Lenders need to return to pricing for risk and there needs to be more 100%, cashback and sub-prime mortgage product availability if the mortgage market is to return to any sort of health.
John Wriglesworth, chairman of the Wriglesworth Consultancy, the PR firm specialising in the mortgage and housing markets, was speaking at tis week's Mortgage Business Expo Manchester 2012.
Wriglesworth, who organises the much-praised Great Housing Debate each year in Westminster, defended lending activity prior to the credit crunch, saying all of it, including sub-prime, was justified.
He said that the reasons for the crisis lay beyond UK shores.
He also said pent-up demand in the first-time buyer market was out there ‘and if they could get hold of a mortgage then they would’.
Wriglesworth added: “Lenders can’t lend in the right way to get the market going. Unless 100% mortgages and sub-prime comes back, then you’re not going to see a healthy market. There is nothing wrong with 100% or cashback mortgages as long as lenders price for risk.”
He was also conscious of the capital adequacy problems facing lenders and said the new round of requirements was ‘Basel III meets Godzilla’.
He hit out at the Financial Services Authority, saying: “The FSA is stifling the ability of lenders to offer mortgages to those that want them. It is a total over-reaction. What’s wrong with giving someone who is riskier an 8% mortgage [rate]? The FSA are not allowing lenders to do this because they don’t trust them.”
He also questioned the motives for brokers selling short-term products. He said: “Those selling two-year / short-term discounted products are mis-selling because you’re exposing borrowers to interest rate fluctuation in two years’ time.”
Wriglesworth concluded: “There is virtue in the fact that we are stable and we’re at the bottom of the market.”
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Comments
@PeeBee:
No it's you who is MDTsh!tting.
You fail to notice that the majority of the housing market is in a deep crisis and neither do you wish to lift even your little finger to try and help resolve that.
Carefully crafted checks and balances need to be implemented to get the housing market, which is vital for the growth of our economy, properly functional once again.
As far as houses are concerned:
At the right (or market) price, sellers can always sell and buyers can always buy.
Therefore, all that is required to get the UK housing market moving again, is to find a reliable method for measuring the right price for each property to be marketed and, it doesn't involve buyers raising bigger deposits and larger mortgages either.
That method is outlined on: http://www.property-match.co.uk/match2/Asking_Price.html
I mention this because you keep failing to read it or react to it constructively. Maybe, one day, a meaningful conversation will transpire?
Maybe some day you will have more time to reflect first before firing off yet another salvo of criticism, usually aimed at someone in person and for no other reason than to try and re-gain the pretend high-ground.
"As far as selling houses is concerned:
At the right (or market) price, sellers can always sell and buyers can always buy."
Pure... unadulterated... unmitigated MDT. There are THOUSANDS of properties currently offered for sale at what are without doubt "the right" price. There are THOUSANDS of potential buyers who would be ready and able to buy them - yet they remain unsold. Would you care to give us the benefit of your insight into the market and tell us why this phenomenon occurs, Mr RR?
(Just so you can't bleat that I'm picking on you again, I'll give you a clue as to where you should be heading on this. I've listed TWO of the magical attributes that a buyer needs...)
Anyway - back to picking on you.
"The readership of this online paper, and its general standing, must have suffered as a direct result."
Oh, dear - Mr RR must have got cut off in his prime, there.
What SHOULD have followed on is:
"... of my first liberal splattering of MDT on here three or so years ago"
Luckily, I am here as always to correct him and fill in the multitude of blanks he leaves scattered behind him... ;o)
Infact don't bother answering we already know.
As to being a little agent. You are never going know the answer to that are you.
Have you sold any houses yet?
Yes or No?
@Wardy:
You don't get the BIG picture (as you're probably just a little agent - with time to troll).
You fail to notice that the majority of the housing market is in a deep crisis and neither do you wish to life even your little finger to try and help resolve that.
Listen here. I've done more to get people moving in the last 5 years than you could ever hope to acheave in your lifetime.
You know, your right. You are a waste of time.
Let us that can carry on and those that cant (you) type away about it. You never know, you might get a 14th facebook friend.
No it's you who doesn't get it.
