the only other income they get from the govt). However, I am still putting away money month after month. The compound interest on that, even at today's lower rates, is starting to get very significant...
I'm extremely reluctant to part with that very sizeable deposit that has been built up through years of careful budgeting, unless I think the 'price is right'. The larger the pile grows, the more determined I am to use it at the mythical bottom of the market (you're right though, who knows when that is?).
And so I wait some more...
Sorry, people - this one ain't gonna be short...
rant: OKAYYY... so now I have had a chance to get my head round all of the below. Let's continue the debate then, shall we? (oh - and before you Estate Agents start shouting "GET A ROOM, YOU TWO!", this IS an open debate and we're the only two commenting because no-one else apparently can be bothered any more... ;o) )
Looking at your 'breakdown' of FTB categories, would you agree that:
1. one thing 'ties' all the categories together - they all want to buy a property; however:
2. they fall into two groups - those that DO buy, and those that DON'T (or ARE/AREN'T going to...).
The report to which this story relates deals with those that DO buy a property. Many would argue that those are the only ones that matter - not me. I believe that those who are reliant upon property sales should be concentrating on the percentage who AREN'T buying. THIS is where their money will be made, and their jobs secured.
You see, those who are going to buy, will buy. It is just a question of "from who?" That is dealt with on a day-by-day basis by Agents who work their applicant registers. If they have the right house for an applicant, then they will sell it. In today's market, buyers are choosy. TOO choosy, I believe. They cherry-pick - and then they sort all the cherries again. This is fine - nothing wrong with wanting the best of the best - however if ALL buyers are doing that, the probability is that they all come up with a pretty similar list of ripest, juciest cherries. Hence you end up with some properties getting multiple offers; some with none at all.
You state "FTBers considering entering the market now would be advised to wait in my opinion" This is where we fundamentally differ, mate. It is those who are sitting on the fence who face the biggers potential problem, in my humble opinion.
The mythical "bottom of the market" does not arrive one day and stay for all to enjoy. It is a moment in time. One day someone buys at bottom book - the next deal is done when the curve is on the way up again.
The problem is, you NEVER KNOW until it is too late...
Now I know that you (and others who post here...) have 'done all right' by renting for a few years. But have you? I will never get you to say otherwise - ain't gonna try - but in the long run only you will decide. You have the potential to buy at a lower price today than you would have bought at three years ago; you have potentially 'saved' money if you have been paying less rent than you would have paid in mortgage; and you have had a roof over your heads. Fine. But the harsh reality is tghat you have had SOMEONE ELSE'S roof over your heads; you have been paying THEIR mortgage; and that when you do decide to buy then the 25 year mortgage clock starts ticking THEN and not three... four... however many... years previous. In other words, long-run, you could end up paying more.
It is an Estate Agent's job to sell a property - agreed? Therefore they will advocate to buyers that house purchase is the right thing to do. They should be 100% behind this advocation without exception (you know where I am going with this - don't you... ;o) ). If they do not believe that someone close to them should buy, then they should not be selling to anyone.
Would I sell the idea of buying a home to my own family? ABSOLUTELY - in exactly the same way that if 'the right property' for MrsBee and me became available today or tomorrow, I would have no hesitation in sticking someone's board up in my garden and going for it! Yes - I would negotiate for them like I had never negotiated before in order to get them their property to the best possible price - but I would not hesitate to push them along the path, and I would not recommend they walk away for the sake of a thousand pounds here or there if it was a property they really wanted. I firmly believe in people owning property wherever possible - have done for my whole career (32 years) and don't see that personal viewpoint changing. Neither do I see the majority changing that viewpoint - but I DO see affordability as one of the major hurdles to home ownership; as well as the current attitude that what we used to consider a "starter home" is not something for many of today's FTBs to be satisfied with.
And as you ask about the lads, I have no problem as such to tell you where they are in life. Both are still in rented - and are destined to remain so for the immediate future I am afraid. No 1 son and his missus rent a 2 bed flat which will do them for now, although they intend to start a family soon. I have spent the last twelve months fighting with the RSL over dampness issues in the property which have now been resolved. No 2 son, his missus and their son rent a 2 bed house - again, from an RSL. Until their family increases (again, on the cards...) this will also suffice for them. Both earn reasonable wages, although slightly below national average - their good ladies earn decent wages also. So - they both pay affordable rents - but they (and I...) see that as wasted money; money that they COULD be spending on purchasing their own home. Of course, they could both buy SOMETHING - but not what either of them would want (or need, in fairness...). Wrong side of town; too small or in need of too much work etc... So, like you, Sibley's..., FTB Dan etc they want something that currently they can't stretch to. THIS particular BoMAD is dryer than a salt flat (I only worked IN Estate Agency, I did not OWN one! ;o) ), so unfortunately financial help is not going to come from my direction. That hurts. THEY want to buy; I want them to buy - but between us we can only want, I am sad to say.