You fail to notice that the majority of the housing market is in a deep crisis and neither do you wish to life even your little finger to try and help resolve that.
As far as selling houses is concerned:
At the right (or market) price, sellers can always sell and buyers can always buy.
Therefore, all that is required to get the UK housing market moving again, is to find a reliable method for measuring the right price for each property to be marketed.
That method is outlined on: http://www.property-match.co.uk/match2/Asking_Price.html
I have tried to debate the current residential property issues and the dilemmas with you at great length here.
Having done so it is clear, to me anyway, that you are not truly prepared to engage with the issues and instead you attempt to keep trying to assassinate different personalities.
This probably explains why you yourself won't disclose your true identity but instead prefer to comment as an anonymous troll.
I'm afraid I cannot therefore keep spending time discussing your disingenuous diversions anymore.
You, of course, have the choice of contacting me direct, either by email or on our own blog pages and by revealing your true identity (whether you decide to admit to your current alias, on not).
I should however, finally counsel you to stop wasting people's time on these pages, or elsewhere, because the issues I have been debating, and will continue to debate, are matters of national importance and are not to be taken lightly as you have been doing.
The readership of this online paper, and its general standing, must have suffered as a direct result.
Why in god’s name would I want to meet you?
You have the all the answers RR. Put them into practice, get some results. Prove it works instead of being a keyboard activist.
We have agreed two sales so far this week which makes me an infinitely better at selling houses that you. To be in a position to sell those houses I had to win the instructions in the first place and value them correctly so that means I’m infinitely better at valuing than you. Don’t feel sad for me RR. The people that work for us are safe in their jobs and the people we work for get the best.
Here's a tip. You want to know how to get property on the market at a realistic figure? Go and have a cup of tea and a chat with people who want to sell.
Unfortunately (for you) you can’t do that from behind a computer.
I afraid it is you that doesn’t 'get it'
Wardy, PeeBee, and others like them:
No, no. Sorry to sound curt, once again but you guys have got the whole thing completely round your necks.
I'm not campaigning for change based on my specific recent sale failure experience. That's just a symptom of a far wider problem being experienced by thousands of others as is evidenced by recent Gov stats.
It's a great shame you cannot get hold of the right end of the stick after all this time, and I feel sad for you to still be in such a state over it.
My best suggestion is for you to break cover, and get in touch, human to human through my blog. Have courage, meet and have detailed discussions. Only then will this labyrinth of misunderstanding have a chance of experiencing some vital and necessary rays of sunshine.
I've been saying it for ages but really cannot keep on forever. The choice is yours - or anyone else's, anyone who cares about this passionately enough to discuss it rationally, of course.
Today you say: "For anyone who wants more information about what is going wrong with the marketing of houses in the UK, please see the current editions of Secret Agent on Channel 4, featuring Phil Spencer explaining in simple detail, whilst making suitably diplomatic suggestions both to owners and their estate agents, why each individual house is not selling and what to do to change things to effect a sale."
Two days ago, you said: "Suppose (just for one moment) that the reason why we had difficulty in selling in Nottingham and simultaneously buying in the South was because of a problem in the way houses are currently marketed by estate agents?"
So... let me get this straight. What you are CLEARLY STATING above is that YOU needed someone to tell YOU what was wrong with your property in order to effect a sale - and that because you did not get this "Secret Agent" treatment, you were unable to sell your property.
Some admission from a guy who proclaims to have "the answer" to the current housing market - innit, pal? ;o)
Still - at least you are finally being upfront that your cupboard is bare when it comes to clues...
You just keep digging the holes, Mr RR - I'm more than happy to simply draw people's attention to them!
get back to us when you sell a house.
PeeBee, Wardy:
For anyone who wants more information about what is going wrong with the marketing of houses in the UK, please see the current editions of Secret Agent on Channel 4, featuring Phil Spencer explaining in simple detail, whilst making suitably diplomatic suggestions both to owners and their estate agents, why each individual house is not selling and what to do to change things to effect a sale.
Agents simply need to notice these pointers and learn to act upon them, themselves. Doing nothing is futile. Pretending the problem lies elsewhere is worse. "Agents need to properly advise vendors; their clients".
No, the problem is being caused by those whose job it is to market houses - that's the agent, in the UK currently.
You and many like you simply don't understand how to help the housing market to operate effectively - end of.
Nothing will be done about this until you wake up and realise it's 'your' actions, like those of the bankers before you, that are causing the issues we all subsequently have to live with.
Trying to blame people like me, or indeed anyone else other than the agents, is plain ridiculous. When are you gong to realise that?
At some point, surely, once you begin to see that you haven't quite 'got it', you ought to start wanting to listen to those around you prepared to explain the problem(s) and to face them.
The time for action is now nigh. When are you, and your cronies going to smell the coffee - pal?
Made yourself look very silly indeed RR.
"Suppose (just for one moment) that the reason why we had difficulty in selling in Nottingham and simultaneously buying in the South was because of a problem in the way houses are currently marketed by estate agents?"
Tell you what - YOU try supposing is WASN'T!
After all - ONE of the properties was YOURS - and as the ower, and being who you think you are, I would have expected that the marketing of YOUR property was handled exactly as YOU seem to think the book should be written.
Therefore HALF of the 'problem' you refer to would not be there...
"house owners need you to be up-front, available, and ready to help us to do business in, what is a crowded marketplace full of houses and people."
THERE IT IS!! Final, total, irrevokable proof that Mr RR does not have the faintest sniff of understanding of the workings of something he claims to be an "expert" in!
You can have a million "houses" on the market, Sir. If one of the "people" does not want any of them; or can not afford any of them - then they are simply adding to an irrelevant statistic. Have you never heard the saying "A house for everyone - and someone for every house"?
Probably not - it's mine... and in thirty four years I've NEVER been disproved!
Look paL There IS something to be learned here - but not by me, wardy - or anyone else evxcept you.
Sh!t happens - always has:always will - and YOU ain't gonna stop the flow.
Here endeth the lesson.
@ Wardy
If only you could understand.
I hope that one day you will be able to. Until then, please try and be patient and listen to wise words.
I'm not suggesting you know very little. I'm suggesting you know nothing.
Your results back up my claim that you know nothing. You are not willing to apply any of what you preach yourself. Put your money where your mouth is implement some of the changes (whatever they are) and get some people moving. If not shut your pie hole, admit that you made a mistake and accept that you can’t make easy money by buying a poxy bit of code from some classified add company. You thought it was easy didn’t you? It took you months before you realised reality and found out that you couldn’t compete with estate agents, rather than look at your own misgivings you decided it was the industry that was wrong.
It’s not our fault that you tried and failed and it’s certainly not our fault that you can’t afford to live down south.
I’ve said it before RR, When you have some results get back to us. When you have some proof that what you do can achieve better results than traditional estate agency then you can have a public apology from me. Until then stop talking a good job, get off your arse and actually do something worthwhile.
Wriglesworth is a fool if he is really calling for a return to the sort of lending standards that led to the bubble and subsequent bust.
He states that what is now considered to be "irresponsibe lending" is required: "if the mortgage market is to return to any sort of health". I would not consider "irresponsible lending" and the effect on asset prices to be any sort of "health". Admittedly, by reducing lending standards we may for a while put things off again temporarily, but it would only eventually lead to an even greater bust further down the road.
Aside from that, he may be more clever than we think in that he is not calling for a return to the bad lending days of the past, but he is merely warning us that without such lending (because it actually won't be coming back) that house prices will quickly fall back to earth.
@Wardy, PeeBee, and others like them:
Fella(s), assuming you are some. KNOW THIS ("I will say this, only once!")
You can never succeed in trying to suggest that I know little and you know - it all.
You are simply deluding yourself(ves) and that IS the problem.
Suppose (just for one moment) that the reason why we had difficulty in selling in Nottingham and simultaneously buying in the South was because of a problem in the way houses are currently marketed by estate agents?
Once you 'get that', we shall be able to move on to the next stage. That is, figuring out what's going wrong (and why) and then working out what needs to be done to put things write. (+ You'll need to multiply the results by the number of sales transactions in the whole country. Then you may get an approximate idea of the scale of the problem I am talking about here.)