As I have said many, many times, for the above reason alone lower property prices would suit me as much as it would you. But personal gains cannot be an issue. There is a duty to the homeowners to achieve best price. I concere that "best price" may well be lower than they paid; that "best price" may well be less next year than it is this - but it still needs to be attained in whatever market it is sought.
And today's price is the best price you will get, as it may not be there to buy tomorrow...
I doubt I've even scratched the surface of this - but I've taken up way too much space already. Perhaps we DO need to get a room after all, mate! ;o)
rant: WOW! Let me digest this response and I will will of course reply... ;o)
The story you refer to is http://www.estateagenttoday.co.uk/news_features/One-in-seven-borrowers-in-negative-equity
I of course replied - and you will see that you scored Kudos points!
In order to keep track of approximately 2 weeks' worth of stories I use the "Last 30 news stories" as my EAT favourites link. This might be of use to you also...
PeeBee - I think you credit HPCers with having more influence than they do ; ) Having said that, someone got angry with me here last week for the impact I was having in talking the market down! I took that as a compliment.
From what I can tell, FTBers at the moment fall into one of several groups:
- Those that can buy and do courtesy of the bank of Mum and Dad and lower prices in their area (the North etc).
- Those that can buy through having a significant deposit, earning enough to qualify a mortgage and do so.
- Those that can buy for the above reasons but are holding out in the belief that lower prices are still to come (I count myself in here).
- Those that can't buy but would if they could take out a 125% mortgage etc (the banks are currently saving this lot from their own ignorance in my opinion).
- Those that can't buy but wouldn't do so at these prices anyway.
The difference between the last two is academic, since the effect is the same.
FTBers considering entering the market now would be advised to wait in my opinion, especially if they can add to a deposit. It can be debated whether prices at the moment are going down. They aren't exactly going up and certainly not at the rate they were though. The 'getting on the band wagon before prices go up further' mentality that was dominant in the run up to 2007 has evaporated.
Having said that, some FTBers may have delayed purchasing but have a growing family. They want the security that the UK's current tenancy laws do not offer. Some might be close to the age that they can still pay off a 25 year mortgage while they are working.
No doubt there are some numpties out there too who aren't in the situation outlined above but are happy to risk money they've been gifted by their parents (but might think twice if it was their own savings they'd scrimped to raise).
Am I right in thinking you've got two lads who are renting? Since this is all anonymous, would you be willing to tell us how they see this all developing and what their circumstances re buying or not buying right now are? No worries if that's more than you want to share - respect to that.
The point about cash buyers was more a statistical example of how a rising % may not translate into any more actual people and not in reference to the current situation.
Also, this is a report by the CML, who aren't exactly a party without a vested interest here in talking up the market.
I'm a Midlands man by the way - that bit that gets forgotten between the north and the south...
I left an answer to the question you posed in another thread by the way. Didn't get your thoughts though since it has disappeared from the front page.
rant: "...for the reasons explained in my post below..."
I'll nail them one at a time:
"FTBs are returning to the market in north England etc where prices have dropped significantly further than the national average. Good luck to those who have waited for and got lower prices I say." But surely these prices are still WAY above whatever indices you care to quote? Surely they still have room to fall further? Surely you should be telling them that they broke rank too soon?
"As a percentage, the number of cash buyers involved in transactions has risen steadily in recent years. ...the number of transactions achieved through lending is dropping off significantly" I would argue that those who buy cash would not have taken out a mortgage anyhow. Therefore their numbers do not skew the figures one way or another.
"It would seem the CML data defines it as anyone who takes out a mortgage after not having had one during the last 12 months. Given all that's being going on in the housing market re accidental landlords, people selling to rent etc, then the term 'FTB' and 'young people' are not mutually exclusive here."