You also need to understand why and how the housing market is influenced by other economic issues and does not stand alone. You need to know this in order to be able to advise your clients effectively.
Unless and until you can engage and do all of this, you (guys, and doubtless also gals) are no-where, and house owners need you to be up-front, available, and ready to help us to do business in, what is a crowded marketplace full of houses and people.
IF you still don't get this - agents - please go and find yourself(ves) another career; for everyone's benefit.
Now who is ready to start the actual talking?
"You'll just have to read it all again and you should see where my reasoning came from, plus if you think a little bit for yourself."
This week's winner of "The Most Irrelevant and Evasive Answer to a Question" goes, of course, to Mr Realising Reality.
No answer to offer?
No clue -- THAT is why! Not one.
The economy is stuffed.
Evertything, E V E R Y T N H I N G, grinds to a halt until the economy kicks off again. Its not a UK thing, its worldwide.
The banks have lost sh1t loads on sub (the clue is in the name) prime lending and this tvv@t wants them to do more to save his fat arse ?? Ha HA .
" We are stable and we are at the bottom of the market " care to guarantee that ? put your money where your mouth is ? lend your own dosh "bottom of the market" ?
So by what measure do you count yourself a good estate agent? By selling none?
If house prices really are justified at current levels by fundamentals (supply and demand, small crowded island, you name the cliche....) then why the hell do we need to go back to sub-prime lending to prop up house prices???
If ever we needed proof that the HPCers have won the argument, here it is!
@Wardy:
Just to get back soon, I once worked in an office where the new boss decided that to test everyone's productivity, he would count the letters we each posted out. The result was a disaster! He then left. You seem to be advocating something similar by thinking the person who sells the most houses is the best estate agent. I don't think so, old chap. If only it were that simple ;-)
@PeeBee,
You'll just have to read it all again and you should see where my reasoning came from, plus if you think a little bit for yourself.
RR.
"The figures suggest there's currently only an average 34% chance of getting a sale during the year if using an estate agent. That isn't great for vendors, or for buyers currently needing to move house."
WHAT figures, Mr RR? Show me them. Convince me and others of their validity.
Your post on this thread - and one made several days go on another in which you said...
"..."An 8% chance of being sold in the next month, and a 34% chance of being sold within the next year."
It won't be too welcome, Im sure, but surely this is not a great testimony for the efficiency of estate agency as the vehicle to sell and let houses across the UK?"
...hints that YOU can offer better. Come on then - SHOW US THE PROOF!
In response to the aforementioned post earlier in the week I asked you "How do YOUR stats compare to the above? Is YOUR vehicle providing better mileage?"
No surprise - but I'm STILL waiting for your answer. No doubt I will continue to wait as you close YET another door behind you.
It's not even good enough to be classed as smoke and mirrors, Sir. You ASPIRE to such great illusion.
Yours is pure, unadulterated quackery with a liberal splatter of MDT.
Interesting to note that wardy is also picking up on your offering of financial advice without relevant qualification.
You REALLY SHOULD watch what you say on the internet, Sir - your written word is biting your ankles far
better than I ever could!
RR,
I am simply discrediting your claims that you are in some way an expert. You can say what you want about the market, I nor the FSA would care about that. But you are in no position to give mortgage advice to people, like you have done on your FB page. As an expert, I thought you would have known that.
You are here as someone, for whatever reason cannot sell property and yet you insist on telling those of us who are, how to do it.
Every time you try and use this site for your own publicity, I will be here to discredit you. So carry on. I enjoy it.
@Wardy:
Oh what-oh-what might I have done to upset old Wardy?
He may quote my name but cannot bring himself to quote his; eh Mr Troll.
He makes untrue statements about our web site because he hates it and seems intent on making as much trouble as he can for me including even trying to interest the FSA in my exclamations about the state of the housing market. We must be getting to him!
Trouble is, it's people like him that I'm trying to engage here but he doesn't seem to realise it (or doesn't want to), yet.
As he's posited about our service, so I'll repeat the problem:
The figures suggest there's currently only an average 34% chance of getting a sale during the year if using an estate agent. That isn't great for vendors, or for buyers currently needing to move house.
There are undeniably massive areas for 'potential improvement' in the way houses are bought, sold, and let. That is clear.
In these economically straightened times, NOT to examine them and to choose what to do first, would seem to be worse than reckless as an attitude.
Yet, who today, if anybody, is actually addressing the main housing issues?
Are the estate agents? Are the bodies trying to regulate even part of their behaviours? Is the Government?
At present, my personal conclusion is that, sadly, none of them are.
Someone, somewhere needs to do something to improve the stat mentioned. In one line, agents need to increase their efficiency.
If they refuse to see this and the need to improve, we at Property Match (UK) do. Therefore I say, "Let the battle commence". Alternatively, lets get talking. Time has run out.
Anyone who thinks this problem can be sorted out by cranking up mortgage finance, simply has not grasped it, yet!
"1 The 'next generation' CAN afford a mortgage because loads of them they are paying that out in rent every month (hence the booming rental market) at a rate that is more expensive than the mortgage repayments (it's cheaper to buy than rent in 80+% of UK towns)."
ONLY at these ridiculously low, temporary interest rates. What happens when these rates go up? The mortgage rate is already dislocated from the bank rate, and will increase as banks find it harder to borrow and the general economic situation gets worse.
There are major economic problems ahead and mortgage rates will get huge.
Now now dear....I do not think we will have a crash but i do not think prices will go up, you need to look at the facts.
"1 The 'next generation' CAN afford a mortgage because loads of them they are paying that out in rent every month (hence the booming rental market) at a rate that is more expensive than the mortgage repayments (it's cheaper to buy than rent in 80+% of UK towns). "
Wrong more and more people are sub letting properties because rents are also unaffordable. these people cannot get mortgages. The Modal wage is below £15K....these people have a choice get together and rent or stay at home with parents get mortgage is not on the list .
Now lets look at your population argument . The ratio between population and total no of homes is similar in the USA and UK and the population growth rate is exactly the same @0.7% / year. Yet its reported the USA has had a crash but the UK has not ....show me your evidence that population increases prices.
the banks idea of extreme caution is asking people what they earn and ascertaining whether they can afford to pay the money back!
the other extreme was lending to anyone with a passport and a pulse
There is merit in some relaxation in lending rules, particular around LTV - clearly there are many people who could happily pay back a mortgage that can't (because of rent levels) save much. 95% should be available to more people.
I wouldn't propose going back to silly income multiples though mainly due to the risk of what happens should interest rates suddenly rise.
This sort of easing would improve accessibility of loans without inflating prices again (which would be a bad thing in my view as it would kill off any revival as soon as it started).
My sense is that the pendulum needs to swing back a little from extreme caution to caution. But I have to say this Wrigglesworth chap is a bit of a clown if he really thinks sub-prime is the way to go (as opposed to simply courting publicity).
I dont think the lobbying for more lending will work (the banks do not have enough capital), IMHO i also dont think it should be encouraged. (Sub-prime lending has bankrupted the western world). So with no easy fix, a long drawn out correction will be the only palatable solution for the politicians, banks and the homeowners.
"Wishful thinking. A fall of that magnitude would would mean many of the current generation would go bankrupt...and unable to take part in society? In my view It will not happen."
You'll have to explain that one to me Ray. At the moment it comes across as baseless scaremongering, but I'm prepared to give you the benefit of the doubt if you can put across a reasonable basis for this analysis.
Prices across certain regions of the UK are already down by 30% and the world still seems to be turning.
Mr Hendry.
I notice you are also giving mortgage advice on your FB page. From an unregulated, unqualified, unauthorised point of view. Do you understand the implications of doing so?
Do yourself a favour and Google 'the FSA' they love people like you.
Wow, just wow. Shameless calls to reinflate the housing bubble.
Sorry John, you're pishing into the wind mate given Basel III accord, the FSA's Mortgage Market Review and that most lenders are scaling back their loan book.
In other news Imperial Tobacco calls for smoking age to be reduced to 12 year olds as 'it never did 'em any harm in the 1950s'.