Accidental Landlords in the main already have mortgages. They take out another and (should...) convert the existing to BTL. People selling to rent will not be taking out a mortgage - they will be paying them off. NEITHER of these affects the FTB figures - but the first example WILL increase the numbers of STB taking out mortgages, making your argument weaker, not stronger, mate.
Like the bit about the North leading the way for FTBs, though. They must be coming from all over the shop, to increase the figures in the way you suggest. Does this mean that you will be joining the mass FTB exodus from the South and moving 'Oop North' to buy your dream home?
I'll be here to welcome you, mon ami... ;o)
Yes PeeBee - for the reasons explained in my post below...
rantnrave: "The ratio of FTBs has increased in a declining number of mortgage approvals. So, second time buyers etc have dropped off a bit."
Oh, come on, matey! Go with the flow on this one. ALL buyers have "dropped off a bit" - I can't deny that. But the underlying, inescapable-though-it-hurts-you-to-acknowledge-it, truth is that, in the month of June 2011, LESS FTBs "dropped off" than second time buyers.
Isn't it? ;o)
Pee Bee - The ratio of FTBs has increased in a declining number of mortgage approvals. So, second time buyers etc have dropped off a bit. Other recent data suggests that FTBs are returning to the market in north England etc where prices have dropped significantly further than the national average. Good luck to those who have waited for and got lower prices I say.
As a percentage, the number of cash buyers involved in transactions has risen steadily in recent years. This doesn't mean there are more cash buyers about, just that they are forming a larger share of the total number of transactions (or put differently, the number of transactions achieved through lending is dropping off significantly).
Another poster has also raised the question of what counts as a FTB. It would seem the CML data defines it as anyone who takes out a mortgage after not having had one during the last 12 months. Given all that's being going on in the housing market re accidental landlords, people selling to rent etc, then the term 'FTB' and 'young people' are not mutually exclusive here.
Erm... excuse me...
I hate to be the bringer of bad news for all the HPCers - but you've all conveniently overlooked something:
"First-time buyers were 8% lower by both volume and value in June this year than last..." - then -
"Overall, there were 46,700 loans for house purchase, worth £6.7bn, in June... down 11% by volume and 13% by value on June 2010."
SO... the ratio of FTBs actually INCREASED year-on year - and they spent MORE on property than last year!
DOUBLE WHAMMY - how do you recover from THAT??
Sorry for peeing on your firework and all - but a headline does not tell the truth.
It sells papers.
We won the lottery a few weeks ago so I asked the kids what they wanted.
Eldest asked for a modest house so we bought her a small teraced cottage.
The next one asked for a car so we bought him a Toyota.
The little lad wanted a cowboy outfit so we bought out the HPC website!
Some of you shouid get together and write a book for the under fours. Was going to suggest the under fives but then approx. 20% would not see anything sorthwhile to read! ;>)
Roll on next week.
Three estate agents and three HPC’ers are traveling by train to a property price conference. At the station in Crewe, the three HPC’ers each buy tickets and watch as the three estate agents buy only a single ticket between them.
"How are three people going to travel on only one ticket?" asks an HPC’er.
"Watch and you'll see," answers an estate agent.
They all board the train. The HPC’ers take their respective seats but all three estate agents cram into a toilet and close the door behind them. Shortly after the train has departed, the conductor comes around collecting tickets. He knocks on the toilet door and says, "Ticket, please."
The door opens just a crack and a single arm emerges with a ticket in hand. The conductor takes it and moves on.
The HPC’ers saw this and agreed it was quite a clever idea. So after the property price conference, the HPC’ers decide to copy the estate agents on the return trip and save some money (being clever with money, and all that, as they are). When they get to the station, they buy a single ticket for the return trip. To their astonishment, the estate agents don't buy a ticket at all.
"How are you going to travel without a ticket?" says one perplexed HPC’er.
"Watch and you'll see," answers an estate agent.
When they board the train the three HPC’ers cram into a toilet and the three estate agents cram into another toilet nearby. The train departs. Shortly afterward, one of the estate agents sneaks out of his toilet and creeps over to the toilet where the HPC’ers are hiding. He knocks on the door and says, “Ticket, please.”
@Concerned of T Wells
Rising house prices benefit......