RR, I’m sure the 13 people that have so far 'liked' the page will be interested to read it. I had a look and this is the bit I like.
'As my individual expertise happens to be in understanding the workings of the housing market,'
Says the man that hasn't sold a single house! Not even ONE! Not even his own!
Priceless
Really?
I think the pendulum has swung way too far in the direction of lenders being over-cautious. But this sounds like a call to return to some of the practices which caused the bubble and its subsequent collapse in the first place.
IMHO 100% mortgages are just about palatable - it would be hypocritical of me to say otherwise seeing as a 100% mortgage got me on the housing ladder way back in 1987 when I bought my first home.
Cash-back mortgages really do imply that the buyer is living beyond his or her means from day one.
As for sub-prime, there's a clue in the name as to why this might be a problem.
as prices start to tumble to more reasonable levels,ftbs will buy rather than rent
the btl market will become unsustainable as there will be a glut of properties and portfolios will be sold or liquidated causing a downward spiral in prices that feeds on itself
all the evidence is there...
you are saying rental demand will support prices...I pointing out that when that demand disappears,btl as a business model is finished
rental market is not fit for purpose and people only rent 'cos they are forced to,however,when things change they will stick two fingers up to landlords
in japan prices are still 40% less than 1991 and kids stay at home buy choice
anyone with a mortgaged btl portfolio faces financial ruin
@dave on 2012-05-25 06:29:22
30-50% reduction in values? Not in a million of our earth years let alone the planet you are on my friend.
1 The 'next generation' CAN afford a mortgage because loads of them they are paying that out in rent every month (hence the booming rental market) at a rate that is more expensive than the mortgage repayments (it's cheaper to buy than rent in 80+% of UK towns).
2 What they WON'T do (not can't do) is save for a deposit. That's why the rental market is so strong. The 'want it now' (not 'next') generation want the latest gadgets and clothes, a new(ish) hot hatch to roar around in and holidays not to Butlins but to Vegas. They are always after the next best thing and being able to change their property like their car appeals. Friend of mine's daughter recently got her first permanent job after qualifying as a beautician and went out and bought a brand new mini-cooper.
3 Ftb (assuming that's the 'next generation' you refer to)profiles have changed. They are now in their mid 30's mostly with a partner,often with a family and are likely to buy a small house. Their place has been taken by B2L landlords which has doubled in last couple of years because of rental demand and increasing rental values.
4 Not all of the UK's property market is on its backside. New apartments aorund here ithat were selling at early/mid £170's in 2009 are achieving £190 now.
5 Finally (phew!) there's supply and demand.New build starts are at their lowest for nearly a century but our population is rising. The private rental market now exceeds the public one. Do the maths!
100% IS ALREADY HERE IN THE MARKET.
ARTAB CAPITAL IS ALREADY LENDING BETWEEN £5,000 AND £100,000 FOR DEPOSITS OVER 15 YEARS ON A FULLY UNSECURED BASIS FOR PEOPLE TO BUY PROPERTY AT A MARKET LEADING RATE.
AGENTS GET PAID 2% COMMISSION ALSO.
E.G. £50K DEPOSIT LOAN EARNS THE AGENT £1,000 EXTRA CASH.
IF YOU WANT TO OFFER 100% TO ALL YOUR PRIME BUYERS, VISIT ARTABCAPITAL.COM AND REGISTER TODAY!
I'm certainly anti-bubble, but I'm also an anti-bubble-breaker too!
These people are so out of touch it's staggering. The idea of more money marketing just beggars belief!!!!!
In an effort to help the folks on Facebook, I've put a new steer on the situation there. (It's not about painting either.)
http://www.facebook.com/PropertyMatchUK
@dave on 2012-05-25 06:29:22
...."the market will return to health when prices fall 30-50% and allow the next generation to partake in society"....
Wishful thinking. A fall of that magnitude would would mean many of the current generation would go bankrupt...and unable to take part in society? In my view It will not happen.
who writes this stuff?
the market will return to health when prices fall 30-50% and allow the next generation to partake in society
transaction volumes would double
never seen so much propping up of a bubble thats going to burst anyway