-Millions of people whose next move will be to downsize
-Millions of people with a mortgage who can get a better renewal rate for a lower LTV
-Millions of people who wish to leave something to their children
-The two million or so second home and BTL investors
-Millions of people whose pension funds have invested in property related companies or investments
-Millions of bank shareholders and pension funds, whose income is enhanced through a booming property market
-Millions of people who either work in construction, manufacturing and sales of home components, furnishings, renovations, etc "
They do not benefit the economy. Billions borrowed and poured into non-producing assets is the recipe for disaster as we are seeing. That money would have been better invested in industry , manufacturing and infrastructure . Sadly i think this country is already f***ed
beyond redemption by unrestrictive borrowing,spending and lending practices unrestrained by the last government.
There is a paranoid HPC'er visiting this site with low self-esteem.
He thinks that nobody important is out to get him.
Why are Estate Agents like Tigers ?
They are both endangered species.
FBA - I always knew they were cowboys hahaha!!
A chap came into my agency just a moment ago and asked our negotiator if he could see the man who arranged loans?
'I'm sorry, sir,' said the negotiator, 'the loan arranger is out to lunch at the moment.'
'Well, can I speak to Tonto, then?' asked the man
Concerend - I do not want a house price crash but your argument seems flawed to me :
- Millions downsizing really show me the stats.
- Second home I have never known anyone have such a thing
- Millions of people who either work in construction, manufacturing and sales of home components, furnishings, renovations, etc - Show me the evidence that falling house prices effect all of these !
Useful phrases for agents to use on this site when replying to HPCers:-
1. Thank you. We're all refreshed and challenged by your unique point of view.
2. I don't know what your problem is, but I'll bet it's hard to pronounce.
3. I have plenty of talent and vision. I just don't care.
4. I like you. You remind me of when I was young and stupid.
5. I'm not being rude. You're just insignificant.
6. I will always cherish the initial misconceptions I had about you.
7. How about never? Is never good for you?
8. I'm sure you are easy to get along with once you people learn to worship you.
9. You sound reasonable...Time to up my medication.
10. I'll try being nicer if you'll try being smarter.
11. I'm out of my mind, but feel free to leave a message.
12. I don't work here. I'm a consultant.
13. It might look like I'm doing nothing, but at the cellular level I'm really quite busy.
14. At least I have a positive attitude about my destructive habits.
15. I see you've set aside this special time to humiliate yourself in public.
What do you call an EA who is too scared to tell his vendor that his favoured asking price is deluded?
A whine bottle.
I'll get my coat.
RnR
Rising house prices benefit......
-Millions of people whose next move will be to downsize
-Millions of people with a mortgage who can get a better renewal rate for a lower LTV
-Millions of people who wish to leave something to their children
-The two million or so second home and BTL investors
-Millions of people whose pension funds have invested in property related companies or investments
-Millions of bank shareholders and pension funds, whose income is enhanced through a booming property market
-Millions of people who either work in construction, manufacturing and sales of home components, furnishings, renovations, etc
Falling house prices benefit......
-A few hundred thousand potential FTB's, but only until they buy when rising prices then benefit them more.
-A small percentage of upsizers, making a very big leap up the ladder... but most did not benefit from the recent crash as the differential grew due to typical FTB houses falling further than typical 2TB houses.
FBA - you already are one of those! :0)
I agree Rant,
let's get the prices down....... I will try for you.... but I fear if I join the merry HPC brigade I become another of those who are:-
The totally unwilling, led and advised by the completely unqualified, trying to do the absolute impossible for the totally ungrateful and uneducated.
Millets sell tents, that would fit all the criteria.
What do you call EAs who give in to vendors' complaints that they shouldn't lower their prices?
A whine seller.
List of people who will benefit from falling house prices:
FTBs
Homeowners looking to upgrade
EAs looking for more transactions
UK business that need people to have more disposable income
Families that would rather choose whether both parents work or not
Taxpayers who wont need to shell out so much in housing benefits
Young people who want to go to university and buy a house in their lifetime
UK employers that wont face upward wage pressure so their employees can afford a roof over their heads
List of people who will suffer with falling house prices:
The small number wishing to downgrade
Property speculators who have priced out a generation
Small numbers left in negative equity and needing to move
Bankers who can't pay out such obscene bonuses
I know which side I have more support for...
I just made a ridiculous straw-man argument. Now everyone can see how clever I am and how silly it is to think that someone trying to sell something might actually pitch it at a level that someone else is prepared to pay for it.
My method of valuing a house to simply tell a vendor that their house is worth about £50k more than what I guess other agents have valued it for. This ensures I have lots of properties in my window. This makes me feel like big man. However, I must admit I don’t actually sell much and I have a knot in my stomach knowing that the moment interest rates rise I am going to loose my own place.
Best make it personal with the HPC’ers, that will make the problem disappear.
What do you call an Estate Agent with two brain cells ?
Gifted.
What do you call a basement full of HPCers?
A whine cellar.
£50K houses? We should be so lucky. Those were the days!
Dear Mr Silver,
I took your advice, strode out of my office, banged on the doors of the first 3 semis I came to, and told the owners in situ they need to get their houses on the market, and the asking prices need to be £50k. And pay me 3% for the advice.
Anyone got a tissue for me to mop up my bloody nose.
Mr Silver,
Please give me your next snippet of outstanding property advice so I can try that out too! Your first advice is clearly not working.
In these uncertain times, sensible people in a position to buy simply won't do it. We've all long realised that house prices are a function of credit, not supply and demand. The credit has dried up again, so down go prices.
So if you've got any cash, it's far more important to diversify the assets you have, rather than sticking all your eggs in one very un-liquid basket (i.e. a house). Especially one who's price makes no sense.
Now, if estate agents want transactions and want to get the market moving, encourage sellers to be realistic.
It's far better you get 3% commission on five 50K houses than one 100k one - surely you must all be able to work that out?
FBA - There are a lot of newbuilds out there that would need smaller and thinner inhabitants... ; )
FBA -, surely if 8% of FTB'ers are tumbling there must be health and safety issue.....lets do a risk assessment on there footware!
FTB Dan,
It seems lots of 'mugs'
"Home movers took out 28,600 loans, worth £4.6bn, in June – up from 23,800, worth £3.7bn in May.
At this point in the economic cycle what mug would want to saddle themselves with a massive debt in order to bail out some fool who massively over-paid during the boom?
Travel light, move fast is the order of the day.
Let house prices adjust to its own levels under market forces. Scrap interventions such as artificially low interest rates and shared ownership. Prices will find their right place and first time buyers will return..We do not want more dodgy schemes to trap them in huge amounts of debt.
Please read the first line of this story again, don't miss the point. it says:-
"First-time buyers were 8% lower by both volume and value in June this year than last, the Council of Mortgage Lenders has reported."
I have seen this first hand myself, the buyers are a lot thinner and shorter than before the crash. Larger people and taller people just are not buying.
Happy funny Fridays....
We would love to own a house, but not if that means taking on levels of debt we can barely afford only to be evicted a few years later. On balance I would rather wait until house prices become realistic.
First time buyers being down is a clear indication that the government must take urgent action to force anyone over the age 22 to take an eight times salary mortgage if they like it or not. I appreciate that some people say that debt levels are too high, but surely the stunning successes in places like UK/US/Greece/Italy/Spain/Ireland all show that if you have too much debt you simply need to take on even more. Then everything becomes OK.
We must not fall into the dangerous thinking that suggests that if something is too expensive and likely to fall in value that is a reason not to buy it. I mean I know it would in literally everything else we buy, but through owning several BTL properties I have become convinced that houses are special, they only ever go up in value, and any amount of debt is a good thing in itself.
@Unhappy Chappy..
Most EA's do not say that.
What everyone wants is mortgages requiring a reasonable deposit (mainly) and at reasonable current interest rate being provided to those who come up to scratch on incomes and prospects. It is not happening.
Before anyone jumps, I am not advocating 6/7 times income and 125% LTV, just 10/15% deposits and at the same rates as those with 15/40% deposit
Some will disagree - so be it.
@Unhappy Chappy
I totally agree that lending "returning to normal" is the only solution that most EA's can see. Luckilly the Government doesn't seem to agree.
From George Osborne yesterday:
we have "unsustainable household borrowing, unrealistic house prices, dangerously high banking leverage" and "the most indebted households, the biggest housing bubble" and that "surely we have now learnt that growth cannot come from yet more debt".
Decent deposits and 3 to 4 times income is normal. It was the boom that was abnormal.
Prices need to fall and whether that is sharply or over a number of years due to inflation, is precisely what will happen.
EA's will say get the banks to lend more at higher LTV and higher income multiples. This is impracticle, does not look at the bigger picture or remedy economic downturn. FTB's will say reduce house prices and lend at higher LTV some would argue this results in more disposable income to spend fuelling growth?